EDITORIAL SAMARTH: EDITORIAL 13.08.11

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Editorial

month august 13, edition 000810, collected & managed by durgesh kumar mishra, published by – manish manjul

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THE PIONEER

A DOUBLE-EDGED SWORD
CALM RETURNS TO UK
THE IRON FRAME IS RUSTED - HIRANMAY KARLEKAR
THE LANGUAGE OF THE UNHEARD? - MITU SENGUPTA
ANALYSIS IS NOT NECESSARILY CONDONING - SWARN KUMAR ANAND
RIOTERS MAGGIE THATCHER'S GRANDCHILDREN - PANKAJ MISHRA

THE TIMES OF INDIA

HOW TO CASH AND BURN
INDIA ON THE STREETS - CHETAN BHAGAT
HARMLESS AND INNOVATIVE
TIES SHOULD BIND- NOT BLIND
DIVING EAGLE, CROUCHING DRAGON, COWARDLY LION

HINDUSTAN TIMES

SOUNDING THE RED ALERT
TRICOLOUR OF HOPE - GOPALKRISHNA GANDHI
YOU HAVE TO EARN IT - ANIRUDH BHATTACHARYYA
DOWN IN MY BUNKER - PRATIK KANJILAL

THE INDIAN EXPRESS

TWENTY YEARS, FULL CIRCLE
COMMONS CAUSE
NORTHERN CLEMENCY
NATIONAL INTEREST: FIGHTING SHY - SHEKHAR GUPTA
RANTING RIOT - MIHIR S SHARMA
THE CINEMA OF 'BAD LIGHT' - DILIP BOBB
THE HIJACKED ECONOMIC CRISIS
BRINGING JUDGES TO JUSTICE - M R MADHAVAN
KARACHI REVERSAL - RUCHIKA TALWAR
NO FREEDOM FOR FARMERS - SHARAD JOSHI

THE FINANCIAL EXPRESS

BRITAIN MUBARAK
JUST CAPITAL
THE LONG AND SHORT OF MARKETS - K VAIDYA NATHAN
CHOOSING CRAZY TREASURY RETURNS - GILLIAN TETT

THE HINDU

ARCHAEOPTERYX DETHRONED
PDS LEAKAGES: THE PLOT THICKENS - JEAN DRÈZE
LIFT THE BAN

DAILY EXCELSIOR

HANDLING RIOTS
ARMY ON GUARD
OF SONIA'S SECRET SURGERY - BY ML KOTRU
RAKSHA BANDHAN: OPENING UP CHANNELS OF EXPRESSION - BY DHEERAJ JANDIAL
HEADING FOR WORLD ECONOMIC CRISIS ? - BY DR SALISH MISRA

THE TRIBUNE

HOPE OR GLOOM?
THREATENED COASTLINE
CULTURE OF INTOLERANCE
MARXISTS IN A QUANDARY - BY SHYAMAL DATTA
THE SLENDER THREAD - BY MAJ-GEN G G DWIVEDI
WE CAN'T DENY THAT RACE PLAYS A PART - CHRISTINA PATTERSON

MUMBAI MIRROR

THESE MODERN AUGUST KRANTIS

BUSINESS STANDARD

RED ROSA AND THE POETICS OF REVOLUTION - V V
IMPORTED MAYBE - SUBIR ROY
WHAT UPA-II HAS ACHIEVED - DEVANGSHU DATTA
HOLA! YO SOY AMERICA LATINA - PARTHASARATHI SHOME
THE FACE OF BUSINESS - T N NINAN
'DESIGNED' LABELS - KISHORE SINGH

THE ECONOMIC TIMES

MIGHTY APPLE
FALSE POSITIVE
THE RIGHT SIZE
HUMPTY-DUMPTY HAD A GREAT FALL
A DIM LIGHT ON GLOBAL WARMING - BJØRN LOMBORG
WHAT ABOUT CHINA'S DOLLAR TRAP? - RAJIV JAYARAM

BUSINESS LINE

UNDERMINING THE STAMP DUTY AUTHORITY
S.MURLIDHARAN
OF ECONOMY AND HOUSEHOLD BUDGETS - D. MURALI
SHOULD MFIS BE ALLOWED TO FAIL? - TARA THIAGARAJAN
ON SALE OF SIM CARD - MOHAN R. LAVI
THERE'S NO END TO RESERVATION - P.V.INDIRESAN

DECCAN CHRONICAL

GANGS OF ENGLAND
DEBT CRISIS IS A HIJACK BY US POLICY ELITE
BANNING FILMS IS NOT A GOOD IDEA

THE STATESMAN

V-C VERSUS V-C
DEATH TRAPS
20 YEARS AFTER LIBERALIZATION - SUSHILA RAMASWAMY

THE TELEGRAPH

WIELDING THE MAGIC WAND
A STRANGE SILENCE -RAMACHANDRA GUHA

THE NEW YORK TIMES

MAGICAL UNREALISM
WHEN WILL YOU RETIRE?
A POLARIZING POLAR BEAR INVESTIGATION
PROGRESS ON FAIR COURTS
WE, ROBOT - BY KURT ANDERSEN

HURRIYET DAILY NEWS

TURKEY DOESN'T RULE OUT INTERVENTION IN SYRIA
RELIGIOUS INTOLERANCE A GLOBAL WOE
TURKEY'S SECULARISTS HAD BETTER REMAIN DELUSIONAL
WEAKEST LINK IN TURKISH ECONOMY?
ALEVIS AND KEMALIST REFLEXES - ORHAN KEMAL CENGİZ
THE AUGUST WAR AND MEDVEDEV'S 'MOMENTS' - ZAUR SHIRIYEV

PAKISTAN OBSERVER

FATA STANDS HONOURED
IHK TO OBSERVE BLACK DAY
PRIORITISING CONSTRUCTION OF DIAMER-BHASHA DAM
GLOBAL IMPERIALISM - DR ZAFAR ALTAF
ANY REASON TO CELEBRATE? - M ZAFAR KHAN SAFDAR
CONCEPT OF FAMILY LIFE IN ISLAM — 13 - SIRAJUDDIN AZIZ
TWO-NATION THEORY - MUHAMMAD TAHIR IQBAL
DEPARTMENT OF INTERNET DEFENCE - DAVID IGNATIUS

THE AUSTRALIYAN

MANAGING SOCIAL COST OF BOOM
MORAL VACUUM THAT BREEDS REBELS WITHOUT A CAUSE
MORAL VANITY MUST NOT WEAKEN BORDER RESOLVE

THE SYDNEY MORNING HERALD

BRITAIN LOOKS AFTER NO. 1
IT'S A LONG WAY TO FAR CATHAY

THE GUARDIAN

MARRIAGE: MY BIG FAT WEDDING
URBAN RIOTS: SEVEN DAYS THAT SHOOK BRITAIN
UNTHINKABLE? STOP SPENDING

THE JAKARTA POST

SOEKARNO-HATTA FACELIFT
WILL E-ID CARDS BE ANY GOOD IN COMBATING FRAUD? - HENDI YOGI PRABOWO
AFTER 44 YEARS ASEAN MOVES CLOSER TO ONE COMMUNITY OF NATIONS - YAYAN GH MULYANA
THE PANDA ON OUR EYELIDS - CHRISTINE SUSANNA TJHIN

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THE PIONEER

EDITORIAL

A DOUBLE-EDGED SWORD

'SOCIAL MEDIA' CAN BE A MENACE TOO

The unprecedented and unexpected rioting in London and other cities in the UK has brought to the fore a new challenge that the police and the civil administration around the world will increasingly face while dealing with violent situations whether in urban or rural areas. This challenge is posed by the universal access to 'social media', increasingly made easier via wireless mobile devices, including cell phones. Whether it is Facebook or Twitter, or for that matter BlackBerry messenger, these new easy-to-operate real time communication platforms and services that are available free of cost and allow individuals users to remain anonymous can be both empowering as well as debilitating for communities and countries. Both Twitter and Facebook were extensively used for mobilising protesters and enlisting popular support for the 'Arab Spring' earlier this year. They were also used for spreading disinformation designed to enrage the masses against the state. At that time, 'social media' was hailed, especially by liberal democracies in the West, as an instrument of empowerment, a weapon to fight back autocratic rulers and bring them down. The digital divide of the 20th century, it was claimed, had been wiped out by the radical impact of 'social media' in promoting freedom and liberty for individuals and communities. That hasty verdict has now returned to haunt the mother of all democracies where freedom and liberty are taken to absurd limits. The hoodies who ran riot in London and other cities, looting shops and burning establishments, worked to an organised plan. Messages were flashed through Twitter and BlackBerry messenger to guide mobs through streets to their targets without being detected by the police. Similarly, instructions were issued on how to avoid being caught on camera. Cell phones offered the rioters the privilege of accessing and sending out messages while on the run. The police, when it realised what was happening, asked Twitter to freeze accounts; but the service provider refused to do so, insisting it would not infringe on the rioters' "freedom of speech". Nothing could have been more absurd. As for BlackBerry, after initially refusing to provide the police with details of those who were using its messenger service to direct mobs and their violence, it has grudgingly agreed to cooperate.

We could well witness a similar situation in India. For instance, in the event of a riot, hooligans could use 'social media' to communicate with each other, spread dangerous disinformation to create disquiet, and remain a step ahead of law-enforcing agencies. Or, in the event of a terrorist attack on the scales of 26/11, Twitter and BlackBerry messaging service could be used for real time communications between the terrorists and their handlers. That would greatly enhance their capacity to cause maximum destruction without having to face resistance. We should not expect any assistance from Twitter or BlackBerry if that were to happen; they would simply and smugly cite "freedom of speech" and allow the abuse to continue. Which brings us to the question: What, then, is the solution to the problem posed by easy-to-access technology? There are no easy answers to this question. That should only strengthen authority's resolve to seriously look at this challenge which law-enforcers will increasingly have to deal with. Recently, the Government has expressed its intention to monitor 'social media', but that does not necessarily mean it is working towards a solution; indeed, this could be just another move to snoop on people for political purposes. Sadly, our security agencies are less interested in securing the nation than in securing the interests of their political masters.

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THE PIONEER

EDITORIAL

CALM RETURNS TO UK

POLICE, JUDICIARY WORK 24X7 TO IMPOSE ORDER

For London and several other British cities, this past week was no doubt the proverbial week from hell. Thankfully, now that week is coming to an end. The kind of intense rioting that had shaken the UK for the first four nights, as violent gangs resorted to arson, looting and vandalism in London and then in other major cities of Birmingham, Liverpool, Nottingham, Bristol and Medway, has now largely simmered down. For this credit goes entirely to that country's law enforcement agencies. Despite an initial failure to contain the unrest, the Metropolitan Police in the Greater London area and local police in other cities were eventually able restore order and take back the streets within the first 48 hours of rioting. Of course, there has been some criticism of their tactics but most of it has come from politicians many of whom, at the time violence first flared on the night of August 6, were on vacation and are still grappling over how best to respond to what can only be described as an unprecedented breakdown in Britain's law and order situation. Even as the British Parliament reconvened for an emergency meeting on August 11 and Prime Minister David Cameron promised to do whatever it takes to annihilate Britain's long festering gang culture and rid the streets of criminality, local police rounded up more than a 1500 rioters across the country and they are already being tried in courts. Indeed, as the UK entered the post-riot, clean-up phase, with the average Britisher taking to the streets with brooms and mops to literally clean up the vandals' mess, the country's judiciary has also responded in equal spirit and measure. In London, Birmingham and Manchester — cities that were worst affected by rioting — magistrates have been hearing cases round-the-clock since Thursday, and they have rightly shown little leniency to those who have been accused of perpetrating Britain's worst unrest in decades.

In fact, most lower court magistrates are of the opinion that the maximum punishment that they can give to petty offenders — six months in prison, or a £5,000 fine — is not sufficient for these vandals. Hence, a vast majority of the cases have been referred to the higher Crown Courts. While the judiciary's strong policy of no-tolerance-for-lawlessness will no doubt serve as a deterrent, the usual suspects are worried about long term implications. Mr Cameron's suggestions to control future riots by shutting down 'social media' and stripping rioters of social benefits merit serious debate and discussion. However, the Government must seek the real reasons that led to such large-scale rioting. At this point, the world only knows that a mixed crowd of young people in hoods took to the streets. Why they did so is still a mystery.

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THE PIONEER

COLUMN

THE IRON FRAME IS RUSTED

HIRANMAY KARLEKAR

The civil services, especially the IAS, were once the over-arching structure of India's administration. That structure is now weakened from within.

Whether one likes it or not, the Indian Administrative Service continues to be the overarching framework of the country's administration. From running sub-divisions and districts to the administration of Union and State Government Ministries, research, commercial and industrial undertakings — and even fashion designing schools — its members man the commanding heights of governance. It is no longer what it used to be in the first two or even three decades after independence. There was a time when a dishonest IAS officer was a rarity shunned and talked about disparagingly by his colleagues. Not so now. According to a senior IAS officer, known for his integrity and competence, only 30 per cent of its members can now be regarded as honest with any measure of certainty. Of the rest, most bend rules to feather their nests in moderation while a minority resorts to downright plunder.

The power that IAS officers enjoy is a major factor. Lord Acton's saying that all power tends to corrupt and absolute power corrupts absolutely, holds good nearly a century-and-half later. But then the predecessors of IAS officers in the Indian Civil Service, which in turn was a reincarnation of the Covenanted Civil Service of the East India Company, enjoyed much greater power. As with the case of IAS officers earlier, dishonesty was very, very rare. Of course, corruption hitched to pelf is only one form of crime fuelled by power, which also feeds arrogance and omniscience, both of which can play havoc with administration by creating a hiatus between the people and the system, which comes to run not for the welfare of the former but pandering to the ego of administrators. The combination of corruption, arrogance and omniscience can be disastrous. Not so long ago, this writer witnessed an arrogant, uncivil, and perhaps corrupt, Joint Secretary to the Government of India severely impairing the implementation of official policies in tandem with a slippery, perverse, and also possibly dishonest, Director from one of the Central services.

Power is exercised not in a vacuum but in a wider social, political and economic context which impacts on the process. These have undergone radical transformation since Independence. Enhancement of the maximum age of recruitment from 24 years earlier (in a 21-24 age bracket) has brought in people aware that they would retire before rising to the coveted positions of Secretaries to the Government of India or their equivalent. This, in a climate of growing permissiveness, breeds a tendency to make hay while the sun shines. Besides, appointment as heads of public sector undertakings or in posts dealing with organisations of industry and commerce, have exposed IAS officers to milieux with rather elastic rules of behaviour. And of course the advent of the market economy with advertising as its cutting edge, which makes the enjoyment of ever rising levels of consumption and the possession of expensive branded goods, the sole criterion of individual worth, has added fuel to fire. Not surprisingly, a small but growing section of IAS officers seems to have been deeply impressed by Deng Xiaoping's slogan, "It is glorious to be rich."

Politics, of course, explains much. In the initial years after independence, leaders — except the stalwarts at the Centre and in the States — were unsure of themselves and deferred to the wisdom of the members of the ICS and the fledgling IAS. Soon, a process of change began. As Bhaskar Ghose points out in his extremely well-written and prescient work, The Service of the State: The IAS Reconsidered, "With the years, however, as the first general election was followed by another, and then another, political leaders began to realise that they were the rulers, much as the British were, and the civil service was there to carry out their instructions and give shape to their ideas and policies. While it gave some — not all — leaders a sense of responsibility, it also meant that the civil services, notably the IAS, had to shift ground, to step back; it meant that they had to reinvent themselves as a service."

Mr Ghose believes that the IAS did make the transition but "in a messy sort of way" and not successfully. He adds, "One of the reasons behind this disorganised and rough transition was simply that there was no one to guide the often-bewildered young IAS officer through the process of transition and adjustment." He cites the case of Probir Sen, a Madhya Pradesh cadre IAS officer with an unblemished record, who was among those who had to fend for themselves. Sen said that as a probationer, his training did not communicate to him "any central ethic of what the service is about," and added, "My idea of what a good officer should be came largely through my reading and watching some of the ICS officers."

Ghose should know, being a distinguished former member of the IAS, respected for his integrity, competence, and capacity to take a principled stand at personal cost. The failure in the initial years of transition to impart a collective vision and code of personal and administrative conduct to members of the service, largely explains its uneven evolution where it is increasingly coming to each being for each and the devil taking the hindmost. It is, of course, easy to blame the seniors who should have laid the foundations of institutional guidance. But they themselves were severely extended to cope with the mind-boggling challenges of the massive communal violence that preceded and followed partition and independence, peasant uprisings, countrywide general elections on the basis of adult franchise, development and a multiplicity of new tasks that opened up to take them over unexplored territory.

The decline in the level of political leadership and the growing criminalisation of politics that began gathering momentum from the 1980s, have further aggravated matters. There is no magic wand to change things. Like its Government, a country deserves the civil service it gets. Besides, the IAS still serves a useful purpose. It still has excellent officers who would do any bureaucracy in the world proud. The task before the public is to single out such officers, strengthen their hands and stand by them in their hours of trial. Should this happen, many officers who now acquiesce to the present drift believing that things would not change, would try to make a difference.

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THE PIONEER

OPED

THE LANGUAGE OF THE UNHEARD?

MITU SENGUPTA

The attempt by the British establishment to pass the blame for this week's riots to "bad parenting" and by implication race must be resisted. It was the crudest articulation of a sense of deprivation, the collateral damage couldn't be helped

British Prime Minister David Cameron has described the recent riots in England as "criminality pure and simple." At first glance, this is an appealing view. The rioters have broken the law, and many have engaged in indefensible behaviour. Yet chalking the riots down to criminality immediately begs the question of why now, and why Tottenham?

A second look suggests that the riots have their roots in racism. The events were triggered by the fatal shooting in Tottenham of a 29-year old black man, Mark Duggan, whom the police claimed had fired at them. Rioting began when a protest march by about 200 people turned violent. It is now clear that the police lied about the circumstances surrounding Duggan's death, and that the black community was justified in its anger (an official inquiry has found that Duggan did not shoot at the police).

England's problem of racism is certainly serious. I spent my childhood in England, and cannot remember a single week when I wasn't called a "Paki." My bullies were reprimanded by parents and teachers, but I know, from personal experience, the distress and fury the sting of racism can elicit.

Beyond a point, however, racism offers little insight into the past week's events. Only a fraction of those rioting in London were black, and as the mayhem spread to London's suburbs and other cities, most involved were white. An exclusive focus on race bears the danger that the full spectrum of riots will be pinned on blacks and other immigrants, further stoking racism (the ultra-right English Defense League is reportedly gaining ground by doing precisely this).

A closer look at the rioters reveals that the common element is not race, but class. The vast majority are deprived young men, united by their lack of social standing and hatred for the authorities.

Britain's savage class divide is well known, and predates even the industrial revolution (colonialism added a racial dimension to what already existed). Following the war, the welfare state built bridges across this bitter gulf, ushering in a time of relative social peace. Britain, it was said, could ill-afford to dismantle its welfare state — for political reasons if not economic ones. Yet since the late 1970s, every government has chipped away at welfare, with Cameron's Conservative government delivering the most devastating blow last year. Its austerity budget is said to be the harshest since the war.

The effects are undeniable. Inequalities of wealth in England are said to be worse than ever, as are opportunities for social mobility. London is the most unequal city in the developed world, with its richest 10 percent more than 100 times better off than the poorest ten. According to Danny Dorling, a Sheffield University professor, London's wealth inequalities are approaching those that "have not been seen since the days of the slave-owning elite." Consequences are inevitable, especially when rich and poor live side by side.

Haringey, the borough that includes Tottenham, is the most polarised in London. Four of its 19 wards are in the richest 10 per cent. Five are in the poorest. Haringey's poorest wards have soaring child poverty and an unemployment rate of 8.8 per cent, double the national average. Other boroughs with heavy rioting — Enfield, Hackney and Croydon — also contain some of London's poorest communities. Like Haringey, they have been badly hit by vicious cuts in social services.

Young people — the force behind the riots — have suffered acutely, thanks to closures in recreational facilities, the withdrawal of the Educational Maintenance Allowance grant (which encouraged teens to stay in school), and rising tuition fees. If young people have little to look forward to, they will more easily conclude that they have nothing to lose by flouting the rules of society and the state. Youth disgruntlement cannot be wished away by "Brand England" endeavours such as royal weddings and Olympic Games.

The fact that the riots are about the economy appears to have hit home with the rich, who are the first to call a spade a spade when worried about their bottom line. A recent report by Reuters quoted several London bankers admitting that austerity measures had probably gone too far. One even proclaimed that, "for a society to grow and move forward all social classes need to benefit from growth."

Indeed, it is unlikely that Cameron genuinely believes in his own theory that the riots are "criminality pure and simple." This is simply a convenient slogan, meant to distract and appease. If the riots are seen as the work of dissipated youth and bad fathers, the government need not be held responsible. Yet Cameron must know that the solutions that flow from his diagnosis of "criminality" are politically unviable in the long-term. He cannot order troops to indefinitely occupy the streets of England, or pummel his citizens with plastic bullets and water cannons. He cannot send immigrants home or discipline neglectful parents. He cannot shut down Twitter and Blackberry. England is not a tin-pot dictatorship where assaults on civil liberties will be easily tolerated.

Since Cameron's government presumably wants to stay in power, it probably has a wider view of the riots than it is letting on publicly. Seumas Milne, a columnist with the Guardian, implies as much when he points to similar riots in London and Liverpool 30 years ago, when Margaret Thatcher's government was implementing ruthless cuts. The riots, also sparked by confrontation between the police and black community, were initially condemned as the work of mindless thugs. Within weeks, however, Michael Heseltine, the Secretary of State for the Environment, was writing a private memo to the cabinet, calling for urgent action on urban deprivation.

The Reverend Martin Luther King once said: "A riot is the language of the unheard." He was not advocating violence, but trying to put context to why socially excluded men and women in the United States were burning down their own communities. He was also issuing a warning. The language of the unheard, as he knew too well, is as destructive as it is powerful.

-- The author is the Director of the Centre for Development and Human Rights, New Delhi, and Associate Professor of Politics, Ryerson University, Canada

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THE PIONEER

OPED

ANALYSIS IS NOT NECESSARILY CONDONING

SWARN KUMAR ANAND

What happened in Britain this week could easily envelop other societies living with terrible injustice — a Saturday Special focus

The truth behind the biggest riots in British history is buried under tonnes of suppositions. To cut through these, and record for posterity the most simplistic and convenient of explanations, Prime Minister David Cameron raked up social factors. The transparent motive was to obfuscate the core issue — the economic hardships wrought upon the population of Britain by the convergence of neo-liberal economics and neo-conservatism state security.

A lot of people wondered why the Indian media took so much interest in what was apparently a little British mess. As if there was great dearth of domestic stories to cover, the Indian media gave the impression of going a little over the top by dispatching reporters to London to report on the vandals. The easiest explanation for this apparently irrational prioritisation was schadenfreude — why not enjoy the misery of the British, the same folks who hector us on our problems even after being the root cause themselves?

But there was a deeper revelation in that we Indians, with all our imperfect institutions, need to look out for. This is an age of great ferment, the hiatus between the miniscule benefitting from "reforms" and the bottom income quintiles seemingly unbridgeable. The Indian people have till now shown great restraint, but there is no guaranteeing when the floodgates will break down. The British experience holds out many lessons. Thankfully, the Anna Hazares and Baba Ramdevs have recalled the spiritual ethos of the land even in this grim hour.

The British societal rot is too well known to recall here. But this week we had the spectacle of a British Prime Minister admitting to it. On Thursday, a day after lamenting that pockets of the British society had become "sick", Cameron gave a pep talk to Britons on "proper parenting" and the need to let the youngsters know the difference between right and wrong. Addressing an emergency session of the British Parliament called to discuss the raging riots, Cameron said that family breakdown and poor parenting were significantly responsible for the unrest and pledged to restore a sense of moral responsibility.

"Responsibility for crime always lies with the criminal. But crime has a context. And we must not shy away from it," he said in a forceful speech. "I have said before that there is a major problem in our society with children growing up not knowing the difference between right and wrong," Cameron said. Yesterday, Cameron had lamented that pockets of the society has not only broken down but is also "sick", and blamed "poor parenting" for the violent behaviour of the teenagers.

"When we see children as young as 12 and 13 looting and laughing, when we see the disgusting sight of an injured young man with people pretending to help him while they are robbing him, it is clear there are things that are badly wrong in our society," he had said.

Cameron said keeping people safe was the first duty of government and pledged to do whatever it takes to restore law and order and rebuild communities. "This is not about poverty, it's about culture. A culture that glorifies violence, shows disrespect to authority, and says everything about rights but nothing about responsibilities," he said.

All right up to here, but there hangs a question. It is not as if this was the first time that the unwashed masses of Britain were taking to the streets. It's another matter that not all of those who went around looting shops and burning parked vehicles were poor — thereby smashing the race bogey — but why was Cameron forgetting that brawling teenagers were always a part of the British social scenery? To the Parisian or Roman, the very mention of "British football fans" elicits a scowling response. We Indians have the memory of rowdy British "tommies" etched forever in our collective memory. When British and Other Ranks (BoR) regiments were posted to Indian military stations, townsfolk and villagers all over a 50 mile radius shuddered at the sight of "tommies" out on day passes. Just for laughs they bullied shopkeepers, ransacked homes and jumped naked into ponds where village women bathed. Rudyard Kipling often wrote regretful prose in damnation of the British underclass who gave his fond empire a bad name.

Clearly, Cameron was being disingenuous. He knew all along that the terrible truth about British youth when in a collective. His pseudo moralising was rooted in the fear of the cat being released from the bag. Like many previous British leaders, the Conservative Prime Minister likes to project himself as a champion of the rule of law. But he cannot escape the fact that like his Labour predecessors Tony Blair and Gordon Brown, who committed British resources to unjust wars in Iraq and Afghanistan, he too had sold the common Briton down the river by getting into a downright illegal conflict in Libya. It was done with the purported aim of enforcing international law. But now Cameron has become a pathetic caricature of himself. He is exposed as a leader who, after proving his failure in maintaining basic law in his own country, is bent on preserving the status quo which was responsible for the breakout of lawlessness in the first place.

Now, the British Prime Minister has decided to use the riots as an excuse to clamp a state of emergency. At the height of the rioting on Tuesday, he gave a shocking preview of coming assault on civic liberties when he announced that the government would not permit 'phony human rights' concerns to stand in the way of tracking down suspects. Already Britain is the most camera monitored country in the world, with surveillance equipment, whether ordinary closed-circuit cameras or satellites, tracking every citizen and visitor going about his or her ordinary lives. Now, the government is planning to arm itself with draconian powers to shut down or disrupt mobile phone messaging services and social networks in times of civil disorder.

In one backward leap, therefore, the government of Britain is taking a poor, divided society to a point of desperation. Cameron may be hoping to capitalise on the injured pride which Britons are gripped by in the first week of the rioting, but he cannot run away from the fact that it was the policy package which he has unleashed over the past year which not only clarified the division between the entitled and the dispossessed in extreme terms, but still preserves the context for future social unrest.

-- The writer is Joint News Editor, The Pioneer

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THE PIONEER

OPED

RIOTERS MAGGIE THATCHER'S GRANDCHILDREN

PANKAJ MISHRA

The "iron lady" sent Britain hurtling towards self-destruction by placing the assets of the nation into the hands of a few. The illusion that St Market knows best has now exploded on the face of a generation born after Thatcher's time

I am often asked, when in the US or Europe, whether I feel frightened while traveling through such obviously dangerous places as Afghanistan and Kashmir.

It's hard for me to explain, and so I never confess, that I feel more insecure on the streets of Tower Hamlets, a London borough just south of Tottenham and Hackney, the epicenters of London's riots.

Tower Hamlets, where I often go to work in a friend's apartment, has among the highest rates of poverty, unemployment, overcrowding and crime in Britain. But it is not a ghetto. Segregation is more insidious, and inequality has shrewd disguises, in what is also one of London's most diverse boroughs.

Among the rundown, gang-infested council estates, the bingo halls, betting shops and working-class pubs, there are wine bars, boutique shops, cafes and studio apartments costing more than a half-million dollars. Bankers as well as artists, designers and other well-paid members of the creative class have turned pockets of Tower Hamlets into London's answer to Manhattan's East Village.

With their obvious education, wealth and mobility, these gentrifiers pay an indirect "inequality tax" in the form of routine burglaries, muggings and occasional physical assaults. I hear sirens in Tower Hamlets more frequently than in any other part of London.

Teenage boys and young men in hoodies take evident pleasure in the fear they provoke in passers-by, whom they taunt or abuse, depending on their mood. White, black and Asian, these menacing youths, who seem to have been released from any obligations to family or community, have long reminded me of the dystopian vision of Anthony Burgess's "A Clockwork Orange."

It wasn't surprising, then, that last week many of them took advantage of a peaceful protest against the killing of man by the police to go on a looting spree. They have no political aims — apart from affirming their right to sport the latest bling. As one woman bravely berating a mob this week in Hackney pointed out: "We're not fighting together for a cause, we're running down Foot Locker."

In their indifference to the common good and single-minded pursuit of brand names, the looters hold an unflattering mirror to many other depoliticised consumers in Britain. Their small regard for authority could only have dwindled sharply in recent months when one British institution after another was revealed as ethically deficient: the members of Parliament caught charging home improvements to the taxpayer, the journalists hacking phones, the senior politicians and police officers prostrate before Rupert Murdoch and the bailed-out bankers with their unrepentantly high bonuses.

Politicians and pundits from the left now blame the rioting on the British government's savage spending cuts to public services. Their counterparts on the right point to the welfare state and the liberal-left encouragement of single mothers.

But the mayhem this week speaks of a broader and irreversible Americanisation of British society in the last three decades, as the imperatives of a global market economy overtook those of society.

