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Tuesday, March 1, 2011

EDITORIAL 01.03.11

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 media watch with peoples input                an organization of rastriya abhyudaya



month march 01, edition 000767, collected & managed by durgesh kumar mishra, published by – manish manjul


Editorial is syndication of all daily- published newspaper Editorial at one place.






































  4. TAXI!!??





























It would be fair to say that there was nothing extraordinarily exciting about the Union Budget for 2011-12 presented by Finance Minister Pranab Mukherjee on Monday. It would be equally incorrect to dub it as a 'bad' Budget as has been done by many politicians in the Opposition who have instinctively reacted along predictable lines instead of taking a considered view. The urge to be seen offering instant commentary is a strange illness that afflicts politicians and hence their views need not be taken too seriously. Mr Mukherjee has produced a Budget that seeks to balance all the compulsions, both political and economic, of his Government and to that extent he has not really done a bad job. Yet there are aspects of the Budget that merit serious scrutiny and comment because they militate against the declared objective of the UPA, more so the Congress, to make life easier for the aam admi and set right systemic faults through fresh reforms. Indeed, if there were any expectations from Mr Mukherjee this year, they centred around reforms that are long overdue in key sectors of the economy; nor has he come up with new ideas to strengthen foreign investor confidence in India. For instance, the subsidy bill still remains astoundingly high, although lower than the previous year, as does the deficit. The direct cash transfer that he has referred to is, for the moment, a pie in the sky and is unlikely to materialise any time soon — it is anybody's guess as to whether the deadline of March 2012 can be kept. The fate of other key reforms like GST and Direct Tax Code continues to hang in balance although we have been promised that both shall be in place by next year. It remains to be seen whether the promise is kept. Mr Mukherjee could have used the robust growth in GDP (8.6 per cent this year; expected to touch or even cross nine per cent next year) to initiate bold reforms in the insurance and infrastructure sectors as well as open up retail to FDI. Instead, he has taken recourse to measures that actually protect the ramshackle retail sector which offers few benefits to consumers while fetching undeserved profits for retailers who continue to enjoy advantage in the absence of meaningful competition. Similarly, Mr Mukherjee has failed to come up with any substantive proposal to combat the generation of black money and stop its flight out of the country or to get back funds that have been salted abroad. Frankly, he could have done better than seeking refuge in bland platitudes.

On the flip side, the Budget should fetch good cheer to farmers who have been promised a better deal on agricultural loans. By offering to discount interest on farm loans which would effectively reduce rates to four per cent, the Government has done the right thing. This and other measures to generate growth in the agriculture sector, which has been stagnating, deserve to be lauded. That said, there's little in the Budget to contain and roll back prices, especially food inflation. In view of the political turmoil in Arab countries which has led to a worrisome spike in oil prices, the Government should have initiated measures to cushion its impact on the economy. For instance, the excise duty on petroleum products could have been pruned. But it has been left untouched. Commonsense tells us that higher oil prices will only fuel prices of essentials and send inflation further northward.







While it is still to be seen if the impressive Budget outlay of `2,200 crore to boost the production of vegetables, pulses and fodder will actually result in reducing the prices of the aforementioned essential commodities, it is nonetheless clear that Minister for Finance Pranab Mukherjee has framed his proposals keeping in mind the urgent need to control food prices that have skyrocketed in recent months. The Union Government has already faced the wrath of a combined Opposition and the people at large when prices of onions and tomatoes hit the roof and resulted in high inflation. The money that Mr Mukherjee has made available will hopefully promote cultivation of these essential food items in rural India. But more importantly, the money will also go towards the creation of an effective storage and distribution system. Indeed, this is what is key to keeping prices low and ensuring that these essential food items are affordable for the masses. While Mr Mukherjee has stressed the need to establish an efficient supply chain, that will provide quality vegetables at competitive prices — he has already allocated `300 crore to set up a vegetable cluster — one has to see whether it will work. The existing system has been less than effective not so much due to the lack of provisions but as a result of poor policy implementation. The problem is often the gap that exists between good intention and its ultimate implementation. The Minister for Finance knows this well and, perhaps, that is why he has decided to make the allocation under the existing Rashtriya Krishi Vikas Yojana. The move will not only empower the existing scheme and make it more viable, it will also save on the creation of a new project that would take its own time to get off the ground.

However, there needs to be a greater level of accountability from the executors of the Yojana, especially since the money allotted has gone up from `6,775 crore to `7,860 crore. Also, the Government must review the existing schemes such as the one operational specifically in the eastern parts of the country and another which is dedicated to increasing the production of pulses. The projects need to be tweaked to attract a larger number of producers. Both have significant, if not vast outlays, but nonetheless they do not seem to have the attention of our policy makers. India is not doomed to have highly priced pulses simply because the country does not produce enough of and is dependent largely on imports. While it is true that we are not yet self-sufficient in pulses, the fact is that production of the commodity had risen by nearly two million tonnes in 2010-2011. It remains to be seen if we can achieve self-sufficiency in the next three years based on the recent boost in production.









The US thought it could buy Pakistan's loyalty by writing out billion-dollar cheques. As the spat over Raymond Davis shows, the US thought wrong.

The month-long face-off between Islamabad and Washington, DC over the arrest of undercover CIA agent Raymond Davis for killing two ISI operatives on January 27 in Lahore could trigger the collapse of American influence in the region. Even if ties are mended for now, the White House will have to revisit its Afghanistan strategy and its animosity towards Iran, which is emerging as a regional hegemon. The Saudi royalty that could have mediated with Islamabad is itself under pressure.


The Arab uprising against US-friendly dictatorships that facilitated the loot of oil wealth by Western multinationals has certainly influenced Islamabad's refusal to grant Mr Davis full diplomatic immunity. This has ruptured communications between the ISI and the CIA; the US has suspended high-level dialogue with Pakistan, putting on hold President Asif Ali Zardari's proposed visit to Washington in March.

Mr Davis, a private security contractor with Blackwater, was posted at the American Embassy in Pakistan (with a work visa) when he shot dead two Pakistanis in 'self-defence' after they tried to 'rob' him. But the Lahore Police said Mr Davis confessed that after shooting the men, he stepped out of his car to photograph one of them and then called the US Consulate for help. Police said the victims were shot several times in the back.

Public opinion was incensed when a youth on a motorcycle was crushed by a Toyota Land Cruiser that raced down the wrong side of a one-way street to rescue Mr Davis. A snag in his vehicle enabled the police to arrest Mr Davis, but the Land Cruiser managed to enter the US Consulate compound; both vehicle and driver were rushed out of the country to the chagrin of the Government and people of Pakistan. Emotions heightened when the wife of one victim died in hospital after consuming poison and telling the media she wanted "blood for blood".

The Police recovered a private pistol, bullets, a camera, cell phones, a sophisticated wireless set and some dollars from Mr Davis. The camera reputedly had photographs of bunkers on an eastern border fort at Waris Road (where a Pakistani Army Unit was once based), sensitive buildings and locations. Scrutiny of the mobile phones showed Mr Davis was in touch with various Taliban groups.

As the matter was highly sensitive, Pakistan's Prime Minister Yousuf Raza Gilani, Mr Zardari and Army Chief Ashfaq Parvez Kayani decided to let the judiciary handle the case on merit. Despite American threats to halt the $7.5 billion five-year civilian aid to Pakistan, the trio resisted pressure to release Mr Davis on grounds of diplomatic immunity. Washington suffered a setback when the Lahore High Court gave the regime until March 14 to decide Mr Davis's immunity.

Islamabad is examining why Mr Davis was roaming around Lahore with a loaded pistol, photographing sensitive sites; if the two ISI agents were killed because Mr Davis feared he had been compromised by their surveillance; and if he was helping Al Qaeda and was linked to the abduction and killing of Col Imam.

Resenting the CIA's attempts to penetrate the ISI and learn more about its nuclear programme, Pakistan was monitoring the American spy agency's counter-terrorism activities. It said Mr Davis's visa application contained bogus references and phone numbers, taking advantage of a Government order to Pakistan Embassy staff in the US, Britain and the UAE to issue visas without normal checks by the Interior Ministry and the ISI. This opened the floodgates and the CIA sent in operatives not known to Islamabad ('contract spies'), which strained ties. Pakistan is now re-examining these visas.

According to Express Tribune of Lahore, Mr Davis was close to Tehreek-e-Taliban Pakistan. The New York Times claimed Davis "was part of a covert, CIA-led team of operatives conducting surveillance on militant groups deep inside the country". Pakistani officials said Mr Davis was recruiting youth from Punjab for the Taliban to fuel the insurgency. He was allegedly working on a plan to legitimise American fears that Pakistan's nuclear weapons are not safe and creating a Taliban group to do his bidding.

Mr Davis functioned under a secret deal made by then President Pervez Musharraf in 2006, which allowed covert CIA operations through private security firms like Blackwater/Xe Worldwide and DynCorp to spy on the Taliban and Al Qaeda. But Pakistani intelligence found he had developed close links with the TTP.

Other sources said Mr Davis's CIA team was tracking the Lashkar-e-Tayyeba, a group Pakistan uses in its proxy war with India and which the US regards as a threat to allied troops in Afghanistan. Pakistan is upset as the LeT has longstanding ties with the ISI. The CIA has also been investigating madarsas in the region.

The Express Tribune hinted that Islamabad's tough stance on Mr Davis reflected anger at Washington implicating the ISI in the November 2008 Mumbai attacks and the decision by a New York City court to summon the ISI chief, Lt Gen Ahmed Shuja Pasha, in connection with the attacks. In retaliation, Islamabad exposed the identity of the CIA's top clandestine officer in Pakistan.

Pakistan is under immense pressure from its civilian population to make America pay for the drone attacks in tribal areas. Releasing Mr Davis could bring the anti-Government protests sweeping Arab countries to the streets of Islamabad. Should such an uprising happen, retired officers warn that the military will refuse to take sides and allow the Zardari Government to fall. This could trigger the rise of militant Islam to power in Pakistan, they warn. As the US needs Pakistan to maintain supply lines to its 140,000 troops in Afghanistan, it cannot push too hard.

But it is a volatile peace. Some militant and religious groups are demanding Mr Davis be tried in Pakistani courts and hanged for his crime. Perhaps Washington will buy peace with the victims' families through a handsome compensation (blood money is permissible under Islamic and Pakistani law).

Regardless how things are finally resolved, US-Pakistan ties can never be the same again. Nor will Afghanistan settle by White House diktat. Afghanistan and Pakistan have become more unstable, and the neighbourhood more uncongenial for Uncle Sam.

New Delhi, which made the grim mistake of annoying Iran (with consequences for our oil security) and welcoming continued American presence in Afghanistan (knowing it is the graveyard of empires), should urgently rework the mindless policy of following Washington without regard to the national interest. India is not a client state. The auto-colonialism of its ruling elite cannot be allowed to compromise the Republic.







While China is free to believe that it has done nothing to raise hackles around the world, more so in its neighbourhood, that is far from the truth. It makes little sense for Beijing to feign surprise that other nations are preparing to meet the Chinese challenge which is not necessarily limited to economic issues. Strangely, while others are mindful of the challenge posed by rising China, India remains trapped in the past

Recently a conference on the Relevance of Tibet in the Emerging Regional Situation was held in Delhi. One of the participants, a professor from Jawaharlal Nehru University, gave the audience a grand lecture on the cultural and civilisational closeness of India and China; other analysts and experts were missing the point, the professor said, because they continue to focus on the nitty-gritty of China-India relations (the border issue, Chinese incursions, stapled visas, the ever-growing infrastructure in southern Tibet, etc); the 'real' solution however was 'civilisational'. The 'eminent scholar' kept repeating this strange word.

Other participants seemed unable to grasp the subtlety of the concept, while yet others, more down-to-earth lamented: "We can't understand the Chinese, we are trying to be nice with them and they are not nice with us".

After reading a recent article published in Qiushi Journal, the official publication of the Central Committee of the Communist Party of China, I could better grasp this 'civilisational' business. The argument developed in the article is: "When faced with an aggressive US, how should China respond?" "How China Deals with the US Strategy to Contain China" quotes from a 1949 slogan of Mao Tse-tung: "Cast Away Illusions; Prepare for Struggle" and reaffirms that "it is still applicable to today's situation".

The author goes into recent China-US relations: "Our wishes to persuade the imperialists and those who are against China to be kind-hearted and repent are fruitless. The only way is to organise forces to fight against them". The author believes that the fundamental principle to be followed is, "If friends come, treat them with wine; if jackals come, we have shotguns for them."

Are these comments not reflective of a certain 'civilisational attitude'?

The Qiushi Journal article mentions six strategies believed to have been selected by the US to 'contain' China: The trade war, the exchange rate war, the public opinion war, the anti-China campaign, the military exercises and simulated warfare; and, the setting up of an anti-China alliance. The author suggests seven counter-strategies.

Regarding the 'trade war', the Chinese publication complains: "Since September, the US has launched seven 'Section-337' investigations and one 'Section-301' investigation, involving products such as solar lights, LCD monitors, and printer cartridges."

The most astonishing trait of the Chinese civilisational character seems to be that Beijing is unable to envisage that something could be wrong in their own dumping exercises or more generally in their international dealings. The same stance is taken by the author for the 'exchange rate war' and the other issues raised by him.

As for the "military exercises and simulated warfare", the Qiushiv Journal asserts that the US frequently prevails upon South Korea, Japan, Vietnam, and other countries to join military exercises: "(The US) purpose is very clear: To encircle China militarily."

Instead of speaking of the US creating an anti-China alliance, Beijing should perhaps analyse its own actions during 2010 and see why the so-called anti-China alliance was forced to act the way it did. Take the case of India, which has always been over-sympathetic to China. What does India get in return? Only the blocking of the Indian seat in the UN Security Council, the raising of a 'dispute' over Jammu & Kashmir and so on.

The article goes into great detail about what China should do to "contain the US" on each of the subjects. India is not mentioned: It is probably not considered worth 'containing', China being aware that India has garnered decades of expertise for shooting itself in the foot (look at Kashmiri leaders 'offering' Aksai Chin to China, or the Foreign Minister reading another Ambassador's speech in the Security Council). About the "military exercises and simulated warfare", the Communist Party publication is explicit: "No doubt the US military exercises challenge China's strategic bottom line. China should certainly actively respond, but the issue is how to respond skilfully. Wherever the US chooses to conduct its military exercises, let's pick another location for our military exercise". The strategy should be 'Besieging Wei to rescue Zhao'.

This is one of the famous Thirty-Six Strategies from ancient China. It refers to an incident that occurred in 354 BC and involved Sun Bin (a descendent of Sun Zi, the author of the Art of War). One day in the court of the Wei State, a Minister jealous of Sun Bin denounced him as a spy; Sun fled to the State of Qi. Several years later, the king of the State of Wei attacked the capital of the State of Zhao whose king immediately appealed to the State of Qi for help.

Sun Bin recommended: "To intervene now between two warring armies is like trying to divert a tidal way by standing in its path. It would be better to wait until both armies wear themselves out." The king followed his advice and waited. A year later Sun Bin decided the time was ripe to help Zhao: "Since most of Wei's troops are out of the country engaged in the siege, their defences must be weak. By attacking the capital of Wei, we will force the Wei Army to return to defend its own capital, thereby lifting the siege of Zhao while destroying the Wei forces in an ambush." The plan worked perfectly.

The article suggested that China should follow this strategy: "There is no need for China to fear the US aircraft carrier. During the Korean War, when the contrast in military strength was much greater than it is now, we were not afraid; why should we be now? Facts prove that America is a paper tiger that cannot even handle Iraq or Afghanistan, not to mention China".

On February 8, 2011, the US Department of Defence published the National Military Strategy of United States of America 2011. Inter alia, it asserted: "We remain concerned about the extent and strategic intent of China's military modernisation, and its assertiveness in space, cyberspace, in the Yellow Sea, East China Sea, and South China Sea". Washington added that the US "will be prepared to demonstrate the will and commit the resources needed to oppose any nation's actions that jeopardise access to and use of the global commons and cyberspace".

The Chinese news agency Xinhua immediately answered through a series of articles analysing the US document. It noted that for the first time a US report lists "coping with the threat of an Internet war" as a separate military strategy. The US strategy is meant to target China, Xinhua affirmed: "The report didn't overtly mention China, but China's influence is obvious in the text… Even when it's not talking about Asia, the main focus is not too far away from China's military expansion."

Once again, the Chinese leadership forgets that it started the cyber war. In 2008, the US-China Economic and Security Review Commission reported: "US computer security authorities detected a series of cyber intrusions in 2002 into unclassified US military, Government, and Government contractor Websites and computer systems. This large-scale operation, code named Titan Rain by the US Government, was attributed to China. Targeted locations included the US Army Information Systems Engineering Command, the Naval Ocean Systems Center, the Missile Defence Agency, and Sandia National Laboratories."

Obviously, the US and other nations have to defend themselves. It is their civilisational right. One old friend used to tell me: "To be loved, you have to be lovable". Beijing should perhaps meditate on the subject instead of promulgating new guidelines to select reincarnated Lamas.







For nine years jholawallahs have been running a malicious campaign of calumny to distort the truth about the carnage in Godhra and overstating the facts of the violence that followed. The special court's judgement has exposed the lot

To slightly modify an adage, delayed justice is better than no justice at all. This rings really true, loud and clear in light of the February 22, 2011 verdict by the special court on the Godhra train-burning episode of February 27, 2002. Almost exactly nine years after those 59 innocent kar sevaks were roasted alive in coach S6 of Sabarmati Express. It is hard to say whether they have gotten justice not only because they aren't alive today but because of what has transpired since: The toxic climate of public discourse has been progressively poisoned by defacing even the memory of these innocent pilgrims.

It is, therefore, important to recap and trace the progression of the events of 2002 until now — given how fast we forget even the worst of horrors — both in the interest of decency and to guard ourselves against similar perversions recurring in future.

In retrospect, 'defacing' does not adequately capture the impact of what has occurred post-Godhra. The 59 murdered kar sevaks have been used as edifices to play out a twisted political game first on the national and then the international stage. The actors include the usual suspects of self-proclaimed secularists and their fellow-travellers in the media. At the time the bogie was burnt, most media houses more or less were faithful in reporting the tragedy. In its immediate aftermath — the violence that followed — the media mostly presented an accurate assessment: That they were a spontaneous reprisal for the unprovoked killing.

But what many missed is the fact that the discourse was perverted ab initio. The coach-burning was blamed on the dead kar sevaks because they 'invited' their deaths by chanting "Jai Sri Ram," which Muslims found "provocative". It is unsurprising then that the subsequent pontification, statements of outrage and calls for justice have been extensions of the same theme, and spawned what has come to be known as the 'Gujarat Cottage Industry'. It is not entirely incorrect to say that no other human tragedy in recent times has been scavenged upon on a scale as the Gujarat violence of 2002. Whether justice has been done or not is a question that pales before the kind of cynical careerism and wealth that it has generated for those who chose to exploit it.

This context is important because every instance of brazen activism by self-styled vigilantes of societal well-being has relied on two things: Obscuring the Godhra train-burning incident without which the riots would've never occurred, and concealing the fact that even Hindus died in the riots that followed. In parallel, these selfsame worthies have carried reports of violent clashes between the two communities but for some reason, only one of them has been shown as deserving justice.

Then there was the Banerjee Report, the brainchild of a desperate-for-electoral-victory Lalu Prasad Yadav was stitched together in a hurry and provided the perfect arsenal to the proponents of lopsided justice. They claimed they had "official proof" that the fire was accidental. This report was cited widely and repeated a la Goebbels even after the courts struck down the very formation of the Banerjee Committee as unconstitutional to begin with. Yet, it continues to be peddled as "authentic".

The vigilantes, undeterred in their quest for justice went on a case-filing spree. They called upon the law to take its course but did everything in their power to exert pressure on the judicial process: Either the courts weren't doing enough or were delaying things. Trial by media became — and remains — the order of the day. These pressure tactics have ensured that the focus remains on the post-Gujarat violence and keeps the jholawallahs in clover. As subsequent events have revealed, we know how, for instance, Teesta Setalvad has consistently tried to manipulate the judicial proces and now stands accused of forgery and perjury.

It is nobody's claim that the perpetrators of violence in Gujarat must go unpunished but what has been done by a certain section of do-gooders in the name of securing justice for the victims of the post-Godhra violence requires critical and thorough scrutiny. The question that is rarely asked is what apart from lip service have these do-gooders done to secure justice for the kar sevaks charred to death in coach S6.

The special court's judgement on February 22 thus deserves credit for convicting the guilty, a rare occurrence in cases of mob violence. The fact that it upheld the Godhra train carnage as a premeditated conspiracy also confirms what Mr Narendra Modi and K Jana Krishnamurthy — the then BJP president — had stated back in 2002 on the basis of intelligence reports.

The judgement is also the latest blow to the 'Gujarat Cottage Industry', which has suffered yet another setback after the Zahira Sheikh affair and damaging revelations by Raees Khan, Teesta Setalvad's former aide. It is also laudable on the part of Mr Modi to let the law take its course —unlike the proponents of trial-by-media.







In the last five years that I have been in Kolkata, I can proudly claim that this city let's me be, like it allows any other woman. I still have not forgotten how I used to envy my friends here while I was in college in another State. Their claim, "We are not even half as scared of eve-teasers in Kolkata. One lewd comment and all we need to do is make a noise and the crowd takes care of the rest."

However, reputed psychiatrist and counsellor Aniruddha Deb cautions, "Times have changed. What you are referring to is history now. People here are turning more and more inert to such incidents." Does that mean that the recent eve-teasing at Barasat on the outskirts of Kolkata, ending in a heinous crime, has come as a forewarning of the times ahead?

On February 15, Ms Rinku Das, a 23-year-old call-centre employee in Kolkata, was returning by local train to her home at Barasat. It was a late hour and as always her younger brother, 16-year-old Rajib, was waiting at the railway station to escort her back home. Slinking out of a dilapidated house, some men popped out with their ugly comments. Rajib tried hard to shut them up and instead was beaten up mercilessly. His sister ran to the nearby District Magistrate's bungalow for help. The guards posted there refused to leave as "they were on duty". And before she could reach back to the ominous spot, she saw her bleeding brother lying on a rickshaw; he had been picked up by a passerby. Next day Rajib died.

The Police Commissioner of Kolkata, Mr Gautam Mohan Chakraborty, says: "Our problem is lack of a police commissionerate there. We had long appealed to the Government for the same." The reality is that nothing has come of it till date. It is also true that the law does not mention 'eve-teasing'. It remains a non-cognisable bailable offence, allowing miscreants to get away by paying a paltry fine. There is no lock-up where they can be interrogated.

Strangely eve-teasing is an Indian euphemism. Our soaps and films have long been glorifying this act. In reality, the act runs the risk of becoming a gateway to a greater crime and most often Eve is blamed for tempting Adam. In Rajib's case, the Home Secretary, Mr GD Gautama said, "Rajib's sister was a 'divorcee' and she used to return around 11 to 11.30 every night."

The people are still angry and concerned. The incident has been making front page news in local dailies and anger is being spewed at the callous administration. Dr Deb points out, "I don't quite agree that Kolkata is as safe for women as it is portrayed to be. Indeed with such horror being perpetrated on women it makes me wonder if we are left with any of the values which we used to hold dear and important."

At the same time one cannot ignore what the Police Commissioner of Delhi, Mr BK Gupta, recently told newspersons: "People should react if they witness cases of eve-teasing in buses and elsewhere. That is very important." His comments were with reference to recent incidents of rape in the national capital. He added, "Why such incidents are reported less in cities like Kolkata, because people there react."

Sociologist Dalia Chakraborty, from Jadavpur Universty, has a very simple explanation to 'lesser crime' against women in Kolkata: "It is because the Bengali bhadralok is still around. Thanks to the British Presidency that existed in Kolkata that chivalry was brought here and still exists."

Despite what Ms Chakraborty says or most people feel, the fact remains that the condemnable cold-blooded treatment of a brother who went all out to protect his sister from eve-teasers has left a scar on the 'safe for women' tag that Kolkata proudly flaunts. Dr Deb says: "We are still able to discuss this issue because there is still some sensitivity left. If similar incidents keep happening and the administration remains as unfeeling, who knows there may come a time when we will treat such incidents as commonplace."

One can only pray that Bengali sentiments and values wake up, that people in Kolkata and West Bengal remember that centuries back reformers from this part of the country had played the most vital role in changing the status of Indian women.









To be fair, budget-making couldn't have come at a pricklier time, marked by slacking reform, scorching prices and tight monetary conditions. If Budget 2011-12 had to go beyond dry cataloguing of allocation details, tax tweaks and statements of pious intent, it had to avoid lazy assumptions about high growth keeping the economy on autopilot. As also see inflation as a function of production and distribution anomalies. Midpoint in UPA's second stint, this was the finance minister's best chance to boldly seek to rectify the economy's many structural warts. Instead, he plays safe. He's not overly populist. Nor is he resolutely reformist. The Budget, equally, seems all over the place.

With good growth and tax and non-tax revenue windfalls, meeting the 4.6% fiscal deficit target seems doable on paper. But spectrum auction funds won't be a cushion for long and, with a Rs 40,000 crore target, disinvestment will need fast-tracking. Government borrowing fortunately isn't about to balloon as was feared. The market applauded this, as a sign that private players' access to credit won't be choked. Plus assorted tax goodies - hiked income tax exemption limit, trimmed corporate tax surcharge or unchanged excise and service tax rates - are likely to spur consumption and business. A major highlight in the Budget is the strong stress on tax reform. Movement on GST, however, demands political will to not further dilute a system designed to boost compliance and create a much-needed common market. On both direct and indirect taxes, we need to move away from annualised tinkering. The faster the Direct Tax Code and GST are launched, the better.

The nod to direct cash transfers for fuel and fertiliser subsidy also deserves a thumbs-up. But why not cover food? Well-designed delivery systems must combat leakages and waste in all pro-poor schemes, backed by financial inclusion and UID projects. Little mention is made of subsidy reduction, though welfare must start aiming less at dole than empowerment. Higher spends on health, education and infrastructure are welcome, skilled manpower and capacity-building being key to sustaining growth. But non-negotiable expenditure under these heads surely demand better targeting and even moratoriums on others. Mega-schemes like food security need better preparation to be executed well. And, be it schools, hospitals or basic amenities, poor service delivery, not lack of money to throw around, hobbles efforts.

India must nuance its approach to inflation, also issuing from rising demand in a high-growth country. Food subsidy, then, is less a solution than boosted agricultural productivity and marketing avenues. The FM creditably asks all states to get cracking on APMC reform. To overhaul logistics, he also makes cold chains and storage an infrastructure sub-sector to attract funds. But retail liberalisation should've been the big-ticket item here, as an investor-friendly message at a time FDI is on the slide. More so, since the passing reference to putting financial sector reform on the legislative agenda won't overly enthuse investors.

Overall, there's a little something for everybody, from handloom weavers and senior citizens to environmentalists and foreign institutional investors. Taxpayers get relief. Consumers await cheaper mobiles and home loans. Farmers get interest-related subsidy on debt repayment and easier access to credit. Industry is pledged incentives for manufacturing and IT. Small micro-finance borrowers are promised protection. Markets smile with mutual funds accessing foreign funds. And FIIs get raised investment limit in corporate bonds, a fillip to infrastructure. Yet, please-all intentions notwithstanding, the big ideas are missing. If vision makes or breaks budgetary blueprints, Budget 2011-12 disappoints. A fast-growing nation with big dreams needs more than muted signals on reform.







Barring the on-field action in the 2011cricket World Cup, it hasn't been a happy story on the organising front. Ugly scenes witnessed outside the Chinnaswamy stadium in Bangalore last week - fans queuing up for tickets were baton-charged by the police - point to a systemic malaise. A mere 7,000 tickets were available to the public for Sunday's India-England contest even though the stadium has a seating capacity of nearly 40,000. Meanwhile, the ICC has written to Sharad Pawar, chairman of the World Cup central organising committee, complaining over the delay in distribution of tickets bought online. A haphazard ticketing policy means ordinary cricket lovers are kept out of the World Cup experience.

With impressive commercial growth and increasing corporate participation, it is imperative to factor in the interests of die-hard fans of the game. Giving out a majority of match tickets to sponsors and VVIPs at the cost of the public erodes the very foundation of cricket's popularity. Also problematic is the mode of sale and distribution of tickets. Instead of a central ticketing authority, tickets are being made available through diverse channels, including through clubs affiliated to host cricketing associations. This perpetuates the so-called 'pass culture' that conveniently fits with the corporate model. As a result, only 4,000 tickets are available for general sale for the final in Mumbai, which will now be sold through a ballot system. A rational, transparent and fan-friendly ticketing policy is the need of the hour. The success of cricket depends on its fan base. Even with commercial interests in mind organisers will do well to increase, not diminish, the fan base.









The finance minister had an exceptionally challenging task in this year's Budget. He was faced with three major goals pulling in different directions. With headline inflation close to double digit, and food prices having risen over 20% in February, his main goal was fighting inflation. However, he needed to do this without compromising on high growth, which is now back on track. Moreover, he also needed to address the inclusion agenda being energetically pursued by the Sonia Gandhi's National Advisory Council. It turns out that he focussed on fighting inflation, taking a risk on compromising growth and postponing the inclusion agenda.

His main tool for fighting inflation is deficit reduction, supplementing the monetary tightening policies already being pursued by the RBI. Deficit reduction is also the core of the fiscal consolidation strategy recommended by the 13th Finance Commission to reduce public debt and contain pre-emption of public resources for debt servicing at the cost of social and development spending. The Budget has accordingly focussed quite aggressively on containing the deficit. The central government fiscal deficit declined to 5.1% of GDP in 2010-11, as against a target of 5.5%. This is now to be reduced further to 4.6% by 2011-12 en route to 3% by 2014-15. The game plan is to achieve this target by containing the growth of expenditure, not raising more tax revenue.

In fact, not much has changed on the taxation side. In direct taxes there is a small increase in the income tax exemption, additional tax relief to senior citizens and a reduction in the corporate tax surcharge. But there's also an increase in MAT, withdrawal of excise exemptions from 130 items, extension of some customs duty exemptions to some items and a marginal expansion of the service tax base for high-end healthcare, restaurants, and air travel. The net effect of all these measures will be additional tax revenue of less than Rs 5,000 crore.

Even without a significant tax effort, tax revenue will still grow because of GDP growth. With assumed tax buoyancy, assumed GDP growth of 9% and 5% inflation tax revenue will grow by 18%. However, non-tax revenues will be lower at Rs 1.25 lakh crore compared to Rs 2.20 lakh crore last year with no exceptional bonanza from 3G spectrum sales. Hence the main plank for deficit reduction will be compression of expenditure. In fact, the Budget assumes expenditure growth of only 3.4%. This is lower than assumed inflation, hence an absolute reduction in real terms. Against the nominal GDP growth of 14%, this implies a very severe expenditure compression. Whether such a target is realistic is questionable since so far the government has not managed to compress expenditure. The deficit target is being met mainly on account of more than expected gain from spectrum sale and tax revenue.


If, on the other hand, tough expenditure compression targets are actually realised, this would help contain inflation but compromise growth. When the 13th Finance Commission recommended deficit reduction, it also recommended an increase in the share of capital expenditure, requiring a squeeze only on revenue (current) expenditure. The revenue deficit is to be reduced to zero by 2014-15. Unlike current expenditure, capital expenditure, i.e., public investment, also stimulates private investment, the main growth driver, thereby generating a strong multiplier effect on GDP growth.

However, the government has found it extremely difficult to curtail only revenue expenditure. The Budget makes a valid qualification about grants to states from revenue expenditure that actually create capital assets. However, even after adjusting for this, planned expenditure compression is not public investment enhancing. It will likely lead to a significant reduction in the growth stimulus.


The business community was upbeat when the Budget was presented and the stock market gained around 2.5% in an hour. It was reacting to the absence of much additional taxation, the Rs 40,000 crore provision for sale of public sector equity, liberalisation of foreign investment regulations, and a modest public borrowing programme of Rs 4.12 lakh crore that will ease pressure on the interest rate. Clearly, the market had not fully factored in the
Budget's negative growth impact. Combined with the external effects of the sovereign debt crisis in
Europe, the Middle East crisis and the spike in oil prices to over $130 a barrel, the growth outcome for 2011-12 is likely to be distinctly lower than the assumed 9%.

Finally, the Budget has postponed the inclusion agenda. The NAC has been pressing for pro-poor spending on employment programmes like NREGA, food security and social sector spending on education, health, etc. However, proposed spending on most of these items is either lower or about the same in 2011-12 as in the revised estimates for 2010-11. Allowing for inflation, that means an actual decrease in real terms. In the rural employment programme, for instance, the finance minister announced that wages will be indexed to inflation, but the absolute allocation is no more than in 2010-11.

This is not surprising. Economists talk about the political business cycle in fiscal policy. Hard measures are taken only in the first half of an elected government's tenure. Popular measures take over as elections approach. Given all his competing goals, and with elections still three years away, the finance minister has postponed the inclusion agenda. However, that agenda will become increasingly visible during the next two years.

The writer is emeritus professor at the National Institute of Public Finance and Policy, New Delhi.







Having swept the top honours at the 83rd Academy Awards – including the Best Motion Picture, Best Director and Best Actor in a Lead Role – The King's Speech joins a long list of critically acclaimed films that took liberty with historical facts. To expect otherwise would not be reasonable. Good cinema has never been about getting historical details right but about dramatising history in a manner that connects with audiences.

Period dramas always leave scope for nitpicking, but that is hardly the point. Unlike in the movie
Braveheart William Wallace never wore kilts. Roman emperor Commodus wasn't killed in the Colosseum as in Ridley Scott's Gladiator. Perhaps the love story between emperor Akbar and Jodhaa Bai in Jodhaa Akbar was exaggerated. Gandhi wasn't the blameless saint portrayed in the film Gandhi. So what? All these films have the power to move us, and convey history in a manner that's relevant to large sections of the audience. And in the end, that is what matters.

Movies are a creative medium subject to the interpretation of the filmmaker. The King's Speech is based on a book that chronicles England's King George VI's struggle against stammering. Pieced together from personal letters between the king and his speech therapist, Lionel Logue, the book is a treasure trove of facts. However, if director Tom Hooper were to strictly adhere to the book, it would have made for a dull film. The way a subject is depicted through cinema is also a study of the times we live in.

Aesthetics play a crucial role in filmmaking. It is precisely for this reason that creative freedom is sacrosanct for a filmmaker. Appreciation of good cinema is acknowledgement of the art of filmmaking, not just getting the history right. All art has some historical basis, but that hardly means art should be denied poetic licence.







If life can reflect art, there is no reason why art cannot reflect life. Indeed art must do so if it is to be credible. The error of historical adaptations is to assume that facts get in the way of entertainment. This results in portrayals that are not just an airbrushing of history but complete rewrites. The cost is borne by us – perceived as simpletons, we are given a fare of simple entertainment – and our young. Presented with warped renditions of history, their ability to learn from history is stunted.

The feel-good film The King's Speech demonstrates how historical films deny us history's lessons by glossing over Buckingham Palace's consistent support for Neville Chamberlain's deal with Hitler. Chamberlain exchanged a free people, the Czech, to safeguard the British empire. Instead we have a sugary sweet rendition, which perpetuates outmoded ideas such as the age-old enthrallment with royalty. This unthinking adoration would be checked if films factually portrayed their subjects, especially if they're inexplicably popular. The film also brushes aside the complexity of human life thereby doing a great disservice to an important historical figure, Winston Churchill. In making him a caricature goody-goody the actual man is lost. He's made into a consistent friend to the stuttering prince. Things and people are rarely so simple. Churchill was a supporter of the Nazi sympathiser Edward VIII.

Bollywood is just as guilty of playing fast and loose with history. Jodhaa Akbar is a case of the director's imagination joining the dots, to make a roaring love affair out of a marriage of convenience. Mangal Pandey is a blatant rewriting of history which, in feeding coarse nationalism, exposes the dangers of misusing history. It's the failure of directors to think that history and entertainment are mutually exclusive. We would be better entertained if the facts of history were respected.







Not since the concept of clothing oneself, created by a Neanderthal with serious body image issues, have humans engaged in an activity so dedicatedly the way they have in Facebooking. And not since the day i got India wrong on a world map for a geography test when i was 10 have i felt more like a loser than when i watched The Social Network.

As you watch the life of Mark Zuckerberg unfurl on the big screen where he's rattling off clever one-liners and mercilessly destroying the obstacles in his path to attain god-like status, there's a sinking feeling within yourself which can be encapsulated in a question, "What the hell have i done with my life?" As an Indian you'd be tempted to blame the educational system which meant that when Americans were learning how to create websites, you were still drawing flowcharts in your computer classes. But in retrospect, i realise that the truth is a little more complex than that.

My two friends and i, after watching The Social Network, had to get intoxicated because there was a mixed feeling of zeal and emptiness that blanketed us. And we all know that those are the two feelings that serve as the unshakeable pillars on which the alcohol industry rests. As always, inebriation led to a random sharing of some interesting anecdotes. At the age of 20, when Mark Zuckerberg came up with the concept of Facebook, i was, if memory serves me right, lying on my couch munching on chips and watching Johnny Bravo. One of my friends was in his 'Bollywood-actress-obsession' phase and was plotting to abduct Anil Kapoor because he got too close to Madhuri Dixit in all his movies. And the other one, well, he was trapping flies in a bottle (he's a bit weird).

Part of the reason why i wasn't driven enough when i was younger was, i feel, owing to the only subject that intrigued me: English literature. We were exposed to these brilliant novels written over the last few hundred years, and almost all of them were written by aimless, disenchanted drunkards. There was never a role model from popular culture in front of me who was either driven or determined to make money and make it big. So i never saw the need either. I always felt that one day a culture-changing book would come out of me and change my life forever. All that came out of me, however, were short write-ups that would put me on the hit list of every religion known to man.

After an hour or so of moping and whining, my friends and i decided, to hell with repenting the lost years. In the next few hours, we would come up with an idea so mind-boggling that it would take the world by storm and result in us partying with girls who made Megan Fox look like Bappi Lahiri.

I was taken with the idea of a website where people could come and vent their anger on anyone they wanted. Until my friends reminded me one can do that on Facebook. Other ideas that came up were a portal for confessions, expressing your weirdest views, bitching about your friends et al. Until we realised all of it could be done on Facebook. The three of us looked at each other and we all had the same thought in our head. We logged onto Facebook and updated our statuses to: Damn you, Mark Zuckerberg!









It is in the fitness of things that Pranab Mukherjee can afford to be a minimalist 20 years after India began reforming its economy in 1991.

Mr Mukherjee is the midwife for a new rules-based tax regime and a considerable part of his energies are devoted to getting stakeholders — state governments for the goods and services tax and lobbying interests for the direct tax code — on the same page. He chose to use the hiatus before the changes are officially adopted to move the existing tax structure deeper into the new templates.

But inflation stayed his hand on raising excise duties to align with the eventual value-added tax rate once India becomes a common market. But he clamped down on excise exemptions, expanded the list of services that are taxable and collapsed customs duty slabs. The higher exemption in income tax and lower corporation tax surcharge alongside higher minimum alternate tax rates, likewise, dovetail into India's vision of direct taxes. In sum, these changes are revenue neutral for the government.

The Centre's spending plans do not lend themselves to such clean arithmetic. Government expenditure this year has overshot initial estimates by 9.72 %. Yet, Mr Mukherjee has budgeted for a mere 3.38 % growth for 2011-12. This year's profligacy is camouflaged by a bonanza from the sale of radio frequencies for telecom, and the finance minister is keeping this tap open alongside the proceeds from divestment. In the event that the 2011-12 allocations for welfare and infrastructure are up by 17% and 23% respectively, and account for nearly 30% of total government expenditure, greater control is called for over revenue spending if the government's more ambitious deficit reduction targets are to be met over the medium term. The revenue deficit does look a lot less unsightly after carving out the capital component in transfers to states. Yet, the Centre's borrowing requirement of

Rs 3.43 lakh crore is big enough to crowd out loans to the private sector at a time when interest rates are climbing.

The rising list of entitlements — and the burgeoning subsidy bill — makes a compelling case for direct income transfers. A project that targets fuel and fertiliser subsidies better through cash handouts could be the fulcrum for future welfare programmes. Mr Mukherjee is characteristically modest when he says the big reforms are not the ones that make headlines but those that deal with the nitty-gritty of governance. His budget speech reflects this. His own ministry is bringing in legislation on insurance, pensions and banking apart from the goods and services tax. Agriculture gets funding in a raft of product- and area-specific schemes; there is easier tax treatment for cold chain infrastructure and the credit subsidy for farmers has been extended. Infrastructure funding has been made easier, transaction costs lowered for exporters, and manufacturing is promised a lower compliance burden.

Prices and corruption formed the political backdrop to Mr Mukherjee's third budget for the UPA. The veteran parliamentarian showed a deft touch on both counts. He did his bit to not add to the inflationary pressure by declining to raise more money through taxes. The issue of black money is to be addressed through greater coordination with foreign governments and a study at home on ways to gouge out money stashed in hidden pools. This budget tries to dispel the spectre of a governance deficit, and succeeds in parts. The stock market's reaction vindicates Mr Mukherjee's efforts to move budget-making in India to a less arbitrary trajectory. It takes a mature hand to realise there's no point in fixing what ain't broke.





When we heard India may be in a spot of bother on Sunday, we quickly turned on our tellies to see whether Pranab Mukherjee was planning to drop a bomb on Monday.

 But silly us. It was the India-England cricket match that had quickened pulses. Well, we have heard Pranab-da's accent many times and plummy isn't the first word that springs to mind. So the next day, it wasn't his speech but Colin Firth's (minus any stutter) that caught our fancy and attention.

And then we hear someone say how he wishes to thank all those who made 'this possible'. How gracious of the finance minister to give so much credit to others, we think. But, oh, we've switched channels again and it's our mistake. This time it's the director of The King's Speech making his acceptance speech.

This is all getting too much for us. But we promise, now that all the excitement is over, clarity will strike us once again. That's if the taxes don't strike us down first.






Just a few days ago, separate courts gave their verdicts in two important cases. In Mumbai, the Bombay high court confirmed the death sentence on 26/11 terrorist Ajmal Kasab while a day later in Ahmedabad, a special court held 31 people guilty of burning a coach of the Sabarmati Express at Godhra railway station in 2002.

There are subtexts in both these judgements. In the Kasab trial, the high court upheld the acquittal of two Indians accused of being part of the Lashkar-e-Tayyeba (LeT). In the Godhra court, the sessions judge acquitted 63 people — more than double the number convicted, for lack of evidence. These sub-texts tell their own story, a story that does not speak well of many of our institutions.

Take the Kasab case first. The only surviving member of the Pakistani terrorist team that attacked Mumbai in 2008, he has been lodged in a high security cell with no expense spared on looking after him. In spite of his indisputable guilt, the prosecution produced over 600 eyewitnesses to buttress its open-and-shut case, thus delaying it for over two years. But the message India wanted to give the world is that our laws are fair, there are no distinctions between people. The acquittal of the two Indians accused of abetting the conspiracy, further reinforces that claim.

If only the Godhra verdict did so too! On the face of it, the judgement seems to contradict itself. As we now know, 31 people were convicted for criminal conspiracy, while 63 were acquitted. Significantly of the 63, there were two people, Maulvi Hussain Umarji and the then president of the municipality, Billal Hussain Kalota, who were accused to be the main conspirators. If your main conspirators are innocent, how can you have a conspiracy?

As it happens, the whole Godhra story is shrouded in confusion, with three theories emerging from the scenario. The first theory is that the fire started from inside the coach. This is not entirely implausible, because the coach was grossly over-crowded and on a long journey many people travel with stoves and beddings which make for a lethal combination. The second is that the conflagration began after a spontaneous fight erupted between the Hindu kar sevaks on the train and Muslim vendors on the platform, a culmination of days of tension between the two. In this confrontation, stones and burning rags were thrown and the latter started the fire in the compartment. The third theory is that the burning of the compartment was a result of a pre-planned conspiracy.

The court has upheld the last theory even while freeing Umarji and Kalota. This is the theory that suits the Modi-led BJP government, as the crowing reaction of a party spokesman to the verdict showed. It suits the party because it acts as some sort of justification for the days of state-abetted carnage that followed in Gujarat which killed 1,800 people. This is also the theory supported by the Nanavati commission appointed by the Gujarat government in 2002.

A second commission headed by another former Supreme court judge (UC Banerjee), which was appointed in 2004  by Lalu Prasad as railway minister when the UPA government came to power in Delhi, contradicted this saying that the fire in the coach started accidentally from inside. It based its findings on forensic evidence and accounts of railway officials and eyewitnesses who deposed before it. This particular theory has been supported by a number of journalists who were in Gujarat at that point. One of them was a resident editor of a national daily and till today he reiterates that railway officials present at the Godhra station on that day told him that there was absolutely no possibility of a conspiracy.

Who does one believe? Does the truth bend with your political affiliations? Shouldn't judicial findings be based on facts which are not coloured by prejudices? Whatever the answers to these questions, one fact is incontrovertible: 55 of the 63 people acquitted were denied bail for the duration of the trial, which was an agonisingly long nine years. In short, 55 innocent people lost nine years of their lives, years which no compensation can return. Careers, reputations and families have been shattered. Who is responsible for this? The police who insisted on denying bail? The prosecutors who fought for this denial? The judiciary which acceded to these requests?

As it happens the Godhra court's verdict relies heavily on the confessions of the accused included those later retracted. Shouldn't the court have looked into the value of confessions obtained in jail? You can't ignore what happened in Malegaon. There young Muslim men were made to confess to a crime they did not commit. Nine of them have spent more than four years in jail and the only reason they are now free is because Swami Asimananda had a change of heart and confessed that it was a group of RSS pracharaks who were behind the attacks.

You might well ask, why does our system go so far out of its way to be fair to a known foreign terrorist like Kasab, while terrorising its own citizens with a perverted justice? It's a question loaded with irony for us, but full of tragedy for those falsely implicated in crimes they did not commit.

Anil Dharker is a Mumbai-based author and columnist

The views expressed by the author are personal





We all are vulnerable to faux pas. But what leads to such oversights? Could it be ageing or just a bad day? We don't know. But certain memorable ones, especially made by leaders of international and national repute, make for interesting stories.

Believe it or not, India's first Prime Minister Jawaharlal Nehru once handed over an empty envelope to Lord Mountbatten, the last governor general of British India. The packet was supposed contain the names of those who were to be sworn in as ministers of independent India's first cabinet!

In the mid-1960s, the hot topic of discussion in diplomatic circles was the secession of the African province of Katanga in Congo. President Mobutu Sese Seko staked his claim to Katanga. But in cocktail circuits, American diplomat John Kenneth Galbraith found inebriated diplomats often describing Katanga as the man and Mobutu as the province.

Krishna Menon, India's most valuable speaker in the United Nations, made history when he spoke for eight hours at the Security Council defending India's position on Kashmir. He reportedly would take sleeping pills at night to induce sleep and 'wake-up' pills to stay awake during the day at the United Nations. Once, he took the wrong pills and the result made international news.

Sometimes even our venerable and serious judges also fall prey to such errors of the mind. And sometimes they take such memory lapses too seriously. Once a judge of the Bangalore high court, who we will not name, took a wrong turn at the traffic signal while driving to his workplace. But instead of finding the right way to the court complex, he returned home and resigned from his post.

More on lawyers: a celebrated advocate once forgot his client's name and started arguing in favour of the accused. While everyone in the court was trying to figure out what had happened, the advocate was not one to be caught on the wrong foot. He displayed stupendous presence of mind and told the judge: "My Lord, I was putting up the likely defence of the accused before arguing for my client against these possible attacks." Have you ever heard a better cover-up by a lawyer than this one?

PC Sharma is a member of the National Human Rights Commission and former director of the Central
Bureau of Investigation. The views expressed by the author are personal




T tion c wo Indian scientists -- Ajay Anil Gurjar and Siddhartha A. Ladhake -- are wielding sophisticated mathematics to dissect and analyse the traditional medita- chanting sound `Om'. The `Om team' has published six tion chanting sound `Om'. The `Om team' has published six monographs in academic journals, which plumb certain acoustic subtlety of Om that they say is "the divine sound".

Om has many variations. In a study published in the Inter- national Journal of Computer Science and Network Security, the researchers explain: "It may be very fast, several cycles per second. Or it may be slower, several seconds for each cycling of [the] Om mantra. Or it might become extremely slow, with the mmmmmm sound continuing in the mind for much longer periods but still pulsing at that slow rate." The important technical fact is that no matter what form of Om one chants at whatever speed, there's always a basic `Omness' to it. Both Gurjar, principal at Amravati's Sipna College of Engineering and Technology, and Ladhake, an assistant professor in the same institution, specialise in electronic signal processing. They now sub-specialise in analysing the one very special signal. In the introductoy paper, Gurjar and Ladhake explain that, "Om is a spiritual mantra, out- standing to fetch peace and calm."

No one has explained the biophysi- cal processes that underlie the `fetch- ing of calm' and taking away of thoughts. Gurjar and Ladhake's time-fre- quency analysis is a tiny step along that hitherto little-taken branch of the path of enlightenment. They apply a mathematical tool called wavelet transforms to a digital recording of a person chanting `Om'. Even people with no mathematical back- ground can appreciate, on some level, one of the blue-on- white graphs included in the monograph. This graph, the authors say, "depicts the chanting of `Om' by a normal per- son after some days of chanting". The image looks like a pile of nearly identical, slightly lopsided pancakes held together with a skewer, the whole stack lying sideways on a table. To behold it is to see, if nothing else, repetition.

Much as people chant the sound `Om' over and over again, Gurjar and Ladhake repeat much of the same analy- sis in their other five studies, managing each time to chip away at some slightly different mathematico-acoustical fine point. The Guardian






A Union budget reflects one year's priorities and spending. But there are longer-term trends to the 2011 Budget statement too, that need to be flagged. There are definite indications of the way in which India is changing and developing as a country and as a polity. Consider this: the allocation for education has been increased by 24 per cent. Sarva Shiksha Abhiyan, of course, is to be expanded. with 40 per cent more. Yes, there are problems with the mechanism of the Right to Education, but there is a larger point to be seen here, too. A point that becomes plainer when we look at the health sector: Plan allocations for health have gone up by 20 per cent, with a corresponding jump in non-plan expenditure, too.

Is India is becoming the sort of country it hoped it could become? According to the ministry of finance, the allocation for the social sector in this budget is Rs 1,60,887 crore. As a bit of perspective, the defence budget is Rs 1,64,415 crore. (Almost Rs 70,000 crore is capital expenditure, and even if a large proportion of that is committed liabilities, that still leaves wiggle room for expenditure.) Defence is not up in real terms, since it has increased by 11 per cent, not that much below the sum of inflation and real growth — and, in any case, what was holding back defence was not the allocation but an unwillingness to buy.

There is little doubt that a changing, growing, maturing India is reflected in these numbers. Perhaps even an expanding conception of where the country stands in the world and what it owes to itself. In a very real sense, the entire trajectory of India's development has shifted. Of course, the delivery mechanism is a work in progress. But the larger point, that India is becoming the kind of country that takes on the concerns about its own people that major countries should, is worth flagging.






Union Budget 2011 has many positive elements, is low on bad ideas and pushes the reform agenda ahead. Finance Minister Pranab Mukherjee focused on implementing the many promises made by the UPA in previous years. This bodes well as the pending reforms on the government's wish list will take plenty of time and effort if they are to be seriously implemented. There is an attempt at fiscal consolidation and controlling expenditure, though there remains the risk that oil prices may make these calculations go haywire. The changes to direct taxes are welcome. The exemption limit needed to be raised to take account of inflation, and the corporate surcharge had to come down. On indirect taxes, the minister did not propose a GST but has taken steps toward the implementation of a GST in 2012. The government will also remain on track on the disinvestment agenda.

What characterised the budget speech, on this 20th anniversary of reform, was the announcement that the unfinished reform agenda would, on many fronts, be completed. To enable the GST, the finance minister said he proposed to introduce a Constitution Amendment Bill in this session of Parliament. He also announced a pilot project with 11 states, using the IT system that is being set up, during this year. Similarly, a large number of financial sector bills are pending. The minister announced that he would move bills such as the Insurance Amendment Bill, the LIC Bill, the revised PFRDA Bill, the Banking Laws Amendment Bill (to allow the Reserve Bank to grant banking licences to private-sector players), the SARFAESI Bill, etc. He proposed to introduce the Public Debt Management Agency of India Bill this year, which would enable the setting up of a Debt Management Office. This has been on the agenda for nearly two years but not much progress has been made beyond setting up a middle office.

The subsidy bill of the government was a budgeted Rs 1 lakh crore for 2010-11. However, the revised estimate shows that the subsidy bill crossed Rs 1.5 lakh crore. The largest element of the subsidy bill that went beyond the budget was the petroleum subsidy. It rose from a budget estimate of Rs 3,108 crore to a revised estimate of Rs 38,386 crore. The food subsidy bill rose from an estimate of Rs 55,578 crore to a revised estimate of Rs 60,599 crore. The fertiliser subsidy bill was estimated to be Rs 49,980 crore, but turned out to be Rs 54,976 crore. The three put together accounted for an increase of nearly Rs 50,000 crore beyond estimates. The risk for the coming year, 2011-12, when oil prices could rise, is large. This could push government expenses beyond budget estimates. One of the most important announcements that could have significant long-run impact is the announcement of the direct transfer of cash subsidies for kerosene and fertilisers to those below the poverty line. As has become apparent, the kerosene subsidy is used to adulterate diesel, and fails to reach its intended beneficiaries. Instead of selling kerosene cheap, if it is sold at market price and the subsidy is given as cash to the targeted group, the poor will benefit, the subsidy bill will come down and the oil mafia could be sidelined. The budget proposes the first step towards a direct transfer of cash subsidy. Once the mechanisms for such cash transfers are put in place, the template can be used for food subsidy.

The budget for 2011-12 has moved ahead on opening up India's capital account. While no announcement has been made on foreign direct investment, the FM announced that discussions are under way to further liberalise the FDI policy. However, on foreign portfolio investment, important announcements have been made. The recommendations of the finance ministry's working group on foreign investment, headed by U.K. Sinha, have been implemented. These include opening up the rupee-denominated corporate debt market to FIIs. The limit on purchase of bonds of infrastructure companies has been increased from $5 billion to $25 billion. This means that the limit for FII investment in corporate bonds has suddenly jumped from $20 billion to $40 billion. A doubling of FII investment in corporate bonds will help both the development of the corporate bond market, and India's infrastructure funding needs. Foreign investors have also been permitted to invest in Indian mutual funds. While currently FIIs and sub-accounts are allowed to invest, the FM announced that other foreign investors who meet Know Your Client norms will also be allowed to invest. These are significant steps towards greater capital-account openness, and will attract long-term capital into the country. And given the legislative support needed for the FM to keep his promises, the budget can be as ambitious as the budget session of Parliament allows itself to be. The UPA's floor managers have their work cut out.






As Finance Minister Pranab Mukherjee presents the Union budget today, he will be held to promises from previous budget statements that remain unfulfilled. Among those, the most important one that stands out as having been postponed year after year is the Goods and Services Tax (GST). The implementation of the GST requires setting up of a goods and services network and mapping out the way from a pilot to a steady state. The Technology

Advisory Group for Unique Projects headed by Nandan Nilekani has already submitted its report on the steps that need to be taken on the implementation of this complex project.

Earlier budget promises include setting up of the Debt Management Office (DMO), or the

National Treasury Management Agency. While the UPA government announced the NTMA and set up a middle office for the DMO, very little progress has been made. The finance ministry's internal working group on debt management provided detailed steps for incubating the project, setting up IT systems, creating databases on debts and contingent liabilities and transferring the functions from RBI to NTMA. But it has been two years and this has not been implemented. The NTMA can be critical in bringing down the cost of government borrowing, very crucial at a time like this when the fiscal deficit is high and rising.

An Expenditure Information Network that can track government expenditure better is still pending. The existing system of government expenditure has enormous limitations. For example, measurement of plan implementation is on the basis of outlay rather than outcome. As the government follows hierarchical and multiple patterns for allocation and release of funds to the implementing agencies and beneficiaries, it is impossible to track the flow of funds to actual beneficiaries. It is equally difficult to evaluate the performance of agencies based on spending and project

implementation. The pension bill too is pending. The New Pension System suffers from many other problems as well. The finance ministry must not postpone steps towards convergence of all pension and provident fund streams, rationalisation of tax treatment of NPS to provide an even treatment with other retirement products and providers and creating awareness among subscribers.







India has had five finance ministers since 1991 — Manmohan Singh (1991-96), P Chidambaram (1996-98, 2004-08), Yashwant Sinha (1998-2002), Jaswant Singh (2002-04) and Pranab Mukherjee (2009 onwards). The brief inter-regnum between December 2008 and January 2009, when PM also held finance portfolio, doesn't count. It has been 20 years since reforms. The code used for July 1991 was "hop, skip and jump", better known as triple jump.

In triple jump, as one progresses from hop to jump, distances covered increase. In 20 Budgets (ignoring interim) since 1991, FMs have sometimes hopped, sometimes in the same place. Rarely have they skipped, and jumps are rarer still. There have been two clear jumpers. The first has to be Manmohan Singh, though Yashwant Sinha claims he would have been the original reformer, given a chance.

But Manmohan Singh will be remembered as the original reformer and we will continue to associate lower import duties, opening up to foreign investments, end of industrial licensing, rupee convertibility and beginnings of service sector taxation with him. That was a big bang, at least till 1993, and it was an idea whose time had come. The second jumper was Yashwant Sinha and he never quite got his due as FM. He wasn't a jumper because he moved Budget presentation from 5 PM to 11 AM, but because he cleaned up excise duties. What Manmohan Singh did for import duties, Yashwant Sinha did for domestic indirect taxes, paving the way for VAT and an eventual GST. There was FRBM too.

