EDITORIAL SAMARTH: EDITORIAL 01.09.11

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Editorial

month september 01, edition 000825 , collected & managed by durgesh kumar mishra, published by – manish manjul

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

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THE TIMES OF INDIA

PRIVILEGE NOTICED
AGE OF BEFUDDLEMENT
TEACHING A HARD LESSON - SUDIPTO MUNDLE
PERFECT OPPORTUNITY FOR INDIAN FOOTBALL
MESSI'S VISIT CAN'T STEM THE ROT
OBSTACLE RACE - BACHI KARKARIA

HINDUSTAN TIMES

DON'T LEAVE IT HANGING
ROUGH GUIDE FOR 007
FIGHTING FOR A LOST CAUSE - NAJEEB JUNG
DETAILS AND THEIR DEVILS - SAMAR HALARNKAR,
NO MESSI-ING WITH OUR HEADS - AMIT S RAO

THE INDIAN EXPRESS

SPORTS RAJ
ROAD LESS TRAVELLED
MESSI-AH!
A 10 PER CENT SAFEGUARD - ILA PATNAIK
THE BILL THAT WASN'T - DESH GAURAV CHOPRA SEKHRI
WORDS ARE ALL WE HAVE - K RAHMAN KHAN
THE MESSAGE FROM THE MEDIUM - SHAILAJA BAJPAI
BURMA RAIL - C. RAJA MOHAN
UPA PROFLIGACY - MANOJCG

THE FINANCIAL EXPRESS

SPOIL SPORTS
OLD PENSION THOUGHTS
INNOVATIONS IN MOBILE TELEPHONY - RAJAT KATHURIA
STRUGGLING WITH A GREAT CONTRACTION - MARTIN WOLF

THE HINDU

DISMAL PROGRESS IN SOCIAL HOUSING
RAISING THE BAR
EUROPE'S WEALTHY ASK TO BE TAXED MORE - JULIA WERDIGIER
"PALESTINIAN U.N. BID GREATER THREAT THAN HAMAS"
AMERICA'S SHIFTING DEMOGRAPHIC PROFILE - SABRINA TAVERNISE
DEEPENING INDIA-MALDIVES RELATIONS - RAJIV BHATIA
WHAT YOU CAN DO TO OUST TYRANTS - JONATHAN FREEDLAND

THE ASIAN AGE

RAJIV KILLING CASE: KEEP POLITICS OUT

DAILY EXCELSIOR

SEEKING INVESTMENT
HALF-HEARTED ACT
ANNA'S AANDOLAN - BY S NARINDER SINGH
ELECTRONIC MEDIA IN AGRICULTURAL DEVELOPMENT - BY DR BANASRI LAL & DR VIKAS TANDON
CURB DISCREATIONARY POWERS - BY ARUN NEHRU

THE TRIBUNE

DEATH FOR RAJIV KILLERS
SPORTS BILL DECLARED LBW
GOODWILL FOR BANGLADESH - BY G PARTHASARATHY
LEFT IS RIGHT - BY ASHOK KUMAR YADAV
WHAT IT INVOLVES

MUMBAI MIRROR

SIGNS OF THE TIMES

BUSINESS STANDARD

GROWTH AND POLICY
RAISING A FALLEN GIANT
TRICKS OF TRADE - T S VISHWANATH
REVIVING GROWTH - SHYAM PONAPPA
NO RELIEF FOR BHARAT - INDICUS ANALYTICS
INSTITUTIONS MATTER - SANJAYA BARU

THE ECONOMIC TIMES

FIND THE SCAM
SIMILAR TREATMENT
SIMPLY OBVIOUS
DIMMING OF THE STARS AND STRIPES
WITNESS ANXIOUS
WHEN PARLIAMENTARIANS HIDE IN PARLIAMENT - AMRITH LAL
IMF'S BOLD RECIPE FOR RECOVERY - T T RAM MOHAN

BUSINESS LINE

THE SLOWDOWN HAS ARRIVED
HE'S GOT THE ACTION, HE'S GOT THE MOTION - EKALAVYA
STEP UP TIES WITH BANGLADESH - G.PARTHASARATHY

DECCAN CHRONICAL

RAJIV KILLING CASE: KEEP POLITICS OUT
007 IS COMING
THE RAJAPAKSE WAY
ONE OF A MILLION MUTINIES?

THE STATESMAN

MAKEN MAULED
PREPOSTEROUS PROPOSAL
ASSAM'S WATERY ORDEAL
GADDAFI ENDGAME - BY SALMAN HAIDAR
INDIA REMAINS A SOFT STATE - BETWEEN THE LINES ~ KULDIP NAYAR
AN EXISTENTIAL ANGST - SUNRIT MULLICK
PUT FINANCE TO WORK FOR THE REAL ECONOMY - ANDREW SHENG

THE TELEGRAPH

MESSED UP
BETTER BET
HISTORY TO BE MADE - SRINIVASAN
DEATH OVER LIFE - NEHA SAHAY
LIVING WITH A BORDER IN THE BACKYARD

DECCAN HERALD

ATTEND TO THIS FAST
DUAL TIME ZONES
QUALITY AND RELEVANCE - ALOK RAY

OHERALDO

JUSTICE FOR CIPRIANO WILL NOT HAPPEN, IF WE SLEEP
MORGUE DISCUSSIONS
FREDDY DIAS

HAARETZ

DON'T SEND PERES TO THE UN
GOOD MORNING, SEPTEMBER - BY ARI SHAVIT
SUDDENLY, IN SUMMER 2011 - BY ISRAEL HAREL
SUPPORT THE OCTOGENARIANS - BY AMALIA ROSENBLUM
THE TEST ON THE SQUARE - BY GIDEON LEVY

THE NEW YORK TIMES

THE MILITARY AND THE DEATH PENALTY
SORRY, WRONG IN-BOX - BY FRANK BRUNI
'THANK YOU, AMERICA!' - BY NICHOLAS D. KRISTOF
WHAT TO DO WITH QADDAFI - BY DAVID KAYE
ISOLATING ASSAD
A BLOCKAGE ON TEACHER EVALUATIONS

TIMES FREE PRESS

IN THE GRIP OF DROUGHT
CHATTANOOGA-MADE PASSATS START TO FLOW
STUDY OF I-24 COULD BE USEFUL
TIGHTEN TENNESSEE LOTTERY SCHOLARSHIP RULES

THE AUSTRALIYAN

MALAYSIAN NON-SOLUTION HIGHLIGHTS INCOMPETENCE
A BREACH OF THE TEACHER'S TRUST
THE RBA AND THE HISTORY CABLE

THE SYDNEY MORNING HERALD

DUTY OF CARE FOR REFUGEES
GLOBETROTTING AUSSIES BEWARE
PRISON CRISIS A THREAT TO PUBLIC HEALTH
CUTTLED, A POLICY THAT MUST NEVER RESURFACE

THE GUARDIAN

IN PRAISE OF… BOWLING GREENS
BANKING: COMPOUND INTERESTS
LIBYA: NOW COMES THE HARD PART

THE JAPAN TIMES

UNSAVORY TIES FOR AN ENTERTAINER
RAMPANCY OF CHILD-PORN FILES
LIBYA'S NEXT FIGHT: THE WEST - BY RAMZY BAROUD
BEIJING WASTES NO TIME WITH NODA - BY MICHAEL RICHARDSON
COMMON CAUSE COULD DRAW INDIA, CHINA CLOSER - BY HARSH V. PANT

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THE TIMES OF INDIA

COMMENT

PRIVILEGE NOTICED

By seeking to move privilege notices against civil society members, trying to weave clauses into the Judicial Standards and Accountability Bill restraining judges from remarking on political matters, and establishing a special group to examine media accountability following the Jan Lokpal movement, the government along with a larger political class has shown that it's still disconnected from the public mood - and unwilling to tolerate dissent that emanates from outside its charmed circle.

The anti-corruption movement gave a resoundingly clear message to India's political class - deliver accountability and drop complacency. Anna Hazare's protest brought to the forefront of public life the disgust prevailing with corruption in governance and a culture of political haughtiness. For decades top Indian politicians have lived highly privileged lives, sequestered in colonial bungalows, travelling in white cars topped with imperious red lights, working in offices surrounded by flunkies and supplicants. Perhaps this explains why most politicians, embracing or inheriting this mantle with ease, seem so out of touch with today's Indian citizen demanding accountability - and an end to double standards. Instead of feeling the popular pulse, by biting back at criticism from civil society, media and the judiciary, the government is instead displaying insecurity. And missing the big picture.

It's a very circumscribed vision of democracy to say that citizens' business is to dutifully vote for one party or the other once every five years when elections come round, but otherwise keep away from political criticism which must be left to politicians alone. If political parties are busy defaming each other all the time, they can't assume that the rest of us don't notice. The Congress, for example, spent much of NDA rule deriding the prime minister as a 'mukhota' or mask for extremist forces. Yet should a civil society activist depict politicians as wearing masks, that's seen by many MPs as going too far. And if the media should be sought when politicos want to express and propagate their views, then the messenger needs to be shot when it provides a platform as well to dissenting voices.

Surely Indian democracy is more robust than this. Criticism cannot be limited to the floors of Parliament, political rallies or TV studios where rival parties face off. India's citizens, celebrated for their argumentativeness, are not going to shut up and dance only to the tunes that leaders play for them. Neither should this be expected of them in a vibrant democracy. If our politicians were ever trying to set the tone for high public discourse, they haven't succeeded. They should not set themselves up as a class with special privileges. MPs, after all, are meant to be servants of the people.

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THE TIMES OF INDIA

COMMENT

AGE OF BEFUDDLEMENT

Economics is a "dismal science". So said Victorian thinker Thomas Carlyle. We agree. True, we've come a long way since Malthus dismally predicted death by population explosion. Yet the vocabulary used by today's less alarmist economists sounds suspiciously like mumbo-jumbo. Not that we need fear the jargon of our priestly class of policymakers. We the clueless people now have Arthapedia, a welcome on-line encyclopedia promoted by chief economic adviser Kaushik Basu. The just-launched official website seeks to explain - and demystify - esoteric terms dismal scientists use. With this ready terminological reckoner, we too can play public policy pundit. We'll finally understand "skewflation" has to do with darned commodity prices. And conceptual bamboozlers like "viability gap funding" and "bid rigging" will get into our frazzled heads.

Only, what'll happen if we the enlightened go beyond wordy abstractions and start asking embarrassing questions about their desi manifestations? Surely it won't satisfy us to just know what "core inflation" means. We'll ask why prices keep pinching even as ministers prophesy pocket-friendly times. Nor will it be enough to learn that "viability gap funding" is linked to infrastructure projects. We'll demand to know why infrastructure isn't up to scratch despite the funds poured in. Indeed, there'll be a deluge of queries. Why, for instance, is the exact number of "BPL households" a mystery despite so many wits claiming to have the answer? Where's "development expenditure" going if development's so tardy? Why, to bypassed beneficiaries, do "flagship programmes" resemble flagging ships that have sprung leaks? And why is "reform" a respectable word in encyclopedias and a dirty word in netadom? We might soon need another portal explaining sarkari action and inaction on the economic front. Call it Karma-pedia.

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THE TIMES OF INDIA

TOP ARTICLE

TEACHING A HARD LESSON

SUDIPTO MUNDLE

Shehla Masood was killed in Bhopal recently, yet another RTI activist who lost her life in the battle against corruption. The Lokayukta report has brought down the chief minister in Karnataka. A high court judge is being impeached in Parliament. The Comptroller and Auditor General and the Supreme Court are in hot pursuit of mega scams. The CBI has charge-sheeted and locked up top executive honchos, MPs, even a cabinet minister. India is at war against corruption.

Now we have Team Anna's much celebrated victory. His hunger strike and arrest galvanised a whole nation. Nothing like this had been seen since the freedom movement led by Gandhi, except perhaps the JP movement. Cong-ress leaders were clearly shocked. As the rallies swelled and Team Anna grew more stubborn, the party swung from hard line to soft line to hard line again.

Finally, it was Prime Minister Manmohan Singh - much vilified in recent times even by his well-wishers for neither leading nor resigning, and presiding over a corrupt regime - who did the right thing. At his instance, alternative proposals for the Lokpal Bill were discussed in Parliament, and an all-party resolution passed that supports the three key issues raised by Team Anna. He then reached out to Anna, requesting him to withdraw his fast.

Anna responded by congratulating Parliament and breaking his 12-day fast while the nation rejoiced and heaved a collective sigh of relief. The prime minister's approach preserved the authority of Parliament, yet ensured that Parliament was responsive to a popular non-violent movement. Between Anna and him, they have led the people and the Parliament of India to the finest moment of our democracy as the world has watched and applauded us.

The Parliament resolution is a giant leap for Indian democracy, but only one big step in fighting corruption. The hard work starts now. As the standing committee gets down to the nitty-gritty of drafting the revised Lokpal Bill, it is a good time to look at the insights on corruption containment offered by a cross-over subject called Law and Economics.

The organising theme underlying this approach is the pleasure-pain calculus attributed to philosopher Jeremy Bentham. The idea that all human behaviour is driven by this calculus is controversial. But it seems reasonable to suggest that crimes like corruption are indeed driven by the criminal's perception of potential gain and the loss if caught: pleasure and pain. Much insight on how to contain corruption derives from this simple principle. However, corruption takes many forms and no matter how clever a policy, the criminal mind can be equally clever. Also, beyond a point, the costs of further reducing corruption could exceed the loss from corruption. Hence, corruption can be contained, possibly minimised, but not entirely eliminated. With this caveat, the following broad proposals can be made.

First, there is the widespread phenomenon of citizens having to pay a bribe to get what they are entitled to by right, e.g., timely delivery of pensions, ration cards, passports, etc or the timely restoration of power, phone lines, water supply, and so on. In such cases, the bribe payer is actually a victim of extortion. In a recent paper, economist Kaushik Basu has proposed that acts of bribe-giving in such cases of 'harassment corruption' should not be considered a crime, as at present. Instead, the punishment for the bribe seeker should be significantly enhanced. Such an amendment of the relevant law could vastly reduce 'harassment corruption' because the potential extortionist would be deterred by his knowledge that bribe-givers are likely to blow the whistle after getting their job done.

For other forms of major corruption, the pleasure-pain calculus has generated three basic approaches for containment: high civil service pay to moderate the lure of illegal gratification; laws prescribing very harsh punishment and/or strong law enforcement to enhance the probability and expected pain from being caught, compared to the potential gain; and strong competitive structures with transparent non-discretionary rules to minimise the opportunities for gain from bribe-driven decisions. International evidence reveals two cases of high civil service pay and low levels of corruption, Singapore and Hong Kong. However, both these places also have strong laws against corruption, strict enforcement and open, competitive market structures. Hence, the individual effects of each of the three approaches cannot be disentangled in either of these cases.

Evidence from other countries indicates that strong laws, strict enforcement and competitive structures each individually and significantly contribute to curbing corruption. In most developing countries, including India, poor enforcement of laws is the norm. Turning that around would be very costly in resources and a great administrative challenge. By comparison, enacting strong laws or introducing reforms to strengthen competitiveness are relatively costless and administratively less challenging.

These should be our strategic priorities in fighting corruption. The former requires a revised Lokpal Bill that provides for very stiff punishment of corruption. The latter requires other urgent reforms to strengthen competitiveness through transparent, non-discretionary regulations that are not unduly restrictive. While these should be our priorities, enforcement too has to be strengthened to the extent our fiscal and administrative capacities permit.

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

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THE TIMES OF INDIA

TIMES VIEW

PERFECT OPPORTUNITY FOR INDIAN FOOTBALL

Lionel Messi is going to play in Kol-kata. That, right there, is going to have every red-blooded football fan in the country salivating. The man who is arguably the finest player today is going to give India its first Fifa international friendly when he leads the Argentinian national team onto the field at Salt Lake stadium to take on Venezuela. There couldn't be a better opportunity to take the sport in India to another level. It has slowly been gaining momentum for some years now. But what it has lacked is the glitz, glamour and big names Indian cricket provides. They don't come much larger than Argentina and Messi.

Right now it's just a one-off. But it provides the headlines and eyeball-grabbing quotient that any sport today needs to thrive. Money and marketing matter. Capture the public imagination and sponsors will follow. The sponsors in turn will put in the money to improve the game on the ground, and capture more eyeballs. It can be turned into a virtuous cycle. And we're already seeing part of it in action with Lakshmi Mittal, Sunil Bharti Mittal and Vijay Mallya all investing money in Indian football.

Structural issues need to be addressed, of course. India's status as a rising economic power and huge potential market is working for it here. Foreign clubs such as Barcelona, Blackburn Rovers and Queens Park Rangers are all looking to set up training centres in the country. They have a readymade base to work with. Football might not be anywhere near as popular as cricket - no sport in India is. But it has a massive following in many states and foreign leagues are increasingly popular in urban centres. As for infrastructure, the minimal equipment required at the grassroots level works in the sport's favour. Harness all of this properly, and perhaps it will be the Indian team Argentina plays in the near future.

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THE TIMES OF INDIA

COUNTERVIEW

MESSI'S VISIT CAN'T STEM THE ROT

Much is being made of tomorrow's friendly football match between Argentina and Venezuela in Kolkata. But hoping that the Messi mania percolates down to the grassroots and energises a decrepit domestic football infrastructure is just wishful thinking. In fact, the hysteria over players like Messi indicates where the problem lies. That we make demi-gods out of foreign football heroes gives away the fact we don't think Indian players will ever approach anywhere near their standards.

For Indian football to shine, it will take much more than Messi and company showing off their skills. It must address systemic woes. The game's administrators stand guilty of inefficiency and lack of vision. Barring a few clubs and academies, such as East Bengal FC and Tata Football Academy, quality facilities are sorely lacking. Interest in the sport itself is confined to a few pockets of the country. True, the popularity of European club football has been on the rise. However, this is no substitute for a genuine, pan-Indian football culture. The premier domestic club competition, the I-League, still has few takers. This also explains the lack of corporate interest in the sport, leaving In-dian football to wallow in pitiable circumstances.

There needs to be genuine change from within the system. Indian football is in need of a grand vision and efficient administrators who can execute this. While several European clubs have proposed starting their football academies in India, these will simply cater to the urban rich. Buying Liverpool or Blackburn merchandise won't produce good football players. The legendary Pele too had played an exhibition match in Kol-kata in 1977. It did little for Indian football. Despite the fanfare, Messi's visit is not about to produce any Indian Messis.

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THE TIMES OF INDIA

ERRATICA

OBSTACLE RACE

BACHI KARKARIA

Now that i live in Mumbai's Maharashtrian heartland - or rather its gutland - i am in the thick of every celebration. Starting today, and going on till visarjan, i will wake up to the chant of 'Ashta Vinayaka namo namaha', go to bed with variations on the mantra, and listen to naught else in between. It's beautiful, but it can be an embarrassment of riches. It seems like sacrilege to be hearing these sacred invocations while performing my low-down morning rituals.