Britain, of course, is the original home of the free market. As the first country to industrialise, and to have an enormous comparative advantage, it inevitably adopted laissez faire policies in the mid-19th century. The harsh effect this had on the working classes and the poor was gradually softened by such Victorian institutions as compulsory education, trade unions and social-service societies. The political and economic catastrophes of the first half of the 20th century buried the idea of the self-regulating market; and a new national consensus was built around the welfare state after World War II.

This all changed starting in the 1980s as successive British governments, Labour as well as Conservative, struggled with high inflation, falling industrial productivity and conflict. The illusion that the nation could be saved only through immersion in a self-stabilising market economy hardened into a revolutionary ideology, embraced by both major parties, that has shaped today's Britain.

In that sense, if Tony Blair and David Cameron are "sons of Thatcher," as the journalist Simon Jenkins puts it, the rioters of today are the grandchildren.

Margaret Thatcher, who famously proclaimed "there is no such thing as society," rapidly privatised state-held assets including railways, steel mills, airlines, coalmines and telecommunications providers. She decimated many public services that tended to the most disadvantaged and vulnerable people in Britain.

More importantly, Thatcher abandoned the idea of full employment — a precondition of the welfare state. She did not stop at defanging trade unions and reducing labour's bargaining power. With one eye on her friend and ideological ally President Ronald Reagan, she ushered in policies that reduced hiring costs for employers, giving workers the dubious gift of endless mobility and a downward race for wages.

The enduring effects of this radical socioeconomic engineering are now visible in the UK, not least in some of the world's highest levels of inequality. As more contract and part-time work appeared, the old bourgeois ideal of a stable career — one still alive in European countries that have not wholeheartedly embraced Anglo-American capitalism — disappeared. An underclass consisting of the unemployed and unemployable grew and grew, even as the old working class fragmented.

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THE TIMES OF INDIA

COMMENT

HOW TO CASH AND BURN

A house for Maya memsaab? A Lucknow bungalow's reportedly being renovated with an eye to her post-CM days. They say Rs 51 crore of public cash has been burnt already for this chateau-in-the-making. Dare we frown? The Congress once questioned Maya's splurges on statues of herself and mentor Kanshi Ram. It was told off about its own costly edifices for the Nehru-Gandhis. As for tuskers-in-stone in UP's parks, a Maya loyalist said the BSP brand elephants were really Bharatiya 'symbols of welcome'. Didn't they adorn Rashtrapati Bhawan as well? A jumbo retort, that.

So, welcome to Bharat. In this land of elephantine plenty, there's cash for more than just monumental blunders. There's cash for votes, and even cash for goats in return for votes. Here, political tit-for-tat is king, not Singh. The BJP called cash-for-votes a bribery bid by the UPA facing a trust vote. The Congress retaliated, calling it entrapment by BJPwallahs who failed to get bribed. Or take goats-for-votes. In Tamil Nadu, DMK promised voters mixies and laptops, saying: "Yeh cheez badi hai muft muft..." AIADMK said, B-a-a-h! Along with gold mangalsutras, it threw goats and cows into the sop-grinder. Never doubt that our netas' hearts are bleating for the cattle class.

Everybody's doing it, so why can't we- that's the googly politicians love to throw at their rivals. Commonwealth Games graft? Why, say Congress-wallahs, the NDA prepared the ground for calamitous Kalmadi's crowning as master of ceremonies. The 2G tangle? Why, Spectrum Raja merely followed precedent. A bhrashtachaar debate? Why, the opposition too has skeletons. The UPA's not-so-Adarsh ideals? Why, the world is full of scamdog billionaires.

Ask the Bellary brothers turned blues brothers. Barred from the new Karnataka CM's cabinet after the Lokayukta's rap for alleged illegal mining of iron ore, they're miffed that a Yeddyurappa minion got inducted despite being tainted. Now, the mining barons are known for being as ever-Reddy to fell governments as the denuded trees of the Republic of Bellary. The BJP had better smelt the iron in their soul. Ore else.

Doubtless jittery about scalping the Yeddys and the Reddys, the BJP now wants the CAG-hit Delhi CM's head, bashing the Congress for being Sheila ki diwani. The Left's not convinced though. It accuses not-so-king Cong of a "secret deal" with the saffronites to block a discussion on corruption in Parliament. The Congress's repartee? The Left-BJP have conspired to stall the House. Aam admi, meantime, sniff a secret political conspiracy. One that'll turn an anti-graft New Deal- Lokpal a.k.a Jokepal- into the rawest deal of all.

Here's the real deal. Buck passing is political stock-in-trade. In rajneeti, two can play the same blame game. It's called the deflector principle- two wrongs always make a right. For instance, if A is father of the bribe, B-to-Z are the grand-fathers, grand-uncles and so on. That makes corruption- in Indira Gandhi's oft-quoted words- a universal phenomenon. It follows that, in politics, two plus two never makes four. Two plus two makes crores.

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THE TIMES OF INDIA

TOP ARTICLE

INDIA ON THE STREETS

CHETAN BHAGAT

We have all had that one uncle who keeps on reminding you how India is terrible. He tells you about how every government authority takes bribes - from the RTO to the ration shop to the municipality. He will tell you how no government department does its job well - the potholed roads, abysmal conditions at government schools and poor healthcare all being examples to support your uncle's theory. It is hard to argue with him, for he is right. Things don't work. There is no justice. Power talks. Equality doesn't exist. All of this, even though uncomfortable to hear, rings somewhat true.

However, the uncle goes on to say this: "Nothing will ever change." He is convinced that our society is damaged irreparably, and India is destined to live in misery. Uncle Cynic goes on to doubt almost everyone, assumes the worst in people, and anyone who is trying to improve the country is branded as someone with a hidden agenda.

This is where i think the uncle gets it wrong, horribly wrong. For it is one thing to point out the problems, it is quite another to give up trying to fix them. Cynicism is not a counter-argument, it is an attitude. For the fact is we still have good people in the country: in society and even in government departments. It is just that they are crushed.

I don't want to give you the reasons why you must support Anna Hazare. It is almost beneath Anna's dignity that he actually has to beg or make a case for support when he is fighting for you, against an abusive, corrupt regime. Still, let me do a quick recap of the facts.

Anna did a fast in April, which became the nation's movement and spread virally. Concerned, the government agreed to make a good Lokpal Bill, shook hands with the activists and in principle agreed to Anna's version, designed to truly check corruption. Since then, the government has insulted Anna's team, thrown away their draft, and come up with its own almost pointless draft of the Lokpal Bill.

The draft the government is presenting to Parliament will not check corruption. Only 0.5%, or one in 200 government officials are under its purview. Your corrupt ration shop, RTO, passport office, panchayats or municipal authority will not be covered. State scams will not be covered - yes, the Adarsh society scam or the Jharkhand scams are all out of its purview. The prime minister is excluded as well. Ever heard of a corruption law in a democracy that only applies to a certain section of people?

The government is throwing magic dust in your eyes - and counting on India's illiterate and ignorant to not know the difference. However, you reading this are educated. You know when wrong is being committed. You know that while you have lived your life with corruption, you do not want your children to do the same. A bad Lokpal Bill may not affect you today - but tomorrow it will hit you when your child does not get a college seat, when your hospital gives shoddy treatment, when your government work doesn't get done. We live in a poor country - poor not because we don't have what it takes to be rich, but because our leaders have let us down. We have given them too much power, and they consider our vote as a mandate to steal and be incompetent. They hate accountability. However, without accountability, our progress will stall. There are countries where the average income per person is 50 times more than in India. Don't we deserve the same?

Thus, whatever your personal view on Anna, it is not him but his cause that needs support. The government can crush a few activists. However, it cannot crush India on the streets. A peaceful, firm, decisive protest is every Indian's birthright, and must be exercised in times of need. Come Monday, and we Indians have a job to do. We have to save our country's future.

A word for the government too. Just what exactly are you thinking when you are trying to shove an impotent law down people's throats? And what makes you feel that threatening, crushing or insulting Anna will take away people's need to rid India of corruption? Anna did not create an anti-corruption sentiment, he merely tapped into it. Crushing Anna will not take away that sentiment. It will just make it fester more. Right now, the movement is still controlled. By going back on your word, displaying arrogance and not listening to the people, you are risking the country's descent into chaos. Be careful. Accountability is much easier to deal with than anarchy. Fix the Lokpal Bill now, please.

Finally, for the people of India, it is time to prove Uncle Cynic wrong. There is a bigger truth than his 'nothing ever changes in India'. That truth comes from the Gita, which states "Nothing is permanent". The Gita also says, "When the pot of sin overflows, something happens to restore order." Now, it is up to you to determine if the pot of sin has overflowed. It is for you to say what it means for Indians to act out their dharma. And you, and only you, will decide if it is time to come on the streets.

The writer is a best-selling novelist .

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THE TIMES OF INDIA

TIMES VIEW

HARMLESS AND INNOVATIVE

Festivals are known to evolve with the times and embrace new customs and traditions. Notwithstanding a desire to retain the fundamentals, the shape and form of celebrations frequently accommodate new trends and quirks. Raksha Bandhan is no different. That rakhis - threads symbolising the bond of love between a sister and her brother- are being made available in gold, diamonds and other precious gems can best be described as innovative. Creativity is intrinsic to the very concept of a rakhi as a plethora of materials is used to make them. Using gold and precious stones is only a logical progression. If people have the cash and wish to splurge on their brothers and sisters- what's the harm?

It is noteworthy that several well-known fashion designers have launched their own unique rakhi collections in tune with the sentiments of the season. Neither Tarun Tahiliani's exotic floral rakhis nor Abraham and Thakore's woven silk variety are out of sync with the spirit of the festival. Critics might be tempted to denounce this trend as crass commercialisation. But as long as the underlying message of the festival remains intact, why shouldn't people indulge in these novelties? There is no reason why a festival needs to be solemn and sombre. On the contrary, it is imperative that rituals embrace change to ensure longevity. Far from being a bad thing, a consumerist culture is crucial to keeping alive and strengthening the association between a society and its festivals.

Whether it is Holi, Diwali or Christmas, none of these festivals are celebrated in their purist versions. Just as exotic statues of goddess Durga have taken nothing away from Durga Puja, gold and diamond rakhis will only add colour to Raksha Bandhan. It is nobody's argument that expensive rakhis become the norm. But those who have the wherewithal to afford them bring no disrespect to the sanctity of the festival.

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THE TIMES OF INDIA

TIES SHOULD BIND- NOT BLIND

Rakhis of gold and silver, studded with diamonds, even cast in chocolate for a quick snack, make a mockery of the festival. The washing-over of Indian festivals, rooted in centuries of culture, by beguiling new market forces may bring more zing to stores- but the festivals themselves lose their original meaning. Most celebrate a very special emotion. Holi expresses the joy of a new spring. Eid marks the blessedness of abstinence and sacrifice. Rakhi cherishes the bond of love between brothers and sisters. This is a serious, deep emotion that doesn't need much external hoo-ha. It can be expressed through a sister tying a simple thread on her brother's wrist. Why subvert this moment of emotion- powerful, profound and poignant- to something as vulgar as how expensive the thread is?

The argument that it's a great way for aspiring India to express its spending power is also ridiculous. In globally volatile times, the last thing Indians should do is blow up their hard-earned money on items like rakhis. Around the world, as economies tremble, customs of barter, exchange and hand-crafting gifts, once flung to the sides of societies intoxicated by gleaming goods and shiny credit cards, are returning to mainstream culture. Globally, people are recognising the power of the gift doesn't lie in its price tag but in its core- the thought behind it. Will it take an economic shock for us to see this too?

Finally, the faddishness of super-expensive rakhis is also socially harmful, emphasising economic divisions on a day when we should celebrate fraternal ties not just with relatives but all those around us. There's a reason why the president and prime minister of India have children tie them rakhis. This is a festival about caring that transcends caste, creed and class. Let's not turn it into a travesty- even one shining with diamonds.

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THE TIMES OF INDIA

JUST GRAFFITI

DIVING EAGLE, CROUCHING DRAGON, COWARDLY LION

WASHINGTON: Has America had its day as a wonderful wizard who manipulates the levers of global power? And, since power hates vacuums, are we soon going to see a radically altered hierarchy of influence in which China will call all the shots?

Maybe, but not so fast. To start with, we mustn't over-interpret Standard & Poor's downgrade of US sovereign debt from triple A to double A+ as a sign of near-terminal illness of the American economy. S&P based its rating last weekend primarily on two fears. One was that US debt was rising too fast; the other was that the American political system would be unable to tackle any coming crisis because it was in an ideological standoff.

On both points, S&P has been getting an earful from political commentators and economists. In its arithmetic, the rating agency made a calculating error of $2 trillion to make the debt problem seem far more insurmountable than it is. In its political analysis, it went too far to assert that the US might default some day because of an ideological deadlock in Congress. That possibility, say most analysts including former Federal Reserve chairman Alan Greenspan, is so remote that it is ludicrous to use it as a risk factor. In short, the eagle is not in a helpless dive, it can regain height.

At $15 trillion, the US economy today remains nearly three times as massive as China's economy. As for those knuckleheads who gleefully blog that China holds a massive amount of US debt that places Washington in near servitude to Beijing, please note that the foreign-held part of the total US government debt of more than $14 trillion is less than a third at $4.5 trillion. Of this, China's central bank holds 26% with the Japanese and British central banks not far behind. It is in the vital interests of all these foreign holders of debt to support a recovery in the US economy in order to protect their holdings.

China is tied to America in what can best be described as a matrimonial alliance. Sure, they bicker a lot. But they both know that they have to get along to jointly manage their finances if they have to look after a worsening world.

China's leaders are aware of this reality. They don't boast of being a superpower. They concentrate instead on managing China's development and, as responsibility increases with size, they play a global role in quiet consultation with the US. The dragon is crouching but in worried introspection, not with any burning desire to leap.

China has much to worry about. Its economy still grows rapidly but there are disturbing signs of slowing speed and rising inflation. And as its middle class expands to demand more freedom of choice in daily life, and therefore a freer flow of information, China's political system of disciplinary authoritarianism becomes increasingly inadequate. It's time for China to introspect.

Then there is that other emerging power next door which thinks of itself as a leaping tiger. It offers a scrappy working model of rapid growth with democracy and should, therefore, be considered a major player in any emerging global power structure along with China. But wait. It has yet to make up its mind whether it should play.

India wants to be a player. Or else its mandarins wouldn't push for a permanent Security Council membership at the United Nations. But its political leaders don't seem to have a vision for its role in the emerging world or a serious game plan. As global turmoil rolls over us, India looks less like a tiger and more like a cowardly lion, which prefers to be a follower on the yellow brick road than a bold contender.

India has, through most of its history, been averse to playing any role or arousing the world's interest beyond the subcontinental region. Today, however, India's own economic interests and global ambition call for New Delhi to develop a clear view of its role. Even its regional strategy needs closer interaction with the world than ever before.

Ah but, as they say, we prefer to be like that only.

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HINDUSTAN TIMES

OUR TAKE

SOUNDING THE RED ALERT

'If wishes were horses, beggars would ride' was the elliptical answer from Prime Minister Manmohan Singh after coming to power in UPA 2 on whether he missed the Left. But, for the Left now grazing in the wilderness after having lost West Bengal and Kerala, the PM's recent bonhomie when he met a Left delegation must have caused hope to spring again in the comrades' hearts.

Now the PM is a man who knows his mind, but we can only hope that absence has not made his heart grow fonder. At a time when the government is being accused of going slow on reforms, the Left's brand of obstructionist politics and its outdated economic theorems are something we can do without. How quickly we have forgotten the bad old days when not a day passed without the dour CPI(M) general secretary Prakash Karat throwing his weight about and threatening to pull the rug out from under the government's feet if things did not go his way.

Yes, the pm who is going through a rough patch may miss the Left's counsel but realist that he is, he is unlikely to invite Mr Karat and co into his parlour in a hurry. The truth is that the Left might not baulk were the invitation to come. But, when it had the chance, it did not conduct itself as a true coalition partner. It may now take credit for restraining the government on economic policies, thereby allowing India to weather the global meltdown. But, the foundations for India's economy which withstood the global hurricane during UPA1 were not laid down by the Left alone but by politicians and economists of varying affiliations.

The nuclear deal on which the PM staked his government is an exemplar of the Left's shortsighted thinking. Instead of making a few course corrections, Mr Karat took an all-or-nothing stand. The Left had never had it so good as in UPA 1 and is not likely to in the near future unless the UPA 2 in a suicidal fit decides to take it on board. Mr Karat's odd behaviour in the recent Kerala assembly elections clearly shows that old Marxists don't change their ideological spots.

UPA 2 should examine what the Left can bring to the table beyond taking credit for the economy staying on course. Its championing of the poor has been taken over quite effectively by the Congress, its influence on foreign policy is negligible, its contribution to the debate on price rise runs on predictable lines. So, let us hope that it was the gentleman in the PM which made these soothing noises to the Left delegation. The Left must use this time on the peripheries to recast itself in a more relevant mould. Recycled shibboleths no longer have any takers. The pm who is a skillful economist knows that even when navigating a slightly shaky economy, he must stay the course. A Left turn at this juncture could mean going down the wrong road.

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HINDUSTAN TIMES

THE PUNDIT

TRICOLOUR OF HOPE

GOPALKRISHNA GANDHI

In two days from now our Prime Minister will be addressing the nation from the Lal Qila.

Being a man of method, we can be sure he has been working hard on his Independence Day speech. Being hard-working, we can be sure he has revised what he has written, revised what he has revised, to strike the right balance, the right tone, the right nuance, so as not to cross the lines of responsible expression. Being a man of moderation as well, we can be sure he will use little or no rhetoric.

But the powerful magnetism of the Red Fort will pull him, without doubt.

That the Grand Moghul Shah Jehan built it in the mid-1600s, and reigned from there, he can't but be deeply conscious of. That less grand Moghuls failed to reign from there, that having captured power Aurangzeb had his elder brother, the hugely-trusted Dara Shukoh forcibly mounted on a slime-covered elephant in front of the Fort and paraded in nearby gullies before being put to death, that the Fort was attacked and looted in 1739 by Nadir Shah who carried away its Peacock Throne, that it was again brutally violated in 1857 by British forces who then took the tragic Bahadur Shah Zafar from his dust-laden bed to a forlorn exile, our prime minister knows. Also, how the Red Fort became a palladium for our freedom struggle, with Netaji Subhas Chandra Bose making it a gleaming goal, though on August 15, 1947, Destiny gave not to Netaji but to the 'Ritu-raj', as Tagore hailed Jawaharlal Nehru, the privilege of unfurling the tiranga atop its pink-red fastnesses.

The Red Fort is a monument to great enterprises, great setbacks, its walls and vaults reflect power's great glories as also great intrigues, machinations, skullduggery and saudebazi (deals) that hide behind its visible face. History is an education but the history of political bastions and battlements, a torment. They tell, in fact, the story, now inspirational and now sordid, of India's political class.

A veteran journalist, gifted with humour and insight but also sadness, whom I have known and respected from when I was a child, told me the other day, "Gopal, the average Indian is now disgusted with the political class." I knew what he meant, and how right he was. "This entire political class has to go," he said. "But who or what is to replace it?" I asked. "Why, the new generation," he said, movingly. "It wants a complete change."

Reflecting on what he said so poignantly, I thought of the Hindustani word 'iman'. The change the public wants to see is iman restored and active in our politicians, just as it wants to see ilm (learning) in a teacher, hunar (skill) in a doctor, kashish (empathy) in a poet.

Disowned by large segments of the political class, iman has become lavaris (vagrant), ready to be lifted off the street by his natural hamdard (fellow sufferer), namely, the hamsarak (fellow wayfarer).

To be sure, there are several worthy and admirable men and women in our Parliament and legislatures, across the political spectrum, who I consider it an honour to know, precisely for their iman.

But there is no denying that iman has taken a beating and a disowning at the hands of politics. So what do we do about it? Despite Jayaprakash Narayan's brave belief to the contrary, I don't think there can be a democracy without politics, politics without party politics and party politics without politicians. And yet we have to recognise the fact of the popular disgust with the political class. That, in a democratic order, is a grave illness that can't lie unattended. It will lead to a prolapse, not just of politics but of democracy.

Restoring the image of its iman is, therefore, critical. Difficult though that it now is for any single individual to attempt, yet, if our democracy is to survive, certain steps need to be taken. They can include:

Reviewing the laws in respect of the corporate funding of elections. Once elected with the help of another's money — be it an individual's or a company's — can the victorious candidate look the donor in the eye and say 'No' when that donor asks for an inappropriate concession? The late Indrajit Gupta had chaired a committee to study these issues. Another study needs now to be made of the working of Section 293A of the Companies Act.

Setting up, in addition to a nationally-accepted lokpal, a nationally-applauded mechanism that coordinates and consolidates existing ones for spotting and stopping be-imani and for protecting whistle-blowers. Aruna Roy and her associates in the National Campaign for People's Right to Information have outlined the mechanism for this.

Protecting the primacy of legislative prerogatives completely but recognising, at the same time, the role of non-legislative and pre-legislation consultative procedures as a natural part of the political process, and giving those procedures clear definition and shape. The Constitution of India was made by the honest for the innocent. It needs now to be operated by the experienced for the wise.

Bringing the political class and non-political groups such as led by Anna Hazare together to draw up a resolute democratic and constitutional methodology for combating corruption, reminding society also of its own responsibilities in the matter.

Giving coalition dharma a brief introduction to history. The first Cabinet of independent India had some distinguished non-Congressmen, even non-politicians. It was a colleagueship, more than a coalition. More recently, we have seen coalitions without colleagueship. Gone is the cooperation that didn't compromise, the frankness that didn't fracture. That needs to change.

These are among several steps that are needed, and not necessarily the most important.

On Independence Day, when our prime minister mounts the ramparts of the Red Fort to share his thoughts with the Nation, he will be expected to discuss, with his characteristic restraint, the problems of poverty and under-employment in India, of our inadequate health, nutrition and education levels, the alarming mismatch in our male-female ratio, and all that is being done to mitigate those evils. He will be expected to tell us how he envisions the growth of our infrastructure to lather the path for development. After he has spoken of these and, as he must, of the three negative globalisms — global warming, global terror and, now, the looming prospect of another global meltdown — he will also be expected, by honest and hopeful people, to speak of iman in our public life.

Overlooking him, beyond the invited 'afsaran' and 'safiran', will be those simple people, the awaam-e-Hind. It is their direct ancestors who flocked around Dara Shukoh in Chandni Chowk, hearkened to Netaji and, as he raised the first tiranga over the Red Fort, called Jawaharlal Nehru blessed. They want to see iman welcomed back and honoured in its democratic home. They want to see iman seated on the Peacock Throne of our national life, not left to wander lavaris amid uncertain footpaths to find a stone on which to lay its tousled head.

( Gopalkrishna Gandhi is a former administrator, diplomat and governor )

The views expressed by the author are personal

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HINDUSTAN TIMES

YOU HAVE TO EARN IT

ANIRUDH BHATTACHARYYA

Economic forecasters seem to have their fingers surgically attached to the panic button, perhaps to compensate for 2008 when they imitated Gandhi's three monkeys.

Having observed the run-up to and the aftermath of the 2008 meltdown from Ground Zero, as it were, I find the ongoing debate almost absurd, but for the sobering realisation that, if it suffers, the US will export enough economic pain around the world to wipe out its trade deficit. But if you can suspend sobriety for a while, here's a primer on the key issues:

Double-Dip: While a double-dip may sound like something that goes really well with nachos, this isn't particularly palatable. The US is gradually emerging from a recession, which also led to negative GDP growth in many other countries. Getting back into negative territory again after signs of positive growth is what double dipping is about.

AAA: Most of us would think of batteries, but it also refers to a country's credit rating. Until last week, all three major credit rating agencies rated the US AAA. But then Standard & Poor's downgraded it a notch to AA+ status, despite making a calculation error of $2 trillion. But S&P had its hard won credibility to protect, which it earned when it gave several Wall Street investment banks, including Lehman Brothers, gilt-edged ratings right before the 2008 crash. To return to the battery motif, a lower rating means that the economy runs on weaker cells, paying higher interest for borrowing. To put things in perspective, S&P's rating for India is BBB-.

Standard & Poor's: The credit rating agency that downgraded America. S&P has warned there's a negative outlook on America, so it could be downgraded even further. The US president's speech after the downgrade carried one curious correction in the text sent out by the White House: "Our problems are imminently [eminently] solvable."

Of course, the downgrade could solve one pressing problem for Obama's administration: Who will replace Osama bin Laden as America's Enemy Number One. There doesn't appear to be any substance to rumours that top executives of S&P are looking for mansions in Abbottabad.

Gridlock: Traffic conditions in any large Indian city at any hour, sure, but this is of the political variety that threatened to result in America defaulting on its debt. This gridlock is located on Capitol Hill in Washington and the reason is that Democrats and Republicans are unable to agree on corrective measures for a cratering economy. The Republicans want deep cuts in government spending, while the Democrats want to raise taxes on those earning over $250,000 annually. The result was a typical Washington Compromise, a deal that annoyed everyone.

Trillion: That's one million million or 1,000,000,000,000. The US owes north of $14 trillion. As part of the Compromise, the US government will cut spending by $20 billion in the first year. Well, it won't actually reduce spending, but won't increase spending by that much. In reality, if the Obama administration is currently spending $100 and had planned to spend $200 next year and brings that down to $180, that counts as a 'spending cut' of $20. Government accounting exists in an alternate reality.

PIGS: The charming acronym given to the European nations of Portugal, Italy, Greece and Spain, which are said to be at risk of sovereign debt default, a situation that arises when countries have borrowed far more than they can possibly repay. If you or I behaved this way, we would be arrested. Since nations can't be jailed, they're bailed out.

Dollar: It's probably not a great idea to use the word default in conjunction with the dollar, but that's the case right now — the dollar is the default reserve currency of the world, to which investors run when there's a crisis.

Debt ceiling: What made the Republicans hit the roof since the Obama administration wanted to increase it, which led to the Compromise. The debt ceiling has been increased to account for a period that runs into 2013, or comfortably after the 2012 US Presidential elections, the only sort of deadline politicians appear to comprehend. If this issue can be resolved, PIGS would fly.

( Currently based in Toronto, Anirudh Bhattacharyya has been a New York-based foreign correspondent for eight years )

The views expressed by the author are personal

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HINDUSTAN TIMES

DOWN IN MY BUNKER

PRATIK KANJILAL

I'm not following the herd and sacking all my investments to buy gold. I'm buying tinned food instead. And a bunker to stash it in. When two of the world's power currencies are stumbling, only survival gear looks real.

The dollar and the euro have been resuscitated but longer heads than mine believe they're on life support. In Washington, a default on federal payments was staved off by hiking the government's debt limit. But the sources of debt — expenditure on welfare and the military — were largely unaddressed, and Standard and Poor's downgraded the US credit rating for the first time since the Great War.

In Europe, Greece was saved from bankruptcy by a bailout piloted by Germany, but it cinched Greece's belt tight as a tourniquet. Analysts speculate that it may be unable to invest in growth and default again, damaging the credibility of the whole Eurozone.

Two huge chunks of the global economy are living well beyond their means. In times like this, the prudent sell everything including the kitchen sink and hoard gold, the one investment which weathers all storms. Well, almost. Archaeologists routinely uncover gold hoards in areas menaced by war in the remote past, which were lost to the world for centuries.

And in the aftermath of war or financial turmoil, the gold held by citizens is menaced by their own governments. In 1933, in an effort to battle the Great Depression, US President Franklin D Roosevelt compulsorily called in gold bullion and coins held by citizens for the federal treasury, to help it inflate the money supply.

In India, the Gold Control Order was passed in 1963 to give the government better command over a shaky economy after the debacle of the India-China conflict. In 1968, the Gold Control Act followed. For decades, citizens were denied the right to hold pure gold bars and coins, the preferred form for investment. Besides uncertainties by fiat, gold has a weakness — it's hard to sell in hard times. Money was invented to save citizens from such anxieties. But it doesn't really represent gold any more.

The latest conspiracy theory about the fallen IMF chief Dominique Strauss-Kahn is that he was on a secret mission to discover why the US was delaying payments to his organisation. Apparently, he was honey-trapped because if he visited Fort Knox, he would have discovered that its gold reserves had been cleaned out by profligate, war-mongering governments.

A lively theory, but there's no substance in it. It doesn't matter if Fort Knox is short on gold. The Bretton Woods system established in 1945 links national currencies to the dollar, which in turn is linked to gold. But in practice, a national currency has value because its government says it does, and other governments believe that it can raise the taxes to prove it.

And anyway the Chinese, who downgraded the US well before Standard and Poor's, are now demanding a new international reserve currency to replace the disgraced dollar, so there goes the Bretton Woods system and its gold linkage. From where I sit in my bunker, the future looks hazy. But swimming in the murk, I think I see millions of tins of tuna. They're as good as gold.

( Pratik Kanjilal is publisher of The Little Magazine )

The views expressed by the author are personal

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THE INDIAN EXPRESS

EDITORIAL

TWENTY YEARS, FULL CIRCLE

The government has replaced the chairman of the struggling airline, Air India, with a bureaucrat: Arvind Jadhav will have to hand the airline over to the civil aviation secretary, who will be assisted by a joint secretary from the same ministry who will serve as managing director. Definitely, something needed to be done to stem the rot at Air India, which has losses that totalled Rs 20,000 crore early this year — as well as debt worth Rs 40,000 crore. Yet the methods the government has used at every point in its futile quest to revive a company that has outlived its usefulness reveal that UPA 2 seems to have given up on whatever post-1991 instincts it possessed, and instead returned to the comfort of a licence-raj era mindset.