Jaswant Singh was a hopper and left no clear legacy, barring reduction in interest rates that triggered higher GDP growth from 2002. P Chidambaram was a mixed bag. There was the dream Budget during United Front. It lowered direct tax rates. However, there were three reasons why P Chidambaram hopped backwards. First, he also cluttered up direct taxation, by taxing items that weren't income. Second, in both his stints, he was associated with increased expenditure and widening deficits. Third, he resorted to sleight of hand in reporting deficit figures.

Where does Pranab Mukherjee fit into the hop-skip-jump category? Before that, Mukherjee is pre-1991 vintage, as FMs go. He was FM from 1982 to 1984, and according to Euromoney, was voted best FM in 1984. Nor is the style flashy. Manmohan Singh's style isn't flashy either, but opportunity to flash presented itself in 1991. What has Pranab Mukherjee done so far? His reporting of Budget numbers is more honest. The offensive FBT and CTT (legacies of P Chidambaram) have gone. What do we expect India's next jumping FM to do? First, we want tax exemptions to go.

We want tax rates to be standardised and unified. That's a pending agenda in DTC and GST. We want that jumping FM to stand up and say that this will be the last Budget, because tax rates won't change from year to year.

Pranab Mukherjee hasn't done that so far (not even on 28 February 2011) and let's not pretend this is because there is lack of consensus on DTC and GST and both have been effectively postponed till 1 April 2012. There's more to it than that. Both on DTC and GST, removal of exemption clauses have been diluted.

There is yet another thing we can expect a jumping FM to do, since Budgets are about Central government's annual receipts and expenditure. We can expect a focus on improving efficiency of public expenditure. Both P Chidambaram and Pranab Mukherjee, during UPA-I and UPA-II have presided over increases in public expenditure. Chidambaram talked about an outlay-outcome exercise that vanished like the smile of the Cheshire cat.

It was a bad exercise to start off with, because social sector outlays-outcomes are determined at level of states, and even lower down in government delivery machinery. Until a FM has guts and political support to stand up and say that Central ministries and/or departments will be abolished, Central schemes scrapped and funds directly transferred to ULBs/PRIs, we won't get far on that. Then the artificial distinction between Plan/Non-Plan and Revenue/Capital will also cease, without having to refer it to C Rangarajan.

But in the Budget for 2011-12, that didn't happen. It's premature.

Yet a nagging question remains. Is present FM far more astute than one gives him credit for? Is it about more than flashiness in style and pre-1991 vintage? Surely, FM knows perfectly well that such speeches, without clear focus and agenda, don't convey any significant message. In a speech that lasted 1 hour and 45 minutes, we got down to nitty-gritty of the Budget in last 20 minutes, not earlier. Before that, there was a plethora of schemes, with token sums allocated. A few small-ticket reforms were thrown in, but without any highlighting and interspersed with irrelevant trivia.

Admittedly, big bang reforms should occur outside Budget speeches, though since 1991, one often looks for these in Budget speeches. Barring Jaswant Singh and Pranab Mukherjee, all the other three FMs had big bang policy announcements that didn't materialise later. Present FM seems to be conscious with two agenda items. First, make Budget irrelevant by shaving off big bang reforms from it. Second, satisfy everyone with a plethora of schemes, so that no one remembers a focus. You make no one happy, but you don't make anyone particularly unhappy either.

While the world concentrates on what it gains on direct taxes, it doesn't notice what it loses on indirect taxes. That's a stealthy way of making Budget irrelevant. It is perhaps hopping of a different kind. But it isn't a legacy that will be remembered. For jumpers a la Manmohan Singh or Yashwant Sinha, we will have to wait for a new generation of FMs.

Manmohan Singh was 58 in 1991. Remember that the definition of senior citizen has now been lowered from 65 to 60. We won't have the jumper until a non-senior citizen presents a Budget.

1 hour 45 minutes

The total time taken by the FM to deliver the Budget speech. However, only the last 20 minutes had any substance

Since 1991

One often looks for big bang reforms in Budget speeches. Barring Jaswant Singh and Pranab Mukherjee, three FMs, from 1991 till now, had big bang announcements that didn't materialise








A lot of very smart people will spend a lot of time explaining to you what the budget means for our economics. If you're not a policy junkie, you might well lose interest once you know your tax bill hasn't changed much. What should interest you, even so, is what it means for our politics.

Indeed, that statement could be a bit vaster: what should interest you is what an entire sweep of budgets past imply about India's future. What they imply about the transformation of who we think we are, and what we expect our state to be.

Why? Well, we've just come off a tough year, financially, in which the Centre's exchequer held on to respectability almost entirely thanks to the unexpectedly large amount that 3G auctions raised. Things were so tight that everyone hoped and expected that the government would tighten its spending. And, indeed, Finance Minister Pranab Mukherjee tried hard to get numbers into the budget documents that look like the Centre's overall deficit will be reined in.

Yet it is fascinating to note where he has not chosen to cut corners. Whichever accounting tricks may emerge, consider those foregone: he kept his promise that the old "off-budget" expenses, oil and fertiliser bonds, would be reckoned as part of the main deficit. There was a point beyond which the government realised such sleight-of-hand would not fool people, and that point was passed some time ago.

But more than that, the government's social-sector schemes haven't been cut. They've been expanded. Now, briefly, listen to the budget chatter. Do you hear howls of outrage from opposition politicians? Concern from UPA allies? Cautionary remarks from the Congress's boringly omnipresent complainers? No. Think about that for a moment.

According to the government's own estimates, the amount that is being spent on the social sector has almost reached the defence budget for this year, rising solidly through good times — and, now, bad. And it has, in the process, become part of the mainstream of our political thinking, across party lines. The Communists were hardly likely to object to greater spending. State-specific parties, too, can now innovate policy without running to the Centre for help. And, most astoundingly, what is supposed to be our right-wing party isn't up in arms, either. In fact, quite the opposite: BJP-ruled states instead trumpet how much better than Congress-ruled states they are at creating and implementing welfarist programmes. Whatever else the UPA's leadership may have fumbled in the years since 2004, here is its one great political success: jolting our politics into a new rut, one in which the state's performance in the social sector is no longer a distant afterthought.

It reflects, too, a changing India: one that expects support from the government, not just "concessions" — that lovely India-specific policy word which used to be trotted out regularly at budget time. An India that begins to believe that investing in itself, and in those that are less fortunate — bringing them, even if infuriatingly slowly, closer to the benefits of 20 years of reform — is something that we can and should do. We should be thankful for this alteration. It is, indeed, a recognisable change, a maturation that many societies have gone through, passing a point where ownership begins to be asserted by citizens over the state. Your government stops being seen as a distant antagonist, or a deus ex machina that emerges if propitiated. If you give people ownership rights over something, they treat it differently.

This budget reflects how the old mai-baap state is dying. Not just in that exemptions and concessions will someday soon become irrelevant, but also because it reflects two policy directions that have impacted our politics, and the nature of our citizenship. Framing the responsibilities of the state in terms of citizens' entitlements, for one, has changed the rules of the game, enabling that ownership of which I spoke. You no longer beg to be noticed; you have the right to be served.

The other policy tweak is in the nature of our spending. Consider insurance and health: they are an interaction between the state and an individual. Consider schooling: between the state and an individual. The NREGA is between the state and a household — though it, too, is drifting towards becoming an individual entitlement. Subsidies and transfers are inexorably moving away from classes and groups to individuals, cutting away the layers through which government benefits used to flow, which siphoned them off, and more importantly, even, replicated the patterns of power and of dominance which independent India was supposed to destroy. The UID, seen that way, is not just a technocratic intervention, but something deeper and grander.

So if you want to step back from post-budget noise, fine. But don't step away. For this emerging and maturing idea of India is one some of us could get behind, an India that knows what it owes to itself.

To paraphrase Martin Luther King, and of course Obama: the arc of India's politics is long, but it bends towards justice.







You can't get more ambitious than this. Finance Minister Pranab Mukherjee expects that the total expenditure will grow by a meagre 3.38 per cent, or just Rs 41,153 crore in absolute terms, in 2011-12 compared with what the government spent in 2010-11. In real terms — even if one accepts the minister's estimate that average annual inflation rate for the next year will be 5 per cent or so — then the government's expenditure is actually shrinking. If Mukherjee manages to control government expenditure in such a brilliant fashion, he certainly deserves kudos. But I'll wait till he presents his supplementary demand for grants during the year.

For the record, the government is spending Rs 1,92,089 crore more in 2010-11 than the previous financial year. In fact, Mukherjee overshot his budget estimate of total expenditure for the current financial year by Rs 1,07,827 crore. Subsidies, pensions and loans to PSUs — which are not really productive expenditure — account for a bulk of the increase. They add up to Rs 64,000 crore, or almost 60 per cent of the increase. Much of these additional expenses are not related to the fiscal stimulus the government was providing to the economy over the past two years. These are spends that reflect on poor management of finances.

Going ahead, given the rise in global crude oil prices due to a volatile and still simmering political milieu in West Asia, there is little to suggest that subsidies on petroleum products or fertilisers would be any less in the coming financial year. The current trend in global food prices also do not provide any room for cuts on food subsidy. On the contrary, enactment of a law on food security — which Mukherjee has promised in the budget — may only increase the subsidy burden of the government.

Next fiscal, he hopes to cut non-Plan expenditure by Rs 5,370 crore but projects Plan spends to increase by Rs 46,523 crore. Mind it, items like subsidies and pensions are part of non-Plan expenditure. This raises doubts about Mukherjee's ability to keep a tight leash on expenditure. A buoyant economy, estimated to grow by over 14 per cent in nominal terms, has helped him project an almost 25 per cent rise in gross tax receipts. So, the finance minister has boldly projected that the fiscal deficit will be 4.6 per cent of GDP in the next financial year.

Any finance ministry will take umbrage if anyone suggests the numbers are dressed up. But what Mukherjee has done deserves appreciation. Given the robust economic growth rate of 8.6 per cent expected this year (18-19 per cent nominal growth rate), he could have easily projected a fiscal deficit of 4.8 per cent of GDP in 2010-11. He seems to have consciously chosen to peg it at 5.1 per cent, clearly building a cushion for himself. In absolute terms, this translates into extra resources of almost Rs 27,000 crore. Moreover, inflation, almost certainly, is unlikely to average at 5 per cent as estimated. So, a higher nominal GDP growth rate will bring him more revenues. The buoyancy in tax receipts, for sure, will be more than the 24.9 per cent he mentioned in his speech.

In a nutshell, Mukherjee has presented an expenditure budget for 2011-12. His tax proposals don't bring him any extra money. There is an upside on the revenue front, but a sharper downside on the expenditure front.







V.S. Naipaul's "million mutinies" play out ever so often on the India stage, exposing its much vaunted democracy as a work in painful progress and, as he put it, a maelstrom of "disruptive lesser loyalties". We are seemingly headed there now, as "lesser loyalties" create political, social and economic disruptions across the country. It is the kind of moment when the question of what really unifies this country acquires prominence in conversation and thought. Well, here's a thought: it is cricket. There is no other adhesive that compacts the Indian identity into some semblance of uniformity; not language, religion, customs, food, dress or economic and social equality. Cricket — not sport, mind you — is the only common denominator, the one single issue that the man from Kanyakumari and his counterpart from Kashmir will have in common. Whatever the cultural differences, cricket fans have their own code of communication that transcends language.

Even Bollywood doesn't rate as a common cultural touchstone. Down south, cinema occupies another dimension and has a different cultural underpinning. Classical music and dance could come closest to a common cultural identity but it does not arouse any fierce passion or sense of patriotism. They also lack the necessary commercial accompaniment, so vital in an age when success and money are conjoined twins. Cricket has become a repository of the national ego, our place on the world stage celebrated with greater national pride than the possession of a nuclear arsenal, A.R. Rahman at the Oscars or 9 per cent GDP growth. Sport everywhere is undoubtedly a major carrier of national identity but in India, our embrace of cricket is much more; it transcends into a national obsession that often crosses the boundary into jingoism when an international tournament gets under way.

That's understandable if it is an India-Pakistan encounter. The intensity of that sporting rivalry devolves as much from the common cricket culture that unites the two countries as from the history that divides them. However, the hype and hysteria surrounding the

Indian team and the ongoing World Cup has an aggressive intent that is almost akin to going to war, or war minus the shooting, as George Orwell once put it in reference to sport at the international level. In his essay, "The Sporting Spirit", he blamed it on the attitude of the spectators and even countries who seriously believe, for that moment, that sporting contests like the

Olympics or football World Cup, are "a test of national virtue". In our case, the war is led by TV channels and World Cup-related advertising that have raised the anticipation of an Indian victory to such a pitch that anything less will count as much of a failure as UPA's second innings. Here's how historian-novelist Mukul Kesavan views our obsession with the game. "The terrifying thought is that if cricket loses its credibility people will still watch it — not the sport but the spectacle. The one-day game may have revived cricket but the result is that we live with cretinous spectators who demand constant thrills."

More serious, support for Team India in the World Cup is almost being equated with patriotism which, unlike the Tebbit test suggested for England's immigrants, puts huge and unfair pressure on not just the Indian team but anyone who doesn't paint their face in Tricolour, wear the India blues and gyrate like Prabhu Deva each time an Indian player scores a boundary. It was never like this. Earlier World Cups carried the hope of a nation but minus the hype. In his book The States of Indian Cricket, Ramachandra Guha brings back fond recollections of an era when cricket was a peripheral pastime and not the 24/7 soap opera it has become, a national obsession and a hyper-aggressive, sexed-up arm of the TV industry. He writes of a time when cricketers were rarely seen or heard outside the cricket field, and even rarer to find them displayed on the front pages of newspapers and in prime-time headlines. Another cricket authority Mike Marqusee had this to say about Indian cricket: "I saw cricket installed at the heart of a burgeoning popular culture, subjected to all the pressures that come with that status. And over the years I've seen cricket unfold its wonderfully pointless essence in the myriad forms that only a society as vast and diverse as India can generate."

Today, nothing brings us together with as much passion as cricket. There is also so much money riding on the game and its practitioners that its commercial value only adds to the hoopla. There is also the fact that India now rightly claims to be cricket's global epicentre, boasting its largest commercial potential and widest social base. Yet, as Marqusee once commented: "For years, Indian cricket's brain has been befuddled by an indigestible cocktail of parochial pettiness and delusions of global grandeur." That has, unfortunately, given it an exaggerated status that is out of sync with its potential as a symbol of national unity. That, sadly, is ultimately a reflection of the limited issues that really unite us as a country. The increasing divisiveness of today's politics is merely a reflection of the growing divide in Indian society in general. The assertion of an Indian identity, cultural nationalism and emotional commonality are all rooted in cricket, to the exclusion of anything else.

Here's another thought. The jingoistic drum-beating we are currently witness to would not exist if it wasn't for that surprise World Cup win in 1983. Everyone knew it was a victory gained against all odds but that is conveniently forgotten in the rush for TRPs and sponsors and advertisers seeking to tap into the perceived national mood by endless repeats of that historic feat. The result is that the macho aggressiveness on display has taken India's chances of winning the 2011 World Cup to unreal heights, ignoring form and competition and the weight of history.







The finance minister rose to present the budget against a backdrop of "a deficit in governance and lack of public accountability". He also added that there were structural supply-side constraints that were holding back growth in agriculture and which needed to be addressed if the country was to get back on to a more sustainable growth path. In addition, the major macroeconomic issues facing the country have been high inflation, particularly in food, and now high interest rates.

However, the budget he presented did nothing to fundamentally address these issues. At a macro level, GDP is expected to grow by 9 per cent next year after 8.4 per cent this year, but it is not entirely clear where that will come from; agriculture has already benefited from a good monsoon and the base effect this year. Industrial growth and services will really have to ramp up, against a backdrop of mounting inflationary expectations and increasingly high interest rates. While the savings rate may support this assumption, whether we can maintain our capital productivity in light of the heightened friction in the economy is highly questionable.

Distressingly, the fiscal numbers achieved for the current year, despite the 3G auction revenue are 5.1 per cent. Take out the auction benefits and it is clear that the target would have been underachieved. In addition, the target for the next financial year is 4.6 per cent, leaving a net borrowing target of Rs 3,43,000 crore, or roughly $85 billion. While this is less than last year, given the already constrained liquidity in the system on the back of RBI monetary actions to curb inflation, this could be a challenge and will definitely lead to the crowding out of private-sector resources. The finance minister has sought to address this issue by encouraging the flow of foreign funds into the corporate debt market by increasing the limit from $5 billion to $25 billion. The finance minister has also sought to encourage the flow of foreign institutional money into mutual funds. But other than this, and raising the limit for the issuance of tax-free bonds, there is little for infrastructure as a sector. Housing, power, roads, communication, urban infrastructure do not find any real incentives.

The finance minister spent considerable time on the introduction of the Direct Tax Code (DTC) and the Goods and Services Tax (GST) and a host of other financial legislations. While all this is critically important for industry and the country as a whole, it did not really add anything new to the debate about what can be done to structurally reduce inflation and interest rates. On the direct tax front, the marginal increase in the exemption limit will add a small amount to the taxpayers' pocket but there were no other real goodies. At the aggregate level, the finance minister decreased direct tax revenues by Rs 11,000 crore while increasing indirect taxes by Rs 7,000 crore and widened the service tax net to garner another Rs 4,000 crore. Net net, therefore, there is no real accretion to the government on account of tax receipts. The FM has budgeted a divestment target of Rs 40,000 crore against last year's achievement of Rs 22,000 crore. This looks ambitious, given the current state of the capital markets and given that we have seen net FII outflows since January. Remember we only achieved Rs 22,000 crore when we had FII inflows to the tune of $29 billion.

From a capital markets standpoint, again the good news was that there was no bad news. Given the political scenario, markets had been sensitised to expect a sharp rise in welfare spending and a higher deficit and borrowing number. When that did not materialise, markets reacted with a brief relief rally.

Unfortunately, on the micro-reforms front, which is ultimately what contributes to the macro numbers, there were no helpful steps. On control of inflation, the finance minister did speak about mega food parks and encouraging some supply-chain activities such as increasing storage of foodgrains but left out an overhaul of the Agriculture Produce Marketing Act or steps in that regard, as it is a state subject. The likely mention of openness to foreign capital in the sector was left out. In fact, FDI did not find mention really anywhere in the budget — whether in the area of insurance, retail, defence, media or education. Presumably, the finance minister believes that foreign portfolio flows are more suitable or less politically contentious than longer-term funds.

The area that disappointed was the social sector. There is a 17 per cent increase in allocations to all welfare schemes but given that nominal GDP growth is at the same level, there is no real increase in allocations. While education received an increase of 24 per cent, healthcare got an increase of 17 per cent.

In all of this, the finance minister stayed true to his conservative image. There was nothing path-breaking in this budget — no visionary or bold strokes with which to excite, and certainly nothing specific to deal with the big issues of the day — most importantly inflation, which will gnaw away at the vitals of our growth aspirations. It is also not entirely clear how the finance minister will stay true to the 4.6 per cent fiscal deficit target given the overshoot of last year, in which the 20 per cent increase in nominal GDP worked so much in his favour. An invocation to Indra certainly will not do the trick.

The writer is chairman of SaVant Advisers, Mumbai







How many Oscars will the finance minister's speech win? At best, it will win a prize for best adapted screenplay for social sector (and network) focus. If one was looking for a big bang, such as FDI in multi-brand retail, there isn't one. Budget 2011-12 is a spillover of Budget 2010-11.

The Economic Survey talked about real GDP growth of 9 per cent (within a 0.25 per cent margin) and the speech repeats this, with an assertion that the economy has returned to pre-crisis levels of growth. Growth of 8.6 per cent in 2010-11 may flatter to deceive, since growth in the first half of 2010-11 was 8.9 per cent. The budget projects 14 per cent nominal GDP growth in 2011-12. That's lower than the almost standard 14.5 per cent. If growth is going to be 9 per cent, a figure also endorsed by the PM's Economic Advisory Council, GDP deflator-based inflation is 5 per cent. That's too low. Inflation is no longer a food price issue. It extends to manufacturing and petroleum products too. Thus, a GDP deflator-based inflation of 6.5 per cent is more likely and the budget probably tacitly accepts slowdown in growth to 8 per cent, if not 7.5 per cent. In other words, a switch from public consumption to private investment and private consumption is not guaranteed.

In this, and in deficit numbers, there is disconnect between the budget and the survey. The survey provided a fiscal deficit/GDP of 4.8 per cent in 2010-11. The budget says 5.1 per cent. Where did the missing 0.3 per cent go? Had fiscal deficit/GDP been 4.8 per cent in 2010-11, budget estimates for 2011-12 would have had fiscal deficit/GDP of 4.3 per cent in 2011-12, unlike 4.6 per cent mentioned.

Therefore, the budget probably provides slack for some fiscal slippage, because of three reasons. First, 2010-11 benefited from high nominal GDP growth that boosted the denominator, a phenomenon that might not continue in 2011-12. Second, food security has not been budgeted for. Third, notwithstanding the disinvestment target of Rs 40,000 crore, it is possibly recognised that non-tax revenue might be lower in 2011-12 than in 2010-11.

Having said this, the budget is fundamentally not about big bang, but about taxes and expenditure. Big-bang policy changes are necessary to correct an impression of permanent policy paralysis (PPP) characterising UPA II, but that is best done outside the budget. This is India's 80th budget. To use this year's budget's nomenclature, it has become a very senior citizen (VSC). Notwithstanding increases in life expectancy, budgets (and hype over them) must die out. The budget must become irrelevant. Taxes and expenditure must both become predictable and standardised, with no yearly variations. Once that happens, budgets can become public documents, debated in public before the Finance Bill is passed. That's what happens in many developed countries. Unlike transient vagaries of Indra, we then rely on a more permanent Lakshmi. But for that to occur, FMs must let go and eliminate discretion.

So one test of a budget is whether we are headed that way. Take direct taxes. Exemption limits attract attention, but are irrelevant from the big picture point of view. We will have the Direct Tax Code from 2011-12. Because of increasing demand for public expenditure, tax/GDP ratio must increase to around 22 per cent. That can only happen through removal of exemptions. If we are convinced that we will be able to get rid of exemptions, why do we have MAT (minimum alternate tax)? Markets are delighted, because they expected MAT to increase to more than 18.5 per cent and had also factored in increases in excise and service sector taxation rates. But the point is different. With MAT, we are making it more difficult to remove exemptions from April 1, 2012. It would have been better to reduce MAT and not lower corporate tax surcharges.

In a similar vein, if filing of income tax returns is going to become easy and compliance costs reduced, why are we excluding some categories of salaried tax-payers from this requirement? Is it because we don't quite believe compliance costs will actually be reduced?

Let's take customs duty as another example. The speech tells us the peak will be 10 per cent and there will be unification at 2.5 per cent, with three rates of 10 per cent, 5 per cent and 2.5 per cent. There have been welcome reductions and some standardisation. But is that invariably the case? Not quite.

There is reluctance to let go of discretion and this is true of expenditure too. Expenditure needs to be decentralised, Central sector and centrally sponsored schemes must be scrapped, artificial distinctions between Plan/ Non-Plan and Revenue/ Capital must go. The budget has effectively passed the buck to C. Rangarajan and Nandan Nilekani. (On the latter, Aadhaar is clearly going to become mandatory and we will get nowhere on this until we have licked the BPL conundrum.) But since budget talks about direct cash transfers for kerosene, LPG and fertilisers, it might as well have announced a negative income tax. Stated differently, a big bang was possible, not for visible items like pensions, insurance, labour market and retail, but for smaller items that fit UPA II's purview. Instead of doing that, why do we have these large number of schemes, with token amounts of expenditure?

Not only are we reluctant to let go of discretion in taxation, we are reluctant to let go on expenditure too. The public expenditure efficiency case would have been far more convincing had there been a ZBB (zero-based budgeting) of schemes and ministries/ departments and if we had been told what was found when 62 government departments undertook the Programme Monitoring and Evaluation System. Does the Centre need to decide salaries of Anganwadi workers, regardless of location?

It's not that there are no trees in this budget — there is self-certification for customs, there are infrastructure debt funds, amendment to the Stamp Act, FII investment in mutual funds and budgetary reporting for SC and tribal sub-plans. There are 13,889 words in the budget speech. It meanders and loses focus. It is not clear what the big picture is. The wood is so large, sprawling and extensive that one tends to miss the trees. But perhaps that is what was intended.

The writer is a Delhi-based economist








Early in his Budget speech, finance minister Pranab Mukherjee spoke of praying to Lord Indra for a bountiful monsoon and to the Goddess Lakshmi as it was a good strategy to diversify risk. To that list of deities he needs to add, more so since he said 3 was a lucky number, Sonia Gandhi's National Advisory Council (NAC) since his amazing expenditure compression (restricting growth to just 3.3% over 18.8% in 2010-11) will go for a toss if the NAC doesn't roll over and die. It's an impossible call even if that happens since the 3.3% growth is lower than even the 5% inflation the Budget assumes for 2011-12! Mukherjee spoke of introducing the Food Bill the NAC has been adamant about, but has made no allowance for this—indeed, his food subsidy Bill is projected to fall marginally to R60,573 crore as compared to the R80,000 crore estimate for the Food Bill by the NAC and the PM's Economic Advisory Council's more realistic R92,000 crore. Which means that Mukherjee either plans to unleash a whole set of delivery reforms—he says the Nandan Nilekani UID-led cash transfers will be in place only by March 2012—or the Budget is in serious danger of going offtrack, much like Ms Banerjee's last Friday.

Though the Budget has many reforms, the deficit is really the key as the first thing that got the markets all excited on Monday was the R3.4 lakh crore government borrowing target. The target is understated as it doesn't include R15,000 crore of advances from RBI and R15,000 crore of recoveries from states, but the real determinant is the deficit—the higher it is, the higher the borrowings, and the greater the pre-emption of funds by the government. One of the keys to a lower fiscal deficit in 2010-11 (5.1% of GDP as compared to the budgeted 5.5%) was one-off events—the 3G auction fetched R70,000 crore more than budgeted for (that's 0.6% of GDP) and revising the GDP from R69,34,700 crore to R78,77,950 crore alone reduced the deficit from 5.5% of GDP to 4.8%—so, Mukherjee's real fiscal deficit, sans the extra 3G revenues, is 5.7% as compared to the 4.8% it should have been. Neither event will re-occur this year.

None of this is to say the Budget doesn't have major positives. Corporate tax levels, as Mahesh Vyas points out, have fallen from 35.9% when the UPA first came to power to 32.1% today and limits for FIIs investing in India Inc's bonds have gone up substantially; the dates for issuing banking licences have been brought forward; allowing foreigners to invest in mutual funds directly is a great opportunity; infrastructure has got a much-needed boost by allowing money to be raised through SPVs, and lowering withholding taxes among others. Greater sops for housing will energise the real estate sector, a major determinant on GDP growth.

That the finance minister has not even given a new time-table for the introduction of GST is disappointing, though he plans to introduce the constitutional amendment Bill in the current session and says the differences with states have been narrowed down considerably. A whole set of reforms are on hold, to be worked out through committees and groups of ministers, though the timeline is not spelt out. This includes one on expenditure reform, on cash transfers, on innovation—a Group of Ministers on environment should please industry no end as it means there will be a larger group looking at their concerns instead of just Jairam Ramesh deciding. Various financial sector Bills are to be introduced, on insurance and pensions for instance, and it does look as if they'll get passed this time around. Again, a big positive for reforms.

The way the markets reacted to the Budget in a sense tells the story best. As the finance minister spoke of his borrowing targets, of his expenditure reduction and the various market-friendly measures, the Sensex rose by 484 points. Later, as the impossibility of some of the targets became obvious, the markets retreated, ending the day up 122 points. The markets found it difficult to believe that, in a government so focused on the aam aadmi, the Budget would be allowed to reduce subsidies by 13%, or that petroleum subsidies could fall 40% from R38,386 crore in 2010-11 to R23,640 crore in 2011-12 at a time when oil prices are expected to soar in the near future (even if the finance minister doesn't include the R1 lakh crore the oil PSUs will shell out on his behalf in 2010-11 and more in 2011-12, the lower figure does look curious).

Whether markets continue to rise over the next few weeks, as the finance minister hopes they will given the plethora of market-friendly measures, will depend of whether they are focused on the Budget's maths or whether they're convinced a fresh burst of reform is in the offing. Watch this space.





Dear God

Finance minister Pranab Mukherjee said he was praying to Lord Indra for a bountiful monsoon and the Goddess Lakshmi for wealth. Since he said 3 was a lucky number for him, he needed to add a third God, in this case, the National Advisory Council to Sonia Gandhi. That's the only way he can stick to his expenditure budget, coincidentally also projected to rise by around 3%.

Popularity is a blessing

Finance minister Pranab Mukherjee is known for his temper as well political acumen, but his Budget speech was delivered in remarkably good humour. The secret of that lay in the fact that as soon as Mukherjee entered Parliament, the treasury benches gave him a resounding round of applause by thumping their desks. After adhering to the party line in the Budget, this applause by his colleagues was perhaps a sign of things to come?

Old age should be the same

Sections in the BJP have dubbed this Budget as the LK Advani Budget since it creates a special category of super senior citizens, that is, those above the age of 80, for whom exemption of personal income tax is up to R5,00,000 per annum. To which another section said that it was basically a conspiracy yet again to keep Murli Manohar Joshi out of the loop, since he was yet to hit 80. Mukherjee was quick to add, while announcing the change, that he had many years to go before he turned 80.

For both ladies and gents

The change in the age for being considered senior citizens has also been tweaked. For men it is 60 years, for women it is 58. This prompted leader of the Opposition in the Rajya Sabha, Arun Jaitley, to say that while he was yet to be considered a senior citizen, leader of the Opposition in the Lok Sabha, Sushma Swaraj, fell in that category.

Didi doodled

Trinamool Congress chief and railway minister, after having presented her own Railway Budget to rapt attention by Pranab Mukherjee, did not bother to return the favour. Throughout Mukherjee's speech she was seen doodling on a writing pad. Mamtadi fancies herself an artist, and was seen showing off her sketches to environment minister Jairam Ramesh.

But kids were keyed up

Pranab Mukherjee's elder son Abhijit Mukherjee was the cynosure of all eyes in Parliament as he turned up along with his sister Sharmistha to watch his father present his sixth Budget as finance minister. Abhijit will be contesting assembly polls in West Bengal this time round, explaining the attention he was getting from all.

And 3 was lucky

Pranab Mukherjee explained away his predilection for granting R300 crore for several programmes as a fondness for the number 3. This prompted one Opposition leader to claim that "finally Mukherjee has realised his place in the government, he is number 3, after Sonia Gandhi and Manmohan Singh."





For the first six years of its tenure, the UPA government has confidently been in a populist tax-and-spend mode. It assumed that it won in May 2004 because the poor were not being helped by the NDA—and that it won in May 2009 because it went on a spending spree to help the poor. Then came the Bihar election of November 2010. I believe that that election will be remembered as a watershed in Indian economics, and politics.

And it already has had an effect on the Budget.

Before the Budget, there was a lot of discussion as to how much social expenditures will go up and therefore destroy any attempt at fiscal consolidation. No one expected much from this classic tax-and-spend government. And the UPA has had more than six years at practice; each year, surprised by the GDP growth and tax revenues, the UPA government increased social expenditures to such a level that allocations were not being spent!

Until the Bihar elections and high unsustainable inflation for the last three years. After averaging close to 4.5% per annum for the long period 1996 to 2007, inflation has registered above 7% for each of the last three fiscal years. Governor Subbarao more than broadly hinted that there were precious few tools left in the monetary cupboard to attack this inflation; and that a necessary condition for inflation to be brought under control was that the fiscal situation improve.

Now there are two ways by which the fisc can be brought under control. The first method is to increase taxation; the second is to decrease the rate of growth of expenditure. There is a golden third method, one rarely chosen by Indian politicians, especially those belonging to the spend-loving Congress party. It is to not increase taxation, and only reduce expenditure growth. To everyone's surprise, and certainly mine, the finance minister has chosen this third option. It is such a surprise that in informal discussions with experts, the common refrain is—it can't be so, that the government in effect is lying. That is the depths to which the credibility of this government has reached.

My belief is that the government is not lying. And not because I think that nobility is at the core of this government. It is that from Libya to Lucknow and from Cairo to Calcutta, governments have no place to hide, or lie, any more. Before, there was no policeman for the government sector, no authority that could expose governments. Today, technology and civil society and media are the new "police". If you lie through documents like the Union Budget, you will be exposed and lose elections faster than you can say Raja. It is okay to be cynical, but not to be naïvely so.

Let us look at some hard numbers on expenditure in India. In 2009-10, the government had budgeted a total expenditure level of R1,109 thousand crore for 2010-11. What actually happened—the spending level was actually about 10% higher, at R1,216 thousand crore. Revenue growth in excess of budgeted estimates was also 10% higher, so the excess expenditure growth was not felt on the fisc.

For 2011-12, the government has budgeted the following. First, nominal GDP growth of 14.1%, and though the break-up is not given, it should roughly be in the zone of 8.5% GDP growth and 5.6% inflation. The numbers are consistent and seem broadly accurate. Tax revenue growth is budgeted at 18%, which, given a GDP growth of 14%, is also realisable. The reduction in effective tax rates via exemption slab expansion should help compliance and tax buoyancy. But, and this is the key point, total expenditure growth is budgeted to increase by only 3.3%!

A perspective on this expenditure growth is that if realised, this will be the second slowest expenditure growth in Indian history (since 1970-71). The lowest realised growth: 1.5% in 2005-06. In that year, the UPA government was committed to sensible macro policies before the rot set in. The lesson from

Bihar is unmistakeable—good politics is good economics. With their backs to the wall more than any government since 1991 (or before), the UPA government is doing what is absolutely necessary for its survival.

This is not a workmanlike Budget; this is not a conventional Budget. It is radical. It smells of good economics. Expenditures on infrastructure and education have increased. Capital flows have been eased, and investment encouraged. And taxes not increased and a commitment and planning for further disinvestment. It is likely that this Budget is a major turning point in India's fiscal history. In short, a brilliant Budget and one exceeding all expectations. For that, the finance minister and the Budget makers need to be congratulated.

The author is chairman of Oxus Investments, an emerging market advisory and fund management firm





Corporate India has been optimistic on India's growth prospects. A recent pre-Budget survey of 127 CEOs/CFOs conducted for Bloomberg UTV showed that 74% of them are more confident this year than in the previous year, 61% will expand capacities, 68% will hire more this year and more than 80% will invest this year.

CMIE's CapEx survey shows that the investment juggernaut that began in 2004 continues to roll. New investment proposals continue to be made even as the stock of outstanding proposals mount. CapEx shows the value of new capacities that will get created in 2011-12 will be over twice the capacities created in 2010-11.

The Prime Minister's Economic Advisory Council and the finance ministry's Survey have both been very sanguine about the economic outlook—as have been most private agencies.

This was the comfortable backdrop against which India Inc prepared to hear Pranab Mukherjee's Budget proposals for 2011-12. And, the grand old master did nothing to spoil the party, or to exaggerate the possibility of India actually reaching an over 10% growth in the near future.

Nobody really expected a fall in corporate tax rates. But, the FM shaved off 2.5 percentage points (ppt) from the surcharge to 5%. This is the second consecutive year of a 2.5 ppt fall in the surcharge. Between 2009-10 and 2001-12, the total direct corporate tax rate has thus fallen from 33% to 31.5%. When UPA-1 came to power, the corresponding rate was 35.875%. Thus, over its eight-year tenure, the UPA has cut the corporate tax rate quite substantially.

The effective corporate tax incidence, as observed from the annual reports of companies, is always lower than the corporate tax rate, even if we exclude loss-making companies from the computations because of various exemptions companies avail of.

Interestingly, the effective corporate tax incidence has increased even as the tax rate has declined in recent years. According to the Prowess database, in 2009-10, the corporate tax incidence at 25.3% was higher than its level in 2008-09 when it was 24.7%, or in 2007-08 when it was 23.2%. Tax rates have come down from 38.5% in 2000-01 to 33% in 2009-10. During this period, tax incidence has risen from 22% to 25%. Apparently, the impact of the removal of the several exemptions that corporates enjoyed has been greater than the fall in the tax rates.

It is very likely that the corporate tax incidence will continue to rise in spite of the fall in the surcharge in the past two years. The FM has not announced an extension of the tax benefit available to software companies. Most IT companies avail of tax exemption on their export revenue from Software Technology Parks (STPI) or from SEZs. The STPI units are currently paying MAT on their export revenue and are exempt from normal tax. However, the tax incentives available under the STPI scheme are only till March 2011. And the Union Budget 2011-12 has proposed to increase the minimum alternate tax (MAT) rate from 18% to 18.5% of book profits. Further, the government has proposed to levy MAT on the software units operating in the SEZs, which are currently getting exemption under section 10AA of the Income Tax Act.

The impact of these is likely to be significant. The government has been using MAT aggressively. MAT was 7.5% of book profits till 2005-06. It rose to 10%, then 15% and 18% in 2006-07, 2009-10 and 2011-12, respectively. This year, while the increase in the tax rate has been marginal, the removal (or non-continuation) of the exemptions to STPI implies a substantial effective increase in the direct tax rate on corporates.

The FM has not rolled back, any further, the indirect tax reductions introduced in the wake of the 2008 global financial crisis. The lower excise duty, though, has been raised by a percentage point. The service tax remains unchanged. But, its application has been extended to newer services.

Historically, the share of indirect taxes in total sales of companies has been reducing. Again, using the Prowess database, we find that in 2000-01, indirect taxes accounted for 8% of sales of non-finance companies. This ratio dropped to 4.9% in 2009-10.

It is unlikely that this ratio would change much following the Budget announcements.

The FM's speech seems to reveal a preference for the manufacturing sector, whose share in the GDP he wishes to raise from 16% to 25% in 10 years. The government's spending on infrastructure is projected to grow by 23% in 2011-12.

Given that a significant portion of the current investment projects in the country are in the infrastructure and manufacturing sectors, this stance of the Budget is likely to compliment the current confidence of India Inc referred to earlier. Union Budget 2011-12 has not made any great policy announcements or any populist announcements. Instead, it has revealed a preference to complete some of the good work that has been in the workings for some time now. It has built confidence in stating that Bills related to the Goods and Services Tax, the Direct Taxes Code and the Companies Bill will be placed before Parliament soon—two of them in this Budget session. In a sense, this is Budget with a focus on business as usual, and that is a good thing.

The author is MD& CEO, CMIE







Bereft of any big idea and with its focus on minutiae, the budget presented by Union Finance Minister Pranab Mukherjee disappoints as a political response to the perception of drift and the succession of scams that have emerged in the recent period. The Finance Minister has addressed desultorily three of the four problematical areas of political corruption, the play of unaccounted money in both the economy and the political system, Indian money stashed away in foreign accounts, and high inflation. He has been content with listing the ongoing efforts of the government in detecting and bringing back the money held in illegal foreign accounts, including negotiating tax information exchange agreements and double taxation avoidance treaties, its participation in international moves against tax havens, and the commissioning of a study on unaccounted income and wealth. Among the areas the group of ministers on corruption is examining are state funding of elections, the removal of the discretionary powers of government, and putting in place a competitive system of allocation of natural resources. Only on food inflation has the Finance Minister announced new initiatives and investments to increase the supply of specific food items such as edible oil, vegetables, pulses, and milk.

While the budget seems oblivious to the political context, on the positive side it will facilitate continuing high growth that is projected at 9 per cent for 2011-12. Its revenue-neutral character, the concessions in personal income tax and in corporate tax even if marginal, measures to boost investments in infrastructure and agriculture, the promise of pushing through reform legislation — including the constitutional amendment on the goods and services tax (GST), laws on insurance and pension funds and the new direct tax code — and information technology initiatives to streamline tax administration and the delivery of public services have had a positive impact on business sentiment. The introduction of an integrated GST will be a major move that will bring efficiency gains to the economy as a whole but there is still some way to go before all the States can be persuaded to get on board. The raising of the exemption limit for personal income tax from Rs.1,60,000 to Rs.1,80,000 has brought some cheer, even if it has fallen short of expectations. The lowering of the surcharge on corporate tax from 7.5 per cent to 5 per cent has boosted market sentiment, as have customs and excise duty concessions to specific industries. To raise revenue and also in preparation for the introduction of GST, the service tax net has been widened to include high-end medical and legal services even while retaining the rate at 10 per cent.

The budget has provided for significantly larger outlays on education, health, women and children, affordable housing, the Scheduled Castes and the Scheduled Tribes, and minorities. Overall social sector spending at Rs.1,60,887 crore will be 17 per cent more than last year, with the outlay on education rising by 24 per cent and on health by 20 per cent. The big idea of food security that was announced in the last budget is still to be operationalised with differences having cropped up between the National Advisory Council and the government on the target group, extent of coverage, and the estimates of the outlays that will be called for. One hopes that this very worthwhile programme will be finalised and put in place over the next few months. Mr. Mukherjee has announced the replacement of the present system of kerosene, LPG, and fertilizer subsidies by direct transfers of cash subsidies to people below the poverty line. It is true that in some contexts, typically in Lain America, direct cash transfers have transformed the delivery system, eliminated leakages, and ensured that the beneficiaries receive the full amount of the subsidy. But serious apprehensions have been expressed by progressive economists that in India, considering the extent of mass deprivation and the actual experience, cash transfers are becoming a substitute for — and even an excuse for weakening — the public provision of essential goods and services.

On the face of it, the government seems to be comfortably placed on the path to fiscal consolidation. The overall fiscal deficit is projected to come down from 5.1 per cent of the gross domestic product (GDP) in the current year to 4.6 per cent in 2011-12. With adjustments to exclude the capital expenditure incurred by the States out of the transfers from the Centre, the 'effective' revenue deficit is expected to come down from 2.3 per cent of the GDP to 1.8 per cent. Yet, holding down the fiscal deficit may not turn out to be as easy as it is made to sound. If last year there was a bonanza from 3G spectrum auctions that provided headroom for higher spending, the Finance Minister has proposed to raise Rs. 40,000 crore through disinvestment in public sector units in 2011-12 even while holding out the assurance that the government will not relinquish majority stake or management control. In addition to the uncertainty over disinvestment, a major question remains over the impact of the food security legislation. Even on the limited scale that the government wants to launch it, an annual outlay of Rs.68,539 crore (or an additional Rs.11,500 crore over the current food subsidy) would be required. Another imponderable is the trend in crude prices that have risen sharply in recent weeks. Persistent high prices will leave the government with three difficult choices: increasing the retail prices of petrol and diesel, reducing the duties on petroleum products, and forgoing revenue or subsidising the under-recoveries of the oil marketing companies. Overall, it is not a budget that is calculated to capture the imagination of the country even as it has sought to maintain the growth momentum through minor tinkering. Many of the promised measures are not specific enough and are as yet for the future.







Will anyone have the guts to bring the families of those who died in coach S-6 of the Sabarmati Express on February 27, 2002, face to face with those who were acquitted of the crime last week? Lost in the joy of the men freed after nine years in jail was the suffering of the families of those who died on the train. But there was at least one Muslim I spoke to who mentioned the Hindus who met a horrible death that morning. "Please, no celebrations, there are victims on that side too," Saeed Umarji pleaded with the media thronging his home to meet his father, Maulana Husain Umarji, acquitted of the charge of being the mastermind behind the so-called train-burning conspiracy.

His plea to journalists was ironic because it is thanks to the media that the 70-plus maulvi became the monster that he remains now in the eyes of most of those who lost family members on the Sabarmati Express. The acquittal of 63 accused in the train burning case has annoyed them, but it is for the Maulana that they reserve their anger, citing his "role" in inciting the mob — as reported by the media. The tragedy is that the role played by the Maulana was exactly the opposite. It was only he who, after the burning of the train, expressed regret on behalf of his community, repeatedly and publicly. Again, he alone restrained the young Ghanchi Muslims whose blood boiled at the sight of raped and battered Muslims pouring into the relief camps in Godhra during the massacres which followed the Godhra train-burning, and who itched to retaliate against the police for their continuous combing operations in Muslim localities after the incident.

Convey Saeed Umarji's message of sympathy to Harishbhai Dabhi, who fell ill with shock after his 69-year-old mother Jeeviben's burnt body was brought home from the Sabarmati Express, and all you get is a cynical retort about the Maulana's "wealth" — quoting the media again. Mr. Dabhi is so upset with the Godhra judgment that he threatens self-immolation if all the guilty are not punished. "What happened to the rest of the mob?" he asks.

Used and ignored

Used by the Vishwa Hindu Parishad, ignored by the Congress, Mr. Dabhi's anguish stems from the knowledge of his own powerlessness. "Shouldn't we have been kept in the loop in this case?" he asks angrily. "But we were told nothing — how the inquiry was conducted, who testified … This old man," he pauses, pointing to his 82-year-old father, "would vote for a donkey if it stood on a Congress ticket. The Congress thought all those returning from Ayodhya on that train were BJP supporters. They forgot there were Dalits among them too."

It's not just the Dalits the Congress forgot. It forgot even its own votebank. When Muhammad Husain Kalota, the Congress Mayor of Godhra (now acquitted), was arrested four days after the train burning in an obviously political move, the party kept quiet. Its silence became deafening when Maulana Umarji was arrested a year later — he had ensured that the party got the Muslim vote in Godhra in the crucial December 2002 Assembly election. But in the next elections, the Congress was back to its games. Its State president, former RSS man Shankarsinh Vaghela, declared in Godhra that the VHP had burnt coach S-6. In one stroke, he delivered the Hindu vote to the BJP and ensured that Gujarat's Muslims would never acknowledge their co-religionists' act of arson. Indeed, the theories propounded by them about the incident would be funny if they weren't indicative of a dangerous state of denial. Either those burnt inside S-6 — by the VHP, of course — were already dead, corpses from some morgue were piled into the train by the VHP, or, they were just beggars picked up from here and there, for, the conspiracy theorists declare, not a single kar sevak died.

Continuous propaganda

At the other extreme is the VHP's continuous propaganda that the burning of S-6 was a conspiracy aimed at Hindu passengers. But though the fast track court judgment upholds this theory, the VHP is fuming since for it, Maulana Umarji remains the mastermind. The Maulana avoided the media after his release; and in a meeting with this writer a few days later, spoke only about his life in Sabarmati jail — Baba Ramdev's yoga classes; the Gita recitations that would go on alongside those from the Koran; the scrupulous medical attention he was given. Nothing political was remotely touched upon. Yet, the VHP now spreads the canard that the Maulana thanked the UPA government as soon as he was acquitted.

If at all any role can be ascribed to the UPA government, it was that its Central POTA Review Committee recommended in 2005 that the incident was neither a conspiracy nor an act of terrorism, hence POTA could not apply to it. This opinion was upheld by the Supreme Court in 2008 and, more importantly, the Gujarat High Court in 2009. And, despite POTA being revoked, very few of the accused got bail during these nine years. Many of their children had to give up dreams of college to support their families.

Perhaps if the families of the Sabarmati victims met Inayat Jhujhara, picked up on his way home from his government job on February 27, 2002 itself, with his office keys in his hand; or tea vendor Siddiq Bakr who was assaulted by the VHP passengers at the Godhra station for his refusal to say 'Jai Sri Ram,' and whose complaint the police refused to lodge, they would accept the innocence of those acquitted. Perhaps if Ahmedabad's Muslims were to venture into their city's neighbourhoods and meet Kirit Kumar Sukla, a giant of a man who developed blood pressure after his 'Ba' was burnt on the Sabarmati Express, or the soft-spoken Prafullaben Soni, who cried all day on February 22, not on hearing the judgment, but because it was on that day nine years ago that she last saw her husband and son alive (both were burnt on the train) — they would know the enormity of the crime committed at Godhra on February 27, 2002.

But who would want this wall of ignorance between the two sides demolished? Saeed Umarji would, but his priority is to see his father closeted in his family, away from the heavy burden of leadership Godhra's Ghanchis are waiting to place on him. Dr. Sujaat Vali, Godhra's well-known gynaecologist, would but his priority is to build bridges first between his own town's Hindu and Muslim youth, something he's been doing tirelessly since 2002. There are far more powerful players in Gujarat who can only gain from strengthening this wall.

Fortunately, other walls are crumbling. The VHP's 2002 plan to boycott Muslims economically failed in Godhra; business partnerships between the two communities are as strong as they were before 2002. "We realised there's nothing to fight about," said BJP supporter Kishorilal Bhayani, wholesale grain merchant, whose business depends on the Bohra traders. The town's Muslims, mostly in the garage and transport business, used to gripe about their area being singled out for load-shedding. Today, Godhra gets power from the newly set up Madhya Gujarat power company, which ensures uninterrupted power supply and decentralised payment of bills. Muslim business is booming. As all over Gujarat, in Godhra too, Muslims are today determined to educate themselves; even the families of those arrested are sending their children to school.

Finally, in a master stroke, Narendra Modi chose Godhra to celebrate Republic Day in 2009. Not only did the neglected town get new roads and a huge sports complex, on the night of January 26, the politician hated the most by Muslims drove through Polan Bazar, Godhra's main Muslim area, shaking hands with the crowds that can be found there every night.

Did this gesture wipe out the fear that has ruled the town's Muslims after 2002 – the fear of being picked up if they spoke out for their community? Did it make their 'leaders' stop bending over backwards to please the VHP? No. It did, however, make them feel, for a brief while, that they belonged.

(The author is a freelance journalist.)








For nearly two decades, the leaders of Al Qaeda have denounced the Arab world's dictators as heretics and puppets of the West and called for their downfall. Now, people in country after country have risen to topple their leaders — and Al Qaeda has played absolutely no role.

In fact, the motley opposition movements that have appeared so suddenly and proved so powerful have shunned the two central tenets of the Qaeda credo: murderous violence and religious fanaticism. The demonstrators have used force defensively, treated Islam as an afterthought and embraced democracy, which is anathema to Osama bin Laden and his followers.

So for Al Qaeda — and perhaps no less for the American policies that have been built around the threat it poses — the democratic revolutions that have gripped the world's attention present a crossroads. Will the terrorist network shrivel slowly to irrelevance? Or will it find a way to exploit the chaos produced by political upheaval and the disappointment that will inevitably follow hopes now raised so high?

Democracy and terrorism

For many specialists on terrorism and the Middle East, though not all, the past few weeks have the makings of an epochal disaster for Al Qaeda, making the jihadists look like ineffectual bystanders to history while offering young Muslims an appealing alternative to terrorism.

"So far — and I emphasise so far — the score card looks pretty terrible for Al Qaeda," said Paul R. Pillar, who studied terrorism and the Middle East for nearly three decades at the Central Intelligence Agency (CIA) and is now at Georgetown University. "Democracy is bad news for terrorists. The more peaceful channels people have to express grievances and pursue their goals, the less likely they are to turn to violence."

If the terrorists network's leaders hope to seize the moment, they have been slow off the mark. Mr. bin Laden has been silent. His Egyptian deputy, Ayman al-Zawahri, has issued three rambling statements from his presumed hide-out in the Pakistan-Afghanistan border region that seemed oddly out of sync with the news, not noting the ouster of President Hosni Mubarak of Egypt, whose government detained and tortured Mr. Zawahri in the 1980s.

"Knocking off Mubarak has been Zawahri's goal for more than 20 years, and he was unable to achieve it," said Brian Fishman, a terrorism expert at the New America Foundation. "Now a non-violent, non-religious, pro-democracy movement got rid of him in a matter of weeks. It's a major problem for Al Qaeda."

The Arab revolutions, of course, remain very much a work in progress, as the Libyan leader, Col. Muammar el-Qadhafi, orders a bloody defence of Tripoli, and Yemen's President, Ali Abdullah Saleh, negotiates to cling to power. The breakdown of order could create havens for terrorist cells, at least for a time — a hazard both Colonel Qadhafi and Mr. Saleh have prevented, winning the gratitude of the American government.

"There's an operational advantage for militants in any place where law enforcement and domestic security are weak and distracted," said Steven Simon, a fellow at the Council on Foreign Relations and co-author of " The Age of Sacred Terror." But over all, he said, developments in the Arab countries are a strategic defeat for violent jihadism.

What the uprisings show

"These uprisings have shown that the new generation is not terribly interested in Al Qaeda's ideology," Mr. Simon said. He called the Zawahri statements "forlorn, if not pathetic."

There is evidence that the uprisings have enthralled some jihadists. One Algerian man associated with Al Qaeda in the Islamic Maghreb, the network's North African affiliate, welcomed the uprisings in a weekend interview and said militants were returning from exile to join the battle in Libya, arming themselves from government weapons caches.

"Since the land is in chaos and Qadhafi is helping through his reactions and actions to increase the hatred of the population against him, it will be easier for us to recruit new members," said the Algerian man, who uses the nom de guerre Abu Salman. He said that Libyans and Tunisians who had fought in Iraq or Afghanistan were now considering a return home.

"There is lots of work to do," he said. "We have to help the people fighting and then build an Islamic state."

How much change?

Abu Khaled, a Jordanian jihadist who fought in Iraq with the insurgent leader Abu Musab al-Zarqawi, suggested that Al Qaeda would benefit in the long run from dashed hopes.

"At the end of the day, how much change will there really be in Egypt and other countries?" he asked. "There will be many disappointed demonstrators, and that's when they will realise what the only alternative is. We are certain that this will all play into our hands."

Michael Scheuer, author of a new biography of Mr. bin Laden and head of the CIA's bin Laden unit in the late 1990s, thinks such enthusiasm is more than wishful thinking.

Mr. Scheuer says he believes that Americans, including many experts, have wildly misjudged the uprisings by focussing on the secular, English-speaking, Westernised protesters who are a natural draw for television. Thousands of Islamists have been released from prisons in Egypt alone, and the ouster of Al Qaeda's enemy, Mr. Mubarak, will help revitalise every stripe of Islamism, including that of Al Qaeda and its allies, he said.

"The talent of an organisation is not just leadership, but taking advantage of opportunities," Mr. Scheuer said. In Al Qaeda and its allies, he said, "We're looking over all at a more geographically widespread, probably numerically bigger and certainly more influential movement than in 2001." If Al Qaeda faces an uncertain moment, so does the Obama administration. For a decade, the United States has been preoccupied with the Muslim world as a source of terrorist violence — one reason both the Bush and Obama administrations had friendly relations with the authoritarian governments now under fire.

It was such a dominant theme of American policy that even Colonel Qadhafi, the quixotic and brutal Libyan leader who President Obama said on February 26 should step down, had drawn American praise as a bulwark against jihadists. A cable from the American Embassy in Tripoli briefing Secretary of State Condoleezza Rice before a 2008 visit called Libya "a strong partner in the war against terrorism," noting "excellent" intelligence cooperation and specifically lauding Colonel Qadhafi's efforts to block the return of Libyan militants from Afghanistan and Iraq and to "blunt the ideological appeal of radical Islam."

Such perceived dividends of cooperation with the likes of Colonel Qadhafi are now history, and that is a point not lost on the CIA, the State Department and the White House. As during the United States' halting adjustment to the fall of Communist governments from 1989 to 1991, officials are scrambling to balance day-to-day crisis management with consideration of how American policy must adjust for the long term.

"There has to be a major rethinking of how the U.S. engages with that part of the world," said Christopher Boucek, who studies the Middle East at the Carnegie Endowment for International Peace. "We have to make clear that our security no longer comes at the expense of poor governance and no rights for the people in those countries.

"All of the givens," Mr. Boucek said, "are gone." ( Souad Mekhennet contributed reporting from Islamabad, Pakistan.) — © New York Times News Service





But the events unfolding in the Arab world, the epicentre of global oil production, are a sobering reminder that trading in oil, that mother of all commodities, is at heart a political game. Not since Iraq invaded Kuwait in 1990 have the politics of crude loomed so large. Like much of the Arab world, this market seems like a pocket full of firecrackers, just waiting for a match.

As rebels tightened their noose around Tripoli on February 27, its critical oil supplies remained constricted. Production from most of Libya's oil fields was down to a trickle.

Several ports and refineries were left stricken by workers too afraid to go to work. And with most foreign oil company employees having left the country and armed men beginning to loot equipment left behind, a return to normal production appears weeks away at best.

Facilities are now in rebel areas

About 80 per cent of the nation's oil production lies in rebel-held territory, though there is not a way to verify how much rebel leaders directly control.

Granted, the world can cope with a disruption of exports from Libya. But what has brought us to $100-a-barrel oil again — and set people on edge — is the possibility that the uprisings that toppled autocrats in Egypt and Tunisia might spread to other Organisation of the Petroleum Exporting Countries (OPEC) nations in the Middle East.

For the moment, heavyweights like Saudi Arabia can make up the difference, and big consumers, like the United States, have stored millions of barrels of oil for just this kind of emergency.

But few oil experts are surprised that the unrest has so unnerved the market. The world is thirsty for oil, and supply and demand are in delicate balance. There is little room for more disruptions in supplies. Indeed, spare capacity — essentially that amount of extra oil that OPEC members are able to produce in a pinch — is now about five million barrels a day. That is about six per cent of the oil that the world consumes every day. That cushion is greater than in 2008, when it equalled about two per cent of daily consumption, but it remains worryingly thin. And that is not even taking into account the loss of about one million barrels a day exported from Libya.

Geopolitical risk

"There is a vulnerability to tightness," said David Knapp, senior energy economist at Energy Intelligence, a specialised publisher. "But for now, there are enough barrels out there in commercial storage and OPEC's spare capacity and strategic reserves held by industrial countries to handle a medium-duration outage from Libya."

The question on everyone's mind is what if this goes beyond Libya. Costanza Jacazio, an energy analyst at Barclays Capital in New York, says further unrest — or simply fear of further unrest — could well drive oil prices higher. "The degree of geopolitical risk now is massive."