Yet, all in all it's uplifting - right up to my 23rd floor. We all need the occasional surround sound of celebration to drown out our usual 24x7 woes. So, Ganeshotsav, do your worst. Let the jutting pandals asphyxiate the alley; let the traffic snail its way through the festive crowds. No, i will not even object to the ear-splitting Ganpati Bappa Shor-ya.

On this Ganesh Chaturthi, however, i would like to invoke the beloved deity in his role as the remover of hurdles rather than as the patron of auspicious beginnings. He will understand my choice. His own arrival at the pandals was not so much an obstacle race as an obstacle crawl.

Mumbai's monsoon-monsterised potholes are omnipotent, omnipresent even omniscient. Don't they have a deep knowledge of every single class of citizen, creature and chassis that has fallen into them, with fear and without favour? Several idols were severely damaged as the festooned trucks stumbled into their jagged jaws. Not at all an auspicious beginning.

The obstacles which Ganpati Bappa will be expected to remove are as multitudinous as his neighbours in the gated community of Mt Kailash. Take three.

One, pandals will pay obeisance to our recent 'AHA!' moment, featuring the Anna Hazare Andolan in their tableaux. Upright citizens will line up here to pray for the removal of obstacles in the path of The Bill as it makes its way through Parliament.

However, since every activist action has an equal and opposite reaction, several fatcats will be offering kilos of modaks to keep their own path of kickbacks free of impediments. With upturned palms they will as fervently chant, 'Vakratunda Mahaakaaya Suryakotee Sama Prabha, O Lord Ganesha who has a large body, curved trunk and the brightness of a million suns, please remove the accursed obstacle known as the whistleblower.'

Yes, the endemic freebie-TB strain may be fatal, but there's still resistance to the introduction of this BCG vaccine - against bribery-corruption-graft.

Two, the barricaded path to the pandals is lined with billboards proclaiming new housing projects and shopping complexes. These are Mumbai's dreams and its nightmares. Aesthetes will pray for the removal of these obstacles to the city's planned growth and seanic beauty. Again in the equal and opposite reaction, the developers will pray for the removal of the obstacle of FSI. They want the Floor Space Index to be replaced by the Free Spread Index.

The third invocation to Lord Ganesha centres on the star visits to pandals. The celluloid gods bow to the celestial ones, and the crowds break the cordons for a darshan of the matinee idols. These frenzied devotees will pray for the removal of all obstacles in the way of a front-row-full-show view of Salman/Shah Rukh. Salman may well pray that his Bodyguard will create obstacles for Ra.One's passage into the real life of cine-goers.

In the Ganeshotsav spirit, Kareena and Preity have reportedly buried their stilettos and made an auspicious beginning to newfound friendship. So have the once-'katti' Shahid Kapoor and the Dabang-bang, shoot-my-mouth-off star. But the obstacles in the path of a patch-up between Salman and SRK seems insurmountable even for our Ashta Vinayak.

* * *
Alec Smart said, "Yes, Om-ji, all politicians are `anpadh`. Wonder which illiterates elected them."

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HINDUSTAN TIMES

DON'T LEAVE IT HANGING

One would take the Tamil Nadu assembly's resolution calling for the death sentence against three of Rajiv Gandhi's assassins seriously if the legislators' claim that they were motivated by humanitarian impulses were more credible. Unfortunately, as is the case all too often in India, decisions regarding capital punishment are more about the politics of ethnicity and community rather than about whether the death sentence is compatible with society and nationhood. Though the Madras High Court's decision to put off a sentence by eight weeks will give the country further time to reflect, it is likely that this chance will be missed.

There are traditionally two debates regarding capital punishment. One is whether to allow it at all; the other is when to allow it. The latter debate is a hollow one in India. Among the 60 or so countries that still have death sentences, India is among those that exercises it the least. Only one person has been executed since 1995 and since 1947, only 52 people have gone to the gallows. The Supreme Court's ruling that the death sentence be applied in the "rarest of rare" cases has been maintained and, if anything, this has been reinforced. The crimes for which a person can be executed in India can be counted on one hand. Some of the more egregious punishments, such as death for drug trafficking, have been sensibly dropped. This is to be contrasted with China, which is estimated to execute as many as 5,000 people a year.

If there is any debate in India, it is really about whether the death sentence should be abolished altogether. Developed countries that abolished it did so not only on humanitarian grounds, but also because their public security environment improved and public confidence in the ability of their police and courts to arrest and convict criminals rose. There is scant evidence that the death sentence deters criminals, at least no more than life imprisonment does. But there is plenty of evidence that a poor conviction rate encourages crime. And that when a criminal is caught, a culture of extreme punishment develops. Unfortunately none of these circumstances applies to India. India is one of the worst sufferers of terrorism. Confidence in its law-enforcement systems could not be lower. And no one can claim assassination has been purged from its polity. Nonetheless, despite all these failings, India has pared capital offences to the bare minimum and hedged death sentences with numerous caveats - and deserves praise for doing so. The recent assembly resolution would have been intellectually honest if it had called for the abolition of the death sentence altogether. Instead, the resolution argues only for special consideration for three assassins and, therefore, deserves little consideration itself.

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HINDUSTAN TIMES

THE PUNDIT

ROUGH GUIDE FOR 007

Like the Big Mac index, Bond films are also a good indicator if you want know which is the 'centre' of the world (economically speaking) at this point of time. So we are not surprised that 007, the ace Brit hunk-secret agent is coming to India after a gap 28 years (the Roger Moore-starring Octopussy being shot in Udaipur 1983) to shoot a new movie, Bond 23. The film will be released in 2012 and Daniel Craig will star as Her Majesty's most dangerous spy on a mission. The film will join an increasing number of foreign movies that have been permitted to be shot in the India. According to a Forbes report, 22 films including Mission Impossible, Life of Pi, Singularity and The Best Exotic Marigold Hotel had been given the go-ahead.

Since India is India and it works in a peculiar fashion that can be called 'Bloody !ncredible India', it wasn't easy even for Bond. Initially, his charm failed to make an impression on officialdom and the latter denied permission to shoot in certain spots citing "security concerns". So apparently, the producers decided to move to South Africa, our fellow member of that MI6-sounding entity called BRICS. And when the news spread, South Africans started counting their Rand even before James could hatch a plan on how how to kill his newest enemy in the most delightful way.

But by then, we guess, our babus had already woken up and brushed up their non-Bond skills to give a clearance for shooting at Sarojini Nagar Market and Ansari Road in Delhi as well as in some spots in Gujarat and Goa too. While the Delhi spots are not exactly what we would call exotic, we think that these hotspots would suit the gritty Daniel Craig version of 007 much better than some swanky place. In any case, he won't be running across St Mark's Square in Venice or cablewalking above Sugarloaf Mountain in Rio de Janeiro but through the maze and mess of Dilli where to survive, he will have to dodge cows, carts, cycles and phatpahtis. So here's a tip for Mr Bond: when in India, do as Indians do - just take it as they come. If there's anything he'll find odd, it's that he, never mind his martini, will be shaken and stirred.

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HINDUSTAN TIMES

FIGHTING FOR A LOST CAUSE

NAJEEB JUNG

One of the major efforts of the UPA 2 and Prime Minister Manmohan Singh is to improve relations with Pakistan. But the worrying question here is whether friendship with Pakistan is possible, given its history and its foreseeable future. Three issues stand out here. First, the foundations on which Pakistan was created. Second, the Kashmir factor and, finally, the current and future situation in Pakistan to the extent we can foresee it.

Pakistan was born on a flawed notion that different religions cannot co-exist in peace. Since its inception, Pakistanis have been fed on anti-India propaganda. It still continues to believe that Islam and anti-India propaganda can keep the country together.

Therefore, despite recent initiatives, relations between the two remain tardy. These initiatives can't wipe away 60 years of constant badgering that India is a Hindu country determined to usurp Pakistan. Often quoted in Pakistan are Acharya Kriplani's (Congress president during Partition) statement that "neither the Congress nor the nation has given up its claim of a United India" and Sardar Patel's statement that "sooner than later we shall again be united in common allegiance to our country".

But Pakistan today is radically different from India. Conversations in social and political circles of commonality in culture, language and food are misplaced. The more the Indians harp on commonality, the more it hardens Pakistani's attitude.

And then there is the dreaded 'K' word. Working on a perceived threat from India, Pakistan's policymakers and the army speak of Kashmir as "the unfinished business of Partition". They feel cheated on the way Kashmir was denied to them in 1947 and later by not allowing any plebiscite. Pakistani leaders are convinced that apart from being Muslim, Kashmir has been historically with Pakistan since all trade and communication routes in Kashmir have been through Pakistani Punjab. Also since Indus, Jhelum and Chenab flow through Kashmir to Pakistan, they are afraid that the flow of water can be stopped despite the Indus Waters Treaty. The government of India's uneasy dealings in Kashmir and the sporadic periods of violence help Pakistan make the case that the Kashmiris do not accept Indian suzerainty.

The division of Pakistan in 1971 was a major blow to the political establishment and Pakistan's psyche. For years, they believed that a few thousand Muslim invaders managed to rule the country for several hundred years. They give little credit to the sophistication of Islamic culture, Sufi charm or the short comings of the Indian caste structure that made conversion attractive. Therefore, the dismemberment of Pakistan in 1971 with the clinical efficiency of the Indian Army, destroyed many myths in Pakistani minds.

Against this background, it is difficult for the Pakistani leadership to show statesmanship, to rise above their established beliefs and accept India as a trustworthy neighbour. This is compounded by the fact that Pakistan is not likely to be stable in the foreseeable future. With the Americans inching towards some understanding with the Taliban, Pakistan is likely to have a hard-line Taliban neighbour in Afghanistan. Balochistan and the Federally Administered Tribal Area area remains disturbed. The Federal government often treats Baloch-istan as a "wasteland" and an "economic liability". Karachi is in flames, ethnic war having destroyed its social services. The provincial as well as the Federal government, seem inept to manage the situation.

Najeeb Jung is the Vice Chancellor of Jamia Millia Islamia

The views expressed by the author are personal

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HINDUSTAN TIMES

DETAILS AND THEIR DEVILS

SAMAR HALARNKAR,

I get it that people are angry at politicians, our honourable elected representatives, whose latest concern is punishing actors Om Puri, for calling them ganwaar (rustic dimwits) and naalayak (incompetent), and former police office Kiran Bedi, for calling them duplicitous folk who wear "several masks".

I get it that it's a bit rich to call the Anna protestors anti-democratic when democratic institutions, including and especially Parliament, are failing our expectations. The latest example: how a cabal Cabinet-ministers-cum-sport-overlords has stopped a law to make sport more accountable. Like Team Anna, I too am distrustful of government (not just this one but any), and I agree that if it were not for the extreme passions generated, an Indian Parliament may not have been willing to listen.

I get it that whatever reservations you may have had with Anna's "second freedom movement" - as I do - it has humbled politicians, at least a bit, and reminded them that earning the trust of India's growing, impatient middle class will not be easy from here on.

What I don't get is this: if we distrust one authority so much, why are we now prepared to trust a powerful institution staffed by other authorities-bureaucrats and judges?

It cannot be anyone's case that Indian bureaucrats and judges are any cleaner than its politicians. For that matter, it is hard to argue that any of us is cleaner than the men and women who administer India. We are all cut from the same cloth.

As some of the passions of restive August die down, this is the time to calmly reflect on the long, bumpy road ahead. Apart from our personal failings, there are two institutional signposts to consider.

First, corruption always rises in a rising nation. Countries like the US and South Korea suffered major periods of institutionalised corruption before their institutions became strong enough to survive fickle, corrupt officials and politicians.

Two, this overhaul of institutions is never easy. A corrupt system requires many energising jolts before it starts to reform. The Anna effect is one of those jolts, a loud, public burst of energy. But national renovation cannot be pushed through only on the streets.

If the middle class suddenly feels empowered or involved in the affairs of the nation, it must now be interested in the details of governance, which is where future devils lie.

For instance, do we really need a Lokpal of the type Team Anna envisages, overlapping with existing authorities and holding out prospects of an unelected super regulator?

The Karnataka Lokayukta shows us how existing institutions can attack corruption at the highest level. The state's biggest corruption industry, mining, is at a standstill after a Lokayukta investigation. Chief minister BS Yeddyurappa has resigned and is now fighting to stay out of jail. His former industries minister, Katta Subramanya Naidu, has been in jail since July, pending trial in a lokayukta court on charges of selling public land for personal profit. All this has happened without the lokayukta getting the powers envisaged for the lokpal.

The idea of five lokpals, proposed by the National Campaign for the People's Right to Information, to fight different types of corruption so one body is not overloaded and underqualified is sensible. So, too, is the idea to keep the judiciary out of the lokpal's purview. This will help preserve the independence of the judiciary at a time when India needs its institutions to be strong and act as checks and balances on one another.

Parliament, which is presently considering the Judicial Accountability and Standards Bill, may need to send it back to the drawing board.

None of this will happen unless Team Anna and others like them expand their one-point agenda and educate both the media and politicians. Instead of empty "game-changing" boasts, such as the one Rahul Gandhi made in Parliament, he could persuade his party to deliver independent lokayuktas with police and judicial wings to Congress-ruled states. That's better than making pledges he cannot deliver; remember the promise he made last year to tribals, "I will be your soldier in Delhi"? Instead, tribals only see more soldiers from Delhi, and the Maoist insurgency worsens. Slogans and street battles are no substitute for systemic change, something the impatient "Anna is India" army should also understand.

Their impatience is good and bad.

Bad, because the impatient middle class often encourages corruption by hiring touts and pays bribes when it is does not want to stand in line. So, it is blind to improvements. In 1996, determined not to hire a tout or pay a bribe, I took 16 days of leave over six months to get the registration of my motorcycle transferred from one state to another. Today, many flaws remain, but the experience in most Road Transport Offices has improved dramatically, thanks to technology and stricter vigilance. Ask me. I move home every few years and am a regular at these bastions of the Indian State. There are other examples, from the Election Commission to the Delhi Metro.

The impatience is good because younger India clearly does not share my patience or perspective. Change must come faster. Aspirations in what will soon be the world's youngest nation have risen at a rate inversely proportional to the delivery of services by state institutions. But impatience cannot replace knowledge and common sense.

It is hard, if not impossible, to police corruption. The key is to prevent it, and that can only come from reform, more reform, better governance and even better governance. That, in turn, can only come from sensible, sustained public pressure. The weeks ahead will indicate if restive August was a harbinger of change or a flash of public petulance.

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HINDUSTAN TIMES

NO MESSI-ING WITH OUR HEADS

AMIT S RAO

There's a reason why we should all be turning our eyes towards the Yuva Bharati Krirangan in Kolkata on Friday evening when Argentina plays Venezuela in an international friendly football match. Well, actually there are three reasons.

First, if all is right with the world, we should get to witness the greatest practising footballer in the world at the height of his prowess. It doesn't matter that the match is a friendly. In the Beautiful Game, 'friendlies' at such a level are high-quality encounters minus the staccato, flow-breaking interruptions of dives and fouls we see in more 'serious' games. So, if everything becomes focused on showing off one's on-field abilities, Lionel Messi should be tantalising. As could be a new name we'll learn to remember.

But we should be watching Friday's match also to watch the watchers - those at the stadium. Brought to the fixture like moths to floodlights, these are people untied by the usual glue of national pride or overt participation in the game. They will be watching the match for the sheer love of watching an art form unfurling in its highest level outside the arena of a television box. It is like a theatre full of people with little or no ability to dance hoping to be entranced by the magic of the Bolshoi Ballet. It is this purity of devotion towards a beautiful contest - aided by the hero worship of Argentina, or Argentina's Messi or FC Barcelona's Messi (or a combination of all three) - which makes Friday's friendly such a great event that goes against the grain of how people are drawn to things and events.

In fact, we'll be able to watch and appreciate Friday's game more 'purely' and without any distraction than any Argentine or Venezuelan whose hearts will be contaminated by bias unconnected to football itself.

And that, amigos and amigas, is the third and best reason to watch a football match between Argentina and Venezuela being played in India.

Amit S Rao is a Mumbai-based writer

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THE INDIAN EXPRESS

EDITORIAL

SPORTS RAJ

The draft national sports development bill was rejected by the cabinet on Tuesday, with several ministers expressing strong concerns about its provisions. This is fortunate; the bill should unquestionably be seen as a naked power-grab. India's sports federations hardly operate at peak efficiency, government control will not improve matters. Indeed, given the government's track record in matters of sport, extending its authority into the nitty-gritty of administration will almost certainly make things worse.

The bill has various provisions that should worry us. Unless "recognition" is bestowed on an organisation, it will not be permitted to claim to send an "Indian team" abroad; nor can it consider itself part of an international federation. "Recognition", of course, will serve essentially to ensure a sports federation does whatever the government wishes it to. Yet this bill is presented to us merely as a harmless reform to try and make sports bodies more open and transparent. Other provisions are also odd: why is the government prescribing a retirement age for the heads of independent societies, for example? With singular recklessness, the sports ministry went ahead even after the International Olympic Association wrote strongly worded letters, warning that interference with the independence of its Indian affiliate would lead to "appropriate measures and actions which might seriously affect the representation and participation of India at the Olympic Games and international sports events".

Even more absurd than the old-line statist impulse of this draft is the decision to make it a priority at this time at all. The UPA is struggling to carry other political parties and state governments along on its pending legislative agenda. It is far from clear why it would choose to dip into its severely depleted reserves of goodwill and authority to get this particular bill passed. If human resources are a concern, where is the forward movement on skilling the working-age population? Energy wasted on fighting the sports bill battle could instead have been focused on the massive expansion of schools and colleges needed to meet the goal of quality education for all those who need it. Does the Central government have the slightest sense of what its priorities should be? Does it feel the slightest urgency to get India moving again? Judging by its choice to waste time and effort on an attempt to take over sports federations, the answer is not reassuring.

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THE INDIAN EXPRESS

EDITORIAL

ROAD LESS TRAVELLED

Being stuck in traffic is one of those unavoidable frustrations of urban living. Most cities, across the world, have to contend with intensified congestion, and are devising their own public policy solutions, but our cities are among the most spectacularly clogged.

While this growth spurt in traffic may be inevitable, it's up to government to organise and price mass transit, and to innovate with transportation planning. It needs to build the infrastructure to accommodate our needs, and manage traffic patterns optimally. In late 2007, the Centre had committed to a Rs 16,600 crore plan to decongest our rapidly growing towns, including Hyderabad, Amritsar, Pune, Nagpur, Chennai, Bhopal, Coimbatore, etc. This entailed making design interventions — by creating ring roads to loop around the city, building roads that allowed traffic to fly over or pass under existing roads, tunnels and bypasses to divert part of the rapid flow of traffic, and increasing the number of lanes. However, most of these plans are still to materialise. The seventh phase of the national highways development programme seems to be stuck on most fronts, and will struggle to meet the December 2014 deadline for its projects. Feasibility studies are still being undertaken in many of these plans, others have stalled at the bidding stage. Either way, this delay is costing our cities.