Consider the many arguments that are delivered in support of Air India from the government, and the many facets of what has led Air India to this pass, more in debt than it can hope to repay. For example, that it is a "national carrier" — implying that the private companies, nimbler and more efficient, which have rendered it redundant are somehow less Indian, and less worthy of representing India. That its debts are backed by an implicit state guarantee, meaning that its creditors have lent to it long beyond the point any real company would have been forced by impersonal market forces to go under as punishment for inefficiency and mismanagement. That it can use state resources with impunity — for example, by getting fuel on credit. The oil companies tried to put a stop to that last week, citing Air India's abysmal creditworthiness, but the civil aviation ministry's company insisted that the petroleum ministry's companies not ask the nasty questions that two companies should ask each other — and UPA 2 backed Air India up, restoring fuel supply. Meanwhile, calls have grown that the state use its power over policy to ensure Air India's continued survival in spite of its apparent lack of ability to turn a profit or provide a decent service: some have argued, for example, that the government push for it as the sole member from India in international airline alliances, or that it be perennially granted profitable routes, insulated from competition.

In allowing this narrative to take hold, the UPA government has demonstrated how, 20 years after Manmohan Singh's reform budget, the government has effectively stopped living by its principles. In spite of Dr Singh's own inclinations, his government seems to give in to a statist, controlling impulse at the slightest provocation.

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THE INDIAN EXPRESS

EDITORIAL

COMMONS CAUSE

The emergency session of the House of Commons, called against the backdrop of the riots in London and other cities, offered a demonstration of the institutional significance of Parliament. The lesson from the Commons holds as much for the public of a parliamentary democracy as for its parliamentarians. How does Parliament conduct business, quotidian or extraordinary, to achieve its ends and also retain public respect? The spirit of deliberations in the Commons this week provides the key.

That said, British MPs haven't grasped the full dimensions of, let alone solve, any of the highlighted problems. Faced with an expanding crisis, Prime Minister David Cameron cut short his holiday abroad and recalled Parliament, where he was bound to face the toughest questions. That he did, but both the PM and the opposition Labour leader, Ed Miliband, wrote on the wall beforehand that this was not to be an occasion for "political point-scoring". Cameron made his case, so did his ministers, and so did Miliband and his MPs, while the House listened with a marked restraint that didn't belie but underscore the mayhem in the streets. It's not that such forbearance usually marks a working day in the Commons; yet, what each MP highlighted was Parliament's responsibility to its electorate and the public impatience with grandstanding and muck-raking, especially in a crisis.

There was consensus on condemning the riots as criminal, there was nothing of the sort on the cuts. Cameron emphasised responsibility, Miliband resources. Labour wanted the police cuts reversed and spending increased. The Tories and LibDems would have none of that. But all agreed what was happening on the streets was unacceptable and had to be stopped forthwith.

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THE INDIAN EXPRESS

EDITORIAL

NORTHERN CLEMENCY

Until now, Mayawati has coasted on the general perception that her administration is tough on crime, especially compared to the previous governments. Indeed, experience bears out the improvement. With her initial swoops on organised crime groups, she cast herself as someone who brought a measure of order and reassurance. She seemed determined to scour public life clean, systematically purging her party of political workers with any criminal taint. She has sent as many as 12 BSP MLAs, one minister and one MP to jail.

However, as an investigation by this paper has shown, a parallel set of actions could severely undermine her reform drive — her government has also moved to ensure that several key BSP politicians are cleared of inconvenient criminal charges, some as serious as rape, murder, kidnapping, and election-related violence. This is purportedly in the public interest — and in cases where the courts have demurred, the government has sent revision applications to higher courts. Even high-profile criminal cases, like Shahnawaz Rana, who was showily suspended in June after allegations of kidnapping and attempted rape, are in the process of being quietly cleared, as is D.P. Yadav, another MLA whose criminal record has trailed him for years. Much like Haryana's Om Prakash Chautala, whose government granted dozens of pardons to convicted criminals, the Mayawati government now appears to be playing partisan politics with the law.

Given that the creep of criminality into politics is primarily responsible for misgovernance, Mayawati's move could be hugely counter-productive. Besides, in the revolving door of state politics, where leaders move easily between parties, whiting out criminal records could have lasting consequences, and set a dangerous precedent. Earlier, Mayawati had publicly disagreed with Chief Election Commissioner S.Y. Quraishi's contention that those with criminal charges should not contest elections, saying that only those who had been convicted by the courts should be disqualified. However, if the government intervenes before that conviction is possible, UP has no real hope of cutting the tight coil of politics and criminality that has choked it for years. Mayawati must bear that in mind, if she wants to preserve the gains of her law-and-order battle.

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THE INDIAN EXPRESS

COLUMN

NATIONAL INTEREST: FIGHTING SHY

SHEKHAR GUPTA

The standout news story of this week was this newspaper's defence correspondent Manu Pubby's on the note of regret that a former Pakistan Air Force (PAF) fighter pilot sent out to the daughter of a distinguished Indian pilot whose defenceless civilian transport aircraft he shot down on the last day of the 22-day war of 1965. The Pakistani pilot's note was unusual, as such sentiments are not usually expressed in this perennially hostile relationship, even if the hint of regret, if any, was entirely qualified. In brief, on the last day of that pointless war of attrition, or rather a war of competitive military incompetence, a Beechcraft owned by the Gujarat government was shot down by a Pakistani Sabre jet in Gujarat, inside Indian territory. Its eight unfortunate occupants, besides the crew and a Gujarat Samachar reporter, included the then Gujarat chief minister Balwantrai Mehta and his wife. Mehta, a Congress stalwart, thus became the first, and only, politician ever to be killed in wartime action in the subcontinent.

The note of the Pakistani pilot, Qais Hussain, has given us the chance of revisiting a question that has never been debated freely in India. That question is, just how well, or poorly, did the Indian Air Force (IAF) do in the war of 1965? For nearly half a century now, India has nurtured a mythology consciously constructed during and in the aftermath of that war: the mythology of the Indian superiority in air, of the little Gnat's invincibility, and so on. A part of that myth-making was also, and one has to be very careful saying that given how much respect three generations of Indians, including this writer, have held him in, the lionising, subsequently, of the then air chief, Air Marshal Arjan Singh. (A wonderful pilot and leader, he remains the only IAF officer to be elevated to the rank of Marshal of the Air Force).

This latest revelation now attacks that carefully cultivated mythology. Military history is serious business. It is also brutal. Because not only is the early history mostly written by the winner (which none was in 1965, overall), it also rarely resembles the purple prose of the gallantry citations. The simple question is, what kind of control over our own airspace did we have that a PAF Sabre was loitering inside and shot down a civilian VIP aircraft?

Of course, no air force can guarantee that not even a single enemy aircraft would be able to enter its airspace unchallenged. But, nearly a half-century after that inconclusive war there is no harm taking a more robust and questioning view of what exactly happened then, in the air, and of how we were able to create such a fictional history afterwards. It is one thing for the Pakistanis to build such mythologies, and then perpetuate these through chapters in school textbooks. But in India, we should have exhibited better sense of inquiry, and self-questioning. If we fought that war in the air as well as we believe, how come we lost 75 aircraft to Pakistan's 28? As many as 37 of our losses were on the ground, compared with eight of the PAF (claimed to have been) destroyed by us. This only underlines that the PAF did a much better job of attacking rival airbases than us.

On the very first day of that war, the IAF opened the campaign losing all four of the Vampires (then possibly the slowest moving jet fighter in the world) sent out to help our beleaguered army units in Chhamb. Why these totally vulnerable (and by then not combat-worthy) aircraft were sent out when better options were available, is not a question that has often been asked by Indian military historians.

This was followed by three other disasters that set the IAF back rudely in that war. Three days into the war, on September 6, eight PAF Sabres attacked the Pathankot airbase, bristling with combat activity. The base commanders somehow ignored even warnings from Amritsar radar (conveyed over the phone) and neither scrambled fighters, nor dispersed aircraft on the ground. The Sabres fired unchallenged, and India lost 10 aircraft on the ground, including two of our most vaunted MiG-21s — out of the nine that had so far arrived as our first half-strength supersonic squadron. This loss of 10 was then followed by another 10 in WW II-style, brave, but chaotic, raids over Sargodha. The Pakistanis, of course, made highly exaggerated claims and celebrate that day, September 6, as Defence of Pakistan Day and hold triumphal military parades. But the fact is that on this day the IAF suffered severe losses, followed by more self-inflicted (through command indecision) losses on the ground as the PAF attacked our eastern airfields. It is now a well-documented fact by non-official historians that the IAF had planned pulverising raids on Pakistani air assets in the east and had even launched fully loaded aircraft, which were called back when they had the targets in their bomb-sites and Delhi got nervous about irritating the Chinese. The PAF Sabres came more or less on the tail of the returning IAF formations, hitting almost all the major IAF bases in the east, particularly West Bengal. Surely, the IAF did much in subsequent days to restore the balance. Its gallant defence of Halwara and Adampur in Punjab resulted in the PAF stopping daylight raids on its air bases, for example. Some of its Gnat and Hunter squadrons demonstrated they had the measure of the Pakistanis, in tactics as well as skill. There was no dearth of courage, ever. One story you can reconstruct with pride is of an audacious plan to lure out the Sabres into combat after the very first loss of the four Vampires. Because it was presumed that the PAF was greedy over the prospect of shooting slow-moving Vampires, a formation of slow and large Mysteres was led by Wing Commander W.M. Goodman to lure the Sabres, with Squadron Leader Johnny Greene's formation of six Gnats lurking behind them. Sure enough, the Sabres took the "bait" and gave the IAF its first two successes of that war even as the Mysteres exited safely. But, overall, the PAF had greater sway over the skies in daytime. And at night, they pretty much had a free run as the IAF fighters were not night-capable.

The IAF and the defence establishment have avoided facing that truth. This, in spite of the fact that 1971 marked the IAF's finest hour. It attacked relentlessly, never suffered a setback, and never yielded the PAF any space. In India, we only have to be grateful to two young writer-researchers, P.V.S. Jagan Mohan and Samir Chopra (The India-Pakistan Air War of 1965, Manohar, 2006, Rs 895) who have put together a remarkably accurate and honest history of the 1965 war we have tried hard to forget. But which this part confession by a Pakistani pilot has now brought back to us.

Postscript: Wing Commander M.S.D. (Mally) Wollen was commanding the still forming MiG-21 squadron in that war. He had the mortification of seeing his MiG blown up on the ground at Pathankot, even as he jumped into a water tank, in full flying livery, to duck the strafing Sabres. Earlier he had fired both his missiles at a Pakistani Sabre from an impossible angle and rued the fact that the first MiGs did not have any cannons on them. I was privileged to have a conversation with him in Shillong in 1982 when, now an Air Marshal, he commanded the Eastern Air Command. A couple of new books had just been published on the air war of 1965 (notably John Fricker's very loaded, pro-Pakistani account) and I asked him what went wrong in 1965. Wollen spoke with honesty not common to the Indian military establishment. He said, of course, things had gone wrong and we had analysed why. Why, he asked, did some squadrons with the same aircraft do very well and some poorly? That's because a fighting squadron is just about 16 pilots. In any group of 16 people, he said, you would find a few that would be totally fearless and competent, a few who would become fearless again in the company of these, and the rest who would then be simply positively overwhelmed by this peer pressure. The IAF realised, he said, that in the rush of the post-1962 expansion, its fighter squadrons were not properly balanced. Some had too many of his first category, and did brilliantly, and some had too few and did poorly. On that cold Shillong evening, I learnt a lesson in leadership and team management as relevant to our humdrum civilian lives as to the military. The key to success lies in distributing the best people evenly amongst all your teams. This was addressed, and the history of 1971 was entirely different.

sg@expressindia.com

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THE INDIAN EXPRESS

COLUMN

RANTING RIOT

MIHIR S SHARMA

When the good people of Tottenham, enraged by a shooting by local police, decided to vent their fury on the better-stocked shops in their neighbourhood, they must not have known that among the more terrifying and disproportionate responses to their behaviour would be discussions on Indian news TV.

NDTV was relatively restrained and informative; the discussion on 'Left, Right and Centre' even arranged for the participation of an editor with London's Independent. Over on Times Now, however, we got the real story. On the 'Newshour', most of the panellists were introduced as "spending some of the year in London", which apparently means you turn into an expert on British politics and society. (Well, one of the panellists so introduced was Suhel Seth, and turning him into an expert doesn't even require that minimal qualification.) The actor Dalip Tahil was asked to break down how much of the riot's causes was simple criminality, and how much was race-and economics-related. Seeing as my only previous image of Tahil was as the hopeful Papa of "Papa Kehte Hain" in Qayamat Se Qayamat Tak, I was prepared for a train-wreck — but Tahil, thankfully, gave a sensible, nuanced reply linking the events in London to the fragile peace that rules most large cities.

Arnab Goswami was as disappointed as I was impressed: "There must be some individual and unique trigger in a situation such as this," he insisted. If not for such useful interventions, the Newshour would have to debate the issues rather than the "trigger", and we might actually learn something for a change. In order to ensure we learn nothing, Goswami turned, therefore, to Suhel Seth.

The riots, Seth explained are "economically linked but it does have undertones of racism which always existed... now the ones who are really racist have a reason to say that, look we are only protecting our people first, who are losing jobs, unemployed and being overtaken by other hardworking communities." It was left unclear whether the rioters were jealous of the unnamed hardworking communities (hint: the communities in question rhymed with "Windian") or whether white Britons, when times grew hard, chose to protect "their people" first, meaning that unnamed hardworking communities would go on a righteous rampage.

This stunningly original claim was too much even for Times Now. (An unprecedented situation.) "But nobody is saying that!" said Goswami, calling Seth to account.

Seth panicked. In breathless succession, he produced the following explanatory gems: "Britain has never been under so much economic pressure." (True, if you exclude 2008, 1991, 1981, 1978 and 1973.) "London is now inhabited more by Arabs than the English — there was nothing Londonish, or English, about London any more." Immigrant presence is sadly "not restricted to the community areas any more. It has spread wide and far." And, to add to the Daily Mail-esque litany, this claim, the most gobsmackingly false: "The only branded showroom attacked was Sony, during which racial slurs were hurled", presumably at inoffensive flat-screen TVs.

Britain, agreed Arnab, is "is extremely uncomfortable facing the reality" of racism. Siddharth Varadarajan of The Hindu tried at this point to disagree, saying what we had seen was opportunistic looting, a simple breakdown of law and order, but Goswami was not appeased. The Brits were sissies as compared to Times Now: "Certain channels have even blacked (race discussions) out — self-censorship imposed in the name of editorial standards!" he said, shocked, presumably, at the thought of editorial standards.

Of course, even as Goswami was saying that, the BBC was under attack because a presenter told an elderly Afro-Caribbean man invited on to talk about race that "he was no stranger to rioting." But where others would see an unwillingness to dwell on a possibly unrelated subject, Goswami saw squeamishness: "Is there too much squeamishness, Suhel?" You could probably guess the answer.

Meanwhile, the fourth guest, Parvez Alam, happily blamed it all on black people, and those of Pakistani and Bangladeshi origin, resenting Indians. People of Indian origin "don't like this sort of thing," he said, of looting. As we know, people of Indian origin are also never racists.

Meanwhile, spare a thought for NDTV's cricket correspondent, stuck covering riots instead. The poor chap turned to the nearest expert on England and Englishness in Birmingham: Sunil Gavaskar. "If England were in India, and the same situation were to have happened, what do you foresee they would have done?" he asked. Gavaskar untangled the question's tenses sufficiently to answer: "Oh, they would have been pressing the panic button. No question about it. They would have been talking in terms of, you know, the team returning home — that is a given." (Kevin Pietersen's England was playing in India two weeks after 26/11.)

And to further demonstrate his expert understanding of the English character, Gavaskar added, without pausing for breath: "Even as far as wickets are concerned, they say, you know, this is a pitch prepared for spinners..." Ah, if only the BCCI could force him onto all our panel discussions, too.

mihir.sharma@expressindia.com

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THE INDIAN EXPRESS

OPED

THE CINEMA OF 'BAD LIGHT'

DILIP BOBB

Filmaker Anurag Kashyap had an interesting take on the controversial ban on Prakash Jha's new film, Aarakshan (reservation), enforced by three states. Urging politicians to see cinema in its totality, Kashyap quipped: "Cinema is much more than heroes and villains."

So who's the hero and where's the villain? Here's the real rub. Jha's film explores the dark side areas of caste reservations in university education. However, it has ended up becoming an expose on vote-bank politics. The alacrity with which the chief ministers of Uttar Pradesh, Punjab and Andhra Pradesh moved to block the film's release in their states clearly has nothing to do with a perceived law and order problem and everything to do with the fact that all three states are headed for assembly elections in the near future.

Being seen as the villain is less painful, politically, than being a hero to supporters of identity politics. In India, it's always been a struggle to make films with a political content. It is not just chief ministers or party leadership, but usually the lumpen elements, often right-wing extremists, who continue to operate under the illusion that they are the guardians of Indian culture. Their politics is not just targeted at cinema with a progressive political context, but at any form of artistic expression. The late lamented Maqbool Fida Husain was its most prominent victim, as was, of course, Salman Rushdie.

Indeed, if illusion is cinema's greatest weapon, it is also the reason why politicians see artistic expression as a soft target, the illusion of power. India has an unenviable history in banning art with political content. Back in 1988, Rajiv Gandhi, hailed as a progressive, modern-minded leader, was roundly criticised for his ban on Rushdie's Satanic Verses. The prime minister was in a similar situation that the three chief ministers are in now — national elections were less than a year away and his political advisers spooked him into believing that the Congress party was in danger of losing its Muslim vote-bank. He later admitted that he had not read the book and had no intention of doing so. So is the case with Jha's effort. The film released on Friday, but the protests had begun well before, with political groups claiming that it was biased against Dalits. None of them had seen the film but that didn't deter them.

Back in 1970, the then-Congress government led by Indira Gandhi objected to Amrit Nahata's film Kissa Kursi Ka. Nahata was no established film-maker like Prakash Jha, but his film was a scathing satire on Sanjay Gandhi's rise to power. The Shabana Azmi starrer was India's first political spoof and its title would become part of Indian political lexicon. Indira Gandhi's errant son was clearly not amused. The film's negative and the master-print were forcibly removed from the offices of the Censor Board and burned. The irony was that it would provide a powerful handle to the opposition, which defeated the Congress in the 1977 Lok Sabha polls. Sanjay and his partner in crime, the then-information and broadcasting minister, V.C. Shukla, were sentenced and sent to jail. The greater irony was that no one actually got to see the film. However, despite the deneouement, it set the stage for an all too familiar script.

In 1971 in Sikkim, a documentary made by the internationally celebrated Satyajit Ray was banned for showing Sikkim as a sovereign state. Shortly after, the remote, Chogyal-led state merged with India. The ban was only lifted last year. Even a dyed-in-the-wool liberal like Jawaharlal Nehru was not above playing politics with political films. The very first Indian movie to be banned was Neel Akasher Neechey, a film by another world-famous director steeped in cinema verite, Mrinal Sen. It was a film with overt political overtones and the central character was a Chinese labourer. His government also banned the classic 1962 film Nine Hours to Rama, based on a critically acclaimed book by historian Stanley Wolpert, who also wrote a definitive biography of Nehru. The movie was on the assassination of Mahatma Gandhi but the government's objection was to the depiction of Nathuram Godse's political and psychological motivation for the act.

Indeed, Indian sensibilities tend to get overly prickly about portrayals of the country or its people by a foreigner, as was the case with the Hollywood blockbuster film Indiana Jones and the Temple of Doom. It was condemned for its "racist portrayal of Indians" and banned. Similarly, City of Joy, based on the book by Dominique Lapierre, was banned by the West Bengal state government "for showing the city in a bad light."

Freedom of expression in the Indian Constitution, comes with certain restrictions on content, mainly to do with national security and maintaining communal and religious harmony. It was on that basis that the 2004 documentary Final Solution, on the Gujarat riots, was banned. Some states with a Christian population have even imposed a ban on The Da Vinci Code.

The current controversy over Aakarshan opens another can of artistic worms. Jha's previous film Raajneeti was an equally gritty expose of politics, including caste issues, in the Hindi heartland. The difference was, there were no state elections on the horizon. The objections to Raajneeti came from the Congress party which accused the filmmaker of basing Katrina Kaif's character on Sonia Gandhi.

Here's the takeaway from Jha's dilemma. In India, art should not imitate life, especially when elections are around the corner.

dilip.bobb@expressindia.com

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THE INDIAN EXPRESS

OPED

THE HIJACKED ECONOMIC CRISIS

Has market turmoil left you feeling afraid? Well, it should. Clearly, the economic crisis that began in 2008 is by no means over.

But there's another emotion you should feel: anger. For what we're seeing now is what happens when influential people exploit a crisis rather than try to solve it.

For more than a year and a half — ever since President Obama chose to make deficits, not jobs, the central focus of the 2010 State of the Union address — we've had a public conversation that has been dominated by budget concerns, while almost ignoring unemployment. The supposedly urgent need to reduce deficits has so dominated the discourse that on Monday, in the midst of a market panic, Obama devoted most of his remarks to the deficit rather than to the clear and present danger of renewed recession.

What made this so bizarre was the fact that markets were signalling, as clearly as anyone could ask, that unemployment rather than deficits is our biggest problem. Bear in mind that deficit hawks have been warning for years that interest rates on US government debt would soar any day now; the threat from the bond market was supposed to be the reason that we must slash the deficit now now now. But that threat keeps not materialising. And, this week, on the heels of a downgrade that was supposed to scare bond investors, those interest rates actually plunged to record lows.

What the market was saying — almost shouting — was, "We're not worried about the deficit! We're worried about the weak economy!" For a weak economy means both low interest rates and a lack of business opportunities, which, in turn, means that government bonds become an attractive investment even at very low yields. If the downgrade of US debt had any effect at all, it was to reinforce fears of austerity policies that will make the economy even weaker.

So how did Washington discourse come to be dominated by the wrong issue?

Hardline Republicans have, of course, played a role. Although they don't seem to truly care about deficits — try suggesting any rise in taxes on the rich — they have found harping on deficits a useful way to attack government programmes.

But our discourse wouldn't have gone so far off-track if other influential people hadn't been eager to change the subject away from jobs, even in the face of 9 per cent unemployment, and to hijack the crisis on behalf of their pre-existing agendas.

Check out the opinion page of any major newspaper, or listen to any news-discussion programme, and you're likely to encounter some self-proclaimed centrist declaring that there are no short-run fixes for our economic difficulties, that the responsible thing is to focus on long-run solutions and, in particular, on "entitlement reform" — that is, cuts in Social Security and Medicare. And people like that are a major reason we're in so much trouble.

For the fact is that right now the economy desperately needs a short-run fix. When you're bleeding profusely from an open wound, you want a doctor who binds that wound up, not a doctor who lectures you on the importance of maintaining a healthy lifestyle as you get older. When millions of willing and able workers are unemployed, and economic potential is going to waste to the tune of almost $1 trillion a year, you want policymakers who work on a fast recovery, not people who lecture you on the need for long-run fiscal sustainability.

Unfortunately, giving lectures on long-run fiscal sustainability is a fashionable Washington pastime; it's what people who want to sound serious do to demonstrate their seriousness. So when the crisis struck and led to big budget deficits — because that's what happens when the economy shrinks and revenue plunges — many members of our policy elite were all too eager to seize on those deficits as an excuse to change the subject from jobs to their favourite hobbyhorse. And the economy continued to bleed.

What would a real response to our problems involve? First of all, it would involve more, not less, government spending for the time being — with mass unemployment and incredibly low borrowing costs, we should be rebuilding our schools, our roads, our water systems and more. It would involve aggressive moves to reduce household debt via mortgage forgiveness and refinancing. And it would involve an all-out effort by the Federal Reserve to get the economy moving, with the deliberate goal of generating higher inflation to help alleviate debt problems.

The usual suspects will, of course, denounce such ideas as irresponsible. But you know what's really irresponsible? Hijacking the debate over a crisis to push for the same things you were advocating before the crisis, and letting the economy continue to bleed. Paul Krugman

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THE INDIAN EXPRESS

OPED

BRINGING JUDGES TO JUSTICE

M R MADHAVAN

Parliament is likely to take up the motion for removal of Justice Soumitra Sen of the Calcutta high court next week. The other motion related to Justice Dinakaran will likely be irrelevant if his resignation is accepted. What are processes and issues related to the impeachment of judges?

The process has to tread a fine balance between the independence of judges and their accountability. It is important that judges are free of any pressures that can affect their freedom to deliver fair justice. And so, the judges of the higher courts — the Supreme Court and high courts — are assured of their term of office and their salaries and emoluments cannot be reduced. The only action that can be taken by a non-judicial body is their removal through a motion in Parliament.

The process of removal is specified by the Judges (Inquiry) Act, 1968. The process starts with a motion signed by either 50 members of the Rajya Sabha or 100 members of the Lok Sabha regarding the misbehaviour of the judge. The Chairman of the Rajya Sabha or Speaker of the Lok Sabha then forms an investigation committee consisting of three members: a Supreme Court judge, a high court chief justice, and an eminent jurist. This committee will frame charges of misbehaviour, and give an opportunity to present a written statement of defence. The judge shall also be given the opportunity to cross examine witnesses, and defending himself. The committee shall, then, present its findings to the Chairman or Speaker.

If the committee's findings are that there was a case of misbehaviour, Parliament may continue with the motion. The motion has to be passed by each House with two-thirds majority (and with half the total membership). This is followed by an address to the president for removal. Both Houses have to pass the motion and present the address within the same session of Parliament.

Two features are notably absent in this process. There is no provision for any disciplinary action against a judge that falls short of his removal from office. Second, there is no provision for any citizen to complain against a judge. The Judicial Standards and Accountability Bill, which is currently pending in Parliament, includes measures that address these gaps. It forms a national judicial oversight committee and scrutiny panels in the Supreme Court and every high court. Any person may make a complaint to the oversight committee, which will ask the scrutiny panel to vet the complaint. If there is prima facie evidence to investigate the complaint, the oversight committee will set up an investigation committee. After the investigation, the oversight committee may (a) find that there is no basis to the complaint, (b) issue advisories or warnings to the judge, or (c) recommend his removal. In addition to this process, the bill retains the mechanism of a motion in either house of Parliament, which will be investigated by the oversight committee. There is no proposed change in the final stage of removal — two-thirds majority votes in each house, followed by a presidential order of removal.

Till date, there has been just one case of an impeachment motion in India. In February 1991, the Lok Sabha initiated a motion against Justice Ramaswamy of the Supreme Court, and the Justice Sawant committee was formed. Though the Lok Sabha was dissolved before the committee started its work, the Supreme Court decided that the motion will not lapse. The committee submitted its report to the next Lok Sabha in 1992, and held that some charges were proved. However, the motion did not find the required majority, and failed.

The facts of the Justice Sen case are as follows. In February 2009, 58 members of the Rajya Sabha gave notice of a motion charging him on two grounds of misbehaviour: misappropriation of large sums of money which he received as a receiver of the Calcutta high court, and misrepresenting the related facts to the Calcutta high court. The Rajya Sabha Chairman constituted a committee to investigate the charges, which found him guilty of misbehaviour on both grounds. Parliament will now examine the inquiry report, hear the arguments, and decide whether to remove him.

The writer is with PRS Legislative Reseach, New Delhi

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THE INDIAN EXPRESS

OPED

KARACHI REVERSAL

RUCHIKA TALWAR

Karachi reversal

Last month, when the local government system of governance was replaced by the commissionerate system in Karachi and Hyderabad, two of Sindh's major cities, violence in these cities gained momentum. This week, the local government system was reinstated. Daily Times reported on August 9 that MQM chief Altaf Hussain hailed the development from London and termed it "auspicious" for Sindh in the month of Ramzan. However, some Sindhi nationalist parties strongly objected to the restoration of the local government system, calling for a shutter-down strike. The News reported that those observing the strike blamed the Pakistan Peoples Party-led government for dividing "Sindh into two parts" depending on how local governance was to be carried out. There was an uproar in the National Assembly over the change, reported Daily Times: "The ruling PPP had a hard day in parliament when one of its allies, the ANP and lawmakers from its own ranks turned against it over the restoration of the local government system and the law and order situation in Karachi." The Karachi violence had the MQM clashing with the PPP and the Awami National Party.

The MQM prefers the local government system, because it can retain its grip over cities like Karachi and Hyderabad by contesting and winning elections there, where there are many mohajir voters. The commissionerate system hands local governance to a commissioner from the bureaucracy, weakening the MQM's position on its home turf. Altaf Hussain, last month, had pleaded with the army to intervene in Karachi. This week, the army's top brass brainstormed over the restive situation in the city, Dawn reported: "While the army command appeared worried about the continuing wave of violence in the country's commercial and financial hub that has so far claimed over 800 lives, it decided to stay out of the Karachi imbroglio and instead backed the government's efforts for bringing back peace. The corps commanders conference, which is the military's principal decision-making forum, was presided over by Army Chief Ashfaq Parvez Kayani... It was for the first time during the current cycle of violence that the military publicly expressed its concerns over the law and order situation and at the same time turned down calls by political parties involved in the conflict for its intervention. The rare army statement on the situation in Karachi came after about 350 people were killed in July and the Karachi Stock Exchange, which is billed as the barometer of the country's financial health, dipped to a four-month low last week, losing 6.7 per cent of its value."

Ramzan ordinance

A female art curator of a popular art gallery and cafe in Lahore was reportedly manhandled by a local police officer for "wearing a sleeveless shirt and interacting with men." Daily Times added: "He not only physically abused the young curator but also accused the gallery's administration of spreading obscenity. Also, he abused the customers, including young females, for visiting the gallery to have meals or to watch the artworks on display in the gallery. The Punjab government has finally taken notice of the incident and has constituted an inquiry committee to probe the incident..."