Jan Stuart, an energy economist at Macquarie Securities, explained: "This brings back the political dimension to oil-price dynamics. For the best part of the past 25 years, the Saudis have bent backwards to make sure politics would be banned from discussions about oil supplies. The risk today is we could go back the other way again."

The price of oil had been rising steadily even before the wave of pro-democracy protests swept much of the Middle East and North Africa. A recovering global economy had convinced traders that demand for oil was going to rise by about two per cent in 2011. Some industry experts and Wall Street seers were predicting a gradual march back to $120 and even $150. The thinking was that investors would pour money into the commodity markets.

Oil futures in New York jumped nearly $12 last week to settle at $97.88 a barrel, their highest since October 2008; in London, benchmark Brent crude traded close to $115 a barrel.

Now economists worry that high and rising energy prices could hurt the economy just as it is beginning to revive. The price of gasoline averaged $3.29 a gallon on February 25, up from $3.11 a month ago. As a rule, every one-cent increase takes more than $1 billion out of consumers' pockets a year.

If prices keep climbing, consumers will in all likelihood tighten their belts. If prices stay high for long, the impact could be severe: every oil shock of the past 40 years has helped push the global economy into recession. Nariman Behravesh, senior economist at IHS Global Insight, said that every $10 increase in the price of a barrel of oil reduces economic growth by two-tenths of a percentage point after one year and a full percentage point over two years.

In some ways, something like this was bound to happen. This is not a "black swan" event — a sudden, unexpected occurrence — but a white swan one, said Michael A. Levi, senior fellow for energy and the environment at the Council on Foreign Relations.

"You can't predict what the specific disruption there will be, but you can be sure there will be some disruption," he said.

Saudi Arabia's reaction

To calm markets, Saudi Arabia has started to increase its crude output to more than nine million barrels a day, roughly 7,00,000 barrels more than at the end of 2010, Energy Intelligence reported. Saudi officials are also asking European refiners, who are most directly affected by the drop in Libyan exports, how much and what grades of crude they need for quick shipment.

And the International Energy Agency, an organisation of consuming countries, also helped defuse tensions in the markets when it said on February 24 that the world had "the tools at hand to deliver adequate oil to the market," including the availability of emergency stocks held by consuming nations.

Much now hinges on what happens next in the Middle East. The price spikes that accompanied the two Persian Gulf wars did not have deep impacts because they did not last long enough. But several oil price increases have preceded economic downturns.

The biggest shock followed the 1973-74 OPEC embargo, which quadrupled oil prices and helped produce stagflation, a period of slow growth, high unemployment and inflation.

The 1979 Iranian revolution caused another shortage, and again American motorists were forced to wait in long lines for gasoline. Oil prices surged, but they did not stay elevated for long, as Mexico, Nigeria and Venezuela expanded production and OPEC lost its unity. Oil prices remained low for years, and the economy through the later half of the 1980s and most of the 1990s was generally strong.

If the current unrest helps drive the price of a barrel up by $40 to $50, back to its level of three years ago, that would really hurt.

"If gasoline prices go over $4 a gallon, there could be a big psychological effect," Mr. Behravesh said, "but it would have to last."— © New York Times News Service






British and German military planes have swooped into Libya's desert, rescuing hundreds of oil workers and civilians stranded at remote sites, as thousands of other foreigners are still stuck in Tripoli by bad weather and red tape.

The secret military missions signal the readiness of Western nations to disregard Libya's territorial integrity when it comes to the safety of their citizens.

Three British Royal Air Force C-130 and C-130J Hercules aircraft plucked 150 stranded civilians from multiple locations in the eastern Libyan desert before flying them to Malta on February 27, the British Defence Ministry has said in a statement. One of the aircraft appeared to have suffered minor damage from small arms fire, according to British Defence Secretary Liam Fox. The rescue follows a similar secret commando raid on February 26 by Special Forces, that included the famed SAS, that got another 150 oil workers from the desert. Separately, Germany said its air force had evacuated 132 people, also from the desert, during a secret mission. Meanwhile, thousands of Bangladeshis, Pakistanis, Somalis, Ethiopians and others have spilled out of a row of sea port side shelters and are facing strong winds and torrential rain. These are some of the foreigner workers whose governments have not organised evacuation for them. Many work for Chinese and Turkish construction firms.

The sheer numbers of foreigners leaving Libya has been staggering. At least 20,000 Chinese, 15,000 Turks and 1,400 Italians had been evacuated, most working in the construction and oil industries. Further, some 22,000 people have fled across the border to Tunisia and another 15,000 have crossed into Egypt, the United Nations has said.— AP




British and German military planes have swooped into Libya's desert, rescuing hundreds of oil workers and civilians stranded at remote sites, as thousands of other foreigners are still stuck in Tripoli by bad weather and red tape.

The secret military missions signal the readiness of Western nations to disregard Libya's territorial integrity when it comes to the safety of their citizens.

Three British Royal Air Force C-130 and C-130J Hercules aircraft plucked 150 stranded civilians from multiple locations in the eastern Libyan desert before flying them to Malta on February 27, the British Defence Ministry has said in a statement. One of the aircraft appeared to have suffered minor damage from small arms fire, according to British Defence Secretary Liam Fox. The rescue follows a similar secret commando raid on February 26 by Special Forces, that included the famed SAS, that got another 150 oil workers from the desert. Separately, Germany said its air force had evacuated 132 people, also from the desert, during a secret mission. Meanwhile, thousands of Bangladeshis, Pakistanis, Somalis, Ethiopians and others have spilled out of a row of sea port side shelters and are facing strong winds and torrential rain. These are some of the foreigner workers whose governments have not organised evacuation for them. Many work for Chinese and Turkish construction firms.

The sheer numbers of foreigners leaving Libya has been staggering. At least 20,000 Chinese, 15,000 Turks and 1,400 Italians had been evacuated, most working in the construction and oil industries. Further, some 22,000 people have fled across the border to Tunisia and another 15,000 have crossed into Egypt, the United Nations has said.— AP







It was no big-bang Budget that finance minister Pranab Mukherjee presented in Parliament on Monday. But nor can it be described as an outright populist one. Indeed, it reflects the sensitivity and understanding the minister brings to bear on issues affecting the farm community, big business, and even "very" senior citizens over 80. The fiscal deficit, perhaps the most worrying factor, along with inflation, is proposed to be brought down to 5.1 per cent from 5.5 per cent in 2010-11 and further to 4.6 per cent of GDP in 2011-12, that is, by `4,12,817 crores. This should boost India's sovereign rating.

The finance minister made it clear at the beginning of his speech that he recognised the need of the hour — to improve regulatory standards and administrative practices to correct the perception that India is a corrupt nation, the need to eliminate middlemen who deprive farmers of a good price, or the need to increase warehousing and cold storage facilities to prevent over 50,000 tonnes of foodgrains from rotting due to lack of godowns. Private investment in the creation of modern storage capacity, cold chains and post-harvest storage is to be recognised as an infrastructure sub-sector. Mr Mukherjee made a significant allocation of over `2,14,000 crores for the infrastructure sector, which is vital if this crucial element of our economic life is to keep pace with growth, and in order to eliminate the bottlenecks that plague it.

The national manufacturing policy, seeking to raise the share of manufacturing in GDP — from the current 16 per cent to 25 per cent in 10 years — is a commendable initiative. So is the `500 crores given to the National Skill Development Fund to impart skills to the jobless so that industry can hire them — the aim being to create a skilled workforce of 150 million individuals by 2022. In agriculture, Mr Mukherjee made all the right noises on increasing production of pulses and cereals for the nutritional security of the poor and rural families, as well as boosting the production of edible oils — given that India has to import 50 per cent of its needs at present. The allocation has, however, not been increased in line with this. The finance minister acknowledged that implementation gaps and leaks from public programmes are a serious challenge. In the context of foodgrain, kerosene and fertiliser subsidies, he said the government was moving towards a direct cash subsidy transfer to those living below the poverty line in a phased manner. But regrettably, the minister was short on specific ideas about how to tackle corruption.

The Budget, on the whole, indicates a tilt toward rural India, even in an area like housing. The minister sprang a surprise on India Inc by increasing the minimum alternate tax to 18.5 per cent, and proposed to levy MAT on SEZ developers. This should not affect zero-tax companies too much by way of eating into their profits, but it has sparked some resentment. This is one reason why the stock market ended lukewarm after it soared over 500 points after Mr Mukherjee began his speech in Parliament. But the minister's decision to retain excise at 10 per cent, which was part of the stimulus package, has somewhat allayed India Inc's apprehensions. Raising excise might also have been inflationary. Mr Mukherjee has given high-bracket earners `11,500 crores in concessions and taken `11,300 crores from the people through indirect taxes. If the `12,57,729 crores that the Budget provides for spending in 2011-12 can be protected from corrupt elements, the country — and particularly the poor — should see better days in the new financial year.






There is nothing for us in this Budget. Finance minister Pranab Mukherjee should have seized the day to safeguard the decade. But he has not. Nothing has been done to incentivise biotechnology or to ensure actual inclusive growth. For how long will we take incremental steps and avoid taking exponential steps?
This Budget presented a platform to be strong not only in views but also on reforms.

Hardly anything has been done on the previously announced intentions of allowing foreign direct investment (FDI) in retail and insurance. The proposal to levy minimum alternate tax (MAT) on developers of special economic zones (SEZs) and units operating in them is a prime example of how we are fast becoming non-believers of our own rhetoric. It is very disappointing and absolutely wrong. You cannot announce certain rules once and then go back on them a few years down the line.

Neither the biotech nor the pharma industry has been given anything in this Budget. I have always said that the biotechnology industry holds immense promise — with respect to medical, agricultural and environmental benefits that accrue from it, as well as economic contribution. I expected the government to demonstrate through the Budget that it sees India emerging as a global biotech leader. Talk of innovation means very little when the government has not tried to nurture an enabling policy environment through regulations that support innovation. Global as well as local businesses were looking for reforms and actions that will positively impact them, but that has not happened. In hindsight, our decision to invest in Malaysia was right.

People who are complacent about the growth of the economy are likely to view this Budget as a great balancing act. Yes, the Budget has something to cheer the stock markets, but that's not enough. India has been announcing to the world that it has arrived. But this Budget has done nothing to show the "rest of the world" that we believe in our own words.

Budget 2011 also does very little for the country's manufacturing sector. The government has been talking about job-creation. Job-creation does not mean the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). MGNREGA is not the only way to attain inclusive growth. The right policies enable job-creation, and this is another area where the Budget failed to do anything — to have policies that incentivise job creation. In a sense, this Budget is a disappointment for those who expected the finance minister to show leadership. This Budget can be viewed as one which shows that instead of leading the way, we are still adopting the agonising wait-and-watch policy.

Kiran Mazumdar-Shaw is chairman & MD, Biocon






The last few Budgets have had the recurring theme of inclusive growth, strengthening the social and physical infrastructure, and preparing the country for a set of institutional reforms. Finance minister Pranab Mukherjee's Budget 2011 continues the tenor, which, by itself, is reassuring.

The finance minister has taken further measures to improve the quality of government spending. There has been a relatively faster increase envisaged in plan expenditure, and focus on areas like education, health and rural infrastructure has been strengthened. Alongside this, Mr Mukherjee has signalled a transition towards direct cash transfers so as to target subsidies more effectively. If this move succeeds, on the back of the UID initiative, it will go a long way towards creating an effective, yet sustainable, social security net.

Even while increasing the outlays for key areas, the finance minister has managed to peg the increase in overall government expenditure at a relatively moderate level. Apparently, India is well on the path of fiscal consolidation. The finance minister has recognised the imperative for a counter-cyclical fiscal policy. This will enable India manage the macroeconomics stability in a prudent manner even as the global economic environment turns more volatile and uncertain.

Notwithstanding some expectations of an increase in the general excise rate, the Mr Mukherjee has refrained from such a step. The Budget has, thus, avoided adding to inflationary pressures. For the corporates, the reduction in surcharge is welcome. The finance minister has also tried to reduce the tax burden on individuals marginally. He has provided a welcome relief to senior citizens.

Though the Budget may not have made many big-bang announcements, it scores through specifically directed initiatives. It has incentivised investment in the fertiliser sector and in cold storage infrastructure. It has endeavoured to attract foreign investment in infrastructure debt funds and in schemes of mutual funds. These will have a salutatory positive, long-term impact. Housing sops are encouraging for middle-class home buyers as well as for the economy through sheer multiplier effect.

The disinvestment process continues with an achievable target for the next year. The intention to formulate a new manufacturing policy driven by considerations of self-regulation and global competitiveness deserves applause. India has great potential to become a global manufacturing hub. As the finance minister elucidated at the very start, this Budget has its thrust on a more transparent and result-oriented economic management in India. In turn, such an approach could help in strengthening the micro-foundations of a great macroeconomics growth story that is evolving in India.






Budget 2011-12 marks a sharp retreat of the United Progressive Alliance (UPA)-2 government from the social and economic sectors. It has cut back expenditures in sectors that matter to common people, especially the poor. On the other hand, it has given huge concessions to the corporate sector in the form of tax cuts and exemptions.
Let us take the overall fiscal stance of the Budget. The underlying strategy is to reduce fiscal deficit to 3.5 per cent and revenue deficit to 2.1 per cent by 2013-14. For this purpose, it has rolling targets for every intervening year. In 2010-11, the fiscal deficit was 5.1 per cent. Thus, fiscal deficit would fall by 1.6 per cent between 2010-11 and 2013-14. During the same period, the gross tax revenue is projected to rise from 10 per cent to 11.3 per cent of the gross domestic product (GDP), a rise by just 1.3 per cent. In other words, there has to be a continuous cutback in expenditures between 2010-11 and 2013-14.

Budget 2011-12 begins this process in earnest. It has sharply cut total expenditure, as a share of the GDP, from 15.4 per cent in 2010-11 to 13.7 per cent in 2011-12 (assuming that nominal GDP grows at 17 per cent in 2011-12). Within total expenditure, revenue expenditure would fall from 13.4 per cent to 11.9 per cent of the GDP and capital expenditure would fall from 1.7 per cent to 1.6 per cent of the GDP.

The cut in expenditures as a share of GDP is set to apply across a large number of sectors. The largest cut has been on subsidies. If we take "major subsidies", the expenditure is set to fall from `154,212 crores in 2010-11 to `134,411 crores in 2011-12. In relative terms, this would mean a fall from two per cent to 1.5 per cent of the GDP. Within major subsidies, the sharpest cut has been in petroleum subsidy, by `14,746 crores. Fertiliser subsidy has been cut by `4,978 crores. Without doubt, a major rise in fertiliser prices can be expected in 2011-12, as the government would move into a nutrient-based subsidy (NBS) regime for urea too. Costs of cultivation are set to rise, when millions of farmers face distress.

Food subsidy has been cut by `27 crores. At a time when food inflation continues to be high, the government has refused to use the public distribution system (PDS) to provide food to the poor at affordable prices. In the light of the absolute cut in spending, the sincerity of the UPA government in bringing a meaningful Food Security Bill stands in serious doubt. Clearly, the effort of the government is to dismantle the PDS in a phased manner and introduce food coupons or direct cash transfers (as Economic Survey 2010-11 demands). This marks a clear retreat of the state from its vital social welfare functions, and its transformation from a direct provider to an indirect provider. The Budget has announced similar intent in the case of subsidies in kerosene and fertilisers also.

There are major problems associated with moving into a direct cash transfer scheme while distributing subsidies. Leaving them apart, how will the government provide direct cash assistance? On this, the Budget harps all hopes on an extraordinarily ambitious and faultily designed Aadhaar project. The Aadhaar project still does not have a feasibility report in place. Privacy concerns apart, it remains unclear whether biometric technology is capable of the gigantic task of de-duplication among a population of over one billion. The Unique Identification Authority of India's (UIDAI) "Biometrics Standards Committee" itself has noted that over 15 per cent of the Indian population (or over 150 million persons) may not be able to enrol for a UID number due to poor quality fingerprints. In other words, the scheme to directly provide subsidies to people is based on a project with an unproven technology and unknown cost.

The withdrawal of the government is visible in several other sectors too. In "social security and welfare", expenditure is set to fall by a whopping `15,184 crores.

There are absolute falls in revenue expenditures in "economic services" also. Between 2010-11 and 2011-12, the revenue expenditure on all economic services is set to fall by `17,731 crores. Within economic services, the largest cuts are to be in "agriculture and allied services"; the revenue expenditure on agriculture is to fall in absolute terms by `5,568 crores. Within agriculture, the largest fall is to be in crop husbandry, with an absolute cut of `4,477 crores. "Rural employment" is a category within economic services, which includes the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Here, the revenue expenditure is to fall by `100 crores. Given the grandiose announcement regarding linkage of MGNREGS wages to the price index, this cutback leaves one in deep doubt about the seriousness with which UPA-2 views the scheme.
While "subsidies" for the poor are cut, there has been a shower of "incentives" on the corporate sector. The total revenue foregone, by way of direct and indirect tax exemptions, was `4.82 lakh crores in 2009-10; this rose to 5.11 lakh crores in 2010-11, of which `88,263 crores was for the corporate sector. In 2010-11, revenue worth `11,501 crores was lost on account of deduction of export profits to software technology parks; another `5,555 crores was lost on special economic zones. When we compare this with the cut in expenditures in crucial social and economic sectors, the class bias of the government is fully revealed.

Budget 2011-12 is not for the aam aadmi, leave alone the poor. The chant of the mantra of inclusiveness is just rhetoric.

Dr R. Ramakumar, a development economist, is an associate professor at the Tata Institute of Social Sciences. His research interest lies in agriculture economics and agrarian studies.




IT'S 5/10


Dear Pranab Babu,

If octogenarians were the only people rating your Budget, you would surely have fared far better than you did with some of the pundits appearing in television panel discussions who have given you four or five out of 10. Your understanding and concern for our elderly, especially the very senior citizens, is indeed touching, and reflected in the measures you just announced: tax exemption limit raised to `5 lakhs a year, and old age pension up from `200 to `500 for those over 80.Gven these thoughtful gestures, I am surprised that you were not a little more expansive on the one subject that obsesses the elderly — healthcare. Come to think of it, in a country where the vast majority of the population have to pay for their own medical treatment and where healthcare costs drive tens of thousands into debt, this is not just a "senior citizen" issue. It concerns us all. It is critical to a future where over 70 per cent of India will be of working age by 2025.

But healthcare was probably the shortest part of your Budget speech. Don't misunderstand me. I cheered when you said that you have hiked funds for the healthcare sector by 20 per cent (to `26,760 crores) and that there is `2,738 crores for medical education, training and research to deal with the acute shortage of healthcare professionals in the country. I cheered again when you told us that the government-sponsored Rashtriya Swasthya Beema Yojana (national health insurance scheme) targeting families below the poverty line is now being extended to Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) beneficiaries and henceforth will also cover unorganised sector workers in hazardous mining and associated industries like slate and slate pencil, dolomite, mica, asbestos etc.

After all that talk about India's demographic dividend, I had hoped that you would come up with some big, new ideas for a healthier India. I am not a hospital administrator or an economist. But like many middle-class Indians who listened to your speech, I wonder why you proposed a five per cent tax on all services provided by hospitals with 25 or more beds that have central air-conditioning; and was even more bewildered by extension of the levy on all diagnostic tests of all kinds. Surely, a health check-up is not an elitist idea.
You may argue that an air-conditioned hospital is a big city phenomenon. So, for the time being, let us keep aside the metrowallah's gripe. But I was talking to healthcare entrepreneurs who have set up hospitals in small-town India and they are disappointed. This Budget does little to cheer people like Dr Ashwin Naik, co-founder and chief executive officer of the Vaatsalya Group, which runs hospitals in towns like Hubli, Bijapur, Hassan, Mysore, Shimoga, Gulbarga etc. You have exempted all government hospitals from this levy, no doubt, because of concerns for the aam aadmi who is mentioned with increasing frequency in official documents. The long-standing demand for treatment of healthcare as infrastructure has been overlooked — once again, as Hari Bhartia, president of the Confederation of the Indian Industry pointed out.

Your government has good intentions and though some TV pundits have been berating your decision to double the salaries of Anganwadi workers and helpers, I think it is an important step, just as your special incentives to improve education and to grow food items like maize can help fight malnutrition. All of them are parts of the social infrastructure necessary for a healthier India, but are not sufficient.

If I may humbly point out, there are two critical "I" words if we are to improve our healthcare. One is "intent" and the other is "implementation". All the money in the world will not a healthier India make if there is no implementation of schemes. And nothing gets implemented if there are no minimal standards and no monitoring on a continuous basis.

Pranab babu, did you know that in this great country of ours with over a billion people, there are only 56 hospitals that have been accredited by the National Accreditation Board for Hospitals and Healthcare Providers? It is good to know that now there is more money for government health programmes and some steps are being taken to get a reality check. One example from the National Rural Health Mission's website — a report by officials who visited the Colonel Ganj community health centre (CHC) in Uttar Pradesh's Gonda district last December said: "It is a 30-bedded CHC. However, no blood storage centre was there. Surgeon, anesthetist, opthlmologist were available. However, there is no gynaecologist. Sole female medical officer posted in the CHC is also on training for ultrasonography. So services of anesthetist not used optimally". Sounds familiar?

Patralekha Chatterjee writes on development issues in India and emerging economies and can be reached at











The markets have reacted with a positive bias to the finance minister's speech. But the charts seem to indicate that the upthrust was more due to the absence of bad news rather than presence of concrete market friendly measure.


To that extent, bear-covering seems to have played a dominant part in the budget-day upmove.


In terms of hard numbers, I feel 5600 level will be a significant resistance on the upside on the Nifty spot and unless this level is overcome forcefully, the bulls seem to be on the ropes. Technical studies seem to indicate the smart money has continued to exit long positions and the outlook in the near / medium term remains that of concern.


Since the bears have not exhausted their entire open interest trade book, there will be some upmoves as shorts are covered and the immediate support on the Nifty will be at 5125-5175 where the recent turning point was in February.


Should this level be violated, 4900 could be a possibility. That decline is expected to be faster and sharper than the fall to 5125-5175 band. Some relief rally may just occur after the 4900 level is hit.


If the flip side possibilities are to become a reality and the market men cheer the budget and choose to take the markets higher, it is critical that the Nifty spot remains above 5300, especially on a closing basis and declines are on lower volumes and rallies be accompanied by higher volumes.


The recent slide has shown volumes to escalate on declining days and this smells of distribution of paper by the smart money. Any upthrust in the coming days must be taken seriously, must see robust volumes or be used to exit longs.


The 5600 level will be the first milestone hurdle for bulls. In the unlikely event of this being overcome, a minute possibility of 5800 may exist. I would suggest partial unwinding at 5600 levels and should the far-fetched level of 5800 become a reality, significant reduction in high beta stocks from your investment portfolio.


Investors looking for fresh buying opportunities may await some declines before deploying cash in the markets and that too only on those stocks where the relative strength comparative vis-a-vis the Nifty is extremely high and beta is possibly lower than 0.75. Also look at alternate asset classes such as ETFs, e-commodities and fixed-income avenues.


Vijay L Bhambwani is CEO,








By and large the railway minister has dealt fairly with the budget and the people. For the third consecutive year, there is no hike in railway passenger or freight fares. That is a help to poor sections of society. Some facilities promised in the budget will be welcome especially that of lowering the age for entitlement to senior citizen facility for the women.


Noticeably J&K State has been very much in the mind of the railway minister despite the fact the state is not going to assembly polls that soon. This gives a lie to the allegation leveled by some quarters that the railway budget is Bengal- centric or catering to the constituencies in states that are going in for assembly polls. The minister has felt that extension of rail link across Banihal to Qazi Gund through a tunnel has been delayed owing to some technical problem but has directed the concerned to speed up the completion of the link. Rail link to Kashmir has become essential in view of recurring blockade of the National Highway causing inconvenience to the passengers and visitors. Apart from that trade and communication between Kashmir and Jammu and the rest of the country has increased manifold. This necessitates upgrading of communication system. In particular this winter has been very harsh and the road remained blocked a number of times. Kashmir's economy is expected to go through sea change once the rail link is established. Railway Minister's announcement of setting up a bridge making factory in Jammu is a big step bound to boost state's economy. The proposed factory will provide employment to thousands of skilled and unskilled workers directly and indirectly, and thus reduce unemployment. Additionally, the railway ministry also proposes to set up a research institute for tunnel making, a technology that has been necessitated by experience in taking railway line across the Konkan and Kashmir mountains. The Kashmir railway link will be having some extraordinary features like high altitude bridges and long tunnels. We will have reason to be proud of indigenous engineering skills once this marvelous link is established. Furthermore it will cement states physical and psychological integration with the Indian Union for all times to come. The path has to be opened for private and public entrepreneurs to invest in J&K particularly in Kashmir Valley and to bring the valley on industrial map of India. Indian industrial magnates and corporate sector will have no hesitation in investing in the valley in a major way once viable communication and transportation links are established. It was observed in the past that while the State government was hesitant to allow big industrialists to invest in the valley, the investors, too, were apprehensive of investing owing to lack of dependable and uninterrupted transportation provisions. With the rail link in place, reluctance on both sides must disappear. Providing a hundred thousand jobs as promised by the Prime Minister in his speech in the parliament is all right but giving jobs to people does not really indicate strengthening the economic base of the State. It is its industrialization and connectivity that matter. Now that we are assured of rail link within the timed bound schedule, it is in the scheme of things to invite the attention of Jammu railway authorities to the need of giving a big face-lift to Jammu railway station. Without mincing words let it be said that Jammu railway station has deteriorated in many ways. Nearly ten million or more people arrive at or leave from Jammu railway station every year. They are mostly pilgrims to Mata Vaishnov Devi. Considering such a heavy human movement, Jammu railway station is too small, too congested, and too shabby. Perched on some height as it is, the railway station should have been one of the most scenic and imposing stations in the country. A large pond with gushing fountains and circular flower beds should have been meeting the eye of incoming passenger. But there is a dreary, obnoxious dirty mini bus stand with uncouth environs. The onus rests with local railway authorities. Do they expect the railway minister to come and tell them to take strong measures to remove encroachment of unauthorized vendors at the entry to the station area making it worse than bottleneck? Who will tell them to ensure sanitary conditions and cleanliness of the station and its outer environs? There is one downstairs passage for passengers to reach the mini bus stop. There are stairs leading from road up to the station and a ramp which is not allowed to be used by outbound passengers. Why does not the railway put up escalators and elevators? Why are passengers forced to drag their luggage all the way up the staircase and get exhausted before arriving at the over-crowded platform? There is one small enquiry booth which is crowded so as to make it absolutely difficult to make any result oriented enquiry. Why are not there escalators instead of staircases to lead to the rest of platforms from platform number one? There are as many as 17 windows at the reservation counter for making reservations but hardly2 or3 are functional. The rest put up a board "Closed" even during peak hours. Why? And inside the reservation hall, the booking clerks are busy chatting more with their colleagues than discharging their duty of attending the customers. There is a lot that is to be done to improve Jammu railway station. Let not authorities take it lying low. It will be advisable for the railway ministry to constitute a committee for renovation and remodeling of Jammu railway station in view of large human movement like the pilgrims to Mata Vaishnov Devi, tourists to Kashmir Valley, army personnel and normal passengers. A comprehensive plan has to be devised to make it very impressive because it has the potential to be the most attractive railway station in the country. The committee should include environmentalist and floriculturist also. The entry to the railway complex has to be either changed or widened by removing vendors who have choked it. It has to become the pride of the City of Temples.








Census is the most credible source of information on demography, economic activity, literacy, education, housing, household amenities, urbanization, fertility, mortality, language, religion, migration, disability and other socio-cultural and demographic data. Census 2011 is the 15th National Census of the country and 7th since Independence. The first systematic Census conducted all over the country in a non-synchronous manner was in 1872 and in 1881 the first synchronous Census was conducted all over the country. The Census is a statutory exercise conducted under the provisions of the Census Act, 1948 and Census Rules, 1990. Census serves as primary data for planning and implementation of policies of the Central and State Governments. Also, it is utilized for the purpose of reservation of constituencies for Parliamentary, Assembly and local body elections. The Registrar General and Census Commissioner of India is the nodal authority for conducting Census in the country.

What is Census?

Population census is the total process of collecting, compiling, analysing and disseminating demo-graphic, economic and social data pertaining, at a specific time, to all persons in a country or a well defined part of a country. As such, the Census provides a snapshot of the country's population and housing at a given point of time.

Census Process

The Census process involves visiting each and every household and gathering particulars by asking questions and filling up Census Forms. The information collected about individuals is kept absolutely confidential. In fact, this information is not accessible even to Courts of law. This provision is there to encourage people to give correct information without any fear.

For population enumeration, 29 questions have been devised on demographic, marital status, cultural, literacy, economic, migration, travel to place of work and fertility parameters. After the field work is over, the forms are transported to data processing centres located at 15 cities across the country. Finalisation of provisional figures of population is done within three weeks after enumeration.

Census 2011

Census 2011 is to be conducted in two phases. The first phase, called the House listing and Housing Census was conducted between April and July last year over a period of 45 days in each State/UT depending on the convenience of different States/UTs. The second phase called the Population Enumeration phase began simultaneously all over the country from February 9, 2011 and will continue up to February 28, 2011. The revisional round of enumeration will be held from March 1 to 5, 2011. In snow-bound areas, enumeration and revisional round were carried out between September 11 to October 6, 2010.


Magnitude of Operations

Census in India is a mammoth project. Spread across 35 States and Union Territories, the Census would cover 640 Districts, 5767 Tehsils, 7742 Towns and more than 6 lakhs villages. More than 240 million households will be visited and 1.20 billion people enumerated during the exercise. To carry out this massive exercise, more than 3 million people are engaged. This includes 2.7 million enumerators and supervisors, 54 thousand master trainers, 725 master trainer facilitators and 90 national trainers. 64 crore Census Forms and 54 lakh Instruction Manuals have been printed in 18 languages. 340 million Census schedules have been printed in 16 languages. Bar codes, form numbers and location particulars (partly pre-printed) are new features added to Census 2011. The Census would cost around Rs.2209 crore. The per capita cost is less than Rs.18.33.


Mapping Activities

The availability of accurate maps as per the latest administrative boundaries is a pre-requisite for Census. The Cartographic Division of the Census Commission has evolved over the years and is now the largest producer of thematic maps in the country. It has come a long way from the traditional manual cartographic methods used until 1981 and now utilizes the latest GIS software to produce digital maps. The latest addition in Census 2011 is the preparation of satellite imagery-based digital maps at the street and building level in 33 capital cities of the country.

New features in Census 2011

Certain new features have been added to the 2011 census. These include state of art designing of the schedules; new/revised questions on the institutional house- hold, new category in gender parameter; a separate code for the separated and divorced; new codes under status of school attendance and a separate code included under non-economic activity. In the work-related questions, a new category for those who work for less than three months has been introduced in 'Among Marginal Workers'. Rentiers – a separate Code-5 has been included under non-economic activity and prostitutes are to be categorized under 'Others' in place of 'Beggar' in the previous Census. Provision to specify the present name of the village/town of the birth place as well as the place of last residence has been introduced in the 'Migration' heading. Census 2011 has also introduced new initiatives to sensitise school students about census operations.

Technology Used

India has always been in the forefront of technology as far as Census is concerned. The Intelligent Character Recognition Software (ICR) that was pioneered by India in Census 2001 has become the benchmark for Censuses all around the globe. This involves scanning of the Census Forms at high speed and extracting the data automatically using computer software. This revolutionary technology has enabled the processing of the voluminous data in a very short time and saving a huge amount of manual labour and cost. The ICR technology with advanced features will ensure faster completion of work and bringing down to 1-2 years the time taken to complete this process from 4-5 years in 2001.

Omissions rate in the Indian Census is around 1.7 per cent which is well within international norms and the effort in the ongoing Census is to further reduce this rate.


People's Participation

For ensuring people's participation in a big way and smooth conduct of the Census process, mass media and public outreach programmes and campaigns on digital media were launched. Rural areas and common man were in special focus in these campaigns so as to sensitize them about the critical issues involved.
With a view to giving a face to Census, a mascot of an enumerator has been created for Census 2011. This is expected to help people relate with the Census process, besides recognising the key role of enumerators in the process. A toll free number and services of call centre have been introduced for addressing grievances from the public.

NPRA milestone of Census 2011 is the creation of National Population Register (NPR). The details required for creating the NPR were canvassed during the first phase. The creation of NPR of usual residents of the country is an ambitious project. It involves the collection of specific information on each person residing in the country. It would cover an estimated population of 1.2 billion and the total cost of the scheme is Rs.3539.24 crore. This is for the first time that NPR is being prepared. The database will be built by the Registrar General, India. Census and NPR are different, even though the basic idea behind both the exercises is collection of information.
NPR involves the creation of a comprehensive identity database for the country. This would facilitate planning, better targeting of government schemes/programmes and also strengthen the security of the country. Another aspect that differentiates NPR from Census is that NPR is a continuous process. In census, services of the concerned officers are dispensed with after the work is over, while in the case of the NPR, the role of concerned officers and that of subordinate officers like the Tehsildar and Village Officers is of continuing nature and permanent. (PIB)








Much progress has been made in recent years in the field of agricultural research and education. However, full benefits of these developments could not be realized by the farming community because of slow pace of transfer of technology. So, the transfer of fast emerging agricultural technologies to the farmers especially in remote and hilly areas after assessment and refinement is one of the challenging tasks that India is facing today. A number of programmes have been launched to educate the farmers about the latest technical know-how and its appropriate use. Indian Council of Agricultural Research has identified the speedy transfer of emerging technologies to the farmers (which are end user of these technologies) its priority task. To achieve this goal, a number of programme and operational research projects were launched. Krishi Vigyan Kendra also known as farm Science Centre is such an innovative science based institutions which was given shape by Indian Council of Agricultural Research (ICAR) after recommendation of Mehta Committee (1973) with prime mandate to impart vocational training to the farmers and field level extension workers. Accordingly, in the proposal it was recommended to have one Krishi Vigyan Kendra in every district of Indian Union for effective transfer of technology developed in the laboratory for the field application at farmers' level. The KVK aim is to reduce the time lag between generation of technologies at the research institute and its transfer to the farmers for increasing productivity and income from the agriculture and allied sectors on a sustained basis.

In Jammu and Kashmir, six KVKs in Jammu province and eight KVKs in Kashmir province are being established and presently working under the administrative control of Sher-e-Kashmir University of Agricultural Sciences and Technology of Jammu and SKUAST-Kashmir respectively. Krishi Vigyan Kendras are playing an important role in bringing the research scientists face to face with farmers. The scientists helped transferring the technologies directly to the farmers' fields and also obtained necessary feed-back for further refinement of the technology which greatly contributes towards an enhancement in the agriculture productivity in the operational areas. KVKs are working to achieve these objectives through
- On-farm testing of latest technologies for identifying location specific adaptation.
- Front line demonstrations on various crops directly in the farmers' field with their active participation.
- Short and long term vocational training courses in agriculture and allied vocations for the farmers and rural youths with emphasis on "learning by doing" and
- Training to extension personnel with emerging advances in agricultural research on regular basis.

Any new technology when transferred to different areas from the place of innovation needs to be tested for better adoption by the farmers. It is a common phenomenon in agriculture that the yield from new technology at a place, where it is invented is always higher comparison to the places where it is demonstrated afterwards. This gap between the demonstrated yield and potential yield of a technology is known as technology gap. Krishi Vigyan Kendras are reducing this technology gap through On-farm testing of new technologies at village level and by generating location specific recommendations which enhance the productivity of introduced technology.
Farmers in our state are still producing crops based on the knowledge transmitted to them by their forefathers and also using the age old seed in the cultivation of important crops. KVKs have introduced new varieties of cereals, oilseed and pulses through Front Line Demonstrations in their respective districts procured from the reputed national level research institutions of the country. Invariably, the demonstrated plots give higher yield comparison to the plots where farmers are using traditional practices. This gap in yield is known as extension gap which is prevailing because of unawareness of farmers about the scientific practices required to be adopted for better yield. The Krishi Vigyan Kendras are, thus bridging the extension gap by introducing the new varieties at village level and, also by providing trainings to the farmers for effective use of new technologies. Vocational training programmes are also designed to impart the latest knowledge to the farmers through work experience by applying the principles of "Teaching by doing" and "Learning by doing". While designing the courses, the concept of farming system as well as farming situation are taken into account to ensure that the enterprises in which they are trained are commercially and ecologically viable, sustainable and profitable. Such vocational trainings help them to sustain themselves through self employment and to make them self reliant economically. KVKs provide training not only in agriculture and allied vocations but also other income-generating activities that may supplement the income of farm families.

KVKs are also organizing training programmes for the extension personals of agriculture and allied departments to update them about the new innovations in the field of agriculture so that the same would be passed on by then to the farmers of their respective circles. KVKs are acting as a hinge between different developmental agencies/financial institutions/NGOs/Cooperatives and farmers/farmers group in implementing different developmental activities. KVKs are also behaving as a knowledge centre in the rural areas for addressing/disseminating knowledge on natural resource conservation, climate or ecological changes, agriculture and environment, human diet- health-disease prevention, zoonosis, impact analysis of developed technologies, ICT in agriculture, intelligent purchasing etc.

Agriculture is always considered as a system, which encompasses several allied disciplines. KVKs stand unique in respect to other institutions being working on system approach with its core team or multidisciplinary scientists and also enjoy strong technology support from host institutes and other research stations.








Towards the end of the twentieth century came the most revolutionary of revolutions - the information revolution. In the wake of the information revolution comes the network society. It has opened new horizons and tests to the limit the ability of political and economic leaders to manage the repercussions of the changes. And what changes suddenly those great walls and formidable borders and barriers seem ridiculously meaningless. The internet leaps borders with impunity - a click of your mouse and the material held on a computer in Delhi gives way to material compiled in London. If Delhi had different rules of decency and probity from the London, nothing much can be done. Further more in the net work society the line demarcating public from private communication simply fades away. All this appears reprehensible to most of us, for changes, and that too rapid change is not easily accepted by all. Easy, quick and wide access to information in combination with the case of communication between individuals interested in the same fields, the rapid advance in and simplification of many technologies have all led to the empowerment of the individual. While this is seen as a positive step by some, there are others who anxiously point out the negative aspects. Crime has become easier, sitting in their rooms, persons operating their computers have been able to spirit away billions of dollars from bank accounts. Easy access to common chemicals and readily available knowledge have enabled men to create explosive devices which have caused frightful damage to life and property.
The challenges posed by the information revolution are serious. Governments are being thrown in to disarray as they do not know how to regulate or control the free flow of information that transcends national boundaries. Some key issues certainly demand attention with out decisive policies in the area of education and training, the gap between the knows and know-nots is found to increase. The net work society could be much less fair, much less socially cohesive, than what existed so far, individuals must be trained to keep up with technological changes and policies directed to this end must emanate from government and implemented with the cooperation of the private corporate sector. The information revolution and the emergence of the network society are at the root of the lightning speed at which capital flows take place around the world. A permanent pressure thus built up to attract investment by providing an environment most conducive for it. In the prevailing conditions, capital markets are seen as dictating the course of events, practically forcing the hands of policy makers. Today, manufacturing capitalism is being over taken by financial capitalism. Already the idea is gaining currency that these changes have benefited the share holders and financiers while the workers were left to bear the costs, tackling such issues is made more difficult with the weakening of political power.

Privileged information was until recently a classic instrument of power with Government with the beginning of an era of instantaneous and multi sourced communication. In the present circumstances a new consciousness of a world community has to develop on all fronts. It is true that, in many cases, existing laws can be used to regulate the internet. In others, it is quite possible that solutions will emerge from usage while the internet may make it easier to break copy right laws, it also makes it possible to find and police the instances of abuse. Already there are service providers who have devices to protect children from viewing offensive material. Parents could choose such sources for their internet access again, dubious business may be easier to establish on the internet, but the readily available information makes it easier for consumers to investigate such business of course, it means an empowerment of the citizen to an extent. However, in the process individuals may grow more responsible, may be able to take better and informed decisions and use the freedom available in a mature manner.








It is a budget for the masses, not classes. It offers small giveaways here and there but takes care not to hurt anybody ahead of assembly elections. The 2010-11 Union Budget's thrust is on the social sector in keeping with the UPA government's goal of inclusive growth. It carries the stamp of Congress president Sonia Gandhi. Prime Minister Manmohan Singh's reforms may have to wait. Finance Minister Pranab Mukherjee is a pragmatic politician and he is best suited for building a consensus on controversial reforms like the goods and services tax (GST), diesel decontrol, labour law amendments, foreign investment in multi-brand retail, banking and PSU privatisation. The GST, when implemented, would have far-reaching consequences on the economy in terms of lowering taxes and raising revenue by curbing tax evasion and the spread of black money.


Benefits for classes are limited. The salaried class may be disappointed by a modest hike in the tax exemption limit but there is a major reason to cheer. Those having salary as the only income will not have to file returns any more. The Budget has reduced the age limit for senior citizens from 65 to 60 for being entitled to the tax exemption limit of Rs 2, 50,000, while for those above 80 a new tax exemption limit of Rs 5,00,000 has been created. Health check-ups in private hospitals will become more expensive. Domestic and foreign travel will cost more as also eating out in AC restaurants. This time the fair sex has got no special treatment. Those fond of branded clothes will feel the pinch. Aanganwari workers have a reason to rejoice as their pay has been justifiably doubled. Soldiers suffering 100 per cent disability in service will get Rs 9 lakh compensation on a par with security personnel fighting the Maoists.


In the clash between inflation and growth the Finance Minister has favoured the former, which is desirable both politically and morally since the fruits of growth are enjoyed by a small section. From March 2012 those living below the poverty line will start getting cash instead of subsidised fertilisers and fuel. Nandan Nilekani's Adhaar scheme, when implemented, would make this possible. Sonia Gandhi's favourite project, the National Food Security Bill, is on the table but Pranab Mukherjee has not given details of the fiscal impact of its implementation. Higher spending on education, health and infrastructure is welcome though it is still below the desirable levels.


To control inflation and achieve double-digit growth it has often been suggested that agriculture should be rejuvenated. The budget has increased credit flows to farmers by Rs 1lakh crore. Farmers who repay their loans in time will have to pay 3-4 per cent lower interest than the market rates. To step up production and productivity, the budget provides Rs 300 crore each for pulses, oilseeds, vegetables and nutri-cereals like millet and maize. Since 40 per cent of food items go waste in the absence of adequate storage and processing, the budget focusses on some such grey areas. Cold storage chains will get infrastructure status, which means cheaper credit. This may attract higher private investment and help eliminate bottlenecks in food supplies.


Industry had feared a rollback of tax benefits given in 2008 to help it cope with global slowdown. That has not happened. Instead the surcharge on domestic companies has been cut to 5 per cent from 7.5 per cent. The minimum alternate tax (MAT) has been slightly raised from 18 per cent to 18.5 per cent. The Sensex shot up after the budget but the gains were trimmed to 122 points by the close. Currently, business confidence is low as interest rates are hardening. The surge in global oil prices due to trouble in the Middle East has led to capital outflows. For foreign institutional investors (FIIs) a high fiscal deficit is also a matter of concern. The Finance Minister has sent a positive message by bringing down fiscal deficit to 5.1 per cent. FIIs, however, are skeptical about his claims of bringing fiscal deficit further down to 4.6 per cent and ensuring 9 per cent growth in a difficult year ahead. One positive is the government will resort to lower market borrowings and this will reduce pressure on money supply and subsequently on interest rates. High interest rates raise the cost of capital and hurt growth. All in all, given the constraints — political and global — it is hard to find much fault with the budget. Its goal of inclusive growth is right. The fiscal deficit may be under control but it is governance deficit which is becoming unmanageable. Elections are won not just by tall promises but by strong performance. Bihar has shown votes follow development.









Malaysia has a democratically elected government, yet it has a system that discriminates against its minorities. Indians in Malaysia are among the worst sufferers. Even a peaceful protest by them is not tolerated when their grievances are genuine. The latest example is the arrest of 109 persons (100 of them were released a little while later) in Kuala Lumpur on Sunday when they held a demonstration in protest against the introduction of a controversial book as part of the senior school curriculum. The book has derogatory expressions like "pariah" referring to the Indians, mostly Hindus from south India. Ideally, the publication should have been withdrawn by the government when all sections of the Indian-origin Malaysians have been opposed to it as it hurts their religious sentiments. But it seems the authorities have no regards for the views of the weakest minority in Malaysia.


The Malaysian government says that it acted strongly against the protesters, belonging to the Human Rights Party, an offshoot of the outlawed Hindu Rights Action Force (Hindraf), because they chose to "violate" the law despite having been warned not to do so in advance. It mentioned the support of 13 NGOs of Indian-Malaysians in favour of the government's stance. But no one knows the standing of these so-called NGOs. There is the possibility of these NGOs having been purchased by the government to come clean in the eyes of the international community. Even if one keeps aside the views of the Human Rights Party of Hindraf because of its allegedly extremist background, the Malaysian government cannot be absolved of the charge of its unfair treatment to the people of Indian origin, mostly poor. The objections against the controversial book raised by Hindraf are also supported by the biggest and moderate grouping of Indians, the Malaysian Indian Congress.


The time has come for New Delhi to intervene in the matter. When Malaysia became an independent nation, a large number of Indian-origin people could be seen occupying top posts in the government. But today very few hold senior positions. There is need for an independent enquiry to find out the truth.










India and Pakistan are all set to resume their stalled dialogue after a near-freeze of several months with External Affairs Minister S. M. Krishna announcing that "a solid foundation" has been laid for a "sustained engagement." Foreign Secretary Nirupama Rao met her Pakistani counterpart in Thimpu and charted a course for the resumption of dialogue on all outstanding issues, including Kashmir, with the aim of completing the talks within the next three months. The ground has been laid for the visit of the Pakistani Foreign Minister to New Delhi in July. These are clearly signs that the two South Asian neighbours are seeking ways and means to engage with each other.


The US has been pushing India to talk to Pakistan for some time now in an attempt to make Islamabad a more active partner in its Afghan war. India, too, is recognising the diminishing returns of its no-talks-till-terror-ends policy. Islamabad also feels that with a renewed peace process with India, it will be able to marginalise the extremist groups within. The issue is whether this will be enough to deliver a substantive outcome. And it is here that both sides need to recognise the real challenges that have prevented a real India-Pakistan rapprochement so far.


Like any other state in the international system, Pakistan has also tried to preserve and enhance its security vis-à-vis its much stronger regional rival, India. The two states have been in a perpetual state of security dilemma ever since their independence in 1947. Given India's enormous economic, military and geographical advantages, Pakistan has relied on non-conventional means to limit India's influence and power. It pursued nuclear weapons in order to prevent India from using its overwhelming conventional military superiority, thereby levelling the playing field. Under the nuclear umbrella, Pakistan has used terrorism as a major instrument of its foreign policy, especially in Jammu and Kashmir which Pakistan has coveted since 1947.


Despite recent attempts by India and Pakistan to patch up their differences, nothing much has changed insofar as the above narrative is concerned. Significant sections of Pakistani military and intelligence services continue to see themselves in a permanent state of conflict with India and have little incentive to moderate their behaviour as a continuing conflict with India is the raison d'etre of their pre-eminent position in the Pakistani society. At a time when Pakistan's Islamic identity is under siege because of its cooperation with the US on the war on terror, the need to define itself in opposition to India remains even stronger. Militarily, Pakistan's strategy of low-intensity conflict based on supporting terrorism can be seen as successful insofar as it has prevented India from achieving its full potential as a major military power.


The Indo-Pak peace process also hinges on the ability of Pakistan's political establishment to control terrorist groups from wreaking havoc in India. It is doubtful how much control the civilian government in Islamabad can exert, given that various terrorist outfits have vowed to continue their jihad in Kashmir. The Frankenstein monster that the Pakistani state had created to further its strategic objectives vis-à-vis its adversaries has now turned against it and threatens to devour any future attempts at Indo-Pak reconciliation. Moreover, there is little evidence of any significant Pakistani effort to dismantle the infrastructure of terrorism such as communications, launching pads and training camps on its eastern border with India.


Finally, and perhaps most important from the point of view of resolution of the Kashmir dispute, is the very different strategic goals India and Pakistan have in pursuing a peace-process. Pakistan has a revisionist agenda and would like to change the status quo in Kashmir while India would like the very opposite. India hopes that the negotiations with Pakistan would ratify the existing territorial status quo in Kashmir. At its foundation, these are irreconcilable differences and no confidence-building measures are likely to alter this situation. India's premise largely has been that the peace process will persuade Pakistan to cease supporting and sending extremists into India and start building good neighbourly ties. Pakistan, in contrast, has viewed the process as a means to nudge India to make progress on Kashmir, a euphemism for Indian concessions. While Pakistan has a clear position on Kashmir and it shows little sign of budging from that, nobody really knows what India wants as it lacks clarity in its objectives and consistency in its plans.


It is obvious that India would not give up its control over the Kashmir Valley. However, it remains unclear as to what is it that India is bringing to the negotiating table for Pakistan to take it seriously. And just as India has had difficulty thinking of what it would offer, Pakistan also has had a hard time articulating what it would be satisfied with, short of wresting Kashmir.


And this is primarily a function of the lack of national political consensus on this issue in both states. In Pakistan, not only radical Islamic groups but also many mainstream political parties are against diluting Islamabad's traditional hard-line on the Kashmir issue. In India, the Congress-led government will find it difficult to make any concessions as it would have to protect its flank from the right of the Indian political establishment. While there is a general political consensus in India on opening up trade routes and bus services, the threat of terrorism keeps all political parties on guard as no one would want to be held responsible for a terrorist attack that might come.


Given the current predicament, it is difficult to be optimistic that the Indo-Pak peace process is poised to move beyond initial pleasantries, at least in the near future.

The writer teaches at King's College, London.








It took me four years to paint like Raphael, but a lifetime to paint like a child." The first time I heard these famous words of Pablo Picasso I was visibly peeved. Goodness to doodle like a child — is that art? For didn't one always identify art with sublime complexity of thoughts and expression. In fact, often we have been made to feel that the more indecipherable and highbrow a work of art is the higher it should rate in the lexicon.


That simplicity can be art is a lesson that I learnt only after my years of association with the world of art and artists. That understanding art requires a visual skill has been reinforced time and again. Of course, the lobby that cares to demystify art has been equally strong. During his heyday, MF Husain, the great painter who has now chosen a life of exile, decided to paint in full public glare — perhaps that was his intention. Never mind that as one saw him start from a single dot to create a great work of art, one was more overawed by the magic of creation than anything else. Art to most of us remains an inscrutable mystery. Indeed, few of us believe that art can be understood without initiation.


At a lecture an eminent art historian dwelt on how one has to be rasik to soak rasas of art. Indeed, there is little doubt that to admire and understand a work of art one needs to be doubly awakened and must possess heightened sensitivity. Nevertheless, soon after the highly engrossing lecture an art aficionado wondered aloud, "If this is true, then what explains the beauty of an art form when it reaches out as easily to a rickshaw-wallah as to a connoisseur? How come at the Hariballabh Sangeet Samellan Hari Prasad Chaurasia's bansuri is equally savoured by an ordinary mortal as well as a scholar who can delineate the difference between various ragas."


The question haunted me and died a slow death. It seemed to crop up again when I found myself face to face with kathak legend Pandit Birju Maharaj. The maestro took immense pride and delight in sharing how he can make his highly complex tihaais comprehensible to even a five-year-old simply by taking similes from everyday life. And on stage as he executed what he called telephone tihaai taking a cue from how the telephone rings, he exemplified that what he said in an interview was no empty boast.


The maestro can truly simplify his art without robbing it of purity or tradition. While he took more metaphors from mundane life, he reached out to one and all, clarifying his concepts in a lucid way. Yet what remained with me, and, I am sure, with most of his audiences, was a masterpiece. A small bit of nritta, of exquisite footwork where ghungroos seemed to be at his bidding that echoed silence (of all things). So eloquent and yet so profound was this encapsulation of shunya, the emptiness.


And I found the answer to my query. Art is as much silence as reading between the lines, as much an inscrutable mystique as a self-evident and self-explanatory phenomenon.










Ever since Shah Bano debate of the late 1980s, a perception has emerged that Islam is unfair to women, and that there is an inherent theological sanction against gender equality. Recent controversy concerning burkha or hizaf in European nations has only perpetuated this perception about women's position in Islam at a global level. In a country like India, where women's position is generally unfavorable- Muslim women are seen as dual victims; firstly by such flawed interpretation of Islam- and secondly by the inherent system of oppressive Indian patriarchy. Seen in this context, it is important to de- contextualize various dimensions of Muslim- women's issues in modern India. New tools are required to advance the cause of modern feminism for Muslim women in India to expand its own variety of multi- culturalism.


A rough extrapolation of the rate of population growth, using 2001 as base year would suggest that the population of Muslim women should be more than 70 million in 2011, which is somewhat close to the population of a major European country such as Britain or Germany. But comparison of the socio- economic conditions of Muslim women with the population of these European nations would naturally signal massive deprivation. On the other hand, debate on Muslim backwardness in the Post- Sachar India has been so focused on the general nature of deprivation of Muslim community that the issues of Muslim women and its particular nature seem to be entirely slighted.


On the other hand, the debate on the position of Women in Islam has become quite polemical and politically charged.


It is a favourite stick employed by the Hindu fundamentalists and feminists for quite opposing reasons. Shah Bano case and the debate on Uniform Civil Code, which is not welcomed by Islamic bodies, are used by the Hindu fundamentalists to create an argument of Muslim disloyalty towards the country and its Constitution. Feminists, on the other hand point out gender inequality as normatively a wrong issue to be embraced in modern times. They accuse it to be based on Islamic preaching. Some scholars, such as Asghar Ali Engineer, have been arguing that there are some clergy who deliberately mis-interpret Islam and its tenets regarding women; their rights and liberty in order to advance their vested interests.


The publication of Sachar- Report (2006) has revealed a very disturbing picture of the Muslim backwardness- mainly under-representation of Muslims in various sectors of the Indian economy. When the entire community is backward, it seems natural to anticipate that the women of the community would be worse. The Committee apparently had five members and a Member- Secretary in addition to its Chairperson, Justice Rajinder Sachar. None of its five members was a woman. Would that imply that no Muslim woman was worth the job? There is a pool of women of accomplishment from the community to choose from. The decision not to include a woman member seems to be a deliberate one, which reflects somewhat unfavorable attitude towards women by the Sachar Committee.


However- the committee sought to make up for it by holding consultations with some women experts and hiring women consultants. The 401 page report has a text of around 263 pages plus appendix containing various tables for the remaining part. The Report does make profound observations about the conditions of the women. In a nutshell, it found that Muslim women are overwhelmingly self- employed, particularly engaged in home- based work. Sewing, embroidery, zari work, chikan work, readymade garments, agarbatti rolling, beedi rolling, are some of the occupations a majority of Muslim women opt for. Low income, poor work conditions, absence of toilet, crèche facilities, lack of social security benefits like health insurance and the absence of bargaining power characterise general nature of their work- profile.


The Report also noted that the distinct pattern of Muslim women's employment in home- based work is partly due to discrimination received in formal employment. It is due to the vicious cycle of poverty, lack of education and technical skills leading to low- skilled, low- income route, that leads back to poverty. Muslim women are unable to bargain for better work conditions because much of the work they do is sub- contracted. The restriction of mobility ( based on social and cultural factors) restricts their employment opportunities and wages. They do not have independent access to credit facilities, opportunities for skill up- gradation, or access to markets.


By the year 2006, when the report was submitted-India had already pursued globalisation for close to 15 years or so. Given the general impression that globalisation has generated employment and wealth- it needs to be noted that it has not worked for Muslims in general and Muslim women in particular. Recurrent incidents of ethnic violence since India's independence have contributed to the ghettoisation of the community, which has a particular consequence for women upliftment. The ghettoisation of poor Muslims has led to the seclusion of home- based female workers.


Another important factor of state bias is reflected in the case of minimal participation of Muslim women in the government sponsored micro- finance programmes such as Self- Help Groups(SGHs), Watershed Programmes and Panchyati Raj. The Sachar Report has recommended that the government should give direct contract to Muslim women for jobs such as preparation of school uniforms.


Muslims- especially women, have virtually no access to government schemes, and lack experience in getting loans from Jawahar Rozgaar Yojana for Below Poverty Line( BPL) beneficiaries. Muslims are often not able to secure reservation benefits available to OBCs as the officials do not give them the required caste certificates. Many eligible Muslim OBCs were not included in the official list resulting in denial of several benefits to the community.


Another important dimension of the Muslim women debate centres around their health. According to Sachar Report, the issue is directly connected to poverty and absence of basic services like clean drinking water and sanitation- leading to malnutrition, anemia, and a variety of diseases and poor life expectancy.


In conflict- prone areas, there is a strong evidence of psychological problems, including stress, depression, and post- traumatic disorders. For decades, a perception has prevailed among some right- wing groups that Muslims do not want to practice family planning- some even accuse the community of having the desire to over- populate India so that India becomes a Muslim majority country. This argument has a great propagandistic value.


Population control programmes and knowledge of contraceptives do not reach Muslim women effectively as the awareness campaign is not designed keeping the community's sensibility in mind. Thus, high rate of fertility among Muslims is partly due to lack of information and non- affordable health-care facilities.


Though, the report also mentions "substantial demand from the community for fertility regulation and for modern contraceptives," which is also reaffirmed by the fact that over 20 million Muslim couples are already using contraceptives. But, women need to have more say in making these choices, which requires special programmes designed to suit the community's sensibility.


In conclusion, there are multiple factors that contribute to the prevailing disturbing portrait of Muslim women in India. In a way, it is part of the general story of the Indian woman. Added to it, community specific factors perpetuate their stereotyping and an almost negligible representation in the growing economy of the country. There are also state biases, and flawed understanding of the community's issues that further complicates the debate. What is now needed is a multi- farious approach at societal, state, and community level in order to address issues of dignity and equality of Muslim women, without which Indian democracy cannot find fuller expressions.