Obviously, different metropolitan areas have their own reasons for congestion — in some cities it's density of settlement in confined areas, in others it's sprawl and employment decentralisation. Many other cities have experimented with their own solutions to ration road space, like London's congestion charges, which are then pumped into the public transport system. Most Indian towns have grown organically, and lie spreadeagled across hundreds of kilometres, but have not been redesigned to cope with the new crush of cars, trucks and cycles that accompany growth. What they need is better planning and engineering, alternatives to the major thoroughfares, a network of roads that loop around and let the traffic whiz around quicker.

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THE INDIAN EXPRESS

EDITORIAL

MESSI-AH!

Ten is football's magic number. Pele, Maradona, Platini, Zico, Totti, Ronaldinho, Zidane, Zola and Bergkamp have worn it; Ardiles, Cantona, Van Basten, Gullit, not readily associated with it, have also valorised the creative midfielder who was once assigned the number on-field, till squad numbers broke the inextricable bond between a player's position and his jersey. The tendency to downplay the creative midfielder — the guy who, more than putting the ball in the net, sets up others to do so — was pronounced around Italia '90, in the mercifully short heyday of ultra-defensive football.

The skills of Pele or Maradona may have gone for good, chased away by the sheer speed at which players run with the ball these days, but the Number 10, in name or game, stayed on. The best sides kept him and built around him, none more so than FC Barcelona, arguably football's greatest success story ever, who currently play four creative midfielders — Andres Iniesta, Xavi Hernandez, Cesc Fabregas and, of course, Lionel Messi, the man who'll be the king of Kolkata come Friday. But unlike Pele or Maradona, Messi is in Kolkata in top form, taking over as captain of a star-studded Argentine national squad in a FIFA-approved friendly against Venezuela.

Gerd Muller, Eusebio, Romario, Francescoli, Zico, Rummenigge, Burruchaga, Diego Forlan, et al have graced Kolkata too, and the city's current madness may invoke a sense of deja vu. But never have former world champions looked to the Yuva Bharati Krirangan to revive themselves under a new coach, after their ignominious

exit from Copa America. Messi himself, always accused of under-performing for the national team, has detractors in Buenos Aires to silence, detractors who'll be looking out also for the Spanish-raised star's lip movements in Kolkata when the Argentine anthem plays.

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THE INDIAN EXPRESS

COLUMN

A 10 PER CENT SAFEGUARD

ILA PATNAIK

The RBI has issued draft guidelines for private bank licences. These emphasise dispersed shareholding. Proposed rules on entry into banking require that, for a company to get a bank licence, no one entity hold above 10 per cent shares in a company. These rules are similar to those proposed by the Bimal Jalan committee that, for the ownership of an exchange, no one entity hold above 5 per cent shareholding. These rules are on the right track. However, as recent experience in telecom and stock exchanges has shown, enforcing such rules is going to be a challenge. The RBI will need strong investigative capabilities, such as in SEBI, in carefully sifting through the bank licence applications that it will receive.

The business of banking is different from other businesses. What is special about a bank? As an illustration, consider a person who puts up Rs 51 to start a bank with an equity capital of Rs 100. With 51 per cent shareholding, he has full control of the bank. On average, Indian banks have total assets which are 20 times the equity capital, so the bank will borrow Rs 1,900 from depositors and give out loans of Rs 2,000. Retail depositors are rarely informed enough to understand unethical practices by banks. This problem is made worse by the political reluctance to let a bank fail. The belief that the government would bail out a bank reduces any incentives of depositors to worry about risks being taken by banks. Data and analysis of who the bank is lending to is not made public. Even if it were, in a complicated structure of company ownership, it is hard for depositors to know if promoters are lending to related parties. This puts the onus on the bank supervisor. The proposed ownership structure for bank licences is intended to address this issue.

A promoter who puts in Rs 51 crore to control a bank gets to control bank assets of Rs 2,000 crore. The world over, promoter-controlled banks have got into trouble because there is the temptation for the promoter to give out dubious loans and thus siphon out more than that Rs 51 crore. If promoter-led banks come about, what will ensue is a continual warfare between promoters and bank supervisors. Given the governance problems of India, prevention is better than cure. The best way out for Indian banking is to open up only to dispersed shareholding banks.

In all countries, at an early stage of development, firms start out family-dominated. In India today, most companies have at least 51 per cent shares with the promoter. From a policy viewpoint, the main concern with this arrangement has been that of corporate governance: where a promoter with 51 per cent of the shares grabs more than 51 per cent of the cash flow of the company by siphoning off cash through underhand means.

In certain fields, the concerns about promoter-led companies go beyond the corporate governance problem. Banking is an example. A promoter-run bank features concentration of decision-making in a few hands. The promoter can give out loans to accomplices adding up to Rs 102 crore. If these loans are not repaid, the promoter has converted Rs 51 crore of investment in setting up the bank into winnings of Rs 102 crore, that is, a 100 per cent return on investment.

What is the alternative to a promoter-run company? All over the world, capitalism grows up, from family-dominated companies to dispersed shareholding companies with a professional management team. A key feature of professional management is the dispersion of information and decision-making among many people. It is harder to execute a scam, when many people, and checks and balances of internal processes, are in the fray. The CEO of a dispersed shareholding company is a professional. If a scandal erupts, it destroys his reputation and thus his lifetime income. Dispersed shareholding with professional management is usually less likely to indulge in corrupt practices. We see this phenomenon with the new private banks that came into operation in India after 1993. By and large, the promoter-led banks got into trouble (other than Kotak Bank). By and large, the dispersed-shareholding banks did well.

The debate in India has been primarily about whether industrial houses should promote banks or not. This is because it is expected that the promoter may use the licence to lend to his industries. But the real issue is about whether a promoter should control a bank or not. We have seen examples of private banks in India where the promoter constructed side businesses to give bad loans to, or gave loans to cronies, even when the promoter was not an industrial house. The real issue is that of incentives and information; not about whether the promoter controls an industrial empire on the side.

Given the difficulties in obtaining information, understanding complex ownership structures and in supervising and prosecuting fraud of the kind described above, the RBI has proposed to address this issue by emphasising dispersed shareholding banks, where there is no promoter.

Dispersed shareholding corporations, with a professional management team, are in any case the destination for Indian capitalism. All over the world, the shareholding of promoters inevitably gets fragmented among many children. The imperatives of growth require bringing in external equity capital which dilutes the shareholding of the promoter. Thus, worldwide, promoter-led companies transition into dispersed shareholding companies. In India, we should accelerate this process, so as to avoid the difficulties of the first stage. We would be getting to the same end-destination — a landscape dominated by private banks all of which lack a promoter — but we would be avoiding many a scandal and some macroeconomic crises along the way. Perhaps one question worth pondering is: what would have happened in Indian telecom if, in 1993, when telecom first opened up, private telecom companies were constrained to have dispersed shareholding?

The writer is a professor at the National Institute of Public Finance and Policy, Delhi
express@expressindia.com

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THE INDIAN EXPRESS

COLUMN

THE BILL THAT WASN'T

DESH GAURAV CHOPRA SEKHRI

The draft National Sports (Development) Bill 2011 (Sports Bill) met with multi-pronged and vociferous opposition on Tuesday. For all intents and purposes, it will need to undergo more than just cosmetic surgery in order for it to be accepted and passed, but at the moment its future acceptance and enforcement seems unlikely. The intent behind the Sports Bill is commendable. It's clearly a good faith effort on the part of the Ministry of Youth Affairs and Sports to try and clean up the sports domain.

Unfortunately, an all-encompassing federal legislation such as this is more or less unprecedented from a global perspective, and that's not a good thing for supporters of the Sports Bill. India lacks the track record in sports to be able to effectively implement a blanket sports development bill on a national scale.

The Sports Bill itself has a variety of omissions and limitations. It is a work in progress, but extremely limited in its scope. For all intents and purposes, it deals primarily with regulating and structuring the National Sports Federations (NSFs), without really delving into how sports overall and the business of sports can be benefited. An important and valid concern is that key stakeholders have been left out from a decision-making perspective, as well as from a future role in developing and creating the business of sports. Sports as a lucrative industry and sporting excellence go hand in hand. The sports industry requires private-sector investment, and also professional management to ensure its growth and development. By omitting the private sector in the Sports Bill, the burden then lies with the state. There is an unfavourable climate vis-a-vis direct or indirect government involvement in sports — the Commonwealth Games is a prime example. To presumably bring the management of sports directly or indirectly under the ambit of the sports ministry, the Sports Authority of India (SAI) and the NSFs, isn't necessarily a convincing step forward. Especially since professional management isn't the public sector's strong suit.

A sticking point for the Sports Bill has been with respect to bringing de facto NSFs such as the BCCI under the Right to Information Act's (RTI) umbrella. The BCCI is one of the most powerful and self-sufficient sports bodies/ entities in the world. It is also one of the most heavily scrutinised. Bringing the BCCI under the RTI might be plausible when it comes to profit-making, or conflicts of interest-related queries. However, given an unlimited licence to question each aspect of the NSF's activities and authority, it's more than likely that the RTI will become a national referendum on team-selection processes involving the public. The risk of frivolity is extreme, and could actually inhibit any professional progress made by those federations who actually intend to promote and develop their respective sports.

The Sports Bill is limited in its ability to regulate the BCCI, the sport of cricket or other self-sufficient sports NSFs. This is a huge obstacle, especially in the context of non-Olympic sports and their governing bodies. If a de facto NSF such as the BCCI chose to no longer align itself with the sports ministry and/ or the Indian Olympic Association (IOA) due to the stringent regulations or onerous burdens that NSF accreditation placed on it, then the erstwhile NSF could conceivably ask the global sports federation to recognise it, independent of whether or not the entity was a recognised NSF. The global sports body will likely have the authority to choose its member federations as it sees fit. So, if tomorrow an Indian sports body opts out of being an NSF per se, the chances are that it could continue to be a recognised entity from the global sports body's perspective. Assuming the sport is non-Olympic, it will be outside the umbrella of the Sports Bill altogether. This is a risky proposition — and a dangerous trend as other federations may then also follow suit, especially those with leverage and surplus funds. It will be a serious setback for proponents of accountability in the domestic sports domain.

The sports industry globally has been given somewhat of an exception when it comes to how it is managed. Barring illegal and nefarious activities, most countries support their leagues and teams by abstaining from decision-making, and actually carve out legislation that grants the leagues and sports associations more freedom and autonomy when it comes to management and regulation. While one cannot speculate on whether or not the Indian sports landscape is similar to its international cousins, the fact is that historical international precedents would greatly strengthen the sports ministry's case. Unfortunately, there are none that immediately come to mind. And this is an aspect that will repeatedly challenge the implementation of any blanket legislation in India — even one with the best intentions.

The author is a sports attorney
express@expressindia.com

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THE INDIAN EXPRESS

OPED

WORDS ARE ALL WE HAVE

K RAHMAN KHAN

Parliamentary debates occupy centrestage in our politics. As a representative institution, Parliament deliberates on various issues confronting the nation; a substantial time is allocated for debates. Debates are supposed to be orderly, with each member speaking in the best possible manner in the time allotted to them, and expressing their views on varied subjects to meet the aspirations of their electorates, society and the nation at large.

In recent years, a culture has developed in which, rather than good debate, unruly behaviour and disorder that are often resorted to as tactics, to yield an assurance from government, or to catch media attention. High standards in debates depend, to a great extent, on the individual member's interest and involvement, including the time devoted to research. Today, a member is also influenced by the prevailing political atmosphere and alignments in the House and, therefore, things have come to such a pass that high debating standards have become extremely rare. Parliament has become a forum for fighting among political parties on partisan lines. The healthy traditions and norms of parliamentary democracy have been given a go-by in today's power-centric politics.

The adversarial posture between the treasury benches and the opposition has also affected the debating standards. The decline in standards cannot be separated from the general decline in parliamentary democratic institutions all over the world; it is a phenomenon not confined to India alone. Good debates are barely reported by the media; that unruly scenes get more prominent coverage than a good speech has become a disincentive for members to participate in debates seriously.

Parliamentary debates are of great significance. During the debates on motions and bills, the members participate in the debates, giving their opinions and viewpoints, which may prompt the government to revise any measure, or give an assurance, after which they are put to vote. Therefore debates are not only important in deciding the ultimate shape of a law enacted by Parliament, but also in making the government take certain measures as a follow-up on what the members have said in the House. Unless the debates are of high order and forceful enough, parliamentarians may not be able to contribute effectively to good governance and welfare.

Parliamentary debates are very different from the speeches made by political leaders in public functions. Parliament is a world in itself with its own customs and rules. Members, while participating in the debates, have to adhere to the rules, customs and etiquette in the House. Members enjoy freedom of speech in the House, which has been recognised as an important parliamentary privilege. Eloquence and a high level of debating skills are coveted abilities, and a high level of debate enriches Parliament.

On going through the daily proceedings of Parliament, it is easy to make out whether debates were of a high standard or not. Debates are published; one can see the difference between debates in the 1950s or 1960s, and those of recent years. At Independence, India was gifted with men of high calibre, who were highly educated and whose scholarly backgrounds and oratorical abilities enlivened debate. They were men of vision, who maintained high standards in personal and public life and conduct, and took debates with due seriousness, preparing themselves by studying the subject of discussion in the House. A decline in debating standards is not an isolated phenomenon: there has been a decline in parliamentary and democratic systems as a whole, what with the criminalisation of politics, corruption, unethical conduct and so on.

The social profile of members of Parliament has changed today, too. Our democracy reflects today the diversities of our country, the grassroots realities, our educational standards, the rural-urban divide. MPs come from these diverse backgrounds, and today the House no longer has an elitist character. As you are aware, the Constitution has not prescribed any educational qualifications for members. The increasing incidence of indiscipline and unruly behaviour, of disorder, disruptions, and the shouting of slogans, of walkouts, disobedience to the chair and so on have led to a decline in standards, and to a crisis of our parliamentary institutions. Members are also pessimistic about the chances that a speech in Parliament will impact government policy, and think a good debate is not worth the effort. Thus, in the House today, speeches made by members revolve around political issues and members do not focus on the issue, or the subject of discussion. Indiscipline takes away Parliament's precious time. Often, debates are incomplete before a bill or motion is put to vote. Even if a member comes well-prepared, he would be lucky to get an orderly atmosphere in the House to speak.

A high standard of parliamentary debate would have several aspects. Certain ideas should be clearly and coherently conveyed. Sometimes, debate is an argument with facts and figures, and the member should be able to deliver those facts with impressive language and mannerisms. The words used, the meaning of the member's sentences, the flow of ideas are all important. How well a member can articulate his views and ideas is crucial. Today we often see tedious, shallow, repetitive speeches, without depth and impact. Intellectual standards and scholarly pursuits are relatively absent in most members. Frequently, debates degrade into verbal disputes between the treasury benches and opposition.

Only on very rare occasions, like the debate on motions of confidence or no-confidence and certain other major contentious issues, can one see high standards of debate and serious participation. In the recent past, debates on Indo-US nuclear cooperation, the women's reservation bill, and on the drafting of the Lokpal bill can be cited as among the best. Another important dimension is pertinent to mention here: when the Lok Sabha was facing disruption, the Upper House, true to the best traditions of parliamentary democracy, concerned itself with the motion for the removal of Justice Soumitra Sen, and there were some excellent speeches on the subject of the legislature and the judiciary.

Without dedication by members, a high standard of debate cannot be expected. The decline in parliamentary institutions can be arrested, to a great extent, by maintaining a high level of debate, but this requires a long-term effort. Sustained efforts made by presiding officers, political parties and leaders can gradually bring changes to our parliamentary institutions.

The writer is deputy chairman of the Rajya Sabha. The views expressed are personal

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THE INDIAN EXPRESS

OPED

THE MESSAGE FROM THE MEDIUM

SHAILAJA BAJPAI

When Anna Hazare decided to break his fast on Sunday with a spartan coconut water and honey, we suddenly realised that, after 12 days, we could also take a break from his fast. The venerable gentleman reclining on the Ramlila stage had been the sole focus of the nation's attention; he was our calendar and our timepiece. "Now he has fasted for 152 hours; now he has fasted for 8 days and 13 hours," the news channels clocked in.

But there was one unintended consequence of his heroic efforts to root out corruption: the entertainment channels got the boot. We preferred to watch, spellbound, the spectacle at Ramlila Maidan (and the antics in the news studios) rather than the soaps, the song and dance, even Amitabh Bachchan.

Between August 16 and August 28, the elder statesman of Bollywood found himself up against the ageing messiah of the masses and, for all Mr Bachchan's charisma, he could not defeat or compete with a hungry old man on a crusade. The angry young man in Bachchan may well have silently applauded Anna Hazare.

Saturday was the one occasion when the crusader was upstaged, that too by politicians who finally had their day and say in Parliament. They gave a good account of themselves — so much so that, the same evening, the media proclaimed everyone a winner! Why had the politicians allowed Hazare and Team Anna to wrest and keep the initiative? Politicians must be heard, seen and seen to act. Last week, after the PM wrote his first letter to Hazare, the politicians were more visible on TV, they spoke up for the Constitution and worked to end the impasse between civil society and themselves — all in the public glare. Thus, by the time Saturday's parliamentary debate on corruption ended, the viewer had begun to think, well, maybe they aren't so bad after all.

Now that the battle has been lost or won, or won and lost — and nobody, not even TV news is quite sure which it is, despite endless debate — Kaun Banega Crorepati (Sony) is an entertaining diversion from the sound and fury of Kiran Bedi's kachehri at Ramlila Maidan. Most importantly, it's a great deal quieter. The loudest sound you hear is the honk which signals the end of an episode, not hysterical voices. There's no Lok, only log from all parts of the country — and the only bills are the ones the winners will receive when they cash their takeaway cheques. Like Season 4, the contestants are from cities or towns outside the metros, like Hisar or Bastar. And they're hungry to win, and win the money. This might seem downright mercenary at a time when we are being exhorted to smell the roses of moral self-righteousness and say no to money power, but these contestants need the money: to build their first home, help their parents, to further their education.

Amitji is as popular as ever, as smooth as the silk kerchief he wears around his neck. He's indulgent and if you have watched him often enough, you can tell when the contestant has the right answer — he rushes through with "computerji." When the answer is incorrect, he pauses deliberately. The questions, meanwhile, seem to have become easier — at least the first seven or eight — what is a lunar eclipse, what sport do you associate Narain Karthikeyan with, who has been the leader of the opposition in the Lok Sabha since 2009? Anyone who is a regular reader of the daily newspapers can answer questions upto Rs 3.2 lakh, sitting at home — and still be empty-handed!

Bachchan's buddy on Sholay, Dharmendra, is also winning us over (India's Got Talent, Colors). He's amiable, gentle even when he's hard on a contestant, he recites poetry, he shakes a leg, both legs — and is so dignified as a judge. Hrithik Roshan (Just Dance, Star) is also generous and gracious: together they have challenged the established notion that the judges' table is a combat zone, as it has been on Sa Re Ga Ma Pa or X-Factor.

shailaja.bajpai@expressindia.com

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THE INDIAN EXPRESS

OPED

BURMA RAIL

C. RAJA MOHAN

Burma rail

What the British Raj could not do in Burma, Beijing is all set to accomplish in Myanmar — building a rail link between China's Yunnan province and the Bay of Bengal.