In Faisalabad, as many as 25 people have been jailed for eating and serving food "in public view" during the fasting hours of the day. The Ehteram-e-Ramzan Ordinance, 1981, promulgated by Zia-ul-Haq when president, bars anyone from eating, drinking or smoking in public who, under the tenets of Islam, is supposed to fast during Ramzan. Reportedly, the SHO also justified his behaviour with the art curator through the Ehteram-e-Ramzan Ordinance as the visitors were "viewing artwork and eating" during Ramzan.

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THE INDIAN EXPRESS

OPED

NO FREEDOM FOR FARMERS

SHARAD JOSHI

Jairam Ramesh, the new minister for rural development, has put the draft of the National Land Acquisition and Rehabilitation and Resettlement Bill, 2011(LARR) online. According to the draft, land acquisition can be done for any public purpose, including development of industry, development of infrastructure, special economic zones and so on.

The fact is that most recent problems relating to industrialisation and development of infrastructure could have been resolved at the dawn of Independence itself, had not Jawaharlal Nehru brought Soviet-brand socialism into independent India. Nehru, with a marked animus towards agriculture, sought to demolish the rural leadership — for example, by replacing moneylenders with a network of cooperative institutions that permitted the draining away of rural savings to the urban populace. At the same time, he deliberately followed a policy calculated to depress agricultural prices. Had it not been for these Soviet-type policies, the problems listed by Jairam Ramesh in the draft would not have arisen in the first place.

Japan is an example. It followed, from as early as 1921, a policy calculated to give its farmers a price for their paddy that was as high as four times the international price. This created the primary capital in the hands of farmers, which they promptly used for developing the cottage industries that Japan is justly famous for.

These cottage industries, little by little, developed assembly plants to put together the parts they produced. The consequence was that most of Japan's major industries developed in the countryside, with the capital owned mostly by farmers, the primary producers. There was no question of any land being arbitrarily taken away from farmers for the development of industry, infrastructure and urbanisation. There would have been no rehabilitation and resettlement (R&R) problem either.

The legislation Nehru brought in to abolish zamindari was rejected by most courts in the country as being violative of the fundamental right to property, including its acquisition, maintenance and disposal. Undaunted, Nehru moved the very first amendment to the Constitution — to abridge the fundamental right to property. His daughter, Indira Gandhi, gave that right a final burial. This established here the principle of eminence juris, copied from the British system, broadly meaning that the land belongs to the monarch and can be taken away only through due legal processes. This was unknown in the Indian system, where the land was considered to be the property of the village. Jairam Ramesh, had he done his homework properly, would have found that he is now grappling with a problem created by Jawaharlal Nehru and Indira Gandhi, both near-deities to the Congress.

The LARR draft proposes the creation of a network of regulations so comprehensive that it will please bureaucrats, who will find their opportunities for corruption greatly expanded. The bill offers a package that is in no way better than the package that was offered to the Narmada Project displacees. The payment of an initial lump-sum calculated in terms of the stamp value of the land to be acquired; a cash payment for transport cost; a built house to each family displaced; and the establishment of community organisations like schools, hospitals and so on are all there. To these are added the offer of a share in equity; the offer of a job in the acquiring company; a subsistence allowance for 12 months and annuity for 20 years for each family, landholder or landless — and the offer of 20 per cent of the developed land in case of acquisition for urbanisation.

But the stipulations for the distribution of these benefits, by treating a family as one unit, will only result in further fragmentation of holdings, and create a large number of disputes which the present judicial system cannot even begin to cope with. It is lucky that the bill has not committed Medha Patkar's mistake, too — she, at one stage, proposed a "land for land" formula. This had permitted the bureaucracy to make money at both the purchasing and the disposal ends. The new draft does not even seek to give land for land, fortunately realising that agriculture is a losing proposition and that most farmers want to quit it in any case.

There is no remedy in Jairam Ramesh's draft to the problem of food security. If land acquisition proceeds at anything like the present rate, and the government continues to create hurdles in the path of the farmers — like cutting power, non-availability of credit, fuel prices inflation, and measures that further encourage the fragmentation of land — food security will become a pipe dream.

Problems of industrial and infrastructure development, as also the problems relating to food security would have been easily resolved by following the Japanese model, and allowing Indian farmers a price for their produce that is attractive. The ideal solution lies in allowing farmers to continue unhindered in agricultural cultivation, if they so wish, but also permitting them the full liberty to dispose of their land — like the freedom that was given to the textile mill owners of Mumbai after the mills went bankrupt, permitting them to dispose of their land to any person, at any time, and at a price that suited them. Jairam Ramesh's magnanimity in stipulating that multi-cropped irrigated lands will not be acquired under any circumstances like saying that invading marauders should not take away your prettier daughters, only the less attractive ones.

Jairam Ramesh has honestly admitted that, so far, in most cases R&R has not kept pace with acquisition. In many cases, the time gap has exceeded several decades. He would do well to start from scratch and examine the genesis of the problem caused by the Land Acquisition Act, 1894, and the tinkering that was done to it, particularly at the time of introduction of Schedule IX to the Constitution.

The writer is the founder of the Shetkari Sanghatana. He is based in Pune

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THE FINANCIAL EXPRESS

EDITORIAL

BRITAIN MUBARAK

With respect to a trade-off between security and free speech, specifically with respect to Internet and social media, some people argue that new technologies must be respected as powerful expressions of citizen desire. Others insist that in the interest of stability, sites like Twitter and Facebook must be blocked to prevent the spreading of "violence, disorder and criminality". The UK Prime Minister endorses both ideas! He made the former case with poetic eloquence (1) during his election campaign against Labour's 'surveillance state', (2) when the French president Nicholas Sarkozy was calling for tighter regulations to prevent the Internet from becoming "an instrument in the hands of those who want to damage our security, and so our integrity", and (3) as the autocratic clampdowns thrown up by the Arab Spring started duplicating strategies that the West had repeatedly condemned in China. But when the UK Parliament subjected him to a gruelling questioning over the riots that had agonised the country for four days, David Cameron endorsed an opposite idea without blinking an eyelid. If the rioting and looting had thrown up scenes that have long been stereotyped as characteristic of the Global South, the Prime Minister's volte-face mirrored the political opportunism that the West has tended to project onto its Other. Whither the difference between Tahrir Square and Trafalgar Square now?

Cameron probably thinks he is riding a wave of public opinion wherein the riots and the looting appear to intensify a demand for a less tolerant welfare state and more intense policing. And there is historical evidence suggesting he might be right in calculating that such an episode would drive a conservative backlash. Margaret Thatcher won elections after Tottenham last burned in the 1980s. But is he too hasty in blaming the current crisis on new technologies, in blaming culture rather than poverty and a lack of opportunities? With the judicial system processing around 12,000 alleged looters and arsonists, who range from a 11-year-old to an Olympic ambassador, more time and deeper analysis is surely needed to lock into the 'true' causes. As for culture, the Luddites thought the industrial revolution couldn't be countenanced, some intellectuals worried that trains would asphyxiate people and one American President thought he could hold off stem cell research with sheer willpower. But culture couldn't be controlled.

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THE FINANCIAL EXPRESS

EDITORIAL

JUST CAPITAL

Despite the turmoil in global markets, the week surprisingly ended on an optimistic note for the Indian economy, with official data showing a sharp surge in both industrial production and exports, and reasonably good progress in terms of indirect tax receipts as well. The IIP numbers showed that industrial growth, which had remained slightly below 6% in the first two months of the fiscal year, grew 8.8% in June, boosting overall growth to a respectable 6.8% in the first quarter of the fiscal year. Export numbers were even more exuberant, with growth picking up to 81.5% in July. It is true, this has been boosted by the fact that export growth slowed dramatically in July 2010—exports grew 12.6% that month compared to 46.6% in the previous month—but even so, the trend growth has been impressive.

There are, however, what look like serious inconsistencies in the data. The apparent pickup in industry—a Reuters poll had put IIP growth expectations at 5.5%—is mostly driven by what's happening on capital goods, a segment which has seen results gyrating wildly in the past. Just one item, electrical machinery, rose 88.9% in July and boosted growth of the capital goods sector, which is a proxy for investments, to 37.7%—this ensured that the sub-sector alone contributed 5 percentage points to the overall 8.8% growth, according to CLSA analysis. Theoretically, the data could be right—capital goods production tends to be lumpy—but the slowing of capital investments in the country doesn't square with this surge. When it comes to consumer goods, which account for 30% of the IIP, growth was a mere 1.6% (13.3% last year), a seven-month low. Growth of intermediate goods (15% weight), similarly, remained sluggish at less than 2%.

In the case of exports, the 57% growth in the first six months of the year doesn't square with the slowing GDP growth in major countries—the commerce ministry explanation is that the exports are for orders received before the slowdown and that India's export basket has diversified away from OECD countries. While that's partly correct, keep in mind that growth of Chinese exports has decelerated sharply from 37.7% in January 2011 to 20.4% in July and trade figures of the US—India's largest trade partner after the UAE—show that US imports from India slowed down sharply from 39.5% in 2010 to 24.9% in the first 6 months of 2011. So the apparent surge in India's export figures raises more questions than hopes.

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THE FINANCIAL EXPRESS

COLUMN

THE LONG AND SHORT OF MARKETS

K VAIDYA NATHAN

Selling securities short has been a controversial practice as long as financial markets have existed, and the recent ban on short selling by the European Securities and Markets Authority

(ESMA) has brought short selling to the fore yet again. Yesterday, amid heightened global volatility, ESMA announced that Belgium, France, Italy and Spain are banning short selling on financial stocks for 15 days. ESMA, European Union's version of the Securities and Exchange Board of India, additionally reminded market participants that it is prohibited to disseminate false or misleading information, as they have sparked sharp sell-offs recently. Short selling was banned across these four specific markets after ESMA failed to agree on a coordinated ban.

Short selling positions make money if stock prices indeed go down as speculated, and are typically done in conjunction with bear raids. A bear raid is a set of trades in which a stock is sold short at a high price, negative rumours are spread to cause the price to fall, and then the short sales are covered by purchasing the stock at the lower price. Buying stock on the way back up, if the stock price bounces back, is a way of adding to the raider's profits from manipulating the stock price. While it may be beneficial for the speculator, for a financial institution, a decline in its stock price may at times cause irreparable damage, because their funding source is based on confidence.

One of the most glaring examples of the dangers of short selling happened in March 2008. On March 11, somebody—nobody knows who—made one of the wildest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of put options, gambling that the stock price of Bear Stearns would lose more than half their value in nine days or less. It was like buying 1.7 million of lottery tickets. But what was astounding was that the bet paid off.

At the close of business that afternoon, Bear Stearns was trading at $62.97. At that point, whoever made the gamble owned the right to sell huge bundles of Bear stock, at $30 and $25, on or before March 20. In order for the bet to pay, Bear would have to fall harder and faster than any investment bank in history. And it did.

The very next day, Bear Stearns went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of aid by the Fed. By the weekend, it was forced to sell itself to JPMorgan. JPMorgan was given $29 billion in public money as a dowry to marry the hunchbacked bride, Bear Stearns, at the humiliating price of $2 a share. Whoever bought those options on March 11 woke up on the morning of March 17 having made more than 150 times his money, or roughly $270 million. The problem is not that the investor concerned profited from Bear Stearns' declining fortunes, but that he acted as a catalyst for the bank's demise.

Likewise, David Einhorn, a long-short value-oriented hedge fund manager started betting on Lehman Brothers' collapse. In April 2008, a month after the Bear Stearns debacle, Einhorn started spreading rumours about short positions on Lehman stock. Lehman CFO had a private call with Einhorn which the latter made public to trigger a decline in Lehman's share price. This resulted in greater media coverage of Lehman's difficult funding position, precipitating the crisis of confidence. When Bear and Lehman made their final leap off the cliff of history, both undeniably got a push from short sellers. The Securities and Exchange Commission (SEC) banned short-selling after the collapse of Lehman but it was too late by then. We are all aware of the tailspin into which financial markets went after the Lehman bankruptcy. To give SEC its due credit, the panic may have been possibly worse without the ban. Who knows, if only SEC had banned short-selling earlier, like ESMA has done now, speculators like Einhorn may not have been able to make a windfall and facilitate the bank's collapse.

There would be a large section of the market participants who would cry hoarse and would present the usual arguments that banning short selling disrupts the price discovery process and affects liquidity. The market participants are not so concerned about price discovery as much as rueing the lost opportunity to make a quick buck on the collapse of a financial institution. For the regulator, sometimes rescuing institutions from these speculators should rightly be a higher priority than worrying about price discovery and liquidity in the short term. And that's what ESMA has done. It is a conservative move, but it is better than allowing speculators to possibly precipitate a crisis.

The author, formerly with JPMorgan Chase, is CEO, Quantum Phinance

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THE FINANCIAL EXPRESS

COLUMN

CHOOSING CRAZY TREASURY RETURNS
GILLIAN TETT

Why does money keep flooding into the short-term Treasuries market, or T-bills? It is a fascinating question, given last week's US rating downgrade—and the fact that yields on three-month bills are now a mere 0.01 per cent. There are plenty of explanations around: investors are searching for safe havens; terrified about growth; worrying about deflation; chasing momentum. Or all four.

But there is another factor investors should watch: what companies and asset managers are doing with their spare "cash".

Earlier this week, the International Monetary Fund quietly published a ground-breaking paper on this issue, written by Zoltan Pozsar, a visiting scholar and former central bank economist*. And while the analysis is couched in dull, central bank language, the conclusions are utterly fascinating, not just in relation to the current markets swings—but also future systemic risks.

The issue at stake revolves around the "cash" which companies, asset managers and securities lenders (such as custodial banks) hold on their balance sheets. Two decades ago, these cash pools were modest, totalling just $100bn across the globe, with individual companies typically holding just $100m, or so. But in recent years, these pools have exploded in size, as the asset management sector has consolidated and companies have centralised their treasury functions. Institutional cash managers now control between $2,000bn and $4,000bn globally, and Pozsar reckons on average there is $75bn sitting at individual securities lenders, $20bn at asset managers, and $15bn at large US companies.

That is startling. But what is more striking is where this "cash" has ended up. Two decades ago, it typically was placed in bank accounts. But in recent years, cash managers have started to avoid banks: in 2007, for example, just 16-20 per cent of these funds were on deposit. Why? Pozsar thinks the key factor was risk management, not yield. From 1990 up to the crisis, US Federal Deposit Insurance Corporation only guaranteed the first $100,000 of any account. And while cash managers have tried to use multiple banks, their cash pools are so large that effective diversification is impossible. Thus they have hunted for alternatives that seemed liquid and safer than uninsured bank accounts, such as repurchase deals (backed by collateral), money market funds (often implicitly backed by banks), or highly rated short term securities (such as triple A rated asset backed commercial paper or mortgage bonds.)

Pozsar argues that this has created a big distortion in the monetary aggregates (ironically, cash is only counted as M2 "cash" in the Fed's accounts if it is held in a bank.) He also thinks this pattern was a little-watched factor behind the boom in shadow banking before 2007. He is undoubtedly correct.

But the really interesting issue is what is happening now. After the 2008 crisis, the FDIC raised the insured account limit to $250,000, and that has prompted cash managers to raise the proportion of funds they place on deposit to 33 per cent. However, surveys suggest they will not go further—meaning that trillions of dollars still sit outside the banking system. This creates some potentially big systemic risks: as Pozsar notes, the amount of institutional cash held outside FDIC-insured bank accounts—and thus outside government umbrellas—is now two thirds of the size of the money which is protected by the FDIC (up from just 5 per cent in 1990). This could provide the source of another panic if a crisis hits, since it is unsure whether banks could really protect, say, money market funds.

But the "vacuum" also affects asset prices. Since 2008, large parts of the shadow banking world have all but collapsed. Thus cash managers are now frantically searching for new places to put their "cash". Some has flooded into money market funds (which buy government bonds) or the repo world (often backed by bonds); some money has entered the T-bill market directly. Either way, the net result is a shortage of T-bills, particularly since banks and clearing houses are also gobbling up

T-bills for regulatory purposes.

Hence the low yields. From an investment perspective, these returns may seem crazy; but they are still attractive to cash managers because T-bills are liquid—and, most crucially, seem less risky than uninsured bank deposits. Or, put another way, faced with a choice between betting on the safety of the US government, or its banks, cash-rich large companies and asset managers are choosing the former. It is an entirely rational choice. But it is also a powerful reminder of how profoundly distorted the US financial system remains. And that is not a comforting thought; least of all in a rollercoaster week.

* Institutional Cash Pools and the Triffin Dilemma of the US Banking System; Zoltan Pozsar; IMF Working Paper 11/190; August 1 2011

gillian.tett@ft.com

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THE HINDU

EDITORIAL

ARCHAEOPTERYX DETHRONED

The discovery of Archaeopteryx , the most primitive bird fossil, in 1861, just two years after the publication of Charles Darwin's great work, On the Origin of Species , could not have been better timed. Exhibiting both dinosaur features and typical bird-like ones such as feathers, wishbone, and three-fingered hands, the 150 million-year-old transitional fossil became the first textbook specimen with the fundamental traits of evolution in progress. The discovery, which played a vital role in our understanding of bird origin, provided the much-needed boost to palaeontologists for unearthing other vital links in the dinosaur-bird evolution chain, and other transitional forms. But even as scientists are celebrating the sesquicentennial anniversary of its discovery, the iconic specimen has been robbed of glory by a paper published recently in Nature ("An Archaeopteryx -like theropod from China and the origin of Avialae," by Xing Xu et al .). The Xiaotingia zhengi species reported in the paper, which has morphological features similar to Archaeopteryx and other confirmed deinonychosaurs — bird-like dinosaurs that are outside the avian lineage — has dethroned the iconic fossil from its high pedestal and clubbed it along with other non-avian dinosaurs. Indeed, the discovery of a few non-avian dinosaur fossils during the last decade served as a harbinger of things to come. These fossils, exhibiting the same avian morphological features seen in Archaeopteryx , raised serious doubts about the basal fossil's very presence in the evolutionary tree of birds. Clinching evidence from the latest find has only confirmed these doubts.

While the dethroning will be hotly debated in scientific circles, the real battle will be fought between creationism and evolution. Creationists, who still claim there are no true transitional forms, are sure to exploit the latest development to propagate their unscientific and obscurantist views. The presence or absence of transitional fossils that show the intermediate stages of evolution from the ancestral form to its descendants has been a bone of contention between the two camps. It is true that all the intermediate varieties have not been preserved in the rocks. Still, scientists have found an abundance of important transitional evidence. The latest is the 2004 discovery of Tiktaalik — the transitional fossil between aquatic and land animals. These finds disarm the creationists from using, in Darwin's own words, "the most obvious and gravest objection" to rubbish his theory. To think that the theory of evolution is on shaky ground due to the removal of Archaeopteryx as a basal bird is nothing but absurdity.

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THE HINDU

EDITORIAL

PDS LEAKAGES: THE PLOT THICKENS

JEAN DRÈZE

REETIKA KHERA

It is well understood that a substantial proportion of the grain, mainly wheat and rice, that is meant to be distributed to eligible families under the Public Distribution System (PDS) ends up being sold in the open market by corrupt intermediaries, including some dealers who manage PDS outlets. The extent of this "diversion" of PDS grain has been a matter of speculation for some time. Two recent surveys shed further light on the matter.

The diversion ratio (proportion of PDS grain "diverted" to the open market) has been estimated by several researchers in the past by matching National Sample Survey (NSS) data on household purchases with Food Corporation of India (FCI) data on "offtake." The former tell us how much grain people are buying from the PDS. The latter tell us how much grain has been lifted by State governments from FCI godowns under the PDS quota. The difference is a rough estimate of the extent of diversion.

Based on this method, the estimated diversion ratio was around 54 per cent in 2004-05, the last year for which detailed data are available from a "thick round" of the NSS. Needless to say, this is an alarming figure. Tamil Nadu had the lowest diversion rate (around 7 per cent); the rate was well below the national average in the other southern States also (around 25 per cent in each case). By contrast, the estimated diversion rates ranged between 85 and 95 per cent in Bihar, Jharkhand, Assam, and Rajasthan. These estimates, if proved correct, suggest a comprehensive breakdown of the PDS in these States at that time.

Having said this, the reliability of NSS figures with respect to PDS purchases is not clear. There are two reasons to assume that they are not wildly off the mark. First, the State-wise averages for 2004-05 are broadly consistent with corresponding figures from the India Human Development Survey (IHDS) for the same year. Second, the inter-State patterns are more or less as one would expect, with, for instance, very little diversion in Tamil Nadu and a huge amount of it in Bihar. Nevertheless, this approach requires independent corroboration, not just because of the uncertain accuracy of NSS data, but also because of other difficulties in this method. Incidentally, among these difficulties is the utter lack of transparency in data on "offtake": both the FCI and the Food Ministry seem to be doing their best to divulge as little as possible of it — they would do well to read Section 4 of the Right to Information Act.

Further evidence on these matters is available from a recent survey, conducted in June 2011 by student volunteers under our guidance (hereafter "PDS Survey"). The survey covered about 1,200 randomly-selected BPL households in nine sample States (Andhra Pradesh, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Orissa, Rajasthan, Tamil Nadu and Uttar Pradesh). The investigators were carefully trained to record the respondents' PDS purchases, in three different ways. The purchases were then compared with "entitlements" — what BPL households are supposed to get from the PDS in different States. For instance, BPL households are entitled to 25 kg of grain a month in Orissa and Rajasthan, and 35 kg a month in Chhattisgarh and Jharkhand. It turned out that in most States (with the notable exception of Bihar), BPL households were getting the bulk of their entitlements. The ratio of purchases to entitlements was 84 per cent in the sample as a whole. Here again, there were significant inter-State variations: this ratio was above 90 per cent in Andhra Pradesh, Chhattisgarh, Himachal Pradesh, Orissa and Tamil Nadu, but as low as 45 per cent in Bihar. The sample average of 84 per cent, however, suggests much lower rates of diversion (even in Bihar) than emerged from the earlier method — at least under the BPL quota.

The findings of this survey confirm other recent evidence of substantial improvements in the PDS around the country. In most of the sample States, there have been major initiatives in the recent past to improve the PDS, and it seems these efforts are showing results.

Also of interest are provisional figures on PDS purchases for 2009-10 (the latest "thick round" of the NSS) computed by the National Sample Survey Organisation. Starting with the good news, these figures suggest that on average PDS purchases of wheat and rice have more or less doubled between 2004-05 and 2009-10. This, again, is consistent with independent evidence of a revival of the PDS in recent years.

NSS-based estimates of diversion rates, however, remain high. Applying the method described earlier to these provisional figures, the diversion rate for 2009-10 seems to be around 41 per cent. This is 13 percentage points lower than in 2004-05, but still very high. The diversion rates improved (that is, declined) in almost every State, with big improvements in some States: down from 23 per cent to 8 per cent in Andhra Pradesh, from 85 to 47 per cent in Jharkhand, from 76 to 30 per cent in Orissa, and from 52 to 11 per cent in Chhattisgarh. Interestingly, these are four States where the PDS Survey also found evidence of major improvements. In 2009-10, none of India's major States had an estimated diversion rate higher than 75 per cent (the top rate, found in Bihar), in contrast with 2004-05 when as many as eight major States had that distinction.

This broad-based improvement is good news, but needless to say diversion rates remain unacceptably high. The question remains how these high diversion rates (41 per cent at the national level) square with the fact that BPL households in the PDS Survey were able to secure 84 per cent of their PDS entitlements. Even if the comparison is restricted to the nine sample States, a similar contrast applies.

There are at least two possible explanations. First, the PDS Survey is more recent: it took place two years after the NSS survey. And as mentioned earlier, there is consistent evidence of steady improvement in the PDS in recent years in many States. However, it is difficult to believe that progress has been so rapid as to explain, on its own, the full contrast between the two surveys. Second, the PDS Survey is restricted to BPL households in rural areas.

Diversion rates may be higher (possibly much higher) under the APL quota, and perhaps also in urban areas. Indeed, the APL component of the PDS, which has expanded steadily since 2004-05 (with a big upward jump in 2009-10), is devoid of any transparency. There are no specific entitlements for APL households, and no clear allocation norms. This segment of the PDS remains highly vulnerable to corruption, as it is possible for large quantities of grain to disappear without anyone feeling the pinch.

If this tentative line of explanation is correct, two conclusions can be drawn. First, both surveys (the PDS Survey, and the 66th Round of the NSS) add to growing evidence of steady improvements in the PDS in recent years. There is still a long way to go in achieving anything like acceptable levels of functionality, especially under the APL quota, but recent progress shows that the PDS is not a "lost cause" — far from it. Second, one thing that really helps to prevent corruption is to give people a strong stake in the system (large quantities, low prices), and make sure that they are clear about their entitlements. That has already happened, to a large extent, with the BPL quota: it has become much harder to cheat the recipients, because they know their due and clamour for it if need be. As Bhukhan Singh, a resident of Kope gram panchayat in Jharkhand, put it, when the price of PDS rice for BPL households in Jharkhand was slashed to Re. 1 a kg, awareness of the new entitlements spread quickly and people made up their mind that they "would not let this go."

The recent turnaround of the PDS in Chhattisgarh (or, for that matter, Orissa) also built largely on this simple insight, as well as on the related fact that broad coverage strengthens public pressure for a functional PDS. There is an important lesson here for the proposed National Food Security Act.

While diversion rates still remain high, evidence seems to point to substantial improvements in the public distribution system around the country.

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THE HINDU

LIFT THE BAN

The suspension of screening of the Hindi film Aarakshan , which deals with issues of caste and reservation, by the governments of Uttar Pradesh, Punjab, and Andhra Pradesh is a serious encroachment on the freedom of expression in the guise of upholding public order and respecting the sentiments of a social group or community. The director, Prakash Jha, has done well to challenge the ban before the Supreme Court of India, which will hear the case on Tuesday. Independent of the merits of the film, such a ban is out of place in a democratic society. It militates against the fundamental right to freedom of speech and expression guaranteed by Article 19(1)(a) of the Constitution. Although clause (2) of the Article allows for reasonable restrictions on the freedom, including in the interest of public order, the Supreme Court has clearly laid down, in the 1989 judgment in the case of S. Rangarajan v. Jagjivan Ram involving the film Ore Oru Gramathile (which too dealt with the issue of reservation), that "freedom of expression cannot be suppressed on account of threat of demonstration and processions or threats of violence." That, the court noted, would be tantamount to "negation of the rule of law and a surrender to blackmail and intimidation." The competent authority for clearing a film for public release is the Central Board of Film Certification, and politicians and communal or sectarian pressure groups cannot arrogate to themselves the right to decide what films others should watch. Taking the easy or opportunist way out by banning a movie is anathema to any functioning democracy.

While it is in the nature of art to shock or provoke, in the case of Aarakshan the portions objected to do not even constitute the thrust of the movie. To tear out of the dramatic context snatches of dialogue and demand their removal from the film is to take intolerance to new heights. The issue is not whether an articulated argument is valid or not. As the Supreme Court noted in the watershed 1989 judgment, "The producer may project his own message which the others may not approve of. But he has a right to 'think out' and put the counter-appeals to reason. It is a part of a democratic give-and-take to which no one could complain. The State cannot prevent open discussion and open expression, however hateful to its policies." The real danger to the public interest springs not from the public screening of the movie, but from state-imposed restrictions on freedom of expression on indefensible grounds. Aarakshan must be allowed a free run as cleared by the CBFC without any cuts — in the interest of keeping India a free and open society. To give in to sectional interests in this case would be to put in jeopardy a cornerstone of the Indian Constitution.

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DAILY EXCELSIOR

EDITORIAL

HANDLING RIOTS

Bringing out public rallies and indulging in disruption of law and order on the behest of separatists leadership's call has become a regular phenomenon in Kashmir for some years in the past. The so-called struggle for freedom is the rubric under which these anti-social activities are openly propagated and promoted. And when the security forces respond to public demonstrations turning violent, it is but natural that some among the demonstrators may get injured or one or two get killed. This becomes another pretext for continued protest rallies, strikes, disruption of normal life and its business. More often than not government's reaction to law disrupting attempts is also subjected to criticism and is alleged to be disproportionate with the type of violence desired to be quelled.

A brief recapitulation of how the British Government has responded to recent widespread riots in London and other towns in UK should be an eye opener to the separatist leaders in Kashmir who consider it their right to instigate the public against the government, overlook the violent activities of angry crowds, rationalize their hooliganism and then in the aftermath go on demanding justice according to democratic norms for the persons arrested on suspicion of being linked to instigating violent stir. Premier David Cameron yesterday promised extra powers to police to quell the violence as a massive clampdown in London and other major cities netted over 1,300 trouble-makers and prevented further chaos. As against this, separatists in Kashmir demand reduction of police and security forces deployed to contain rioting crowds. "We will track you down, we will find you, we will charge you, and we will punish you. You will pay for what you have done. We will not allow a violent few beat us," Cameron said. One wishes, the Indian Prime Minister or Home Minister said even one tenth of what Cameron told the miscreants and rioters. He means business and he will do it. But does our government really mean to do the business of uprooting all elements that contribute to a situation of disorder and disturbance in the State? Many questions can be asked. British papers wrote. "Cameron, who deployed thousands of police personnel on streets in the affected areas, vowed to act "decisively" to restore order."The young people stealing flat screen televisions and burning shops that was not about politics or protest, it was about theft." Precisely this is the situation that develops in disturbed Kashmir when day in and day out separatist leadership gives call for strike and shut down. This is not a call for aazaadi but simply for disruption of law and order in the State because the separatists believe that more instability is brought to the government more are their objective coming to the point of realization. All that we desire is that our governments both in the State and the Centre taka cue from the way British government is handling the rioting in London and elsewhere. We lack a will to uproot lawlessness and disruption of order. During over two decades of insurgency, disorder and turmoil in Kashmir, we have not a leader of some stature who would rise and speak as frankly as David Cameron has done. Deployment of more police and troops on streets, intensified checking of public movement, identification of miscreants and reaching them, putting thousands behind the bars and investigating their antecedents are the measures that Cameron government has begun to put into action. Compare it with our political leaders and you will find how lackadaisical they are on important issue of insurgency and disruption of law and order.