(The author is a faculty at the Centre for Minorities Studies, Jamia Millia Islamia, New Delhi)








Haroon Lorgat was sitting in the stands on Sunday with a goodnatured, almost goofy, smile on his face: forehead wrinklefree, eyelids relaxed. The deafening roar in the Bangalore stadium made it difficult to hear yourself think but it wasn't a problem for the ICC's Chief Executive – by all accounts, he hadn't done too much thinking over the last few weeks in any case.


A couple of days before the match, Lorgat had given the world a glimpse of his softer side when, asked about the lathi-charge on fans scrambling for limited tickets for the India vs England match, he'd said the incident showed how popular the World Cup was. A few people beaten outside the ground was, to him, a sign that all was well.


While Lorgat's positive outlook, as highlighted by the comment, may be a cause for envy, it raises a very important question: Do you HAVE to be completely disconnected from reality to become the ICC's CEO?

Having seen the last two incumbents in action at World Cups – Malcolm Speed in the West Indies and Lorgat in India – it seems the ICC advertisement for the CEO's post mentions it as a key requirement. "Wanted, a well-dressed man with his head in the clouds, to run world cricket. If you've ever been classified as sensible or sensitive, please don't apply. Get a real job instead."


In a real job, there are bottom lines, performance appraisals, tangible targets to achieve; there is, at the very least, a limit to how many times you can goof up.


West Indies 2007, conducted with Speed at the helm, was a scheduling and ticketing disaster. Close to twice the length of the football World Cup and three times longer than the Olympics, the tournament seemed like it would never end as only one match was played on most days. With most of these games meaningless, the grounds were empty right through. High ticket prices, set in US dollars, alienated the local Caribbean population. The ICC even banned all musical instruments from the grounds, robbing the tournament of a custom synonymous with cricket in the West Indies.


By the middle of the tournament, as questions started being asked, Speed took on the role of grouchy businessman rather than chief executive of a sports governing body. His churlishness spilled over in a press interaction in Grenada, where Speed asked hotel security to evict a reporter whose sister publication had published a factually incorrect article. The ICC, I'm told, has a system in place to deal with what it considers biased or incorrect reporting. The guidelines do not include its CEO personally telling reporters to "get out".

 Speed's tournament finally got the tragicomic ending it deserved. As Australia started celebrating, an aghast, amused audience watched the umpires and match-referee debate whether the rain-curtailed match was really over or not. They reached a new decision every two minutes until someone dug out the rule book.

 "It was hilarious. None of the officials knew the rules," Ponting said after the final. "The tournament was a grand success," said Speed. The only important question was how many ICC officials it took to change a light bulb.

 Still, Speed got by just fine in spite of his attitude, and more importantly in spite of the failure on several counts of a World Cup directly under his control. He was hailed as one of the ICC's most influential, most successful CEOs when he retired, paving the way for Lorgat to take his legacy forward.


And he sure has. The biggest problems with the 2011 World Cup are again scheduling and ticketing. The tournament is almost as long, and meaningless matches have gone up instead of coming down. The general public hasn't been priced out this time, it has not been invited at all. Best of all, Lorgat's comments are sounding as strange as Speed's did four years ago. Bottom line: another great ICC CEO is in the house.



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Apart from his invocation to Lord Indra and Goddess Lakshmi, Union finance minister Pranab Mukherjee should also have prayed to Lord Vinayaka, for good luck and Godspeed! His fiscal strategy is based on brave assumptions about robust economic growth, better tax compliance, stricter expenditure management and the world continuing to view India favourably. If in fiscal 2010-11, the windfall earnings from 3G spectrum auction saved the finance ministry's budgetary strategy, in fiscal 2011-12

Mr Mukherjee has pegged his strategy on a different set of 3Gs — growth, at 9.0 per cent; better governance, especially in tax administration; and, higher global financial flows, especially through new windows of opportunity that have been opened.In a business-like, if excessively long, speech Mr Mukherjee enthused the markets by showing a lower than expected revenue and fiscal deficit numbers, not raising excise duties (as widely expected), assuring financial sector reform, including easing foreign fund flows into mutual funds and promising to stick to the goods and services tax road map. The moves on services tax, which will yield net revenues of Rs 4,000 crore this fiscal, also suggest that the movement towards a GST has begun. While naysayers and fiscal conservatives will question the credibility of the fiscal numbers, especially since the finance minister's strategy is based more on expenditure reduction than revenue mobilisation, Mr Mukherjee could well prove his critics wrong if he meets the Rs 40,000 crore disinvestment target and the twin forces of economic growth and simplified procedures enables the government to meet, or even improve upon, its revenue projections.

Mr Mukherjee claimed that his intention this year was to move towards a "more transparent and result-oriented economic management system in India", and he sees the reform of tax administration and moderation of taxes and tariffs as a means to these ends. However, given that Mr Mukherjee did underscore the virtues of counter-cyclical fiscal policy, as "our best insurance against external shocks and localised domestic factors", it was surprising that he did not opt to raise more revenues and make a more convincing pitch on fiscal stabilisation. The jury remains out on the tax buoyancy assumptions.

While critics may be disappointed that the finance minister's speech was not more forthcoming on reform and liberalisation initiatives, one must not lose sight of the fact that there are indeed several embedded reform measures that the seasoned and "politically correct" Congressman in Mr Mukherjee chose not to highlight. By opening up investment in mutual funds the finance minister has taken an important step closer to full capital account convertibility. The promised amendments to various financial sector legislation also indicate a willingness to finally open the sector up to more foreign investment. However, the overall approach remains, as we said last year, a very 1980s style of micro-managing tax policy, with a large number of special gestures, exemptions and targeted imposts.

There has been some reversal in the cleaning up of the tax system, widening the scope for bureaucratic discretion. The tax subventions given to farmers is a bad populist idea that has been repeatedly discredited in practice but one that politicians like as an idea. On the other hand, time was ripe for tapping a bit more into the wealth and incomes of the rich, given the mood in the country and that Mr Mukherjee chose not to do, hoping better compliance and higher growth would bridge the gap.

The success of Mr Mukherjee's fiscal strategy will depend critically on the economy's response in terms of growth, on the government's response in terms of transparency and administrative efficiency, on the government's ability to restrain wasteful expenditures and on the international investor community's response to India's increased openness. If the government of the United Progressive Alliance is unable to get its act together, and if the Congress party succumbs irreversibly to populist spending pressures, India runs the risk of getting trapped in a state of complacency induced by reasonably good growth, 7.0 per cent or so, which is not good enough to generate either the required employment or the required revenues that would take India to the next level of development. It is too early for India to take its 9.0 per cent growth rate for granted. Much more needs to be done to increase investment in employment generating manufacturing (including labour reform), in skill development and vocational education and human capital building. The finance ministry's Economic Survey says it all. Yet, the government is unable to take the great leap forward on far too many fronts. Mr Mukherjee told the media after his speech in Parliament that he was adopting an incremental approach. This was the year for more, and in opting for caution, so typical of UPA-II, he has erred and missed an opportunity to find a place in history books.






If there is a single issue which has proved to be an over-riding factor in the formation of this year's budget, it is inflation. Almost everything that the finance minister has done, and not done, can be explained by that one issue. Consider the following.

This is the sharpest fiscal correction that any government has attempted in the two decades since 1991. Don't go by the headline numbers of 5.1 per cent fiscal deficit for this year and 4.6 per cent for the next. Buried within the 5.1 per cent figure for this year is the bonus money from the auction of spectrum for both third-generation telecom services (3G) and broadband wireless. Take that "one-time" gift away and this year's deficit would settle at 6.2 per cent or more. To try to come down from that height to 4.6 per cent in one year is heroic indeed. Since this government has under-performed on fiscal correction so far, the only explanation is that it recognises its own role in adding to the problem of inflation; and it no longer wants a loose fiscal policy to add to the problems of the monetary authority as it tries to bring prices under control.

Take a look then at the expenditure numbers. Next year's total government expenditure is budgeted to be only 3 per cent more than in this year; that is in sharp contrast with the 19 per cent increase in expenditure this year. It also compares with about 4.6 per cent inflation anticipated for next year; so, in inflation-adjusted terms, government spending will have shrunk. Can anyone recall the last time this happened? In other words, don't get taken in by all the big spending hikes that Mr Mukherjee announced during his rambling budget speech; the sum total of expenditure has been severely curtailed. The skeptics would argue that these are still only plans for next year, and that one must wait for the reality. Of course, but you can see what the intention is: to sharply rein in government spending.

The changes, and the absence of changes, in tax rates buttress the point. Mr Mukherjee has caused mild surprise by not raising the rates of excise and service tax from 10 per cent to 12 per cent (which would have taken them back to the level that prevailed before the slowdown of 2008). The fact is that he would have been completely justified in reverting to 12 per cent since the economy is said to be once again chugging along at 9 per cent annual growth. The only plausible reason for staying his hand can be that the finance minister did not want to add to cost-push inflation by jacking up indirect taxes that would have been passed on to consumers.

The relief given to those paying income tax, and the fact that it is focused on benefiting most those at the bottom of the tax-paying ladder, is of a piece with this. The government is admitting that inflation has eaten into real incomes, and is compensating by raising the tax exemption limit. Not by enough, some might say, but you can see where Mr Mukherjee is coming from.

Flowing from the general restraint on expenditure is the tight control on the government's programme for borrowing in the money market for financing the deficit. Next year's borrowing programme is Rs 3.43 trillion, up only fractionally from Rs 3.35 trillion this year, but lower than the Rs 3.98 trillion last year. This means that the government will not be pre-empting financial resources in the same way as before, that there will be more money available for private borrowers, and that there will be more liquidity in the money market. This makes the Reserve Bank's job easier because it has more elbow room to play around with interest rates as demanded by the inflation situation.

The final bit of proof for the anti-inflation thrust of the budget is the fact that the government expects its scheme to work, and for inflation next year to average no more than 4.6 per cent (the difference between 9 per cent real growth and 14 per cent nominal growth). That is lower than the long-term inflation rate for India. To be sure, this calculation could be undone by a sustained increase in petroleum prices, but a close observer of the world oil market argues that much of the recent oil price spurt has been caused by speculative activity that he says is unsustainable. The combination of high open interest and high carrying cost should mean that the speculators will have to unwind their positions before long, and this would mean moderation in prices.

The subsidiary point about budget 2011 is that it once again underlines the central role of rapid economic growth in solving many economic problems, including taking care of the aam aadmi. The finance minister has not raised any fresh taxes (net) in his budget, but tax revenue is expected to increase 18.5 per cent — in a year when nominal GDP growth (i.e. real growth plus inflation) is expected to be 14 per cent. This is on top of 26 per cent growth in tax revenue this year, when nominal GDP growth is expected to be 20.3 per cent. In both years, growth in tax revenue has outperformed GDP growth by about 30 per cent. Rapid economic growth therefore gives governments the elbow room to move to a sustainable level of fiscal deficit, to reduce the debt-to-GDP ratio, and thereby to get to a healthy fiscal situation — while simultaneously undertaking fiscal transfers from rich to poor through social welfare programmes of the kind that the UPA government has made its hallmark. So, it is a pity that the civil society activists who argue the strongest for expansive fiscal transfer programmes also mock the economic growth and tax policies that make it possible to give them what they want.






The Union finance ministry's Economic Survey 2010-11 offers an upbeat view of the state of the Indian economy and its prospects in the foreseeable future. While the document does raise concerns about potential spoilers like inflation, high levels of fiscal and current account deficits, declining levels of foreign direct investment, global economic conditions, including a spike in oil prices, it tends to portray them as transitory. It would be dangerous to minimise the potential ramifications of these downsides to growth and to that extent the Survey seems a bit too sanguine for comfort. To be sure, India has a lot to celebrate about its recent economic performance. It has been among the few countries to have emerged from the global economic downturn relatively unscathed. Annual economic growth fell below 7 per cent just once in 2008-09, the darkest year of the crisis. The speedy recovery to 8 and 8.6 per cent in the two subsequent years is a tribute to both the resilience of the Indian economy and astute fiscal and monetary policy. It is heartening that savings and investment rates, while lower than the heady pre-crisis levels never fell below 32 per cent of GDP and are now inching their way back to former highs.


The downsides to growth are nonetheless daunting. Inflation remains the biggest concern, especially with global commodity prices rising again. The Survey offers a masterly overview of the problem and puts forward some interesting hypotheses. Inflation in India is still largely supply driven, particularly with respect to food articles. While a decent rabi and kharif harvest may boost production and lower prices, supply chain bottlenecks and unclear procurement policies could still prevent the full benefit of a bountiful harvest from being realised. The RBI which has positioned itself as a 'first line of defence' against inflation would be forced to hike interest rates only to lower inflationary expectations, thereby setting off a chain of undesirable outcomes, notably a fall in private sector investment. Indeed as highlighted in this space, much of the new 'investment' is infrastructure driven---private sector capacity expansion has been ominously low over the past two years.

The gross fiscal deficit even at 4.8 per cent of GDP is worrisome and already hurting. Fiscal consolidation is an imperative. The 3G & Broadband auctions along with a few successful divestment programs (particularly in Coal India Limited) provided a one-time bonanza in FY 2010-11, but the government will hereafter have to rely on tax revenues, while cutting down on unwanted expenditures to keep the fiscal deficit within bounds. The way forward is through another round of comprehensive reforms. These would include sustained investment in agriculture, tax reform mainly in getting the GST in place, removing administrative hurdles to FDI, and reducing transactions costs that stifle domestic enterprise. Complacency could derail hard earned progress and further weaken the political resolve for tough minded fiscal and economic reform that India needs to sustain and stabilise its growth story.








On the eve of budget day, the Economic Survey revealed encouraging macro-economic data, barring the inflation barometer, which remains a huge worry for the economy at large and potential challenge for sustaining the growth momentum. The finance minister (FM) in his speech confirmed growth forecasts in the Economic Survey that the economy is likely to grow at 8.6 per cent during the current fiscal. For consecutive years, economic growth has been riding high on the impressive growth trends of the service sector, which grew at close to double digits.

Backed by a remarkable turnaround in the current fiscal, Mr Mukherjee set out ambitious targets of fiscal consolidation for next three fiscal years; he aims to contain the fiscal deficit in a phased manner and achieve a deficit of 3 per cent by FY14. A first look at the budget estimates for the fiscal deficit may appear ambitious, although the resilience of the economy of late suggests the targets are not impossible to achieve with sustained growth trends.


The FM's budget speech was replete with major policy reforms including proposals for infrastructure and banking sectors. The FM indicated that the government would continue to pursue its disinvestment programme as he set out a whopping target of Rs 40,000 crore for non-tax revenue mobilisation. For financial sector reforms, the FM proposed to introduce legislative amendments to extant legislations (for insurance and banking industry); for granting the new banking licences to the private sector players, he indicated that legislative amendment to the Banking Regulations Act will be proposed in the ongoing session of Parliament.

On the tax policy front, the announcement on the roll-out of new tax legislations — the Direct Taxes Code (DTC) and the Goods & Services Tax (GST) would be welcomed by the trade & industry. Mr Mukherjee has re-affirmed the government's commitment to roll out the DTC by April 2012, after the standing committee's report; however, he held back from committing to the calendar for the GST roll-out. The proposal to liberalise the policy on foreign direct investment is an encouraging move.

In line with expectations, the FM did not propose significant changes in headline income tax rates, except a marginal increase in the basic exemption limit for individual taxpayers. A half percentage point increase in Minimum Alternate Tax (MAT) could hurt critical industries that are otherwise eligible for tax holiday incentives, though the reduction of surcharge may marginalise the overall impact. Developers of special economic zones (SEZs) may feel the heat more than any other industry now that the FM has proposed to extend MAT applicability to hitherto exempt SEZ developers and units. The proposal to tax the foreign dividend at an incentivised rate of 15 per cent would encourage outbound investments.

The FM has taken cognisance of the long-term growth drivers in the economy and has proposed measures to address them through focus on education and skill building to cash on unique demographic dividends the country enjoys. Proposals to provide "tax pass-through status" to infrastructure debt funds and incentivised taxation of income from such funds will provide a fillip to infrastructure funding, a huge challenge for the 12th Plan. Policy move to strengthen PPP and attempts to address environment-related issues are just the right policy moves in the nick of time.

To tackle the black money menace, the Budget has proposed to notify a list of non-cooperative jurisdictions and legislate anti-avoidance measures in respect of transactions undertaken with residents of such jurisdictions.

The status quo on indirect tax rates is in line with the industry's expectations; the FM has, however, proposed to broadbase the service tax net with a view to mop up additional revenues of Rs 400 crore. There were let-downs, nevertheless; the countervailing duty in lieu of state VAT on imports has not been withdrawn. Proposals for indirect tax amendments broadly hovered around the transition to the GST regime, as the government braces for the overhaul with the Constitution Amendment Bill likely to be proposed in the current Parliament session.

In summary, the FM has pulled off the task with ease and as much precision without disturbing the fiscal equilibrium. The policy initiatives for critical sectors such as banking and infrastructure will help the cause of economic inclusion and fiscal consolidation. Having said that, it would be equally important for the government to rein in inflation with supply side measures; the enhanced emphasis in the Budget proposal for the development of agriculture should achieve this objective in the short to medium term.

(The author was assisted by Sumit Singhania. Views expressed are personal)

Mukesh Butani, Partner, BMR Advisors









First, some arithmetic. On paper, the government's FY12 budget targets a consolidation not achieved in the past two decades. The fiscal outturn for FY11 came at 5.1 per cent of GDP, which contained 1.3 per cent of GDP in spectrum sales and 0.3 per cent of GDP in disinvestment. Excluding these (as it is done in almost every other country) the outturn is 6.7 per cent of GDP. The FY12 budget aims for a deficit of 4.6 per cent of GDP, which contains 0.4 per cent in disinvestment, the only asset sales. So, comparing apples to apples, the planned deficit reduction is from 6.7 per cent of GDP to 5 per cent of GDP — a staggering 1.7 per cent of GDP. Let's say, the general fiscal multiplier is 0.6 that includes the crowding in effect of the lower fiscal deficit on private investment. This should imply a reduction in GDP growth of around 1 per cent! So, in this budget the government is engineering to slow the GDP growth to 7.5 per cent from last fiscal's estimated growth of 8.5 per cent. But the budget expects GDP growth to be 9 per cent! Where am I going wrong?

Previously, in this paper and elsewhere, I have argued that the current high inflation is an unsurprising consequence of loose monetary and loose fiscal policies pushing the economy to grow beyond its capacity. A 1 per cent engineered reduction in demand should help bring down the inflation rate from this year's average of 9 per cent to closer to the government's comfort zone of 5 to 6 per cent. Yet, I am not jumping with joy.


 Yet, I have this nagging suspicion that this is not what the government intended to do in this year's budget — reduce growth and curb inflation. I guess there is this nagging suspicion that the arithmetic adds up just too nicely. To begin with, tax revenue is expected to grow by 18 per cent on the back of a 14 per cent rise in nominal GDP. This is a pretty strong buoyancy assumption. One typically sees such increases in buoyancy coming out of an economic slowdown as in FY11 not going into a slowdown. But this is not as bad as it looks. The nominal GDP growth is likely to be higher than 14 per cent on continued high inflation, so even if the buoyancy comes lower, the budget target won't be missed much. The government has assumed another year of Rs 40, 000 crore in disinvestment. With several big-name IPOs postponed to FY12, this too, looks achievable.

The real problem is expenditure. It grows only 3.5 per cent. True that quite a bit of money transferred to states for spending in FY11 has not happened but really, 3.5 per cent! To be sure, unlike the last budget when the government allocated only Rs 3,000 crore for oil subsidies, it has budgeted for Rs 24,000 crore this year. In FY11, so far it has run a subsidy bill of Rs 24,000 crore and are likely to run arrears of Rs 20,000 crore on the assumption that oil averages $85 a barrel. Even if we conservatively estimate that in FY12 crude will average $95 a barrel, the estimated oil subsidy comes to Rs 63,000 crore and not Rs 14,000 crore that will be left over after paying this year's arrears. Assuming that the government again runs arrears of around Rs 20,000 crore, we are looking at another Rs 30,000 crore in oil subsidies.

The second egregious omission is the actual estimate for the National Rural Employment Guarantee Act (NREGA). It has been kept at last year's level of Rs 40,000 crore. At the same time, by linking the NREGA to CPI inflation (the formula has not been determined, which is presumably the reason for keeping the estimate constant), the allocation should go up at least another Rs 15,000 crore even if the number of recipients remain unchanged.

The budget also plays the same card regarding the cost of the Right to Food Security Act. On the grounds that this Bill has not been discussed in Parliament, the budget is silent on the amount of additional food subsidy needed. Even if the Act comes into operation only in the second half of this year it could well mean another Rs 10,000 crore in additional spending.

Add just these three items and it runs to around 0.7 per cent of GDP. So, without assuming any revenue slippage, we are looking at a deficit of 5.3 per cent of GDP and fiscal consolidation of around 0.3 per cent of GDP. Ah! Now this makes sense. For a moment I was really worried that the government was truly planning to cut back GDP growth by 1 per cent and reduce inflation.

In a world in which supplementary budgets have become institutionalised the government can play such number games. But such games do tax (no pun intended) the government's credibility in the end. For now, we should seek solace in the fact that none of these risks will materialise in the coming few months, i.e. not before the first supplementary budget in October. After that bond yields and lending rates could go through mayhem, but I guess the Reserve Bank will once again bail out the government through their generous open market operations.

These are the author's personal views

Jehangir Aziz, India Chief Economist, JP Morgan Chase







The FM puts a positive spin on the Budget but the math looks dodgy


The finance minister (FM) has done, for once, a good job of giving a positive spin to the Budget and its arithmetic. He positively surprised the market by delivering a fiscal deficit number of 5.1 per cent in FY11 and proposed 4.6 per cent in FY12. The 4.6 per cent number is way below embedded market expectations of 5.1 to 5.2 per cent for FY12. He has managed to get to these numbers without any windfall like an amnesty scheme or asset auctions, which makes it even more creditable.

The problem, however, is that his math seems dodgy. He has actually budgeted for a decline in subsidies in FY12! The FM has budgeted for a reduction in oil subsidies from Rs 38,000 crore to Rs 23,000 crore, a drop in fertiliser subsidy from Rs 55,000 crore to Rs 50,000 crore and stable food subsidies at Rs 60,000 crore. There is no way these subsidy numbers for FY12 are even remotely credible, especially with oil at $105 a barrel. There is a minimum under-budgeting of Rs 50,000 crore. The only way these numbers can be met is if the FM moves immediately on de-control of diesel, raises other fuel prices and goes in for a nutrient-based subsidy regime for urea (with an immediate price rise). These are great reforms if he can get them done, but the track record does not inspire confidence. He has also not provided anything for the Right to Food Bill. Even on the revenue side, assuming an 18 to 20 per cent increase in tax revenues is ambitious (on a high base).

Thus, the entire fiscal arithmetic seems flawed, we will end with a fiscal deficit probably closer to five per cent, than 4.6 per cent. Commensurately, the net market borrowing target is going to be closer to Rs 400,000 crore as opposed to the Rs 350,000 crore given in the Budget. With this amount of market borrowings, interest rates and bond yields will remain under pressure.

Even though the FM may not meet his targets on the fiscal, he should be commended for appearing as non-populist as we have ever seen him. He is targeting total expenditure growth in FY12 of only 3.5 per cent over the revised estimates for FY11. He has actually budgeted a decline of one per cent in non-plan expenditure in FY12. While he may not be as tightfisted as that, clearly the days of government expenditure growing at 15 to 18 per cent are thankfully over. He has also taken a lot of pressure off the Reserve Bank of India (RBI), by trying to instill discipline on the spending side.

If this marks the beginnings of a desire on the part of the executive to stand up to the National Advisory Council, and its spend-at-any-cost policy orientation, it is a huge positive. The primacy of fiscal consolidation will be well received.

Thus, on the fiscal side, I would say, while things are not as good as he projected, the desire to control spending and the implicit intention to move on fuel and fertiliser subsidy is a plus.

On structural reform, the clear positive to my mind is the stated intention to move to a system of cash-based subsidy for fuel and fertiliser by the end of FY12. This is a huge structural positive, possible game changer and may also explain his under-budgeting of these two items in the Budget. We seemed to have finally moved beyond talk on this issue.

The FM also spoke at some length about Goods and Services Tax preparations, the intention to implement the Direct Taxes Code by FY12, and sent out a clear message that both these critical tax reforms would be on the statute books by FY12.

The stated intention to move ahead on financial reforms, through the introduction of various financial sector Bills like Insurance and Pension Fund Regulatory and Development Authority (PFRDA), as well as the RBI outlining guidelines on new bank licences is another positive. The promised introduction of the new Companies Act legislation is one more in a series of measures to demonstrate that this government is firmly in charge and moving ahead.

The decision to not tinker with tax rates (especially indirect taxes) but keep them stable and instead focus on reducing exemptions and laying the ground for tax policy stability is a good development. Predictability and stability of taxes is a boon and aids long-term decision making. No longer will the government change industry economics through the stroke of a pen.

The decision to raise the limit on corporate infrastructure bonds by $20 billion and making them tradeable among foreign institutional investors (FIIs), despite a five-year lock-in, is a positive, though one will have to see how FIIs use this. Allowing foreigners to invest in mutual funds is an incremental positive.

As for the negatives, we missed the opportunity to allow foreign direct investment (FDI) in retail, nor was anything done to incentivise the states to clean up the regulatory framework around the agricultural supply chain (Agricultural Produce Market Committees Act, mandi tax etc.) The whole issue of monetisation of state natural resources was dumped on another Group of Ministers (GoM) to go through the environmental regulatory environment. The market will see both of the above as ducking a decision.

The setting up of another GoM on corruption is not likely to inspire much confidence.

The FM disappointed with no immediate movement on a nutrient-based subsidy for urea, nor was there any mention of a framework on land acquisition to enable projects to get a move on.

On the whole, a reasonable effort, better than expectations for sure, but I don't think enough has been done to break the market out of its trading range. We will remain hostage in the short term to macro and governance headwinds, till we see action on some of the structural reform hinted at in the Budget.

Akash Prakash, Founder and CEO, Amansa Capital








EVERY FINANCE MINISTER indulges in some fudging of figures to show a reduced fiscal deficit. But in showing a fiscal deficit of 4.6% of the GDP for 2011-12 compared to 4.8% mandated by the Thirteenth Finance Commission, the FM has indulged in sheer deception — and tried to bury this deception in a lot of verbiage. The fiscal deficit projected in Budget estimates 2010-11 was 3,81,408 crore. In revised estimates, it is 4,00,998 crore despite the 3G bonanza. The actual deficit for 2009-10 was 4,18,482 crore. So, if the fiscal deficit for 2010-11 is 5.1% of GDP instead of 5.5%, the credit doesn't go to expenditure contraction or higher revenues, it goes to the unexpected one-time windfall gain from 3G and the higher growth rate projected for the year. Similarly, the figure for 2011-12 at 4,12,817 crore is less than the actuals of 2009-10 and based on completely unsustainable expenditure projections.

The non-Plan expenditure, put at 7,35,657 crore in 2010-11, has gone up to a whopping 8,21,552 crore. But in BE for 2011-12, it has been pegged at 81,61,82 crore, which is entirely unrealistic in absence of major expenditure control measures. Expenditure on subsidies in BE 2010-11 was 1,16,224 crore. In RE, it has gone up to 1,64,153 crore. In BE 2011-12, it has been put at 1,43,570 crore — again an unrealistic figure if one takes into account galloping international crude prices and the increase in fertiliser and food subsidies, specially if the proposed Food Security Bill is implemented. Similarly, the figures on pensions and non-Plan expenditure on social services in BE for 2011-12 are unrealistic and unacceptable. But I do give full credit to Pranab babufor having buried the fraudulent budgetary practice started by P Chidambaram to show a lower fiscal deficit by artificially shifting below the line the subsidy expenditure through the issuance of bonds. The GoI's expenditure practices, however, were crying out for other reforms as well. This was a golden opportunity for the FM to rationalise the GoIrun development schemes, radically change their monitoring mechanism and cut out wasteful expenditure. That opportunity has been wasted.


The Budget is highly disappointing on economic reforms. There is nothing new to indicate the FM means business on this front. The proposed legislations are old and already in the pipeline. India ranks a lowly 134 in terms of doing business, according to a recent World Bank report. I'd hoped a mention of this in the Economic Survey would have prompted the FM to deal with this issue more determinedly. Instead, he has brushed it aside. The fact remains that this government is as crippled by coalition dharma as far as economic reforms are concerned, as it was in its previous avatar.

On infrastructure, the Budget is a huge disappointment. The FM has not explained why the government is constructing only 4 km of national highways a day, instead of the 20 km announced with fanfare two years ago. Like his predecessor, the FM has only talked about how to finance infrastructure without insisting on physical targets. Everyone knows financing is not the issue in infrastructure; it is implementation. Here, the government has failed miserably.

My biggest disappointment is in the area of rural infrastructure and provision of basic amenities to rural people. An increase of 10,000 crore only for Bharat Nirman will be cosmetic. I am not disappointed at the provision of 40,000 crore for MGNREGS compared to 40,100 crore in the current fiscal year for the simple reason that a huge chunk of this money is wasted. But the FM should have listed the steps he would take to remove the design faults in this scheme and curb corruption. On black money, he has just repeated what is already in the public domain. I wish he had come down more heavily on countries that provide for tax havens and banking secrecy loss.
The FM has been timid on the tax front. On direct taxes, he should have included all the draft provisions dear to his heart in the Direct Taxes Code. On indirect taxes, he should have announced a central GST and put in operation the GST IT network. This would have served as an example for the states. On Customs duties, he has perpetuated the practice of his predecessor of giving concessions for individual items instead of going for systemic improvements.

The biggest problem of the economy, namely inflation, especially food inflation, will not be controlled by the measures in this Budget. Mangaru Manjhi, in Reshaam village of my constituency, will continue to live without road, water, electricity, healthcare and education. All FMs have failed him, including Pranab babuand me.











IN RECENT YEARS, INDIA HAS been one of the fastest growing economies and navigated the global financial crisis quite well. This was made possible by the inherent strengths of its domestic economy and relatively lower dependence on global demand along with aggressive monetary and fiscal support. However, the backdrop of the Union Budget for the fiscal year ending March 31, 2012, was challenging, faced with headwinds such as high inflation and twin deficits. Also, the series of corruption scandals have raised questions about governance. India's high growth rate means that consumption in some sectors has risen faster than output, resulting in higher inflation. Inadequate supply has pushed up food inflation as the focus on farm income was not accompanied by increased farm productivity. In response, the government has made removal of bottlenecks in the food sector as a key priority area for 2011-12 and announced new measures such as infrastructure status for cold storage chains to address logistics issues.

Managing inflation without endangering economic growth remains the chief task of the government and the RBI. In the current cycle, the RBI was one of the first central banks to take up monetary tightening, but recently indicated that fiscal stimulus control is required as well to contain inflation. The fiscal deficit situation had become manageable in the current fiscal year due to the successful 3G spectrum auction, divestment and strong GDP growth leading to buoyant tax revenues. The projection of Centre's fiscal deficit at 4.6% of GDP for the next fiscal year is clearly a positive and the market borrowings estimate for the next year has come in lower than market expectations, despite the hike in social spending. Also, the Budget exercise hinges a lot on keeping fuel subsidy to a minimum and that could be a challenge in the current environment. The introduction of the Food Security Bill may add further pressure on the expenditure side. The implementation of Direct Taxes Code and the goods and services tax could help raise tax revenues over the medium to long term. Higher global commodity prices pose challenges to India Inc in terms of rising input costs and have an impact on the country's current account deficit, given its dependence on oil imports. In recent months, the trade deficit has moderated due to rising exports, but the current account deficit at close to 3.5% of GDP remains a concern. The government introduced additional measures to ensure that capital flows remain strong, which include allowing foreign individual investors to access equity mutual funds and the $20-billion hike in FII limits for corporate debt exposure to infrastructure.

Infrastructure creation has been a key focus area for the government and India has announced aggressive plans to push spending to around 9% of GDP over the medium term from the current 5-6%. Some estimates indicate that around $1.7 trillion of financing will be required by 2020 to meet the country's infrastructure needs. On this front, the government has announced measures including financing measures such as creation of infrastructure debt funds and higher FII investment limit in corporate bonds. As always, the effectiveness of a Budget is in the implementation of policies. The government has realised that spending on information technology would increase effectiveness in tackling leakages. To meet the long-term growth expectations, the government would need to address infrastructural bottlenecks and expedite key reforms in areas such as tax, labour and education. Over the coming years, ability to manage inflation, pushing through institutional reforms for tackling graft and ensuring affordable housing in urban areas will be critical for sustainable growth. If these are addressed, I am confident that we will continue to witness India's incredible economic growth and transformation.










'HONOURABLE MEMBERS must be wondering why all new projects have been allocated 300 crore. It is because number three is lucky for me,' said finance minister Pranab Mukherjee as he presented Budget 2011, his third consecutive Budget in his present stint as the finance minister. Will what's lucky for the FM prove as lucky for the country? We must fervently hope so because there is little in the Budget to count on for that. There are no big-ticket reform announcements, no attempt to correct the skewed pattern of overseas inflows with portfolio flows dominating foreign direct inflows — on the contrary, the imbalance is set to grow with further liberalisation of portfolio flows — the disinvestment target for the next fiscal year has been kept unchanged at 40,000 crore and though there is some move towards fiscal consolidation, the numbers don't add up. Indeed, as one goes through the fine print of the Budget documents, what is clear is that the finance minister is, once again, betting on growth. How else can one explain the fact that while there is a mention of inflation — 'huge differences between wholesale and retail prices and between markets in different parts of the country are not acceptable' — the focus is on growth? An entire section of the Budget speech devoted to Sustaining Growth with inflation getting only an honourable (?) mention! What is even clearer is that we will need dollops of luck if that gamble is to pay off and Budget calculations are not to go awry. The numbers flatter to deceive. Thus, at first glance, the FM appears to have bettered his fiscal deficit/GDP target for the year. But as the Economic Survey presented in Parliament on Friday last points out, the higher nominal gross domestic product (GDP) estimates for the year translate into a fiscal deficit/GDP target for the current fiscal year of 4.8%, not 5.5% as originally estimated in Budget 2010. Hence, far from besting his fiscal deficit target, the FM has actually fallen short of target. The current fiscal year is expected to end with the fiscal deficit/GDP ratio at 5.1%. In a year when the exchequer got a huge bonanza from the 3G spectrum auction that raised 1,05,000 crore against the Budget estimate of 35,000 crore, one would have expected the finance minister to use the opportunity to set government finances in order. Instead, he has opted to underachieve. He is been more circumspect with the revenue deficit — the excess of revenue expenditure over revenue receipts — the more dangerous of the two deficits as it measures how much government is borrowing to finance its current expenditure. The revenue deficit/GDP ratio is not only well below the Budget estimate of 4.0%, but is also below revised target indicated in the Economic Survey (3.5) after taking into account the higher GDP. Unfortunately, he does not build on that. On the contrary! Along with inflation, fiscal consolidation seems to have got the back seat. The revenue deficit/GDP ratio for the next fiscal year is projected to remain at 3.4% while fiscal deficit/GDP ratio is projected to come down marginally to 4.6%. Seen in conjunction with the Budget announcement on linking payments under the MGNREGS to inflation and the government's commitment to passage of the Food Security Act, both the deficit numbers seem gross underestimates. Unless, of course, the FM is third-time lucky and his gamble pays off. But that is a big if! No wonder the market, after shooting up almost 600 points, sobered down to end the day just about 122 points higher!






THIS BUDGET NEITHER ADDRESSes the basic issues confronting the aam aadmi like price rise, corruption and black money, nor promotes inclusive growth. The finance minister says inflation is due to 'shortcomings in distribution and marketing systems'. There is no effort to roll back the last Budget's hikes in petroleum duties. There is no reference to prohibiting huge speculative trading in the commodity exchanges. Nor is there is any reference to releasing from central godowns food stocks that are more than double the buffer norm. Any, if not all, of these measures would have eased the pressure on prices.

On the contrary, the burden on the people will increase. Major subsides on fuel, fertiliser and food have been cut by over 20,000 crore, compared to the 2010-11 Revised estimates (RE). The budgetary support for the central Plan goes up by only 12%, trailing nominal GDP growth of 14%. This squeeze in real expenditure is reflected in decreased allocations for agriculture and rural development compared to last year's RE. Total non-Plan expenditure is also lower than the RE with major reduction in economic services that include agriculture, industry, power, transport, etc, and social services that include education, health, etc.

There is a relief of 11,500 crore in direct taxes, a subsidy to the rich, while there is an additional mobilisation of 11,300 crore through indirect taxes, a burden on the consumers. This comes on top of the total tax concessions given last year amounting to over 5,11,630 crore. Conceding for a moment the concessions in excise and Customs duties were meant to be a stimulus, the concessions in corporate and personal income tax amounted to 1,38,921 crore. This is an additional subsidy to the rich during last year. This Budget, therefore, continues with the philosophy that subsidies to the rich are incentives for growth while those to the poor are detrimental.
In this background, the proposal to target fuel and fertiliser subsidies through direct cash transfers, apart from excluding large sections of the needy, will adversely impact upon the deepening agrarian crisis.

On tackling corruption, the finance minister typically announced the constitution of a group of ministers! With regard to black money, we are informed that the 'government has put into operation a five-fold strategy that consists of joining the global crusade against black money'! No concrete measures such as reviewing the double taxation avoidance agreement with Mauritius, through which 42% of foreign capital inflows to India are routed. Such channels are the biggest conduits for tax evasion and money laundering.

That such measures are being shirked in order to propitiate international finance capital at the expense of siphoning off huge amounts of our resources becomes apparent with the announcement of moving forward with financial liberalisation, for which seven laws in the financial sector have been announced. It is precisely because the Left prevented UPA-I from undertaking such measures that India could withstand the devastating impact of the global recession. With the now-declared desire to appease international finance capital, India is being rendered vulnerable to global speculative shocks, particularly with India's current account deficit widening.
During the last three years, corporate and personal income tax concessions, according to the budgetary Statement of Revenue Foregone, amounts to a whopping 3,61,415 crore. If this revenue were collected and utilised for public investments, we would have been able to build our much-needed infrastructure and generate employment. This, in turn, would have substantially enlarged domestic demand laying the basis for a healthy, sustainable growth trajectory. Instead, the divide between the two Indias is only being widened. Ironically, all in the name of the aam aadmi!

In sum, this Budget will only aggravate the widening economic inequalities taking India further away from inclusive growth, while weakening its economic fundamentals.







                                                                                                               DECCAN CHRONICAL



It was no big-bang Budget that finance minister Pranab Mukherjee presented in Parliament on Monday. But nor can it be described as an outright populist one. Indeed, it reflects the sensitivity and understanding the minister brings to bear on issues affecting the farm community, big business, and even "very" senior citizens over 80. The fiscal deficit, perhaps the most worrying factor, along with inflation, is proposed to be brought down to 5.1 per cent from 5.5 per cent in 2010-11 and further to 4.6 per cent of GDP in 2011-12, that is, by Rs 4,12,817 crores. This should boost India's sovereign rating. The finance minister made it clear at the beginning of his speech that he recognised the need of the hour — to improve regulatory standards and administrative practices to correct the perception that India is a corrupt nation, the need to eliminate middlemen who deprive farmers of a good price, or the need to increase warehousing and cold storage facilities to prevent over 50,000 tonnes of foodgrains from rotting due to lack of godowns. Private investment in the creation of modern storage capacity, cold chains and post-harvest storage is to be recognised as an infrastructure sub-sector. Mr Mukherjee made a significant allocation of over Rs 2,14,000 crores for the infrastructure sector, which is vital if this crucial element of our economic life is to keep pace with growth, and in order to eliminate the bottlenecks that plague it. The national manufacturing policy, seeking to raise the share of manufacturing in GDP — from the current 16 per cent to 25 per cent in 10 years — is a commendable initiative. So is the Rs 500 crores given to the National Skill Development Fund to impart skills to the jobless so that industry can hire them — the aim being to create a skilled workforce of 150 million individuals by 2022. In agriculture, Mr Mukherjee made all the right noises on increasing production of pulses and cereals for the nutritional security of the poor and rural families, as well as boosting the production of edible oils — given that India has to import 50 per cent of its needs at present. The allocation has, however, not been increased in line with this. The finance minister acknowledged that implementation gaps and leaks from public programmes are a serious challenge. In the context of foodgrain, kerosene and fertiliser subsidies, he said the government was moving towards a direct cash subsidy transfer to those living below the poverty line in a phased manner. But regrettably, the minister was short on specific ideas about how to tackle corruption. The Budget, on the whole, indicates a tilt toward rural India, even in an area like housing. The minister sprang a surprise on India Inc by increasing the minimum alternate tax to 18.5 per cent, and proposed to levy MAT on SEZ developers. This should not affect zero-tax companies too much by way of eating into their profits, but it has sparked some resentment. This is one reason why the stock market ended lukewarm after it soared over 500 points after Mr Mukherjee began his speech.






The last few Budgets have had the recurring theme of inclusive growth, strengthening the social and physical infrastructure, and preparing the country for a set of institutional reforms. Finance minister Pranab Mukherjee's Budget 2011 continues the tenor, which, by itself, is reassuring.

The finance minister has taken further measures to improve the quality of government spending. There has been a relatively faster increase envisaged in plan expenditure, and focus on areas like education, health and rural infrastructure has been strengthened. Alongside this, Mr Mukherjee has signalled a transition towards direct cash transfers so as to target subsidies more effectively. If this move succeeds, on the back of the UID initiative, it will go a long way towards creating an effective, yet sustainable, social security net.

Even while increasing the outlays for key areas, the finance minister has managed to peg the increase in overall government expenditure at a relatively moderate level. Apparently, India is well on the path of fiscal consolidation. The finance minister has recognised the imperative for a counter-cyclical fiscal policy. This will enable India manage the macroeconomics stability in a prudent manner even as the global economic environment turns more volatile and uncertain.

Notwithstanding some expectations of an increase in the general excise rate, the Mr Mukherjee has refrained from such a step. The Budget has, thus, avoided adding to inflationary pressures. For the corporates, the reduction in surcharge is welcome. The finance minister has also tried to reduce the tax burden on individuals marginally. He has provided a welcome relief to senior citizens.

Though the Budget may not have made many big-bang announcements, it scores through specifically directed initiatives. It has incentivised investment in the fertiliser sector and in cold storage infrastructure. It has endeavoured to attract foreign investment in infrastructure debt funds and in schemes of mutual funds. These will have a salutatory positive, long-term impact. Housing sops are encouraging for middle-class home buyers as well as for the economy through sheer multiplier effect.

The disinvestment process continues with an achievable target for the next year. The intention to formulate a new manufacturing policy driven by considerations of self-regulation and global competitiveness deserves applause. India has great potential to become a global manufacturing hub. As the finance minister elucidated at the very start, this Budget has its thrust on a more transparent and result-oriented economic management in India. In turn, such an approach could help in strengthening the micro-foundations of a great macroeconomics growth story that is evolving in India.

* Kumar Mangalam Birla is chairman of the Aditya Birla Group






There is nothing for us in this Budget. Finance minister Pranab Mukherjee should have seized the day to safeguard the decade. But he has not. Nothing has been done to incentivise biotechnology or to ensure actual inclusive growth. For how long will we take incremental steps and avoid taking exponential steps?

This Budget presented a platform to be strong not only in views but also on reforms. Hardly anything has been done on the previously announced intentions of allowing foreign direct investment (FDI) in retail and insurance. The proposal to levy minimum alternate tax (MAT) on developers of special economic zones (SEZs) and units operating in them is a prime example of how we are fast becoming non-believers of our own rhetoric. It is very disappointing and absolutely wrong. You cannot announce certain rules once and then go back on them a few years down the line.

Neither the biotech nor the pharma industry has been given anything in this Budget. I have always said that the biotechnology industry holds immense promise — with respect to medical, agricultural and environmental benefits that accrue from it, as well as economic contribution. I expected the government to demonstrate through the Budget that it sees India emerging as a global biotech leader. Talk of innovation means very little when the government has not tried to nurture an enabling policy environment through regulations that support innovation. Global as well as local businesses were looking for reforms and actions that will positively impact them, but that has not happened. In hindsight, our decision to invest in Malaysia was right.

People who are complacent about the growth of the economy are likely to view this Budget as a great balancing act. Yes, the Budget has something to cheer the stock markets, but that's not enough. India has been announcing to the world that it has arrived. But this Budget has done nothing to show the "rest of the world" that we believe in our own words.

Budget 2011 also does very little for the country's manufacturing sector. The government has been talking about job-creation. Job-creation does not mean the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). MGNREGA is not the only way to attain inclusive growth. The right policies enable job-creation, and this is another area where the Budget failed to do anything — to have policies that incentivise job creation. In a sense, this Budget is a disappointment for those who expected the finance minister to show leadership. This Budget can be viewed as one which shows that instead of leading the way, we are still adopting the agonising wait-and-watch policy.

* Kiran Mazumdar-Shaw is chairman & MD, Biocon







The main challenges we face today are to constrain inflation, particularly food inflation, moderate fiscal deficit to low inflationary expectations, deal with corruption and promote growth while improving the welfare of aam aadmi and aam aurat. One Budget cannot deal with all these issues. However, a Budget is an opportunity to provide a roadmap of how the government plans to deal with them.

From this point of view I look at finance minister Pranab Mukherjee's Budget 2011 and find it somewhat disappointing as I thought the climate is right to take some major new initiatives. Mr Mukherjee has promised lower fiscal deficit, but given that there is no net change in tax rates and there won't be any 3G auction windfall next year, how is this going to be realised? His promise is based on the expectation of 55 per cent increase in gross tax revenue. This may be too optimistic.

These are no specific measures to contain food prices in the short run excepting a prayer to Indra Dev for timely and plentiful rains. No reforms of the Agricultural Produce Marketing Act has been proposed — without this the differences in the price of a commodity across markets and between retail and wholesale market will be difficult to bring down.

While corruption was mentioned, no measures were suggested. We were asked to wait for a committee report. Mr Mukherjee's Budget does indeed have lots of measures for aam aadmi. Indexing Mahatma Gandhi National Rural Employment Guarantee Scheme wages to inflation, pre-matric scholarships for SC-ST students, higher wages for Anganwadi workers, extending health insurance to many poor workers, credit write off for handloom workers, etc. are certainly good measures, provided, of course, they are effectively implemented.

The announcement to deliver fertilisers, kerosene and LPG subsidy through cash transfers is also welcome. In summary, the finance minister has played to the gallery but missed the opportunity for substantive initiatives for which the current climate is right.

* Kirit S. Parikh is chairman, Integrated Research and Action for Development






BUDGET 2011 comes against the backdrop of an emerging global food crisis caused partly by extreme weather events in some major food-producing countries, including China, and partly by the escalating petroleum price due to the battle for democracy in West Asia. Add to this the continuing food inflation in India.

The last Budget of finance minister Pranab Mukherjee included special production efforts in eastern India, described by the National Commission on Farmers as the "sleeping giant of Indian agriculture". The major components of the 2011-12 Budget relating to farming include bringing Green Revolution to the eastern region, integrated development of 60,000 pulses villages in rain-fed areas, promotion of oil palm, increasing the production of fruits and vegetables and the promotion of nutritious millets like bajra, jowar, ragi, and initiation of a national mission for protein supplements through dairy farming, piggery, goat rearing and fisheries in selected blocks.

Provision has also been made for accelerated fodder development programme and the promotion of organic farming methods. The target of credit flow to farmers has been increased to Rs 4,75,000 crores and since so far most of the credit went to companies and not to farmers, Mr Mukherjee is planning to advice banks to step up direct lending to small and marginal farmers. Also, the effective rate of interest to farmers who repay the crop loans on time will be four per cent, as suggested by the National Commission on Farmers in 2006. Provision has also been made for more mega food parks, for warehousing and storage and cold chains. It is proposed to attract private investment in this sector.

Mr Mukherjee has also announced that a national Food Security Bill will be introduced in Parliament this year, to address under nutrition and malnutrition particularly among women and children. He also proposed that some of the subsidies, like the one relating to fertilisers and kerosene, will be paid to the farmers directly. Excise duty has also been reduced in the case of equipment for drip irrigation. A welcome step is the creation of the Women Self-help Groups' Fund with an outlay of Rs 500 crores. If this is linked to the Mahila Kisan programme, it will have an impact on rural income.

On the whole, the Budget contains several good proposals but it lacks a vision and a strategy for keeping farmers on the farm and for attracting and retaining youth in farming. While Mr Mukherjee emphasised the need for reaping a demographic dividend from our youthful population, there is no strategy or programme for attracting and retaining youth in farming.

Most of the farm graduates seek employment in the organised sector and are not interested in going back to the villages. The major deficiency of this Budget is that it has not addressed two goals of the National Policy for Farmers placed in Parliament in November 2007.

This policy calls for an income orientation to farming and the measurement of agricultural growth in terms of growth rate in the real income of farm families. Also it calls for an integrated action plan involving higher farm productivity and larger income to encourage yuva kisans to take to farming as a profession.

It is unfortunate that in a year of emerging global food crisis and persistence of food inflation, an opportunity to accelerate agricultural progress and agrarian prosperity has been missed. The only hope for farmers is the enactment of a Food Security Bill which confers legal access to food. While the right to information can be implemented with the help of files, the right to food can be implemented only with the help of farmers.

* M.S. Swaminathan is the chairman of the National Commission on Farmers. He is considered the father of India's green revolution.






Budget 2011-12 has several major initiatives for financing infrastructure projects and stepping up investment in this sector. The 13th Finance Commission had, in its report, suggested a path of fiscal consolidation.

The Budget proposals of 2011-12 are in conformity with this and fiscal deficit is targeted to go down to 4.6 per cent as against 4.8 per cent indicated previously. Lower deficit will enable availability of funds for the private sector and this will ensure large flow of resources to infrastructure projects, too.

It is estimated that $1 trillion investment will be required in the infrastructure sector during the Twelfth Five Year Plan (2012-17). This is almost double of what the current plan is expected to attain. The finance minister has opened several windows for flow of funds from foreign investors to meet part of the financial resources required for this. The Securities and Exchange Board of India-registered mutual funds have now been allowed to accept subscription from foreign institutional investors; a major thrust has been provided by increasing the foreign institutional investors (FIIs) limit for investment in corporate infrastructure bonds to $25 billion from the existing $5 billion with the total limit of FII in corporate bonds being raised to $40 billion; a further initiative has been permitting tax-free bonds up to Rs 30,000 crores; similarly, National Highways Authority of India (NHAI), Housing Urban Development Corporation (Hudco) and ports have together been allocated Rs 20,000 crores tax-free bonds. Substantial step up in the pace of infrastructure projects can be funded through these initiatives.

Investments in the power sector will be the largest component of infrastructure. The Budget announcement of excise-duty exemption on supplies to mega and ultra-mega power projects will place domestic manufacturing on an equal footing with imports.

It had been decided under the road component of "Bharat Nirman" to connect all villages above the population of 1,000 in the plains and up to 500 in the hills and other areas. Proposal for increase in Rural Infrastructure Development Fund (RIDF) for National Bank for Agriculture and Rural Development (Nabard) from Rs 16,000 crores to Rs 18,000 crores will certainly help.

There, is however, a need to enhance this further as the requirements of the rural economy is large.

A major initiative announced by Mr Mukherjee is the creation of special vehicles for getting foreign investment in the form of Notified Infrastructure Debt Funds. To make this attractive, these funds will attract withholding tax rate of five per cent instead of current rate of 20 per cent. This should make these funds attractive for foreign investors as the funds can be invested freely in the infrastructure and their income will be exempted.

* B.K. Chaturvedi is a member of the Planning Commission










Rarely, if ever, has the budget of the Government of India, been presented under such exacting deficits of governance and finances, amidst a state of near paralysis in policy-making and action. It shows. The aam aadmi has always been content: some added tax exemptions (Rs 1,80,000 this year) and minor miscellaneous goodies are all that it takes to shut him up for a year. Industry segments are happy if their specific tax/ excise/ related matters are sorted out. No one is worried about the big picture that presents a frightening divide between the reforms agenda, "the chosen path" to quote Mr Pranab Mukherjee, since the early Nineties and the package that the ordinary Indian ~ promised prosperity without tears ~ has received.

Could the Finance Minister have channelized black money to work for him this year? Yes but he chose to make noises around allocations to strengthen the physical and human infrastructure to tackle black money. Was there any daring or dramatic initiative on any other count? No. For all practical purposes this budget is an exercise in futility that has neither the capacity to address the genuine problems (that the minister admitted) nor the ability to implement past initiatives even though it directs some 80 per cent of investments. Even infrastructure, which has been the centre of attention for several years, does not send out happy vibes. Industry expectations of financial interventions with an infrastructure bond to tap household and corporate savings and the infrastructure debt fund rollout have been belied. The headlines, of course, were about the government delivering growth ~ India is on a nine per cent growth path (agriculture growth 5.4 per cent; industry 8.1 per cent and services 9.6 per cent) but Mr Mukherjee's promised deficit of 4.8 per cent has not been met (5.1 per cent in 2010-11) with a promise of 4.6 per cent for 2011-12. This was despite the Rs 65,000-crore bonanza (Rs 30,000 crore more than budgeted for) from the 3G auction that has spared Mr Mukherjee some big blushes this year.
Someone should remind the Finance Minister that his audience is not at Davos but in the homes of ordinary Indians and what concerns them is the frightening inflation that has disenfranchised the poorest and is even pushing the middle class against the wall amidst all the vacuous talk of ensuring food security and inclusive growth. Has the budget allayed these concerns? Definitely not in the short term. The worst is, of course, the lack of clear policy guidelines to achieve stabilization at the macro level; restore agriculture to its rightful place and ensure that farmers produce enough, sell produce at affordable prices while retaining sustainable incomes for themselves. India is producing lesser than it did a decade ago and that is the moot point; not the so-called growth story of becoming the fifth largest global economic power. India's current account deficit too is in excess of three per cent of the Gross Domestic Product, which is as bad as it was in 1991, when the reforms were launched. Former Indian finance secretary and current Rajya Sabha member, Mr NK Singh, talked about the need to reinvent the budget and that is the moot point. Has the budget been able to narrow the policy divergence between the forces that send growth spiraling and those that lead to genuine development for some 70 per cent of India's people? Has Mr Mukherjee been able to deliver a clear message on the cash transfers to people below the poverty line? No, save for saying that Mr Nandan Nilekani is looking into the mechanism for implementing the plans vis-à-vis kerosene and LPG.

The much-awaited reformative Direct Tax Code and the Goods and Services Tax are still pies in the sky though Mr Mukherjee did give a definite date for a DTC rollout (April 2012). The important points that Mr Mukherjee made were that there is no resource crunch; leakages and implementation gaps are problems as is corruption. He should be equally concerned about international commodity and crude petroleum prices and their inflationary impact. Inflation is still being under-reported and the new Wholesale Price Index does not capture more than 40 per cent of the required data. In the final analysis, the Finance Minister has presented a bit-and-pieces budget; but not really gone back on what he had started. What one wanted of him is action and on that score Mr Mukherjee has disappointed.




PERFECTLY understandable was North Block's advice to the Orissa government not to buckle under Maoist pressure and to release some of their cadres in "exchange" for the abducted Collector of Malkangiri district. A dubious precedent has indeed been set. Since hostage taking seems to "pay", the Maoists could be encouraged to repeat that. Yet equally understandable ~ though theoretically not excusable ~ was Naveen Patnaik ignoring P Chidambaram's line. Securing the release of RV Krishna was a bit more than giving a good officer his due, it was a signal to all officials and their families that the government would not abandon them should things sour. Having never headed a state government, Chidambaram has been spared the myriad pressures that come into play in "hands-on" dealings, the emotional quotient that can negate theory. From a safe distance New Delhi can appear firm, cold-blooded (in the positive sense of the term) and "professional". The direct managers of such crises cannot make light of the human element ~ unless they emulate some of history's authoritarian figures.
In a contemporary scenario in which the TV cameras raise emotions to fever-pitch the last thing they wish is to appear ruthless. Yes, India is a soft state: the negotiated settlements of the Rubaiya Sayeed and Kandahar hostage situations has established that. But so have the chicken-hearted responses to the terrorist strikes on Parliament House and high-profile locations in Mumbai. So Patnaik is not the only "push over": on the contrary, that the Collector and Junior Engineer returned unharmed would earn him a degree of local appreciation. In their own ways both Chidambaram and Patnaik were correct, yet the two "rights" do not add up to complete success.

What is highlighted by those differences of opinion is that there is no consensus on a comprehensive counter-Maoist policy. True at a tactical level there cannot be a one-size-fits-all formulation: but there appears only limited unanimity on basics such as whether "force" precedes "development", how tough will the forces act, the extent to which a region's natural resources remain the preserve of local communities, the response to the "human rights" activists etc.

And of course the manner in which political parties will exploit the situation. Even coordinated police functioning is not evident. It is palpable that the meetings of chief ministers with central government leaders have not gone beyond routine speech-making, and the Opposition parties in the Centre and the states are not fully on board. Indeed, even within ruling parties differences persist. It all adds up to a deficit in governance and leadership.








Understanding Empire is "so simple," George Orwell declared in Burmese Days, a novel based on his stint as an imperial cop in the 1920s. "The official holds the Burman down and the businessman goes through his pockets." Nothing much has changed about the classic roles of the official or the businessman except that now they usually are native recruits to the enterprise of plunder, doing the biddings of multinational firms, the IMF, and our too-big-to-fail-or go-to-jail banks.