Myanmar's railway minister, Aung Min, told reporters this week that work will begin on an 850 km railway line from the border between Yunnan and northern Myanmar to the Kyauk Phyu port off the Arakan coast in the Bay of Bengal.

"The whole project will take five years and cost about $20 billion. China will bear the cost and the agreement will be based on BOT (build, operate and transfer) for 50 years," Aung Min said. Work is expected to start by December.

"China will use this railroad to transport goods from Kyauk Phyu port to its capital Beijing and other cities via Ruli and Kunming," Aung Min said. "Their ships will no longer need to sail through the Malacca Strait," he added. The rail line is expected to follow the alignment of the natural gas pipeline that China is already building between Kyauk Phyu and Kunming, the capital of Yunnan.

Way back in the late 19th century, the British Raj had explored the prospects of building a rail link from the Bay of Bengal to Yunnan province. Initial surveys were made, with labour from Bihar, in the 1880s. Construction finally started in the 1930s, but the project did not take off as World War II broke out. The Raj was lured by the prospect of the large Chinese market and cutting short the distance to China's east coast via the Malacca Strait. Similar logic is now driving Beijing — to provide a shorter route to the Indian Ocean littoral which provides vital natural resources to China's massive industries and reduce the current reliance on the Malacca Strait.

Onto Chittagong

Beijing also wants to link its rail network in Yunnan to Bangladesh via Myanmar. An understanding to this effect was reached when Prime Minister Sheikh Hasina travelled to Kunming last year, and the governor of Yunnan province, Qin Guangrong, paid a return visit six months later.

Meanwhile, Bangladesh has begun work on a $250 million project to extend the railway line from Chittagong to the border with Myanmar. The initial surveys for this project were also made more than a century ago by the British Raj.

Chinese companies are actively participating in the modernisation of the Bangla railway system and have shown interest in the development of the Chittagong port.

India's options

China's rail links to Myanmar and Bangladesh come amidst Beijing's plans to extend its South Xinjiang rail line across the Karakorams into Pakistan and bring the Tibet rail into Nepal.

Sitting in Delhi, it is easy to cry wolf and talk about China's "encirclement" of India. That will not stop Beijing, which is determined to expand its national rail network into the subcontinent.

China is doing much the same on all its borderlands in the Northeast, Southeast and Central Asia; it is part of a wider plan to deepen China's overland connectivity.

Railways have been at the very centre of modern China's vision for nation-building. Sun Yat-Sen, the first provisional president of the Republic of China, had written in the early 20th century about political integration and economic development of China through massive rail-road development.

Sun Yat-Sen also dreamt of connecting the Chinese networks to those in India and Europe. He visualised the Chinese rail network extending all the way to Cape Town in South Africa.

While India has failed to the take full advantage of the rail network that the Raj had built, China has dramatically expanded railway construction, much along the pattern that Sun Yat-Sen had visualised.

Instead of objecting to China's rail links to South Asia, India must modernise its own frontier railway system and connect it to the rail lines that Beijing is bringing to our borders in South Asia.

There is no rail line which runs only one way; if Beijing's new railways give China improved access to markets across its borders in South Asia, they also let India and her South Asian neighbours partake in south-western China's massive economic boom.

The Chinese rail lines also provide India a shorter route into China's industrial heartland in the east. After all those were the very reasons why British Raj wanted to build a rail line connecting the subcontinent to Yunnan through Myanmar.

Next week in Dhaka, Prime Minister Manmohan Singh is expected to unveil an agreement for rail transit through Bangladesh. He must also use the moment to join hands with Sheikh Hasina to outline a bold vision to link the South Asian rail networks with those Beijing is building in Myanmar and south-western China.

The writer is a senior fellow at the Centre for Policy Research, Delhi

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THE INDIAN EXPRESS

UPA PROFLIGACY

MANOJCG

UPA profligacy

The RSS claims the UPA government has "gifted away" Rs 9,003 crore of taxpayer money to foot the bills of European countries. The context for this claim is India's decision to contribute to the IMF's emergency fund to bail out crisis-hit European Union economies.

The editorial in RSS weekly Organiser says that the donation of such a huge amount "without batting an eyelid shows the arrogance of the UPA government," at a time when the fiscal deficit is burgeoning and when money available for infrastructure and development programmes is dwindling.

According to the government's own admission, 70 per cent of India's population is in need of food security, which means that millions in the country are starving, it argues. The government had sought Parliament's consent for making the contribution at the beginning of August. It says the government "adopted a mean device" by including it as one of the items in the table of the supplementary demands of the general budget. "No case study, no debate, no explanation. Not one party or MP, including the leftists, raised any question, though the report appeared in a small section of the media," it says.

It concludes that under Manmohan Singh, India has been at its profligate best, lending to countries like Afghanistan but not leveraging on that aid. In the case of contributions to the IMF, it says "some of the tax havens where black money from India has been stashed away are in Europe. India could well have used this occasion to bargain for the return of the booty," but it did not, claims the editorial.

All for Anna

The RSS journal Panchjanya sought to puncture claims that the Anna Hazare agitation did not have the support of the Muslim community. A full-page article in its latest issue says that these falsehoods were being deliberately spread by the Congress with the help of some friendly Muslim leaders and Urdu newspapers. It claims that these attempts to keep Muslims away from the movement did not succeed. "Thousands of Muslims carrying the national tricolour and shouting 'Vande Mataram' and 'Bharat Mata ki Jai' were seen in the Ramlila grounds. About 2000 Muslims from the Mewat region had reached the Ramlila grounds to participate in the movement," the article says. The Panchjanya editorial talks of a "secular attack" on the Anna agitation from organisations claiming to represent scheduled castes and tribes, backwards and Muslims. It says the entire attempt, instigated by the "Sonia party", was aimed at somehow weakening the anti-corruption agitation by creating controversies. Panchjanya also has a full-page article on the issue of favouritism allegedly having been shown to the Rajiv Gandhi Charitable Trust in the allotment of eight acres of land in Haryana.

Boosting factories

In the context of the government's announcement of a national manufacturing policy, an Organiser article wonders whether these proposals will help factory output. It says the policy aims at creating a 100 million additional jobs and augmenting the share of manufacturing to 25 per cent of India's GDP by 2025. It also wants to create national investment and manufacturing zones with world-class facilities. "The government's emphasis on manufacturing has not come a day too soon. The Index of Industrial Production (IIP) has been showing a lot of volatility in recent times," it says.

"Quite apart from the political crisis looming large, policy paralysis, and a hawkish Reserve Bank at home, there are the issues of fragile recovery in the developed world and uncertainty in the United States, the world's biggest economy," it observes.

However, the article says that the interventions required are obvious. The rates of indirect tax in India are among the highest in the world. In addition, states and local levels of government levy octroi or entry tax. "This is perhaps the most important issue for industry, but it cannot be addressed given the government's precarious fiscal situation and its proclivity to launch more populist, revenue-guzzling schemes."

Inadequate infrastructure, labour inflexibility, lack of skilled workforces and paucity of raw materials add to the problem, it says, and that policy-makers are not unaware of the measures that need to be taken. "A rational manufacturing policy can be simple, but for the distortions added by Congress-style politics," it concludes.

Compiled by Manoj C.G.

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THE FINANCIAL EXPRESS

EDITORIAL

SPOIL SPORTS

It is unfortunate that, even in these times of an increased push for transparency and accountability, vested interests in the Cabinet shot down Ajay Maken's proposed Sports Bill. One of the main provisions of the Bill was to bring all sports bodies, including the BCCI, under the RTI. This was reportedly vociferously objected to by the Cabinet, five members of which are in charge of various sports bodies. Another regulation was to set a retirement age, at 70, for the presidents of sports federations, and cap their tenures to three terms in a row (12 years). This, too, naturally met opposition from the geriatric club of India's sports body presidents. It is true, as has been argued elsewhere, much of the BCCI's success (and there has been much success, the India-England test series notwithstanding) has come from the fact that it is a private body, not reliant on the government for its revenue. While this may be true, it could still voluntarily come under the RTI and make its financial accounts public (another feature of the Bill), as a show of good faith to cricket fans. Cricket Australia does it, what's the problem? This would dispel a lot of the opacity the BCCI is associated with. Instead, the media reported, Sharad Pawar got so angry that he threatened to take the issue up with Sonia Gandhi. As far as the retirement age and presidency tenure goes, 70 is just a number—it could just as well be 75. The point is that there should be a limit, whatever it is, so that the incumbent president doesn't start thinking of himself as the ruler of a fiefdom for life.

The tragedy is that with the demise of this version of the Bill, several other good and non-contentious features also bite the dust. Including athletes in the decision-making bodies of sports federations and giving them 25% of the voting rights can only be a good thing. But, sadly, opacity and feudal workings won the day.

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THE FINANCIAL EXPRESS

EDITORIAL

OLD PENSION THOUGHTS

Given that the standing committee on finance has cleared a 26% FDI component in the Pension Fund Regulatory and Development Authority Bill, 2011, the stage is set for the Bill to get passed in the monsoon session of Parliament. Once the Bill is passed by Parliament, it will give the PFRDA—the interim authority that was set up in 2003 through an executive order—statutory powers to regulate the sector. At the moment, if the interim PFRDA has a problem with a fund manager, for instance, it can try and fix it only through the contract—that is, it has to go to court. Once the PFRDA Bill is passed, however, the PFRDA will regulate the sector in the manner that regulators like IRDA and Sebi do, by issuing regulations and orders.

Where the standing committee has got it wrong is on the New Pension Scheme (NPS). It is rightly concerned that the NPS has hardly taken off—of the R9924.72 crore of total assets under management as on July 16, just R100 crore has come from about 51,000 subscribers and the bulk of this has been contributed by two public sector companies which have migrated their employees' pension to NPS. Government employees who joined service after January 1, 2004 are mandated to come under the NPS. The standing committee's solution is that the NPS offer a minimum return that is equal to the interest rate offered by the EPFO—if it falls below, the government will chip in (this will also make the fund managers less driven to perform!).

While offering at least the EPFO rate will make the NPS more attractive, the standing committee forgets that NPS was devised only because existing pension schemes such as the EPFO's Employees Pension Scheme (EPS) and the government's pension scheme were a huge drain. The EPS is only 15 years old and services just 1.5 crore or so persons and has a gap of well over R50,000 crore already. The government liability on its guaranteed benefits pension—half of your last salary as pension for life—has also been going up by leaps and bounds. UTI's US 64 also collapsed only because of the guaranteed returns it was offering. Which is why, instead of defined benefits (DB), Indian pensions started moving towards defined contributions (DC) where the money is invested by fund managers of your choice and the pension depends on the returns they generate.

If the government has been able to get just 51,000 persons for the NPS, it is not because the NPS offers lower returns than the EPFO. In most years, it is higher. And for NPS-lite, offered for the poor, the government also contributes R1,000 per year for five years, making the real returns here much higher than on EPFO. Given that the privately-run IIMPS' pension scheme has managed to get 3 lakh subscribers already, and without the R5,000 government contribution, it's obvious the real driver is product delivery, not nominal returns.

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THE FINANCIAL EXPRESS

COLUMN

INNOVATIONS IN MOBILE TELEPHONY
RAJAT KATHURIA

When considering the technological innovations of the past fifty years, the Internet is probably the one that has had the greatest impact on everyday life. The near universal reach of mobile telephony in developing countries means that mobile phones will be the dominant means to access the Internet. There are now 5.3 billion mobile subscriptions globally, of which more than 3 billion are in developing countries. Even in remote villages without power, people can find access to a phone. These phones are becoming more and more powerful and, according to Gartner, "By 2013, mobile phones will overtake PCs as the most common web access device worldwide."

India's mobile and internet achievements are a study in contrast. While there were 785 million mobile subscribers in February 2011, the corresponding numbers for Internet and broadband were 20 million and 12 million, respectively. Net additions in broadband subscribers are merely 0.2 to 0.3 million per month compared to around 15 million mobile connections. In other developing countries, too, there are many more mobile phones than Internet connections. In Brazil, Russia, China, Indonesia and India (the so-called BRICI countries), there are 610 million regular Internet users, but a staggering 1.8 billion mobile-phone connections, according to the Boston Consulting Group (BCG). In a report called The Internet's New Billion, BCG predicts that by 2015 there will be 1.2 billion Internet users in these countries—dwarfing the total in America and Japan.

These new internet users in India, therefore, will mostly log on via their mobile phones. This is because it tends to be cheaper and easier than any other option. Besides, mobile phones independent of the Internet are delivering enormous value. There is now incontrovertible evidence of mobiles being used in ways that contribute to productivity enhancement. For example, farmers use price information available on the mobile to exploit the price disparities to their advantage. Layers of intermediaries can be dramatically reduced, if not eliminated altogether. More recently, innovations such as geo-location technologies and social networks have begun to transform accountability loops in a number of different ways. These innovations allow citizens to participate and demand better citizen services. The role of technology in improving accountability is part of a broader trend of empowerment through more open development.

Mobile applications (including access to the Internet) are expected to make significant contributions to economic and social development in India over the next five years. Vigorous competition among service providers in India led to aggressive pricing that made it affordable for lower income classes to own and use a mobile phone. In addition, in some cases, it was easy to demonstrate that the mobile paid for itself. Thus, for the self-employed and many others, the mobile was not only the only form of connectivity but also an instrument for cost savings and revenue enhancement.

Using this connectivity to deliver an enhanced array of services will be a lot more challenging in the future. Moving to the next level will not only mean greater coverage but more wide-ranging applications that deliver innovative services like m-commerce, m-health, m-education, m-entertainment etc. Innovations are likely to be the key to usher in the new era of digital society in India.

Globally, mobile apps, the small applications that can be downloaded to smart-phones to access social networks, play games and music, have already taken off. Apple recently announced that its App Store now offers 225,000 apps, which collectively have been downloaded 5 billion times. Android Market, the storefront for the operating system that powers many smart-phones, now has 60,000 apps and is catching up fast. And GetJar, an independent mobile store that offers programs for all kinds of handsets, claims 72,000 apps and 1 billion downloads. In a recent study, Juniper Research put 2010 revenues from mobile apps at nearly $10 billion and estimated that these will more than treble by 2015.

In India, the focus of innovations in mobile telephony naturally has to be beyond entertainment. It is not to say that entertainment will not be a prominent application, in fact, it already is, but modern mobile systems hold the promise of helping the poor in radical and game changing ways in the developing world. For example, M-pesa in Kenya is a mobile banking solution that has caught the imagination of development professionals as is now being replicated in a number of countries as part of the 'financial inclusion' initiative. Again in Kenya, evidence of m-health's usefulness is shown by something as simple as sending text messages to remind Kenyan patients to take their HIV drugs. This alone improved adherence to the therapy by 12%.

There is no doubt that local ideas will provide a fillip to innovation. Victoria Hausman of Dalberg, a development consultancy, has surveyed dozens of m-health business models in Haiti, India and Kenya in her work for the World Bank. She predicts that mobile banking, which has already taken off in Kenya, will be a great enabler of m-health. Firms are coming up with ways for patients to pay doctors, receive subsidy vouchers and so on, using their phones. According to Bill Gates, "Middle-income countries are where most innovation in health care is going to come from."

Crowdsourcing is another method that has become increasingly wide-spread and powerful to help solve problems in 'distributed' ways. 'Crowdsourcing' is the act of outsourcing tasks, traditionally performed by an employee or contractor to a large group of people or community (a crowd). The task therefore is to create an ecosystem around which contextual and meaningful innovations can flourish and deliver value. While the market itself will cater to some needs, an enabling policy environment can go a long way in helping the process along.

The author is a professor at International Management Institute

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THE FINANCIAL EXPRESS

COLUMN

STRUGGLING WITH A GREAT CONTRACTION
MARTIN WOLF

What has the market turmoil of August been telling us? The answer, I suggest, is three big things: first, the debt-encumbered economies of the high-income countries remain extremely fragile; second, investors have next to no confidence in the ability of policymakers to resolve the difficulties; and, third, in a time of high anxiety, investors prefer what are seen as the least risky assets, namely, the bonds of the most highly rated governments, regardless of their defects, together with gold. Those who fear deflation buy bonds; those who fear inflation buy gold; those who cannot decide buy both. But few investors or corporate managers wish to take on any longer-term investment risks.

Welcome, then, to what Carmen Reinhart, senior fellow at the Peterson Institute for International Economics in Washington, and Harvard's Kenneth Rogoff call "the second great contraction" (the Great Depression of the 1930s being the first). Those less apocalyptic might call it the "Japanese disease".

Many ask whether high-income countries are at risk of a "double dip" recession. My answer is: no, because the first one did not end. The question is, rather, how much deeper and longer this recession or "contraction" might become. The point is that, by the second quarter of 2011, none of the six largest high-income economies had surpassed output levels reached before the crisis hit, in 2008. The US and Germany are close to their starting points, with France a little way behind. The UK, Italy and Japan are languishing far behind.

The authoritative National Bureau of Economic Research of the US does define a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months". This is to focus on the change in output, rather than its level. Normally, that makes sense. But this recession is not normal. When economies suffer such steep collapses, as they did during the worst of the crisis (the peak to trough fall in gross domestic product having varied between 3.9% in France and 9.9% in Japan), an expansion that fails to return output to the starting point will not feel like recovery. This is especially true if unemployment remains high, employment low and spare capacity elevated. In the US, unemployment is still double its pre-crisis rates.

The depth of the contraction and the weakness of the recovery are both a result and cause of the ongoing economic fragility. They are a result, because excessive private sector debt interacts with weak asset prices, particularly of housing, to depress demand. They are a cause, because the weaker is the expected growth in demand, the smaller is the desire of companies to invest and the more subdued is the impulse to lend. This, then, is an economy that fails to achieve "escape velocity" and so is in danger of falling back to earth.

Now consider, against this background of continuing fragility, how people view the political scene. In neither the US nor the eurozone, does the politician supposedly in charge—Barack Obama, the US president, and Angela Merkel, Germany's chancellor—appear to be much more than a bystander of unfolding events, as my colleague, Philip Stephens, recently noted. Both are—and, to a degree, operate as—outsiders. Mr Obama wishes to be president of a country that does not exist. In his fantasy US, politicians bury differences in bipartisan harmony. In fact, he faces an opposition that would prefer their country to fail than their president to succeed. Ms Merkel, similarly, seeks a non-existent middle way between the German desire for its partners to abide by its disciplines and their inability to do any such thing. The realisation that neither the US nor the eurozone can create conditions for a speedy restoration of growth—indeed the paralysing disagreements over what those conditions might be—is scary.

This leads us to the third big point: the dire consequences of soaring risk aversion, against the background of such economic fragility. In the long journey to becoming ever more like Japan, the yields on 10-year US and German government bonds are now down to where Japan's had fallen in October 1997, at close to 2%. Does deflation lie ahead in these countries, too? One big recession could surely bring about just that. That seems to me to be a more plausible danger than the hyperinflation that those fixated on fiscal deficits and central bank balance sheet find so terrifying.