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DAILY EXCELSIOR

EDITORIAL

ARMY ON GUARD

Army chief Gen. V.K. Singh has concluded his recent two-day tour of forward sectors in Poonch, Rajouri, Mendhar areas in Jammu region close to LoC. Prior to it; he also visited the border sectors along LoC in the Valley. The crux of General's impressions is that the troops can't afford to lower the guard on the Line of Control (LoC) as militants were still present in the camps in Pakistan and Pakistan occupied Kashmir (PoK) and could try to infiltrate into this side any time. Inter-acting with troops in forward posts of Lalyali in Sunderbani and Kachryal in Pallanwalla on the LoC, Gen Singh on last day of his two days visit to Jammu region, called upon the troops to remain vigilant and alert as Pakistan hasn't dismantled the camps and the militants were still lodged there waiting for an opportunity to sneak-in. "We can't lower our guard. We have to be fully alert all along the LoC as the militants were sitting in the camps and launching pads and could try to infiltrate anytime''
This is a language very different from what was exchanged between the Indian and Pakistani foreign ministers who met recently in New Delhi. The situation is becoming complex on the border with increasing reports of terrorist concentration in training and ammunition dumping camps along LoC in PoK. In Kupwara and in Surankot areas skirmishes have taken place as infiltration bids from across the LoC continue. The Army is engaged in foiling these attempts but as the line is a long one all vulnerable points cannot be plugged. Reports of brutalities committed by Pakistani infiltrators on kidnapped Indian soldiers like cutting off their heads and returning headless bodies have also come in. The Pakistani Army website posted the information. The families of two such victims have protested to the army authorities for not allowing them to see the dead bodies of their kith. Such and other reports are highly disturbing. How can peace talks succeed when one party's affiliates run amuck with lethal weapons to do what they want at their will? This situation needs to be resolved and the General issuing instructions to his troops not to lower guard against the enemy is rendering the highest patriotic service to the nation. He knows where the shoe pinches. Some commentators are led to believe that the high level talks are nothing but fake and will not lead us anywhere keeping in mind the real intentions of our adversary. Unless infiltration stops fully, there seems little sense in carrying forward the dialogue.

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DAILY EXCELSIOR

EDITORIAL

OF SONIA'S SECRET SURGERY

MEN, MATTERS & MEMORIES

BY ML KOTRU

Lest I be misunderstood, I must clarify that it is not my intention to be critical of Ms. Sonia Gandhi who is said to be recovering after a major surgery at New York's Sloan Kettering Memorial Hospital. Her son Rahul, daughter Priyanka and her husband have been in attendance at the hospital. In the absence of regular or authoritative bulletins about her post-operation condition - apart from knowing that she was shifted from the Intensive Care Unit to hospital room after 24 hours - we can only presume that Mrs. Gandhi is well on road to recovery.
Yet it looks odd that the Gandhi parivar should have chosen to leave the country, and her partymen, clueless about her ailment. Why did she have to leave the country so secretively as if falling sick is a crime? Sonia Gandhi after all is human, like you and me, and, like us, she, now in her mid-60s, is as vulnerable as anyone else to one or the other ailment. Where was the need to be so secretive about the state of her health and the destination she chose for treatment.
The danger with such bizarre secretiveness is that it gives free rein to speculation. Ms. Gandhi's sudden disappearance, along with her close family, did indeed seem curious. Made worse by the announcement that the UPA Chairperson had appointed a four-man committee to look after the Congress party affairs during her absence, currently expected to last for nearly a month.
Interestingly, Sonia Gandhi appointed as regents (Rahul Gandhi, Ahmed Patel, her longtime political aide, A.K. Anthony, the Defence Minister and Mr. Dwivedi, the head of the Congress Information cell to mind the store before she was flown out. None of these names, except of course, Rahul's, is hardly the kind to inspire confidence. Patel has been a loyal manipulator, Anthony, a trusted partyman but largely less known even after stints as Kerala Chief Minister and Central Minister and Mr. Dwivedi is for me a verbal contortionist.
Mind you, the most viable of the regents, Rahul, is with her in New York, which leaves the party rudderless as was evidenced during the parliament meeting early this week when the BJP, all fired up for a major onslaught on the government on the Commonwealth Games and 2G Spectrum scams apart from moving a motion against the Sports Minister Lalit Maken for "misleading" the House, forcing a blackout in both houses.
I am sure many of Manmohan Singh's colleagues knew how to tackle the situation but were all too patently unwilling to suggest the way out. Sonia's counsel was not available and the regents appointed by her seemed unwilling to take risks in the absence of Rahul. A regent, I am sure you know, as the dictionary says, is appointed to administer a "kingdom" during the minority or incapacity of the sovereign, one invested with royal authority on behalf of presiding deity, in this case Sonia, the Congress President and the UPA Chairman. Poor Prime Minister, dare he allow himself to be seen as the man in command.
At the time of writing I am somewhat certain that he would have called New York to inquire after Madam's health. He couldn't have gone beyond that, given "the state of Sonia's health". May be the principal regent will return home earlier than the three to four week's his mother is expected to remain under medical supervision in New York and hopefully succeed in restoring order in the ranks. The other three regents cannot act independently, in the absence of the crown prince.
Which brings me to the question why this hush hush over Sonia Gandhi's ailment and the need for surgery? Why weren't we told what's wrong with her? Is it because the Indian elite believes in its immortality. Indira Gandhi was shot fatally by her security guard and everyone knew she died on the spot. Yet it was not before several hours that death at AIIMS was announced.
On the other hand when Manmohan Singh had quintuple bypasses two years ago we were told in great detail about it. You might argue that it is Sonia Gandhi's personal choice to remain secretive about her health. But she is not a private citizen. She is a pivotal person in Indian polity. She has achieved, as someone has noted, her present status not merely because she was married to Rajiv Gandhi.
After making the "supreme sacrifice" by declining to succeed her assassinated husband she did turn the party around in the following years, making it once again a political force to reckon with, and successfully led it in many election campaigns which had till then seemed an impossibility.
That said, a democracy should be open about the health problems of its leaders even after allowing for the instability of institutions and the pathetic multiplicity of fractious political parties in the country. President Eisenhower, if my recall is right, was admitted to the same Sloan Kettering Memorial Hospital during one of his medical problems, where Sonia is currently recovering. Ronald Reagan, as President was detected for a cancer in his colon, he recovered and was back in office. There was no hush hush business then except in the case of John F. Kennedy, who suffered from many ailments, including a persistent pain in his back, caused during his time in the US Navy in World War II but failed to divulge at his campaign for the US Presidency. He eventually fell to a bullet in Dallas and unrelated to his shocking death, health was accorded a high priority in the subsequent US campaigns.
Indeed each candidate is expected to make public declaration of the state of his health. But America is an evolved democracy with all the institutional safeguards in place, unlike our anarchic politics and political parties.
It is not just health, even in terms of immunity from the law and impunity of behaviour, we Indians tend to make great concessions to our leaders or those elected as people's representatives from the municipal ward to parliament. Leaders have always remained as somewhat different in the mass psyche. Indeed anyone, as soon as he or she becomes a MLA, MP or municipal councilor considers himself/herself above the law.
We have witnessed the uncommon zeal of our rulers when it comes to scotching any effort to curb their immunities. Witness the fire and brimstone that politicians have let loose on the Lokpal issue. Why should the Prime Minister be kept out of the purview of the Lokpal Bill? Why shouldn't he be accountable for any acts of omission and commission? Why must government permission be a pre-requisite for prosecuting bureaucrats of the rank of joint secretary and above even when they are patently guilty of misconduct etc? Is it because the politician and the bureaucrat have their hands in the till all the time. Law should have universal applicability. Is that asking for too much? Not in a democracy. (e-mail: mlk57media@gmail.com)

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DAILY EXCELSIOR

EDITORIAL

RAKSHA BANDHAN: OPENING UP CHANNELS OF EXPRESSION

BY DHEERAJ JANDIAL

Celebrated on the full moon day in the Hindu calendar month of Sharavan, Raksha Bandhan is the one of most widely celebrated festivals of India. Full moon is considered to be an auspicious day and an auspicious day of the holy month Sharavan is of great importance. It is a day that symbolizes the sacred relationship between a brother and a sister. Literally translated, raksha means protection while bandhan means bond. Raksha Bandhan, therefore, signifies the bond of love, security, affection and protection.
Although primarily observed in Northern and Western India, the festival is celebrated by Hindus, Sikhs and Muslims alike. The central ceremony involves tying of a rakhi (sacred thread) by a sister on her brother's wrist. The brother in return offers a gift to his sister and vows to protect her. Rakhi, thus epitomizes the unconditional love between brothers and sisters. The day is also known as Janai Purnima, Rishi Tarpani Purnima or Rishi Dori.
Since its inception during the vedic period, the festival is celebrated as soul purifying ceremony. Vabisha Purana while explaining , the spiritual connotation of Raksha Bandhan has described thus,
'Sarvarogopasman Sarwa Subabinash nama Sakritakitay mapdamek yanaraskha krita Vhaswayta', which means , the thread tied on this festival cures all diseases and averts all misfortunes. Even tied once a year remains protected throughout the year. The scientific logic behind this is that during the month of Sharavan, it being a rainy season the people are less exposed to sunlight and are more prone to contagious diseases. Therefore, tying of a thread blessed with vedic mantras would afford the necessary prevention, which instils a psychological sentiment of 'May I live safer throughout the year'.
Originally, this festival only emphasized and encouraged a strong bond of love and sincerity between a husband and wife but with the change of time its connotation too have widened. Mythology and history has it, once Indra, the God of Heaven was about to go into battle and was feeling a little apprehensive. When his wife tied a sacred thread to his arm for his protection and assurance, all fears vanished and he was successful in all his endeavours. From then on began the tradition of celebrating Rakha Bandhan- a festival for protection of loved ones.
Raskha Bandhan, it is mentioned in epics as a festival of Gods. However, the festival assumed significance among brothers and sisters when Yamuna, the sister of Lord Yama (the Lord of Death) used to tie rakhi to his brother on every Sharavan Purnima. Yama was so moved by the serenity of the occasion that he declared that whoever gets rakhi tied from his sister and promised her protection, will become immortal.
The fact gets reverberated in the Punjabi couplet which sisters recite while tying rakhi on the wrist of their brothers. The couplets goes as :
' Suraj shakhan chhodian, Mooli chhodian baej, Behen ne rakhi bandhi, Bhai tu chir jug jee', which means - The Sun radiates its sunshine, the radish spread its seeds, I tie rakhi to you O brother and wish that you live long.
Inspired and impelled by the sentiment of the fragile thread of Raksha Bandhan, the brave Rajputana soldiers sacrificed their life protecting the chastity of their sisters from the enemies when these gallant men were approached by their sisters for help with rakhis in their hands.
Foreign writer Colonel Tad in his book recounts the story which dates back to 1535 AD of how the widowed queen of Chittor Rani Karnavati approached Mughal Emperor Humayum with a rakhi for help against the invasion by the Sultan of Gujarat, Bahadur Shah. Touched by the affection, Humayum immediately responded and set-off his troops to defend Chittor. However, Humayum arrived too late, and Bhadur Shah managed to sack the Rani Karnavati's fortress. Karnavati along with a reported 13,000 other women in the fortress carried out Juhar on March 8, 1535 killing themselves to avoid dishonour. On reaching Chittor, Humayum evicted Bhadur Shah from the fort and restored the kingdom to Karnavati's son Vikramjit Singh.
The great epic Mahabharta too has references to Raskha Bhandan, when Lord Krishna hurt his hand while fighting Shishupala. When this happened, Draupadi, the wife of Pandava brothers rushed to cover the wound by tearing a piece of sari and tying it around Lord Krishna's hand. In return for her gesture, the Lord asked her for a wish. Draupadi replied by saying that she only desired His Divine presence at every moment of her life. Much later, when the Kauravas tried disrobe her in their court, helpless, she called out to Lord Krishna to save her chastity. In return , the Lord saved from being dishonoured as the Kauravas were unable to disrobe her.
In Nepali society, it is the Brahamins who tie rakhi going from door to door, in doing so the Brahamins enchant mantras referring to Lord Vaman and King Bali thus,
'Yanabaddo Balliraja Danayendro Mahabal Tena twa Pratibagnasni Rakchay mahachala' meaning : The reason why the demon King Baliraj remained secured and safe even after giving everything he had to Lord Vaman was only because of Raksha Bandhan, while in Central-East India the day is celebrated as Balrama Jayanti, i.e birthday of Lord Balrama (elder brother of Lord Krishna).
According to another legendry narrative of the Alexander the Great and King Porus, when Alexander the Great invaded India in 326 B.C., Roxana (or Roshanak, his wife) sent a sacred thread to Porus asking him not to harm her husband in battle. In accordance to tradition, King Porus gave full respect to the rakhi. On the battlefield, when Porus was about to deliver a final blow to Alexander, he saw the rakhi on his own wrist and restrained himself from attacking Alexander personally.
Raksha Bandhan, as such is a festival that enables one towards purification, both physically and spiritually, besides renewing the relationship with sisters. Although today a great change has come to this otherwise simple ritualistic celebration with different innovations and different colours, but the basic idealism and sentiments of the ceremony have not changed as yet. Raksha Bhandhan opens up channels of expression, give us an opportunity to rework on our role as human beings and most importantly bring joy in our mundane lives. The sentiment of this festival is best expressed in the Sanskrit verse: 'Sraway bhawantu Sukham'
May all be happy,
May all be free from ills,
May all behold only the good,
May none be in distress.

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DAILY EXCELSIOR

EDITORIAL

HEADING FOR WORLD ECONOMIC CRISIS ?

BY DR SALISH MISRA

Last couple of days has seen turbulence in global markets with stocks prices nose-diving and precious metals prices going up. Wild fluctuations in international markets have created a crisis of confidence.
Indian markets, taking a cue from the American and European share indexes, also took hammering creating uncertainties. Different interpretations of the origin and impact of the crisis are being given.
There are valid questions in the public mind about the state of world economy. People fear a repeat of 2008 Global economic meltdown when the international economy faced a severe crisis and it took lot of efforts to restore a semblance of normalcy.
The US debt crisis was the starting point of the present crisis and the compromise reached between the US Congress and President Barack Obama further compounded the nature of the problem. What panicked the global markets particularly the American and the European was the downgrading of US credit rating by Standard & Poor from Triple A-its highest- to AA+ with the argument that Washington had not done enough to reduce the long term deficit and further expressed reservations about the ability of political leaders to work together to solve the problem.
Economic scenario in Europe particularly state of economies in Ireland, Greece, Spain, Portugal and Spain further dampened the spirits of the markets. Riots in Britain added insult to injury. Overall picture thus of the world economy became gloomy.
As a result, the global markets went into tailspin without grasping the intent and depth of such an assessment correction. Experts and media started speculating about the impending dangers and some predicted the repeat of the 2008 economic recession which was triggered by the US subprime crisis resulting in the collapse of Lehmann Brothers.
World-wide impact of the S&P move was severe as Asian markets also witnessed the bloodbath despite the fact that fundamentals of Asian economies by and large are on a firmer footing. Economies of China, India, Indonesia, South Korea, Russia, Brazil and Africa are on growth path
Undoubtedly, Europe and America have been the main drivers of the world economy and conventional wisdom says that if something goes wrong there the world bear the consequences.
But times have changed and are changing fast. Days are over when the US and Europe used to dominate the global economic architecture though they still occupy seats of decision making in international organizations. Centre of global economic activity is shifting to the southern hemisphere and particularly Asian, African and Latin American economies are going to be the growth engines of the first half of the 21st century.
As the Wall Street Journal says that "this time is different, and the bankers, investors and corporate executives who look at today's problems through the prism of 2008 risk misjudging the issues confronting the global economy". One of the most striking differences between the 2008 crisis and now is that while the financial sector's breakdown had resulted in slowing down ultimately resulting in global recession three years back, this time Governments and political system have failed the business and financial communities.
The other difference is that in 2008 companies and business community were responsible for the crisis as they had profited from cheaper credits up to 2007-08 but when the bubble burst then they needed more money to salvage their commitments. When the US Federal Reserve opened up its chests enabling the US Government to give stimulus package, the recovery began. Not only the US but governments across the world came out with massive stimulus budgets to give a push to take out the international economy from the vicious recessionary cycle.
This time, companies and individuals are not opening their chests and keeping the money away from investments. In words of Wall Street Journal "The Present day strains aren't caused by a lack of liquidity- US companies, for one, are sitting on record cash piles-or too much leverage. Both corporate and personal balance sheets are no longer bloated with debt."
"The real cause is a chronic lack of confidence by financial actors in one another and their government's ability to kick-start economic growth", says the Journal. In words of George Friedman, "The current economic crisis is best understood as a crisis of political economy".
One indication came on Tuesday when the Federal Reserve made the rare promise to hold short term interest rates near zero at least till the middle of 2013 and the day witnessed the huge recovery at New York Stock Exchange. The Dow ended the day with 429 points up in the wake of Federal Reserve statement. On Wednesday, Indian markets too recovered with BSE sensex gaining 1.6 percent and ending six sessions steep fall.
At the same time, the prospects of the US growth are bleak and the US unlike the past would not act as the motor of the global economic recovery. On the contrary, the rest of the world would be helping the US economy to recover and move on the growth path.
Surprising is that demand for US bonds has been going up which reflects the global confidence in America. What lies at the heart of the present crisis is the eroding credibility of the political class. This is equally true of America, Europe, China and India.
Inability of the political class to take quick decision and gnawing gap between the ruling establishment and the opposition like between the Democrats and Republicans to reach a consensus on solutions and prescriptions to economic growth are at the main causes of the present turmoil. In essence, it is the crisis of governance. (NPA)

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******************************************************************************************THE TRIBUNE

EDITORIAL

HOPE OR GLOOM?

CHOICE IS WITH THE GOVERNMENT

Food inflation rising to a near double-digit level for the week ended July 30 spells trouble for aam adami. The diesel price hike in June is showing its effect. The global and domestic economic environment is uncertain. The Indian economy is resilient and it is for the government to build on its strengths. The country's industrial production grew at a healthy 8.8 per cent in June compared to a disappointing 5.9 per cent in May. This lends weight to the government's hoped-for growth rate of above 8 per cent, which, if achieved, may prove to be a silver lining in a dark horizon. India's exports rose 82 per cent in July but domestic consumer demand is flagging due to high interest rates. Car sales fell by 15.8 per cent in the same month.

There are, of course, known hurdles to faster growth. The most serious is high inflation, about which the RBI's position is quite clear. Last month's shocker -- a 50 basis point rate hike -- had unnerved investors. The latest inflation and growth figures are likely to fuel the RBI drive to harden the key rates at the monetary policy review meeting on September 16. The apex bank's approach is in sharp contrast to that of other major central banks, which are now more concerned about dwindling growth rates than inflation. The US Federal Reserve has promised to keep interest rates at zero rates in the next two years to avoid double-dip recession.

If the government gets over its scandalous affairs and resumes reforms, the emerging global scenario can be turned to India's advantage. The slowdown has brought down oil prices, which may soften inflation, and subsequently, the interest rates. Since the emerging economies, including India, are stable and growing at a respectable rate, surplus global capital may head towards these safe havens. India has an advantage over other Asian countries as its growth is not dependent on exports to the turbulent West. The government can help by removing supply-side bottlenecks, strengthening infrastructure and taking appropriate policy decisions to quicken the inflow of foreign investment.

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THE TRIBUNE

EDITORIAL

THREATENED COASTLINE

INDIA HAS LEARNT LITTLE FROM 26/11

Those who thought that the loss of a large number of lives during the 26/11 terrorist attack in Mumbai in 2008 led to a strict vigil on the long coastline of the country need to update their information. India's coastal security can still be breached though huge funds have been allocated for the purpose and plans are under implementation to prevent the recurrence of what happened on that fateful day three years ago. At least three incidents that occurred in the recent past provide proof of this painful reality. A merchant navy ship, M T Pavit, abandoned by its crew in Oman, floated towards Mumbai and reached the Juhu-Versova beach undetected on July 31. Personnel of the Indian Navy, the Coast Guard and the Marine Police of the Maharashtra government had little knowledge about it till some fishermen informed the authorities about the serious security lapse. The ship had 30 tonnes of oil. The oil spill that it caused took many days to bring the situation under control. In the meantime, a lot of damage to the environment had been done.

Two other such cases were reported some time ago. A ship named MV Wisdom entered the Juhu beach area undetected, exposing the hollowness of the claims of the authorities that the country's coastline had all the necessary arrangements to prevent terrorists and other such elements from giving the nation a surprise. Oil spill of a dangerous level was caused when a cargo vessel, MV Rak, sank in the sea near Mumbai a few days back.

Different agencies have been blaming each other now when these serious incidents have come to light. The alarming nature of these happenings led to the Defence Minister, Mr A. K. Antony, reviewing the coastal security situation and asking the agencies concerned to prevent anything like what happened in the past. But this is not enough. These incidents have brought to light the serious lack of coordination among the agencies responsible for coastal security. There is need to fix accountability for the past happenings so that some heads must roll. Any matter concerning national security should not be taken lightly.

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THE TRIBUNE

COLUMN

CULTURE OF INTOLERANCE

BAN ON FILMS, BOOKS REFLECTS NARROW MINDSET

Whatever may be the outcome of the ban on Prakash Jha's film "Aarakshan" in Punjab, UP and Andhra Pradesh, it has once again exposed the growing intolerance of society. That a film cleared by Censor Board of Film Certification should face the censure of the state governments would almost be laughable if the issue was not so serious. For beneath the ban on the film that deals with the issue of reservations lurks a myopic mindset that not only questions the filmmaker's right of freedom of expression but also paves the way for a divisive society.

This is not the first time fangs of intolerance have been bared. Often enough in India different communities backed by political factions take it upon themselves to infringe upon the prerogative of artists to free and fair expression. It is this bigoted attitude that led to the self-imposed exile of legendary artist late MF Husain dropping of Rohinton Mistry's "Such a Long Journey" from Mumbai University's syllabus and stalling of shooting of Deepa's Mehta's film "Water" among other things. As far as the popular culture of cinema goes, hackles of political leaders are raised at the slightest provocation invariably on the most frivolous pretext. Film after film is mired in unwanted controversy and an unwarranted hullabaloo vitiates the atmosphere of a country that otherwise takes pride in its syncretic culture.

Without a doubt, artists do not have an unqualified licence to provoke and hurt others' sensibilities and makers like Mr Jha who has agreed to make changes even after the censor board's clearance are aware of their responsibilities. At the same time the political leaders and communities need to respond in the same spirit. Liberty and freedom are the cornerstone of a democracy and debates triggered by films, books and other artistic ways of expression should be allowed freely. By its very inherent nature art is meant to probe and pose questions. Instead of creating stumbling blocks the governments, both at the Centre and in the states, must provide an amenable atmosphere to artists so that they can dare to raise significant issues.

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THE TRIBUNE

ARTICLE

MARXISTS IN A QUANDARY

SHIFT IN POLICY CAN HELP MEET CHALLENGES

BY SHYAMAL DATTA

The Marxists in West Bengal remain stupefied by "shock and awe" that the Assembly elections delivered in May this year. The mighty political giant,considered to be invincible in the East, stands traumatised at the scale of defeat.The party stalwarts who roared till the other day look downcast,demoralised and devastated.They witness in mute silence and with a sense of resignation the party being mauled by desertions, shifting of loyalties, closing of offices and exposer of the past misdeeds. At the enormity of adversities, the party rank and file look bewildered and thoroughly confused. They wake up to the reality that the revolutionary fervour of the party is shaken to its roots, and deflated all around.

A few programmes and protest actions that are being organised, focusing attention on emotive issues like the price rise, killings of party cadres, etc, evoke poor response and lukewarm publicity.

Marxist cadres also feel considerably disturbed that the leaders in the forefront, who brought discredit to the party after ruling for 34 years without any break, have so far shown no initiative to come to grips with the extraordinary situation and do something extraordinary to try and bail the party out of difficulties. On the contrary, they, in spite of being rejected by the people in the elections, have continued clinging on to power and position in the party and shown no indication to step down voluntarily, owning moral responsibility for the defeat. This has prevented the much-needed overhaul of the organisation and the leadership at the apex level.

Maintaining anonymity, a few of these leaders assert that some of the party supremos must go, and propriety demands that they should make room for the new crop of comparatively young leaders to come to the forefront, and assume charge and control of the party. They and not those unequal to the task of dealing with the formidable challenges, should bring in fresh energy and sense of purpose required to navigate the course of the party's ship tossed in turbulent waters. The policy of wait and see, status quo and prevarication amount to adhocism, and deserve to be buried forthwith for an urgent revival of the party in the state.

A major section of leaders at the district and local committee levels, who have gone out of lucrative earnings after the party has failed to return to office, show signs of serious concern at the dire possibility of the worsening fund position during the period the party will spend in the political wilderness. The state of West Bengal will soon cease to be the main money-churner, and the units of Kerala and Tripura will not be in a position to meet the shortfall. Already,the patronage of the government, monopolised for decades in the state, is petering out. The readerships of the party daily Ganashakti and the party journal People's Democracy are said to be on the decline, adversely affecting the flow of funds through advertisements. The collections of funds by party cadres and members through unions and other sources, formal and informal, are also becoming difficult. The development has serious adverse implications for the growth and refurbishing of the party.

Fulminations are also noticed that despite being in power for decades, the party did not care to put in place the line of succession in different echelons of organisations, on the pattern of the Chinese system. Leaders unlike their counterparts in China, enjoy almost life-long tenure in office, be in the government or in the party. No wonder that they after some time, in appearance and in substance, look less revolutionary and more unattractive and uninspiring. Their mind remains firmly rooted in dogma and resistance to change. They are averse to breaking from the past and reinvent to march with the time and the evolving situation. In sharp contrast, the youthful elements in the party take the ignominy caused by the colossal defeat as a challenge and a unique opportunity to effect major changes in the line of command at different levels, and in the content and style of party functioning. They strongly believe that without a paradigm shift, it will not be possible to effectively deal with the present-day challenges.

The party leadership has to reckon that the generation of today is markedly different from that of their days. For them, interests of the people and the state far outweigh the interests of the party alone. They decry partisan politics and the use of violent and high-handed methods as instruments to further the influence and strengthen the dominance of the party at all costs. The politics they espouse make it obligatory on their part to stand firm and resolute against all that tends to undermine the values and norms, making the poor poorer and the rich richer. They want that the process of growth and prosperity through any means must make a welcome difference in the life of those at the bottom of the socio-economic pyramid. They constitute a classic group of educated, tech-savvy and forward-looking youth, known for the capacity and capability to compete with the best in the world. They talk of emphasis and focus on governance to ensure safety and security of life and property, well-being of people through growth and development, based on people-centric policies, and projection of power whenever necessary.

It is the considered view of this lot that the poll debacle has offered a long time-frame for the Marxists to ponder, go to the drawing board and draw up an action plan for a party architecture which is fundamentally strong and flexible to function effectively in the changing dynamics of present day politics, regaining the support and confidence of the people. The sweeping election verdict makes it fairly evident that the people of the state are mentally prepared to give at least 10 years' time to the present dispensation to "clear, hold and build" since the malaise inherited is not only deep but has also turned malignant.

It will call for a huge investment of efforts and funds for prolonged curative plans with a well-calibrated strategy, designs and tactics to infuse life into the body-politic. The poor fiscal health of the state, acute scarcity of funds and tardy governance make the task of transforming West Bengal herculean.

Under the circumstances, political wisdom will lie in the Marxists getting actively engaged, without any loss of time, with the formidable task of setting their house in order, weeding out the undesirable elements and infusing fresh and youthful blood. They need to address ideological and organisational issues in depth, and will do well to refrain from doing anything undesirable for the lure of office and power. There is every possibility that after some time the enormity of the tasks ahead for the ruling party, a rash of promises and commitments being made, and serious constraints of different types and dimensions are going to provide the Opposition on a platter the ammunition to fire at and exploit the same to their advantage. At the same time, chances will also exist for the ruling party to succeed in bringing about a modicum of change and set off some measure of people's satisfaction. That might marginalise the efforts of the Opposition to reassert politically.

A tough battle to capture the political turf through competitive politics, based on good governance, is what the people look for. The state is in urgent and dire need of responsible and circumspect conduct on the part of both the parties in power and in the Opposition to restore civility and high standards of politics. Only that can help improve the quality of parliamentary form of governance and human life in the state. We sincerely hope that with the growth of such politics, leaders will evolve from across the political spectrum and hasten the pace of change with people coming forward to act as a catalyst to their endeavour.n

The writer, a retired Director, Intelligence Bureau, is a former Governor of Nagaland.

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THE TRIBUNE

OPED

THE SLENDER THREAD

BY MAJ-GEN G G DWIVEDI

In the absence of effective government machinery in the newly liberated Bangladesh, the mere presence of the Indian Army had a salutary effect to instill confidence amongst the locals as also keep the bad elements at bay.

One day as I was stepping out of my shelter to lead an 'Area Domination Patrol', I was informed that some locals were waiting to see me. They were a Hindu family huddled together; middle aged couple, with their teenage daughter and son. Whereas the parents appeared to be deeply shaken, the young girl was rather composed. It was she who narrated the tale of their vows in fluent Hindi.

What emerged was that a self-styled 'Mukti Bahni' cadre was coercing the girl to marry him. The individual was in his late forties and already had two wives. He had been persistently luring the girl's father but the old man had spurned the offer despite abject poverty. The only asset the family possessed was a small piece of land to eke out their livelihood.