So, in revolutionary upsurges as in Egypt and Tunisia, there are two crucial battlefields: the first against the officials (bureaucrats, police, military) on the front line, and a more tenacious and protracted one against a business elite who have concocted innumerable ways to strip your pockets bare, and cannot help doing so. The system ~ still labeled capitalism but only faintly resembling the textbook image ~ makes them do it, or so they shrug their Armani suited shoulders and say: Some things, though, have changed.

Attending a graduate seminar at a US university in the 1970s one of us recalls discussing a book by Andrew Shonfield entitled Modern Capitalism. This tome amounted to the holy book of the Keynesian post-war era consensus. Shonfield's upbeat gospel was that the ugly capitalist evils depicted in Dickens' novels and in Friedrich Engels' grim portrait of 19th century Manchester were now and forever a musty memory fit for museum display. Capitalism smartly had been reined in and tamed throughout Western Europe, Japan and (a little less so) the US through the enacting of a "social democratic contract," comprising industrial regulation, worker protection, trade union expansion, welfare state buffers, and Keynesian techniques for smoothing the needless business cycles through which an ungoverned economy formerly inflicted agonies upon everyone but the rich. That was then.

Last year a young academic on the rise presented a policy paper in that same seminar room. He proceeded to argue that wise states must relinquish purchasing policies that favour domestic producers over foreign ones. This act supposedly would make life better, and prices cheaper, for all, according to free market dogma. A feisty graduate student launched a Keynesian criticism, almost straight out of Shonfield's book, retorting that nations perhaps were better advised to retain policy instruments to cope with future economic reverses. Did anyone here really care to bet that there never would be another downturn? Be happy to give you odds on that. Government purchasing, after all, is one of the ways you gin up a sagging domestic economy. The young academic then startled us when he replied that in previous presentations at other elite institutions he never before encountered this kind of critique. By now, a neo-liberal consensus ~ "markets are magic" ~ had smothered all alternatives, and almost all common sense.

Don't get us wrong. There are sharp American economic voices out there, such as Robert Reich, Dean Baker, Paul Krugman, James Galbraith and Joseph Stiglitz.  But these heretics are shunned by the Obama White House, which is a wholly owned subsidiary of Wall Street. Yet the America of the much-maligned 1960s and early 1970s ~ for all the turbulence that the Vietnam War and anti-racist movements stirred ~ was, unlike today, an increasingly prosperous place for most ordinary people (though the right skin colour helped).  Living standards more than doubled since the Second World War. Taxes on the rich and on corporations were much higher yet business boomed and the rich got richer, but not richer so much faster than everyone else, as is the case today in a tax-cutting (for tycoons) environment to which Obama succumbed so supinely in 2010. Social mobility was real and many people moved into a growing middle class. Higher education was virtually free at public universities. Environmental regulations were enacted. There was even a stab at conducting a 'war on poverty' to mop the scandalously large pockets of people not already inducted into the Affluent Society.
Here, with all its faults, was an economic arrangement far superior and much more promising than the devil-take-the hindmost system promoted these days. So much so that today it would seem utopian to advocate returning to 1960s' levels regarding taxes, unionization of workers, regulation, and welfare. The same addled Tea Party-supporting American suburbanite whose own prosperity was based on those policy conditions would denounce anyone as a socialist for trying to restore the economic policies in place under Eisenhower. You would have to be a raving revolutionary to try. That's how much things have changed.

No sooner did this mildly civilized economic system emerge after the Great Depression in response to public demand than the dismantling of it very slyly began. One price the Western working class exacted for fighting the Second World War was the setting up of welfare states. Economists too knew the welfare state was not only a humanitarian device but a vital means to maintain social stability. Even segments of business recognized this practicality. Still, a welfare state required progressive taxes that the elites want to wriggle out of. Secure workers become an affront to employers and must be subdued. So the well-funded Right set about undermining social advances by creating media propaganda centres, buying pliant legislators, and portraying policies favouring themselves alone as exhilarating "reforms." This remorseless rollback was subtle at first but grew brutal as it picked up momentum from Ronald Reagan's presidency onwards. The so-called "Washington consensus," prizing phony free markets over every other concern, was the smug outcome of a long multi-front struggle to "discipline" labour. That's what happened in a superpower with formal democratic mechanisms. What can one expect elsewhere?

Expelling dictators from Tunisia and Egypt was the first act in a longer process of altering the socio-economic priorities they served. At last, however, a line is being drawn against routine, legalized and systemic swindles. Prices, for example, soar because speculative money floods commodity markets formerly protected from such influxes, and as a consequence angry masses flood Tahrir Square. Global elites begin to notice resistance stretching potentially from Cairo to their Park Avenue and Hampstead doorsteps. It's no more tolerable being unemployed in Brooklyn or Belfast than in Alexandria. Governments slice services for ordinary citizens and lavish cash on elites who wrecked otherwise sound economies. These problems are rampant wherever neo-liberal cant rules. We wonder why Marxists in the recent past lamented the lack of radicalism among people subject to the wiles and lures of capitalism. By their own scriptural terms, it is circumstances, emerging out of the contradictions of capitalism that generate the revolutionary materials they crave ~ and there they are. The ironic aspect is that ameliorative social reforms would have averted these crises, but clueless or merely selfish honchos everywhere ~ from Mubarak to David Cameron ~ cannot seem to help but do all the wrong things. It looks too late in the Middle East for rulers to begin to connect the dots ~ and expect to stick around.
The writers are freelance journalists and researchers







Miss Mayawati is no stranger to controversies. Sitting majestically on her elephant, she rode to power in Uttar Pradesh, leaving wrestler-turned-politician Mulayam Singh Yadav's cycle far behind. Her spectacular victory, thanks to an elephantine majority won by the Bahujan Samaj Party (BSP) on its own, has been marred by a string of controversies and scandals. The Taj corridor case, garlands of high-denomination currency notes presented on Ms   Mayawati's birthday and allegations of amassing assets disproportionate to her known sources of income are but  a few. It seems absolute power has corrupted, well, her judgement absolutely. The installation of her own statues raised a few hackles but the Uttar Pradesh chief minister remained unfazed. As if the hue and her cry over the rape of a Dalit girl by a BSP legislator in Banda was not enough, Miss Mayawati recently got embroiled in yet another controversy. This time, it was what the media dubbed Operation Shoe Polish. The incident took place in the first week of February in Naunipur village in Uttar Pradesh. Miss Mayawati had just alighted from her chopper in Auraiya while on a routine inspection, when her personal security officer (PSO), Mr Padam Singh, took out his handkerchief and stooped to wipe the dust from her sandals. Mr Singh's efforts were captured on camera and extensively telecast by TV channels.
Mr Singh has been part of Mayawati's security team for more than two decades. He retired in 2010 but was given an extension. Awarded a gallantry medal by the President and decorated with Utkrisht Sewa Medal instituted by Miss Mayawati, Mr Singh has never been out of the chief minister's security ring and was Miss Mayawati's PSO even when she was out of power. The sandal-cleaning bytes fuelled a political dust-storm and her opponents tried to make an issue of it. They decried the incident as shameful and said it reflected the chief minister's "feudal attitude".

Commenting on it, Jammu and Kashmir chief minister Mr Omar Abdullah tweeted that he would not allow his security guards to carry even his briefcase. The Uttar Pradesh Cabinet secretary rubbished allegations of sycophancy and said that the security officer was only doing his duty. There is some truth in what he says. The chief minister never stopped Mr Singh from doing what he did, so it can be safely assumed that sandal-cleaning was part of his job.

This is not the first time that footwear has made headlines during Miss Mayawati's regime. Earlier, senior bureaucrats were asked to take off their shoes before entering her chamber because she was "allergic to dust". It was then seen as a ruse to humiliate the upper-caste bureaucrats. Footwear has played a pivotal role in the formation of Miss Mayawati's party which she claims is of Dalits, by Dalits and for Dalits. That the BSP has a long and enduring affair with footwear is evident from the party's popular slogan: Tilak, tarazoo, talwar inko moro jootey char. Tilak, tarazoo and talwar denote Brahmins, Banias and Rajputs, respectively. The slogan caught the imagination of Dalits and Miss Mayawati came to be deified as the long-awaited messiah of the state's downtrodden. The party was cruising along nicely till it realised, though belatedly, that a Dalit-centric party cannot necessarily win elections. So, the BSP decided to jettison the footwear-slogan in order to woo the upper castes.

Uttar Pradesh seems to have a peculiar preoccupation with footwear. The players keep changing, the script remains the same. This time, it was Miss Mayawati's PSO who chose to clean her sandals. Former Uttar Pradesh chief minister Mr ND Tiwari was photographed tying the shoelaces of Sanjay Gandhi. At that time, Sanjay was not even a Member of Parliament, nor did he hold any post in the Congress party. What probably endeared him to the much older Mr Tiwari was his provenance ~ Sanjay Gandhi was the younger son of the then Prime Minister. Why blame Miss Mayawati? She has not done anything beneath her dignity as a chief minister. At least, she was not tying someone else's shoelaces like Mr Tiwari had done.

Footwear, in recent times, has refused to remain tied to the feet. It has started flying now. If pigs can fly, why not shoes? It was an Iraqi journalist, Muntazer al-Zaidi, who discovered the aerodynamic value of shoes and tested it on the world's most powerful man at that time, President George W. Bush. Mr Bush was addressing a news conference in the highly-fortified Green Zone while on a surprise "farewell visit" to war-torn Iraq on 14 December, 2008. When he finished his brief speech by saying "Thank You" in Arabic, al-Zaidi took off his shoes and threw them at Mr Bush one after another. When he hurled the first shoe, he yelled in Arabic: "This is your farewell kiss, you dog." After his second attempt, he shouted: "This is for the widows and orphans of Iraq." The two misguided missiles missed their target. Al-Zaidi was nabbed, beaten and sent to prison for three years. His sentence was later reduced to one year in prison. The President was not injured and joked about the incident: "If you want facts, it's a size 10 shoe that he (the journalist) threw." Al-Zaidi became a hero in the Arab world. He showed how an unarmed person could register his protest by using shoes as projectiles.

The art of shoe-tossing as pioneered and perfected by al-Zaidi has become popular in other parts of the world, including India. Home minister Mr P Chidambaram was the first high-profile political victim in this country followed by Mr Omar Abdullah, chief minister of Jammu and Kashmir. His father, Mr Farooq Abdullah, said after the incident that his son was now part of an elite club that counted Mr George W. Bush among its members. However, politicians who call Press conferences at the drop of a hat, directed journalists to take off their shoes before entering the conference room. In London, a Pakistani national hurled a shoe at former President Pervez Musharraf during a meeting. The shoe never went past the front row. The former military dictator has been named an accused in the Benazir Bhutto assassination case. More shoes will likely greet him in Pakistan if he returns there to depose in the case.

Bollywood director Mahesh Bhatt has come up with a play titled The Last Salute in which newcomer Imran Zahid will essay the role of the Iraqi journalist. It will glorify shoe-throwing as a form of the common man's revenge on tyranny. The play has been inspired by Muntazer al-Zaidi's book The Last Salute to President Bush and will be staged soon in major cities in India and in Dubai.

The writer is a freelance contributor






The address which Mr A.M. Montrath delivered at the annual meeting of the Bengal Chamber of Commerce was a multifarious but not very illuminating review of the commercial year and of commercial requirements. As the yearly gathering is the chief opportunity which the business world enjoys of placing before the Government and the public broad views of policy it is unfortunate that the occasion should not have been more profitably employed. Among the topics to which the retiring President devoted some attention were the supply of railway wagons and the desirability of instituting an Advisory Committee for the Eastern Bengal State Railway. With the first of these questions Mr Monteath dealt only superficially. It is easy to demand that the railways should always have an ample supply of rolling stock for every emergency, but the difficulty is to secure the provision of reasonable facilities in a year of brisk trade without locking up capital in wagons which will be idle in a slack year. Probably no commercial company manages its affairs on the principle of being prepared to meet an exceptional demand, and there seems to be no ground for urging the railways of India to adopt a course which is not supported by the practice of private enterprise. Mr Thomas Robertson, in his memorable report on Indian railways, strongly deprecated the policy of a constant increase of wagon-supply, holding that the most efficient as well as  most economical method of meeting the over-pressure of a busy season was the running of trains with a lighter load at a higher speed. An increase in the wagon supply is undoubtedly from time to time necessary, but it is dubious wisdom for the spokesmen of commerce to confine themselves to pressing upon the railways this expensive and wasteful method of meeting extraordinary pressure when insistence on a better utilisation of rolling stock would probably conduce to an advance in the average efficiency of the railways. With Mr Monteath's protest against the refusal of the Railway Board to accept the suggested Advisory Committee for the Eastern Bengal State Railway there will be a considerable amount of sympathy.







When I fetched up in a hospital on hearing of the grave illness of our "Boro Boudi" who is Boroma to our children, a motley crowd was milling around. Boudi had slipped into a stupor in the wee hours and the local doctor had diagnosed it as "coma" that required immediate hospitalisation. Since she was nearly 80 years old, it was considered a life-threatening condition. By midday, the hospital was flooded with relatives, friends and well-wishers anxiously awaiting the doctor's opinion. Expressions ranged from solemn to grim, tearful to tension ridden even as talk veered around sundry experiences of illness and hospital situations that added to the sombre atmosphere.  

Immediately after Partition, Dada had taken up the mantle of a guardian, taking care not only of his parents and siblings but also indigent cousins and even distant relatives seeking a foothold in an alien city. Boudi was always by his side. Struggle in adversity is the stickiest glue that binds a family together and so, over the years, the members worked hard and built together a relatively prosperous future. When I entered the household as a young bride of the youngest son of the family, Dada and Boudi were the people we looked up to and turned to in times of crisis. Our children knew them to be the patriarch and matriarch of the family, a big banyan tree who gave shelter to many. So when Boudi entered a coma, the hospital was inundated with relatives and our telephone lines were jammed as updates on her health travelled back and forth. In an age glorifying the nuclear family, such overwhelming familial solidarity is rarely seen outside of novels, cinema and TV serials.
Within a few hours of her admission to the hospital, Boudi's condition improved miraculously. It was not a case of a stroke as was earlier feared but an acute complication arising out of chronic asthma, so the turnaround with life support was quite dramatic. The immediate crisis had blown over. When I visited the hospital again in the evening, the mood was quite different. The Basu family was out there in strength with almost every branch of the family tree represented by someone or the other. While the elders were inside the building, the younger generation could be found in the hospital garden outside, catching up with each other till visiting hours got over. A couple of thoughtful members of the family brought with them flasks of tea and a few packets of biscuits. The atmosphere was more like a impromptu family outing. We joked and shared laughter. Boudi had managed to bring together everyone ~ from her great grandchild to her usually busy nephew who had taken a break from the corporate world to pay her a visit. I was reminded of lines from Achinta Sengupta's poem Pran Aache: "As long as life is there, it is valuable, life is the most cherished treasure, the undying hope…" I came home in high spirits and gave my husband a very positive update on Boudi's health as also updates on the lives of so many relatives whom I met after a long time. He was quite amused. "It seems if you have come back from a family get-together and not a hospital," he quipped. "That is the miracle of life and Boudi's presence," I said.







Disillusionment does not always mean despair. The Union budget for the next financial year was presented against a backdrop of growing disillusionment with the United Progressive Alliance government because of the runaway inflation and the large number of cases of corruption associated with public projects. Since elections are just round the corner in some states, many expected Pranab Mukherjee to present a populist budget designed to placate voters, perhaps at the expense of the private sector. Mr. Mukherjee has surprised everyone by coming up with a budget which makes a lot of economic sense. The central message of the budget is to promote fiscal consolidation along with some modest measures to promote the interests of the weaker sections of the population. There are no big-ticket reforms, except the announcement that the government would move towards a system of direct cash transfers in kerosene and fertilizer subsidies. This would be a radical departure from current practices. Clearly, the finance minister believes that the Indian private sector can achieve a high rate of growth in the current global environment if only it is left to itself.

The aggregate budgetary figures seem very promising. The budget estimate of the fiscal deficit for the next year is only 4.6 per cent of the gross domestic product compared to a revised estimate of 5.1 per cent for the current year. This huge and significant decrease is sought to be achieved without recourse to any additional taxation. In fact, a modest increase in the exemption limit for personal income taxation coupled with a reduction in the surcharge on corporate income tax will mean a small loss in direct tax receipts. A correspondingly small increase in indirect tax rates means that the new taxes in the budget are revenue neutral. Despite this, tax receipts during the next fiscal year are estimated to be 24 per cent higher than the budget estimates for the current year because of the belief in high tax buoyancy and a GDP real growth rate of 9 per cent. The target for disinvestment is only Rs 40,000 crore, which is quite realistic. Tight control is to be exercised on government expenditure to meet the fiscal deficit target. A bonus is that government market borrowings will be much lower than was expected. This will help in staving off pressures on interest rates.

Following the pattern witnessed in the last couple of years, the bulk of the increase in expenditure is in infrastructure, agriculture, and the social sectors. Overall spending in infrastructure and the social sectors will go up by 23 per cent and 17 per cent respectively. In the agriculture sector, the government will spend more to improve agricultural marketing, in order to reduce the gap between the price that the farmer receives and what the final consumer pays, and towards farm development. Interest rates will be lowered for farmers who pay back their loans in time. The budget speech contained some hint of future reforms, with the finance minister announcing the government's intention to introduce legislation for reforms in pensions, insurance and banking. But perhaps the biggest disappointment is the failure to promise any firm date for implementation of the goods and service tax.







This budget marks a watershed. For years, from 1995 onwards, the Congress had difficulty in winning elections. Its first decisive victory in a long time was in the 2009 general elections. It took some time after that to shed its electoral insecurity. In those days of the search for power, it returned to its populist, socialist roots; it blew up a lot of money on social programmes, especially on subsidies and employment programmes. To finance them, it had to run rising fiscal deficits. They cause inflation, but it was comfortable with that. The United Progressive Alliance budgets from 2005 till 2010 mirror these compulsions.

They have waned now. The general election is three years away. The social service programmes are fully funded; despite all help from politicians, local governments are finding it difficult to spend the money allocated. The Opposition is in poor shape, so the Congress is not nervous about elections, and did not need the finance minister to bribe voters. His fellow ministers who run spending ministries can be demanding; but he had a windfall from the 3G spectrum, so he had no difficulty in meeting their demands.

The economy can give headaches, but it is doing well; at any rate, the people in the government are satisfied with the way it is growing. Inflation is a problem. Macroeconomically, taming it would require a lowering of the budget deficit. But if the Economic Survey is a guide to their thinking, the policymakers attribute inflation to causes which do not require a macroeconomic response — prices are raised by local monopolists trading in non-cereal food products, inflation is being imported from abroad, India is bound to experience inflation because, as it gets richer, its prices must approach prices abroad, and so on. So the consensus in the government was that the budget should not be stimulating or deflating, but broadly revenue-neutral. Even if the fiscal deficit remained unchanged in absolute terms over the coming years, its ratio to gross domestic product was going to come down from 6.4 per cent last year to 5.1 per cent this year, and further to 4.6 per cent next year as the GDP grew. In another three years, it could be down to 2 per cent — a level that could be financed from currency issues, without issuing any fresh debt. So the finance minister did not have to worry about the economy.

Having been thus relieved, he decided to listen to fellow ministers, and to the businessmen who make a beeline to the finance ministry before the budget. This year has seen sharp inflation in food products, especially non-cereal ones; so Pranab Mukherjee gave his assent to many projects concerning coarse cereals, fodder, transport, storage and distribution. And he brought down customs duties on a number of items.

There is no hard evidence that Indians are holding large amounts of money in tax havens abroad. But the minimum level of paranoia amongst Indians is high. Every once in a while someone begins howling about billions in black money stashed away abroad. This year it was the report of Global Integrity. Whenever the prime minister goes to G20 meetings, his fellow leaders talk about businessmen evading taxes. So the finance minister asked his taxmen to get active, and to negotiate agreements with other countries on double taxation and information exchange.

Excise duty exemption is high enough to keep out small manufacturing firms. But there are many small firms in services; they are often harassed by tax collectors, who raid them and disrupt their business. The finance minister has listened to their plaints, and freed all non-corporate businesses with a turnover below Rs 60 lakh from audit. The idea is good; but it is difficult to see why the businesses have to be unincorporated to be exempt from raids.

Service tax began by being levied on a number of services, which finance ministers have expanded every year. Now the finance minister wants to start a debate whether all service providers should not be taxed save those in industries on a negative list. It is not as if they are not being taxed. They all pay income tax provided their income is high enough; it is only service tax they do not pay. The number of service providers in this country is enormous; almost half of the workers are supposed to be working on their own account, including casual labourers, peddlers and pavement sellers. The finance minister surely cannot contemplate bringing them into the tax net.

He is fond of extending taxes to ever more goods and services, and then giving abatements. This is really equivalent to multiplying the number of tax rates, and it extends duties to products that bring little revenue. It makes little sense to have a duty of 1 per cent on diapers. It is equally stupid to tax something, for instance taxis which seat 13 passengers including the driver, and then to give a refund. Ambulances built in a factory used to get such a duty refund till now; now they will be exempted. Why was an ambulance taxed only if it was built in a factory? And what suddenly made it deserving of exemption? Why does bamboo pay 10 per cent import duty if it is to be used for agarbatti, and 30 per cent otherwise? How does a customs officer know whether the bamboo would be used to make agarbatti or not? Suppose he decides it is not going to be so used; can he be persuaded to change his mind by some instant gratification?

Newspapers have long been allowed to import high-speed printing presses free of duty. That is understandable, since politicians would naturally seek to befriend press owners. Presumably, one of them whispered to the finance minister over dinner that when the newspapers came off the press, there were machines that folded them, packed them and got them ready for despatch; mail-room machinery was just as deserving of concession as printing machinery. So now, Mukherjee has exempted mail-room machinery. But why just high-speed machinery? Why not slow presses used by small printers of magazines?

It is difficult to avoid the conclusion that there is considerable arbitrariness in the proposals. If it were some other minister and not Pranab Mukherjee, it would have raised worse suspicions. A visitor to the finance ministry can still hear the juicy story of a predecessor of Mukherjee who reduced an excise duty after a rendezvous with an attractive woman. And then, the finance minister talks of simplifying taxation, but goes on complicating it in fact. Nor is the justification for exemptions and rebates always clear. For example, the film industry is one of the country's biggest money-spinners; there is no reason why it should not pay import duty on film rolls.

To misquote the finance minister, it is the big favours like Raja's that make news, but it is often in petty favours hidden in the budget speech that big money lurks. He talked about petty reforms. But the favours he introduced would complicate tax regulations. A decade hence another finance minister would simplify them, and be hailed as a reformer. He would owe his ascent to his pragmatic predecessor.






The state, railway and Central government budgets had to deal with large deficits and debts, inefficiencies in expenditures, excessive subsidies, and galloping inflation. The Centre also has an obsession with growth, and had to deal with large current account deficits and volatile foreign exchange inflows and outflows, stimulating investment (both domestic and foreign), accelerating infrastructure development, correcting a declining agriculture, encouraging exports and domestic production to combat imports, and controlling corruption and black money.

In 2010, growth is said to have been 8.6 per cent, with 9 per cent as target in 2011-12. The prime minister wants to do nothing that will affect growth even if there is inflation. The government is also anxious to show a build up of foreign exchange reserves, even if volatile. Three state government budgets have been announced; so has the railway budget. The railway budget and the state budgets are largely playing at vote-bank politics, not displaying sound financial management. The railways have the usual cascade of new trains and projects for West Bengal, accompanied by some for election-bound Tamil Nadu, Kerala and Assam. The states do little to improve efficiencies of expenditures or to involve the local authorities (panchayats) in the expenditures, which, by involving the beneficiaries, might become a little more efficient.

To take one state, Karnataka, free power to farmers is already costing the power-short state, and now taking money away from power purchase. Like other states, Karnataka wants to hold on to tariffs. It also has inadequate generation capacity. In a purely political move, Karnataka has cut support for power purchase, implying acceptance of load-shedding. Indian state governments lost over Rs 70,000 crores on power last year, and must privatize distribution, enforce reduction of theft, raise tariffs and attract investment in power.

Mamata Banerjee has actually been a bit more Indian this time than pure Bengali. The uproar in Parliament as she announced the flood of projects with Bengal as focus was to be expected from the neglected states of India. Her financial and managerial illiteracy, combined with her burning desire to occupy the Writers' Buildings, take her to insane lengths. Hopefully, she will regain a modicum of sense when she gets to Writers'. The many trains and projects she has announced have practically no funds to back them. She talks of borrowing, but she will find it difficult in competition with other infrastructure borrowers, especially from the private sector.

Pranab Mukherjee's 2011 budget has had television talking heads calling it from "pedestrian" to "perfect". There is a lot for the middle classes and the corporate sector, and foreign and domestic investment — such as the higher tax slabs, reduction in the surcharge on corporate tax, investment of foreign funds in mutual funds, infrastructure debt funds. It came close to announcing the opening of foreign investment, in retail and insurance, which might well come this year.

The fiscal deficit is down to 5.1 per cent in 2010, but largely because of the one-time income from the sale of telecom spectrum and disinvestment and buoyant tax revenues. Disinvestment is to continue, but the target of 4.6 per cent in 2011-12 demands considerable buoyancy in tax revenues. That will result from growth. The budget shows a sharp fall in government borrowing, one reason for the stock market's happiness, since it indicates that interest rates may stay as they are.

This might be upset by inflation. Food inflation has been in double digits for two years. The prime minister is satisfied if inflation (presumably in the wholesale price index) reduces to 7 per cent by the end of the year, that is, in 10 months. Given that food products have a weight of only 15.402 in this index, there seems little expectation that food prices will stop rising. The strong stand taken by the National Advisory Council to cover almost half the population with cheap grain is therefore a necessary step. This expenditure is reflected in the budget. As with all government social programmes, its effectiveness will depend on its ability to reach the poor. Agricultural product prices are believed to be high due to intermediaries and speculators, and not profit-making by farmers. That requires dramatic policy changes in allowing organized foreign retail into food since that might introduce better supply management, less waste and less profit-gouging by intermediaries.

The government can announce foreign investment in retail without new legislation. The budget provides for a continuing investment in storage and cold storages. It also offers larger interest subventions to farmers and a number of other schemes for agriculture. One must doubt whether these will transform the erratic growth in agriculture and its decline in productivity.

Progress in the Unique Identification project is a major development and will lead to better access to banking and benefits for the rural poor. The announcement that by the beginning of the next fiscal year, cash transfers to beneficiaries of kerosene, fertilizers and LPG will replace physical transfers is perhaps the most notable announcement. There is as yet no mention of foodgrains — the largest of the physical public distribution items and in need of moving to cash transfers — being subject to much leakage.

While the budget expresses concern over the large current account deficit, it does little to bring it down. It needed to cut FII portfolio inflows, close the capital gains tax exemptions for investment from Mauritius, stop participatory notes, and introduce a tax to compel the inflows to stay invested for at least a year. The budget also does little to encourage foreign direct investment. It does make a modest attempt to provide a level playing field for Indian producers of silk, power-plant equipment and so on, compared to imports, and that might put some cap on imports. But control on the current account deficit gets little attention.

The budget pays some special attention to funds for infrastructure investment. The institutional changes proposed for highways, ports and so on will help. Where it fails is in reducing dependence on state governments — by and large populist, inefficient and corrupt. Thus the state electricity boards in power continue to lose vast sums of money and are yet to keep tariffs low. Highway development is mired in land acquisition problems and local inefficiencies.

The budget was an opportunity to tackle the "ethical and governance deficits" in government. Black money, money laundering, large sums held illegally abroad, the collusion of government officials and criminals, were issues that could have been tackled. They were not. A part of the budget speech should have mentioned that the government was coming out with proposals to fix individual accountability in government and performance evaluation that tackles individual successes and failures, not of the government. It should have set out timelines and physical targets that could be monitored.

This budget is the response of a tired government to many challenges. The response is not well co-ordinated. It does not deal with the difficult issues, only with the easier ones. It is, on the whole, a disappointing budget. Coming as it does as the Centre approaches another election in 2014, the budget does not augur well for the long-term future of the government.

The author is former director general, National Council for Applied Economic Research.





Budget day. We need a 'day' when each elected member of parliament would take an oath to be transparent. We can christen it 'Deliver Day'. The budget should merely be the placing of the accounts of the government on the floor of the House with an ensuing debate. But in India, we use the budget to determine changes of policy — something that should be happening throughout the year — implemented and accounted for. The next fortnight will witness continuous discussions on the budget and world cup cricket. Boring. Within the rank and file of the Congress, there is a fast-escalating anxiety that the government has not been able to meet the aspirations of the electorate that could have ensured another win at the hustings. Last time, it was the Mahatma Gandhi National Rural Employment Guarantee Act, and not the nuclear bill, that brought the Congress to a 207 mark. The bill was an executive necessity, like many other such decisions and everyday policy initiatives. India needs concerted action at many levels.

The political foot soldiers know the ground truths better than general- secretaries and ministers sitting in their ivory towers in Delhi. But they are hardly ever heard, except if they happen to be part of one Delhi-based clique or the other. They have no access at all to their leaders. They are misused, their energy is dissipated.

It is clear today that there are profound divisions in the political perceptions of the reality that is India circa 2011 from the point of view of the Congress and its government at the Centre. The Opposition is capitalizing on this weakness. Why are leaders of the Congress permitted to continue with their random politicking against one another which has destroyed the party over the years? Why is there no desire to overhaul the system, to make the 'faithful' retire and prepare the next generation to carry the baton? Why this incomprehensible fear of change and profound inability to take risks?

Confusion seems to be the new mantra. To many of us in the public domain, there is no cohesion in the formulation or in the implementation of policy. Connected departments all pull in different directions, motivated by different vested interests. To cite one example, our northern frontiers seem to have no 'policy' that is operating effectively. Chinese influence and intervention dominate the vast stretches of our mountainous borders. Relations with Nepal are tenuous. The Chinese recognize that our policy is fractured, and have done well for themselves in the area. They are strengthening their partnerships with Myanmar, Bangladesh, Srilanka, Pakistan and beyond, while we do not seem to know what our ultimate stand is. West Asia is burning as the people there are heroically fighting for their freedom, for liberty, for civil society as defined by democratic frameworks, for humane leadership that is able to debate, discourse, hear and listen, to be compassionate and transparent. There is no sound coming out of India, not even a whimper. Our traditional allies have been bypassed and, in a manner, betrayed by us as we reach out to those who exploit our geographic location, our burgeoning middle class, its aspirations and our markets. We are losing the real plot.

We seem confused about the bedrock of values from which good, equitable governance should come. We are confused about the dharma of coalition politics. Surely, we should be able to prevail upon political partners to abide by the laws of our land? What rulership is that which condones the breaking of laws and the tolerance of scamsters? That is no dharma. It is bad karma. The wrongdoings are no aberration but the norm.

The prime minister needs a new team of babus and advisors, bright men and women representing a cross-section of views. The ones in place at the moment have not done him justice. They have isolated him. They need to be dislodged and a renewal needs to happen. Catch the bull by the horns and begin the restoration.








Everybody expects a great many things from the budget. At a personal level, they want their taxes to go down, prices to be curbed and incomes to go up. At an impersonal level, they want deficit to go down through a curb in government expenditure, more government spending on health and education, cheap food to be available to the masses and everyone's pet sector to be showered with subsidies and sops. Given that ours is a democracy, and given that every finance minister wants to be re-elected to Parliament next time around, can anyone figure out why the budget does not give everyone what they want? Well, the answer is a simple one. People want contradictory stuff. For instance, you cannot have expenditure cuts if you want subsidies to be maintained or increased. You cannot have expenditure cuts if you want to correct the appallingly low spending on law and order, education, health and other public goods like infrastructure. And, you certainly cannot have lower income taxes if you want the tax revenues to go up to meet the deficit. Maybe you can, but that is only if growth happens. That is precisely what the budget for 2011-12 is hoping for.

Unfortunately, this hope has not struck a chord among some. They have a valid reason for it. Somehow, the numbers do not stack up, they say. The finance minister maintains that the tax changes are revenue neutral, with the loss in direct taxes being more or less the same as the gain to be made through indirect taxes. In other words, there has been no extra effort made to mop up additional resources and, hence, all the extra expenditure will be financed by greater tax buoyancy (increase in the tax to gross domestic product ratio) and the fact that the GDP will grow at 9 per cent next year with 5 per cent inflation. And this, the budget papers claim, will be sufficient to bring down fiscal deficit next year to 4.6 per cent. Of course, the minister has reduced the current year's fiscal deficit, from what was planned for in last year's budget, through the 3G licence sales. Will he be able to find a similar thing to auction this coming fiscal year? Or, will he be able to disinvest enough public sector holdings? Those who are worried about the deficit and the deviation from the fiscal consolidation targets do not find this entirely believable. I am myself not very enamoured of the fiscal deficit one way or the other and so I will pass up on this particular controversy.

In the last three or four budgets, there has been sufficient noise created on cash transfers. Every budget has promised trials and experiments where such transfers were to be used in lieu of many of the current social programmes. However, there has been enough opposition on the ground and lack of political will in Parliament to ensure that nothing was done. In this budget, the finance minister has used a tragic and disgraceful incident perpetuated by the oil (kerosene) mafia to make the point that cash transfers need to be undertaken. One hopes that the naysayers will have enough intellectual honesty to, at least, try out cash transfers in lieu of kerosene subsidies. One has to be really dogmatic or cussed to oppose cash to buy kerosene; current kerosene subsidies do not work but create tremendous amounts of corruption. The budget speech seems to suggest that the minister was confident that this will be tried out in the coming year.

But before I go into the other points of the budget, let me mention something that blew my mind. It blew my mind because I cannot imagine what the minister was trying to achieve by it. He extended the set of services that will come under the service tax net. This is a very good step, especially if we want to move towards a uniform goods and service tax. What bothered me was his additional tax on hospital services in a 25-bed (or more) hospital with central air-conditioning. This bit was a bit shocking. Are we saying that it is all right for a poor patient to sweat post-surgery because, after all, she is paying less than what she would have paid if she went to an air-conditioned recovery room? Come on Mr. Minister, recovering fast and recovering well is a right; it is not a privilege that a person must pay for. So, either you pay, or you do not, regardless of whether it is air-conditioned.

It requires courage for a finance minister to stick to his task and not play to the gallery during a budget speech. In this year's budget speech, Pranabbabu took the difficult road of sticking to his task. No big promises were made, especially the ones you know the finance minister can do nothing about since they are not in his jurisdiction (like power reforms, for instance). Instead, he painstakingly went through the processes in the budget by trying to align the details at each step to give direction to the fiscal regime in the next few years. Thus, given that he promised movement on the introduction of the direct tax code and the GST, he did everything possible to ensure that income taxes and excise duties were kept in line with those promises. Wherever rationalization was possible he did so; and, so as not to pre-empt the Centre-state discussions on the GST, he did not raise excise, saying that he will not roll back the fiscal stimulus to growth.

Indeed, he has done small things that can have a significant impact on the growth process. He has reduced taxes on farm equipment and tools, given the incentive of lower interest rate on farm loans to those who repay on time, recharged the micro-finance sector after the uncertainty that was brought about by the Andhra Pradesh fiasco last year, and rationalized customs and excise duties. He has also tried to make processes smoother for business. Not only has he not pulled back the fiscal stimulus, but he has also announced that businesses can assess their own custom duty obligations and pay up online. There will be random audits done by tax inspectors to ensure that no one gets away by under-paying taxes. This one step will have a huge impact on the way business is done in India. For one, it will bring down the transaction cost of releasing goods from custom holds, in addition to the time it takes. Yes, this is not a big-ticket item but it has a much larger impact on what matters, compared to announcing big-ticket reform plans over which the finance minister has no say.

I do not know if it is the team behind the finance minister or the minister himself but this budget has done a number of things, each of little significance maybe, but together they could have a big impact on maintaining the growth process. There is too much wishy-washy macro-analysis of every budget. I hope this budget is looked at carefully for the important micro-changes it has made to the way the economy is managed.

The author is Research Director, India Development Foundation





******************************************************************************************DECCAN HERALD




Finance minister Pranab Mukherjee's Union Budget for 2011-12 has turned out to be an exercise in timidity as it has no major initiative or announcement to catch the imagination of the people and the industry. He has not imposed any new taxes, except bringing in some new services under the service tax net and kept the tax rates unchanged for most products.

He has also not offered any major concessions to any sector. The tax exemption limit for general category individual tax payers has been marginally increased from Rs 1.60 lakh to Rs 1.80 lakh, which will hardly mean anything when adjusted to inflation. One welcome feature of this budget is that the long-suffering retirees have been offered some relief as the qualifying age for tax exemption has been reduced from 65 years to 60 years and the exemption limit raised to Rs 2.5 lakh.

Yet, without major changes in rates the government is hoping to achieve a 19 per cent growth in total tax receipts at Rs 9,32,440 crore in 2011-12. The overall fiscal deficit is expected to be lower at 4.6 per cent of the GDP in 2011-12 as against 5.1 per cent now.

How did the finance minister manage this? He is mostly depending on a very robust growth of the economy as the GDP growth is expected to be 9 per cent in 2011-12 against 8.6 per cent in the current financial year. As a result, the government is expecting a sharp increase in income from various sources like, excise duty, customs duty, corporation tax, etc. In fact, the budget expects total gross receipt to go up by 18.50 per cent.

There was a strong case for replacing ad valorem duties with specified duties on petroleum products so that the consumer doesn't have to pay every time crude oil price rises, but the finance minister failed to introduce the reform. The proposal to bring private health care under service tax and hike service tax on air travel and hospitality industry is bound to be unpopular as a large number of people will be affected by these measures.

Though there is no mention in the budget of the controversial proposals to increase FDI in life insurance and in retail trade, it could still find its way at a later stage considering the various lobbies at work. The proposal for direct cash transfer of subsidies on kerosene, LPG and fertilisers to the beneficiaries is a welcome move as, if achieved, it will contribute significantly to curbing the misuse of subsidies.







The arrests of Lalit Bhanot and V K Verma, two key aides of Commonwealth Games organising committee chairman Suresh Kalmadi, in connection with the irregularities committed during the conduct of the Games were not unexpected. Kalmadi himself may be arrested in the coming days.

The CBI has charged the two with cheating and conspiracy in the award of a Rs 107 crore deal with a Swiss timing firm. It is likely that there will be other charges. Both the officials were removed from their positions after the Games and their premises were searched. Kalmadi's residences have also been searched.

In spite of all this, there is a genuine impression that investigation is moving at a slow pace. The Games ended on October 14 but the raids on officials were conducted only in December and on Kalmadi still later. That has given rise to suspicions that they were being allowed to cover their tracks. There have even been reports that Kalmadi has shifted some papers abroad.

But the politician-cum-sports administrator is still defiant and has pointed his fingers at the others. The message may be a veiled  threat to the officials not to implicate him. Kalmadi's argument that others are also equally involved in all decisions should be a lesson to all those who have to rubber stamp the decisions taken by powerful persons.

Every one knows that it was Kalmadi and his men who actually took all important decisions. But the idea of joint responsibility is being invoked when things have gone wrong.  In any case, the officials who were parties to the irregularities should also be made to account for their conduct. They are accomplices in the wrongful actions.

Kalmadi has demanded the setting up of a joint parliamentary committee to investigate the irregularities. No one considers it a serious proposition. Kalmadi himself does not believe in it. That shows the insincerity and flippancy of the man.

The Congress party has started distancing itself from him but there is still no certainty that he would finally be brought to book. He might refuse to go away quietly. But if the government or the party shields him now or in future, the damage in the long term will be much more than what he can inflict in the immediate term.







Judging by Mamata's astute demeanour at chambers of commerce meetings, she wan-ts to show that rabble-rousing is only for street rallies.

With Mamata Banerjee making it clear that her future interest is in ruling West Bengal and not running trains from Delhi, there is speculation about the fate of two groups that have benefited from 30 years of Left Front patronage.

One is the tribe of businessmen and promoters who get land virtually for the asking; the other the peculiarly Bengali phenomenon of Marxist intellectuals (or is that tautology?) who rake in capitalist loot.

Actually, both will continue to flourish. A Bengali writer boasted in 1857 that he was prepared for whichever side won by wearing a dhoti over his trousers. The dhoti could quickly be discarded if the British prevailed; no one would know of the trousers beneath if the Sepoys won.

I was reminded of this opportunism at a dinner for Lord (Chris) Patten, the chancellor of Oxford University, when a Marxist thinker who once wrote venomously against Indo-British cooperation in the fellow-travelling journal, 'Now', complained that Indian students were deprived of the Oxford experience for lack of funds.

He was begging for British money so that Indians could study in England. The Marxist mayor of Kolkata who wanted the American consul-general to twin his city with San Francisco (ignoring Kolkata's existing twin, Odessa) where his son lived was more discreet. But with time running out, the regime's cultural hangers-on can dispense with reticence.

Full-time communists are also spectacularly self-contradictory as the Marxist historian, Eric Hobsbawm, noted after meeting young Indian communists in England, worshipping at the feet of Rajani Palme Dutt, the British communist party's half-Indian half-Swede but wholly upper class English guru. He "did not realise how untypical they were of their societies... the elite of the elites of the 'native' colonial populations."

Like Indira Gandhi's one-time confidant, Mohan, son of the zamindar of Kumaramangalam (as he styled himself though others remember him better as Dr P Subbarayan), they illustrated how in the absence of an hereditary aristocracy, the haute bourgeoisie rule the roost. Hobsbawn called it a 'bizarrerie.'

Its highlight was the Christmas dinner the CPI's Renu Chakravorty hosted in Calcutta. Hobsbawm was served ham and turkey from the Calcutta Club (where her cousin was secretary) followed by biryani, and then plum pudding, also from the club.

A titled Englishwoman representing a British philanthropic trust told me how nervous she was about calling on Indrajit Gupta, then home minister in H D Deve Gowda's government. North Block was uninviting and Gupta's room bleak as she awaited her first encounter with a communist. Then her eyes lit on a framed photograph of King's College, Cambridge, and all fear vanished. Mohan, son of the zamindar of Kumaramangalam, was also a King's, Cambridge man.

Dominant ideology

If, returning to Hobsbawm, "the dominant ideology of every society is the ideology of the dominant class," its lifestyle is the prize that inspires the masses. Some are born bourgeois like Brinda Karat with her zamindari and westernised boxwallah background.

Others become bourgeois like the revolutionary actor who hired an interior decorator to create two sitting rooms in his house — one upstairs in black leather and white wrought iron with a bar for society; the other downstairs with rough benches for party hoi-polloi. Gupta could afford to distinguish between 'gentlemen of privilege' which he spurned, and 'gentlemen of the people' which he claimed to be.

A fiery young radical who threatened to call his book about yesterday's revolutionaries 'The Lost Generation' himself scaled dizzy corporate heights under Left Front benevolence. Those he held in contempt but whose ranks he joined also became managing directors of public sector units, chairmen of statutory bodies, university vice-chancellors and Rajya Sabha members. As the baddie in John Le Carre's 'The Night Manager' says, "Today's guerrillas are tomorrow's fatcats."

Businessmen and promoters may have suffered socially when Jyoti Basu retired since his successor doesn't hob-nob with them over a whisky at the Tollygunge Club. But their interests remain secure. Even revolutionary parties need funds which tycoons provide in exchange for permits and licences. The revolution that will never come has been mortgaged in advance to them.

That nexus will continue. Judging by Mamata Banerjee's astute demeanour at meetings organised by chambers of commerce or major Bengali publications, she wants to prove that  rabble-rousing is only for street rallies. Her serious side should command middle and upper class allegiance. Scenting power, the classes are ready to oblige.

Neither intellectuals nor promoters need produce an Indian version of 'The God That Failed' whose promotional tag read "Six famous men tell how they changed their minds about communism." The Indian God is Mammon in whom no one ever loses faith. Moreover, Trinamool Congress' rhetoric is comfortingly progressive.

It's like the Vicar of Bray in an 18th century satirical song about someone who changes beliefs and principles to stay in favour with authority. The chorus explains his  philosophy of survival:

And this is law, I will maintain

Unto my Dying Day, Sir.

That whatsoever King may reign,

I will be the Vicar of Bray, Sir!

The CPM's goons were the first to make the move. Industrialists and intellectuals are following them.








The need to ensure that global fisheries are managed on a sustainable basis has never been greater.
Overfishing is one of the greatest sustainability challenges facing the world today. The United Nations Food and Agriculture Organisation (FAO) estimates that over a quarter of the world's fish stocks are overfished or depleted and over half are being fished at capacity. Pressure on this valuable renewable resource is increasing. Today one billion people depend upon seafood as their only or main source of animal protein.

By 2050 the global population is predicted to increase from about 6.2 billion to 9 billion people. More people, increased affluence, and higher per capita demand for seafood will only increase this pressure further. Consequently, the need to ensure global fisheries are managed on a sustainable basis has never been greater. Livelihoods, food security, and the ability of both this and future generations to enjoy sustainable and renewable seafood choices will be dependent upon achieving this outcome.

Despite all the doom and gloom written about the global fishing industry, there is much to celebrate as well. Many fisheries around the world are operating sustainably. Others are making improvements to the way they fish that I believe, could one day lead to more stable harvests and perhaps also, in some instances, higher overall catch rates.


The Marine Stewardship Council (MSC) was established to provide a mechanism to identify and reward existing good practices and most importantly to create the financial and economic incentives for other fisheries to improve their performance. We do this by working in partnership with the conservation community and industry — from harvest, through processing, to retail and foodservice.

The MSC concept has been proven. There is a clear business case for credible, third party and stakeholder-engaged certification and labelling, and most importantly, there is a proven and growing ecological case. The programme has also scaled-up: over 230 fisheries are now engaged at some stage in the assessment process, landing over 7 million tonnes of seafood (12 per cent of global capture production for direct human consumption); 103 fisheries are certified and many are using their MSC certification to not only maintain existing markets but to win access to new markets and in some instances, secure price premiums.

There are numerous examples of positive and lasting change being catalysed by engagement in the fishery assessment process, including significant reductions in by-catch, more precautionary approaches to quota negotiations and the implementation of voluntary closures and other measures.

Through the leadership of key players in the industry and the efforts of the broader conservation community perhaps the most dramatic development over recent years has been the growth in demand for certified and MSC eco-labelled sustainable seafood choices. There are now over 8,000 individual MSC labelled products available in over 70 countries around the world serving a market worth over 2 billion dollars annually.

This increased demand, growing consumer recognition and support creates incentives for more fisheries to enter into assessment and, where necessary, improve their performance to ensure they can meet MSC's standard for environmentally responsible and sustainable fisheries management. In a nutshell, this is MSC's theory of change that we hope will contribute to ensuring seafood supplies are safeguarded for both this and future generations.

There is — of course — no silver bullet to the global challenge of overfishing. Sound public policy and the eradication of illegal, unreported and unregulated fishing are also vital in the journey toward a sustainable future for our fisheries. However, all of the evidence shows that robust and credible certification and eco-labelling schemes deliver real change and are a vital tool in helping to make fisheries sustainable.

Independent certifiers accredited by an independent body carry out MSC assessments. Those certifiers examine the stock of the fishery's target species, its environmental impact and the quality of its management. These three principles are broken down into 31 detailed criteria to produce a scientifically robust certification decision that is independent of MSC and our diverse stakeholders. No other fishery assessment programme offers the same level of transparency or as many opportunities for stakeholder engagement in assessments.

We know that some recent certifications have courted controversy. But behind the controversies there is evidence of real environmental benefit occurring — many of them driven by fisheries' desire to attain and keep their MSC certificates. Stocks rebounding in Alaska pollock, New Zealand hoki, and British Columbia salmon are evidence of strong fishery management.







More disturbing is the imbalance caused by a faulty mixing of the sound output.

Time was when musicians sang and music lovers listened to music without a public address system. Even stage artistes spoke their dialogues to be heard in the far corners of auditoria without it. But all that has become part of history now. With the march of time, technology has developed, touching all fields of human activity. Music was not left alone.

Despite initial fears that the advent of the machine may corrupt the pristine quality of art, the entry of well-designed equipment made musicians as well as the music lovers happy. And the microphone came to stay as part of the music world. In fact, it was regarded as a boon both to the singers and their listeners.

The fair weather, however, was not perennial. Development in the field of audio-engineering saw improvements in the design of each component of the system. It even incorporated sophisticated features to meet the special requirements of different — and often difficult — situations in public performances. With such a wide choice of equipment and design, the selection of the right mix of components to meet specific needs called not only for a sound knowledge of the the equipment, but also a close familiarity with the kind of music that the system had to handle.

Barring a few music organisations possessing in-house expertise, others merely sought the advice of equipment dealers. This invariably resulted in an over use of features and facilities.

One can imagine the disastrous results of such abuse in the hands of persons not familiar with the fine technique of sound mixing. One often sees members of the audience covering their ears to muffle the high decibel volume of sound during music concerts.

Even more disturbing is the imbalance caused by a faulty mixing of the sound output from different microphones on the dias. Problems largely arising due to lack of expertise in those operating the complicated units of the system.

Added to the confusion is the interference from the performing artistes themselves in the placement of microphones and their level settings to gain prominence for their individual performance. It would be unfair to generalise, but I am sure that audiences would have felt irked by this ego-driven trait that is common among percussionists in particular.

Some vocalists too suffer from this desire to attract public attention, especially when it comes to group singing like bhajans and other devotional programmes where the text, which carries the essence of the devotion, is completely drowned by their unbridled fervour and uncontrolled outbursts.

The way in which some of them vie with one another to gain proximity to the public address system and prominence for their individual abilities, makes one wonder if the object of worship in such devotional singing is the microphone itself? Has what was once regarded as a boon in the world of music sadly become a bane?



******************************************************************************************THE NEW YORK TIMES



In a landmark case three years ago, the Supreme Court ruled that detainees at Guantánamo Bay, Cuba, who are not American citizens have "the constitutional privilege of habeas corpus." It gives them the right to have a federal judge decide promptly whether their detention is illegal and, if so, order their release because the United States controls the place they are held. The 5-to-4 decision in what is known as the Boumediene case was a repudiation of the Bush strategy of imprisoning the detainees outside American territory so the Constitution would not apply. Or so many thought.

The United States Court of Appeals for the District of Columbia Circuit, the only circuit where detainees can challenge their detention, has dramatically restricted the Boumediene ruling. In its hands, habeas is no longer a remedy for the problem the Boumediene majority called "arbitrary and unlawful restraint."

The sole recourse is for the Supreme Court, once again, to say what the Constitution requires judges to do in habeas cases. Fortunately, a case is at hand for the justices to do so in an appeal from the District of Columbia Circuit. In the Kiyemba case recently, five Uighur, or Chinese Muslim, detainees filed a brief with the Supreme Court in support of their petition for it to restore the power of federal trial judges to free them.

This appeal in no way threatens national security. The government has admitted that the Uighurs are not enemies, let alone enemy combatants. Refugees from China, they were mistakenly imprisoned during the Afghanistan war and sent to Guantánamo Bay in 2002. Other Uighurs accepted release to the island of Palau, 500 miles from the Philippines, but these five declined the offer because they have no connection to the island.

The appeal is about judicial power and the duty to use it. In 2008, a District of Columbia trial judge ordered the government to bring the Uighurs to his court to resolve how they should be released. The appeals court ruled that the judge lacked authority to free them in the United States because the "political branches" have "exclusive power" to decide which non-Americans can enter this country.

Judge Raymond Randolph of the District of Columbia Circuit wrote the key Kiyemba opinion. The Uighurs' brief says, "The constant in this case is the court of appeals' refusal to apply, or even acknowledge," the Boumediene ruling.

Judge Randolph also wrote the opinion for the District of Columbia Circuit that the Supreme Court overturned in Boumediene. In a speech called "The Guantanamo Mess" last fall, he said that the justices were wrong to do so and all but expressed contempt for the holding. As the basis for the speech's title, he compared the justices who reached it to characters in "The Great Gatsby." "They were careless people," he read. "They smashed things up ... and let other people clean up the mess they had made."

In Kiyemba and related cases, however, it is Judge Randolph and others on the District of Columbia Circuit who are making the mess. Respected lawyers say they are subverting the Supreme Court and American justice. Of 140 challenging their detentionsin the face of this hostility, dozens who should have been freed will likely remain in prison.

Alexander Hamilton called "arbitrary imprisonments" by the executive "the favorite and most formidable instruments of tyranny." In Boumediene, Justice Anthony Kennedy stressed that habeas is less about detainees' rights, important as they are, than about the vital judicial power to check undue use of executive power.

The appellate court has all but nullified that view of judicial power and responsibility backed by Justice Kennedy and the court majority. The Supreme Court should remind the appellate court which one leads the federal judicial system and which has a solemn duty to follow.





Col. Muammar el-Qaddafi of Libya is deep into a fantasy world. In an interview with ABC News, he insisted that his people "love me," blamed the courageous uprising against his rule on "terrorists" and refused to take responsibility for his many crimes.

That list of crimes continues to mount. Rebel commanders said on Monday that Libyan Air Force warplanes bombed rebel-controlled areas in the eastern part of the country. Libyan special forces mounted ground assaults on two breakaway cities near the capital.

After temporizing, the United States, the European Union and the United Nations Security Council are now pushing Colonel Qaddafi and his cronies to go. The international community will have to keep pushing hard to break through their fantasies. The Security Council has ordered countries to impose travel bans and asset freezes on the Libyan leader and his henchmen and halt arms sales to Libya. It called on the International Criminal Court to investigate potential war crimes.

Even before the Council acted, President Obama closed the American Embassy in Tripoli and imposed unilateral sanctions. Washington has already frozen $30 billion in Libyan assets. On Monday, the European Union — whose members have strong trade ties with Libya — adopted its own sanctions, including an arms embargo. Italy has suspended a nonaggression treaty with Libya, and France has sent medical aid. Germany has proposed suspending all Libyan financial transactions with European banks. That is a very good idea.

On Monday, the United States said it was moving military ships and planes closer to the Libyan coast, without specifying what they might do. Secretary of State Hillary Rodham Clinton said Washington was making contacts with the rebels to "offer any kind of assistance" — another carefully vague threat. Both are apparently intended to get Libyan military leaders to rethink their allegiance to the regime. We hope it does, but the United States must not intervene militarily in what increasingly looks like a civil war.

There are things the Pentagon can do short of that, including blocking Libyan military communications. If this goes on much longer, NATO or the United States and certain allies can impose a no-flight zone to ground Libyan warplanes and helicopters.

We were disappointed to hear Prime Minister Recep Tayyip Erdogan of Turkey — the Muslim world's leading democracy — denounce "any sanctions or interference that would mean the punishment of the Libyan people." If Libya's people are willing to put their lives on the line, all democracies should stand with them.






One can scarcely imagine the pain borne into St. Mary's Pro-Cathedral in Dublin last month at a Mass — "A Liturgy of Lament and Repentance" — offered for the victims of sexually abusive priests.

It was a reminder that the scandal, a global catastrophe for the Roman Catholic Church and a national tragedy in Ireland, is also a universe of individual tragedies. But there was also hope that some church leaders, at least, are facing up to that pain and that catastrophe. The archbishop of Dublin, Diarmuid Martin, and Cardinal Séan O'Malley, the archbishop of Boston, presided over the Mass, which went to unusual lengths to involve victims and to gaze unflinchingly at their suffering.

With 400 people in attendance, lectors read long passages from official reports on decades of abuse in Irish parishes and schools — horrific reading for a sacred space. A few victims interrupted the proceedings with their own stories of shame and terror.

Just as unusual, even startling, was the way the archbishop and cardinal made personal the church's act of contrition. They lay prostrate in silence before a bare altar. They washed and dried the feet of eight abuse victims — just as the Catholic clergy do at Mass on Holy Thursday to recall how Jesus washed his disciples' feet, a gesture of humility and service.

Archbishop Martin offered what may be the most specific apology yet, showing an understanding — rare among his peers — of the difference between lip service and true repentance. "When I say 'sorry,' " the archbishop said, "I am in charge. When I ask forgiveness, however, I am no longer in charge. I am in the hands of the others. Only you can forgive me; only God can forgive me."

Not all survivors of abuse will likely accept the apology. They are right that the church has a long way to go to cleaning house and repairing trust with its flock. Reforms are lagging, many victims are still waiting for compensation and a full accounting of crimes. Some predator priests are still in ministry. Bishops have largely avoided punishment or credible repentance.

Still, gestures and ritual can be meaningful, and forgiveness has to begin somewhere, which is why the Dublin Mass seemed to be a true step forward. "We want to be part of a church that puts survivors, the victims of abuse, first," Cardinal O'Malley said, getting it right.

And for that Sunday, anyway, the victims took precedence. "What the hell did I do wrong as a child?" asked a man, Robert Dempsey, who told of being abused in a mental institution. "What the hell did any of us do?"





We love watching our fellow New Yorkers, and we are particularly devoted to watching the many creative ways they hail taxis. The taxi-seeker edges out into the street. And as the arm goes up, he or she is not merely signaling a taxi but also betraying a need in public — something New Yorkers dislike doing.

It should be simple enough: Arm goes up, cab pulls over, pedestrian becomes passenger. But does the arm beckon or beseech? How high above horizontal? Is it summoning the Force? Does the index finger point as if at Superman, or do the fingers flutter in air, waving an invisible hanky? How much faith in the gesture? How much despair? Above all, how much self-consciousness?

It is a ridiculous moment. That's why some of the finest cab-hailers in the city look so indifferent. One walks against traffic, cellphone at ear, arm extended — signaling that it's up to the taxi fleet to do the noticing. Others never gesture until they see a cab they are sure to catch and then crook an elbow as if it was inevitable. What matters isn't only catching a taxi. It's also avoiding rejection in the street. We're more sensitive, New Yorkers, than we really look.