A shock caused by a huge fight over fiscal policy—the debate over the terms on which to raise the debt ceiling—has caused a run into, not out of, US government bonds. This is not surprising for two reasons: first, these are always the first port in a storm; second, the result will be a sharp tightening of fiscal policy. Investors guess that the outcome will be a still weaker economy, given the enfeebled state of the private sector. Again, in a still weaker eurozone, investors have run into the safe haven of German government bonds.

Meanwhile, stock markets have taken a battering. Yet it is hard to argue that they have reached a point of capitulation. According to Yale's Robert Shiller, the cyclically adjusted price-earnings ratio for the US (based on the S&P 500) is almost a quarter above its long-term average. In 1982, the valuation was a third of current levels. Will markets avoid such a collapse? That must depend on when and how the great contraction ends.

Nouriel Roubini, also known as "Dr Doom", predicts a downturn. "A stopped clock", some will mutter. Yet he is surely right that the buffers have mostly gone: interest rates are low, fiscal deficits are huge and the eurozone is stressed. The risks of a vicious spiral from bad fundamentals to policy mistakes, a panic and back to bad fundamentals are large, with further economic contraction ahead.

Yet all is not lost. In particular, the US and German governments retain substantial fiscal room for manoeuvre—and should use it. But, alas, governments that can spend more will not and those who want to spend more now cannot. Again, the central banks have not used up their ammunition. They too should dare to use it. Much more could also be done to hasten deleveraging of the private sector and strengthen the financial system. Another downturn now would surely be a disaster. The key, surely, is not to approach a situation as dangerous as this one within the boundaries of conventional thinking.

What being bolder might mean and what should therefore be done will be the topic for next week's column.

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THE HINDU

EDITORIAL

DISMAL PROGRESS IN SOCIAL HOUSING

The progress in providing housing for the poor, as revealed by data recently released by the Ministry of Housing and Urban Poverty Alleviation, is way off target. This calls for a serious questioning of the approach and capabilities of government institutions to deliver badly needed social housing. The Interest Subsidy Scheme for Housing the Urban Poor (ISHUP), launched in 2008 to provide an interest subsidy of five per cent on a loan amount of Rs.100,000 to the economically weaker section and lower income group, has so far benefited only 7,805 people as against the 2012 target of 310,000. Although a sum of Rs.1,378 crore was allotted, merely about Rs.6.5 crore has so far been utilised. Progress on the flagship project, the Jawaharlal Nehru National Urban Renewal Mission, which has a provision of Rs.50,000 crore for the period 2005-2012, is no better. Only about 30 per cent of houses sanctioned for the poor under this scheme have been built. The lack of funds is often projected as the main reason for the dismal situation of social housing. It is now evident that, more than funds, poor conceptualisation of policies, procedural inefficiency, and ineffective construction practices are the major impediments.

ISHUP has failed to deliver because it is conceptually flawed. Policymakers assumed that the poor had access to land and needed only financial support to build their houses. As a result, the focus was on making credit easily available. However, the reality is that neither cheap land nor affordable houses are in good supply. If the demand for social housing is to be met, in addition to rectifying policies, construction practices and performance regimes need to be greatly improved. In particular, State-level housing boards must improve their capacity in order to fully utilise the available funds and deliver more houses. The experience of the United Kingdom offers valuable lessons in this area. Since 1998, after the Construction Task Force set up by the U.K. government published its seminal report 'Rethinking Construction', local authorities earnestly adopted best building practices. They formed productive alliances with the construction industry and adopted modern methods that increased the production of homes four-fold. Specific annual benchmarks, such as a 10 per cent reduction in cost and construction time, were set and procurement processes were streamlined. The financial gains from these improvements were invested in the housing projects. It is only by adopting such innovative practices and radically changing the approach to the provision of social housing can the vision of making cities slum-free be realised.

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THE HINDU

EDITORIAL

RAISING THE BAR

The Reserve Bank of India took a measured step towards licensing new private sector banks by releasing a set of draft guidelines on Monday. The central bank's concerns on licensing-related issues have been evident right from the time the Finance Minister mooted the idea in his February 2010 budget speech; unsurprisingly, these find expression in the guidelines. Allowing private players to start banks has always been a sensitive issue in India's recent history. More so when it is seen to benefit large industrial houses and business groups, whose questionable practices in banks they owned were one of the justifications for bank nationalisation that began in 1969. RBI Governor D. Subbarao was airing a widely held apprehension when he said recently that the "gaps" in the existing regulations could lead to corporations "self-dealing" in banks they promote or using them "as a private pool of readily available funds." The limited attempts at licensing new private banks through guidelines issued in 1993 and 2001 do not offer any valuable lesson for current policymaking beyond the quite obvious fact that only banks with sound promoters do succeed. The RBI has therefore done well to insist on "sound credentials", "integrity", "diversified ownership" and a 10-year track record. Prospective promoters should not have even a 10 per cent exposure to real estate and broking businesses. That is ostensibly meant to keep out those from "speculative" sectors.

The stipulation that a new bank can be set up only through a wholly owned non-operative holding company is an important safeguard designed to ring fence the bank and its depositors from problems in related entities. Necessary amendments to the Banking Regulation Act 1949 will be carried out to remove the restriction on voting rights while concurrently empowering the RBI to approve acquisition of shares/voting rights of 5 per cent or more by persons who are "fit and proper." The RBI will get sweeping powers, for instance, to supersede the bank's board in certain cases. The minimum capital requirement is fixed at Rs.500 crore and the capital adequacy ratio at 12 per cent. New banks will have an up-to-date technology platform from day one and ensure that every fourth branch is located in rural areas. Furthering financial inclusion is one of the main reasons for licensing new banks. It is likely that only a small number of applicants will qualify and fewer still will be able to get the licence from an RBI-appointed expert committee. The central bank has said that licences will not be issued to all those who qualify. It is clearly not about to open the floodgates.

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THE HINDU

EUROPE'S WEALTHY ASK TO BE TAXED MORE

JULIA WERDIGIER

Echoing a call by Warren E. Buffett, members of the European wealthy elite are urging their governments to raise their taxes or enact special levies to help reduce growing budget deficits.

Maurice Levy, chairman and chief executive of the French advertising firm Publicis, on Tuesday became the latest European business leader to ask for higher taxes on top earners, writing in The Financial Times that it was "only fair that the most privileged members of our society should take up a heavier share of this national burden."

"I am not a masochist; I do not love taxes," wrote Mr. Levy, who is also president of a French association of private enterprises. "But right now this is important and just."

The moves come after a similar proposition by Mr. Buffett, the billionaire investor and founder of Berkshire Hathaway. Mr. Buffett wrote in an Op-Ed article in The New York Times on August 14 that the United States should stop "coddling" the rich and raise the top income tax rate in an effort to reduce the deficit.

Mr. Buffett's comments started a debate among some of Europe's elite as to whether austerity measures in some countries were too punishing for the poor while sparing the rich.

The multimillionaire chairman of Ferrari, Luca di Montezemolo, backed Mr. Buffett's idea in an interview with the Rome daily La Repubblica . "I am rich and I am ready to pay more taxes, for reasons of fairness and solidarity," Mr. Montezemolo told the newspaper.

This month, 16 of France's wealthiest people, including the chief executive of the energy giant Total and the L'Oreal heiress Liliane Bettencourt, signed a petition published in the magazine Le Nouvel Observateur urging the French government to tax them more. Other signatories were the chief executives of Societe Generale, Airbus and PSA Peugeot-Citroen.

A group of about 50 wealthy individuals in Germany, who have been campaigning for a higher top tax rate since 2009, said last week that it welcomed the French petition. "Austerity programs, which affect mainly the poor, are ill-suited to solve the crisis," said the group, whose name in German means the Initiative of the Wealthy for a Wealth Tax.

On the Continent, government attitudes toward taxing the wealthy have so far been mixed. The French President, Nicolas Sarkozy, last week announced a three-per-cent increase of the tax on the wealthiest individuals, which is expected to generate about $288 million a year.

In Italy, however, there were signs as recently as Monday that Prime Minister Silvio Berlusconi could be backpedalling on similar measures. The government on Monday dropped plans for a bonus tax on Italians earning more than €90,000 ($130,000) a year even though it would still apply to members of Parliament.

Some analysts said the calls for greater sacrifice from Europe's wealthy might have sprung from growing concern that austerity measures in Europe were leading to social unrest, after protests in Greece and Spain and images of burning police cars and shops in the streets of London.

Jean-Philippe Delsol, of the Institute for Research in Economic and Fiscal Issues in France, said he found "surprising" the recent eagerness of top earners to volunteer to pay higher taxes. "Maybe some are ashamed by what they earn," he said. "But they can just ask to be paid less."

Mr. Delsol said his research showed that higher top tax rates did not necessarily lead to larger tax revenue for governments because, for example, they could act as a disincentive to earn.

In Britain, where no top executive has yet joined the call for raising tax rates, the government is investigating whether the current rate of 50 per cent on those making at least £150,000 (about $245,000) has actually improved public finances. — New York Times News Service

"For reasons of fairness and solidarity"

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THE HINDU

"PALESTINIAN U.N. BID GREATER THREAT THAN HAMAS"

The Palestinian campaign to secure full U.N. membership presents a greater threat to Israel than that posed by Hamas, the Israeli Finance Minister said on Wednesday.

"This Palestinian initiative represents a more serious threat than that posed by Hamas," Yuval Steinitz told Israel's public radio, referring to Gaza's Islamist rulers whose founding charter calls for the destruction of the Jewish state.

If the Palestinians made good on their plans to seek United Nations membership, Israel would "respond," he promised.

Although Mr. Steinitz did not spell out exactly how Israel would retaliate, his remarks were made shortly after Haaretz newspaper published a report saying the Minister had blocked the payment of 380 million shekels ($106 million) in tax revenues to the Palestinian Authority.

The Minister, who belongs to the ruling Likud party of Prime Minister Benjamin Netanyahu, said he believed it would be impossible to stop the bid which is to take place when the U.N. General Assembly meets in New York next month.

Infrastructure Minister Uzi Landau, who was also interviewed on public radio, said that if the Palestinian went ahead with their bid it would signal the end of all agreements signed with Israel. — AFP

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THE HINDU

AMERICA'S SHIFTING DEMOGRAPHIC PROFILE

SABRINA TAVERNISE

Minorities accounted for 98 per cent of the population growth in the U.S.' largest metropolitan areas over the past decade, according to a new report, as the country's white population continued to stagnate, and in many places, decline.

Hispanics and Asians led population growth in the country's 100 largest metropolitan areas over the past decade, growing by 41 per cent and 43 per cent respectively. The population of African-Americans grew by 12 per cent, and the aging white population was largely flat, increasing by less than one per cent.

William H. Frey, a demographer at the Brookings Institution and author of the report, also said the U.S. had reached a demographic milestone: About half of all recent births were to minority parents, a shift that will have broad policy implications in the years to come.

The country's largest cities are changing the fastest, Mr. Frey said, and provide a snapshot of what the country might look like in the future. Hispanics were 20 per cent of the population of large metropolitan areas defined by the Census Bureau as cities and their suburbs up from 15 per cent in 2000, and 11 per cent in 1990. African-Americans, the second-largest minority group, accounted for 14 per cent of the population of large cities in 2010, unchanged from 2000. Asians totalled six per cent.

The population increases added 11 million Hispanics to the populations of the largest U.S. cities, nearly four million Asians, and three million African-Americans, Mr. Frey said. The number of whites increased by just over 400,000.

"Where these large metro areas are now is where the rest of America is headed," Mr. Frey said. "The old image of the white and black American population is obsolete."

The white population is aging, with the share of women in their childbearing years shrinking. Hispanics, by contrast, are much younger, with a relatively large portion of Hispanic women in their prime childbearing years. In large metropolitan areas, the white population represented 57 per cent of the total in 2010, down from 71 per cent in 1990. Whites accounted for a bigger share in smaller cities, at 73 per cent, and in rural areas, at 80 per cent, Mr. Frey said.

In all, the white population shrank in 42 out of the top 100 cities. Leading the decline in the share of the white population was Las Vegas, where it fell to 48 per cent of the total in 2010, from 60 per cent in 2000. — New York Times News Service

Hispanics and African-Americans account for the bulk of population growth.

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THE HINDU

DEEPENING INDIA-MALDIVES RELATIONS

RAJIV BHATIA

South Block often faces criticism for neglecting the neighbourhood but, ironically, when it shows pro-activism to cultivate neighbours, critics tend to ignore its endeavours. A case in point is External Affairs Minister S.M. Krishna's painstaking work. In recent months, he has helped in extending the arc of dialogue and cooperation through systematic visits to Sri Lanka, Nepal, Bangladesh and Myanmar. His recent trip to Maldives deserves attention because the skilful management of relations with this country is an indicator of the success of India's South Asia policy.

The Economist recently commented that India's dealings with its neighbours are "mostly driven by arrogance and neglect," an evaluation that is debatable. The magazine added that of its eight neighbours, "only two can be said to be happy with India." They are Bhutan and Maldives.

Maldives' angst: Located in the Indian Ocean, south-west of India, Maldives is a fascinating conglomeration of 1,200 islands and atolls, of which only 200 are inhabited. The nation faces an existentialist angst, not of the philosophical but real kind — of possible extinction due to the vagaries of climate change. The earth's warming and resultant rising sea levels mean that Maldives could disappear in a century or more, depending on which estimates are reliable. Maldivians, living at an average height of 1.5 metres above the mean sea level, experience the threat on a daily basis.

Soon after his election as President in 2008, Mohamed Nasheed began to draw international attention to the adverse impact of climate change on island nations. His decision to set aside a part of the national income for possible purchase of land that may serve as an alternative home for his people triggered a controversy, especially when it became known that three countries that may be approached are Sri Lanka, India and Australia. Nothing much seems to have come out of this initiative, but it has successfully highlighted the dangers experienced by the nation and the long-term perspective it is being encouraged to adopt.

Krishna mission: If Mr. Krishna discussed long-term cooperation on climate change issues in Male during his July visit, he chose to divulge little on this aspect. But what he did share with people was important. He conveyed to the Maldivian leadership that "a prosperous, democratic and peaceful Maldives" is in "our mutual interest" and that India remains committed to assisting it "in all possible ways." Transmitting this message was necessary because New Delhi had enjoyed proximity with Maldives under M.A. Gayoom, who served as President from 1978 to 2008. Realpolitik was behind this, but the notable fact is that once Maldivians chose to usher in a genuine multiparty democracy, India was pleased to work with the new government and strengthen bilateral cooperation even further. Political relations have been consolidated through close consultations, regular high-level visits, and a consultative approach on a wide variety of international and regional issues. President Nasheed, a frequent and welcome visitor to India, has shown remarkable interest in deepening ties with this country.

Bilateral cooperation has been "on a high trajectory in recent times," as the Indian side put it, with both sides engaged in a series of "comprehensive, forward-looking, pragmatic and mutually beneficial initiatives and projects." Defence and economic cooperation represent two vital pillars of this multidimensional relationship.

Ever since 1988, when India took daring and speedy action to thwart an attempt by Sri Lanka's Tamil militants to overthrow the Gayoom government, much of the region has understood and respected the deep linkage between the strategic interests of India and Maldives. Over the years India has extended assistance in the form of equipment and training, measures designed to enhance cooperation between the Coast Guards, and help in undertaking hydrographical surveys in Maldivian waters. Cooperation to counter piracy and terrorism is on the rise. China seems to be taking a heightened interest in the Indian Ocean, raising its presence and profile in a sustained manner. It would no doubt like to increase its influence in Maldives. Keeping its latest plans and overtures in mind, the External Affairs Minister may have sensitised his hosts suitably and received credible assurances.

Economic cooperation: While strengthening economic cooperation, policymakers in New Delhi have to factor in the small size and vulnerable nature of the Maldivian economy. With tourism and fishing as the main sources of revenue and the country needing to import everything, it is not surprising that bilateral trade largely comprises exports by India. Investments by Indian companies have been increasing in sectors such as education, hospitality, renewable energy, health and waste management and marine products. India Inc's involvement has enriched the relationship, which has been dominated so far by government-funded projects.

Mr. Krishna announced a rich package of measures including renovation of the Indira Gandhi Memorial Hospital, construction of the Faculty of Hospitality and Tourism by 2015, establishment of a development finance institution, setting up of an Information Technology Village in Male, and promotion of Maldives as a film shooting destination. Another important step is to enhance connectivity through the launch of a passenger-cum-cargo ferry service between Kochi and Male by November 2011. Further, India would provide $40-million line of credit for the housing sector and $100-million as soft loan for a comprehensive economic development package.

Cultural bonds: India-Maldives relations go beyond diplomacy and economics. "Despite the high visibility of political and economic themes," said Mr. Krishna, "it is basically the scope and depth of the people-to people relations at the ground level that ultimately determines the level and warmth of relations between the two countries." Guided by this concept, fresh efforts are under way to impart momentum as is evident from the decision of the Indian Council for Cultural Relations (ICCR) to set up the Indian Cultural Centre in Male. One has to visit the country to experience how deeply India's music, dances, films and cuisine are popular with the people.

Maldives will host the next South Asian Association for Regional Cooperation (SAARC) Summit in November, for which India is extending all necessary assistance. These efforts can perhaps be broadened by involving our youth. For example, a group of university students from Kerala and New Delhi should be drafted to serve as volunteers to help delegates. Most tourists to Maldives still come from Europe; this must change by developing attractive packages for well-to-do tourists from Indian cities. More efforts are required by our media organisations to step up coverage of developments in Maldives. To invest in raising awareness and interest within India about relations with our smaller neighbours is promoting self-interest, not altruism.

Above all, we should draw appropriate lessons from India-Maldives relations for the management of other neighbourhood relationships. Greater efforts and sensitivity — not just by the government but we as a nation — are certain to yield rich dividends. Without a friendly, peaceful and prosperous South Asia, India's ambition to be a great power may remain unfulfilled.

( The author is a former Ambassador, with considerable experience in managing neighbourhood affairs in the Ministry of External Affairs .)

Skilful management of relations with Maldives is an indicator of the success of India's South Asia policy.

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THE HINDU

WHAT YOU CAN DO TO OUST TYRANTS

JONATHAN FREEDLAND

They may call it political science, but it's rarely like that. Politics tends to be messy, rather than exact. Yet under way in the Arab world is what might be described as an uncontrolled experiment, testing what has emerged as one of the defining questions of 21st century international relations: when is armed, foreign intervention necessary to remove a brutal tyrant? On one side of the West Asian laboratory stands Libya which, thanks to the help of Nato firepower, has shaken off all but the last remnants of the vicious Qadhafi regime. And on the other stands Syria, where impossibly courageous people continue to brave bullets and rocket-propelled grenades, as they work to topple the pitiless Assad regime, certain that there will be no British, French or U.S. fighter jets to lend them a hand. The uprising that received foreign help has succeeded. What if the one fated to fight alone fails? On its face, the Libya case seems to settle definitively a debate that has raged for most of the last decade, reaching its hottest point nearly a decade ago in the lead-up to the invasion of Iraq. Once again the two sides, interventionists and their opponents, have been saddling up and doing familiar battle against each other. Since last week's fall of Tripoli, it has been the interveners' chance to crow — taunting the anti-war crowd with the claim that, had they had their way, the Colonel would still be riding around in his golf cart, wearing his phoney uniforms, having slaughtered any Libyan who had dared rise up against him. The discovery of farm buildings filled with charred human remains testifies to the dictator's cruelty but also to the apparent necessity of foreign military action. Without it, Mr. Qadhafi could have gone on killing.