During sensitive situations, Mr Mustafa, ( Junior Engineer – Electricity Department) in whose office compound we were camping, was of immense help. With the aggrieved family and Mr Mustafa in toe, we set off, to amicably resolve the issue. The trouble shooter, after initial reluctance, promised to step back. Assuming that the matter was settled, we proceeded on, dropping the family en route at their village.

Their hut appeared to be barren, but for a few aluminum and earthen utensils. When we gave the family some rations, with teary eyes they expressed their gratitude. As we were leaving, the little girl ran inside and came back with a small crumpled paper wrap. "I had bought this for my brother, but would you accept it please?" she mumbled in a choked voice thrusting the packet into my hands. With a reassuring smile, I took it and tucked into my ammunition pouch.

Soon I was deputed on an outstation duty. On my return, I learnt that the same family had come to meet me again. Sensing trouble, the following day I routed my patrol through their village, only to find the abandoned hut. Upon inquiry, the villagers informed us that a few days back the girl had been taken away. The family had left the village the same night.

I was deeply distressed. Suddenly I remembered the small packet. On opening it, I found a string of beads. It was a symbolic gesture of gratitude, trust and faith which had been reposed in me, although I was unable to uphold it for circumstances, well beyond my control.

The following day, we were to leave Bangladesh and head home. Moments before departing, I walked up to the Meghna River which flowed nearby. The sun had almost gone down and the dying rays had set the water ablaze. I pulled out the string and with a sense of remorse slowly lowered it into the river. As the string floated adrift, I stood still, wondering at the ways of nature; subjecting helpless masses to intense misery, their destiny always dangling by a "Slender Thread"!n

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THE TRIBUNE

OPED

WE CAN'T DENY THAT RACE PLAYS A PART

TOO MANY BLACK MEN HAVE BEEN KILLED BY THE POLICE. THIS IS NOT THE CAUSE OF THE UK RIOTS, BUT IT IS A FACTOR
CHRISTINA PATTERSON

August, historians will tell you, is a good time to start a war. And, boy, does this feel like a war. This feels, when you switch on the TV, and see footage of burning cars, and burning buildings, and of people jumping out of burning buildings, and of people too scared to walk down their street, and of dark silhouettes in helmets waving shields, and of dark silhouettes in hoodies waving iron bars, like the nearest to war most of us have been.

This feels, when you talk to friends, and find that they're staying in with their children all day, because the area outside their front door has been turned into something that looks as though a bomb has hit it, and when you talk to friends who do open their front door, and find a looter in a balaclava hiding in their garden, like the end of something, and the start of something else. It feels like the end of getting up in the morning, and knowing that you'll be able to go to work safely, and get home safely, and do your job safely when you're there.

End of everything

For some of us, the only sign on our doorsteps was even more police cars screeching past than usual, and shops that closed early, and helicopters overhead. For my neighbours, down the road in Dalston, and down the road in Hackney, it wasn't. For the man, for example, who runs a pharmacy in Mare Street, and watched a group of teenagers try to trash his shop, which was, he said, "everything he had", and who pleaded with them not to, it must have felt like the end of everything he'd spent his whole life working to build up.

For the other shopkeepers in Mare Street, and the ones in Dalston, and the ones in Tottenham, and the ones in Brixton, who watched teenagers smash glass and fill their pockets with mobile phones, or jewellery, or grab trainers, or tracksuits, or even stagger under the weight of giant TVs, it must have felt as if one of the central pillars of their life was under threat.

And for the people who lost their homes, and all their possessions, and their children's toys, and every single photo of their children, which they will never, ever be able to get back, and who nearly lost their lives, and their children's lives, because someone thought it was a good laugh to throw a can of kerosene and a match, it must have felt as near as you get to losing your world, without losing your life.

Old, old story

This is what happens in a war. Wars start for a million different reasons, and the time to understand those

reasons is not while the war is going on. They can start – even world wars can start – with a single gunshot. This one did. This one started with an old, old story, of a black man killed by police. It started when a woman wanted to know why four children would never see their father again. And when the police said nothing. And frustration turned, as it often does, and particularly in communities where there's a lot of frustration, to anger, and anger turned, as it often does, and particularly in communities where there are a lot of teenagers with not very much to do, to violence.

And it spread. Do we know if the boys, and young men, smashing windows, and trashing shops, and burning cars, and buses, and buildings, in Hackney, and Croydon, and Brixton, and telling passers-by that what they were doing was "fun", and that they were "trying to get their taxes back", knew about the shooting of the black man, or even cared? Do we know if they knew about the black teenager in Hackney who was stopped and searched by the police, and found to have nothing illegal on him?

wrecking lives

We don't, and we can't. We don't, and can't, know why young men, and teenagers, and children as young as 10 suddenly decided that it was a good idea to do what everyone else was doing, which was to spread chaos, and violence, and fear. But we do know that when a tinderbox, or a car, or a carpet store, is set alight, this is what, throughout history, everywhere in the world, sometimes happens.

Race didn't cause these riots, but it played a part. Why else do you get three black men talking about them on Newsnight, when you almost never see a black man talking about anything on Newsnight? And asked questions about "the black community", as if the people who had had their livelihoods destroyed would have the same views on anything as the 12-year-olds waving iron bars? And why else do you get people talking, as they are on newspaper websites, and radio phone-ins, about "thieving black scum"?

There is no excuse for wrecking people's livelihoods and lives. "She's working hard to make her business work," screamed a brave black woman at some of the rioters in Hackney, "and you lot want to burn it up, for what? To say you're warring, and you're 'bad man'? This is about a fucking man who got shot in Tottenham. This isn't about busting up the place. Get it real, black people. Get real!"

Thrill of power

The woman was nearly in tears, and who wouldn't cry seeing their community destroyed, and who wouldn't cry knowing that this would be yet another excuse for people to associate black people with crime? The rioters weren't all black, of course. They were black, and mixed race, and white and wannabe black. They were people who are probably already in gangs, but who usually keep their violence to other gangs, but who, on Saturday, and Sunday, and Monday, and Tuesday, didn't. On Saturday, and Sunday, and Monday, and Tuesday, they discovered, perhaps for the first time outside their little world, the thrill of power.

There are 169 gangs in London. There are 22 in Hackney alone. These are people, often people who have grown up on estates where almost nobody works, often without fathers, and often without any qualifications, skills, or ambitions, who feel that the world has let them down. The guns and knives they carry make them feel that there's a tiny corner of the world they can control. And because of these boys – no more than 2,000 of them – who carry guns and knives, and because it takes more than reports on "institutional racism" to get rid of "institutional racism", you can hardly walk down a street, if you're black, without being stopped and searched.

Feeling powerless

Too many black men have been killed by the police. Too many black men and women have been treated like criminals when they're not. This is not the cause of these riots, but it's there in the mix, a mix where the key ingredient is feeling powerless. Cuts won't help. Growing unemployment won't help. Some investment, in youth services, and better schools, and mentoring schemes, might, but money alone isn't the answer.

It wasn't these children who created the culture that told them that what mattered was the brand of their trainers, or the glitter of their bling. It wasn't these children who created the culture that told them that their one hope of escape was hip hop, or fame. It wasn't these children who created the institutions of a country where all the black workers were in the canteens. We have, as a society, created this monster and, as a society, and like those people heading into the trouble spots with dustpans and brushes, we must pick up the pieces. —The Independent

Riots in Britain

Here are some details of major rioting in Britain over the past 30 years:

April 1980 – Bristol

The Black and White Café, which had a reputation as a centre for drugs, was raided by police, triggering riots in the St Paul's area of Bristol.

April 1981 – Brixton, south London

Brixton had long seen high tension between the police and the black community. The stabbing and subsequent death of a black man was blamed on police brutality and sparked the riot.

July 1981 – Toxteth, Liverpool

Rioting was triggered by the arrest of 20-year-old Leroy Alphonse Cooper. Nine days of violence followed.

October 1985 – Broadwater Farm, Tottenham, London

The Broadwater estate in Tottenham erupted into violence between youths and the police when a woman suffered heart failure after a police raid.

March 1990 – Poll tax riots, London

When Margaret Thatcher's government introduced the poll tax 1,00,000 people turned out for a protest in central London which quickly turned violent.

1999 – Anti-capitalist protest, London

Demonstrators clashed with riot police, burnt cars and stormed a major financial exchange in June.

May-July 2001 – London May Day riot and violence in northern England

Some 5,000 anti-capitalist activists brought the commercial heart of London to a standstill amid scenes of violence and vandalism.

April 2009 – Anti-G20 protests, London

Violent confrontations between anti-capitalist demonstrators, environmental campaigners and riot police broke out in London during two days of protests.

March 2011 – TUC march, London

Masked youths battled riot police and attacked banks and luxury stores in central London on March 26, overshadowing a protest by more than a quarter of a million Britons against government spending cuts.

August 2011 – London, Manchester and other cities

Rioting has broken out around major cities in England including Manchester and Liverpool in the northwest and Birmingham in central England. Gangs have ransacked stores causing millions of pounds of damage. The riots broke out on August 6 in north London's Tottenham district. — Reuters

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MUMBAI MIRROR

EDITORIAL

THESE MODERN AUGUST KRANTIS

ONGOING STRUGGLES FOR FREEDOM FROM THE STATE'S COERCION, THE MIGHT OF INDUSTRIALISATION, AND FROM CORRUPTION

Freedom is my birthright, said the Lokmanya, who was born on August 1. And just like he had asserted, the people of India indeed regained that birthright in August, twenty-seven years after the Lokmanya died.
But what exactly is this thing called freedom? If Lokmanya were alive today, in his home city of Pune, he would find that he was surrounded by many freedom struggles on a daily basis.

The farmers in Maval taluka of Pune district thought they had freedom to pursue a decent livelihood, till they found out that Pimpri-Chinchwad was going to steal their water. They also learnt that it wasn't really "their" water, so their freedom was an illusion. (The British used to tell us, that this is not your country to rule.) Similarly, there are villagers around the Tansa and Vaitarna lakes who thought that they too had freedom from water scarcity. But the lake water is not "theirs", just as water of River Pavana is not the Maval farmers'. Water in the lake turned out to be a mirage for them. So these villages are parched, and they don't have freedom from water tankers.

Farmers and mango-growers around Jaitapur thought they had freedom to farm their lands, but they learnt that they too could be forced out. Their freedom could be overruled by an amorphous entity called society's freedom to set up a nuclear plant. That amorphous entity has a face, and it is called the government, which says that electricity is more important than farm produce.

Similarly, villagers in the eastern part of Pune were told that their land was being transformed into an infotech park. Their freedom to pursue farming was subservient to the interest of the Information Technology industry. Hinjewadi's phase 1 came up, then came phase 2. At phase 3, they woke up at last, realising that their freedom too was illusory.

Just like the erstwhile farmers of Hinjewadi, villagers around Noida thought their land was being taken to set up industrial projects, perhaps with job opportunities for them.

But it turned out to be real estate projects for housing and malls.

These are only a few, and relatively recent episodes in a modern freedom struggle. Maybe it is unfair to describe it thus. Economists might describe this as part of the grand tussle between development and environment, or public versus private interests, or simply tradeoffs of a modern vibrant economy. One acre of farmland when transformed into an IT park, or an industrial project, generates ten times more income. But whichever way you describe it, it seems clear that a lot of people are perceiving that they are losing their freedoms, and some are violently resisting it. This violence stems from the fact that it affects people's livelihoods. Losing access to water and land threatens their very existence.

For the rest of us city dwellers, we too continuously lose our freedoms, but don't necessarily become violent. So we lose freedom from noise pollution, from lack of open recreation spaces, from malaria, from traffic congestion. All of this might increase our heart rate or add to our hypertension, but we don't take to the streets like those farmers of Maval or Noida. (Ironically the Maval agitation and subsequent tragic deaths happened on August 9, the anniversary of the launch of the Quit India Movement. It was an August Kranti, nevertheless.)

Anna Hazare has called his agitation against corruption a second freedom struggle. This is the quest for Swaraj, or genuine self-rule, free from the tyranny of remote rulers.

These modern August agitations are a far cry from innocent villagers of 1947, who supposedly asked Congress workers, fanning out into the countryside: "Oh the British have left! Then who will rule us now?!"

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******************************************************************************************BUSINESS STANDARD

COLUMN

RED ROSA AND THE POETICS OF REVOLUTION

V V

Rosa Luxemburg (1871-1919) was a brilliant and engaging Marxist intellectual and one of the greatest theoretical minds of the European socialist tradition. Born a Polish Jew, she was a polyglot, writing in Russian, German and English besides Polish. She also participated in the creation of the German Communist Party and rapidly rose to the party echelons to become a star. In the words of another Jewish intellectual, Hannah Arendt, she was – and remained – a Polish Jew in a country "she disliked and a party she came to despise".

Luxemburg is remembered today as a champion of the socialist, communist and feminist movements around the world and, more significantly, as someone who took on Lenin and told him in essays and pamphlets where to get off. And Lenin returned the compliment by recommending the publication of her complete collected works (despite "her errors") because she was "an eagle of the revolution". The Letters of Rosa Luxemburg (Verso, £25.99) written to friends, lovers and colleagues, among whom were all the leading lights of European and international labour, reveal a multi-faceted woman: economic theorist, political activist, literary critic and lyrical stylist with a tormented inner life.

These letters cover a vast area of interest, personal and political, but of interest to Indian readers would be her opposition to the official party line and blind faith in the theory and practice of communism. "Revolutions," she had said in an essay titled "The Mass Strike, The Political Party and the Trade Unions" admonishing Lenin in 1905, "do not allow anyone to play the school master with them."

Though she acknowledged that no one was better placed than Lenin to understand the mechanics of making a socialist society, she felt he was completely mistaken in choosing the means: "decrees, dictatorial force of the factory manager, draconian penalties, rule by terror." The editors to this volume of letters remind us that the demand for a constituent assembly, though a central plank of the Bolsheviks, was dropped in 1917 because there was always a possibility that democracy could throw up wrong results. For Lenin, the elections following the October Revolution, in which the peasant masses had returned Kerensky supporters to the Assembly, indicated the limits of democracy in a revolutionary situation.

For Rosa this was a betrayal of everything that the Bolsheviks had been fighting for. Rosa quoted Trotsky here: "As Marxists we have never been the idolisers of formal democracy." "Nor," she snapped back, "have we ever been idolisers of socialism and Marxism." And she didn't stop at that. In a speech in 1907, with Stalin in the audience she said that a slavish adherence to The Communist Manifesto was "a glaring example of metaphysical thinking". In fact, she insisted that under conditions of rampant inequality, formal democracy was a hoax. Only under socialism would true democracy have a chance. "The remedy which Trotsky and Lenin have found, the elimination of democracy as such, is worse than the disease it is supposed to cure: for it stops up the very living source from which alone can come the correction of all the innate shortcomings of social institutions, That source is the active, untrammeled, energetic political life of the broadest masses of the people."

Because of Rosa's criticism of the communist party's central leadership she has been portrayed as a "revisionist" who opposed the socialist revolution in the making. These letters show her not as an anarchist but as a passionate democrat whose political actions were based on the call for elections and representative parliamentary forms.

She called for freedom of the press, right of association and assembly which had been banned. Anything less, she insisted, would lead to "brutalisation" of public life.

The course of politics is incalculable, she said — it came to be known as Luxemburg's theory of spontaneity. It was a theory that was severely criticised as a form of adventurism that could only lead to political disaster. But these letters elaborate what she really meant: that a revolutionary momentum was unpredictable but the spirit must be carried over after the revolution had taken place. In other words, organisation was always to be subservient to spirit. This was not something that Lenin could ever have accepted if it had to be done; only organisation and the discipline behind it could achieve the goals; for Rosa "only experience was capable of correcting and opening new ways".

Rosa Luxemburg was one of those romantic exiles who believed that dreams were the stuff we were made of. Read the letters if only for their lyricism and practical wisdom.

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BUSINESS STANDARD

EDITORIAL

IMPORTED MAYBE

SUBIR ROY

It has been raining almost incessantly in Bangalore, creating a chill that is so different from the weather in most of the rest of the country. It usually does not pour but there is a slow, steady light-to-heavy patter. The city's famed greenery is mostly gone but should you be lucky and be able to see a full stretch of green ahead, you will see the green enveloped in half mist, making it look a bit like the English countryside which keeps dripping through summer and beyond. Which is why the English might have decided to set up camp here.

The incongruity of a bit of English weather in India is heightened by the small empty kiosk dripping in the rain on the pavement before one of the more successful large stores in the well-off neighbourhood of Indiranagar. The kiosk owner has run away as much because he can't stand and get drenched in the rain as also because in this half chill there is no customer for what he has to offer. But the somnolent kiosk manages to make a loud statement through the longish message painted on its facade, the main banner headline on the top proclaiming, "Tropical Sno, Hawaiian Shake Ice". A cooling ice on a sunny Hawaiian beach is not out of place, but offering it in rain-drenched Bangalore only heightens the incongruity.

But what made me step out in the drizzle, with a ballpoint pen and paper in hand, is what else was written across the kiosk which, unknown to its enterprising owner, held an authentic mirror to the tastes and fads of today's newly rich Indians. Not satisfied with simply advertising the exotic, the writing went on to proclaim, "Ice cream made form purified water." How you can purity water without distilling it which will kill all taste is not clear, but the germ-dreading, bottled water-dependent upper-class Indian has to be reassured that what is on offer is safe to slurp.

After reassuring came the main punch and the selling line, "All flavors imported from the USA", no less. That is the surest way to the heart and the wallet of today's well-heeled Indians, the geography where you must be, or failing that, whence must come all that can catch your fancy. Time was when declaring something to be simply "imported" was enough. But today's post-liberalisation consumer, attuned to global flavours, must have it straight and only from the US of A. Irrespective of how synthetic the flavour may taste or smell, it is the cultural flavour of the country of origin that is important.

The targeted customer who insists on the flavour from the US is nevertheless uniquely Indian, how much so is clear from the next line — it proclaims and reassures, "100 % vegetarian". In the land of adulteration anything less than "100 %" of what is proclaimed is unacceptable and reminds me of the confusion long ago of the foreign visitor who could not make out what was meant by "pure butter" when all he had ever known was plain butter. The globetrotting unadulterated vegetarian takes pride in holding high his flag of vegetarianism even as he savours and goes for all that is imported and foreign.

In a flash it reminded me of the irritation that I lately felt while scouring shop shelves for mayonnaise that tasted right and was made in part from eggs, an essential ingredient. Everywhere you look, it is the "egg less" variety that confronts you. Such moments also bring to mind the acerbic, atheist science professor in college who declared one day with a glint in his eyes, "Do you realise that your suddh vegetarian milk is full of animal protein?"

The well-off flavour-from-the-US-loving vegetarian is also naturally afflicted with the usual lifestyle diseases and has, therefore, to be reassured, which is done by the next declaration, "0 % fat". It is another matter that there is no mention of the sugar in the flavoured ice, not all of which will get burnt and will find a resting place in the fat around the middle. Nevertheless, the stuff itself must be fat-free! I am sure not too far from now will appear an additional declaration proclaiming the stuff to be containing "0 % cholesterol". That is where it must stop because after declaring that the flavours come straight from the US you cannot quite proclaim, as is often done, "no added flavours".

Having gone thus far, the home-grown copy writer must have run out of ideas. He must have needed a couple of closing punch lines and so had to improvise. "The perfect Reason for every Season," it said, leaving much doubt about what he wanted to convey. Maybe the flavoured ice was the perfect reason for self-indulgence in every season, or the perfect passion for every season. But whatever it was, there were no takers for this "Reason" when the wet and shining pavement had only the empty kiosk for company with even its keeper gone.

The copy writer, totally exhausted by now, but with a space equivalent to a line at the end, could only add with flourish a final repetitive exhortation, "Enjoy the treat from the USA." The security guard at the store gate looked quizzically as I jotted down the lines while getting partly wet in the rain, having to take in the imported wet English summer along with the promise of imported American flavours, all put into an authentic Indian concoction.

subirkroy@gmail.com

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BUSINESS STANDARD

WHAT UPA-II HAS ACHIEVED

DEVANGSHU DATTA

PA-II has acknowledged that corrupt practices took place while it was in charge; It has sacked ministers and put them in jail

It is easy to characterise this government (United Progressive Alliance-II) as corrupt, crony-capitalist and economically incompetent. It is also true that UPA-II is the most honest and open government India has ever had.

The bar isn't high and UPA-II is a long way from being either honest or open, in absolute terms.

Nevertheless, it has acknowledged that corrupt practices took place while it was in charge; it has sacked ministers and put them in jail; it has admitted it cannot control inflation owing to global economic trends beyond its influence. That is far more in the way of honesty than any previous Indian government has displayed.

India has never had an honest, open regime. That is why we fall back on fables about Ram, Yudhisthira and Harishchandra when those buzzwords come up. The British openly milked the subcontinent. The inheritors of the Raj continue to milk it.

Cronyism and its twin brother, nepotism, are regarded as virtues in all oriental value systems. In India, one is taught to favour kith and kin above all, then to favour caste-siblings and friends of family, then people from the same religious background, and so on, thus creating pyramids of influence instead of the level playing fields favoured by woolly-headed Occidental theorists.

The number of honest Indian politicians who have ever made it to the gaddi can be counted on the fingers of one hand. A double-amputee could tot up the number of Indian politicians who have avoided cronyism and nepotism. The entire license raj, along with convoluted tax laws and vast discretionary powers, was designed to enable this.

Between 2009 and 2012, however, far more scandals have made it into the news in far greater detail. That cannot be bad in itself. UPA-II has also acknowledged that the current system is broken, by resurrecting the long-shelved concept of a Lok Pal. It is a different matter that the Lok Pal concept itself is flawed and has sparked a three-ring circus.

Obviously, UPA-II hasn't done this willingly. Its hand has been forced by an inability to control dissemination of information. But this does set precedents. It makes it more likely that in future notably corrupt ministers could be sacked or jailed. Therefore, it makes it at least a little more likely that future corruption will be less blatant or damaging.

On the economic front, it has done some positive things as well. It has (reluctantly) enabled independent regulators in key sectors like the Airports Economic Regulatory Authority and the Petroleum Natural Gas Regulatory Board. It has freed the price of petrol, (even if it hasn't touched diesel or kerosene). It has run a massive urban renewal scheme, which has made a definite difference to quality of life for the 400-million odd people who live in India's cities and generate 70 per cent of its gross domestic product.

The UPA-II government has also tried to clean up policy in sectors such as power, roads and ports. It may yet "manage" the telecom mess. It might even, out of desperation, end up reviewing land acquisition processes and legislation.

It has tried to create a unique identification system, which could form the basis for an e-governance structure. This would substantially reduce low-level corruption (while creating new problems in terms of privacy). Of course, it has also introduced blatantly populist schemes like the National Rural Employment Guarantee Scheme and on food security rather than deal with the problems that plague India's labour markets and the food distribution chain.

As to economic incompetence, the acid test will really be the next year or two. Can UPA-II maintain India's growth rates at above 6.5 per cent, while Japan, Europe and the US all go through busts? If it does, by the next general elections, some more tens of millions will have bootstrapped out of poverty.

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BUSINESS STANDARD

COLUMN

HOLA! YO SOY AMERICA LATINA

THE REGION OFFERS PLENTY OF OPPORTUNITIES FOR TRADE WITH INDIA

PARTHASARATHI SHOME

Hello? And I am India! Language is a terrible barrier but the walls are coming down. Latin Americans speak Portuguese in Brazil and Spanish elsewhere, reflecting the division of commercial interests in the continent centuries ago. But they are learning English, though Indians are reluctant to learn their languages, still preferring, curiously, to learn French or German. That should change rapidly as trade and cultural links spread and firm up. Fifteen years ago when I spoke of the ABC economies (Argentina, Brazil and Chile) at a seminar in Delhi, an unimpressed researcher lamented that he was tired of examples from banana republics. Recently, a scholar from Jawaharlal Nehru University visited São Paulo and exclaimed, "São Paulo is New York! How can we compare Brazil and India?" Clearly, times have changed.

For cross-country comparisons from India's viewpoint, it is best to think of Latin America in groups: (1) Brazil since it is part of BRICS (Brazil, Russia, India, China and South Africa); (2) Argentina, Colombia and Chile (ACC), noting that our exports to Colombia are greater than to Argentina; (3) Mexico and Venezuela (MV), because they are oil producers; (4) Bolivia, Ecuador and Peru (BEP), since they are heavily indigenous and India could establish synergies with them; and (5) Uruguay, Paraguay, Cuba, Nicaragua and Guyana (UPCNG) comprising small yet varying interests. To put per capita incomes into perspective, diagram 1 demonstrates how small India's per capita gross domestic product (GDP) is relative to Latin America's. It also reveals that Brazil's per capita GDP is not the highest in Latin America; it is in the middle. One could allude to India's population challenge. At 1.2 billion, India is double that of Latin America in terms of population. Brazil is 200 million, Mexico 100, Colombia 50, and Argentina 40.

In the February edition of Diplomatist, R Viswanathan, India's ambassador to Argentina, provided trends and potential in trade and investment in traditional manufacturing and services, agribusiness and farmland, and culture and entertainment. In 2009-10, Indian exports to Latin America increased by 20 per cent, reaching $9 billion but India's imports were $14 billion, implying a considerable trade deficit for India and, therefore, potential for export. India's export and import trends are shown in diagram 2 and diagram 3. They demonstrate how India's overall trade relationship with Latin America has expanded. But considering that the region imported $700 billion in 2010, India's share is minuscule. Clearly, the potential is huge.

Diagram 2 reveals India's exports to Brazil and to the rest of Latin America were almost equal. Diagram 3 shows India's imports from Brazil did not match those from the rest of Latin America combined, though they surpassed imports from each of the other groupings. Beginning with Brazil, there is essentially a manufacturing-food exchange. More than two-thirds of Indian exports to Brazil include manufactured products – engineering, chemicals and textiles – while more than one-third of India's imports from Brazil comprise food and related items. Similarly, India imports crude from Brazil and exports high-speed diesel to it.

The trade pattern between India and ACC, BEP or UPCNG is a bit different from that with Brazil — almost all of India's exports to these three groups include exclusively manufacturing, though the commodity range is comparable to Brazil's. But, unlike in Brazil's case, there are negligible diesel or petroleum products in India's export basket to them. Also, though India does import a manufacturing range from Brazil, there is no import of manufacturing from the others to India except a very small amount of chemicals and textiles. Instead, from those three groupings, India mainly imports metal ores and scrap, a lot of food and wood products, some wool, and a bit of crude (see table).

Thus, despite some intra-variations, the India-Latin America trade relationship has remained quite traditional with India exporting much more of processed or manufactured products and Latin America exporting much more of the primary product variety. This implies that there are good possibilities for co-operative strategy and exploration for diversification on both sides. Finally, the trade between India and MV is also almost exclusively based on an exchange of manufacturing for petroleum products.

The possibilities are not restricted to trade in goods. Information technology (IT) as Indian exports and entertainment and culture as Indian imports comprise services that are picking up rapidly — so is Indian higher education as Indian university teachers move to Brazil, a country two-and-a-half times the size of India, to teach IT and other subjects. Colombia has officially recognised Ayurveda as a medical system and Ayurvedists are regular peripatetic visitors there. Embracing their culture and language, and participating in their reform process, I realised that Indian traditions of hospitality, health care systems such as Ayurveda, Yoga, Unani, and classical dance and musical traditions are vehicles waiting to be snapped up by the eager and trusting Latins.

The author is director and CEO, Icrier, New Delhi

His book Modernising Tax Administration: Championing Analysis and Specialisms will be published this autumn

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BUSINESS STANDARD

COLUMN

THE FACE OF BUSINESS

THE TELECOM SCANDAL, THE COMMONWEALTH GAMES DEALS AND CROOKED GOVERNMENT CONTRACTS IN GENERAL HAVE ALL HAD A STELLAR ROLE RESERVED FOR BUSINESSMEN

T N NINAN

The last few months have seen a good deal of comment, not least by businessmen, about a paralysed government that is unable to move on its reform agenda, and is caught in webs of scandal. While that is as it may be, little or no attention has been paid to the role of business in creating this denouement. The telecom scandal, the Commonwealth Games deals and crooked government contracts in general have all had a stellar role reserved for businessmen — some of whom are in jail, and others still free. More may emerge on this as the spotlight gets focused on the stacks of money stashed away abroad. On a different but related note, a recent research report had the ring of truth when it said: "It is our contention that notwithstanding the many positives of a growing Indian economy, corporate governance, accounting standards and disclosure practices adopted by some of India's prominent companies are questionable."

Compare this with the image projected by Indian business in the mid- to late-1990s, when the rewards of economic reform began first to show up. The names projected then were essentially ethical personalities — Premji of Wipro, Narayana Murthy and Nilekani at Infosys; businessmen with clean profiles who were also winning internationally (Baba Kalyani of Bharat Forge, Suresh Krishna of Sundaram Clayton); and first-generation entrepreneurs making their mark in tech or sunrise sectors, like Anji Reddy and Kiran Mazumdar Shaw. It was as if India had turned its back on the businessmen who had prospered in the days of the licence-permit raj, and that Indian entrepreneurship was flowering afresh in a new, competitive, open environment and confidently taking on the world.

Substantial elements of that picture still hold true, but new images now figure prominently in the mosaic — Ramalinga Raju of Satyam, the Bellary brothers, the owners of DB Realty, Vedanta and others that stand accused of violating environmental norms, Hasan Ali, and companies and realtors that are in conflict with poor villagers over forcibly acquired land. The rising tycoons of today tend to be in the resource sectors, and winners of public-private partnership arrangements. While everyone should not be tarred with the same brush, the political crisis over corruption is precisely because deals have been done. Call it the unacceptable face of Indian capitalism.