Everything changes with the kind of precipitation that fell early this week. Cabs dissolve in the rain. The streets become histrionic. There is Napoleon, on Park, trying to halt the storm and a taxi both while keeping his papers dry. Downtown, Bette Davis is acting out the perfidy of cabdrivers on a damp planet. Martha Graham in the mid-50s waves her shopping bags on high before keening forward in despair, hand to brow. And the real experts? They are already waiting on the subway platform where no gesturing is needed.






In Lewis Powell's now-famous memo to America's business community, which felt beleaguered in the political environment of 1971, the future Supreme Court justice stressed the importance of organizing.

"Strength lies in organization," he wrote, "in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations."

Powell's memo points to the reason why there is such an effort now not just to extract concessions from public employee unions to help balance state budgets, but to actually crush those unions, to deprive them once and for all of the crucial and fundamental right to bargain collectively.

When you talk to the workers who are hurting most in this epic downturn, they are overwhelmingly out there on their own. No one has their back. The corporate community and the politicians who do their bidding know better than anyone else that workers who are not organized are most often helpless. They have no leverage. They cannot demand raises or health and retirement benefits or paid vacations or sick leave. They cannot negotiate shorter hours or better working conditions. It's the boss's way or the highway.

It's not just pocketbook issues but the dignity of American workers that is at stake in the confrontations in Wisconsin, Ohio and elsewhere. These confrontations are about so much more than the right of public employees to bargain collectively, as important as that is. This most recent assault on labor is part of an anti-worker movement that has been on the march for decades. Jobs have been shipped overseas. Workers have been denied their rightful share of productivity gains. Wages have been depressed and benefits in many, many instances have disappeared.

It's true that states are facing serious fiscal problems, crises in some cases, but a much bigger threat to America as we've known it is the increasing inability of hard-working men and women to earn enough to maintain a middle class standard of living, even as the corporate sector is thriving. The economic lives of the poor and an ever-widening portion of the middle class have become maddeningly insecure as the wealth of the society has been funneled, increasingly and unconscionably, to those at the top.

There was no net job creation during the first 10 years of the 21st century, and median incomes fell during that period, an abysmal record unmatched by any similar period in the modern post-World War II era.

I have long believed that virtually all workers should be organized, whether they were actually in a union or not. The man or woman who goes home after a long shift with barely enough to pay bills and nothing put away for an emergency, and who knows that he or she could be terminated at any moment for any reason, is subject to a permanent state of anxiety. There should be someone, some group or organization, to turn to for advice and support.

Unemployed workers who show up fully qualified to apply for a job only to be told that the prospective employer will not even consider someone who is already out of work should not have to feel that there is absolutely no alternative, that it is impossible to fight back. American workers should not be treated as if they don't matter.

Working America is a pro-worker advocacy organization affiliated with the A.F.L.-C.I.O. that has signed up millions of nonunion members in an effort to increase the organized reach of workers. Much more organizing, on myriad fronts, is desperately needed.

Millions of Americans throughout the country are facing extreme economic hardship. The Community Service Society in New York City does an annual survey of low-income residents. Twenty-seven percent of respondents to its most recent survey said they had lost a job; 26 percent had had their hours, wages or tips reduced; 23 percent said they had often skipped meals because they did not have enough money to buy food; and 26 percent said they had been unable to fill a needed prescription because of a lack of money or insurance.

One of the saddest things I've read in The New York Times recently was a comment by Richard Freeman, a Harvard economist, who said that he views the current hostility toward unions by members of the general public as a sign of the erosion of the aspirational nature that has for so long characterized Americans. "It shows a hopelessness," he said. "It used to be, 'You have something I don't have; I'll go to my employer to get it, too. Now I don't see any chance of getting it. I don't want to be the lowest one on the totem pole, so I don't want you to have it either.' "

Lewis Powell's advice to the corporate community in 1971 is — though he certainly never intended it to be — the best advice I can think of for workers today who are fighting to hold off the tide of lower living standards. It is not a struggle that can possibly be won alone.






We're going to be doing a lot of deficit cutting over the next several years. The country's future greatness will be shaped by whether we cut wisely or stupidly. So we should probably come up with a few sensible principles to guide us as we cut.

The first one, as I tried to argue last week, is: Make Everybody Hurt. The sacrifice should be spread widely and fairly. A second austerity principle is this: Trim from the old to invest in the young. We should adjust pension promises and reduce the amount of money spent on health care during the last months of life so we can preserve programs for those who are growing and learning the most.

So far, this principle is being trampled. Seniors vote. Taxpayers revolt. Public employees occupy capitol buildings to protect their bargaining power for future benefits negotiations. As a result, seniors are being protected while children are getting pummeled. If you look across the country, you see education financing getting sliced — often in the most thoughtless and destructive ways. The future has no union.

In Washington, the Republicans who designed the cuts for this fiscal year seemed to have done no serious policy evaluation. They excused the elderly and directed cuts at anything else they could easily reach. Under their budget, financing for early-childhood programs would fall off a cliff. Tens of thousands of kids, maybe hundreds of thousands, would have their slots eliminated midyear.

Out in the states, the situation is scarcely better. Many governors of both parties are diverting money from schools in thoughtless and self-destructive ways. Hawaii decided to cut the number of days in the school year. Of all the ways to cut education, why on earth would you reduce student time in the classroom?

Texas is taking the meat cleaver approach. School financing will be cut by at least 13.5 percent, around $3.5 billion. About 85,000 new students arrive in Texas every year. There will be no additional resources to accommodate them.

Which leads to the third austerity principle: Never cut without an evaluation process. Before legislators and governors chop a section of the budget, they should make a list of all the relevant programs. They should grade each option and then start paying for them from the top down.

It seems simple, but that is not what is happening. Instead, legislators and administrators are simply cutting on the basis of what's politically easy and what vaguely seems expendable. In education, many administrators are quick to cut athletics, band, cheerleading, art and music because they have the vague impression that those are luxuries. In fact, they are exactly the programs that keep kids in school and build character.

I have a lot of problems with President Obama's tepid budget. But it does an excellent job of linking funds to outcomes, especially in education.

Education Secretary Arne Duncan gave a superb speech in November called the New Normal. He observed that this era of austerity should be an occasion to increase productivity and cut the things that are ineffective. Duncan is a fountain of ideas to make more with less.

For example, he says, if we have to increase class sizes, we should put more kids in with the best teachers and then we should pay those teachers more to compensate for the extra load. Most of us parents would rather see our kids in a class of 30 with a great teacher than a class of 25 with an average one.

The president's budget increases spending on things like early education, and it is also stuffed with mechanisms to make programs perform better. When I spoke with the mavens that put the budget together, I found that they had a clear and skeptical view of whether many of these programs work. They perfectly described the studies measuring the strengths and weaknesses of each program.

They know that Head Start, for example, is a hodgepodge. Some facilities are great. Many are terrible. The administration would evaluate each program. The bottom 25 percent would have to compete to keep their financing. Those that didn't improve would get replaced.

Similarly, Pell grant levels have surged in recent decades, but college completion rates have been flat. The administration would reform the Pell grant program, eliminating parts that don't work. More important, it would establish stronger incentives so colleges have an interest in getting kids to graduate, not simply attend.

During the fat years, nobody bothered to link pay to performance. Government workers and government programs got funding increases no matter how they did. This model is anathema to most Americans, especially those under 40.

This period of austerity will be a blessing if it spurs an effectiveness revolution. It will be a disaster if the cutting is done politically or mindlessly. Unfortunately, that's often how it is being done now.







IF you or a loved one is suffering from excess incivility — perhaps while picketing the statehouse in Indiana, Ohio or Wisconsin — please grab your "Walker = Hitler" or "Walker Is a Weasel, Not a Badger" sign and buy a plane ticket to Tucson. You could be one of the first civility-impaired citizens to be treated at the new National Institute for Civil Discourse.

Announced just last week by the University of Arizona, the new civility institute will have as honorary chairmen former Presidents Bill Clinton and George H. W. Bush. Together with the institute's director, Brint Milward, they will promote compromise among opposing political parties and views and focus on political disagreements "from the grass roots all the way to the top."

Finally! Hope for the angry masses leading lives of noisy desperation.

If you are wondering what civil discourse might look like on a national scale, wonder no more, because last week we placed United Nations polarization observers and civility reporters on the ground for you in Arizona, where they were given carte blanche to imagine what might be going on inside the new institute. (Parody has no place in civilized discourse, of course, but give it time; the institute is young.)

By mid-morning Thursday, Mr. Clinton and Mr. Bush were conducting anger-management classes, working with Fred Phelps and his civility-impaired congregation from the Westboro Baptist Church in Topeka, Kan. Mr. Phelps and his strident adherents filed into the institute waving their famously uncivil signs: "God Hates Fags," "Priests Rape Boys" and "You Are Going to Hell." After two hours of tea and therapy with the two former presidents, Mr. Phelps and his followers emerged bearing signs that said: "We Believe That the Non-Sectarian Divinity May Not Approve of Certain Sexual Orientations. You May Have A Different Opinion. Let's Compromise!" and "Some but Not All Priests Have Struggled With Pedophilia. If You Disagree, We Are Willing to Listen!" and "Have A Great Day! Before You Go to Hell!" All of their signs featured cheerful emoticons and happy faces.

Later, reporters were allowed inside the institute to tour the facilities, which include padded quiet rooms and soundproof time-out cubicles where the likes of Bill O'Reilly, Rush Limbaugh, Keith Olbermann and Rachel Maddow were sequestered between shock treatments and remedial civility lessons.

The centerpiece of the tour was a look at how even a topic like abortion, predictably rancorous and caustic, may be elevated in tone to an acceptable level of civility. Observers were allowed to watch through one-way mirrors as pro-lifers and pro-choicers struggled to converse civilly and accommodate each other's polarized views under the watchful eyes of institute mediators.

By noon, progress was undeniable, as pro-choicers were overheard politely saying, "If you will respect my right to choose, I may respect your right to harbor demented religious delusions." To which the pro-lifers decorously responded, "If you will respect the word of God and the sanctity of all human life, I may respect your right to murder unwanted babies." Still not quite there, but the day was barely half over!

Access to the "Birthers Versus Obama Supporters" clinic was closed for repairs because of the release of toxic fumes related to the work being done there.

But reporters were allowed to visit the institute's library, where experts in decorum and seemliness were hard at work deconstructing the texts of famously uncivil curmudgeons from the dark days of our nation's history of storied incivility: H. L. Mencken ("If a politician found he had cannibals among his constituents, he would promise them missionaries for dinner."), Ambrose Bierce ("Politician, n. An eel in the fundamental mud upon which the superstructure of organized society is reared. When he wriggles he mistakes the agitation of his tail for the trembling of the edifice.") and Mark Twain ("When angry, count to four; when very angry, swear.").

Hard at work in the institute's legal clinic, scholars were rethinking a central tenet of First Amendment theory, that unbridled free speech functions as a kind of "safety valve," allowing frustrated and alienated citizens to blow off steam instead of engaging in violent revolution. So maybe civility is actually more dangerous than incivility?

After all, Justice William Brennan, writing in New York Times v. Sullivan, spoke of "a profound national commitment to the principle that debate on public issues should be uninhibited, robust and wide open, and that it may well include vehement, caustic and sometimes unpleasantly sharp attacks on government and public officials."

Still, the civility institute hopes that these time-honored free-speech fundamentals can be modified. Just a bit. If we promote civility, might we not achieve a political nirvana where it is possible to be robust, vehement and caustic while at the same time remaining punctiliously civil and decorous?

Sure, but that would bring to mind another Ambrose Bierce quotation: "Politeness, n. The most acceptable hypocrisy."

Richard Dooling is the author of "Rapture for the Geeks: When A.I. Outsmarts I.Q."







AS any Sam's Club shopper knows, buying in bulk saves you money. But states and cities have paid too little attention to the costly and inefficient way they buy goods and services. By visiting an office that few of them have likely paid much attention to — central purchasing — governors and mayors could make significant headway in plugging their deficits.

Nearly every state is facing budget problems. A fifth of all states face deficits equal to 20 percent or more of their budgets, topped by Nevada and Illinois at 45 percent. Gov. Andrew M. Cuomo of New York inherited a deficit equal to 17 percent of the budget.

Pennsylvania faced a likewise daunting deficit, of $2 billion, in 2003, when I began managing the state's procurement operations, responsible for $4 billion in annual spending. To help close it, we borrowed an approach used by businesses: strategic sourcing.

Previously, the state purchasing office would set up a master contract with dozens of suppliers and then allow agencies to buy whatever they wanted from whichever supplier on the list they preferred.

The result was to break the state's buying power into thousands of pieces. Rather than making a big monthly purchase at, say, Costco, Pennsylvania was effectively making tiny, hourly purchases from 7-Eleven.

Take ketchup. In a state with a former senator and a football stadium both named Heinz, it's no surprise that we use a lot of it. But since every agency was allowed to choose the vendor it wanted, the state paid wildly divergent prices: a hospital in Allentown paid $23.20 for a case while a prison near Shamokin paid just $12.66.

Our approach turned this model on its head. Rather than allowing purchasing decisions to be made by each agency, state procurement aggregated purchases while consolidating suppliers, pushing prices down by buying in bulk.

We did the same with technology purchases, requiring that all the state's computers come from a single manufacturer, saving $19 million annually. We saved $4 million by closing 13 state-managed warehouses after we switched to a single office-supply vendor that guaranteed next-day statewide delivery, eliminating the need to stock our own supplies.

What's more, strategic sourcing reversed the traditional relationship between agencies and vendors, who had used our decentralized processes against us to drive up their profit margins at taxpayer expense. Suddenly the state had the power and vendors were competing for larger but less lucrative contracts. By the time we were done, we had saved Pennsylvania taxpayers $360 million annually across dozens of contracts.

The same approach could work in New York and other states and cities facing yawning deficits. New York City is one of the largest buyers in the world, but it doesn't act like one. The Department of Citywide Administrative Services, for example, oversees 1,100 citywide contracts worth roughly $1 billion — including 19 separate contracts for plumbing supplies.

By identifying contracts that could logically be combined, the city would increase its buying power, streamline procurement operations and drive significant savings. If New York's procurement director were given the tools we had in Pennsylvania, the city could realize upward of $100 million savings annually.

True, strategic purchasing won't close the entire budget hole. Finding the way out of their deficits will require governors and mayors to make dozens of difficult, gut-wrenching decisions.

But they can make a serious dent in those deficits with relative ease by just walking a few doors down from their offices to meet their chief procurement officers.

David Yarkin, a former deputy secretary of the Pennsylvania Department of General Services, is the president of a company that advises state and local governments on purchasing.







The Chattanooga area's people, homes and businesses are blessed with a virtually unlimited quantity of pure, good-tasting water to meet both our needs and desires, and it is delivered to us conveniently at the turn of a tap.

We are thankful not to have to dip water from the river. But we may tend to take the good service of Tennessee American Water for granted.

Currently, the water company is requesting a price increase for its service.

The reason it has to "request," instead of just setting the price itself, is that our local water service is a monopoly. It would be uneconomical and foolish to have several competing water companies, wouldn't it? But we wouldn't like to have a monopoly dictating costs to us with no reasonable option. That's where the Tennessee Regulatory Authority comes in. It's a three-member state body that analyzes costs and controls utility prices.

What should the water company be permitted to charge?

Obviously, it should be allowed to charge enough to cover its costs in providing us good service — purification, maintenance of the distribution system, labor costs and other necessary business expenses — plus a fair profit for its efforts.

After all, the reason we have good water service is that a great many people have invested their money in the water company, with the reasonable expectation they will earn a fair return.

Tennessee American is requesting a $9.9 million increase — which reportedly would amount to $4.68 a month for the average residential customer. The last increase was in October 2008. The company says it needs the increase to cover its rising costs in providing service. The Tennessee Regulatory Authority will consider the facts and make a decision.

Nobody wants to pay more for anything. But nobody wants any deterioration in our good water service. We should want to be fair to all concerned — the water company investors and the 75,000 water customers, 63,000 of them at residences.

Our current average monthly home water bill is $16.62. Isn't that a bargain for home-delivered, good water? The requested increase would raise that to $21.30. (Some water bills also include a "city sewer service charge" that does not go to the company but is necessary for local sanitation services.)

Water company President John Watson said, "Our costs for energy, chemicals, labor and taxes have all gone up, and we need to recover those expenses to continue to make investments in this water system."

We should want the company to continue its excellent service, and earn a fair profit for providing the good water we need. Balancing all needs and interests isn't easy, though. It is important to be fair to the company and to our home, business and industrial water customers. We expect the Tennessee Regulatory Authority to do that in hearings on Tennessee American's rate increase request.





One of the ugliest and most dishonest tactics in Washington is for politicians to claim that "the other side" is planning to slash Social Security benefits. The goal of those claims is to frighten senior citizens and to get them to line up politically behind the politician who is making that false claim.

Most recently, the Obama administration sent out a scary letter claiming that proposed Republican budget cuts could lead to furloughs of Social Security Administration employees. Then, Democrats in Congress sent out a statement claiming that Social Security offices might be closed, and benefit payments might be delayed, if GOP spending cuts are approved.

But that's nonsense. As The Associated Press pointed out recently, even if the current spending standoff between Democrats and Republicans led to an actual "shutdown" of the federal government, essential services would continue uninterrupted: "Social Security checks would still go out. Troops would remain at their posts. ... And virtually every essential government agency, like the FBI, the Border Patrol and the Coast Guard, would remain open. That's the little-known truth about a government shutdown."

The overwhelming majority of our nation's 4.3 million federal employees — a figure that includes the military and postal workers — would not be idled by a "shutdown," the AP noted. In fact, the number of federal workers who would not report to work is fewer than one in four.

And Social Security most definitely would continue operating. "The Social Security Administration would not only send out benefits but would continue to take applications," the AP reported.

That is worth remembering as the president continues to oppose necessary spending cuts proposed by Republicans. The danger is not that Washington may cut "too much" but that it will cut far too little.





Probably no regime on the face of the Earth is more vicious than that of Communist North Korea. The faintest hint of dissent can lead to torture or execution, not only for the so-called "offender" but even for his relatives. Individual liberty is so brutally suppressed that some have observed that the nation is in effect a "giant concentration camp."

Meanwhile, its collectivist economic system is so inefficient that mass starvation has afflicted the people of North Korea again and again.

While free nations abhor the Communist North Korean government's cruelty, we equally lament the suffering of the country's people and seek to ease that suffering with food shipments.

But in 2009, the United States suspended its food aid to North Korea. Why? Because that nation's dictatorial leadership had expelled foreign monitors whose duty it was to confirm that the food actually went to the hungry people. Disgustingly, Communist North Korea has at times diverted food aid meant for civilians to its military — a military that suppresses the civilian population.

Tragically, some recent reports from that country indicate that it is again suffering severe food shortages, leaving famished citizens to forage for grass and herbs in some cases.

It is impossible not to pity the people of North Korea. But sadly, the United States cannot afford to send unmonitored aid to that nation when the aid is highly likely to be used not to help but to afflict Communist North Korea's people.

How much better for North Korea if it had followed prosperous South Korea's model of economic and personal liberty.






In a perhaps-apocryphal tale, there was a pitched battle back in 1821 during the Greek revolt against Ottoman rule, with the Turks taking refuge in the famed Acropolis. The Turks, running desperately short of ammunition, began melting down lead clamps holding marble statuary together to make bullets. Learning of the Turks' predicament, the Greek commander dispatched a wagonload of bullets to the enemy Turks with the plea: "Use these, but please leave our Acropolis intact."

We mention this anecdote not to revisit that particular bit of history, although we do think it reflects a bit of the chivalrous spirit present on both sides of the Aegean. Rather we think it might serve as inspiration for resolution of the standoff between Turkish Culture and Tourism Minister Ertuğrul Günay and Germany's "Prussian Cultural Heritage Foundation" over the pilfered "Hattuşa Sphinx," now in a Berlin museum. Günay wants it back. The Germans say no. And the collision course both sides are now on will be a ban on German participation in Turkish archaeological digs. If push comes to shove, we will certainly be cheering Günay. But we think there is a better way. Metaphorically speaking, let's offer the Germans some bullets.

It's not just the Germans, of course. France's Louvre, England's British and Victoria and Albert museums and America's Metropolitan are essentially constructed atop centuries of looting. Late in the 19th century the theft became more sophisticated, packaged as a concept known as "partage," basically a pay-for-excavation-with-treasures proposition that offered a patina of legality. This is how the Germans acquired the sphinx, a relic from 1400 B.C. Hittite civilization.

For at least three decades, debate has raged between the so-called "host" countries with money and their "encyclopedic" museums and the "source" countries like Greece, Turkey and Egypt, which are poorer but have the goods. Despite some goodwill gestures, primarily from the Americans, a resolution of the standoff has proved elusive.

The solution is in better partnerships between the museums above ground if we are to have effective collaboration below ground. Longer-term and rotating "loans" from Turkish and other source countries can enable Western museums to preserve their "encyclopedic" nature; in fact it could be enhanced. Interactive technologies and "virtual" displays created mutually could augment cooperation. And within such a framework, Turkey can get back its sphinx languishing in Berlin, Greece can retrieve its stolen Elgin Marbles and Egypt and others can recover priceless links to their history that to date have been wrongly denied.

Or, we can continue the impoverishing warfare and kick Germany out of ongoing digs across Anatolia. We think it would smarter, however, to take a cue from that Greek commander back in 1821.






It is not immediately apparent why Prime Minister Erdoğan opposed U.N. sanctions on Libya so vocally and so angrily. His remarks in doing so are also seriously out of tune with the kind of sanctions eventually imposed on that country on Saturday by the Security Council.

Erdoğan had indicated previously that the Libyan people were already in a difficult situation, adding that "sanctions would make life even more unbearable for them." Calling on the international public to act against Libya "from a humanitarian perspective and not out of considerations for their oil interests," Erdoğan had also uttered some loaded remarks "for those who had initially remained silent" when the uprisings in Egypt and Tunisia had taken place.

Indicating that this was "a double standard that could not be compensated for," Erdoğan claimed that "those who supported sanctions now were in fact after something else." He added "you cannot secure world peace if you say let us have sanctions every time something happens." Speculation is now rife as to why he took this line on the question of sanctions against Libya.

Some attribute this to the billions of dollars of investments that Turkey has in that country. The argument is that Erdoğan is considering the situation that will emerge after Muammar Gadhafi is gone, and does not want to ruin the chances of Turkish companies returning to that country once everything cools down.

This argument however can be turned around in two ways. Firstly, if this is indeed the case then it would be as cynical a position as the "double standards" Erdoğan is accusing "those who are acting out of consideration for their oil interests." The second argument is just as problematic as far as Erdoğan is concerned.

While he called for a "humane attitude" toward the Libyan people, it is possible that the position he took on the question of upping the pressure on Gadhafi and his regime by means of sanctions may not be something that the Libyan people forgive once they have freed themselves from the grips of this regime.

This possibility looms even larger now that the sanctions were adopted on Saturday with unanimity and involved countries that can easily fill in any gap left by Turkish companies in Libya.

One might also conjecture here that Erdoğan has an automatic and natural antipathy for sanctions now given the way Turkey, along with Brazil, was isolated in the Security Council last year on the Iran sanctions issue. The two countries had voted against these sanctions, while all five permanent council members, including Russia and China of course, had voted for them. 

There is talk now among the Western members of the Security Council for more sanctions on Tehran, whether this is done unilaterally or through the U.N., and this could also be feeding Erdoğan's anger. The fact is however that he was left out in the cold in a manner that is much worse than was the case with the Iran sanctions. At least some non-permanent members of the Security Council had abstained then.

Now however all 15 council members voted for the Libya sanctions, and these include Brazil, Bosnia and Herzegovina, Nigeria and Lebanon, four countries that are non-permanent council members at the moment that the AKP administration feels a natural affinity toward.

It is questionable whether one can attribute the not so favorable image that has emerged here for Turkey to a misreading of the situation by the Turkish Foreign Ministry, and particularly to Turkey's permanent representative in New York, Ambassador Ertuğrul Apakan.

Apakan and his staff are competent enough to figure out how the wind was blowing at the Security Council, and it is more than likely that they informed Ankara about this. It seems then that we may have another case of Prime Minister Erdoğan unilaterally going out on a limb and leaving Turkey isolated in the end on a key international issue.

Perhaps, as some suggest now, Erdoğan overextended himself in expecting his angry remarks concerning the Libya sanctions to have an effect on at least some "friendly" members of the Security Council. If that is the case he clearly misjudged seriously. As for his calling on the international community not to make life worse than it is for the Libyan people with new sanctions this also fell flat on its face.

It must have come as a bitter blow to Erdoğan to see even Libya's deputy permanent representative to the U.N., Ibrahim Dabbashi, thanking the members of the Security Council for adopting the Libya sanctions. As for the sanctions that were adopted in the end, it is clear that these do not target the Libyan people in any way but involve an arms embargo on the Libyan regime, as well as the freezing of assets for the Gadhafi family and its cronies.

It is not hard to imagine given the circumstances in that country that this is precisely what the Libyan people would have wanted done anyway. So once again we see Mr. Erdoğan misreading the diplomatic situation – even though he was lucky in terms of his gamble on calling for Hosni Mubarak to leave at the time.

The bottom line in all this is that if Turkey was still a non-permanent member of the Security Council, as it was last year, it would have been even more isolated internationally than it was on the Iran sanctions issue.

It may be time therefore for Mr. Erdoğan to listen more to the advice of his senior diplomats in the future – even though he has little love lost on diplomats in general – in order to avoid leaving Turkey isolated and embarrassed in this way.







The Feb. 28 post-modern coup hit Necmettin Erbakan the hardest. And Erbakan died the day before the 14th anniversary of Feb. 28. May he rest in peace, may God give his loved ones patience. 

Of course Erbakan is one of the most critical political figures in republican history for being the architect, even the founder, of political Islam in Turkey. He made a permanent mark on history.

The National View came to the fore as an organization following in the footsteps of the Muslim Brotherhood. But in today's Turkey, the National View left the Brotherhood way behind in terms of political power.

Whether you like it or not, the National View, be it the original version or the changed one, is one of the most effective political movements in Turkey.

And for years to come, this will not change.

In my eyes, Erbakan will leave his mark in history not as one of the prime ministers of the Republic of Turkey but the founder of political Islam in Turkey. 

However, we mostly remember him with the Feb. 28 coup. Feb. 28 symbolizes how Erbakan's politics was reared up and erased from history at the same time.

The same Feb. 28 process, however, provided historic terms for the ruling Justice and Development Party, or AKP – the most "moderate" representative of political Islam in the Middle East today, and therefore the one managing to pull the West's attention.

With the Feb. 28 process, the AKP, the only lifesaver and ancient ally of the United States and the West in the Middle East, rose from the ashes of anti-imperialist Erbakan.

Alas! The anti-American Erbakan is the godfather of the AKP, the most-reliable U.S. ally in the Islamic world! 

Erbakan was a real leader, a sharp man who never gave up on his political ambition until the last moment.

Although he was a champion compared to his adversaries during the Feb. 28 process, i.e. İsmail Hakkı Karadayı, Çevik Bir, Güven Erkaya or Erol Özkasnak, Erbakan lost out to them. He could not resist!

After resisting for five days, why did he sign the Prime Ministry Working Group's foundation decree, as well as the Feb. 28 communiqué which was obviously designed to finish him?

Why could he not say, "Shove it!"?

I have a simple answer: Because the late Erbakan was addicted to political power!

He considered every single day in power as being to his benefit during the Feb. 28 process, and spent his days thinking "while there is life, there is hope."

For him, political power must have been felt so wonderful that even in his last days, Erbakan could not entrust the chairmanship of the Felicity Party, or SP, to Numan Kurtulmuş out of fear of losing control! 

If Erbakan had the determination and courage to resist against the Feb. 28 process, he would've left his mark in the history as "a hero of democracy," and would've become the one disheartening the "pro-coup" people who imitated Bir after the AKP came to power!

He could've claimed a totally different place in history. 

Turkey has raised very few key political leaders, Prime Minister Recep Tayyip Erdoğan is the last one, but I think, no statesman has been raised in this country since the founder of the Turkish Republic, Mustafa Kemal Atatürk!







European visa requirements for Turkey started with West Germany in 1974. The foreign minister of the period, Hans-Dietrich Genscher, stated that they had completed recruitment from Turkey which started in 1961, and were now going to diversify by recruiting from other countries. Therefore, they had to apply a visa to Turkey to prevent a deluge.

There was reasoning behind the decision as Turkey was going through a great crisis and experiencing unemployment during which people would migrate to Germany from the far corners of Anatolia. The Germans were afraid of a deluge and shut the doors.

Then other countries started to get afraid of a deluge. While those countries shut their doors, Germany took more precautions.

According to the Ankara agreement in 1963 and the Inclusion Protocols in 1971, there was free movement granted for Turkey and as time passed, the so-called second priority was to employ unemployed Turks in jobs the Germans refused to accept.

Europe no longer is afraid of foreign employees.

We arrived at 2011 and for the past 20 years much has changed.

The European Union has grown much.

First Spain then Portugal were afraid. They thought chaos would take place.

It didn't.

Then poorer European countries became full members.

Foremost Poland, Bulgaria, Hungary were the ones to stir up the market. And everybody thought they'd increase unemployment.

Again it didn't happen.

Then it was understood that as economic wealth increased, after a while, employees migrating from full-member countries would go back to their countries. The EU started to open its doors for non-member countries. It loosened general visa requirements. But the only exception was Turkey.

Turkey's visa issue became a political issue.

Turkey only watched and talked.

Turkey, as a candidate for full-membership, sufficed with being a mere spectator. May no one be offended but starting with our foreign minister and other ministries, no one took the matter seriously enough. They only produced words and complaints. They didn't even struggle as much as the Economic Development Foundation.

Today, the European Court of Justice decided in favor of Turkey; but Germany doesn't care. The Munich Administrative Court decided that Turks, especially those visiting for tourist purposes, could enter Germany without a visa and stay for up to 3 months, but again Berlin didn't care.

Why? Because visa requirements for Turks have entirely become a political issue.

And we just keep watching.

EU authorities following this issue closely, openly state that technically there is no justification left for a visa requirement but it has become a political issue.

"Nobody believes anymore that Turks, becoming progressively healthier, will invade the German market or screw up the EU job market," says a European authority who believes that Ankara needs to take immediate action.

But he also underlines the fact that this endeavor needs to be handled with a well-prepared plan and politically on the highest level.

The key to the visa is for now in German Prime Minister Angela Merkel and French President Nicolas Sarkozy's pockets. If these two leaders are convinced, then a solution would seem extremely probable.

During his last visit to Ankara Sarkozy's own words of "transparent and honest" attitude reflect the views of a strong segment in the EU, including Merkel, regarding relations between Turkey and the EU.

But just as Semih İdiz's quote went in the daily Milliyet yesterday reflecting on the words of a European ambassador who has a positive view of our membership, "Even if Sarkozy considers himself the owner of the EU when Turkey is ready for full membership, Sarkozy will long be gone, leaving behind a "repellent sound."

And let's never forget that there are some within the EU who calculate the cost of offending Turkey.

Now the EU is getting ready to grant Turkey some flexibility.

But our job is to carefully analyze the granted flexibility.

For, it is trying to ease visa requirements for some groups like businessmen and students seemingly granting "Turkey special advantages," but that is not the case.

These "special advantages" are not specifically designed for Turkey but everybody else who is granted even more rights.

Let's not fool ourselves. Let's consider advantages versus disadvantages, make a decision and take action.

This knot can only be solved by the prime minister.

This fall he will meet with Merkel in Berlin to join in on the celebrations of the 50th anniversary of Turkish employees immigrating to Germany.

Turkey might obtain its rights by making an uproar in Europe.

But the prime minister needs to put it on his agenda.

If the EU does not want to lose Turkey entirely, it needs to change its visa politics

To tell the truth, the EU needs to take this subject seriously.

Of course, only if it doesn't want to lose Turkey entirely.

If there is no solution to the Cyprus issue by the end of this year, which would require a miracle, there won't be any topics left to discuss with Turkey, leading to a definite crisis.

"Either Turkey or Cyprus" arguments will emerge.

Today's course shows that Europe wants to postpone Turkey's membership until at least five to 10 years in the future. But I don't think the prime minister will want to wait that long.

The end is near.

The doors need to be opened in respect to the visa issue if the EU does not want to lose Turkey entirely. Such a gesture would prevent the Turkish public from turning its back on Europe and create as much enthusiasm as full membership in the EU.

It's time EU countries get ready to play their trump.






Almost everybody now thinks that the Turkish economy needs no further help from the International Monetary Fund. This is good news. However, at the same time it is interesting to observe the change in the general attitude after 10 years, as happened in every country that has called on the IMF for help. This is normal for ordinary people. A short time after the implementation of stability measures recommended by the IMF, people get angry because of the negative impacts of the stability measures on their daily lives. It is not easy to convince people that those measures are for their long-term interest. On the other side, professionals must be more objective. Unfortunately, it seems that this is not the case in Turkey 10 years after the 2001 crisis.

There is an old saying in Turkish that roughly translates as human memory is crippled by forgetfulness. First of all, the 2001 crisis was not the most serious one in Turkey's economic history, despite the insistence of most of the professionals today. It might be somewhat difficult to remember the years after 1956, but at least economists should be aware of the economic bankruptcy just before 1980 and the difficulties after 1990, which forced the authorities to call on the IMF for help.

Surprisingly, some claim that due to the implementation of the measures that the IMF recommended – those could also be found in every economics textbook – the 2001 crisis deepened. Maybe they don't want to imagine what could have happened if those measures were not implemented: A real possibility of the most serious economic crisis in Turkey's history and a second bankruptcy.

Evidently, it has become necessary to remind them about the hopeless situation that created the 2001 crisis. When serious economic problems appeared again toward the end of the last millennium, the IMF was called again for financial help. Advice given was no surprise. Authorities in Turkey have heard those pieces of advice many times since 1958, but they have never tried a full implementation. However this time, the situation was quite serious. For that reason, full implementation was necessary. Those bits of advices were very simple as usual but politically difficult to implement: Budgetary discipline and a more flexible but controlled foreign exchange regime: if everything went well, the nation was to move toward a free-floating exchange rate regime step by step.

Nobody expected a political crisis immediately after the implementation of those new economic policies. At first, the crisis seemed not so serious. However, "those at the top" in Turkey are always very keen to exaggerate small crises. When news began to be announced by TVs and radios, the elderly guessed by their past experience what could happen the same day. Turkish people during any political crisis were used to rapidly change their money with foreign exchange and of course, foreigners knew of this habit as well. Immediately after everybody heard about the problem between the then-president Ahmet Necdet Sezer and the late prime minister Bülent Ecevit, not only Turks but also foreigners rushed to the foreign exchange market. Foreign exchange rates jumped to unbelievable levels and to stop the rush it became necessary to increase interest rates over those levels. After seeing that interest rate hikes could not calm the markets, an early shift to a free exchange rate became necessary.

It is not wise now to discuss the advantages or disadvantages of a freely fluctuating foreign exchange rate regime. The early shift to that regime was not voluntary, but forced. If an unexpected political crisis had not happened, it might not have been necessary to change the foreign exchange regime before it was decided whether that change was advantageous or disadvantageous for the economy.

It is obvious that because of the foreign exchange regime, the Turkish Lira became overvalued and as a result a serious current account deficit problem was created. However, it is not rational to put the blame on the IMF which did not – and could not – force the authorities on the early shift to a foreign exchange regime. Unfortunately, the hopeless situation forced the authorities into that immediate action.

One last remark: Either the IMF cannot explain the real meaning of its advice or the people of the countries that call on the IMF for help cannot understand it – or do not want to understand it. As a result, it is better to discuss first the probable positive and negative impacts of policy recommendations and after that to try to reach a rational and most suitable mix without giving any concession from the essentials.

If you ask which country has tried to tread that path, the answer is none. Then, who is to blame first?






The world economy has, since the turn of the new millennium, been moving along different tracks. Growth in the north continued on its long slow down, even as reliance on financial innovation increased exponentially; by contrast, growth accelerated in the south led by key emerging economies, notably China and India, and accompanied by rising south-south trade and investment flows. More encouraging still, the Least Developed Countries, or LDCs, saw annual average growth accelerate to over 7 percent in the period 2000-2009, outpacing growth in the advanced countries even in per capita terms.

The resulting global convergence and drop in poverty rates have been widely heralded. On some accounts, the emerging economies can even pull the world economy on to a new sustainable growth path. This is unlikely. Not only does it ignore the huge domestic challenges facing the emerging economies, but their economic cycles remain strongly synchronized with, and vulnerable to, developments in the north.

The real (and realistic) challenge for the developing world is to ensure that the recent rapid expansion of south-south trade and investment flows is extended and turned in to lasting developmental gains, particularly for LDCs. There are reasons for optimism but its achievement will call for an expanded south-south cooperation agenda.

That agenda must face up to the big challenges of uneven development and continued vulnerability. The LDCs epitomize these challenges. Despite their recent upturn, their income gap vis-à-vis other developing countries has continued to widen. Since the first United Nations conference on LDCs in 1980, average real gross domestic product per capita in LDCs has declined from more than one-third of that in other developing countries to one quarter today. Moreover, research by secretary-general of the United Nations Conference on Trade and Development, or UNCTAD, has shown that even as growth has picked up, the LDCs have been unable to diversify away from their dependence on a small number of commodities, many have faced rising trade deficits and continuing high levels of indebtedness, despite debt relief initiatives, and many remain heavily aid-dependent.

The larger developing economies have certainly played a prominent role in supporting the growth recovery in LDCs. However, their impact has varied considerably. Research by UNCTAD suggests that growth in China has had a strongly positive impact on growth in countries in Sub-Saharan Africa, of which 33 are LDCs, and with some positive feedback on China`s own growth; in the case of Indian growth, the short and long-term impact on Sub-Saharan Africa has been much weaker.

India recently offered duty-free and quota-free market access to LDCs. Within a short period, exports from LDCs benefiting from these concessions grew by 70 percent. Investment flows to LDCs have also been growing, linked in some cases, as in Africa, to a vibrant diaspora community; over 100 Indian multinationals are currently operating in Africa.

If these trends continue for another few years, it would strongly demonstrate how closer trade and investment can help sustain growth in LDCs. However, it is not just how much, but what is traded and invested that matters for longer-term development prospects. In this respect, India's trade and investment relations with Sub-Saharan Africa offer some real grounds for encouragement. India's imports from the region ($7.8 billion in 2009) are almost equal to its exports to the area ($8 billion in 2009). India is exporting products like pharmaceuticals, vehicles, electrical machinery and equipment while importing fruits and nuts, inorganic chemicals and wood, in addition to minerals and fuels.

But more has to be done to ensure inclusive and sustainable gains from these south-south economic links; selective and targeted integration strategies will also be needed. There is little doubt that the success of East and Southeast Asia, including the rapid growth of LDCs from that region, is due to industrial development, which has had a strong locational component linked to regional production networks. There is nothing to stop these being replicated elsewhere. Research by UNCTAD has shown that, for example, the clothing and textile sector in South Asia could become much more competitive if it was built around stronger regional supply chains, including LDCs such as Bangladesh.

Nevertheless, financing remains a binding constraint on sustained and inclusive growth in LDCs. The onus is on rich countries to fill the significant gaps in development financing. However, south-south financial flows have so far been on a very small scale, in part because the financial system is underdeveloped in many regions, including South Asia. On some estimates, China, for example, is already lending more to developing countries than the World Bank, though the scale is still small relative to what it is lending to advanced countries. Recycling the massive payments surpluses for development purposes is a major collective challenge for south-south cooperation.

It should be clear that unlocking the potential of south-south economic relations requires more than passive reliance on market forces and private initiative. Creating policy space for government action and regional policy coordination will be essential. The failure of most structural adjustment programs to achieve their stated aims over three decades, particularly in LDCs, serves as a reminder that the state needs to play a more hands-on developmental role in tailoring policies to meet local constraints and imperatives.

Many emerging economies have acquired considerable policy experience which can be shared with policy makers in LDCs. South-south partnerships supporting development programs in LDCs have already begun to emerge, among them the India-Africa Summit. This area of south-south cooperation needs scaling up and UNCTAD is aiming to establish an institutional portal through which LDCs and other developing countries can approach each other for policy advice and assistance and to exchange experiences.

Thirty years of finance-led globalization has produced an unbalanced and unstable world economy. While the economic storm clouds of recent years have yet to fully break, the emerging south offers a silver lining. Yet, the LDCs are even further behind today than they were at their first U.N. conference. Enhanced south-south cooperation is needed to begin to turn things around. The meeting this week organized by the government of India to harness south-south cooperation for LDCs is an important step. However, it can only be part of a larger rebalancing agenda in support of development-led globalization. India, as a prominent member of both the G-77 and the G-20, can play a pivotal role in shaping that agenda and helping to build a more inclusive and sustainable global economic order.

* Supachai Panitchpakdi is secretary-general of the United Nations Conference on Trade and Development, or UNCTAD.






Many of the great declines in the stock market over the past 30 years have been related to oil. This week we have seen the major indices plummet on geopolitical chaos throughout North Africa, especially the large, oil-producing Libya, as investors returned to gold, silver, and oil. As the market reached record overbought territory, any excuse could begin a significant pullback in equities.

Investors are monitoring key assets in Egypt (Market Vectors Egypt Index, or EGPT). If either the Suez Canal or Sumed Pipeline comes under attack, then we will see a major oil spike, possibly worse than in the late 1970s. Already Iran has taken advantage of the chaos and passed into the Mediterranean, further escalating potential conflicts between Israel and Iran's allies, Hezbollah and Syria, who wants to take back control of the Golan Heights. This Middle Eastern instability may have deeper consequences and I don't believe it will end anytime soon. In fact, it may even eventually spread to Saudi Arabia where the royal family maintains weak control and extremists are gaining in popularity. In late January in an article entitled, "Will Gold, Oil Prices Soar on Revolts in Tunisia, Egypt?" I wrote about the domino effect hypothesis, stating that chaos would not be contained in Tunisia and Egypt. This spread of chaos, causing volatile power vacuums, could have a significant impact on gold and oil, especially now that the domino hypothesis is being confirmed.

At the end of January investors returned to precious metals. Gold has been on sale every six months. A January phenomenon occurs when mutual funds and institutional investors reposition their holdings, sometimes allowing investors to buy a sector on sale. At the end of January, gold and silver found support as geopolitical conditions worsened. The recent Libyan crisis has caused oil to jump which in turn has caused a decline in equities.

As much as the financial crisis and record government spending has helped gold soar to record highs, terrorism and war have been major drivers of the price since Sept. 11, 2001. The Middle East possesses approximately 65 percent of the world's oil reserves, and Egypt in particular has two key assets which effect the global oil trade: the Suez Canal and the Sumed Pipeline. Many analysts did not expect Libya to fall into civil war. Reports are showing that oil exports are being curtailed, sending oil to new 52-week highs.

The "Sputnik" moment which President Barack Obama spoke about in his State of the Union address may come faster than expected out of necessity. Washington is actively pursuing supply of North American heavy rare earth assets to fast-track into production since top-secret defense technologies depend on it. Sanctions on China from the WTO will not be enough to meet the growing demand. Even China, which produces over 97 percent of rare earths, has expressed interest in heavy rare earth assets globally. Hyundai, the latest company on the electric-car scene, recently commented that it was pursuing a rare earth supply as well.

Economies are growing and demand has increased since the last major Iranian Revolution in 1979 when oil spiked higher. An oil spike now could be much more detrimental 32 years later. The world is more dependent on fossil fuels and many nations are struggling with slow growth and huge debt burdens. An oil spike could cause a major setback for the global economic recovery unless governments initiate major alternative energy and clean energy programs. I believe these current events will create a more significant push into clean energy, non carbon energy. A few commodity sectors may benefit, including uranium, lithium (Global X Lithium ETF, or LIT) and rare earths (Market Vectors Rare Earth/Str Metals ETF, or REMX).

Obama has released this year's budget and it was shocking. Many analysts were surprised by the huge amount of capital allocated to clean, alternative energy in order to spur innovation and job growth. In the recent budget, a $7,500 tax credit will be given to car buyers who purchase an electric car. Obama has a goal of putting 1 million electric vehicles on the road by 2015. Many analysts are predicting about a 10 percent increase in cars sold due to this legislation. However, tensions are escalating as Iran sticks out its tongue at Israel by passing through the Suez Canal. Oil prices could spike as turmoil spreads through North Africa and the Middle East. Legislators are sending a message that they want to wean themselves off of Middle Eastern oil and look into clean and independent energy.

Investors should expose themselves to the potential supply-demand constraints and rise in oil prices by purchasing developers with major assets in these clean energy mineral sectors or by diversifying into these newly created exchange-traded funds, such as REMX or LIT, which track these sectors. As oil spikes, these clean energy commodities should receive renewed interest from legislators and investors who believe in clean energy power generation.

*This article was originally published by, which offers free information and analysis on energy and commodities. To find out more, visit the website at







The level of belligerence in Punjab and the centre is growing. The Punjab Chief Minister Shahbaz Sharif, using a distinctly sharper tone than the one used by him before, has accused President Zardari of deliberately curtailing the gas supply to Punjab. The accusation is a serious one, given the degree of damage the gas shortage faced by the province caused all winter. The problems with the gas supply continue, even with winter beginning to give gradual way to spring. The cut-offs have paralysed industry, resulted in lay-offs and created havoc in households. If the charges Shahbaz has reiterated can be proved, they would constitute what amounts to a crime committed by the federal government against hapless people. The prime minister has denied any mala fide and claimed available gas was evenly distributed, but this, like much of what politicians say, holds only limited credibility.

The comments on the gas supply mark a hardening of lines. We can expect more angry words in the future. The president, following a meeting with key aides, has accused the PML-N of engaging in horse-trading and corrupt politics. In a typically cryptic remark, he has accused 'our friend' of encouraging these practices. More drama over the coming weeks would not be unexpected. Fortunately, the president has clarified there will be no attempt to dislodge the Punjab government. This is a welcome assertion — but we still do not know what lies ahead or how things will pan out in the province. The fact that the governor is a close crony of the president may become very significant indeed. The role he is likely to play is still far from certain - though we must hope good sense prevails and there are no attempts to disrupt the working of government. Concrete issues that are being raised meanwhile need to be dealt with. Gas supply is one of them. The matter has lingered on for months and, despite several rounds of meetings, remains unresolved. The problem is obviously an acute one for the Punjab government. It needs to be addressed. We also need transparency in the matter and a willingness to lay out all the cards on a common table. Punjab and the centre will need to continue cooperation at some level; this, after all, is a requirement in the running of any federation. The degree to which they succeed in doing so over the coming weeks will determine a great deal about the levels of maturity of the political leadership, particularly those in Islamabad who hold most power in their hands. We must hope, for the sake of our fragile democracy, that they will use it wisely.







As if our justice system had not suffered enough, it is now suffering from a dearth of judges. Over fifty percent of the sanctioned strength of judges in five high courts across the land are lying vacant. Consequently, a disproportionate workload falls on the shoulders of those judges who are in post and the Judicial Commission (JC) is facing very considerable difficulty in filling the vacancies. The total strength of judges in the High Courts is 137 but only 62 are in post and a further six are non-functional as they are facing contempt proceedings for having taken the oath under the Provisional Constitution Order (PCO) in 2007. At least, in part, the problem stems from the unwillingness of senior lawyers to be elevated to the judiciary, plus the very high standard set by the JC in order that only the best are appointed. The JC itself is very stretched as it is primarily engaged with reviewing the cases of additional judges who have been working in the high courts, rather than making the necessary new inductions.

Further hurdles in the way to having a fully staffed high court are provided by the tussle between the JC and the parliamentary committee that has oversight of it. The recommendations of the JC are not automatically approved; and judicial appointments are as political as every other appointment to a government position. Somewhere at the bottom of this unhappy situation is the poor litigant, the men and women whose cases are either before, or due to be before, the courts. Cases are deferred, sometimes for months or years, and drag on interminably. It is a legal axiom that 'justice delayed is justice denied' and as the politicians play chess with the appointment process, countless thousands of people are denied the justice which is their right. Instead of political chicanery, we need to see the process of judicial appointment de-politicised and an effort made to clear the massive backlog of cases that is everywhere — but particularly in Balochistan and Khyber-Pakhtunkhwa. Justice for all remains a distant dream.







The question of loan write-offs by banks is becoming increasingly complex. The governor of the State Bank has informed the Supreme Court that banks operating in the country do not need the Central Bank's approval to write off loans, and this is a matter decided by the board of directors of each bank. The apex court had taken suo motu notice of the loan write-offs by commercial banks over the years — which, we all know, has been a key means to benefit the powerful and add considerable sums to their bank accounts. There seems little doubt the practice continues today.

Mr Shahid Kardar, the SBP governor, in his letter to the court, has also noted that while guidelines had been framed on loan write-offs by the Central Bank, banks are not bound to follow them. He has also warned that the write-offs may increase as a result of losses suffered because of the floods last year as well as the global recession. These are legitimate write-offs. Many others are not. We need to develop a mechanism to regulate the giving out of loans, often against inadequate collateral, and the process of recovery. The structures used in other countries need to be examined. It would seem more regulation of banks is required and perhaps the Supreme Court's interest in the matter can lead to some means being found to curb the generous handing out of colossal sums of money that are never returned. We are in desperate need of this.








The next general election is two years away but it seems the campaigning has already begun. Coalitions are falling apart and alliances are being repaired or formed anew. Talk of Changa Manga, one of the world's largest man-made forests near Lahore that became known for hosting and protecting lawmakers from being bribed to switch sides, is once again on many lips as another round of horse-trading is about to begin.

Though Changa Manga, the 12,000 acre irrigated forest planted in 1890 by the then British rulers of undivided India to provide wood fuel for the railway steam engines, became notorious as part of the game being played by Nawaz Sharif and Benazir Bhutto to outwit each other, it wasn't the only place for merry-making at the state's expense at the time. There was the good old Murree and also the heavenly Swat, the two popular hill-stations offering pleasant weather and beautiful sights in the hot summer to the assembly members whose stock rose manifold in the 1990s as they were offered anything and everything to defect.

Changa Manga was referred to as the stable for legislators siding with Nawaz Sharif while Swat became the destination of choice for those in the PPP camp led by Benazir Bhutto. It is sad that picnic spots and tourist destinations became associated with the buying and selling of elected representatives of the people.

Those with the power and money used to insist in the 1990s that there would be no horse-trading. Both sides did exactly the opposite as they tried to buy the loyalties of vacillating members of the assemblies.

This claim is again being made, but there aren't many takers due to the lack of credibility of the claimants. Prime Minister Syed Yousaf Raza Gilani was the latest to make the claim, though he seemed to be leaving the options open by pointing out that there were many people who wanted to join the PPP. This was a hint that his party too could pay back in the same coin if the PML-N continued to encourage defections and rewarded the turncoats.

To begin with, the two parties could trigger as many defections as possible from the faction-ridden and hapless PML-Q, which has already lost 47 out of its 81 provincial assembly members in Punjab to the ruling PML-N. If the confrontation grows, then the PML-N and PPP could attempt to encourage dissidents in the two parties much in the same way in which they indulged in horse-trading in the 1990s. Once such a game begins, there is no end to it as to every action, there is a reaction.

Not surprisingly, the main political forces in the arena are the same and, therefore, to expect a different or more principled approach from them would be futile The principal players are still the PPP and the PML-N, the former now led by President Asif Ali Zardari in place of his slain wife Benazir Bhutto and the latter still by Nawaz Sharif. Once again Punjab is the main battleground and that is the reason for Changa Manga being mentioned by President Zardari as a reminder of the unsavoury and undemocratic practices of the past. Obviously, Mr Zardari is reminding everyone that it was Nawaz Sharif and his brother Shahbaz Sharif who played the Changa Manga game in the 1990s, and that they are doing so again to keep their PML-N in power by bringing the so-called Unification League formed by PML-Q defectors into the Punjab government at the expense of the PPP.

President Zardari also argued that Changa Manga politics were against the Charter of Democracy that Benazir Bhutto and Nawaz Sharif had agreed upon while promising not to bring down each other's government through defections. It is strange, though, for President Zardari to refer to the Charter of Democracy after having violated it time and again and gone back on promises publicly made to Nawaz Sharif.

In fact, it is better for the PPP and PML-N to part ways in Punjab after having ended their alliance long ago at the federal level. Their coalition government in Punjab wasn't sustainable as the two parties were at cross-purposes. Though stranger things have happened in Pakistani politics, it was unusual to see the seven PPP ministers and 13 parliamentary secretaries in Punjab clinging to their official positions despite being told that they were unwanted as part of the PML-N-led provincial government. Instead of resigning gracefully, the PPP ministers and parliamentary secretaries prefer being axed by Chief Minister Shahbaz Sharif.

Some of the minor players in the unfolding 'Changa Manga' politics are also familiar to the people of Pakistan. They include the ANP and the MQM, the PML faction of Pir Pagara who refuses to call it a day despite his old age and stale predictions, and one or two Baloch-centred parties. The ANP in the 1990s was an ally of Nawaz Sharif and its lawmakers were among those being feted and entertained in Changa Manga. Now it is firmly in the PPP camp and is in the habit of showering more praise on President Zardari than even his PPP loyalists. Such is the unbreakable bond between the ANP and the PPP that the PML-N is not even considering making an attempt to befriend Asfandyar Wali Khan and his ANP lieutenants.

The MQM, forever in power for as long as one can remember and adept at playing the role of both the government and the opposition, is also an ally of the PPP. However, it would continue its somersaults, abandoning the PPP at short notice and then agreeing to enter into a 'strategic' alliance with the same party. Principled politics are in short supply in present-day Pakistan.

To complete the script of the changing political situation in the country, there are also new kids on the block, or perhaps old ones in new guises. Shah Mahmood Qureshi is one, offering himself as a one of the "new, sincere and honest" leaders who could safeguard Pakistan's sovereignty and honour. It is strange of him to express his loyalty to President Zardari and refute reports that he may launch a new party based on the ideology of the late Bhuttos and then insist that Pakistan needs new leadership.

Surely, old leaders such as Mr Zardari would have to be discarded if the country really needs the new, sincere and honest leadership that has become a trademark of Qureshi's speeches during his recent tour of his hometown Multan and then the towns falling on the way to Garhi Khuda Bakhsh where he was planning to visit the graves of Zulfikar Ali Bhutto and Benazir Bhutto. So desperate are our people for a saviour that a single act of defiance by the former foreign minister on the issue of US 'diplomat' Raymond Davis, the undercover CIA agent who murdered two young Pakistanis who were following his suspicious movements in Lahore, has made Qureshi an unlikely object of affection for many Pakistanis. Qureshi won't be able to stay in the PPP and do the kind of politics he is now doing and before long would be expelled or forced to quit.

Others eager to play a more meaningful role in the emerging political scenario are mostly the leaders of parties that made a mistake by boycotting the 2008 general election.

They are desperate to join the political mainstream and would be happy if the existing, crisis-prone power-sharing set-up referred to as 'national reconciliation' by President Zardari was packed up and mid-term elections were held. Imran Khan appears to be the most active of the lot, but the Jamaat-i-Islami leader Syed Munawar Hasan and the PMAP head Mahmood Khan Achakzai and some of the Baloch nationalist leaders would, no doubt, welcome mid-term polls. The return of Changa Manga politics would certainly provide valid reason to these parties to push for mid-term elections.

The writer is resident editor of The News in Peshawar. Email:







Countries are inevitably affected by developments in next-door neighbours. Afghanistan's problems have permeated into our social and political fabric. Indonesia, the largest Muslim nation, is following in the footsteps of its neighbour Malaysia. Indonesians are not a mob like us, but is becoming a nation.

Like Malaysia, Indonesian society reflects a beautiful mix of religion and worldly matter. Whether university graduates or madressah-educated, Westernised or religious-oriented, the majority of them live side by side without threatening each other. Women clad in skirts or scarves work side by side in offices and factories. Except for preaching in a non-intrusive manner, nobody is allowed to force others to change their lifestyles. Christians and Hindus make up 8 per cent and 2 per cent of the population respectively. However, Muslims and these minorities don't hate each other. Unlike Pakistan, this country does not harbour hate against foreigners. People from various parts of the world come here as visitors. I write these lines from Jakarta with the hope that Pakistanis may at least bother to learn some lessons from the most populous country in the Islamic.

The University of Indonesia, in collaboration with Oslo University, had organised a conference on "Terrorism, freedom of expression and the media," in which a number of journalists and university professors were invited from Norway, Bangladesh and Indonesia, including five journalists and three professors from Pakistan. During the proceedings, the conference turned into an accountability forum for Pakistanis. We Pakistanis were bombarded with questions from invitees of a non-Muslim country (Norway) and two Muslim countries (Bangladesh and Indonesia). All of them were united in blaming us for spreading terrorism and threatening other countries' harmony. Yet others blamed us for exporting religious extremism.

Indonesia is encouraging tourists from across the globe. Therefore, it issues visas to guests on arrival at the airports. All visitors from the West, the Arab world or India are treated with hospitability. But here too Pakistanis are singled out for discriminatory treatment in security checking. Two well-known persons in our group were even fingerprinted.

Our religious bigots, mercurial protesters, effigy burners or institutions that have actually turned Pakistan into a lawless land in the name of strategic and institutional interests, are unaware of this country's international image. Even Bangladeshi journalists and professors were raising questions about the viability of Pakistan which they thought was fast becoming a failed state. When these concerns crossed a limit, some of our friends got sentimental and gave befitting answers to the Bangladeshi participants to shut their mouths.

But the question remains: can rude answers allay the concerns that our actions have created in the minds of people from all parts of the world. A measure of these concerns may be gauged from the fact that when we tried to answer questions about the presence of Al-Qaeda in Pakistan, others raised the issues of Swat and Waziristan. When we were trying hard to search for answers to these questions, the questioners turned to the assassination of the late Salmaan Taseer. When we were still struggling to find satisfactory answers to this issue, they turned to the exodus of experts, professionals and intellectuals from this land. We responded that Pakistan was a responsible state. But they are not convinced and changed the subject to the situations in Karachi and Waziristan and claimed that Pakistan has lost control over half of its territory.