Meanwhile, those who opposed the Nato operation have been left to argue that things could yet go horribly wrong, especially if the western allies decide to hang around as they did in Iraq and Afghanistan, or that it would have been so much better if the Libyan rebels had toppled Mr. Qadhafi all by themselves. Of course that would have been the ideal — but all the evidence said it was impossible. If a dictator is as determined as Mr. Qadhafi, and as ruthlessly ready to deploy force, then it amounts to a kind of callous indifference to tell the people crying out for help — as the Libyan rebels were — that they are on their own. If Mr. Assad continues to murder his own people and clings on to power, then that will prove the point in morbid fashion.

But what if there is a flaw in the experiment, a flaw indeed in the way this long, wearying debate over intervention has run for most of the last 10 years? For what the Libya/Syria comparison assumes is a crude binary choice: either we bomb the hell out of a wicked despot or we do nothing. But that dichotomy might be false. A far fuller range of options might be available.

The thought should be appealing even to those who support military intervention. All but the most gung-ho concede that such action comes at a cost. Greatest, of course, is the loss of human life inevitable in any military deployment. Nato pilots returned unscathed from their Libyan sorties, but those on the ground did not. Perhaps the new masters in Tripoli will say those lives were a price worth paying to remove the tyrant. But not all the grieving families will see it the same way.

What's more, armed intervention can have a distorting effect once the dictator has gone. By aiding the Benghazi rebels, for example, Nato may have given greater muscle to that particular element of the anti-Qadhafi forces than would have been the case had Libya's revolution unfolded the way change came to, say, Egypt. And because western armies were its midwife, the new authority is born with a legitimacy problem. So, could there be another way to act, one that might have all the efficacy of the Libya intervention, but with fewer of the costs? Enter Carne Ross, a former high-flying British diplomat who resigned after serving as the U.K.'s lead man on Iraq at the U.N. Security Council. In a powerful new book — part fiercely self-critical memoir, part idealistic polemic — Mr. Ross argues that we have, for too long, expected governments to take care of the world's problems and that they are no longer up to the job. He calls instead for a Leaderless Revolution — the book's title — in which people will reclaim control over their own lives and futures, through even the tiniest individual actions. Having served at the diplomatic frontline in several western interventions, Mr. Ross has particularly strong views on what outsiders might do when they witness brutality far from their shores.

He is no pacifist; he does not rule out the use of force (and, had he been an MP, would have voted for it in Libya). But he says that all too often we turn to it as a first, not last, resort. In Iraq, Libya or Syria there was much that could have been done to oust those hated regimes non-violently long before the West finally acted. Rather than waiting for an uprising to begin, outsiders could embark on any combination of these three steps, depending on the circumstances: "Boycott, Isolate, Sabotage." So Mr. Qadhafi could have been shunned, rather than embraced by Tony Blair while his sons were feted in London. We might have mounted cyber-attacks on the Colonel's infrastructure. Mr. Ross cites approvingly the Stuxnet computer worm which has wreaked such havoc with Iran's nuclear programme. Such methods entailed no violence and might have hastened Mr. Qadhafi's downfall — and are applicable to today's Syria. The target would emphatically not be the Syrian people but the Assad regime, restricting the travel and freezing the bank accounts of the key players, making their lives difficult if not impossible.

But Mr. Ross goes further. Yes, there are non-violent routes that governments fail to pursue. But why leave it all to the politicians? "Why do we think that all we can do is write to an MP or sign a petition?" Mr. Ross asked when I spoke to him. "I used to think those were mechanisms of action. I don't anymore." Instead, he suggests individuals can act, especially in concert with others. Such talk sounds fanciful until he recalls the example of the Spanish civil war, when 30,000 foreign volunteers went to fight for the republic. Mr. Ross asks the question: "Why do people not do that anymore?" He's not suggesting a stampede of Brits to Syria — though he says that "when I was 22 I might have done it" — but he is laying down a challenge. Why not boycott companies that trade with Damascus? Or lend your bandwidth to an effort like Access Now, whose "proxy cloud" enables internet users in repressive states to reach blocked sites? Hackers might even want to help the Anonymous effort to launch "distributed denial of service" attacks on Syrian government websites. Just as governments have come to believe their only tool is force, so citizens have come to believe only governments can stand in the path of a foreign tyranny. But they might be wrong.

The white-coated scientist would be tempted to stand back and do nothing for Syria, for the sake of the purity of the experiment — to see whether Syrians can liberate themselves unaided. But this is no cold, academic inquiry. Lives are at stake.

Even if there is to be no military help for the people of Syria, that does not mean we have to do nothing. We can act — and we surely must. — © Guardian Newspapers Limited, 2011

Governments bomb despots, or do nothing. It is time to explore the alternatives. And that's where you come in ...

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THE ASIAN AGE

EDITORIAL

RAJIV KILLING CASE: KEEP POLITICS OUT

The Madras high court granting an eight-week stay of execution to the three convicts on death row for helping to assassinate former Prime Minister Rajiv Gandhi will leave many questioning it, although it is evident that there is something quite seriously wrong with the system at present. The three — Murugan, Santhan and Perarivalan — were convicted by the Supreme Court in 1999. Their guilt cannot thus be a matter of conjecture, as many in Tamil Nadu are now trying to suggest. The three sought a presidential pardon after being sentenced. It is a sad commentary that it took Rashtrapati Bhavan close to 12 years to decide to confirm the death sentence and deny clemency. Since so much time has elapsed, the counsel for the convicts have pleaded that their clients had undergone deep "mental agony" and should be spared death. Their plea is that the death sentence be commuted to life imprisonment. If this is granted, we may be quite certain that the three will then seek discharge from prison on the grounds that they have already been in prison for 20 years since being committed, following the dastardly crime.

It is clear enough that Parliament should step in and lay down that the President must take a view on clemency pleas within a stipulated time so that there is no scope for absurdities to be entertained, as we are now witnessing in Tamil Nadu. Twelve years is long by any stretch of the imagination. In effect, the delay has been that of the Union home ministry, which has to advise Rashtrapati Bhavan on such matters. L.K. Advani, Shivraj Patil and P. Chidambaram, who have held that charge in this period, have some answering to do. We also do not know if Rashtrapati Bhavan made enquiries with the home ministry in this matter and in respect of other long-pending cases. The President cannot in such matters remain a passive recipient of advice.
It is a great pity that political elements in Tamil Nadu have summoned parochial and communal grounds to intervene in this discussion. It is this that has given rise to the political sentiment that parties like the DMK and MDMK are seeking to irresponsibly spread. By implication, such elements are suggesting that the Tamil people were being sought to be penalised for the crime of killing a former Prime Minister. The passage of the resolution in the state Assembly urging commuting of the Supreme Court verdict unfortunately invokes the same imagery. Under our law, individuals are charged with a crime, not their communities. If the matter is not allowed to rest on this premise, we will be opening a Pandora's box.

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DAILY EXCELSIOR

EDITORIAL

SEEKING INVESTMENT

Chief Minister has given vent to his vision of investment in States electronic technology in a big way so that employment for the youth is generated and economy of the state is strengthened. This is a good idea and we have always been laying emphasis on industrialization of the State. In this age of electronics and computer technology, entire life style has changed and vast scope for diversification of developmental activity has been explored? It is unfortunate if the State does not derive proper benefit of the scientific and technological advancement marking the modern times. There are no two opinions about the intellectual human resource of high quality available in the State but the potential has not been exploited to optimum output. The time has come when industrialization of the State is to be re-oriented.
A look in retrospect will show that many misconceptions and false apprehensions dogged the state's decision making organs during past six decades when the question of investment by Indian capitalists and business magnates was taken up. It was propagated within close circles in the corridors of power that by inviting Indian Corporations and business magnates to make investment, the State would ultimately lose its special status and individuality. Ambiguity of local leadership and lack of clear-cut industrialization policy kept investors away from the state. This was ultimately to the detriment of the interests of the State. If by chance some industries countable on finger tips were incepted, there was so much interference from the government that these units soon ran into losses. For instance take the case of HMT Watch Factory at Hanjeek heights. A factory with latest machines and technology and technical staff was started in right earnest. But with the passage of time and owning to interference by the government, it became a den of intrigues where more of short sighted politics began to be manufactured than the watches. The case of Wuyan Cement Factory is nothing better. One Cadbury floated the plan of using vast quantities of Kashmir apples and other fruits normally getting wasted for making jams. The blue print of the plan was accepted and the Cadbury even established collection centres at innumerable places in the apple growing region of Rafiabad in Sopor. But before the work would start, it ended in a fiasco. The reason is that the apple merchants and middlemen, fearing loss to their business of exploiting the basic fruit growers engineered the failure of the scheme. These are glaring examples of a sort of anti-industrial culture promoted in the valley just for political aggrandizement.
We have raised the point not for discouraging the Omar Abdullah Government in pursuing its plans of giving a big boot to Electronics System Design and Manufacturing (ESDM) industry in the State. It appears that he has the blue print ready with him for discussion with proper quarters in New Delhi. He has begun the old mantra of asking the centre to provide adequate funds for the scheme, and we see no reason why the centre will not be forthcoming to assist the state in its industrial development. The Chief Minster will have to make sure that he carries the entire Kashmir leadership with him, and that the ESDM will not go hay-way as some of the aforementioned industrial units were made to go. If the State leadership was not myopic, and if false apprehensions and far-fetched inferences were not to keep the state tied to conservatism, the industrialization that the Chief Minister advocates now with all his earnestness would have been carried out decades ago. It is noted that on the behest of the PMO some mega industrial houses have agreed to soften their attitude towards investment in the State. Recently Wipro has concluded spot placement of youth in Kashmir University. This is the beginning of a great change in the overall economic and industrial scenario of the State. But we must warn the Chief Minister that no real industrialization in the State is possible if the State continues to be handicapped by power deficit. Before embarking on a major thrust for ESDM, the government must take decisive and fast steps to improve power supply position in the State.

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DAILY EXCELSIOR

EDITORIAL

HALF-HEARTED ACT

This summer has seen a long tantrum for Panchayati Raj, Panchayt elections and the propaganda that successful management of Panchayati Raj is the panacea for the difficulties and problems facing the State were trumpeted all the time. It was presented as something like a gift from gab bound to treat all ills afflicting the Sate. But in a democracy, the people at the helm of affairs know how to play with the sentiments of the people. From the very beginning there was a row on the issue of applying the Panchayati Raj Act with or without the inclusion of Amendments 73 and 74. The State government never committed itself to the inclusion of these two amendments whenever Panchayati Act was going to be implemented. But it was the PCC Prof. Soz who, speaking at some public function in Langet, said that Congress would ask for inclusion of these two amendments while applying the Act. But now the coalition government has moved forward and begun to implement the Act without including the two amendments in question. It has granted one lac rupees to each Panchayt by way of what it has been drumming up as financial empowerment. The government has asked the Centre to release 1200 crore rupees as the promised amount once Panchayat elections were over. But placing one lac rupees at the disposal of each Panchayat for developmental works is a cruel joke. Is this what the Chief Minster has been calling financial empowerment? According to the Act, and the two amendments to it, the Panchayats are entitled to a big money for development purposes out of the allocated amount of 1200 crore. The way the government thinks the Panchayats will be made functional is flawed and may even become counter productive. Foremost of all it is necessary to keep the Panchayati Raj system away from local and regional politics. Unless there is a foolproof guarantee of non-interference by political parties and their leadership, Panchayat system may not become rally functional and may not be able to deliver the goods. The State government should desist from playing tricks like exclusion the two amendments from the Act. It will earn them the ire of the masses of people and not their goodwill.

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DAILY EXCELSIOR

EDITORIAL

ANNA'S AANDOLAN

BY S NARINDER SINGH

Corruption is the result of the nexus between political class, bureaucracy and the business class. The politicians, possibly have the most to lose, if these Bills are introduced and passed by the Parliament and legislatures at the state level.
The last time in late 1980s's, the corruption hit the country with ''Bofors'' scam while the current ''Bofors'' are the common wealth games, 2-G, mining, and the like. It is of course not clear whether, finally, the jinx of 42 years will be broken and there will be a Lokpal and in what form. The Govt prepared another draft of the Lokpal Bill in Oct 2010. However, if effective Lokpal Bill gets passed and is implemented in the real spirit the people who benefit from corruption are likely to face a cut to their monetary inflows and those who have to pay to get their legitimate dues are likely to gain. Common citizens who pay to bribe benefit by getting their job done, but the one who gets the bribes to do the job benefits more. The politicians seem to have succeeded to some extent in convincing some significant parts of civil society that Lokpal Bill being extremely important piece of legislation needs to be discussed at all levels before it can be considered seriously. The idea is to delay the process. Actually this Bill is a small step in the shift of a bit of power from the political class supported by bureaucracy and the business in favour of people. Such shifts are necessary from time to time to correct imbalances that creep in over time.
We got freedom from British rule but not from corruption. It has penetrated every sphere of public activity and our blood deeply, its roots are so strong and firm that it has become a way of life for all of us. It has become difficult to eradicate it unless a revolution take place in our country and Anna Hazare's agitation is a first step towards revolution for bringing change in the mindset of the people of the country. People in general are not aware about Lokpal Bill, but their reaction is against rapidly growing corruption in our country. After 64 yrs of independence from the British rule What have we got ? Did we get freedom from poverty and hatred? What to talk of communal harmony there are caste wars created by the politicians for their vested interests. Instead of doing good for the country, political parties are busy in exposing scams of other parties for election gains. Today social evils like dowry, hoardings, adulteration drugs addiction black marketing have became norm of the day.
If our political system is set right the chances of growing corruption can be minimized. Rapidly growing corruption is a serious threat to our society and the country as a whole. People have very warmly responded to Anna Hazare's call for fast for introducing effective Lokpal Bill in the Parliament and Lokyukta Bill for the states. It is mainly people resentment against growing corruption which is causing hindrances in ameliorating the lot of poor masses. Govt approach in handling the issue was not proper, conditions are definitely put in view of the present concept of freedom. Today the people have the freedom, to observe, hartals, bandhs, freedom to burn buses and block roads. But all the aspects have to be visualized before hand and instead of arresting Anna Hazare, he should have been allowed to sit on fast and situation should not have been allowed to aggrevate to this extent. However, it is not too late, both Govt and members of civil society should move in the right direction and try to solve the problem after all Parliament is also the elected body of the people of the country which is supreme constitutionally. Janlokpal Bill is for stopping corruption, among legislators bureaucrats and judiciary but there is no mention of employees of defense forces and paramilitary forces. There was a time when these forces were kept in high esteem as they are always ready to sacrifices for their lives for the country. Now many scams have come up among the high officials including Generals and Commissioned officers.
This is level of corruption which have penetrated into the blood of our society. The whole hue and cry by Anna Hazare's civil society is about corruption by politicians, judiciary and administration and bureaucrats. He is trying to get passed Lokpal Bill and Lokyukta at the Centre and State level. This is one section of society, what about the society as a whole which includes business class who indulge in black marketing, hoarding, adulteration and also bribe the politicians and officials for their undue benefits/favours. This class has gone to the extent of injecting eatables that is vegetable, fruits including adulteration in pulses, spices, milk and ghee etc, there by weakening the very existence of the society no, deterrent punishment is given to the killers of humanity. I will request Anna Ji to have oath from the members of this class of society to remain honest in their busienss/professions, hence forth. Because this section of the society bribe the politicians, officials for their undue benefits/favours and is a powerful source of nexus between politicians and bureaucrats. There is no price control and the poor is becoming poorer and rich is becoming richer. People in all walks of life are corrupt.
No doubt media is playing an important role in highlighting evils in the society but at the same time they too have vested interest and believe in sensational stories least bothering about the national interest. Under these circumstances Anna ji movement is justified, it is a revolt which can change the destiny of the poor Indian masses and is a a step towards achieving this goal. Honesty starts from our conscience. Those who are in the helm of affairs are willing to give freedom to the common man up to a point where it does not effect their interest. We have to struggle for getting the real freedom and this freedom is not possible without economic justice in the society. Freedom means to enjoy fundamental rights which an individual gets by birth which also includes to get the job and choose life companions of choice. Law permits to enjoy such freedom but our society is not liberal as it should be. It is not the law enforcing agencies which take away lot of freedom but it is civil society which itself cries for freedom.
The movement started by Anna Hasare's against corruption would not yield any result till people do not transform their conscience at individual level. The change has to come from within an individual only then corruption can be eradicated from the society. Anna's fast movement demanding strong Lokpal and Lokyukta Bill at the centre and state level to tackle corruption will only succeed if society as a whole become honest and thousands and thousands of people who are joining this agitation and siding with him on this noble cause of eradicating corruption menace should take oath that from today onward they would not indulge in mal practices in their trade business and professions.
(The author is former Director Information)

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DAILY EXCELSIOR

EDITORIAL

ELECTRONIC MEDIA IN AGRICULTURAL DEVELOPMENT

BY DR BANASRI LAL & DR VIKAS TANDON

The population of our country has already crossed one billion and is still increasing alarmingly. It is really creating a tremendous pressure on the food grain production of India.
Roughly it has been observed that there is an increase in per capita availability of food grain in India but there is no certainty of filling the number of empty stomachs in the new millennium. Until and unless we concentrate in this area, shortage of the food is likely to be one of the greatest problems in years to come. In order to achieve the desired results, Indian farmers really need to make the best use available modern high production oriented technologies. It has been observed that out of available agricultural technologies with research system, only thirty to forty per cent are transferred to the farmers. It is therefore needed to bring the remedial change in the existing system of technology transfer.
Today electronisation and mechanisation of communication technology is multiplying every day. There is need to make proper use of such communication technologies for the benefits of mankind. Electronic media have really revolutionized the communication process. Electronic media like computer, internet etc. can play a major role in transfer of high tech agriculture from global pockets to Indian farmer's field. The modern communication technologies play a very important role in transfer of improved agricultural practices to the farmers. These technologies have the potential to ignite the flame of interest in the farmers. Electronic media is also important for the farmers residing in far-flungs areas which are lesser accessible to extension functionaries. Radio and television have made strides in dissemination of agricultural information. Among new electronic technologies computers, videotapes, interactive computer video technology (ICVT) etc and video information deserve close scrutiny.
Electronic media can be categorised in three groups as simple electronic media, advanced electronic media and other modern electronic media. Radio, television and videotapes are said to be simple electronic media because they do not need the complexities for their operation and maintenance as compared to others. Radio broadcasting in India started in 1927 and All India Radio (AIR) was established in 1936 that became Akashwani in 1957. Presently radio signal covers almost the whole country. The local radio stations are ideally suited to the dissemination of farm technologies according to different agro-climatic region. Television in India began modestly on September 15; 1959 TV is very powerful electronic medium for transfer of information and entertainment. A programme known as Krishi Darshan was started on 26th January 1967 especially for the farmers. TV is considered as a source of information and is taken as authentic, trustworthy and prestigious medium for promoting interaction. It is very easy to handle and also easy to carry. Videotape and video information are ideal medium for awareness among the farmers towards new technologies and are also helpful for motivation and change in behaviouur of the farmers.
Internet, interactive computer video technology (ICVT) and computer aided systems are said to advance electronic media. These media involve more technicalities in their operation. Use of internet is increasing at a fantastic speed. It is cheaper then fax and teletext. Through internet the scientists can gain instant access to the world's most advanced research facilities, can discuss their research problems with the others. . The district or stage extension agencies can create their own home pages or internet for farmers use. Farmers of one place can share their information with the farmers of another place. Interactive video technology is an amazing device for the storage and retrieval of audio and video information. In this system, the learners control the system through the computers for their interaction with the video recorded material chosen for learning. It can be used for training of extension personnel. The Chennai Dialogue Information Technology (1992) chaired by Dr M S Swaminathan resulted in proposal for the establishment of Computer Aided Agricultural Extension (CAEs) and Information Village (IV). The purpose of Computer Aided Agricultural Extension (CAEs) is to generate and disseminate information for a locality in different areas e.g pest and disease information, remote sensing, marketing information on different enterprises like aquaculture, water harvesting, apiculture etc. The videotext, teletext and videoconferencing have been under the category of modern electronic media. We can disseminate the text and graphic information through videotext and then can be received either by a videotext television or on an ordinary television. A video coupled with a microcomputer permits editing as well as retrieval of information on video-text page. The video transmitted via telephone, data lines, cables etc. is called interactive videotext. It can be used in training programmes. The videotext transmission based on broadcast signals is called teletext. Teletext links a computer to a television by which text and graphic information can be disseminated on a one way basis to home viewers. Video conferencing is a two way conferencing of two or more sites that help in communication in real sense. It can be widely used for educational purpose and is helpful for quick feedback by involving more people.
The electronic media can play a crucial role in the dissemination of improved agricultural innovations. But a responsible electronic communication media should be clean, comprehensive, competent and should present the real information. Electronic media has tremendous potential for use in agricultural development. Computer networking at local, national and intenational level can establish a good linkage for dissemination and sharing agricultural information.