In a country that will have very large numbers of poor people for many years to come, the manifest increase in inequality over the past decade and more carries with it an inherent risk. Economists have shown that rising inequality is inevitable at a certain stage of economic development. What gives this a broad measure of public sanction is the fairness of the process — the winners have won in an open market, they have used clean methods, and they have shared their wealth or put it back in the business for productive ends, not frittered it away on conspicuous consumption. Most importantly, there is something in it for everyone — jobs, the hope of a better future, upward mobility from one generation to the next. Take away some of those elements, and it undercuts the legitimacy of enterprise itself.

Yet, the chambers of commerce that were once busy projecting the clean faces of Indian business are now silent. The defence mechanisms – sector regulators, courts and the media – are not effective enough. Shareholders occasionally hammer down a company's stock price when the CEO buys a plane on company account for Rs 270 crore, but you know that something is going off the rails when a car company readies to launch a new model in India for Rs 16 crore. What are we waiting for — street riots of the kind just seen in England?

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BUSINESS STANDARD

COLUMN

'DESIGNED' LABELS

KISHORE SINGH

You've just cost me a fortune," said Sarla, clutching shopping bags with both hands and looking extremely pleased in the bargain. "Me too," said Padma, pushing fake Diors off her face and posing in teetering heels that couldn't have come from any Fendi showroom but probably had a Ghaffar Market sticker where it couldn't be seen.

We'd gathered for lunch at a restaurant that once had a name you could pronounce, but now consisted of an unintelligible collection of alphabets rearranged in a manner that sounded like it had been faked, though, of course, it was the real thing. "Every time I come here, I promise myself I won't shop," said Sarla's husband – for the brands in the mall were all the highest end that, if they could, would charge you for polluting their rarefied atmosphere with your middle-class breath – "but every time," he grinned, "I break my promise."

Like his wife, Sarla's husband too was clutching bags from Tom Ford and Harry Winston and Hugo Boss. "Paid a packet," he said happily, "but it's worth it, I say." Later, my wife said, "I don't think he fooled anybody." "What do you mean?" I asked. "Tut-tut, you silly man," she said, "Amrita saw their chauffeur carrying all those bags from the boot of the car into the mall, so it's clear they brought those bags from their home to fool you into thinking they'd been shopping here."

I might not have believed my wife if it hadn't been for our other friends, Chandni and Chanda, who joined us later for cappuccinos at the ground floor café, themselves carrying bags, somewhat scuffed, but bearing such labels as Versace and Canali. "You've been shopping," squealed my wife, clapping in hands. "Yes, darling," said Chandni, "you'll love it," and out of the Canali bag fished out a Mango packet, from which she extracted a trendy jacket. "And what's wonderful," she purred, "is that it was on sale."

The wives spent the next couple of minutes exclaiming over how Mango was their absolute favourite, till finally I interrupted to ask, "But if you're so fond of the brand, why hide it in a Canali bag?" "Look around you, you dolt," mocked Chandni, "and tell me what you see." It was true that the well-heeled who'd sunk into the sofas all around seemed better suited to the Louis Vuitton bags and Bottega Veneta shopping bags they were carrying than high street labels such as Zara at the mall next door, but I was still perplexed. "When in Rome et cetera," grinned Chanda, and opened the Versace bag he was carrying to reveal his Fabindia shopping inside."

It was dishonest and wicked and ought not to have been right, but I saw the logic of it right away. Having seen our friends off, I walked into a Burberry showroom and told the lady there that my shopping bag had burst, and could she spare me a paper bag please — which she did, reluctantly. So armed, I set off for my meeting at the same café with a luxury consultant I was seeing for the first time. "This place," said the consultant, "is hard on one's credit card," placing a Gucci bag on the table between us. "Every time I come here, I promise myself I won't shop," I agreed – my Burberry joining her Gucci on the table – "but every time I break my promise." Both of us having thus established our fake credentials, we got on with the task at hand — discussing a white paper on the growing incidence of counterfeits in the Indian market.

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THE ECONOMIC TIMES

EDITORIAL

MIGHTY APPLE

APPLE SYMBOLISES THE POWER OF BRANDING, INNOVATION, DESIGN AND GLOBALISATION

Sir Isaac Newton hit upon the theory of gravity, so goes the story, after an apple fell on his head. Apple, the maker of the iPhone, shows scant respect for the force of gravity, however, and its stock price has levitated enough to make Apple the most valued company of the world, pushing oil giant Exxon-Mobil to second place. Apple's rise to such exalted heights is a paean to the power of branding and marketing, building on insight into consumer behaviour and on design and technology that produce an experience that goes beyond functional utility to delight the consumer. Apple's success is also a tribute to the power of globalisation. Success of this spectacular kind is not easy to duplicate but it is possible to strike a middle ground between walking away from such an impossible achievement and standing agape, lost in amazement. Oil and energy are basic necessities, and make modern societies run. So is computing a basic necessity. But Apple is not any more a computing company. It has successfully made the transition to a consumer electronics company, one that caters to human wants and aspirations, constructs ever new stories to an intriguing pleasure palace into which the consumer is inveigled. (Can a communication and business device be categorised as an instrument of pleasure? If its utility were all that mattered, the iPhone would not outsell all other smartphones despite its premium pricing.)
Apple is one of the finest examples of a company taking advantage of globalisation. The product innovation, design, engineering, branding and marketing are done by the parent out of its home base, but the actual production is done in the far east. The manufacturing location captures a tiny fraction of the value added while the rest accrues to the company. The products are sold around the world. The services riding on the iPhone, the iPad and the iPod, too, have global sourcing and global marketing, all of which produce revenue for Apple. Yet, Apple might not quite live happily ever after, thanks to its proprietary technology model that makes Apple products pricey in relation to its open-source competition. May Apple and its rivals add further to consumer delight!

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THE ECONOMIC TIMES

EDITORIAL

FALSE POSITIVE

INDUSTRIAL GROWTH OF 8.8% IN JUNE SEEMS GOOD BUT THAT FEEL-GOOD IS SUPERFICIAL

The latest estimates of industrial production, for June, show credible 8.8% overall growth, over the like period last year, although disaggregated figures show marked slowdown in key segments like consumer goods. Also, while the buoyancy in capital goods might appear to point at investment demand in the pipeline, much of the growth appears to be in power and electrical machinery, and that is clearly lop-sided and unbalanced. Tight monetary policy would appear to be beginning to bite. A sectoral break-up of the figures shows that manufactures, with 75% weight in the index of industrial production, have posted a strong 10% rise in June. And electricity output, with 10% weight, is up 7.9%. However, this robust show in power generation would lose steam without prompt plugging of widespread revenue leakage in distribution by state utilities. As for mining, with about 14% weight in the industrial index, output is down to a lowly 0.6%, for which warped policy seems squarely to blame. The policy framework for ore and coal mining needs to thoroughly overhauled. Use-based figures put capital goods, which accounts for about 9% weight in the index, growing at 37.7% y-o-y. The big increase is partly statistical, coming as it does on a low base: growth under the head was a mere 3.7% last June. However, further disaggregation reveals that the segment machinery and equipment, with about 4% weight in the index, has posted a lacklustre 2.2% increase. And the head electrical machinery and apparatus, with 2% weight, has grown a stupendous 89%. It cannot be gainsaid that industrial growth is patchy, what with entire sectors like textiles, apparel, chemicals, plastics products and TV and communication equipment, with a combined weightage of over a fifth in total industrial production, posting negative growth. Further, consumer goods, with 30% weight, have risen by a poor 1.6%. The growth in durables, with 8.4% weight, is down to 1%. The latest increase in consumer items is on a high base, as growth was in the double digits last June. Overall, the industrial growth momentum appears to be faltering.

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THE ECONOMIC TIMES

EDITORIAL

THE RIGHT SIZE

THINKING SMALL DOESN'T HELP, NOR DOES THINKING BIG

Getting office space in Dubai, where over 40% of commercial property is vacant after the tiny sheikdom went belly up, should be a no brainer, right? So why is Standard Chartered, the financial conglomerate, building its own tower in Dubai? Because it couldn't find a single large space that it could rent or buy that was owned by one entity. During Dubai's real estate bubble thousands of people bought floors or apartments to flip them at higher prices. After prices crashed in 2008, most of them got trapped with their holdings; they can sell small units to individual buyers, but when a large client which needs lots of space turns up, there's nobody who can rent or sell that much space. Thinking small, as Indians are reminded of everyday, has its perils. But then, on the plus side, past small-mindedness has given a present boost to Dubai's construction industry.
But does it always make sense to think big? Indians constantly tell themselves that the Chinese do everything — from hosting games to building high speed rail lines — better. We should look at some of China's gargantuan failures. Six years ago, global media took the opening of the New South China Mall in Dongguan as evidence of China's growing consumption appetite. The numbers for what was touted as the largest mall in the world, were impressive: it had 9.6 million sq ft of space, enough for 70,000 shoppers and 1,500 large stores. It had mock ups of Venice's canals, the Arc de Triomphe, dinosaur parks and ghost rides. Less than a dozen stores eventually came up and every one of its principal attractions failed. The largest mall in the world is also the loneliest, with 99% of its area vacant. But why just malls? China builds entire cities, Ordos is the best example, which lie deserted. Big or small does not matter, the right size does.

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THE ECONOMIC TIMES

HUMPTY-DUMPTY HAD A GREAT FALL

RIOTS ACROSS BRITAIN SIGNAL THE INCREASING DEPOLITICISATION OF THE COUNTRY'S MULTI-CULTURAL SOCIETY

Faced with unprecedented riots backed by no organisation, mobilised through new media and social networking sites, lacking in any political cause and focused on consumer goods, British politicians and journalists have responded by accounting for them in as conventional a way as possible. It is perhaps because they put into question traditional ways of thinking about British society that these riots have to be forced into a set of standard explanations categorised by political affiliation. So, on the one hand, we have a narrative of social marginalisation leading to a violent outburst, and on the other, an equally stereotyped story about the loss of state authority resulting in wanton criminality. Whatever the truth in such explanations, they are too generic to account for the sheer novelty of the mayhem on England's streets over the past few nights.
Before asking what these extraordinary events are about, we should be clear about what they are not, if only because the government and its security agencies had anticipated something quite different. These are not race riots fomented either by disempowered ethnic groups or antiimmigrant parties. Neither are they violent protests over some political issue like war in the Middle East or tuition fees. And they certainly have nothing to do with that most worrisome of recent phenomena, Islamic terrorism. Both politicians and the police are used to such disturbances, and have invested a great deal of effort in preparing for them. But once they started spreading across England, it became clear that no single factor like race or class could compass the diversity of age and ethnicity, income and gender, locality and family background that marked the riots. Even the fact that they were largely young and working class defined the looters only in the most general terms, since they included the employed and unemployed, suburbanites and inner city youths.

Instead of bemoaning the fact that this great diversity of men and women had abandoned social norms during the riots, we might see them as participating more fully in the consumer society that has become our greatest norm. For their ferocious concentration on looting the most ordinary and indeed affordable goods seemed to be an exercise of consumer choice, not least because it was only certain objects that looters were after and not others. Bookstores remained untouched, for instance, and the fairly modest goods on sale at sports shops, electronics retailers and groceries were the great favourites among rioters, not big-ticket luxury items that might transform the quality of their lives. It was as if these youthful thieves were participating in a gigantic going out of business sale mounted by an economy they all knew is in a state of crisis.

Much has been made in the press of the rioters' looting mirroring that of a ruling class that has lost legitimacy in recent scandals over corruption, but what strikes me as being crucial is the fact that the crowds on the street were in many ways products of an increasingly depoliticised British society.

As in some other Western countries, the political arena in Britain has been narrowed down to elections, which are marked by declining voter turnout while being dominated by the middle-aged and the middle class. Apart from this intermittent political act, praised as the very essence of democracy, no other form of public opinion, a few selected polls apart, is allowed to impede the wheels of government. So from this year's massive anti-war protests to the recent student demonstrations against fee hikes, no public voicing of grievance has had any effect upon or support from within parliamentary politics. And yet it was not frustrated protestors who turned out to pose a threat to law and order, but rather crowds of violent consumers who were the product of a depoliticised society.

The kind of threat these crowds pose, however, is not to law and order alone, but to the very categories by which political parties label citizens. The riots, after all, could not be defined by reference to immigrants, Muslims or even the white working class, which suggests that the notion of a national majority too is shifting, if only in the absence of traditional political conflict. So, while the Prime Minister dismisses any social explanation for the violence and appeals to a vengeful constituency by promising a tough law and order response, symbolised by the sentencing of an 11-year old boy for stealing a waste paper basket, a concerted effort is being made to re-apportion the citizenry along conventional lines. And race has emerged as the best way of doing this, with the Sikhs, Turks and Poles who defended their communities during the riots hailed as being more patriotic than the white or black working class.

But at the same time there are anxieties that the vigilante groups set up to protect neighbourhoods, whose very existence demonstrates a general loss of faith in the police and politicians, might degenerate into gangs fighting one another on racial lines, particularly because anti-immigrant groups like the English Defence League have announced their intention to defend the streets from which they were absent over the last few nights. And much of the European press has been even more anxious to redefine the riots in racial terms. However warranted these praises as well as fears might be, they signal a return to the political divisions of the past that the riots had quite ignored. Will a national majority be reconstituted in this manner, or do the riots of August portend a real historical change?

FAISAL DEVJI

READER IN HISTORY, UNIVERSITY OF OXFORD

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THE ECONOMIC TIMES

GUEST COLUMN

A DIM LIGHT ON GLOBAL WARMING

BJØRN LOMBORG

Amid a growing wave of concern about climate change, many countries — including Brazil, Australia, the US, the EU — passed laws in the 2000s outlawing or severely restricting access to incandescent light bulbs. The intention was understandable: if everyone in the world exchanged most light bulbs for energy-efficient compact fluorescent light bulbs (CFLs), we could save 3.5% of all electricity, or 1% of our CO2 emissions.
The current attempt by Republicans in the US Congress to roll back America's effort to ban incandescent bulbs has revived this discussion. Many contend that the agenda is being driven by knuckle-dragging climate-change deniers. But it's worth taking a closer look at the premise that banning things is the smartest way to tackle global warming. Let's be clear: we do need to tackle climate change. But this does not mean that we should just cut all emissions. Burning fossil fuels also has significant benefits, and we should weigh those benefits against the costs.

A tax on carbon should be equivalent to its damage. The best estimate of this is about $7/tonne of CO2 or $0.06/gallon of gasoline (€0.015/litre). Most developed countries already have a tax of this size (and often much larger) on electricity and fossil fuels, although this also incorporates the costs of air pollution and supply insecurity.

While CFLs are more expensive to buy, they are much cheaper over their lifespan, because they use much less energy (even more so with the cost of CO2 factored into taxes on electricity). Thus, on a straightforward cost-benefit basis, it seems to make sense for most people to switch from incandescent bulbs to the new, greener technology.

This is what is great about technological solutions to climate change: if an alternative option is cheaper, people will start using it. My household uses CFLs, and I enjoy knowing that I am causing fewer CO2 emissions and spending less money.

Why, then, is it even necessary to outlaw the old bulbs? The reason is that monetary cost is only one factor. Many people find it annoying that CFLs take time to "warm up". Or they believe that their light is "funny". Or they worry that the bulbs can spread poisonous mercury if they break. For some people, energy-efficient bulbs can trigger epileptic seizures and migraines. The upfront cost is a factor, too, especially for those on low budgets. And in places where lights are not used very often, a lower-price incandescent bulb can cost less overall than the energy-efficient alternative.

You might imagine that people could choose the right light bulbs for themselves. But proponents of phasing out access to incandescent bulbs argue that they know better. As US Energy Secretary Steven Chu put it recently, "We are taking away a choice that continues to let people waste their own money."

Setting aside other possible objections to this view, there is the problem that it presumes that all incandescent bulbs are worth less than $7/tonne of CO2. This is clearly not true for those who suffer from migraines or epileptic seizures because of the new bulbs, or for those who are seriously worried about mercury, or for those who have other reasons for preferring incandescent bulbs.

The solution should be to focus on improving the technology — making the lights safer, brighter, warm up faster, and save more energy, so that more people will replace more of their lights.

But it is not just light bulbs that policymakers have tried to ban. EU parliamentarians voted overwhelmingly to outlaw patio heaters, which one MEP declared to be "a luxury the planet cannot afford".

Who decides when something is luxurious? And where does this end? Should we outlaw air-conditioning or television satellite boxes because some people find them luxurious? Should we ban private cars wherever public transport is available to move us from A to B with fewer CO2 emissions?

It makes sense to reflect the cost of CO2 (among many other factors) in the price paid to drive our cars or heat our patios; but when the phase-out proceeds more slowly than some lawmakers wish, a ban is not the right solution.

Real reductions in carbon emissions will occur only when better technology makes it worthwhile for individuals and businesses to change their behaviour. CFLs and other advances can take us part of the way, but there are massive technological hurdles to overcome before fossil fuels generally become less attractive than greener alternatives.

This is where a lot of policymakers get it wrong. Governments talk far too much about setting a relatively high carbon tax on emissions, while focusing far too little on ensuring a meaningful increase in research and development to bring about necessary breakthroughs.

Limiting access to the 'wrong' light bulbs or patio heaters, ultimately, is not the right path. We will only solve global warming by ensuring that alternative technologies are better than our current options. Then, people the world over will choose to use them.

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THE ECONOMIC TIMES

WHAT ABOUT CHINA'S DOLLAR TRAP?

RAJIV JAYARAM

If you think that the credibility of international credit rating agencies passed from AAA to BB- during the 2008-09 global financial meltdown, think again. They have lost none of their edge when it comes to working up market fright. Witness this week's turmoil in international financial markets wrought by Standard & Poor's (S&P) downgrading of the US credit rating from AAA to AA+ on August 6.
But the other two premier global rating agencies, Moody's and Fitch, have not downgraded the US. So, it's odd that this time around, there was no chorus demanding 'rate the rating agencies'. That was the call heard often during the financial crisis as securities based on US subprime mortgages that were rated AAA by S&P and other agencies turned out to be highly toxic and caused financial ruin across the world. They had also given similar gilded ratings to Lehman Brothers and AIG just before they went belly up.
Some say S&P is playing smart now. However, the talk this time was, 'let us not shoot the messenger'. It was apparent for some time that the US economy was heading towards the dumps, and the world fretted about it. Three days before the S&P downgrade, China's largest stateapproved rating agency Dagong had slashed US credit rating from A+ to A-, citing the deteriorating debt repayment capability. Last November, Dagong had downgraded the US after the Federal Reserve decided to continue its ultraloose monetary policy.
So, the Chinese were quick to jump on S&P's move. In a scathing editorial on August 6, the state-run Xinhua heaped ridicule on US financial policies and declared the downgrade was an "overdue bill that America has to pay for its own debt addiction". It said the US spent too much on military and entitlement programmes, lived beyond its means, and should expected more downgrades if no substantial reforms are enacted. "The US government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," the editorial went on.

For some time, the Chinese state-run media has been busy inventing a fantastic dark world of American-style capitalism's decline. But note the high road of sermonising taken now, in English, for foreign audience. Reports suggest that the reaction of the Chinese media in Mandarin was a cross between schadenfreude and outright gloating.

Anyway, Xinhua didn't let any prized US state secret out. Everyone knows that if the US doesn't trim its fiscal and trade deficits and curb its debt-induced spending binge, it was asking for trouble — and for others as well. That's econ 101. And no one doubts China's right to criticise the US. With its stockpile of $1.16 trillion in US Treasury bills — and likely more amassed through overseas entities — China is the largest foreign holder of American debt.

But then, the US has been running its twin deficits for years. Yet, China's investment in US Treasury bills showed no sign of decline. Rather, it climbed up and up in the past decade, just as China began to pile up huge forex reserves brought about by its trade surpluses, including with the US. So, the question is unavoidable: what about China's own addiction — for dollar-denominated assets? Here, the authoritarian state's self-serving narrative gets a bit murky. The truth is, China is caught in a dollar trap of its own making and has little choice but to keep pouring the bulk of its growing forex reserves into the US Treasury, which, all said, still remains the only market deep enough and liquid enough to support such investments. If China goes on a selling spree of its US bond holdings — say, in retaliation for US arms sales to Taiwan, as People's Daily has darkly hinted — the inevitable crash in the value of the dollar would diminish the value of its own bond holdings to unacceptable levels. For the communist regime that pumps up economic nationalism at home on the premise that the country's forex reserves are the fruits of the 'blood and toil' of its citizens for 30 years, the loss of face would be terrifying. Many Chinese have already started questioning the very basis of China investing in the debt brought on by reckless American spending.

There's another danger — significant appreciation of the yuan, which is pegged to the dollar. That has been the dread of the communist regime, which ties internal social stability — and its own survival — to the export-led GDP growth model. If it stops purchasing US debt and other dollar assets, keeping the yuan's rate artificially low would become unsustainable for the Chinese central bank. The export competitiveness China enjoys in trade, particularly with the US, would be the first casualty of this. Factories would close, jobs lost and the planned rebalancing of the economy towards consumption look increasingly fragile. For a regime that has no clear plan B to ensure 'social harmony', it would be a horrendous prospect.

Lecturing the US is fine, but for the Communist Party of China to retain power, part of the strategy remains: "In the US Dollar We Trust".

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BUSINESS LINE

OPINION

UNDERMINING THE STAMP DUTY AUTHORITY

S.MURLIDHARAN

The Direct Taxes Code Bill, 2010 (DTC) gives a no-holds-barred impetus to black money generation from immovable properties. First, while computing income from house property, it dumps the time-honoured concept of fair market rent. And when the time comes for disposal of a house property, once again it would be the assessee's word that would prevail. As it is, the assessing officer can plump for the stamp duty value fixed by the stamp duty authority in case he suspects under-disclosure of the true consideration . Before this regime kicked in, there was a more effective regime that called the seller's bluff — of pre-emptive purchase.

If a property was proposed to be sold through an agreement to sell at Rs 1.5 crore with the actual consideration being Rs 2.5 crore and the difference settled in cash outside the books and banking channels, the authorities could pre-empt the deal after proper enquiries by issuing a cheque for Rs 1.5 crore and thus putting paid to the plans of the seller.

Seller let off hook

The DTC commits the sin of neither restoring the regime of pre-emptive purchase nor persisting with the regime of resorting to stamp duty valuation, thus opening the floodgates of black money generation from this source. One wonders why the DTC is casting all caution to the wind while dealing with immovable properties.

The stamp duty regime is discredited because the go for high-pitched assessments but the regime of pre-emptive purchase was quite fair and transparent. It appears that the DTC has left the seller off the hook deliberately because the subsequent provisions dealing with receipt of gifts among other things say that if a person gets an immovable property at a consideration that is less than what the stamp duty authorities say, the difference would be taxable as his income by way of gift.

Thus if the stamp duty authorities say that the value of the property that has changed hands is Rs 2 crore whereas the seller has got only Rs 1.75 crore from the buyer, the buyer would have to pay tax on Rs 25 lakh.

It would be downright inequitable to penalise the buyer for the shenanigans of the seller.

It goes against another canon of taxation — the beneficiary should be taxed.

Admittedly, when consideration is fixed in such a manner to bail out the seller, the tax authorities ought to get at the bottom of the transaction to tax him rather than to tax the buyer who often happens to be an innocent accomplice to the deal.

At best, he should be penalised for paying a part of the consideration in cash . But to say that he got the property cheap and hence has to pay a gift tax pro tanto is patently unfair to him.

It may be contended that the new scheme is designed to catch bribes guised as undervalued properties. This possibly cannot be ruled out, but it is wrong to penalise all buyers just to prevent a few shady deals.

The DTC is still before Parliament, and before it is signed into law it must be ensured that glitches therein are removed.

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BUSINESS LINE

OPINION

OF ECONOMY AND HOUSEHOLD BUDGETS

D. MURALI

By 2019-20, Indians will earn about double of what they do now and this extra income will also reflect in a changed household budget, foresee Laveesh Bhandari and Swati Gupta in The Indicus Handbook 2011: Indian economy, markets and consumers ( www.pearsoned.co.in).

The authors expect household budget to be about two times higher than it is now, in real terms, with household expenditure growing by more than 8 per cent per annum in the next decade. "The percentage share of food and related products in total household consumption would fall from 40 per cent now to 34 per cent in 2019-20. Transport, education, health, and recreation would all be among the most rapidly growing items of consumer expenditures."

The authors highlight what they call 'the next tipping point.' What is that? Cooking at home will continue, and we will not do away with kitchens as in Thailand, but processed foods and eating out will emerge as the most rapidly growing component of household budgets, they forecast.

An interesting insight in the book is that many households that can afford to buy different types of durables do not. Why so? Because of lack of consistent and quality power, water, or gas, coming in the way of making full use of durables. What the authors hope is that as infrastructure improves in both rural and urban areas and utilities become more efficient, there will be a greater demand for durables.

Recommended reference for the quick presentation of facts on a variety of facets of the economy.

Balance of power in energy equations

The US-India civilian nuclear energy cooperation agreement is about much more than mere nuclear technicalities, writes Harsh V. Pant in The US-India Nuclear Pact: Policy, process and great power politics ( www.oup.com). It is about the emergence of a new configuration in global balance of power, thereby highlighting how strategic considerations drive the non-proliferation priorities of great powers, he notes.

The unspoken context of the deal, in the author's view, was the US concern about China's rapid ascendance in the Asia-Pacific.

"Both India and the US realised that, to prevent China from dominating the Asia-Pacific, a close partnership between the world's two largest democracies was essential. The nuclear deal became the most potent symbol of the US-India rapprochement."

Observing that Japanese nuclear companies are eager for a share of the Indian market, Pant adds that, given the involvement of Japanese firms such as Toshiba Corp, Hitachi Ltd, and Mitsubishi in the US and French nuclear industries, an Indo-Japanese pact is essential for the US and French civilian nuclear cooperation with India. He hastens to mention, however, that post nuclear crisis at the Fukushima Daiichi nuclear power plant recently, it will be some time before Japan and India will be able to come to some sort of an understanding on this.

Essays of significance on an unfolding energy horizon.

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BUSINESS LINE

OPINION

SHOULD MFIS BE ALLOWED TO FAIL?

TARA THIAGARAJAN

Sure, I say. I'm taking a contrarian position in the industry and here's why. Let's look at why people have loved the microfinance industry, at least in the past.

First, there was enough propaganda that it was alleviating poverty to make you feel good about association. And proponents will still argue that if some of the struggling MFIs are allowed to fail, it will crush the dreams of financial inclusion and, thereby, a chance to 'better the lot of the poorer sections of society'.

This simply does not hold. Six years into this, it is starkly apparent to me that financial inclusion in the form of high interest loans does not better the lot of anyone very much. There is very little productive use of the money and very little of sustainable value has been created with microfinance funds — the value creation per rupee is lower than if the funds were deployed elsewhere.

To create sustainable changes we need something more fundamental than financial inclusion. We need ways to enhance human capability and the creation of value and then let the funds follow, not lead.

Managing repayment

Second, there's been the tenet that the industry stakeholders have stuck by — that the need and demand is huge and therefore that supply should not be choked in the short term. This is tricky. Of course, there is enormous demand among the poor for money. There's demand everywhere for money. But the kicker is that the demand is for cash in hand and not for debt.

People want money to manage their cash flow but are not really thrilled at the prospect of paying it back.

Typically they are not ecstatic, loyal customers but rather opportunistic borrowers, and managing repayments is the single biggest task of lenders. The microfinance industry has shown that under ideal circumstances of few lenders and no political intervention, its repayment mechanisms can work very well.

However, as the Andhra Pradesh crisis has clearly demonstrated, customers see little value in sustaining debt, little loyalty to the lender and can be easily convinced to default. If indeed the value creation and livelihood development facilitated by microfinance was so profound, then the customers would be rising up against the AP government to protect the value that they saw in their debt relationships.

So if we are to protect the industry or individual players within the industry, what is it we are really trying to protect and why? If we take the view of the ultimate outcome of value creation on a longer time scale, it is major upheavals that pave the way for completely new thinking and fundamentally new and better models.

Evolutionary advances

In nature it has been the cataclysmic instances that have paved the way for the most significant evolutionary advances. It has been the famines and floods that have tested the limits of the robustness of the organism's constitution, and with thinking organisms, their foresight and ability adapt to these new circumstances.

It is when only the most robust remain to breed with completely new behavioural paradigms constructed from lessons of the past that real advance is made. And as it is for organisms, so also it is for organisations.

In the microfinance industry, the opportunistic, highly leveraged approach of rapid growth without genuine customer engagement and value creation was evident among a number of players long before the Andhra political intervention. Customers jumped easily among lenders and borrowed from one to pay another and the premise that microfinance largely funded micro-enterprise was challenged with direct evidence to the contrary.

And cataclysmic defaults are no strange beast when it comes to this segment — the banking sector has experienced it before and individual players in the industry have battled it even when the going was good for others in the industry.

The good news is that there are companies within the industry that have vigilantly protected themselves against these risks, building value steadily and deliberately. It is these that will emerge stronger from with even better mechanisms to build real value for customers and consequently, loyalty.

So in the long run, I believe, the industry will survive even as some of the players drop out, and the crisis will actually speed up the path to a genuine solution to the country's larger problems.

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BUSINESS LINE

OPINION

ON SALE OF SIM CARD

MOHAN R. LAVI

In the 1994 Budget speech, while introducing Service tax , the then Finance Minister had stated that he was making a modest effort to tax services which at that time was contributing 40 per cent to the gross domestic product (GDP). With the efflux of time, the modest effort turned out to be a money-spinner encouraging the law-makers to levy the tax on transactions that had a tinge of service to them, but which were essentially goods. The perceived clear distinction between sales and services became a blur. Subscriber Identity Module (SIM) cardshave created large headaches for the tax administrators and tax payers. As a SIM card is a tangible and physical substance, the normal reaction would be to regard it as a sale of goods thereby VATable. However, the service provider also provides a phone number with the SIM card and activates the number which has all the elements of service embedded in it. CESTAT benches and High Courts across the country researched on this and gave differing judgements which inevitably brought the apex court into the picture.