It appears that, sooner than later, we as a nation will have to make a decision. Either we turn this country into one with no contacts with the outside world, following the advice of our hardliners, or we mend our ways and keep abreast of the world.

This conference has strengthened my impression that the crux of the problem between Muslims and the West lies in the communication gap between the two. The West looks at us from its own perspective while we look at it from the Eastern perspective. That is why, despite frequent interactions, the psychological gaps have in fact widened. The West does not understand our preferences and demands, while we are unable to appreciate theirs. For example, in the conference the Norwegians were amazed at our reaction to the blasphemous cartoons in the Western press.

They interpreted our reaction as being against freedom of expression, while we took such acts of incitements and arousal of Muslims sentiments as violation of norms of journalism and correct behaviour. Still, we did not approve of their discriminatory treatment of Muslims in the West, but they termed it ingratitude on our part. When we criticised the West's duplicity and anti-Islam attitude as the basis for extremism, they pointed to Muslims who behead their brethren.

The writer works for Geo TV. Email:








 There is a semblance of normalcy in the Afghan capital of Kabul. The battered roads now remain choked with traffic most parts of the day, with glitzy four-wheel drives and cars, while new multi-storey buildings, bill-boards and shopping centres are among the new facets of this conflict-prone city. The head-to-toe veils and long beards of the Taliban era are hardly noticeable in Kabul's downtown. Many men dress in Western clothes and women can venture out of their homes barefaced without the fear of being flogged. Music and musicians, banished by the former Taliban rulers, are also back with a bang and FM radio stations rule the waves. More than 20 television channels fiercely compete for viewers' attention. And, yes, glimpses of NATO troops, foreign aid workers and diplomats also remain common in the city, where the local Afghan security personnel appear in charge and huge portraits and billboards of the slain Tajik guerrilla commander Ahmed Shah Masood stare at passers-by at important junctions and roads.

My three-day visit to Kabul this cold, wet and snowy February for a media conference came after 10 long years and contrasts of then and now proved striking. Despite occasional terrorist attacks, which rock the Afghan capital at least twice or thrice every month, life and businesses mostly appear as usual these days. But this visibly carefree attitude should not come as a surprise. The resilient residents of Kabul have seen worse days during their country's protracted conflict spanning over more than three decades. They can smile and play perfect hosts even during a barrage of artillery fire and these are peaceful times according to their standards. However, to achieve this semblance of normalcy, they have paid a heavy price through their blood and tears. And yet their worries remain far from over.

You scratch the surface a little and the fragility of Kabul's glasshouse stands exposed, where not just peace but even the infrastructure largely os in a shambles despite the engagement of world powers in its affairs since late 2001. The tenacious Taliban insurgents and their Al-Qaeda allies, hovering within and around this city, remain the key. President Hamid Karzai's house of cards stands discredited even in Afghanistan's seat of power, let alone the Pakhtun-dominated regions serving as the hotbed of the armed resistance.

The Karzai administration remains tainted with allegations of massive corruption and nepotism. Even some of the senior non-Pakhtun Afghan journalists admit that the situation remains grim. "The whole government system is rotten with corruption," said a veteran Afghan journalist. "Now one cannot travel out of the city safely because of lawlessness and crime. No road going out of Kabul stands safe."

While the sense of insecurity has increased in post-Taliban Afghanistan, with the rampant kidnappings and broad-daylight lootings on highways, the top Afghan officials are often being accused of multimillion-dollar corruption scams. The Karzai government seems unable to rub away this impression.

Almost 10 years after the ousting of the Taliban from Kabul by the US-led forces, the present political setup continues to bank solely on foreign money, muscle and compassion for its survival. Its chances of standing without foreign crutches appear bleak even in the long run. With little organised economic and business activity in the country, the Afghan government could raise only one billion dollars in 2010 from its own resources. The remaining amount of more than 5.5 billion dollars had to come from the United States and its allies, both for civilian and security needs of the Afghan budget. Given the weariness of the NATO countries locked in this decade-long conflict and Washington's plans to end combat missions here by 2014, the current setup is in a race against time to prove wrong those prophets of doom and gloom who want to write in advance its obituary.

But the trouble is that there are no easy, readymade solutions to the complex Afghan crisis. It is not a simple "them vs us" divide. Afghanistan stands deeply polarised and divided—horizontally and vertically. The Taliban insurgency underlines not just the ideological divide between the modern and fundamentalist forces. It basically remains ethnic in nature with the majority of Pakhtuns having a perception that despite being more than 60 per cent of the total population, they remain denied of their fair share in Afghanistan's power structure, which they say remain lopsided in favour of ethnic minorities including Tajiks and Uzbeks. Karzai's Pakhtun credentials and loyalty remain controversial.

For Mohammed Daud Miraki, a US-based and US-educated politician, those Pakhtuns who are working for this government had "sold themselves to the devil."

"A genocide of Pakhtuns is going on both sides of the border (Afghanistan and Pakistan)," said the clean-shaved Pakhtun politician sitting in Kabul's Intercontinental Hotel, where foreigners and locals brush shoulders discussing all sorts of theories on why peace continues to elude Afghanistan. "The Americans equate the Pakhtuns to the Taliban and the Taliban to Al-Qaeda. There can be no peace until Pakhtun representatives get their share in power, which includes the Taliban and their leader Mullah Omar."

But the very thought of bringing top Taliban leaders into any reconciliation process remains a big a "no" for many other Pakhtun and non-Pakhtun politicians and intellectuals, who question the worldview and way of life of the religious militia. For them any share of power to the Taliban would mean losing whatever little freedom and modernity they managed to restore in the capital Kabul, the country's north and small pockets in the Pakhtun belt.

But many of the Pakhtuns living in Kabul, including journalists, appear to be seething with anger against the Karzai regime and the US-backed war which they see as directed against Pakhtuns in the name of the Taliban. The government and its Western allies have so far failed to remove this impression that this war was not directed against Pakhtuns.

Indeed, the war has its own economy and vested interests. The way regional and world powers contributed in making the situation worse in Afghanistan—also is a hard fact. But pointing fingers at this neighbour or that—in which Pakistan remains a favourite target of many educated Afghans—is not going to heal Afghanistan's festering wound.

As all the Afghan sides engaged in the conflict tend to take extreme ideological and political positions, it is the collective failure of the Afghan leadership that they have been unable to find a middle ground which paves the way for sharing of power and ownership of the peace process among all the stakeholders.

There appears no end to the Afghan tragedy as the main players, including the present Afghan setup and its Western allies, have failed to alienate the Al-Qaeda-linked hardliners from the mainstream Pakhtun resistance. Until this is done and Pakhtuns are brought into the fold of Afghanistan's power structure, peace will continue to elude this unfortunate nation, let down both by its leaders and foreign friends.

The writer is business editor, The News. Email:








When the singer Rahat Fateh Ali Khan was held up by the authorities in India, the reaction back home was, how could an artiste of his stature be meted out such treatment. It was also alleged that what lay at the bottom of his detention was traditional Hindu antipathy towards Pakistanis and Muslims going back to the bifurcation of India more than six decades back, and beyond that.

Rahat, no doubt. is a singer par excellence, whose popularity transcends geographical boundaries. With the film industry of Pakistan in a hopeless condition and that of India booming, every Pakistani artiste—singer and performer—is panting for making his or her name in Bollywood. However, few of them have matched or even come closer to their countryman Rahat in the appreciation and following that he commands across the borders. That Rahat at the moment is the most sought0after male singer in Bollywood testifies not only to his tremendous talent but also to the fact that a good voice is appreciated, irrespective of its country of origin.

But great talent, whether in science or literature, sports or showbiz, is not bigger than the law of the land. Therefore, no one should break the law and get away with that on the flimsy ground that he or she is someone special. In a way, since the stars are a role model, they need to show greater respect for the law than the ordinary citizen.

Coming to the case of Rahat, every country places some restrictions on the movement of foreign exchange and a person who is leaving the country with forex in excess of the permitted amount has to make a declaration to that effect before the customs. India, of course, is no exception. Rahat did transgress his host country's laws while trying to leave the country without declaring that the dollars that he was carrying well exceeded the amount he was allowed.

The singer confessed to the transgression but maintained that he didn't do so intentionally. And there's hardly any reason one shouldn't agree with him. But wittingly or unwittingly, he did violate the law and was detained and fined for that. Rahat subsequently apologised to his Indian fans for what he called letting them down. It was a simple case in which the writ of the law was enforced irrespective of the status of the person on whom it was enforced. Reading any ulterior motive into that is unwarranted, uncalled-for.

That episode, however, was evidently rather amazing for us Pakistanis, who believe that one's exalted status in society entitles one to special treatment. Therefore, the reaction which Rahat's detention precipitated was quite normal and brings out a singular feature of our culture—that the rich and famous, the high and mighty, are bigger than the law.

Take an ordinary example. If someone runs the red light and is stopped by the traffic constable with the intention of handing down the penalty for the violation, the typical response is: You can't do this to me; don't you know I'm a politician, a parliamentarian, a councillor, a lawyer, a government officer, a serviceman, a journalist, a showbiz or sports star, or someone closely related to any of these so-called VIPs? In case the poor constable is brave enough to do his duty and insists that the errant driver pay the fine, all kinds of threats are hurled at him. The message is loud and clear that even if "I" have broken the law, because of my position or connections, "I" should be allowed to go scot-free.

This exactly happened sometime back when a silver-screen star, better known for her real-life anecdotes, got into an argument with a policeman who dared to stop her for driving a car with the blinds pulled on in violation of traffic rules. Instead of acknowledging her mistake and quietly paying the fine, the lady lashed out at the constable: how come she, a celebrity, was being treated like an ordinary citizen.

In our VIP culture, being powerful or influential means being above the law. If you are a VIP, you needn't pay a single penny in taxes or return bank loans, and of course you can stash away as many dollars, pounds, euros and francs as you want. Rest assured, neither tax nor customs nor bank officials would lay their hands on you. How little our millionaire politicians, business tycoons and leading sportspersons and entertainers, who always brag about their patriotism, pay in taxes is all too well-known to mention. The authorities wouldn't dare bring them into the tax net, because they are special persons and need to be given special treatment. Little wonder, then, that we have one of the lowest tax-GDP ratios and one of the highest loan defaults in the world and public revenue always lags well behind public spending.

The author is a freelance contributor based in Islamabad. Email: hussainhzaidi@








Every political party in a democratic set up would claim to work for improving the country's economy, creating employment opportunities, reducing or even eliminating poverty, and improving living standards of the people once it comes to power. However, historically, it has been observed that the economy has remained off the radar screen of political parties in Pakistan. None of the political parties has a credible economic team.

The last three years have seen the economy being neglected by the present political leadership. Everything under the sun has been discussed and practiced but the economy has remained out of focus. Five finance secretaries, four finance ministers, three governors of the State Bank of Pakistan and four chairmen of the Federal Board of Revenue in the last three years speak volumes about the importance accorded to the economy. In the midst of instability in the economic team, should we expect stability and progress in the economy?

Pakistan's fiscal situation has deteriorated immensely over the last three years owing to the unwillingness of the government to broaden tax bases with a view to mobilising more resources on the one hand and rationalising or reducing wasteful expenditure on the other. Irresponsible spending by provincial governments and dwindling provincial tax efforts have further weakened Pakistan's fiscal balance. Resultantly, Pakistan's dependence on external resources, even to finance wasteful expenditure, has increased. Accordingly, public debt has ballooned during the last three years, matching the accumulation of debt over the last 60 years.

Pakistan's finances are in a deep crisis. In the absence of external flows, the government has been borrowing heavily from the SBP to finance its revenue - expenditure gap. Such financing is inflationary and has been one of the root causes of persisting high double-digit inflation. Higher inflation has forced the SBP to keep discount rate at an elevated level which, in turn, has increased the cost of borrowing, lowered investment rate, slowed economic growth, led to more unemployment and a rise in poverty.

The current government is weak and has become a lame-duck. Its economic team has largely consisted of 'strangers in the town', totally oblivious to the ground reality. Accordingly, the government's ability to take difficult decisions has been eroded. Under the pressure of its allies and opposition in parliament, the government reversed its own decision of passing on the rise in international price of oil to domestic consumers.

It is abundantly clear that the government cannot undertake any meaningful economic reform without the support of the major political parties in parliament. Accordingly, the government entered into negotiations with PML (N) to agree on an economic reform agenda. By looking at the composition of the teams on both sides, it was clear that no one was serious about addressing Pakistan's fiscal challenges.

After every meeting, the two finance ministers (present and the former) would talk to the press, highlighting the progress on setting up an independent election and accountability commissions but never spoke on the subject of public interest. No mention was ever made during the 45 days of negotiation on tax reform, that is, on the issue of RGST, bring agricultural income under direct tax net, imposition of flood tax, improving provincial tax efforts, devising mechanisms to pass on the higher international fuel prices to domestic consumers, salvaging the new NFC Award, the issue of circular debt, power sector reform, and rationalisation of expenditure.

The nation waited painfully for the positive outcomes of the 45 days parleys. The talks ended with anticipated outcomes. After 45 days, the government is still nervous about passing the high cost of imported fuel to domestic consumers and reluctant to bring the RGST bill in parliament for voting. Isn't it a waste of national time? After 45 days, we still haven't made any headway.

Political temperature in the country is on the rise. The battle lines have been drawn. Should we expect the lame-duck government to undertake meaningful economic reform in the present scenario? The staff level IMF mission will be visiting Pakistan on March 1, 2011 to gauge the government's intention, willingness and capacity to undertake tax reform.

Pakistan is facing serious budgetary problems. The gap between resources and expenditures is widening. If no corrective measures are taken, the gap can swell to eight percent of GDP. With the IMF programme remaining under suspension, inflows from other development financial institutions and friendly countries may also have been disrupted. How can Pakistan finance its yawning fiscal gap is the most serious budgetary issue facing the country. Political leaderships across the political divide are totally oblivious to the current economic crisis in the country.

The political leaderships' interest in the economy is limited to the speeches in parliament, press conferences, talk shows and populist measures. The rest of the people of Pakistan are suffering from persistence of higher double-digit inflation, lack of employment opportunities, decline in their real incomes, and rise in poverty. Economy has remained out of focus for the last three years and there are indications that this will remain so in the remainder of the period.


Can a lame-duck government and weak economic team revive the economy? Can it enforce financial discipline? Can it succeed in keeping budget deficit at sustainable level? Can it manage to finance fiscal gap in a non-inflationary manner? These are valid questions and the answer appears to be in the negative given the rising political temperature and new political battle lines drawn in the country. Times of economic difficulty are likely to persist with serious social consequences not far behind. Political leaderships must give priority to economic revival, in their own interest. Without a sound economy, the political system will remain fragile. For a sustainable democracy, Pakistan needs reforms both in the political system and the economy.

The writer is the Principal & Dean at NUST Business School (NBS), Islamabad









The writer is special adviser to Jang Group/Geo and a former envoy to the US and the UK.

The wave of popular uprisings sweeping the Middle East takes my mind back to a book I read some time ago. Published in 2009, the book's portion on the Arab world would have to be substantially recast if it was being written today. The escalating public revolts that have toppled regimes in Tunisia and Egypt, spread to Libya, Bahrain and Yemen and have unleashed ripple effects beyond, are remaking the region's political map.

The book called the 'Geopolitics of Emotion' by Dominique Moisi offered a provocative but interesting thesis. In an age of globalization, emotions, claimed the author, have become indispensable to understanding the world we live in. Magnified by the media they both reflect and react to globalization and in turn influence geopolitics.

With these assumptions the book focuses on three primary emotions - hope, fear and humiliation - as they are closely related to the notion of confidence, the defining factor in the author's view, in how nations and people address the challenges they face. From here Moisi argues that cultures of fear, hope and humiliation are reshaping the world.

He identifies Asia as the continent that has seized the economic initiative from the West and is focusing on building a better future and creating a culture of hope, understood as an expression of confidence. The US and Europe he says have been dominated by fear - of the 'other' and ensuing from a loss of national purpose.

The author argues that the Arab world has been defined by humiliation or the injured confidence of those who have lost confidence in the future. A combination of historical grievances, exclusion from the economic boom of globalization and experience of conflict has created a culture of humiliation. The author acknowledges that these cultures are not static and can change and be transcended over time.

If this paradigm is applied to the ongoing upheavals in the Middle East it is clear that they are pushing their societies beyond a stagnant present and an inglorious past to a hopeful future. The political ferment in many Arab nations reflects a spectacular effort to throw off a legacy of humiliation and reclaim national self-esteem and dignity crushed by decades of Western-backed autocratic rule. The uprisings have in fact generated a tide of hope as they are led by a restless new generation that is refusing to submit to the despair induced by an oppressive status quo.

In re-imagining a better future for themselves young Arabs are charting a course that aims to recover their national pride. This sentiment has been captured in several news reports about Egypt. One cited a young Egyptian who had helped organize the protests as saying he could not, at first, figure out what was missing for his generation until the success achieved by their movement. That missing element was pride, he said, that had now been restored. This liberation of the mind has been critical to being able to break free from the shackles of repression.

Portrayed for decades as nations whose people were quiescent and resigned to accepting the status quo, Arab protestors have been challenging this by demonstrating an unshakable resolve to shape their own destiny. They have refuted the notion that they are politically supine, incapable of responsible citizenship and not ready for democracy.

Some Western writers have been quick to proclaim that the Arab Awakening resembles 1848 (the French uprising that spread to Europe but eventually failed) or 1989 (a Berlin 'moment' which refers to the fall of the wall that divided Germany and triggered East Europe's liberation from a collapsing Soviet empire). But it is neither. Given the role that modern communications - social networking and the Al Jazeera 'effect' - have played in mobilizing the protest and driving the 'contagion' across borders, this is a very contemporary, youth-inspired phenomenon located in the context and dynamics of Arab society that is setting its own trajectory rather than following somebody else's path. The upheavals reflect the vision of a new generation and not a replay of Europe's past.

The patronizing Western claim that the Arab movements are a triumph of Western values miss the point. The yearning for change, greater freedom and better lives are universal aspirations not the monopoly of a single culture. So also is the desire for self-determination that is motivating the Arab movements. Representatives of the homegrown protests have themselves rejected any suggestion that they looked outside for inspiration.

The demand for basic freedom is the common thread connecting the mass protests in different countries. In all of them the young articulated this aspiration and gave voice to the pent up discontent with unaccountable authority.

The youth bulge common to the Middle East - where more than half of the population is under 25 - served as the catalyst for the eruption of the Arab street. What has been called a networked generation, empowered by new technology, used the Internet, Facebook and Twitter to heighten awareness, rally and sustain the peaceful resistance. Modern real-time communication helped to expose the young to a wider world that they saw passing their country by.

While the movements and the factors behind them differ from one country to the other there are commonalities - prolonged authoritarian rule by dictators surviving well beyond their political shelf life being the principal one. Another is the peaceful, nationalistic and democratic character of the movements. The participation of women is also a common feature.

Political and economic stagnation and disenfranchisement, concentration of wealth, regime corruption, rising prices and unemployment especially among youth (estimated to be as high as 25 % in some countries) are among other similarities that contributed to creating a breeding ground for popular grievance and frustration. These political, social and economic conditions became increasingly unacceptable for a younger generation whose demand for an end to the old order and the right to choose their leaders animated the protests and resonated among people from all walks of life.

While it is much too early to conclude that the Middle East's momentous events will fundamentally transform the region and go beyond just toppling leaders, a powerful dynamic has been generated for democratic transition in the region.


These developments have also thrown into sharp relief the decline of US influence in a region where for decades Washington placed security for Israel and the need for cheap oil above and beyond all other concerns and chose to ally with tyrannical regimes. The West failed to see the upheaval coming, trapped as it was in a flawed policy prism that saw autocratic client states as a bulwark against Islamic extremism.


Tom Friedman captured this opportunistic policy succinctly in a recent column. "For the last 50 years" he wrote, "America treated the Middle East as if it were just a collection of big gas stations... (The) message to the region has been very consistent. Keep your pumps open, your oil prices low, don't bother the Israelis too much and, as far as we are concerned you can do whatever you want ".

The US has been reduced to a bystander by the chain of Arab uprisings and has since been scrambling to avoid being caught on the wrong side of history. Unmistakable in all of this has been the ebbing of its influence in the region. But America isn't alone in losing ground. Its most implacable foe al Qaeda, also confronts the prospect of a decline in its appeal. The more Arab countries move towards accountable government and greater freedom the more the conditions and grievances which fed al Qaeda's narrative will be eroded. Already al Qaeda's call for the violent overthrow of Arab tyrannies has been rendered irrelevant - and rejected - by the peaceful protests that seek to achieve this aim by the assertion of people's power.









MEMORIES are still afresh about what happened in the political history of Pakistan in 1990s when two major Parties — PML and PPP took their political rivalry to new heights and in the process inflicted self-harm. Confrontation during that period was so intense and bitter that it has assumed proverbial significance in our history and is being referred to frequently whenever there are apprehensions of returning to that type of politics.

After last general elections, there were visible signs that the political Parties have learnt the lesson and are now following the path of accommodation, mutual respect and reconciliation, which are, in any way, hallmark of democratic process elsewhere in the world. We still believe that there is somewhat maturity in politics, democratic culture is flourishing and national consensus on different issues has emerged. Despite difference, which, at times, threatened the system itself, political Parties managed to avoid politics of confrontation and successfully accomplished some of the most ticklish tasks like reforms in the constitution and new NFC award. However, recent developments especially Sunday's charges and counter charges levelled by PPP and PML (N) leaders were ominous signs that we were returning to the dark period of 1990s. Though Prime Minister Yousuf Raza Gilani appreciably declared that he would continue to push forward the process of reconciliation despite parting of ways by PML(N) yet President Asif Ali Zardari, who is otherwise symbol of the Federation, has, perhaps in his capacity as Co-Chairman of the ruling PPP, preferred to pollute the atmosphere further like his confidant Babar Awan by referring to Changa Manga and turncoats, forgetting what he tried to do when Sharifs were disqualified and Governor's rule imposed in Punjab. Law Minister is also advocating the theory of a plot to block PPP's victory in the Senate in elections due next year. Punjab Chief Minister too has raised the ante by warning the President to stop gas shortage drama in Punjab, which analysts too believe is artificial because five day a week load-shedding for industries in the Province was inconceivable after massive fall in demand for gas following end of the winter season in most of the regions of the Province. In this backdrop, we would urge the political leadership to go for moderation and avoid raising temperature, as things could go beyond their control if they did not exercise restraint.








FORMER President of the erstwhile Soviet Union Mikhail Gorbachev, who became focus of the attention because of his policy of Glosnost and Prestroika, resulting into ultimate fall of the second superpower of the world, has remained controversial in some circles for his approach and strategy. However, this time, he is absolutely right in his assessment of what the United States is doing to Islam.

In a wide-ranging newspaper interview with a British paper on Sunday, Gorbachev blamed the United States for conflict with Islam, also urging British Prime Minister David Cameron to withdraw troops from Afghanistan. Assessment of the former Soviet President is shared by almost all independent and neutral observers who believe that the US war against terrorism is nothing but a strategy to destabilize the Islamic world and deprive Muslims of their identity and natural resources. For this purpose, the only superpower of the world is using brute military power, economic tactics, global financial institutions and above all powerful Western media to project negative image of Islam and its followers. The discrimination becomes glaring when happenings in the Islamic countries are blown out of proportions while similar developments in non-Muslims countries are totally ignored. It is also known to all that the United States carried out aggression against Iraq on concocted grounds bypassing the United Nations while it is widely believed that Afghanistan has been bombed and occupied on the pretext of 9/11 that was the handiwork of American and Israeli intelligence. Now the exposure of Raymond Davis has proved it beyond any doubt that the United States was engaged in dirty game in Pakistan to destabilize the country. According to analysts, Washington is also behind the political unrest in the Middle East which is part of its plans to re-draw the map of the region to suit its own regional agenda and that of Israel. Statement of Gorbachev is manifestation of the growing realization that the policies of the United States are doing great harm to the world peace.







ASIAN Development Bank is expected to come up with a proposal of price model for the gas to be imported from Turkmenistan through Afghanistan to Pakistan and India in the next few days. The Bank has also shown its willingness to sponsor the Pakistan equity in the $ 7.6 billion 1,640 km long gas pipeline project.

It is encouraging that some sort of activity on the project has started and the long delayed project is likely to move ahead. In December last year the Cabinet ratified the inter-governmental agreement between Turkmenistan, Afghanistan, Pakistan and India for the gas supply project that was signed by President Asif Ali Zardari during his visit to Turkmenistan. TAPI gas pipeline, backed by the Asian Development Bank, would bring 3.2 billion cubic feet of natural gas per day (bcfd) from Turkmenistan's gas fields to Multan in central Pakistan and end in the north western Indian town of Fazilka. Under the IGA, the four nations would commit to provide government support, including security for the pipeline. If all goes well, the construction of the pipeline is likely to commence soon and would be completed by 2014-15. The project would help overcome Pakistan's growing energy crisis that has caused electricity shortage and protests across the country. Critics however say that Afghanistan doesn't have the infrastructure needed to host the pipeline and security in the country is a major concern. One hopes that Afghanistan Government would be able to ensure security of the pipeline once completed because any interruption in the supply would lead to closure of many industries that would be running on the imported gas. According to reports the ADB has asked Pakistan to expedite the required work on the project so that it could come on stream in early 2015. We hope that the Government would give priority not only to the TAPI project but also to the pipeline for import of gas from Iran to meet the growing energy needs. Pakistan cannot afford any more delays in these two vital projects because there is an acute shortage of gas and electricity and people in general and industrialists in particular are protesting over the suspension of vital energy supplies.









It is an irrefutable fact that given a visionary and capable leadership, Pakistan being a resourceful country could become economically strong, which in turn can make it militarily strong. This is the only way to guard its independence and sovereignty, especially when there is a hostile neighbour next door. Today the position is that Pakistan faces economic challenges; Pakistan's economy is in dire straits because of fiscal deficit, trade deficit and current account deficit. Our tax to GDP ratio of 9 per cent is the lowest in the region, firstly because of tax evasion and secondly because agriculture sector, which is contributing about 24 per cent to Gross Domestic Product (GDP), but is not being taxed on the grounds that it is a provincial subject. There are also threats to its internal and external security. It is therefore imperative to take measures to strengthen the economy so that adequate resources could be allocated for the welfare of the people and defence of the motherland. Care should be taken that the fruits of development reach the broad masses through socio-economic justice in order to bridge the gap between the rich and the poor, which will help create unity between the people of all federating units.

But there are also social malaises. Rampant corruption, inflation and unemployment have made the life of poor masses miserable. The entire land from one end to another is echoing with the public cries of gloom, dejection and distress. But there are no listeners either in the ruling hierarchies or the opposition camps. Just turn over the pages of any newspaper, its inside pages make doleful read on a screaming public being crushed by a cruel juggernaut of poverty, want, disease, joblessness, inflation, lawlessness and criminality. It is indeed the primary responsibility of rulers to ensure protection of life and property of citizens; create employment opportunities; keep the prices of essential commodities within the reach of the common man and allocate a reasonable amount for health and education sectors in the budget. But the ruling elite seem to be oblivious to those genuine demands of the people. Instead of addressing these problems, the rulers are engrossed in settling scores with their opponents. The ruling elite in Pakistan have failed to demonstrate futuristic vision and skills to handle the economic affairs of the country. Disproportionate rise in the prices of almost all agriculture products, scarcity of energy for industry, global increase in oil prices, and lavish spending by political leader have adversely impacted the economy.


In order to extricate from this situation, the political leadership must demonstrate a firm resolve to exercise strict financial discipline, avoid wastage of resources, bring about effective tax reforms, uproot corruption, improve law and order situation with a view to attracting foreign investment. Our political leadership on both sides of the divide must unite against the terrorism and give a sense of optimism to the masses by providing them economic relief and hope for a better life. Our economic managers also have failed to address the imbalances and distortions in the economy because of their flawed perceptions and ineptness. Instead of taxing the rich, they find it convenient to frequently increase prices of petroleum products and electricity tariff, knowing full well that the cost of transportation and cost of production also increases, placing additional burden on the consumers. In order to fight cost-push inflation, measures should be adopted to reduce the cost of production by lowering the interest rate and rationalization of electricity and gas tariffs. The problem is that the rich and powerful do not pay due taxes, it is therefore imperative for the government to increase its revenues by directly taxing the income of the rich and powerful, and at the same time check tax evasion.

Losses to the public sector organizations due to mismanagement and corruption are other reasons for the present dismal situation. It is in this backdrop that the government has to fall back on the IMF. But conditionalities of the IMF like enhancing electricity tariff, and higher bank interest rate are a recipe for disaster. On one hand, our industry is becoming uncompetitive in the world market, while on the other hand, together with food inflation, it is eroding the incomes of salaried class and fixed income groups. It is desirable that the government comes out with the plan to get rid of the IMF. There is a perception that if tax evasion is checked and the government shows zero-tolerance to corruption, the budgetary gap can be bridged. Similarly, if the government puts restrictions on import of luxury items, the trade deficit can be controlled, and Pakistan could come out of clutches of the IMF within a short time. The problem is that our leaders neither have the time to address real issues nor they have the vision, wisdom and expertise to meet the challenges facing the nation.

The PPP-led federal government has indeed failed to deliver on many counts; but so have all the provincial governments, because controlling the law and order situation and maintaining a check on prices fall within the domain of the provinces. And they have also utterly failed in keeping a check on prices and providing any relief to the masses. They have been trying to amuse the people through the Charter of Democracy and with the 10-point programme, on which confabulations between the PML-N and the PPP have led to nowhere. In fact, there was nothing to alleviate the sufferings of the people either in the Charter of Democracy, in the 18th amendment or for that matter in PML-N's 10-points. What people are interested in is the consensus on the ways to generate job opportunities and to bring the prices of essential commodities within the reach of common man. Meanwhile, PML-N has ended its coalition with the PPP in Punjab and got rid of the PPP ministers and parliamentary secretaries. In fact, the present crop of the political class continues with the blame game against each other to divert the attention of the people from the real issues.

This way they try to cover up their intellectual bankruptcy, shady political deals, political expediencies and dirty political tricks. These eminences do not realize that the people are fed up with this churlish circus show and do not consider them as real leaders. There is still time that instead of indulging in the politics of power and pelf, they get down to the serious business of governance of state that has been neglected banefully so far. For how long have the people to keep putting up with the ploys of self-perpetuation and self-aggrandizement of these elites who are the worst type in the world for their greed, avarice, exploitation and sleaze?

The question is why the filthy rich and jagirdars are not being taxed on the spurious pretext that it is a provincial subject? With the scions of landed aristocracy occupying the positions of strength in both the government and opposition camps, only an incorrigible optimist or a fool can imagine if such tax will ever be introduced. They will have to change otherwise the tiny islands of opulence will be swamped and washed away in the vast ocean of poverty.

—The writer is Lahore-based senior journalist.







Recently, an international Sikh organisation, Dal Khalsa, struggling for free Khalistan slammed New Delhi for being selfish, self-centered and hypocritical and unwilling to peacefully resolve genuine problems of ethnic and religious minorities. The organization in a letter to Prime Minister Manmohan Singh demanded that all commitments oral and written by the Indian leadership to Sikh nation before and on the eve of India's independence in 1947 be honored. The organization said that Sikhs are not part of Indian mainstream and historically, religiously and politically Sikhs are a sui generis (Sovereign) people. The members of the organization said, "Indian unwillingness to talk to look at the 'Sikh question' as a nationality question enforces our belief and commitment to the right for self determination of Sikhs". They further said that peaceful India talks only to those who use violence as means to achieve their objectives. Discrimination against different communities such as Sikhs, Christians, and Muslims is rampant in India and it's spreading like plague. Different types of discrimination are prevalent in India such as religious discrimination, racism, nationality, social status etc. The Sikhs are discriminated on racial, linguistic and religious lines since independence. They were betrayed by Indian leaders, who promised them full rights provided that they join India. Their religion, culture and identity is under constant threat and attack in secular democratic India.

Of the major threats to Sikhism is that Hinduism wants to engulf it in its fold as it has already done the same to Buddhism and Jainism. The movement of annihilation of the minorities is going on in India with complete support of Indian government. The theological principles, the articles of faith, the way of life, rites and rituals etc of the Sikhs are altogether different from those of the Hindus. In Sikhism every one has the equal right whereas Hindus believe in caste system. Sikhism does not have a clergy class as it considers this as a gateway to corruption. According to Sikh's Holy book Guru Granth Sahib, "All the people have one base". (Guru Granth Sahib P.83).In Hinduism, the worship of idols of the mythological gods and goddesses has great importance, but Sikhism rejects it altogether and prohibits it. "Those who worship stones are ignorant and foolish". (Guru Granth Sahib p. 556)

Even the British government considered the Sikhs a separate nation. In the 1940's the British Parliament declared unequivocally that after the British quit India, there are three distinct peoples, i.e. Hindus, Sikhs and Muslims who are the legitimate heirs to the sovereignty of India, and whatever these three "nations" agree to, the British will accept their decision before they quit India. But the Indian government always mistrusted them and exploited them. On 10th October 1947, less than two months of India's independence a secret circular by the Punjab Governor, Sir Chandu Lal Trivedi, declared that Sikhs are a criminal tribe and threat to peace and that the activities of Sikhs should be kept under watch. Nehru and Gandhi, urging the Sikhs to join India, made a commitment that no constitution of India would be framed unless it was acceptable to the Sikhs. Even the Indian constitution farmed and adopted in 1950, did not recognize Sikhs as a separate identity and considers them Hindus with long hair. Due to this the Sikh representatives had rejected and refused to give their assent to it. In 2005 the Indian Supreme Court, said, " if the argument for recognising every religious group within the broad Hindu religion as separate religious minority was accepted and such tendencies were encouraged, 'the whole country, which is already under class and social conflicts due to various divisive forces, will further face divisions on the basis of religious diversities. A claim by one group of citizens would lead to a similar claim by another group and conflict and strife would ensue."

The Indian government tried to undermine Punjabi, the language of Sikhs, several times. In 1951 census Hindi was preferred over Punjabi. The ruling Congress party issued an advertisement in newspapers asking non-Sikh residents of Punjab to return to Hindi as their mother tongue, even though Punjabi had been their mother tongue since ages. Almost all the Punjabi speaking Hindus declared Hindi as their mother tongue during the census of India in 1951 and 1961. Similarly, the Congress government even opposed the formation of Punjabi State in total contrast to the commitment to demarcate India on a linguistic basis made by the Congress party in 1929, 1946 and 1947. The Hindus burnt the Sikh religious literature several times and committed the acts of sacrilege of Guru Granth Sahib and the Gurdwaras on the behest of government. To quote a few instances from history, in 1983, the State Reserve Police and the Central Reserve Police were directed by the government to attack Gurdwaras on the slightest pretext. During the year, Gurdwara Sahib Sisganj, Delhi, Gurdwara Imli Sahib, Indore, Gurdwara Sahib, Churu, Rajasthan, Gurdwara Sahib Chandokalan, Haryana and Gurdwara Sahib, Chowk Mehta, Amritsar were attacked.

In June 1984, on the orders of the Prime Minister Indira Gandhi, Golden Temple and 37 other Gurdwaras were attacked by all sections of the Indian Armed Forces and other security agencies, killing thousands of Sikhs, desecrating the holy premises, vandalizing heritage records and artifacts. During the attack on Golden Temple, the Sikh Reference Library was vandalized by the Indian Armed Forces and the looted material has not been returned to this day. Sikhs faced racial discrimination even in the Indian Armed Forces. In 1971 the Defence Ministry under Jagjivan Ram, took a policy decision, to recruit army personnel on the basis of population rather than merit. Due to which the percentage of Sikh participation in the Indian Armed Forces was gradually reduced to a meager 2 percent. Similarly, the government compelled Sikh officers, both in the Defence and Civil services to renounce their Sikh identity (i.e. Kesh and Kirpan) if they desired promotions and possible retention in their services.

Repressive laws were introduced to harm Sikh community. In 1987, the Terrorist and Disruptive Activities (Prevention) Act, 1987 was passed. This act violated all norms of criminal jurisprudence. Every safeguard guaranteed by the Constitution, all international standards of human rights laid-down by the Universal Declaration of Human Rights and International Covenant on Civil and Political Rights were violated by this Act, even though India is a signatory to both these declarations. The Sikhs suffered the consequences of TADA. Thousands of Sikh youth were detained, tortured, and killed both in Panjab and in other Indian states. In 1988, Prime Minister Rajiv Gandhi introduced the 59th amendment to the constitution of India, withdrawing the right to life of the people of Punjab and enabling more discriminatory laws against Punjab. In 1991, Brigadier Sinha of the Indian Army publicly declared that the only way to subvert the culture of the Sikhs was to rape and humiliates Sikh women. On 6 September, 1995, human rights activist, Jaswant Singh Khalra, who had unearthed gross human rights abuses in the district of Amritsar about individuals who had disappeared involuntarily was tortured and killed extrajudicially. On 20 March 2000, coinciding with the visit of US President, Bill Clinton, 35 young Sikhs were killed in Chittisingpura, Kashmir by state vigilantes. This has been proved without doubt but the state has not taken any action so far. In the year 2007, while the blasphemous activities of Sirsa dera chief, Gurmeet Ram Rahim have been allowed to continue, in complete violation of legal provisions, sedition charges have been foisted against Sikh leaders.


The Indian Supreme Court called the Indian government's murders of Sikhs "worse than genocide." According to a report by the Movement against State Repression (MASR), 52,268 Sikhs are being held as political prisoners in India without charge or trial. Twenty-six years after the massacre of thousands of Sikhs in India the country's government has failed to bring to justice those responsible. Sikhs ruled an independent and sovereign Punjab from 1710 to 1716 and again from 1765 to 1849 and were recognized by most of the countries of the world at that time. No Sikh representative has ever signed the Indian constitution. Indian rulers should understand one thing that persecution can not annihilate the Sikhs and they will never become Hindus even if they are denied their due rights. There is a need that Indian government must respect the minority rights and stop its brutalities and atrocities against them. Otherwise the saying of Franklin D. Roosevelt that "No democracy can long survive which does not accept as fundamental to its very existence the recognition of the rights of minorities" would come true of India.








Coming upon one of those billboards that blight the skyline, one learnt to one's horror that a certain brand had the distinction of being "Pakistan's favorite water". This was news indeed, since local lore one had grown up with always had it that any locality's favorite water was the one that came out of the deep well next to the mosque. At least this was the case, a few decades ago, which was presumably the last time 'elders' gathered round to consider the issue. Maybe, unbeknown to one, the situation had radically changed after nine/eleven, just as everything else has. But, then, why announce it on billboards?

The one reason that one can think of for this haste to announce it from the housetops (read, billboards) is that our economy whiz kids have all of a sudden realized that there is big money to be made from water. This commodity, that was once not only freely available but was also considered nature's gift to humankind, has now - thanks to the mixed priorities of our merry band of planners – become a saleable commodity and one out of which millions could be earned without much effort. The only hurdle in the way of the cut-throat brigade aforementioned was the way this precious commodity was available in plenty in this Land of the Pure (read Poor). So, what better way to vault this hurdle than to contaminate our natural sources of water so as to oblige an already impoverished multitude to get addicted to bottled water they could ill afford? What will they think of next? Bottled fresh air, perhaps!

One would crave the indulgence of the gentle reader to digress a bit from the matter at hand. One may be old fashioned, but one can distinctly remember the time when the ultimate thirst quencher was, well, plain water! When one felt thirsty one instinctively went for a refreshing glass of fresh water. And if one felt like living it up a bit when the weather was warm, one opted for the luxury of iced water. That appears now to be history. This is not the done thing any more if you happen to belong to the benighted but bejeweled brigade.

It is considered to be infra-dig to imbibe water if you happen to be thirsty; you are supposed to go for what is euphemistically called 'a beverage'. For those who still thirst for plain old water, the powers that be happen to have another trick up their sleeve. They have thought up what is now known as 'designer water'. Public Relations agents have thereby managed to give a whole new meaning to the phrase 'liquid assets'. The resultant 'war of beverages' has been on for a while.

Aerated waters and colas have enjoyed a monopoly of sorts over the beverage market for quite some time now. One read somewhere the other day that the soda business in the United States alone is worth some sixty billion dollars. The investors, it would appear, are further looking at the emerging market of some twenty billion dollars for what are known as 'alternative beverages'. The mind boggles! If this were the story confined merely to the so-called developed world one would not get overly exited about the affair. But there is more to it than meets the eye.

The irony is that while this game is being played in the prosperous societies, the overwhelming segment of the world's population (in the not so prosperous lands) does not have access to clean drinking water. Those (among them the inhabitants of our blessed land) whom nature has endowed with abundant water resources are being deliberately denied access to this natural resource by their 'planners' in order to swell the local market for the beverage multinational giants. Meanwhile, children of numerous societies around the world continue to die by the hundreds of thousand every day because they are condemned to drinking contaminated water. What adds to the tragedy is the fact that, in these very impoverished societies, bottled beverages of all genres are fast making inroads earning additional billions for the multinational companies that monopolise the 'popular' brands.

While on this sorry subject, one could perhaps take time off to remind the multinational beverage giants of their duty towards humanity at large. Their profits from the sale of bottled beverages (even if we were to count only the developing world markets) are astronomical. Would it be too much to expect these multinational giants to put aside a small proportion of their profits (say ten percent) to be utilized, under the general supervision of the United Nations, for projects intended for the express purpose of making clean drinking water available to the deprived sections of the world populace? Such projects could also help to raise the image of the United Nations from an ineffectual debating society to that of a utilitarian Organization working for the general uplift of the 'peoples' it is supposed to represent. Some hope, though!

Meanwhile, the beverage wars go on unabated. Bottled water and the alternative drinks with their eye-catching names add to the flavour of the contest. The multinational giants continue to rake in billions. The Third World and the common man, as is the norm, remain on the receiving end where they belong! As the French would say, "Ca, c'est la vie".

After this digression of sorts, one could perhaps revert back to the res, as legal eagles are wont to put it. History as we know has seen wars over the control of various natural resources. The most recent have been the wars for the control of oil. It appears highly likely that the wars of the foreseeable future will be on the control of the world's water resources. Already in the Middle East and occupied Palestine a struggle about control of the sources of water is already on. India's obduracy about Jammu and Kashmir can be directly traced to her desire to control the upper reaches of the sources of water flowing into Pakistan.

An authority on ecology once said, 'there is no problem faced by a developing country that cannot be traced back to water: either its shortage or its surfeit'. The world has learned the hard way to take water seriously. As always, we are several steps behind. Still it is never too late to make amends. There are bitter lessons to be learnt from history. The world may be in for "water wars" to follow the ones for the control of fuel oil. Fore-warned is fore-armed.








The attacks carried out on September 11, 2001 changed the whole geo-political scenario. Out of the horror, there rose a new paradigm, which is affected the whole world. As a result of this, friends became foes, enemies became associates, old alliances broken and new coalitions were forged. Perhaps every country in the world went ahead to change its local and foreign policy, regarding international terrorism. Pakistan was the most affected by these events, because of its location and affiliations with Afghanistan. Policy makers had to take some very serious, difficult decisions and even unpopular decisions for the long term betterment of the country. With a decade behind us of the war on terror, there still seems a lot more to be done for the achievement of our goals.

Throughout this time violence has been on the rise in Pakistan, as Taliban, Al-Qaeda and other extremist elements try to destabilize the country. There is no city, town or village where these terror networks have not carried out their activities. Major cities, such as Karachi, Peshawar, Lahore, Islamabad and Rawalpindi have been continuously plagued by these rogue elements. Total civilian death toll in 2010 was 1,784, while 465 security personnel also laid down their lives. Recently a lot of terms can be found circulating in the media and civil society, referring to these terrorists. These terms mostly are used to classify these elements according to their ethnicity and loyalties. The most common used are Punjabi Taliban, Swati Taliban, Al-Qaeda, Al-Qaeda Affiliates, White Taliban, Foreign Taliban, Local Taliban, Anti- Pakistan Taliban (TTP) and Pakistan Friendly Taliban (Haqqani Network).

Before going into the details of this categorization, one must look into the history of these terror groups. Before 9/11 Taliban were controlling Afghanistan, Mullah Omer being their leader. While Osama Bin Laden was heading Al-Qaeda in Afghanistan, on the behest of Mullah Omer. Every terrorist in the world would visit Afghanistan to be trained by Al-Qaeda.

These terrorist organizations developed close ties with Al-Qaeda and Taliban. Post 9/11, due to absence of leadership Taliban and Al-Qaeda split into smaller groups, but it is to be realized that these groups still are part of the same network. They have the common goal of tainting Islam's image, spreading widespread chaos and weakening our country. There might be some misgivings among them, but it has been highlighted on many occasions that these groups support each other. Instead of branding these groups with different names, giving them the one label of terrorist is quite appropriate. We have given them different identities and have different policies to tackle each of them. This misinterpretation has hindered even our policy makers to formulate a comprehensive strategy for the eradication of all these terror groups.

Punjabi Taliban title has been awarded to those militants or extremists, who operate inside Punjab and mostly belong to seminaries of Southern Punjab. There operational area is also considered to be within Punjab. White Taliban and Foreign Taliban are those who have a foreign background, mostly those who have been born and spent most of their lives in West. The extremists from Central Asian states are also branded as Foreign Taliban. "Swati Taliban" understandably are those who operate in areas of Swat and follow Fazalullah. "Al-Qaeda affiliates" is mostly a term used for sectarian groups and terrorist groups using Pakistani soil to launch attacks on other countries. "Local Taliban" is to characterize those who are the locals of the Tribal Areas. Tehrik-e-Taliban Pakistan, having Pakistan on top of its list is considered to be the top most threat for the country. While, the Haqqani Network in North Waziristan is known to be a friendly form of Taliban.

Even reading through the description above, one can understand that, there is not much difference among them. They are all terrorists and all of them are bent upon destroying the nation. It has been evident, throughout the Swat conflict that foreign militants were present in that area along with Swati Taliban. It is a fact that the so-called Punjabi Taliban have been financed and armed through the TTP. There are evidences of Al-Qaeda and its affiliates carrying out attacks against sectarian targets, with the help of TTP, which provides them with operational support.

Similarly these terrorists have also been found responsible for the growing unrest in Sindh and Baluchistan. Even if a group is not creating problems in Pakistan, it has been using our soil to launch attacks in other countries, straining our relations with those nations and further aggravating an already difficult situation. The recent Iranian warning regarding "Jundullah" and the US concern over "Haqqani Network", are a couple of examples, of the problems created by these so called "Friendly Taliban". These terrorists support each other, through financing, recruiting or operational assistance.

It is to be understood here by our nation as a whole that there is no concept of friendly, "marginally better" or an area specific extremist. They are all a monster with thousand faces, out for our blood. These organizations are part of a larger network, which supports each of them, when the time comes. Their strategy seems to be for creating of confusion, while they carry out their horrific agenda. It is also evident by the fact that when, the state takes measures against one faction, all of these groups rise against the state. In the aftermath of Lal Masjid militants belonging to different chapters launched attacks throughout the country, some even violating and cancelling the peace agreements, they had signed. These terrorists have perhaps read Sun Tzu who has stressed many times, that the secret of winning a war lies in confusing the other side, so they cannot comprehend your real intents. This terror network has created these figures to confuse and prevent us from devising a comprehensive plan to disrupt their activities.

This classifying of terrorists is a wrong trend present throughout the media, intellect, the civil society and even the policy makers. It is to be realized that these are not different organizations, but members of the same network. They should all be treated as terrorists, as they are slowly weakening Pakistan. It should be evident after ten years of fighting these elements, that they have no concern for Pakistan or for the people of Pakistan. They claim to be holy warriors, but they have no respect for Islamic values.

They target the innocent, use coercive means on the masses to bring them to submission, hold no value for life of honor and have no concept of honoring their commitments. These elements can no longer deceive us through their fiery rhetoric of liberating muslim lands from the infidels, to install Islamic laws or to unite the Ummah. As it is now being realized that it is because of the activities these elements, due to which the muslims and the religion of Islam are under close scrutiny from the rest of the world. They defy the teachings of Islam and present to the world a tainted image of the religion. Pakistan is especially in the crosshairs of the whole international community, due to these active networks. The nation will now have to build its resolve and clear rethink its approach, in order to fail the nefarious plans of the extremists.








Islamic reforms could be implemented only in Islamic world only in Muslim nations. The continuation of west dominated corrupt-criminalized polices in Islamic world has clearly alienated the people, even though they also vote. Mubarak is not the only despot in Islamic world- if fact bulk of Muslims rulers are rogues themselves which is the key bottleneck in good governance and cause for the pro-West corrupt regimes promoting family cum corporate cum US interests. It is a shame that the Arab world also depends on the unilateral USA to sustain their misrule for years.

True, Pakistan does not require the unilateral US as an ally for murdering Pakistanis by specialized drones that are also been used by fascist Israel to kill the defenseless Palestinians, but then, Pakistani leaders, including military, requre3 the US in and around for safeguarding their own self-interests. With US-UK guarding them form any troubles against their wealth and illegal manipulations, the Pakistani leaders and their media lords feel most secured.That is the fate of Pakistan. The same is true of Afghanistan and Iraq and many other countries as well.

Jordan King Abdullah has already felt the Tunisian-Egyptian uprisings and has announced some minor reforms and has not talked about Islamic reforms that are vital for the survival of Islamic world. The Tunisian uprising is continuing, even if the street protests have subsided following the government reshuffle that removed some of the old faces from the Ben Ali regime. Ben Ali, and the rest of the Tunisian capitalists that remain, represent international finance capital, and Western governments are working overtime to re-establish a regime that will maintain that mutually beneficial relationship.

At least 219 people were killed during the uprising and a further 510 injured in the Jasmin revolution . It is thought that 72 people died in the country's jails alone, 48 of them in Monastir prison.The transition regime has made some face-saving efforts to freeze or seize Ben Ali's assets. A plane belonging to one of his sons-in-law was seized at Le Bourget airport in France. The Swiss authorities have seized a plane, too. European ministers agreed to freeze the assets of Ben Ali and his wife, Leila Trabelsi. But the couple remain in luxurious exile, with 1.5 tonnes of gold from the Tunisian reserves worth $56 million. In total, the family's assets are estimated at $10 to $12 billion and are spread across numerous countries. They include interests in hotel chains, pharmaceuticals, car plants, tuna fishing, telecommunication, banking and insurance. The family is thought to control 30 to 40 percent of the Tunisian economy.


Some 30 members of the family have been arrested and the valuables they were attempting to smuggle out the country recovered. But the whereabouts of most of the wealth, which Ben Ali and his extended family looted from Tunisia over his 23 years in power, are unknown.

Mubarak's decision to quit after enjoying life and crippling the Palestinian economy and life for 30 long years is welcome. Huge protests in Cairo and other cities, estimated at more than a million, demanded that Egyptian President Hosni Mubarak and his regime immediately go. Mubarak first announced his intention to serve out his term of office until presidential elections due in September, but later knowing that his time has run out completely decided to quit at the earliest. Mubarak emerged from the army to become president in 1981 following the assassination of Muhammad Anwar El Sadat. The army remains Mubarak's power base. His initial effort to secure his rule in the face of the protests that erupted last week involved appointing a cabinet even more openly dominated by the military. In fact, Egypt's rulers have depended directly on the military and drawn their leaders from its ranks ever since Muhammad Naguib and Gamal Abdel Nasser led the Free Officers Movement in overthrowing King Farouk in 1952. Mubarak expected the army to act ruthlessly to resort to repressive measures against the uprising and preserve the existing social order.

The Egyptian capitalist state is in crisis, but it remains intact and is working to regain full control.That the mass movement has yet to develop the necessary organizational forms and political leadership is a boon for corporate class and ruling elite. The Mubarak regime, resting on the military and retaining the backing of US imperialism, seeks to exploit this limitation. There is no unifying leadership in Egyptian struggle and a foreign returned ElBaradei who is essentially a US agent used against Iraq and Iran ( even if against his own will) can only promote the US as well as corporate interests. .

US is keen to prop up bourgeois rule and uphold the strategic and economic interests of US imperialism in the region. Like wise, the US President B. Obama endorsed his Egyptian ally's plan to cling to office until September, but when Mubarak announced his retire, he supported that as well. Obama's determination to back Mubarak exposes the rank hypocrisy of his declarations of support for "democracy" and the rights of the Egyptian people. Washington has relied on the Egyptian dictator as a cornerstone of American policy throughout the Middle East for the past three decades, tacitly sanctioning his regime's repression. US funds to the tune of $1.5 billion a year to Egypt and get Cairo support for Zionist blockades in Palestine. US agent ElBaradei declared that the regime had lost its legitimacy, adding that only the president's resignation would bring stability. Mohamed ElBaradei, a man with no substantial support in Egypt, being in discussions with former intelligence chief and newly named Vice President Omar Suleiman and representatives of various opposition parties. The aim of the discussions was reportedly to establish a "board of trustees" made up of Suleiman; Sami Anan, the chief-of-staff of the armed forces; ElBaradei himself and Ahmed Zeweil, a Nobel chemistry prize winner. It now appears that this course of action has been rejected, with the US fearing that ditching Mubarak too quickly would create a power vacuum..

Now that Mubarak has finally come down, leaving future a change to take care of Muslims in and around, a new government when formed must consider the Islamic law for replacing the existing western criminality operating so far in the name of law. Muslim leaders should not try to stick to power at any cost because this animal mentality is alien to Islam and collective decisions and implementation of programs for the whole society and common people- not just for the wealthy and corporate outfits. Islam does not promote capitalism, colonialism, imperialism or extra profits.

Popular revolutions in Tunisia and Egypt must help herald a new era of true Islamic governments in the Islamic World . The Muslims have been at the receiving end for years now because the GST rogue states led by the US-UK terror twins and their allies Israel and India want to subjugate the Muslims and defame Islam and the revolutions should not lead the nations to worse conditions. Those hypocritical Muslims who seek western corrupt-criminalized governments and who shun Islamic governance must opt out of government formations. They have no right to deMuslimize the Muslims.









The King's Speech, one of the most intelligent films to grace movie screens for years, richly deserved the Best Picture award and was a triumph for Sydney producer Emile Sherman and director Tom Hooper, a joint Australian-British citizen. Hooper had sagely followed the advice of his mother, Adelaide-born Meredith Hooper, who in late 2007 attended a small, fringe theatre reading of an unrehearsed play then phoned him: "Tom, I think I've found your next film." Colin Firth was a worthy Best Actor winner for his portrayal of King George VI, but for many viewers, he and Geoffrey Rush as Australian speech therapist Lionel Logue were equally indispensable in the telling of a fascinating story.

The range of local winners augurs well for the local industry, including make-up artist Dave Elsey for his work on The Wolfman, Kirk Baxter, who won the Film Editing award for The Social Network,and Melbourne illustrator and director Shaun Tan for Best Animated Short Film for The Lost Thing, based on his book.

At a challenging time for the industry, it is to be hoped such success ushers in a new era of home-grown movies mainstream audiences enjoy.






The Cruze local production project was the largest recipient under the Green Car Innovation Fund, attracting $149 million in taxpayer support for the fuel-efficient, turbo-diesel vehicles, previously imported from South Korea. Given the inefficiencies and distortions inherent in this sort of industry assistance, we note with some relief that just weeks before delivering this first Cruze, the fund was abolished.

Much public money worldwide is being directed towards so-called green jobs, and no doubt -- by some researcher's measure -- the extra 265 jobs created at the GMH assembly plant will be counted as green. About the same time Ms Gillard was launching the Cruze, a major Climate Institute study of the potential for green jobs in regional Australia was launched in Canberra by the crucial rural independent MP, Tony Windsor, a member of the Prime Minister's multi-party committee on climate change. Despite selling his farm for coalmining last year, Mr Windsor apparently is gung ho for renewable energy and green jobs, especially in regional areas.

The report claims up to 34,000 jobs can be created over the next two decades and it is being used to support both a carbon price and government subsidies. The Australian would offer a word of caution.

It has become fashionable and sometimes politically popular for Western countries to invest in the green industry sector, particularly in the wake of the global financial crisis. Stimulus spending in renewable energy and green jobs has been promoted on the basis that, to varying degrees, it could produce multiple wins: rebooting the economy; reducing carbon emissions; increasing energy security; and encouraging innovation. But such unambiguous success is seldom, if ever, the case, with the reality usually falling somewhere between the manifest folly of Australia's pink batts disaster and the electricity price increases fuelled by wind farms and solar projects around the world. A study in Spain demonstrated its renewable electricity subsidies created green jobs at a cost of E570,000 each, whereas the general private sector created a job for every E260,000 invested. By not taxing and not subsidising, the government could create twice as many jobs. Little wonder it revised the programs.

Still, there are many other factors to consider, such as environmental benefits and, of course, other costs. Studies use differing definitions of green jobs and the lines can be absurd; Holden's Cruze assemblers might be classed as holding green jobs while their workmates making Commodores certainly won't. Importantly, most studies into potential green jobs fail to take into account the jobs that are lost. So the tradesmen employed constructing a wind farm are added but the lost jobs for the scrapped coal generation plant are not subtracted.

Then there is the market distortion that green job studies often ignore. Subsidies, mandatory targets and tax breaks push energy production to renewable but more expensive technologies, thereby increasing power prices. These increased costs are imposed on the entire economy, reducing investment and employment. A study last month for the Copenhagen Consensus Centre, by economist Gurcan Gulen from the University of Texas, found that for all these reasons, green job studies were unreliable. "In a sense," Dr Gulen concluded, "many studies are cost-benefit analyses without adequate cost considerations."