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DAILY EXCELSIOR

EDITORIAL

CURB DISCREATIONARY POWERS

BY ARUN NEHRU

The Jan Lok Pal first round is over but it is rather early to think of victory and defeat and Anna ji while he recovers from his fast fires a missile or two on the right of the electorate to reject and remove and I suppose there will be additional demands on several issues and I think both Team Anna and the UPA along with the Opposition have sufficient time to think and reflect on the future. All sides concede that corruption is a issue and while this covers a large spectrum of activities as a start why does the UPA and State government not take action on 'discretionary' powers with Union Ministers and State CM'S on issues like land acquisition, change of land use and sanction of commercial complex and group housing till a transparent system evolves and this could be a temporary measure taken to avoid 'excessive corruption' and when we think of corruption at the 'macro' level this would include awarding contracts for roads and highways, granting licenses for natural resources like minerals etc. The Sports bill is rejected in the Cabinet and the media gives the views taken by each Cabinet Minister [so much for confidentiality] and even this is being taken as encouraging corruption by the Union Cabinet!

Let us observe the ground situation. The Aam Aadmi gets up in the morning and he may not have slept to well as there was no electricity at night for many hours and there was no water in the taps! He has a cup of tea and it tastes different every morning and depends on the extent the milk has been diluted with water and then he sets out to work in a bus which is overcrowded and is not roadworthy but the concerned road transport officials have been taken care of and as rides to work he reflects on his life!

His life savings he invests into a small plot of land and constructs a small house and his nightmare begins as the officer refuses to accept his valuations and asks him to pay additional stamp duty, but for a 'small fee' will ignore the guidelines and once he has negotiated this hurdle he registers the land and submits plans for construction of the house and he has to pay for these to be 'accepted' and then he has to pay to get these sanctioned and these are kept pending till he gives in to extortion and there is no one

to fight the system. He is angry as he is not sure of the quality of the food he consumes

or the medicines he purchases but he resigns to his fate because he knows that the officer and others implementing the Food and Adulteration Act are all on the take. Fair price shops are anything but fair and the weighing scales dip in the direction of cheats and

look at the adulteration of oil! The note I have received goes into several pages and covers corruption, criminality and extortion in every field from school education, willful evasion of excise duty and sales tax and the web of procedures around octroi and the settlement necessary and goes on to cars and two wheelers, the list is endless! The law offers few solutions and a good lawyer can bankrupt you in a few hearings as cases can take two decades to settle. What does the Aam Aadmi do and this category now includes all those not connected to the ring of power either at the Center or in the States. They can continue with the cash and carry system or they can wear the Anna cap and fight for their rights.

Anna Hazare steps into the picture and look at the response he receives and he receives this response is there because the ground situation supports the reality of the situation. I must admit that I have severe apprehension on several issues but I have to balance my thinking with what I see on the ground and this cannot go on for very long. There are good governments and I would suggest a visit to Gujarat and even to Bihar. I have spent

a few days in Patna and I know this area well and the change in the last few years is

'magical' as law and order is restored and all the Mafia elements are in jail , the roads and buses work and even on electricity things have improved. Nitesh Kumar is spoken off with respect and is assuming a cult image and his sincerity is visible as virtually all income levels support him. Lalu Yadav and the RJD have lost ground and reduced to 4 seats in the Lok Sabha and a little over 20 seats in the State Assembly and the Congress have paid a very heavy price by aligning with him both at the Center and in the State.

The UPA if it is to survive even a full term till 2014 is to ignite hope in the Aam Aadmi that they will fight corruption and besides the 2G scam, CWG and the vote for cash case there are several cases of disproportionate assets. The UPA cannot be faulted for the accumulated mess over decades but they are in power and for a start they must curb discretionary powers and there is a urgent need to identify unreasonable laws which

have no reason to be in the statute book and exclusive discretion which lead to the unreasonable implementation of these laws. Team Anna is not a political body and we can condone the angry and offensive words used by Kiran Bedi and the comic act of

Om Puri but it is important for the UPA to consider how the entire system of power

was derailed by Anna Hazare and his 'cap'.

Decisions in any system is controlled by a small group who represent less than 1% in numbers and in this case it should have been the PM and the CCPA with inputs from the party. I do not believe in the blame game but if there was any 'game changer' it was the decision to arrest Anna Hazare at the crack of dawn before any law was violated and I cannot believe anyone with the elementary knowledge of politics would have taken this decision. The government closes ranks as it must but a extended vacation is in order for the 'official' who took this decision.

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EDITORIAL

DEATH FOR RAJIV KILLERS

NO ROOM FOR ANY SECOND THOUGHTS

IT is difficult to find merit in the eight-week stay granted by the Madras High Court on the hanging of three men sentenced to death for conspiring to assassinate former Prime Minister Rajiv Gandhi in a suicide bomb attack in 1991at the instance of the Liberation Tigers of Tamil Eelam. Many experts feel that the court has no locus standii to commute the death sentence after the President, on the advice of the Union Cabinet, recently rejected the petition of the three convicts on death row — Murugan, T. Suthendraraja and A.G. Perarivalan — to convert their death sentence into life imprisonment. That it took the President 11 years to decide on not granting clemency during which period the convicts were incarcerated in solitary confinement has been held out by their lawyers to seek relief from capital punishment. While it is unfortunate that so much time was allowed to elapse before the rejection of the clemency plea, the death penalty decision handed out in 2000 was after due process of law. The Tribune is a votary of capital punishment only in the rarest of rare cases and we deem this ghastly assassination of the country's former prime minister as one such case.

The whole issue of death penalty to the three convicts has assumed political overtones with the ruling AIADMK spearheading a resolution in the Tamil Nadu assembly urging the President to review the rejection of the mercy pleas and its rival DMK also reversing its earlier stand of no mercy to them by seeking the President's clemency. Evidently, the parties in Tamil Nadu do not want to be seen on the wrong side of a Tamil cause which could well have a strong emotive appeal.

Yet, the Union Government has to take a well-thought-out decision. It is imperative that the fear of law be instilled in those who commit acts of terror. At the same time, there is need to find ways to speedily deal with mercy petitions so that justice is not unfairly delayed beyond a point.

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THE TRIBUNE

EDITORIAL

SPORTS BILL DECLARED LBW

BIG POLITICAL GUNS TRIFLE WITH IT

IT is not easy to remove politicians from their seats, even in the sports arena. As expected, the established political order has put up such a stiff resistance to the National Sports Development Bill 2011 that it is in danger of being put on the backburner for a long time to come. The Bill had already been watered down considerably, but even then the Sports Ministry has been asked to drop the "intrusive" clauses from the draft and come up with a modified Bill. In simple English, that will mean that it will be pared down till it becomes a truly ineffective instrument.

Everything that the Bill had sought to do, has been objected to by political who's who, including several Cabinet ministers. It wanted to put restrictions on sports federations in terms of tenure and age of office-bearers. M/s Sharad Pawar, Farooq Abdullah and Kapil Sibal put up a spirited defence — for obvious reasons. They not only waxed eloquent that even those who are in their seventies are fit as a fiddle, they also warned the Sports Ministry that what it sought to do was gross interference in the affairs of sports federations. Indeed, the Olympic Charter of the International Olympic Committee (IOC) provides them considerable autonomy. Moreover, the Centre can also not interfere because sports is a state subject.

The move to bring the Board of Control for Cricket in India (BCCI) within the purview of the Right to Information Act has also been stymied with Mr Sharad Pawar threatening to take the matter to the court of Mrs Sonia Gandhi. The proposal was seen as a backdoor attempt to snatch the autonomy of the cash-rich body. The BCCI has all along kept the government at bay on the plea that it has never sought any financial aid from the latter. So, at least for the time being, the Sports Ministry's endeavour to tighten its grip on the business of sports stands duly frustrated.

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THE TRIBUNE

COLUMN

GOODWILL FOR BANGLADESH

INDIA HAS A STAKE IN DHAKA'S PROGRESS

BY G PARTHASARATHY

Neighbouring countries often face the challenge of reconciling the contradictions between their separate sense of nationhood on the one hand and their common historical and cultural heritage on the other. Pakistan has tried to deal with this issue by going to the extent of claiming that unlike India, it is the inheritor of a unique Islamic civilizational heritage of the Indus valley. Six decades after its independence, Pakistan's quest for a separate identity from India, while rejecting all manifestations of a shared cultural and spiritual ethos, has rendered the country schizophrenic.

Bangladesh, born barely four decades ago, on the other hand, feels quite comfortable to share its cultural values and ethos with its neighbours across its borders, while zealously protecting the separate national identity it assumed since 1971. Both India and Bangladesh are this year separately and jointly celebrating the 150th birth anniversary of Gurudev Rabindranath Tagore, whose poetry enriched the lives of their people. Tagore was uniquely, the composer of the national anthems of both nations. Sharing much in common, while yet being separate sovereign and independent nation States is a challenge that Bangladesh and India will confront in an era when religious beliefs across the world are assuming salience.

Vice President Hamid Ansari led a high-level delegation to Bangladesh in May this year to mark Tagore's birth anniversary celebrations. There is also much else that has transpired in relations between the two neighbours that deserves to be welcomed. Bangladesh has cracked down heavily on Indian separatist and terrorist groups, which had become used to operating from its soil, with State support. India, in turn, has reciprocated by becoming more forthcoming on resolving complex problems of river waters and border management, which have bedevilled relations between the two neighbours.

India has also realised that it has a vital interest in the economic progress of Bangladesh and has a responsibility to cooperate in its neighbour's economic development. The recent $1 billion line of credit extended to Bangladesh seems, at long last, to be coming in place to foster cooperation in areas ranging from railways to infrastructure development. India unfortunately has a reputation of being slow and tardy in implementing developmental projects in its neighbouring countries. One hopes that arrangements for supplying 250 MW power promised to Bangladesh are put in place expeditiously.

Prime Minister Manmohan Singh will be in Dhaka in the next few days. This will be a visit undertaken after meticulous preparations. Cabinet Ministers Pawan Bansal, P Chidambaram and S.M. Krishna have already paved the way for the forthcoming summit by discussions on border management, sharing of river waters and South Asian connectivity. An agreement on transportation and transit for exports from Bhutan has been signed. Home Minister P Chidambaram's assurance that India's Border Security Force has been barred from shooting at people crossing the border has been greatly welcomed in Dhaka. There appears to be confidence that the long-pending differences in implementing the 1974 Indira-Mujib Agreement on border issues, which India never formally ratified, will be finally put to rest during this summit.

The most visible symbol of Indian goodwill for Bangladesh Prime Minister Sheikh Hasina to silence critics in Bangladesh of her policies towards India will be the signing of an agreement finally demarcating the entire India-Bangladesh border and resolving other long-pending differences in implementing the 1974 Indira-Mujib Agreement. India is required to hand over 111 enclaves to Bangladesh and in return get 51 enclaves under the 1974 agreement. It took us 18 years to lease a small corridor of land which we were required to, under the 1974 agreement to Bangladesh, giving it access, in perpetuity, to its Dahagram-Angarpota enclave. An ingenious solution has now been found to enable Bangladesh nationals to travel to this enclave continuously instead of the present restricted dawn-to-dusk arrangement for access. This is hugely important in symbolic terms for Sheikh Hasina.

Differences over the transfer of enclaves and adverse possessions have also been amicably resolved. Bangladesh will get 10,048 acres of land and India receives 7,110 acres when the exchange of enclaves takes place. It is not likely that significant numbers of people will leave their homes once these transfers occur. Barely 6.5 kilometres of the 4,096-kilometre India-Bangladesh border is left to be demarcated after the 1974 agreement. Thanks to some hard and dedicated work by the ministries concrened in Delhi and the West Bengal Government, differences on border issues will stand resolved soon.

The visit of Prime Minister Manmohan Singh will also see the signing of agreements for resolving long-pending differences on sharing of the waters of the Teesta and Feni rivers, with the signing of a 15-year interim accord that caters to the needs of West Bengal and Bangladesh equitably. If Mr. Jyoti Basu played a key role in fashioning the 1996 agreement for sharing the waters of the Ganga, Chief Minister Mamata Banerjee will inevitably be a key player in taking forward the India-Bangladesh relationship in areas like border management and sharing of river waters.

The one remaining area on which Bangladesh has a legitimate grievance will hopefully be addressed when Dr. Manmohan Singh visits Dhaka. This is the growing trade deficit. Indian exports to Bangladesh in 2010-2011 stood at $3.84 billion, while we imported barely $406.3 million of Bangladesh products. Bangladesh today has a creditable record in improving its human development indicators and in its global and exports of garments. It has been asking us for some relaxation on our garment import curbs. While Commerce Minister Anand Sharma demurred, one hopes Prime Minister Manmohan Singh will show accommodation on this score. The India-Bangladesh relationship has to be strong enough to withstand changes in government on both sides. It was only appropriate for Mr. S.M. Krishna to have called on the leader of the opposition, Begum Khaleda Zia when he visited Dhaka, despite her known anti-India propensities.

We need to build on these developments by more multi-party parliamentary exchanges between the two countries. Some of our members of Parliament spent a lot of time and effort recently hosting a questionably funded visit by Pakistani parliamentarians, who showed little sign of being interested in, or capable of, ending cross-border terrorism. It is unfortunate that sustained efforts are not being made to cultivate parliamentarians from Bangladesh, irrespective of their political affiliations. Besieged by domestic criticism and controversies, Prime Minister Manmohan Singh will be lauded for his efforts and contribution in building a relationship of amity and cooperation with Bangladesh. This will be seen as a significant foreign policy achievement in his second term.

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THE TRIBUNE

ARTICLE

LEFT IS RIGHT

BY ASHOK KUMAR YADAV

WHAT IS common among most uncommon historical icons like Mahatma Gandhi, Alexander the Great, Napoleon Bonaparte, Joan of Arc, Isaac Newton, Albert Einstein, Leonardo da Vinci, Michelangelo, Barrack Obama, Bill Gates, Amitabh Bachchan, Prince Charles and my daughter, Archna? They are all left handers.

Soon after Archna's birth when we discovered her leftist leanings, we impulsively forced her to be a rightist, somewhat similar to what was done to King George VI. Whether we did the right thing by putting her on the righteous path or compounded a wrong, we are still not sure.

Strangely, National Left Handers' Day, being celebrated since 1976 on August 13, passed off unsung as usual, without caring to promote awareness about the inconvenience the left handers have to face in a right-handed world. Despite a sizeable 13 per cent population being left handers, they are often teased as "khabbu" or whose brain is in the wrong place. Like Hinduism, the Christianity is also tilted against the left hand; the Bible contains over 25 unfavourable references. However, about 75 per cent people still prefer left eye for one-eyed tasks, such as, looking through a telescope, while 70 per cent prefer left ear for conversing on the telephone.

There are hundreds of linguistic phrases where "right" is good and "left" is bad, e.g., "being in your right mind", "the divine right of kings," "it will be all right in the end", "on the right side of the ruler" as against being "left out", having "two left feet", "a left-handed compliment", "conspiring into one's left ear" and "left hand doesn't know what the right is doing". Even Orhan Kanik, a Turkish poet, has cursed left hand as an "awkward hand; poor hand" in "My Left Hand".

Interestingly, left handers have dominated the "genius" bracket, with IQ running over 140; and monopolised creative professions, such as, music, art, writing, astronomy, and political leadership. Five out of last seven US Presidents have been left handed. Both Neil Armstrong and Buzz Aldrin were lefties; and they put their left foot first on the moon. Why Archna is so good at "best out of waste", Green Educare or street plays, I often wonder. May be, creativity ingrained within her keeps cascading, though her leftist affinity was ostensibly curbed long ago.

No wonder, left handers excel in tennis, baseball, swimming, boxing, fencing and video games, where hand-to-eye coordination matters. That is why, left-right combination rules in cricket. Remember, the man slips wedding ring on the bride's left hand; keeps her on his left, while she holds the baby on her left. Again, it is only the left hand that protects the heart and comforts vital and non-vital parts when we need to scratch them. As an NCC cadet, I used to parade left-right-left and never right-left-right.

The brain is incredibly cross-wired; its left hemisphere controls the right side and vice-versa; hand dominance is connected with brain dominance on the opposite side — which is why, we say; only left handers are in their right minds. Oh, left handers of the world unite! Possibly, my daughter would have proved another Marie Curie, a double Noble laureate and a leftist, had her natural reflexes not been reversed. My apologies to her!