In Union of India vs State of Uttar Pradesh, the apex court held that there could be certain transactions which have a flavour of both a sale and a service implying that double taxation can occur. Pending legislation on the same topic provided an opportunity for the apex court to look at the vexatious issue again in Idea Mobile Communication Ltd vs Commissioner of Central Excise and Customs, Cochin.

SC decision

The apex court dissected the decision of the Kerala High Court in Escotel Mobile Communications Ltd. vs. Union of India and Others, reported in (2002) Vol. 126 STC 475 (Kerala). The Kerala High Court was of the view that the transaction of sale of SIM card is without doubt exigible to sales tax under the KGST Act and both the selling of the SIM Card and the process of activation are "services" provided by the mobile cellular telephone companies to the subscriber, and squarely fall within the definition of "taxable service" as defined in section 65(72)(b) of the Finance Act.

Without generalising the ruling, the apex court held that the position in law is therefore clear that the amount received by the cellular telephone company from its subscribers towards SIM card will form part of the taxable value for levy of service tax, for the SIM cards are never sold as goods independent from services provided.

Dissecting contracts

Normally, a person who needs a mobile number purchases a SIM card and not vice-versa. It needs to be seen if the logic of the decision of the apex court can be used by other composite service providers. A host of legal decisions after Daelim Industrial Company permit artificial bifurcation of composite contracts with 70:30 evolving into an unwritten rule. A service provider is at liberty to choose the most tax-efficient structure. It remains to be seen if Central GST is enunciated on the same lines.

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BUSINESS LINE

OPINION

THERE'S NO END TO RESERVATION

P.V.INDIRESAN

The book Tom Brown's School Days was more or less mandatory reading for school-boys a couple of generations ago. I still remember one sentence: There is an end to everything in life and that is the important point. It referred to Tom Brown's first day at school when, as the newest boy, he was the last one in the list.

As the names of the boys were called, Tom Brown was getting more and more anxious whether his turn would ever come and, when it did, if he would be able to respond. The important point is, it did happen, his turn did come and he was able to respond. But that is another story.

Our Constitution-makers introduced reservation only for the Scheduled Castes and Scheduled Tribes in jobs and in admissions to colleges, and that too for ten years, though with possible extensions if need be.

They rejected Dr Ambedkar's suggestion that it should be for a fixed period of 30 or 40 years, with no provision for extension. Thus, the system has been extended every ten years, for nearly 70 years.

The scheme has also been extended to backward castes, Other Backward Castes and Most Backward Castes as well. It has created such a vested interest that there appears to be no way that it will ever end. Unlike Tom Brown's attendance, the important point does not seem to happen; there appears to be no end to the process of reservation.

I am reminded of this factor because of the banning of the film Aarakshan by UP, Punjab etc. The opposition to screening the movie comes from the view that no one, not even a film producer, can discuss the issue. I must confess I have not seen the film and, as I am out of the country on holiday, may not be able to see it even if it is released before this article goes to print.

However, my concern is not about what the film depicts but the issue of freedom of speech. Does our legal system prohibit even the discussion of this or any other controversial issue?

Eschewing the system

I think the reservation system is being perpetuated, not out of hatred for the upper castes, but because it has become an enormous source of wealth for the beneficiaries. It will probably come to an end not because of opposition or even criticism from the affected communities but because the beneficiaries get tired of it and give it up on their own.

For instance, Dr Arokiaswamy joined IIT Delhi after getting a Ph.D. from the Imperial College, London. Two years later, I got a note from the IIT administration to the effect that, as per government instructions, there must be a Scheduled Caste member on the selection committee for appointment to reserved posts and would I release Dr Arokiaswamy, the only such member in the Institute.

I asked Dr Arokiaswamy why he never said he belonged to the Scheduled Caste. He just laughed. He was an outstanding engineer who demonstrated how linear motors — the basis of modern high-speed railways — could be built. Unfortunately, our railways are very conservative; they would not listen to him. Otherwise, we would have been ahead of the Chinese in developing such systems.

I have heard of another social scientist who — along with all others — was removed from a prestigious think-tank when a new director took over. After hearing that one of the persons he had removed was from the Scheduled Caste, the Director called him to assure that his job was safe. The social scientist cut him short by saying 'I know why you have called me and I do not want to work in an organisation that makes such a distinction'.

There must be thousands of such people who do not want to make use of the reservation system. The persons we hear of and see on the TV are the different kind; they insist all the time how badly they have been treated. For instance, IIT Delhi introduced recently a special course for Scheduled Castes/Scheduled Tribe candidates. It was a tactless move but not really a bad one because, even after forty years, many of those students were at the bottom of the class. What a furore there was on the discrimination they received! But nobody realised or thought it fit to point out they were in the IIT only because they were discriminated against in the first place.

Different parameters

Caste is a permanent attribute that cannot be removed or lost. Thus, reservation based on caste has identified certain communities as deserving and some others as undeserving of government patronage for all time.

If reservation had been based not on caste but on income — for instance, for all BPL families — practically no Scheduled Caste or Scheduled Tribe would have been excluded, but the beneficiaries would have changed every generation. Further, it should not have been at the tertiary level; but at the primary and secondary level in the best schools in the country. Then, the bitterness of caste divisions would not have been politically perpetuated as they are now. As matters stand, I am not sure when the important tipping point — that there is an end to everything in life — will ever occur in this case.

Had reservation been based not on caste but on income — for instance, for all BPL families — practically no Scheduled Caste or Scheduled Tribe would have been excluded, but the profile of beneficiaries would have changed every generation.

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DECCAN CHRONICAL

EDITORIAL

GANGS OF ENGLAND

"So much agreement So much amity They lie in their graves In permanent gravity..." From What Are You Talking, Yar by Bachchoo A crude British joke poses the question: "Why do dogs lick their genitals?" Answer: "Because they can!" The riots that started in north London and spread in a few hours to other parts of the capital and in 24 hours to Birmingham, Bristol, Liverpool, Manchester and other cities are testimony to this rule of possibility. The riots happened because they could. Britain, its politicians and its population are deeply anxious and ashamed that the world now has evidence not of urban insurrection or some terrorist or revolutionary force in the heart of its cities but of a broken society. And this especially as the country prepares to host the 2012 Olympics. Ever the shopkeeper, Britain is anxious about the impact of this universally reported urban disturbance on the commercial viability of the Games. The riots were enabled through a breakdown of the principle of Britain as a consenting society in which citizens keep the peace because they agree that it must be kept. They happened because a section of society saw that the risk of riotous behaviour was low enough for them to take it. The riots happened because they could. In the "hard" enclaves of British cities, mostly in those areas that are the poorest and by definition house the black and Asian immigrant population, a gang culture has been growing for decades. The original black gangs of the Eighties and Nineties had very clear commercial purposes. They were formed to sell illegally imported drugs such as cannabis, cocaine, crack and, in the case of Pakistani immigrants, heroin from Afghanistan. Those gangs had clear networks and purposes. They used young men and sometimes women as runners, the foot soldiers of the multi-million dollar operation on which some smugglers, criminals and businessmen grew rich. Gang members of all ranks got their rewards. The young man who wore gold bracelets and necklaces, who had a couple of gold teeth, drove a BMW and wore Cecil Gee suits won the respect of the younger men who aspired to be in the drug gangs but were not recruited till they were absolutely needed. A culture of easy money rather than one of hard work was given wide currency. Today's inner-city gang culture was born of this wish. Young people formed these imitative gangs without the primary business of drugs to which they had no access. The gangs became territorial. Boastfully claiming and defending a patch, a council estate, a street, a chunk of the ghetto, but not being directly employed in the business with access to money their main preoccupation was rivalry against other gangs. Apart from thieving, mugging and the petty trading in drugs they had nothing better to do than to fight each other. Over the last 15 years the tension has grown. The central fact of the urban ghetto gang in Britain is that it doesn't feel British. It has no loyalty to any idea of a country, a history or a community. Neither has any concerted policy or unconscious growth or economic and social initiative of the government given these youths any sense of achievement or belonging and hence of responsibility to anything beyond the gang. They have things in common. A culture of antagonism and defiance fuelled by the violence of rap lyrics and symbolised by the video games in which teams of miscreants with whom the player can identify destroy police stations and attack authority. They share the common heritage of urban Britain, which has through the last four decades developed a sub-class of unemployed, welfare-dependent sections of society. The riots began with a tragic incident in which a police squad shot and killed a young man. The police allege that he was armed and dangerous and was killed in a confrontation in which he threatened their lives. An investigation was immediately announced. His family and supporters protested outside the police station in Tottenham. Gangs of youths, some as young as 11, gathered in the High Street close to the police station and vented their anger by at first setting fire to street garbage bins and then to cars. The small police force was preoccupied with these disturbances and the breaking into and looting of shops began. The looters were summoned through messages on their Blackberries. They were using Twitter networks and other "social media" to announce where and when they would congregate and hit next. Mark Duggan was killed by the police on Thursday. By Friday, London was burning. Masked and hooded youths were setting fire to cars in the street and then to random buildings and using the scarcity of police on the streets to break the glass frontage of shops and enter and loot them. Most of the stuff they looted was electronic gadgets, TV sets, computers, mobile phones and accessories, designer shoes and designer clothes. When the looting was reported on TV and radio, it began to spread to other cities and became a Lootathon. That first night London deployed 6,000 police on the streets and the gangs, communicating with each other about police numbers and presence, hit where they could. It was unbelievably simple. One saw it unfold on TV as the camera crews got into low-flying helicopters and filmed the mayhem in the streets. Very many people gathered and stood by to watch, some of them recording the looting on phone videos. One saw hundreds of looters making off with TV sets and clobber and even some hooded and masked girls trying on trainers in the shops they had broken into before stealing them. The riots lasted four nights. Prime Minister David Cameron, home secretary Theresa May and London mayor Boris Johnson cut short their August holidays abroad and flew back to London, called emergency strategy meetings with the police and reconvened Parliament. Seventeen thousand police were drafted onto the streets of London. All over England more than a thousand people have been arrested on public order charges. The police have been equipped with tear gas, rubber bullets and water cannon. In Southall, a thousand Sikh men gathered at the main gurdwara resolved to act as vigilantes and keep their streets clear of any marauders. It worked. The looters stayed well away. London is by no means normal and, if only in anticipation of the Olympics, some long-term strategy to contain urban violence will have to emerge. All the king's horses and all the king's men are on full alert.

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DECCAN CHRONICAL

EDITORIAL

DEBT CRISIS IS A HIJACK BY US POLICY ELITE

Has market turmoil left you feeling afraid? Well, it should. Clearly, the economic crisis that began in 2008 is by no means over. But there's another emotion you should feel: anger. For what we're seeing now is what happens when influential people exploit a crisis rather than try to solve it. For more than a year and a half — ever since US President Barack Obama chose to make deficits, not jobs, the central focus of the 2010 State of the Union address — we've had a public conversation that has been dominated by budget concerns, while almost ignoring unemployment. The supposedly urgent need to reduce deficits has so dominated the discourse that on Monday, in the midst of a market panic, Mr Obama devoted most of his remarks to the deficit rather than to the clear and present danger of renewed recession. What made this so bizarre was the fact that markets were signalling, as clearly as anyone could ask, that unemployment rather than deficits is our biggest problem. Bear in mind that deficit hawks have been warning for years that interest rates on US government debt would soar any day now; the threat from the bond market was supposed to be the reason that we must slash the deficit now now now. But that threat keeps not materialising. And, this week, on the heels of a downgrade that was supposed to scare bond investors, those interest rates actually plunged to record lows. What the market was saying — almost shouting — was, "We're not worried about the deficit! We're worried about the weak economy!" For a weak economy means both low interest rates and a lack of business opportunities, which, in turn, means that government bonds become an attractive investment even at very low yields. If the downgrade of US debt had any effect at all, it was to reinforce fears of austerity policies that will make the economy even weaker. So how did Washington discourse come to be dominated by the wrong issue? Hard-line Republicans have, of course, played a role. Although they don't seem to truly care about deficits — try suggesting any rise in taxes on the rich — they have found harping on deficits a useful way to attack government programmes. But our discourse wouldn't have gone so far off-track if other influential people hadn't been eager to change the subject away from jobs, even in the face of nine-per cent unemployment, and to hijack the crisis on behalf of their pre-existing agendas. Check out the opinion page of any major newspaper, or listen to any news-discussion programme, and you're likely to encounter some self-proclaimed centrist declaring that there are no short-run fixes for our economic difficulties, that the responsible thing is to focus on long-run solutions and, in particular, on "entitlement reform" — that is, cuts in Social Security and Medicare. And when you do encounter such a person, you should be aware that people like that are a major reason we're in so much trouble. For the fact is that right now the economy desperately needs a short-run fix. When you're bleeding profusely from an open wound, you want a doctor who binds that wound up, not a doctor who lectures you on the importance of maintaining a healthy lifestyle as you get older. When millions of willing and able workers are unemployed, and economic potential is going to waste to the tune of almost $1 trillion a year, you want policymakers who work on a fast recovery, not people who lecture you on the need for long-run fiscal sustainability. Unfortunately, giving lectures on long-run fiscal sustainability is a fashionable Washington pastime; it's what people who want to sound serious do to demonstrate their seriousness. So when the crisis struck and led to big budget deficits — because that's what happens when the economy shrinks and revenue plunges — many members of our policy elite were all too eager to seize on those deficits as an excuse to change the subject from jobs to their favourite hobbyhorse. And the economy continued to bleed. What would a real response to our problems involve? First of all, it would involve more, not less, government spending for the time being — with mass unemployment and incredibly low borrowing costs — we should be rebuilding our schools, our roads, our water systems and more. It would involve aggressive moves to reduce household debt via mortgage forgiveness and refinancing. And it would involve an all-out effort by the Federal Reserve to get the economy moving, with the deliberate goal of generating higher inflation to help alleviate debt problems. The usual suspects will, of course, denounce such ideas as irresponsible. But you know what's really irresponsible? Hijacking the debate over a crisis to push for the same things you were advocating before the crisis, and letting the economy continue to bleed.

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DECCAN CHRONICAL

EDITORIAL

BANNING FILMS IS NOT A GOOD IDEA

It is a sorry reflection on an avowedly democratic and liberal society when all kinds of vested interests manage to stifle creativity by alleging that the creator — a writer, artist or filmmaker — has in some way been offensive. Regrettably, that is the state of affairs in India today. Time and again extra-constitutional elements have used power and muscle to get a book proscribed, a painter hounded or a film banned. The latest to face the heat is filmmaker Prakash Jha, whose film Aarakshan has incurred the wrath of many groups for its allegedly anti-reservations stance. This time it is worse; three state governments have banned it and in one instance it has been generously 'cleared' by a state minister provided two cuts are made. Ironically, the objectors freely admit they haven't seen the film. The Uttar Pradesh government banned it as it fears allowing it would create a law and order problem, while in Maharashtra a minister says a wrong impression was formed from the promotional clips, which was rapidly cleared after seeing the whole film. This after the censor board, which has become somewhat liberal in recent years, did not impose a single cut. This is a worrying trend that shows how intolerant we have become. Assuming that this or any film takes a position that is against reservations, so what? Everyone in India has a right to have an opinion and freely express it. There are perfectly legitimate ways available to oppose that opinion and counter it. But demanding a ban or tearing down posters is not the way to react. What is even more shocking is the reaction of governments, which ought to know better. Instead of promising the filmmaker protection, they have gone and banned his film. This is a cynical move, aimed only at pleasing the dalit and backward caste constituency. The filmmakers have repeatedly said the film has characters who offer varying takes on the issue of reservations, but to no avail. Some politicians spotted an opportunity to grandstand and have jumped at it. One reason why community leaders and politicians get away with such brazen flouting of democratic norms is that there is no strong counter-voice to stand up to them. Liberal elements do raise objections but their numbers are small and they don't count as a significant votebank. The film industry tends to maintain a low profile every time one of their own faces the wrath of one group or the other. No one from the fraternity has come forward to declare solidarity with Jha; it is as if it's not their problem at all. In many a case in the past, film producers have apologised or discreetly worked out a compromise with the objectors. This inevitably encouraged all kinds of groups and individuals to look for the main chance to raise the "hurt sentiments" bogey and seek to exploit the situation for their own ends. In other words, blackmail. The pusillanimity of the film industry and the tacit encouragement of political forces make the blackmailer's task easier. This is bad for our democratic health. Debate, discussion and healthy difference of opinion is the bedrock of our political system. Stifling them creates a chilling effect which then leads to self-censorship: do we really want an environment in which only banal and anodyne films and books are produced? The bans on Aarakshan must be lifted forthwith. Ministers, instead of demanding cuts, should assure the filmmakers that no one will be allowed to disrupt the screening.

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THE STATESMAN

EDITORIAL

V-C VERSUS V-C

PRESIDENCY DESERVES BETTER

THE evolution of Presidency University must transcend the bickering between the mentor group and the governing council, now aggravated by dissent from within the latter. Unwittingly or otherwise, the dissenting voice has buttressed the case of the mentors against announcing expansion plans before the infrastructure is in place. The kerfuffle has doubtless intensified with the Presidency VC, Amita Chatterjee's fairly strong point-by-point rejoinder to Prof Suranjan Das, Calcutta University's VC and incidentally the dissenting member of the council. Both have advanced seemingly cogent reasons for and against two crucial issues ~ the opening of post-graduate courses in six subjects and the admission ratio in favour of "home" graduates.
Yet the public discord is one of the worst developments that could have hobbled the functioning of the fledgling institution. Not to put too fine a point on it, because of the turmoil of ideas Presidency is making a spectacle of itself in the process of transition from an under-graduate college to a unitary university. There is no regulation that stipulates the Vice-Chancellor is answerable to the mentor group, still less to a dissenter in the governing council. The second is the CPI-M's government's creation; the first Mamata Banerjee's embroidery. The post is one-year tenure-based and he/she cannot be expected to function within the umbra and penumbra of a dozen worthies, predominantly offshore. Theoretically, the two decisions of the Presidency VC and the governing council cannot be faulted. Having said that, we must concede that the campus is yet to be suitably equipped to run post-graduate classes.

The suggestion on inter-university cooperation, advanced by Sugata Bose, the head of the mentor group, and readily accepted by Calcutta University's Vice-Chancellor can turn out to be a unique experiment in the advancement of learning. Yet it isn't an issue that can be brought up at the seminar stakes, as it was last week. It needs urgently to be followed through and the scope of cooperation widened to ensure the academic support of, for example, other universities with quality faculties in the social sciences. The finest academics can lend a hand to Presidency as guest professors both before and after the new faculties are in place. This will ensure a degree of forward movement that unfortunately the mentor group has not been able to bring about. The students deserve better than bickering at rarefied levels.

DEATH TRAPS

ROADS THAT LEAD TO MISERY

WEST Bengal is not the only state in the country that faces heavy downpours in the monsoon months. But quite the most apparent aspect of urban infrastructure in the state following these rains is the manner in which entire stretches of tarred roads have collapsed, thoroughfares reduced to a series of potholes. Driving is akin to negotiating an obstacle course, and often enough fatal. This is a recurrent nightmare, one that visits citizens during every monsoon, and underscores the fact that over the years of Left rule faulty road construction had become an essential ingredient of governance. It therefore devolves on the new government to appreciate that road maintenance isn't just a matter of floating tenders, opening bids, coming to sleazy arrangements with contractors and covering potholes up until the next deluge. There has to be accountability, there must be guarantees sought and obtained from contractors on the life-expectancy of a re-laid surface. Above all, those paying for roads deserve roads, not death-traps.
To begin with, the urban affairs department would do well to consult experts from states such as Goa and Tamil Nadu which face the fury of monsoons and yet produce roads that remain in good condition. It cannot be anyone's case that politicians and road engineers in those states are any less corrupt than their counterparts in Bengal, or that roadways contractors don't pay bribes there. But while the commerce of governance goes on, they also manage to produce roads of reasonable quality. Next, the state government must identify roads that are in the worst condition, identify the contractors who last re-laid or repaired them and summarily blacklist them for a period of three years. Third and even if it costs more, road construction works must be awarded to infrastructure companies of repute, and not to cousins and uncles of party functionaries. And finally, every contract must require bidders to offer a guarantee on the life of the repaired surface. Without wishing to poke fun at dreams of Kolkata becoming like London, surely it isn't too much to expect that Kolkata become like Calcutta of the 1950s and 1960s and Bengal a state where people can move about safely.

Unconvincing denial
Paresh Barua should get it right

SELF-STYLED Ulfa commander-in-chief Paresh Barua, who now claims to be the sole custodian of what is left of the outfit after most of his top colleagues surrendered to Indian authorities, has described as "unfounded and malicious" the reported remark by chairman Arabinda Rajkhowa that they took help (during the early days) from the Pakistan ISI and fundamentalists", adding further that "we don't encourage fundamentalists". A responsible leader like Rajkhowa could not have been in a confused state of mind when he admitted the truth and that should have caused no unease to Barua. But if the comment did hurt him, then the relevant question is from where did the outfit procure huge arsenals to challenge the Indian authorities? There is little doubt about Ulfa being tutored by foreign benefactors without whose support it could have been a spent force a long time ago.
Many leaders who surrendered in the aftermath of the 2004 Independence Day Dhemaji carnage, in which 13 people, mostly women and children, were killed, have confessed that many in India's "most wanted list " were trained near Islamabad in handling time-delayed explosives. Barua's denial is clever enough but hardly convincing given the fact that in return for these favours the Ulfa is said to have supported Pakistan during the Kargil war.
Election time, Independence Day and Republic Day continue to be handy for various militant groups to announce that they are still a force to reckon with. Following militants' call for a 17 hour general strike on 15 August, Assam, Meghalaya, Manipur and Tripura are on maximum alert. But in the recent past there had been some encouraging signs of public participation in national day celebrations by defying threats and also impressive voter turnouts in every election. This should indicate the shape of things to come.

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THE STATESMAN

ARTICLE

20 YEARS AFTER LIBERALIZATION

NARASIMHA RAO MUST NOT BE FORGOTTEN

SUSHILA RAMASWAMY

THE post-Nehruvian economic system, which accepted liberalisation and globalisation, was initiated by Narasimha Rao. In 1990-91, the economy was facing a severe crisis. Foreign exchange was virtually nil, necessitating the mortgage of the gold reserve to tide over the crisis. The government had no option but to accept the conditions imposed by the international funding agencies.

As Prime Minister, his credit doesn't really lie in initiating structural reforms and adjustment, but to implement the agenda. He was heading a minority government with stiff opposition on two counts ~ the fact that he was the PM and his deviation from the Nehruvian model of import substitution and the doctrine of self-reliance.
Till he became the Prime Minister, Rao's involvement in politics was only peripheral. He was the country's Home minister when the Sikhs were massacred in 1984 after the assassination of Indira Gandhi. He meekly supported the Emergency of 1975-77. During his prime ministership, the Babari Masjid was demolished in 1992. Admittedly, law and order is a state subject and it was the BJP government in UP, with Kalyan Singh as chief minister, that was responsible. He had assured Rao that his government was committed to upholding law and order; and yet the demolition was not averted. Rao's critics and detractors blamed him for his inaction and stoic silence.

Large-scale corruption is another problem that surfaced during his time. Harshad Mehta reached Rao's residence with a suitcase containing Rs one crore. The JMM bribery case was another sordid chapter of his tenure.
Despite such negative aspects, Rao must be credited with the introduction of economic reforms with the help of Dr Manmohan Singh who was then the Finance minister. However, it is Dr Singh, and not Rao, who is credited with the success of India's economic liberalisation. Even the Congress leadership often tries to belittle Rao by projecting Rajiv Gandhi as the architect of the 1991 liberalisation plan. It was because of Rao's skilful handling of an extremely difficult transition that made liberalisation possible.

It was accidental though that Rao became Prime Minister in 1991; before the Lok Sabha election that year, he was preparing for retirement. He had conveyed his decision to Rajiv Gandhi and the latter had accepted his wish. But Rajiv's assassination and the void that it created altered the situation. Sharad Pawar and Arjun Singh were serious contenders for the post of Prime Minister. There was also a proposal to bring back Dr Shankar Dayal Sharma, the then Vice-President to active politics. Madhavrao Scindia, Narain Dutt Tiwari and Rajesh Pilot were the others in the race. Amidst this intra-party rivalry, Rao became the consensus candidate to be the Congress president. Indeed, his strength lay in his weakness, reminiscent of the united Congress choosing Indira Gandhi in the late 1960s. It was also agreed that when the situation became more favourable and conducive, Rao would step down as the Congress president and make way for Sharad Pawar, a commitment that was never kept. In a sense, 1991 witnessed a rerun of 1966 with the difference that the oldest political party ~ even 100 years after its foundation ~ had not been able to create a framework for smooth succession.
Narasimha Rao occupied the office of the Prime Minister with two serious challenges: factional rivalry within his party and a strong opposition to reform with a large section in favour of the Nehruvian economic policies. Second, there was an unprecedented economic crisis. It goes to the credit of Rao that he handled the situation deftly despite the fact that he headed a minority government.

The Nehru-Mahalanobis economic model based on Fabian collectivism, that saw a regime based on the permit/licence quota Raj, was slowly disbanded and the MRTP abolished. This paved the way for foreign capital investment and privatisation. His first major task was to convince his party sceptics and the beneficiaries of the existing system to accept the difficult changes. He had to undertake the Meiji restoration as it were without the Meiji consensus and support. The other problem was to convince the world that India was really changing and the changes were irreversible. He achieved both these tasks and came out with flying colours.
In achieving this historic mission Rao did not receive much support from the Nehru-Gandhi family and its close associates; rather they provided tacit support to the traditionalists and even encouraged Arjun Singh to continue with his stance of open defiance. In order to surmount his difficulties Rao inducted a relatively unknown Dr Manmohan Singh, then the chairman of the University Grants Commission as the finance minister and ignored stalwarts such as Sharad Pawar, Arjun Singh and Madhav Rao Scindia. That was a master-stroke.
In doing this he achieved two things: he brought in an outsider who was not involved in factional squabbles. Second, Dr Singh was competent to handle the difficult transition that the country had to make. Before becoming the finance minister, Dr Singh was the deputy chairman of the Planning Commission, which Rajiv Gandhi had once characterised as a "pack of jokers", and the head of a South Commission in Vienna. Rao kept the industry portfolio and it ought to be remembered that the economic reforms were not part of the 1991 budget proposals but were announced as the new industrial policy.

The low-profile Rao achieved what had seemed to be impossible. For inducting Dr Manmohan Singh and for crafting the new economic order for modern India, Rao will be remembered in the same way as Andropov for appointing Gorbachov as his successor. In the 20th year of India's liberalisation policy, Rao must not be forgotten. As the head of a minority government, he took bold steps to bring about the economic transformation without which the country would have still have been in the grip of the Hindu rate of growth.
In the reckoning of critics, Rao's economic initiatives were not as bold as that of Deng Xiaoping. Deng came to power in China after an intense power struggle with the hardliners many of whom wanted to continue with Mao's economic policies. He could silence his detractors; but this was not possible in India, a multi-party democracy with a strong Opposition. Rao had to surmount the opposition both within his own party and that of the opposition outside. Considering the difficulties that he encountered, his achievements are stupendous.
The writer is Associate Professor in Political Science, Jesus and Mary College, New Delhi.

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THE TELEGRAPH

FOLLOWING FORM

WIELDING THE MAGIC WAND

It was not his fault, but it is now his burden. Amit Mitra, West Bengal's finance minister, has inherited an empty coffer and a huge financial commitment on salaries, pension and the servicing of debt alone from the previous Left Front government. It is common sense that cutting costs and raising revenue are the only way to set things right. But what he has offered in his "annual financial statement" is a mixed fare. It holds out a promise, but does not quite say how that promise is going to be fulfilled. His twin objectives of reducing the share of salaries, pension and interest outgo in the total revenue receipts from 93 per cent to 74 per cent this year and of raising the earnings by 31.4 per cent shows his anxiety to restore the fiscal prudence that was totally missing during the Left regime. However, the new government has been generous in announcing new projects. This raises questions about how it is actually going to cut costs.

The devil, as they say, is in the details. Mr Mitra spells out two areas — liquor and online lottery — from where he expects to raise additional revenue worth Rs 300 crore. The problem is that an overtaxed liquor trade could react by expanding the illicit sector. That would mean the trade becoming largely an unorganized sector from which the government's revenue can actually shrink. It cannot be any government's intention to push the larger part of an organized trade into an unorganized one. The biggest question, though, relates to the new government's refusal to levy new taxes in order to increase its revenue receipts. Mr Mitra obviously does not share Benjamin Franklin's view that death and taxes are the only two certainties in life. It is common for state governments in India to fight shy of imposing taxes, especially in election years. But Mamata Banerjee has a huge mandate for overturning not just the political but also the economic legacy of the Left Front. Levying new taxes is not merely a question of raising revenue; more important, it is a crucial means of ushering in financial restructuring. Yet, this government's refusal to introduce a water tax cannot be a hopeful sign for such restructuring. The economic logic apart, political correctness also demands that such a tax be introduced at least on the commercial establishments and the affluent sections of the people. There can be no argument for allowing such people to use a vital natural resource that is being depleted fast. Also, the money raised from water tax on such sections can be used for the poor and on productive schemes.

A new approach to the management of Bengal's finances is more important than quibbling over whether Mr Mitra's statement can be called a budget. He seems to have the best of intentions. It is also possible that he will manage to achieve his targets. But the Writers' Buildings is no Hogwarts, where he can take his training in financial wizardry.

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EDITORIAL SAMARTH

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Sunday, August 14, 2011

EDITORIAL 13.08.11

Balance of power in energy equations