No doubt the Prime Minister pondered the future of manufacturing as she toured Holden's factory floor. Her carbon tax provides a crucial chance to eradicate other inefficient green measures. With taxpayers and industries awaiting details, Bluescope Steel chief executive Paul O'Malley has warned that the tax could spell the end of manufacturing in Australia. This comes as another independent MP, Andrew Wilkie, is demanding limits on compensation to industry. He needs to understand that allowing Bluescope and Holden to survive will keep thousands of people in work.






It will become even better next year when the link to the new Airport Link tunnel is completed. But as with similar projects in other states, the business case for the Clem7 public-private partnership was built on unrealistic expectations of traffic volumes and a disproportionate allocation of risk. Last week, the company was placed in receivership by lenders owed $1.3 billion. Just over a year ago, Sydney's Lane Cove Tunnel went into receivership owing $1bn.

PPPs were pioneered by former British prime minister Tony Blair to deliver public infrastructure without adding to the national debt. There is nothing intrinsically wrong with the concept, in which the private sector builds and operates infrastructure in return for user pays revenue and-or a subsidy from the state. The challenge, in a nation desperately short of productive infrastructure, is to get the model right.

RiverCity's collapse has been an expensive lesson for small investors who paid $1 for shares before it was built then watched their investments crumble. No investment is risk free, and people who cannot afford to lose money would be well advised to cast a sceptical eye over the projected returns of any project. RiverCity's initial traffic forecasts predicted the Clem7 would carry up to 60,000 vehicles a day. But only about 27,000 motorist are currently prepared to pay $3 for the trip.

In some projects, too-clever-by-half models designed by financial engineers have encouraged money managers to focus on upfront fees rather than the viability of an investment. After the financial failures of Sydney's Cross City and Lane Cove tunnels and the Clem7, some construction firms argue that if PPPs are to be a viable way to build long-term infrastructure, a greater sharing of risk-taking is needed. This could take the form of larger upfront government contributions or partial government underwriting.

In our major cities, which are poorly served by public transport, further major road building is essential to keep the economic wheels turning. Governments cannot afford to go it alone, so if PPPs are to be successful, they must be based on realistic projections and models.






DISABILITY is a word that covers a vast range of circumstances. Some people are born with a disability, others fall ill or are injured. If they are injured in a car crash or a workplace accident, their care and rehabilitation are likely to be covered. All other Australians with a disability - and it can happen to anyone at any time - have no guarantee of adequate care and support. The Productivity Commission, which has undertaken a year-long inquiry into disability care and support, acknowledged in its issues paper that whether people get good care can be a lottery. Yesterday, its draft report offered recommendations that could transform life for people with disabilities and their carers. This potentially includes every Australian.

The report warns that the system is unfair, fragmented, inefficient and unsustainable. Government funding is only half of what is needed. Yet over the next 40 years the number of people with disabilities is forecast to double. The reliance on unpaid carers will be further tested as the ratio of five people of working age for every one over 65 will fall to 2.7 by 2050. Most carers leave the workforce. Many get burnt out by the round-the-clock responsibilities. Families break down. Without sweeping reform, the costs and strains will only grow.

The commission recommends two insurance schemes, to begin in early 2014. A scheme to cover lifetime care after catastrophic injury would build on existing state schemes. A bigger national disability insurance scheme would, like Medicare, guarantee all Australians and their families long-term care and support. The political challenge in this is the prospect of higher taxes or a levy to raise $6.3 billion a year.

Opposing another ''great big tax'' would be easy politics, but Coalition leader Tony Abbott said last July he would consider universal disability cover. Such a scheme can deliver long-term savings (as shown by transport accident cover), enable more people to work and avert social and financial disaster, which has already touched many families affected by disability. While the commission's final report is not due until July, Mr Abbott should commit now to working with Prime Minister Julia Gillard on these transformational reforms. Both sides of politics have a duty to do the right thing by government budgets, the economy and all Australians for decades to come.

Many details must be worked through, but this is a chance to ensure no Australian with a disability or their carers ever again suffers the current disgraceful levels of underfunding and neglect. For once, Ms Gillard and Mr Abbott must put aside politics and ensure they do not let these people down.





THE independent MP Tony Windsor has a point about the Greens making unilateral announcements about what should be included in the carbon price scheme announced last week by the Prime Minister. The Greens are just a small part of the political coalition that will be needed to get this scheme through Parliament - a critical part, but one out of 150 members of the lower house where it first must pass.

Julia Gillard has just given us a statement of intent, to put a charge on carbon production from July next year, a couple of years before a carbon trading system. The details of what will be subject to the carbon levy, its level, and what compensating payments will be returned to households and industries are yet to be worked out. The Greens, along with Windsor and the other independent supporting the government, Rob Oakeshott, will be included in the ministerial committee that works all this out.

Maybe it is too much to expect that everyone will shut up until this committee has disappeared into a room and re-emerged with a fully developed plan and draft legislation. If Christine Milne of the Greens has been ''unilateral'' in asserting that petrol prices must reflect the levy and therefore rise, in order to ''drive changes in behaviour'', then Windsor himself is being a bit unilateral insisting that fuel costs for rural motorists should not rise.

Of course there should and will be trade-offs in various ways for households and producers, including people in areas where there is no public transport alternative to the private car. There is talk of a cent-for-cent adjustment in the fuel excise to compensate. But possibly the cost offset should not come directly into the price. Consumers would then have the incentive to economise on the polluting product where they can, and divert the payment elsewhere.

The broader message in Windsor's threat, though, is that the Greens have form in blocking a good outcome for the sake of the best. Australia voted for action on climate change in 2007, and the Rudd government worked out legislation that would have got the country embarked on carbon pricing. It was extremely cautious, and contained some proposals for compensating big industrial polluters that many thought over-generous, but it was a start and better than nothing. The Greens opted to kill it, because it did not go as far as they wanted. If the Greens now go into negotiations with a similar all-or-nothing attitude, they will be delivering failure to their only possible allies and handing government to climate-change deniers.






THE Herald's revelations yesterday and today about surgery cancellations in public hospitals show that even predictable and manageable parts of hospitals' workload in NSW are beset by shortages that undermine their performance.

The delivery of treatment in hospitals is highly complex, requiring not only advanced professional expertise but also expensive and often scarce equipment. If demand for them were controllable, these scarce inputs might be managed to ensure the delivery of services was even and efficient. Scheduled operations - non-urgent procedures - would go ahead on time at a roughly predictable rate. This is what happens more or less routinely in many private hospitals. Unfortunately, in public hospitals, life is not like that - nor can it ever be. Public hospitals house casualty departments and intensive care units as well as the most sophisticated medical technology for complex procedures. The demand for these facilities is unpredictable, because accidents and the onset of catastrophic illness do not happen to a hospital schedule. Hence, if they can wait, other patients must line up for the lulls between acute cases when hospital resources can be used for their more routine procedures.

What the Herald's reports show, though, is that this unavoidable wait is made longer and worse by something far more easily foreseen. As we have reported, some patients - roughly 5 per cent of all those scheduled for elective surgery in public hospitals - have been fully prepared for surgery, having fasted and had blood taken in preparation, and have then been told to go home without undergoing their operation. NSW Health says nearly 9000 patients will have their operations cancelled on the day they were scheduled this year for various reasons. Some will be sick on the appointed day, or will not turn up. But most of the operations will be cancelled because of failures of some kind at the hospital. The most worrying of these - because it should be completely avoidable - is that no suitable bed is available for the patient afterwards. Apart from the waste of patients' time and emotional reserves, which are important enough, this inadequacy also wastes the time and effort of hospital staff - and hence money. Doctors and nurses do not come cheap.

NSW hospitals are already chronically overcrowded. Last October the Health Minister, Carmel Tebbutt, was arguing that NSW did not need (that is, could not afford) to observe the 85 per cent bed-occupancy ratio that would allow our stretched hospitals to cope with peaks in demand. The revelations on cancelled operations are another reason why she was wrong.







Ask the public if they want more referendums and they tend to say yes. Actually hold a referendum, however, and the public don't always bother to turn out – fewer than 50% voted in the last two regional referendums held in England in 1998 and 2004. Partly for that reason, the last government took the view that referendums should be used "only where fundamental change in the constitution of the country is under consideration". Most politicians seem to agree. But what does this mean?

Last year, a House of Lords select committee said such issues might include the abolition of the monarchy, membership of the European Union, secession from the United Kingdom or a change to the electoral system. The Lords committee conspicuously did not, though, say that the question of whether the Welsh assembly should progress to part four of the 2006 Government of Wales Act was the sort of fundamental question that should be put to a referendum. No surprise there, since the issue is technical not fundamental. Yet a referendum there will be – this Thursday, throughout Wales.

The underlying issue to be decided on Thursday is whether the Welsh assembly should have more decision-making powers on devolved matters. But the actual question on the ballot paper is more technical. At present, the assembly can adopt legislation for Wales on devolved subjects such as health, education and transport, but only after the UK parliament at Westminster has given permission in the form of a legislative competence order (LCO). These orders are given on a case-by-case basis. Supporters say the LCOs are an important check and balance. Critics say the system is cumbersome and gives Welsh politicians too many easy excuses for failure. The referendum would abolish LCOs and allow the assembly to make laws on all the subjects on which it has powers, without needing Westminster approval.

It is frustrating that it is necessary to hold a referendum on such matters, especially since almost all political opinion in Wales is in favour anyway. This week's vote cheapens the currency of referendums. But, since there is to be one, it is also clear that the vote should be in favour of the proposed changes. Laws which only affect the people of Wales should be made in Wales. The Welsh assembly has proved itself competent but a bit hamstrung. It has worked hard to carry Welsh opinion – no small task given the historic scepticism of many Welsh voters over devolution. It needs this extra power. With Wales now due to lose 10 of its 40 Westminster MPs under boundary revisions before 2015, it is more than ever reasonable for the assembly to take effective control over the devolution settlement. Wales should vote yes.






The international community has been compromised by the revolution sweeping the Arab world. In three uncertain weeks, the United States vacillated from urging stability to shore up a strategic ally in Hosni Mubarak to cheering his overthrow. France trod the same path in Tunisia. Happily, the foreign minister Michèle Alliot-Marie, whose first reaction to the uprising was to offer Ben Ali France's superior knowledge in riot control, has finally resigned. But her family's involvement with the ancien regime (her parents had shares in a property company owned by a businessman close to the regime) provided its own morality play.

Few were disinterested observers. When it came to the crunch, such as organising the interrogation under torture of jihadis picked up in Pakistan, the CIA, among others, traded with the darkest elements of Mubarak's regime being denounced with such ardour today. Russia and China, both of whom have much to fear from spontaneous demonstrations by their own people, have fared little better.

The conflict inherent between policy and principle continues to this day. While the world's attention has been focused on a mad colonel's dying days, Libyan troops are not alone in firing on unarmed demonstrators. After a mass demonstration in another Tahrir Square, this time in Baghdad, Iraq's security forces detained 300 people, among them prominent journalists, artists and intellectuals, some of whom were later beaten up or tortured in custody. At least 29 died nationwide in Iraq's "day of rage". Rather than denounce an ally in Nouri al-Maliki, whose coalition government Washington toiled hard and for many months to create, the US embassy in Baghdad played down the violence.

Three lessons should be drawn from the revolutions taking place in Libya, Egypt, Tunisia and elsewhere. The first is that they belong to the people who made them. The Libyans, Egyptians and Tunisians have made enormous personal sacrifices to get this far, humbling eyewitnesses with their determination and heroism. They do not want, nor have they yet sought foreign intervention. The ownership of change across the Middle East does not, however, make international action irrelevant. The vote in the United Nations to impose travel and asset sanctions on Gaddafi and his entourage broke new ground for the international support it mustered, helped not least by the Arab League, the African Union and support from Libya's own US mission, which defected en masse. It is unlikely to continue, but the process of rediscovering the benefits of genuine international coalitions and institutions like the human rights council is a healthy one.

The second lesson is that these revolutions have only just begun, and the task of clearing out old faces is still work in progress. Tunisia ousted its second leader in as many months when Mohamed Ghannouchi resigned as prime minister after three days of protest. With the US and France pressing for the formation of a model which would absorb leading members of the old ruling party, the RCD, in a new democratic party, the Tunisian street is having none of it. They want a complete change, not people like Ghannouchi back in new guise. Whether a leaderless revolution will be able to create its own leadership without fissuring is another matter. But it is clear what the ambition is.

The third lesson is that the process of remaking politics will occur independently of outside influence, Islamist or western. While the Egyptian military will still need US aid, the government that finally emerges after free elections may indeed be more independent. Western policy in the Middle East will have little option but to adjust to a new reality. It will be in no position to dictate terms. When these regimes died, their role as unsavoury, but ultimately useful clients died with them.






Tonight he speaks at the LSE in commemoration of its esteemed researcher, Richard Titmuss, but Tony Atkinson has now been The Man on inequality for longer than his late subject ever was. He has spent a career unbundling the statistical white light of the average into a rainbow, to expose who gets what. Most economists lazily stick with financial aggregates precisely because this task involves so much number-crunching, and as a 1960s PhD student he had to got on his bike to Cambridge's radio telescopes to get his hands on prototype computers. He has since lived through the explosion of processor power – and made full use of it. Tonight's lecture ties together up-to-the-minute research about the re-emergence of a plutocracy, as well as meticulous arguments about the best way to define a family in statistics. But unlike many masters of detail, Atkinson can soar magisterially just as surely as he can dive. Unfazed by fuzzy ancient data, he tells the story of the haves and have-nots over a full century. Everyone knows Thatcher widened the wealth gap, but Atkinson encourages hope that it might be closed, by pointing out that both Harold Wilson and the second world war achieved that in the past, in very different ways. Although a knighted professor, he is neither a champagne egalitarian nor in any way self-important (he played the back end of a pantomime horse in the Oxford college he ran). It is thanks not to his honours but to his hard graft that the rest of us can mind the gap.






The Justice Ministry's Legislative Council on Feb. 15 handed Justice Minister Satsuki Eda a recommendation that the Civil Law be revised so that parental prerogatives can be suspended for up to two years if necessary. The proposed step will make it possible to protect children against abuse and neglect by their parents — such as violence, molestation, refusal to give meals and medical neglect — more effectively than now.

Currently family courts can deprive parents of their prerogatives permanently. Heads of child consultation centers can ask such courts for the deprivation. But this provision is not of practical use or help because the permanent deprivation of parental prerogatives could destroy the child-parent relationship. Under the recommendation, children, children's relatives, legal guardians of minors and public prosecutors can ask family courts for permanent deprivation or up to two years' temporary suspension of parental prerogatives if parents are damaging children's interests through the use of their prerogatives. Thus children suffering from abuse or neglect by their parents will be able to have family courts directly hear their appeals. The temporary suspension of parental prerogatives will be an effective weapon to deal with parents who insist on their right to discipline them in an attempt to hamper the protection of abused or neglected children by the police or children's welfare facilities.

At present, only one person can become a legal guardian of a minor. Under the recommendation, a number of people and corporate bodies such as nongovernmental organizations can become legal guardians of one minor. Children and legal guardians of minors will also be able to request that parents be deprived of their right to manage children's property. The proposed law revision will enable relatives of abused or neglected children and other people around them, such as workers of children's welfare facilities, to fully cooperate to protect the children and enhance their interests. The government and the Diet should not lose any time to enact a revision bill.





The Justice Ministry's Legislative Council on Feb. 15 handed Justice Minister Satsuki Eda a recommendation that the Civil Law be revised so that parental prerogatives can be suspended for up to two years if necessary. The proposed step will make it possible to protect children against abuse and neglect by their parents — such as violence, molestation, refusal to give meals and medical neglect — more effectively than now.

Currently family courts can deprive parents of their prerogatives permanently. Heads of child consultation centers can ask such courts for the deprivation. But this provision is not of practical use or help because the permanent deprivation of parental prerogatives could destroy the child-parent relationship. Under the recommendation, children, children's relatives, legal guardians of minors and public prosecutors can ask family courts for permanent deprivation or up to two years' temporary suspension of parental prerogatives if parents are damaging children's interests through the use of their prerogatives. Thus children suffering from abuse or neglect by their parents will be able to have family courts directly hear their appeals. The temporary suspension of parental prerogatives will be an effective weapon to deal with parents who insist on their right to discipline them in an attempt to hamper the protection of abused or neglected children by the police or children's welfare facilities.

At present, only one person can become a legal guardian of a minor. Under the recommendation, a number of people and corporate bodies such as nongovernmental organizations can become legal guardians of one minor. Children and legal guardians of minors will also be able to request that parents be deprived of their right to manage children's property. The proposed law revision will enable relatives of abused or neglected children and other people around them, such as workers of children's welfare facilities, to fully cooperate to protect the children and enhance their interests. The government and the Diet should not lose any time to enact a revision bill.






A recent Council of Europe report says that during and after the 1998-99 Kosovo conflict, militia leaders of the Kosovo Liberation Army (KLA) tortured and killed hundreds of Serbs and political rivals in secret Albanian hideouts, removed their organs for sale and dumped their bodies in local rivers.

The report added that these people were also heavily involved in drug, sex and illegal immigrant trafficking across Europe. Yet while all this was going on, the NATO powers had decreed that Serbia should be bombed into accepting the KLA as Kosovo's legitimate rulers — rather than the more popular Democratic League of Kosovo headed by the nationalist intellectual Ibrahim Rugova advocating nonviolent independence.

Recent years have not been kind to Western policymakers. They have shown an almost unerring ability to choose the wrong people for the wrong policies. Think back to the procession of incompetents chosen to rescue Indochina from the communist enemy. Does anyone even remember their names today? Yet at the time they were supposed to be nation-savers.

Before that the United Kingdom, United States and Australia had banded to try to prevent Lee Kuan Yew from being elected prime minister of Singapore. He was seen as a crypto-communist. They preferred the incompetent pro-British Lim Yew Hock.

Then we saw the West, and Japan, throw their support behind the hapless Afghan President Hamid Karzai as the strongman to defeat the evil Taliban whom the U.S. had once embraced as the good Taliban.

If not for the end of the Cold War, we almost certainly would be seeing the U.S. and U.K. today once again backing Middle East dictators against their protesting masses.

And now we discover that the people chosen to take over Kosovo from Serbia were not quite the heroes they were made out to be at the time.

Western involvement in the breakup of the former Yugoslavia had more than its share of such mistakes. The Serbian forces resisting the breakup were accused of war crimes and ethnic cleansing. But anyone aware of that nation's troubled history should have realized that the Serbian minorities in Croatia and Bosnia would not accept domination by the successors to their former pro-Nazi oppressors.

Retaliations and violent resistance, including even the shocking Srebrenica killings, were inevitable. Besides, the final result was that close to a million Serbs had to seek refuge in Serbia itself. So who had been cleansing whom?

Kosovo too had seen wartime ethnic cleansing against Serbs by pro-Nazi elements. The cleansing continued during the 1990s as U.S.-trained KLA guerrillas targeted Serbs isolated in rural districts and towns (by then Belgrade's efforts to give the province autonomy had failed on the rock of ethnic Albanian noncooperation).

When Belgrade finally sent in troops to resist the guerrillas, it was accused of war crimes even though the illegitimate force used was much less than what we see when most other Western nations, the U.S. particularly, intervene against guerrillas they do not like.

When many ethnic Albanians fled temporarily after the NATO bombing intervention, that too was supposed to be Serbian ethnic cleansing.

Even after gaining power, the KLA violence and cleansings continued. Their victims included the Jewish and Roma minorities and ethnic Albanians who had cooperated with Serbia's attempt to offer autonomy. The trafficking of drugs, women and body organs continued, right under the noses of the U.N. forces sent in to maintain order. Rugova supporters were eliminated.

The U.S., U.K. and Germany bear most of the blame for this horror; Germany especially should have realized the passions that would be unleashed by any sudden breakup of the former Yugoslavia. But they seemed more interested in the geopolitical gains.

In exchange for helping the KLA, the U.S. got to add the strategic Bondsteel military base in Kosovo to its global base network. And the feisty U.S. Secretary of State Madeleine Albright got to play world leader at the 1999 Rambouillet conference by decreeing that the dashing, handsome KLA leader Hashim Thaci was far preferable to the elderly, unpretentious Rugova as Kosovo's future leader, and that Serbia should be bombed if it did not agree. Belgrade's agreement to Rugova as leader of an independent Kosovo was dismissed as irrelevant.

One wonders how the Serbs saw this performance. Two generations earlier, they had been the only European nation with the courage to resist Nazi attack. They had been bombed and massacred as a result. Now they were to suffer again at the hands of the NATO-supporting European nations, most of whom had spinelessly succumbed to, or had even collaborated with, that former Nazi enemy.

True, the Parliamentary Assembly of the Council of Europe has now resolved that it is "extremely concerned" over the recent KLA revelations. But is that not rather too late?

And will we see apologies from the people behind the past policies, particularly from the likes of former U.K. Prime Minister Tony Blair who still boasts that his firm resolve against Serbian "ethnic cleansing" in Kosovo led him to support the U.S. in Iraq? I doubt it.

Gregory Clark is a former Australian diplomat and longtime resident of Japan. A Japanese translation of this article will appear on






CHENNAI, India — Now that President Hosni Mubarak has finally relinquished power in Egypt and the military has taken control, the question in India is whether such a people's revolt can possibly happen there.

The issue has gained enormous significance in the light of how the Egyptian revolution has provoked others in the region, notably Iran, Bahrain, Libya and Morocco, to try to get rid of their own dictatorial regimes. Their aim is democracy — to transfer power to the people. What is a more pertinent point there is corruption. The people are tired of seeing dictators plunder their countries of their wealth.

Corruption is also an extremely pressing problem in today's India. It has seen in recent years a virtual anarchy in its administration that has even spilled over to its media. The country had two terrible scams recently. During the Commonwealth Games, millions of dollars were taken in kickbacks by corrupt bureaucrats and ministers. Earlier, the allocation of the "2G spectrum" to telecom players also saw huge losses to the state exchequer.

Both financial scandals have shaken the average citizen's trust in the federal government, which is run by a coalition headed by the Congress party, which once boasted of highly virtuous and upright leaders like Mahatma Gandhi, Jawaharlal Nehru and Sardar Vallabhai Patel.

India has a history of financial scams, but it is only now that the media have begun to expose the corrupt, often taking a very bold stand. So, the question then arises, how has India, despite such bad and terribly corrupt governance, been able to keep an Egyptian-style uprising at bay? Here are some facts to ponder.

Although India's growth (close to 7 percent) has been greater than Egypt's, Egypt's per capita monthly income is around $130, about twice that of India.

Yet, Indians may never see a revolution. The military may never rebel. India's billion-plus people may never take to the streets to topple the government. An important reason for this is the country's unfailing democracy that has weathered many violent storms and wars.

The democratic institutions, including the judiciary and the police force, have remained intact for all of the 60-odd years of India's independence. These institutions may be ineffective — or may have been at different times — but they have been extremely tolerant of criticism and opposing voices.

What's more, India's political elite come from different classes, castes and religious groups. We have a Muslim heading Kashmir as the chief minister. We have a low-caste Hindu leading Uttar Pradesh, the most populous Indian state and the second-largest state economy in India (after the western Indian state of Maharashtra whose capital is Mumbai, the nation's financial center). Uttar Pradesh contributes nearly 9 percent of India's total GDP and, by virtue of its population, sends more representatives to the federal parliament, thus enjoying the power to have a decisive say in the making and unmaking of a government.

As one economist wrote: "This contrasts with a banana republic where the ruling coterie hang together. Every group member knows that together they are like a bunch of bananas; if you break free, you get skinned. By contrast, India is probably a banana-peel republic: its rulers are all over the place, slipping and sliding, from post to post, promise to promise."

There are other vital differences between India and Egypt. India's impressive growth rate even in the starkest period of the global economic recession did not admittedly bring about considerable development or significant rise in individual financial status. About 50 percent of Indians still live below the poverty level, going hungry every night.

Yet, there has been remarkable horizontal mobility. Far, far more Indians than Egyptians are looking out and on the move for jobs, and are perfectly willing to travel and set up home hundreds of miles away from where they grew up, places where their parents would never have dreamed of migrating. There may not have been any important vertical mobility, but horizontal movement, indeed a lot.

In fact, India is gigantic pot of migration. Its men and women are always on the move. More than 5 million train tickets are sold every year. Men and women travel to work or go home from work or visit parents in their ancestral villages or towns or cities.

With such horizontal mobility — from a village/town to a city or from a farm to a factory — dreams are fulfilled, ambitions realized. Such mobility reduces frustration so that times do not look as bad they really are.

On the other hand, Egypt is a society where not much horizontal movement has taken place. The country's rural population has remained a constant 56 percent for many decades, while India's has diminished from about 80 percent in the 1960s to about 70 percent today.

Millions have left their villages and agriculture and gone to cities and to a relatively more comfortable existence. India's informal sector absorbs most of those who come from the countryside. Egypt's informal sector is way behind in this; 31 percent of its workforce is employed in the now stagnating public sector, one cause for the rising joblessness.

India has also afforded wonderful opportunities for self-employment, and some of the poorest regions have seen this happen, thanks to bank loans. Women in particular have benefited from this: They have set up small shops or tailoring units catering to the needs of their own small communities. A steady source of income is ensured. This is missing in Egypt.

Finally, Indians are an enormously tolerant race. They are willing to wait and watch. But a point could come when the thread snaps.

Gautaman Bhaskaran is a Chennai, India-based author and journalist.








A row between Cabinet Secretary Dipo Alam and the national press has worsened after the top government official said he plans to report Metro TV to the Press Council and the National Broadcasting Commission in response to the news channel's legal move against him last week.

The unwanted court settlement could have been avoided had Dipo demonstrated his statesmanship by offering an apology for his blatant abuse of power. Dipo started the fire during a media conference when he threatened to boycott media outlets that were critical of President Susilo Bambang Yudhoyono. He also called on government agencies to stop placing advertisements with Metro TV, Media Indonesia and TVOne and to block access for their journalists.

Albeit controversial, such statements would go unchallenged and be implemented under the New Order. But that regime changed over a decade ago. Dipo may not have been aware of this, or perhaps decided to ignore the reality of the freedom of the press Indonesia has staunchly advocated. In a country that claims to be the third largest democracy in the world, the government, or any other force, cannot infringe upon the freedom that distinguishes us from authoritarian states.

The press can play its role as the fourth pillar of democracy only if it can exercise its freedom, which can manifest in criticism or accolade when necessary.

Intimidation against the press is therefore an anachronism in this democratic era, but there is a chance for it to be taken for granted if Dipo goes "unpunished" because other officials or people with power or money might follow suit.

What would be more worrying than Dipo enjoying impunity, or even receiving a morale boost, is the possibility for the government to resist — and in turn stifle — criticism. The fact that Dipo is showing no remorse may indicate not only his self confidence, but also support from fellow government officials. If dragged out, the situation could steer the government and the media into an energy-sapping, unnecessary head-on collision.

Dipo may claim to have represented his own thoughts when he launched the attack on the media, but the public would easily associate him with the Yudhoyono administration. As Dipo's direct superior, the President cannot remain silent. He instead must take action against the Cabinet Secretary for bringing his government to disrepute.

The government's hostility against its critics, whomever they may be, will turn the clock back to the past when the authoritarian regime ruled the country. It's difficult to imagine Indonesia restoring the old days while on the other side of the world, particularly in the Middle East, people are clamoring for freedom of expression.

Needless to say, the media are not perfect and therefore need close supervision from the public, otherwise they will manipulate facts for certain interests or agendas. In this era of liberty, the public has the luxury of reserving the benefit of the doubt when it comes to news broadcast or published by media outlets. This is necessary, because despite their claims of independence, the nation's media outlets are owned by politically-wired businessmen.
Dipo, either as an official or individual, has the right to suspect a certain media outlet of being biased, but a fair arrangement through the Press Council to prove his suspicion is available without having to resort to intimidation or threats.

Such mediation is highly-recommended, although it failed to mend fences between Dipo and the three media outlets last week. An apology from Dipo would be the most graceful exit from this dispute, or else it could blow itself out of proportion.





ASEAN, as a region, has some 32,000 islands spanning over 4 million square kilometers which are inhabited by about 600 million people who speak more than 900 different languages and dialects on a daily basis.

Equally diverse is the level of economic development where the GDP per capita between the most and least advanced members varies from US$800 to $49,000.

Despite the socio-economic disparities, ASEAN has collectively made significant progress through various economic, social and political initiatives to be one of the fastest developing regions in the world.

One such initiative is the establishment of growth triangles to link different ASEAN member-states with different comparative advantages to form sub-regions of economic growth such as the BIMP-EAGA, IMT-GT and SIJORI-GT.

For example, under the BIMP-EAGA (the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area), the expansion of air linkages through the granting of fifth freedom traffic rights for designated international airports, removal of restrictions on frequency and capacity and code sharing arrangements will help set the ground work for region-wide implementation.

However, ASEAN must not rest on its laurels, for there are significant challenges that lie ahead as she works toward establishing her community by 2015.

Internally, one of the key challenges to address is trade facilitation as reflected in World Bank Logistics Performance 2010 where ASEAN member-states ranked from second to 146th out of the 155 countries

Externally, ASEAN would need to step up its intra-regional trade if she is to maintain a central role as the driving force for regional integration framework, given the emergence of new economic superpowers such as China and India.

Last October, the ASEAN leaders adopted the master plan on ASEAN connectivity which aims to facilitate economic growth and narrow development gaps by enhancing physical, institutional and people-to-people linkages in the region.

For physical linkages, the key issues to be addressed, among others, are enhancing transportation links, connecting archipelagic member-states to the mainland, narrowing the digital divide and addressing increasing energy demands.

In its ongoing effort to establish an efficient, multimodal transport system for seamless movement of goods, services and utilities, as well as the movement of people across and beyond the region, ASEAN drafted strategies to upgrade existing road links, construct missing rail links, enhance key ports' infrastructures, promote greater use of roll-on/roll-off activities to connect archipelagic regions and capitalize on endowed navigable inland waterways.

Such strategies will benefit both consumers and producers in terms of access to a variety of goods
and services and alternative transportation links, respectively.

More importantly, it will help develop and link local markets in the archipelagic member-states with the rest of the region.

ASEAN also recognized the increasing role of information, communication and technology (ICT) in its endeavor to create a single market and production base through the simplification of trade documentations, clearance of goods and enhanced logistic services.

ASEAN further recognized the need to address the digital divide, nurture technological innovation and harmonize ICT regulations.

Strategies are in place to ensure that ICT infrastructure is accessible and affordable across the member-states with the view to promote greater usage of ICT as an empowering tool for governance and

This includes the establishment of the ASEAN Internet Exchange, which will increase the speed of transactions while reducing the associated costs, the establishment of the ASEAN Broadband Corridor to offer seamless broadband quality across the member states and adherence to the Universal Services Obligations to promote accessibility and affordability for ICT services.

Under institutional linkages, the key challenge here is to put in place requisite legal and institutional mechanisms to enable physical linkages to facilitate movements of goods, services, utilities and people within and beyond the region.

One such mechanism is the establishment of a system (e.g., the ASEAN Single Window and the associated National Single Windows) which will process all related documents such as customs declarations, import/export permit applications and quarantine inspections, in relation to the release and clearance
of cargo.

Currently, importers and exporters are required to obtain necessary papers and permits from
several government agencies in order to complete their respective transactions.

When the system is in place, traders will benefit from an open and transparent process, effective deployment of resources, faster clearance and release of cargoes and reduction in transaction costs.

The governments will benefit from greater compliance on the part of traders, high revenue yield and enablement of risk management tools for control and enforcement purposes.

Another important ASEAN initiative relates to the minimization of technical barriers to trade to support free flow of goods in the region.

This will address differences in technical regulations, standards and conformity assessment to realize the ASEAN goal of one product, one test, accepted everywhere (in the region).

The key benefits to the manufacturers are cost savings, inasmuch as they do not have to perform
multiple tests for their products to meet local requirements, as well as access to a larger market for their products.

The consumers will also benefit from a wider choice of products whose quality and interoperability have been assured as a result of the requisite tests when the products enter the local market.

Another promising mechanism is the establishment of an ASEAN Single Aviation Market where there will be no restrictions on routes, capacities, frequencies or types of aircrafts over ASEAN skies.

From the passengers' perspective, they will benefit from lower fares, better services and more options on how to get to their destinations. Airlines will also benefit from the access to new markets.

With the master plan in place in this three-pronged set of strategies for improved physical connectivity, better institutional connectivity and deeper people-to-people connectivity, its full implementation will deepen and widen ASEAN production and distribution networks which will create more opportunities for inclusive economic growth.

Finally, it is important to underline that the concept of ASEAN connectivity is consistent and strengthens the ASEAN community building efforts.

A more connected ASEAN region would certainly improve the region's competitiveness which is an important ingredient to sustaining ASEAN centrality in tougher global competition.

Dionisius Narjoko is a researcher and Hong Hin Lim was an associate researcher at the Economic Research Institute for ASEAN and East Asia.






While the causes of the present revolt in Egypt are complex, it is reasonable to say that the high rate of youth unemployment in the country is among many other important triggers for the crisis.

It is also noteworthy that even before the global financial crisis hit, youth unemployment in Egypt was running at more than 30 percent.

Egypt's problems were also shared by other countries in the Middle East and North Africa, from Tunisia on the northwest coast of Africa to Iran in the east, where rates of unemployment, underemployment and informal work were among the highest in the world.

In Tunisia, the young people who helped bring down dictator Zine El Abidine Ben Ali are called hittistes — French-Arabic slang for those who lean against the wall.

Their counterparts in Egypt, who on Feb. 1 forced President Hosni Mubarak to say he would not seek reelection, are called the shabab atileen or unemployed youths.

In addition, Egypt and other countries in the region have overwhelmingly young populations — approximately two-fifths of the region's adult population is under the age of 30.

In short, the youth boom and massive unemployment among young people in Egypt as well as skyrocketing prices of food, political oppression and chronic anger among young people and the wider population with the Mubarak regime are important in terms of the social and economic background to the revolt.

The widespread use of communication and information technology such as cellular phones and Internet among Egyptian young people also contributed to the rapid escalation of the revolt.

Numerous studies have maintained the importance of employment for people's (including young people's) wellbeing.

This is because employment has both a manifest function i.e. to obtain a regular income to fulfill one's basic needs and a certain form of lifestyle, as well as a latent functions, for example to achieve a decent identity, status and wider social networks.

The absence of employment, therefore, not only means income deprivation but also the deprivation of identity, dignity and respectability. It is not surprising if disillusionment, boredom and depression are common among unemployed people.

Widespread unemployment among young people in tandem with rampant disenchantment due to political repression provides fertile ground for revolt.

It is also important to note that according to the latest International Labor Organization (ILO) report, world unemployment reached record levels last year, affecting 205 million people. Some 77.7 million youths between the ages of 15 and 24 years — or 12.6 per cent of the population — were jobless in 2010.

ILO chief Juan Somavia warned leaders in Middle East and North African countries that a failure to address rampant youth unemployment effectively, with all of its consequences for poverty and unbalanced development, together with limitations on basic freedoms, could trigger a massive outpouring of popular demands and a youth revolt.

Moreover, the ILO raised an alarm in recent months over the high level of unemployment as
one of the causes of 2010 riots in Greece and more recent protests in Tunisia that ultimately ousted
long-time president Ben Ali.

There are many similarities and lessons Indonesia can learn from the Egypt revolution that overthrew Mubarak. Like Egypt, Indonesia has relatively large young population, with more than a half of the nation's population aged between 12 and 30 years.

Like Egypt, unemployment also significantly affects young Indonesians. There are 4.8 million young people aged between 15 and 24 years who are out of work, and this country still ranks highly in terms of unemployment rates in Southeast Asia.

The number of unemployed young Indonesians exceeds 20 percent and is more than five times the adult rate of unemployment. More than 60 percent of the unemployed are elementary or high school graduates and school dropouts aged between 18 and 35, who potentially contribute to prevailing social problems.

Fortunately, unlike Egypt, since 1998 Indonesia has had a more democratic political environment. Therefore, the high rate of youth unemployment in Indonesia is highly unlikely to trigger a youth revolt like the recent one in Egypt.

However, this is not an excuse to neglect and to do nothing to address the high rate of youth unemployment in this country.

Studies have revealed the association of youth unemployment with many health and social problems such as the increasing rates of depression, disillusionment, problematic substance use, self harm, suicide as well as involvement in crime and offences.

The government should address more effectively the economic inequalities, employ a pro-poor economic policy, increase economic growth and revitalize the real sector that could provide more jobs to young people.

After all, the costs and human suffering caused by doing nothing to significantly reduce youth unemployment, as the cases of Egypt and Tunisia have proved, are too high.

The writer is a lecturer at the School of Public Health, Hasanuddin University, Makassar.







A heated debate is underway on the effectiveness of the coalition that supports President Susilo Bambang Yudhoyono, after it narrowly escaped a House of Representatives' inquiry into tax graft last week, which saw two of his allies, the Golkar Party and the Prosperous Justice Party (PKS), on the opposite side.

Despite their move against the government, the two coalition members say they do not want to leave the coalition, which is reminiscent of their maneuvering last year when they spearheaded an inquiry into the Bank Century bailout that led to the departure of former finance minister Sri Mulyani Indrawati.

Going over the process of the formation of this alliance, one cannot help but notice that the coalition was set up without a solid foundation. Nowhere can one find any documents that elaborate on details of thematic issues as the basis of the coalition.

Looking at Europe's experience, setting up a coalition is serious business. Political parties that agree to join a coalition share a program that they will use as a collective position in dealing with other parties, especially the opposition camp.

When the experiment of a coalition between the German Conservative Party (CDU) and the left-wing ecologist Green Party broke down after three years in the German Federal State of Hamburg, Greens party chairman Cem Oezdemir said "Of course, coalitions are dependent on thematic issues, but they also depend on people."

He said politicians in coalitions didn't necessarily have to like each other, but a certain amount of trust and respect was imperative to support effective decision making. That is the reason why every coalition in the 16 German federal states sets up a "Coalition Treaty". Depending on the degree of policy differences, the treaty includes more or less compromise and accentuation. If policies on certain issues just do not fit, this topic is likely spared from the treaty — and less worked on in the coalition. This has the negative effect of stagnation in selected fields, but also guarantees that stable governments can work together until the next election.

Parties join a ruling coalition either seeking office, which simply means power, or seeking political influence, which explains their will to change the political surroundings of their country. No coalition can work without securing power, and therefore politicians need a certain willingness to gain power.

However, history has shown that ruling coalitions fail if their participating parties cannot deliver on their promises. Consequently, a coalition will be stable if they make up broad common ground for supporters of all coalition members and are able to communicate why some decisions do not live up to expectations.

Especially in the media, it is suggested that coalitions need a broader goal that connects and motivates them. The need for such a "shared project" is highly debatable. Whilst it could be assumed that political parties that represent close policy goals form more stable coalitions, it has also been observed that opposing parties could work together quite well. The two biggest parties in Germany, the Conservatives and the Social Democrats, have been rivals since their establishment. Nevertheless, they were able to form a relatively stable coalition, called the "grand coalition", under Chancellor Angela Merkel. In fact it was far more respected and assertive in public than the current government, even though this represents more coherent goals.

In political science, such debate is ongoing. Robert Axelrod suggests that polarized or unconnected coalitions are less stable than connected ones. It is also mentioned though that politicians have an interest in forming a stable government with opposing parties for pragmatic reasons. As they are accountable to their voters, this has to be kept in balance with the policies they are actually elected for. To guarantee this, convincing leadership is crucial. Heads of parties have to agree on very clear terms of reference that can be communicated not only to supporters, but also to a wider public sphere.

But a successful coalition needs more than leadership. For the grand coalition in Germany, it was a big surplus to have absolute majority in parliament. Knowing this, leaders could also enforce laws that were not supported by all of their members of parliament.

What is far more important, it seems, is that none of the party leaders is afraid of being cheated by their coalition partners. The coalition treaty appears to be the best instrument guaranteeing the required reliability and predictability for both — the coalition and the public. This is to say that, besides specific laws, the population also honors coalitions that deliver concentrated and issue-driven work, without mutual harassment and slander. This requires discipline, transparency and fairness.

For the next three-and-a-half years, Yudhoyono needs to ensure that his coalition will really deliver his election promises. Therefore, he urgently needs to strengthen his grip on the coalition and ensure this time around he will have a stronger and more solid coalition that supports his programs in the House. A tough decision has to be made to achieve that goal.

Finally, it is up to him whether he wants to be remembered as one of the greatest president's in Indonesian history for his ability to achieve stability and economic prosperity, or simply a leader whose terms were full of internal squabbling among his own coalition members.

Cecep Effendi is a senior lecturer at the Post Graduate School of Communications, Muhammadijah University, Jakarta. Felix Anderl is a student of the School of Political Science, University of Freibourg, Germany.









Twenty five years ago, J.S. Tissainayagam, then a final year undergraduate at Peradeniya, declared to me 'I am a feudalist'.  That was a strange and one-of-a-kind confession.  Feudalism after all is about lords and vassals, fiefs and fees, families owning and exploiting the lives of other families, horrendous terms of exploitation, legal and military service of tenants, forfeiture, eviction, homage, humiliation and even rights to sexual favours. I am not sure if Tissa was making a point about social, political, economic and cultural realities or stating a preference for a political and economic system. He would know best what prompted the choices he made in later life, the terms of engagement etc.  

That was a different time. I was young and less persuaded to examine the nuts and bolts of things. Emotion swayed reason and rhetoric sounded nicer than logic.  'Modalities' was a word I hadn't encountered and a concept that was to be thought of after the revolution. It was two decades too early for systems and institutional arrangements to capture mind and imagination. 

That was then and this is now. We are officially a democracy. We have the trappings. Governments come and go. On the other hand, to the extent that there are constitutional monarchies, there could be constitutional feudalisms too and all things considered it is hard to say that we've moved out of feudalism or indeed if democracy is what works best for us ('stages' is a German concept and is too value-laden to be taken as a given 'better'). 

 Sri Lanka is a nation that had its institutional arrangement subverted by a constitution that centralized power in one institution, that of the Executive Presidency', had it all being further compromised by a culture of apathy and/or fear contributing to the politicization of the public service. It is a nation whose governance flaws and the handicaps of political culture were exacerbated by a thirty year war with a ruthless terrorist outfit that necessitated deferring to extraordinary mechanisms that were implicitly sanctioned by the general citizenry.  The end of war does not result in automatic readjustment and correction.  Furthermore, the snuffing out of close to two hundred thousand lived in a relatively short period of 40 years (20,000 in 1971, 60,000 between 1988 and 1989 and 100,000 during the 30-year war) naturally produced a massive human resource problem.

At the end of the war Sri Lanka didn't have the cushion of a decent and effective institutional arrangement, the checks and balances that ought to have been embedded in the constitution or the personnel who possessed the knowledge, skill and integrity to show flaw and suggest correction and to occupy relevant positions requiring technical expertise.  The only sphere of the public service where excellence of any kind was demonstrated was the security services.  It is perhaps natural then for the Government in the post-war phase to rely heavily on those officers who showed courage, discipline, ability to mobilize human and other resources etc. 

 It made political, military and administrative sense to appoint military personnel to key posts relevant to the relief, resettlement and rehabilitation effort.  Lack of competent persons may have prompted the President to appoint senior officers in the security forces to key diplomatic posts.  Putting the Urban Development Authority under the aegis of the Ministry of Defence also might have made sense, given the above facts and demonstrated inabilities.  Colombo certainly is looking pretty and clean and looks to be getting prettier and cleaner by the day.  My concern is about the 'how' of this transformation and what it all portends for all our tomorrows. 

Take the issue of squatter-eviction. There are two kinds of squatters, those who have been displaced due to natural or other calamity and have some kind of official acknowledgment of temporary residency and those who don't have such sanction.  Both categories can be evicted citing relevant acts, statutes or ordinances. In the case of the latter, there is very little by way of legal recourse against eviction.  The state can acquire land and deploy it for specific purposes and anyone squatting on such properties must leave. 

These are weak people in terms of wealth, political power or knowledge of things legal.  These attributes or lack thereof are further exacerbated by the knowledge that they do not have strong legal claim or in fact are guilty of wrongdoing.  In any event, if they do not take the litigation route, then there's nothing more to be said.  Whether relevant notices are given and whether these people (who are after all citizens of this country and therefore their possible homelessness ought to be a concern of representative government) are offered some kind of relief, no one seems to know at this point.  What is more disturbing to me is the question whether 'voluntary' vacation of residence is fear-provoked. That would be feudalistic to me. Or worse. It cleans city, helps development etc., but is symptomatic of a dangerous kind of apathy, on the part of the evicted as well as the witness to eviction.   We need to remember also that there is nothing to say that stated motive will not be ignored later and the acquired properties disposed of in ways that are not exactly in the better interest of the public or indeed done so to line someone's pocked. One can only hope that stated motive will win the day, but 'hope' is a deference to leadership-largesse and that's feudal. 

The stop-gap solution to the human resources problem; that of appointing military personnel who can reasonably be counted on to ensure discipline, great efficiency etc; whether in the public sector or in the diplomatic service has similar problems.  One might argue that if the public sector could be politicized and if the politicization of the military was a necessary evil to defeat terrorism then the militarization of the polity is a natural outcome which cannot make things work.  On the other hand, especially in the absence of any manifest effort to sort the human resources problem in effective and comprehensive ways, indicates a deference to the ad-hoc and a discarding of institution and process in favour of whim and fancy.  That's feudalistic and one might argue even despotic. 

 Perhaps this is the only way we can get certain burning issues out of the way, like waste management and Denuge-control for example, but there is always an after-taste and a set of consequences.  What are we going to do when the 'excellent' officers grow old and retire?  What are we going to do about the culture of fear, helplessness, the ad-hocking of things and so on, after the city gets beautified, the sewerage system restored and the underworld eliminated outside of due process (admittedly to the unanimous cheers of an appreciative citizenry).  When are we going to put in place systems of education and training as well as recruitment that will ensure that processes outside of leadership whim, fancy and loyalty-assessment put the right man or woman in the right position for the necessary task? 

 There's a question, though: 'how long ad-hoc?'  Underlying this are clear indicators of who we are as a people, what we are ready to go along with and what that says about our character, our system-preferences and the terms of our preferred servility.  Right now 'serf' seems to be the more appropriate descriptive. Not citizen.   

Malinda Seneviratne is a freelance writer who can be reached at msenevira@gmail






The Economic Survey 2010-11 is positive on the macro-economy without glossing over the challenges. The economy's resilience is seen in its ability to withstand two shocks in quick succession. The ripple effects of the global economic crisis (2007-09) that devastated world growth, trade, and finances have persisted in the form of the European fiscal crisis. On the domestic front, the farm sector that saw a negative growth in 2008-09 was further hit by erratic monsoons, severe drought, and unseasonal rains in two successive years. Despite this, the economy is poised to grow at rates seen during the pre-crisis period. On top of an estimated 8.6 per cent growth during the current year, the economy is projected to grow at 9 per cent during 2011-12. The optimistic forecasts as well as the downside risks are in line with the assessment of the Prime Minister's Economic Advisory Council. The services sector, for long "the power house of the economy", with a more than 57 per cent share of the GDP in 2009-10, has started gaining momentum. That should augur well for the medium term growth prospects. Another favourable feature is that India's demographic dividend is yet to peak. The growing trend in savings and investment rates should benefit from the gradual withdrawal of stimulus measures by the government. In a message that could be a pointer to the strategy in the Budget, the Survey notes that once the economy operates around full capacity, it is not the savings and investment rates that will drive growth but skills development and innovation. The major downside risks to growth are weather, a disproportionate spike in petroleum prices, and a slowdown in the advanced economies. Inflation and a large current account deficit are major concerns. The Survey cautions that higher growth and a faster monetisation of the economy, through financial inclusion, may mean increased money supply and hence more inflationary pressures. It has recommended a phased entry of foreign direct investment in multi-brand retail, apparently in response to the concerns of farmers and consumers. That should also add to stable capital flows. Given its upbeat tone on growth, the Finance Minister is expected to meet the fiscal targets. As part of its reform agenda, the Survey calls for a streamlining of land acquisition and environment clearance procedures, using smart cards to target subsidy payments and issuance of basic banking licences. There should be an unrelenting thrust on infrastructure development. None of these is new or visionary but the Survey has stressed the doable and underlined the priorities in a way that demonstrates pragmatism.





Head of the European Parliament's Delegation for relations with South Asia, Jean Lambert spoke to the Daily Mirror on the curtailing of the military presence in the north and livelihood opportunities there, as well as the issues of human rights and media freedom in Sri Lanka. Ms. Lambert, part of a seven-member team was in the country for the sixth Inter-Parliamentary Meeting with the Sri Lankan Parliament. Excerpts of the interview follow; watch the entire interview on

Q: The Delegation while in the country visited the North, what is your assessment of the reconstruction process there and employment opportunities in the North?

We've visited Vavuniya and Jaffna and seen sort of a snapshot of things in the North. I think that in terms of the issues around housing there is progress being made but there are questions about the speed at which everybody can have decent housing, we have also being told that there is an issue of land and land availability- a lot more people wanting to return than there is available land at the moment. Because there are still exclusion zones areas that are still quite heavily mined and obviously these have to be cleared before there can be people going back- and there is progress being made on that in some areas it is more effective than in others.

But livelihood is going to be an issue- there are certainly a lot of measures that the government plans to take- a lot of development they want to see; but still there will be a time-lag even with the best government in the world between the planning and the implementation. We met a lot of people who were working on daily labour whatever they could pick up. At the same time resettlement has also meant that there are more jobs in building- so there is more availability of that sort of labour.

Q: You said during the press conference that a lot of plans were presented to you at "break-neck speed", but with regards to the actual ground situation, how well do you think these plans will be implemented?

On paper there has been some thorough thinking about issues of water supply, power generation, a whole set of things, even looking at where funding for these projects might be coming from; whether it's the Asian Development Bank, the World Bank or anywhere else. But there are questions. With these questions there is obviously going to be a period of time in which this has to happen. Inward direct investment is something that you can never totally guarantee will be there. For instance the hotel that we stayed in was owned by someone who lives just around the corner from me in London, who has seen a development possibility there.

There is a great interest for development and then there is the question of how do you control that development to make sure that this is not developers coming in and paying large amounts for the land that people have been waiting for, instead it should work sustainable for the people and the whole country. So these are going to be some of the development challenges but at least the proposals are there.

Q: There is a reportedly heavy military presence in the North, what is your view on this?

The questions of the role of the Military is something that we've raised with ministers and many of the people that we have met and it is true to say that there is a concern- there always is in a post-conflict situation, about what the role of the military is. The military becomes very useful for assisting with de-mining or with reconstruction- but then there is that question of where do you draw the line. Certainly when we met the Secretary of Defence, he was very, very clear that the military has its job- but law and order issues around that will clearly be the police. In his view the military will stay- in various places around the whole country because, he wants to make sure that peace is sustainable. Then there is the question of whether a heavy ongoing military presence assists the peace process. But there is the commitment that the military will pull back from civil society duties, and it is the duty of parliament and the government to ensure that this happens.

Q: Last year when the EU suspended the GSP+ concession, on of the conditions that it asked for was the release of the names of those detained by the government for issues relating to the conflict. What progress has been achieved on this front?

I am honestly not sure whether our visit here will affect issues around releasing the names of detainees and giving further information on them. The government response is that "yes we hear what you are saying". But I would hope that the very fact that we have raised it will be a concern. This is not the only place that we have raised the issue. With regards to long-term detention in other countries as well- where there are detainees who are not being charged and have no idea if they will be charged this is an area of concern. We have done it with the Americans on Guantánamo and we are doing it here as well.

Q: The Human Rights issue was another reason that the GSP+ was suspended; you said earlier that the GSP+ is no longer an issue for the Sri Lankan government. However what is the European Parliament's view on the human rights situation in the country at the moment?

We have had a few discussions and hearings in the European Parliament about the human rights issues in Sri Lanka partly because this is related to the post-conflict situation and related to certain of the issues which were there before. So it is not a forgotten issue, obviously it because a strong issue when GSP+ was being discussed- because GSP+ is a trade concessions absolutely related to human rights, that is its purpose. These are issues that we continue to raise- just because GSP+ is gone doesn't mean that we have forgotten these issues. Hopefully now that you are in a post-war situation certain of the rationale for those practices disappears. If for instance the emergency regulations are continuously under review then that is very positive for the citizens of Sri Lanka.

Q: The final of those 15 regulations given for the GSP+ was media freedom, but this was not quantified. What is you assessment of media freedom in the country?

I think it is difficult to quantify it with our presence here. We have been told that it is not so much what is written- and that in itself makes it very difficult to quantify. I think that we are looking at issues of media access to all parts of the country, the information which is in the public domain-those sorts of things I think become very important for people feeling that this is an open society  where they can discuss questions freely as an element of free speech.

Pic by Waruna Wannirachchi










With local government elections to be held in March the soothsayer's warning to Julius Caesar, "Beware the Ides of March," might imbue the  contestants with a sense of foreboding; not that usually representatives of the ruling party ever get such forebodings since wealth and political power diminish whatever forebodings that the Ides of March have for after all Caesar would never have thought with his power and might that someone so close to him and so very trusted would turn enemy.

Perhaps our political representatives, those already in Parliament, and others aspiring to represent the people in local government should also reflect on the present situation in the country and consider whether the aspirations of the people have been really fulfilled. Whatever sugar coated goodies the Department of Census and Statistics displays to the people on the diminishing poverty levels, the people's representatives should go back to their electorates especially those in rural marginalized areas and consider the plight of the people. They will see unemployed youth aimlessly wandering around or sitting in some small tea boutique discussing what they could do with their lives. Families disrupted by mothers going abroad in search of the proverbial pot of gold and coming back with almost nothing urge their children to study in the hope that he/ she will get a job somewhere, but where is the heart-breaking question?

None of the large number of political representatives is really that bothered of working our programmes to get the unemployed youth in these areas gainfully employed. What cannot they revert back to the well know cooperative systems and set up youth cooperatives and provide these youth mostly school drop outs with poultry , vegetable seedlings and teach them methods of agriculture and  livestock farming arrange for marketing methods and find markets for their products. In most rural villages one sees large tracts of unused land that can be used for these programmes. Idle minds are the devil's workshop it has been said so why allow these youth to  remain idle and grow up dabbling in the use of drugs and  getting into  situations of crime and violence .After all to their minds what matters most is to earn some money to buy at least some of the goodies they see on TV , even on the State TV channels that are very  often the only channels available in their villages .When legitimate methods are not available to get money why not use illegal means to get what their own representatives in government institutions  seem to have?

Then we again have the problem of educated unemployed youth. Some firms take them; give them a dignified designation of sales executive with a visiting card that naturally makes this young AL youngster feel real important and then fixes targets to achieve.  Their basic allowance is around Rs 7000 to 8000 and the rest of the monies are dependent on the clientele targets they are given. In a country like Sri Lanka where even commercial Banks are competing with each other offering various incentives how could these youngsters achieve the targets imposed. They receive no EPF or ETF benefits and soon they are so harassed about targets that they rather stay at home than go to offices where they are blasted often in unparliamentarily language for their inability to achieve the impossible targets , and the people's representative never even say a word about their plight. Perhaps because they know nothing of them or maybe they have seen some youngsters waving mosquito and fly catching equipment and never stopped to inquire about their finances they receive for all their exercise!

Firms who appear to be so conscious of their social corporate responsibilities should perhaps work out a feasible programme with the government and instead of making huge donations which receive great publicity consider the plight of the younger generation and work out training programmes for graduate youth who are yet to see the future utopia.









New light has been thrown on the cause of death of singing legend Elvis Presley by the discovery of records in an old filing cabinet at a disused medical practice in Memphis, Tennessee. They record the examination of an anonymous patient who experts are already saying may have been Elvis himself. All that follows is taken from the doctor's notes...


The patient presented himself in a state of severe agitation and described himself as being "all shook up". When asked to be more precise about the symptoms of being all shaken up, he blurted out a string of apparently disconnected symptoms including itching, which he likened to that of "a man on a fuzzy tree", shaky hands, weak knees and an inability to stand on his own two feet. When asked if he had any history of cardiac illness, he said that his heart beat "so it scares me to death". He further complained of being tongue-tied and shaking "like a leaf on a tree". Whether this was the same fuzzy tree that caused his itching was not made clear.


It seemed likely that he had a viral infection and he was asked whether he had experienced hot flushes, to which he responded enthusiastically, saying "Mm, mm, oh, oh, yeah, yeah," and went on to say that he frequently exhibited signs of fever.


His temperature was taken and showed no signs of abnormality, so he was asked when these symptoms of fever occurred. "Fever in the morning," he replied, then added, "fever all through the night" and also seemed of the opinion that the fever was likely to exhibit itself when another person held their arms around him. This may have been simply a sign of constriction of the airways or the blood supply resulting in an increased feeling of hotness, so was ignored in attempts to reach a diagnosis.


In order to eliminate avian flu or swine flu, the patient was asked if he had been in contact with sufferers from either of those ailments, which he strongly denied, saying that his fever "isn't such a new thing," but "started long ago". He then became delirious, stating that Romeo and Juliet had suffered from a similar ailment, as had Captain Smith and Pocahontas.


He was administered a sedative and after it had taken effect, he apologised for his outburst but said that the point he was trying to make with his story was that "cats were born to give chicks fever be it Fahrenheit or Centigrade". A further sedative was administered and while waiting for it to take effect, the medical literature was consulted for reports of feline febrifacients being transmitted to chickens but none was discovered.


Asked about his earlier claim to have suffered fever in the mornings and at night, the patient said enigmatically that the Sun lights up the daytime and the Moon lights up the night, which suggested an element to light-sensitivity. He was therefore advised to take two aspirins and go to bed in a darkened room. He gave his address as a hotel at the end of Lonely Street, but did not return to the practice for a further appointment.



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