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THE TRIBUNE

OPED

PHYSIOTHERAPY ROUTE TO A HEALTHY LIFE

SPECIALISED PHYSIOTHERAPY SERVICES ARE GAINING POPULARITY ALL OVER THE WORLD, PARTICULARLY IN THE WEST. MANY PEOPLE ARE FED UP OF TAKING MEDICINES FOR DIFFERENT KINDS OF AILMENTS WHICH CAN EASILY BE TREATED AND CURED THROUGH PHYSIOTHERAPY

DR JAGMOHAN SINGH

Physiotherapy as defined by the Indian Association of Physiotherapists is a physiotherapeutic system of medicine which includes examination, treatment, advice and instructions to any person preparatory to or for the purpose of or in connection with movement dysfunction, bodily malfunction, physical disorder, disability, healing and pain from trauma and disease, physical and mental conditions using physical agents including exercise, mobilisation, manipulation, mechanical and electrotherapy, activity and devices or diagnosis, treatment and prevention.

Physiotherapy is concerned with identifying and maximising quality of life and movement potential within the spheres of promotion, prevention, treatment/intervention, habilitation and rehabilitation. This encompasses physical, psychological, emotional and social well-being. Physiotherapy involves the interaction between patients/clients, other health professionals, families, care givers, and communities in a process where movement potential is assessed and goals are agreed upon, using knowledge and skills unique to physiotherapists.

A physiotherapist utilises an individual's history and physical examination in diagnosis and treatment and if necessary incorporates the result of laboratory and imaging studies. Physiotherapy provides services to individuals and populations to develop, maintain and restore maximum movement and functional ability throughout the lifespan. This includes providing services in circumstances where movement and function are threatened by ageing, injury, disease or environmental factors. Functional movement is central to what it means to be healthy.

Physiotherapists are qualified and professionally required to:

Undertake a comprehensive examination /assessment/evaluation of the patient/client or needs of a client group;

Formulate a diagnosis, prognosis, and plan;

Provide consultation within their expertise and determine when patients/clients need to be referred to another healthcare professional;

Implement a physical therapist intervention/treatment programme;

Determine the outcomes of any interventions/treatments; and

Make recommendations for self management.

Knowledge of body

The physiotherapist's extensive knowledge of the body and its movement is central to determining strategies for diagnosis and intervention. The practice settings will vary according to whether the physiotherapy is concerned with health promotion, prevention, treatment/intervention or rehabilitation.

Physiotherapists operate as independent practitioners, as well as members of health service provider teams, and are subject to the ethical principles of the World Confederation for Physical Therapists which is a governing body of physiotherapy worldwide. They are able to act as first contact practitioners, and patients/clients may seek direct services without referral from another health care professional.

Physiotherapy is an established and regulated profession in many countries, with specific professional aspects of clinical practice and education, indicative of diversity in social, economic, cultural and political contexts. But it is clearly a single profession, and the first professional qualification, obtained in any country, represents the completion of a curriculum that qualifies the physiotherapist to use the professional title and to practice as an independent professional.

Physiotherapy is concerned with the treatment of seriously ill patients of orthopaedics, cardio-pulmonary, neurology, paediatrics, geriatrics and all other types of ailments. Physiotherapists are as essential as other doctors and surgeons in recovering and rehabilitating patients from a state of incapability because of genetic defect or due to an accident or illness. In sports, the role of physiotherapist is of great importance and his presence is must. He makes assessment and plans proper treatment and gives exercises in the event of any injury to the players in the field and helps him returning back to the sport with full potential as early as possible.

Physiotherapy is not new. Earlier there were only two modes of treatment worldwide: physical therapy (physiotherapy) and chemical therapy (chemo/drug therapy). It has been practiced to treat people by advocating manual therapy techniques, hydrotherapy and massage circa 460 BC. In India role of physiotherapy started after World War II. First independent physiotherapy centre started in 1952 and now there are more than 200 colleges in India offering BPT and a few MPT and PhD degrees out of which 15 are in Punjab in 3 State and one private universities. The need is to regulate the profession by forming an independent Council both at National and State level. The basic (entry level) qualification required here is intermediate i.e. 10+2 with medical group.

Specialised services

Physiotherapy has quite large field and has specialties in each branch of medical treatment such as:

Orthopaedics: Physiotherapists diagnose, manage and treat disorders and injuries of the musculoskeletal system

and help in rehabilitation after orthopaedic surgery. They take the responsibility of the treatment of post-

operative orthopaedic procedures, fractures, acute sports injuries, arthritis, sprains, back and neck pain, strain,

spinal conditions and amputations. The patients suffering from injuries or disease affecting the muscles, bones,

ligaments, or tendons of the body get a lot of benefit by physiotherapy.

Neurology: In neurological disorders including Parkinson's and Alzheimer's diseases, brain injury, cerebral palsy, multiple sclerosis, spinal cord injury, stroke etc. In neurological treatment the Physiotherapist's role is as important, rather more, as that of a physician and surgeon. He gives proper exercises and manual therapy to bring the patients on their routine working life.

Cardiopulmonary: Role of a physiotherapist in cardiopulmonary diseases is both preventive as well as therapeutic. Physiotherapists treat a wide variety of patients with cardiopulmonary disorders including heart attacks and post coronary by-pass surgery etc and also to clear secretions of the lungs.

Paediatrics: Physiotherapists are fully competent in the diagnosis, treatment, and management of infants,

children and adolescents with a variety of congenital neuromuscular, skeletal or acquired disorders/ diseases. Children with developmental delays, cerebral palsy, spina bifida, or torticollis are wonderfully treated through physiotherapy.

Geriatrics: Physical Therapy takes care of the problems emerging with growing old age and treats the people suffering with arthritis, osteoporosis, hip and knee joint replacement, Alzheimer's disease and helps in restoring mobility, reducing pain and extending the fitness levels.

These specialised physiotherapy services are very promising all over the world, particularly in the Western and advanced countries. In these countries, people prefer to go to physiotherapists for treatment and go to physicians only on the advice and recommendations of the physiotherapists. The physiotherapists are in great demand in these countries. Our qualified and competent physiotherapists used to migrate to these countries for green pastures. Alas! Punjab could have retained them.

In Punjab, several private hospitals and nursing homes are running their physiotherapy centres profitably. Also, the opening of a new physiotherapy centre does not cost much. To commence with, it needs only about Rs 5 lakh. There is a quite bright future for young physiotherapists to open these centres. No doubt the people are fed up of taking medicines for different kinds of ailments which can easily be treated and cured through physiotherapy.

Punjab can become a hub of physiotherapy by opening specialised physiotherapy centres even for foreign

patients. It costs more than 40-50 pounds (Rs 4000) for outpatient visits and 70-80 pounds (Rs 7000) for indoor

physiotherapy stay per day in the United Kingdom (data provided by British Society for Rheumatology). In

some southern states such centres are being set up, as Karnataka is earning in heart-related ailments where a good number of foreign patients come for treatment.

In Punjab, this will not only help patients to get the best of the treatment that they deserve but also to the budding physiotherapists to get avenues to settle here. Therefore, private hospitals, nursing homes, NGOs, trusts and societies should come forward to open as many as physiotherapy centres as possible to cater to the need of patients and to serve the society at large.

The writer is Professor & Principal, Gian Sagar College of Physiotherapy, Rajpura

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THE TRIBUNE

OPED

WHAT IT INVOLVES

Physiotherapy is concerned with identifying and maximising quality of life and movement potential within the spheres of promotion, prevention, treatment/intervention and rehabilitation.

It involves the interaction between patients/clients, other health professionals, families, care givers, and communities in a process where movement potential is assessed and goals are agreed upon, using knowledge and skills unique to physiotherapists.

A physiotherapist utilises an individual's history and physical examination in diagnosis and treatment and if necessary incorporates the result of laboratory and imaging studies.

The physiotherapist's extensive knowledge of the body and its movement is central to determining strategies for diagnosis and intervention.

The first professional qualification, obtained in any country, represents the completion of a curriculum that qualifies the physiotherapist to use the professional title and to practice as an independent professional.

Physiotherapy is concerned with the treatment of seriously ill patients of orthopaedics, cardio-pulmonary, neurology, paediatrics, geriatrics and all other types of ailments.

The need is to regulate the profession by forming an independent council.

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MUMBAI MIRROR

EDITORIAL

SIGNS OF THE TIMES

THE TRUTH ABOUT THINGS IS LOCKED IN THE SMALLEST ACTIONS IT ENGENDERS, LIKE WEARING 'NIGHTIES' OR SCRATCHING IN PUBLIC

Santosh Desai's collection of columns, entitled Mother Pious Lady (Harper Collins 2010) is sub-titled "Making Sense of Everyday India." He writes, "Everything in India is capitalised. Ours is without doubt the land of the swollen cliché. We live in Grinding Poverty with which we cope with a sense of Cosmic Fortitude," and etcetera… " But Desai's aim is to write of a "changing India as seen through its daily life." He continues, "The truth about things is often locked in the smallest actions it engenders. It is what we do without conscious and deliberate thought," for instance, wearing 'nighties' in public during the day, (our local ladies call them maxis), scratching one's itch in public, rejoicing in the arrival of the bright red Maruti, young women riding a scooter in small-town India.

In using such seemingly trivial things to analyse shifts in social attitudes, Desai is part of a tradition that can be said to have begun at the beginning of the last century, with a discipline known as semiotics. The nightie is not just a garment. It's a "sign." What does it signify? One of the best known texts in this area is the French critic Roland Barthes's book Mythologies (in French in 1957, and in English translation in 1972). The "mythology" he refers to is the kind of fake meaning created to deceive. He gives us an illustration from the magazine Elle: ornamental cooking, ie chiselled mushrooms, carved lemons, arabesques of glace fruit. The magazine is addressed to a "genuinely working-class public," and it is very careful not to take for granted that cooking must be economical. It does not touch on the real problem concerning food: "the real idea is not to have the idea of sticking cherries into a partridge, it is to have the partridge," that is, to be able to pay for it.

In 1977, there was a collection of essays from the journal "New Society," edited by Paul Barker, and called Arts in Society. There was John Berger examining the war photographs of Don McCullin, Angela Carter satirical about male pin-ups and centre-spreads, Reyner Banham on potato chips at the crossroads, and on the design of icecream vans. And of course there was Berger's own book Ways of Seeing (1972) about, among other things, the male gaze at the female nude. The suggestion in innumerable paintings was that women existed only to be looked at, and admired by men.

So, what's with the nightie/maxi? "Every morning," Desai writes, "in large parts of India, women wake up, have a bath, and change into a fresh nightie. This is then worn throughout the day…Like the engagement ring, the nightie is an alien habit that we have embraced without reservation but in our own unique way." It is modest because it makes no allowances for the shape of the wearer, it's feminine because of its floral prints, but steers clear of anything racy or frilly. "The nightie is perhaps a deceptively understated banner of revolution. It is a garment of liberation, a freedom smock. It offers her freedom from shape…The saree and the salwar kameez are both garments that are embedded with implicit social roles… The nightie tells us that modernity is at heart about functionality rather than appearances."

And what about freedom for men? "It is unfortunate," Desai says, "that civilization has taken a firm position against the institution of public scratching." However, he is happy to report that the Indian Man, particularly the North Indian variety has refused to submit to the arcane ways of civilization, and continues to scratch away at himself with some diligence." It points to "a larger comfort that we feel with our bodies – witness the ease with which we relieve ourselves of our various burdens in public."

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COLUMN

GROWTH AND POLICY

SELF-INTEREST MUST BRING CONGRESS AND BJP TOGETHER

The first-cut data on national income growth in the first quarter, showing a deceleration in the growth rate of gross domestic product to sub-eight per cent level, are along expected lines. India's macroeconomic authorities have been warning that in fiscal 2011-12 the economy is likely to grow between 7.5 and 8.5 per cent. A variety of explanations can be offered for the slowdown, ranging from questions about the quality of data and changes in data computation methodology to global economic and domestic political factors. While the big picture is along expected lines, the sharp deceleration in the construction sector remains unexplained. To the extent that this is a response to monetary policy, not only is the deceleration to be expected, but it must also be condoned. After all, it was a stated objective of monetary policy that the observed increase in bank lending to the real estate sector should be squeezed a bit. However, this is unlikely to be the complete explanation. There may have been a deceleration in demand in key growth centres. For example, construction activity in the erstwhile boom town of Hyderabad was seriously impacted by the Telangana agitation. A similar decline in investment in real estate may have happened in some other cities owing to an assortment of political factors, ranging from the Adarsh Housing Society scam in Mumbai and the Lavasa project delay in Maharashtra to the judiciary's interference in land deals in Uttar Pradesh and Haryana and so on. It is also possible that public investment in construction has come down owing to renewed concerns about fiscal deficit management. The deceleration in manufacturing sector growth could also have a negative effect on construction plans. A focused strategy to revive construction activity would help. The story in mining and quarrying, where growth has slowed sharply, would be similar.

Going beyond the construction and mining sectors, an important reason for the deceleration in growth at home, apart from global economic factors, seems to be the widely reported dampening of the "animal spirits of enterprise". This would explain the deceleration in gross capital formation and the manufacturing sector slowdown. The problem with "animal spirits" is that though most economists and businesspersons know what they are, few can offer a credible menu and road map for their revival, apart from the usual mantra about interest rates. Successful politicians and policy makers are those who can alter the state of expectation for the better and help release the "animal spirits" of enterprise. The Manmohan Singh government did just that in the period 2004-08 when the rate of investment and savings rose sharply and the economy logged an average growth rate of nine per cent per annum. Fiscal reform, consensus on land acquisition policy, labour reform, facilitating private investment in food processing, logistics and supply chains, and liberalisation of investment policy in the strategic and defence industries could once again help stimulate the "animal spirits" of enterprise. Having exhausted the fiscal stimulus, the government is no longer able to spend its way back to higher growth. Working together, both the Congress and the Bharatiya Janata Party – which run most of the state governments – could alter the state of expectation by unleashing a slew of policy reforms. They can return to their political battles next year after getting the economy on track.

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BUSINESS STANDARD

EDITORIAL

RAISING A FALLEN GIANT

WITH SIX PMS IN FIVE YEARS, POLITICS HAS COST JAPAN DEARLY

Anyone who thinks there is no economic price to pay for prolonged political instability has to only look at Japan. The sixth prime minister in five years has just taken charge. Prime Minister Yoshihiko Noda, the latest occupant of the hot seat, will have to contend with a fractious political system, both within and outside his party, which makes his task of reviving a moribund Japanese economy even harder. Mr Noda is described as a "reformer" who favours tax increases to pay for sharply increasing social security costs as Japan's population ages and also to curb its staggering public debt. His contention that Japan's population will have to share the financial burden of reconstruction following the tsunami-earthquake combination in March is also unlikely to draw serious opposition. Mr Noda is also a political revivalist of sorts. His comments exonerating convicted Japanese World War II criminals have expectedly drawn loud protests from China. He would do well not to roil the waters.

The task of resurrecting a $5-trillion economy, whose GDP growth rate over the past two decades can charitably be described as "sluggish", is daunting. Mr Noda took charge days after credit rating agency Moody's downgraded Japan's debt rating to Aa3. Japan's problems are long-standing and there is no quick-fix solution in sight. Its GDP growth rate since 1992 has averaged 1.5 per cent and, barring a brief episode (2003-07) of export-driven growth, has typically been below 2 per cent, making Japan an underperformer compared to its counterparts from the Organisation for Economic Co-operation and Development. Japan's public debt at $10.6 trillion is equivalent to 225 per cent of GDP, which makes countries like Greece look like poster countries for fiscal rectitude! A sharply rising yen has hobbled Japan's exports, for long the engine of economic growth in the country, despite recent intervention by the Bank of Japan. An ageing population is not helping either, forcing Japan to relax its traditionally restrictive policies towards foreign labour.

Ironically, the sliver of hope for Japan's beleaguered economy lies in the reconstruction of the Tohoku region in the north-east devastated by the tsunami. Japan has already budgeted $80 billion for rebuilding the region, with another $100 billion in the pipeline. The impact on the ground has already been visible: Japan's economy, which was expected to contract by 0.7 per cent during 2011, is expected to actually grow by a little over one per cent! While reconstruction is expected to stimulate demand in the medium term, it is unlikely to be the panacea for Japan's economic woes. If Japan is to regain the pre-eminence it enjoyed until the late 1980s, tough decisions on reforming the banking sector, liberalising land acquisition and paring the fiscal deficit will have to be taken. Japan is far too important an Asian economy and power to allow itself to go into slumber. Clearly, Japan needs to get its act together for its own sake and that of the global community.

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BUSINESS STANDARD

TRICKS OF TRADE

T S VISHWANATH

Environmental protection must not become an ally for countries to boost market access for industrial goods

Can countries protect the environment while advocating and practising policies that liberalise trade in goods and services? The Doha Work Programme of the World Trade Organisation (WTO) calls for "enhancing the mutual supportiveness of trade and environment" and broadly called for negotiations on three issues: (i) the relationship between existing WTO rules and specific trade obligations set out in multilateral environmental agreements (MEAs); (ii) drawing out procedures for regular information exchange between MEA secretariats and the relevant WTO committees and; (iii) working on the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.

The Committee on Trade and Environment in the WTO has held discussions on these issues. But the main issue that has been of interest to industry across the globe has been on the reduction or elimination of tariffs on environmental goods and services.

This issue has been given some thought in a recent paper by Singapore at the WTO. The paper titled "Promoting Mutual Supportiveness between Trade and Climate Change Mitigation Actions: Carbon-Related Border Tax Adjustments" takes a broad look at several issues related to trade and environment.

One area of focus in the paper that needs considerable amount of debate and discussion to address emerging market access issues for concluding the Doha Round will be the issue of identifying environmental products on which duties can be reduced or eliminated over the next few years.

Countries have looked at various approaches to identify the products that can be listed for tariff reduction or elimination. These include a list approach, the project approach, the request-offer approach and the hybrid approach. Singapore supports the hybrid approach, which it claims combines the benefits of the project approach and the request-offer approach. However, a hybrid approach can also lead to confusion on the products to be included. India has supported a project approach.

Even as negotiators may be of the view that progress has been made in the negotiations over the last decade and some of the issues have been sorted out, there may be a need to look at some important issues closely so that industry remains tuned to the current situation. Since many critical negotiations in the Doha Round have remained moving targets due to some major countries bringing in proposals, the issue of tariff reduction or elimination on environmental goods also needs another look.

To begin with, it is important to fix the issue on whether there would be a reduction or elimination of tariffs. Given the fact that there have been divergent views on the criteria to be adopted to identify the products, countries may first agree to the fact that unless proved necessary for some products, there would only be a reduction of tariffs in majority of cases. This may help countries move quickly in finding a solution to identifying the list of products. There could be a debate on what should be the level of reduction based on the applied tariffs on that product in each country.

Second, the focus has to be on which products protect the environment and not about market access for industrial goods. Industry has been of the view that many of the products on the list approach were not even close to being termed an environment product. The criteria have to be that the product's use will help protect the global environment and not boost market access for the largest exporter of that product.

Third, there is a need to ensure that technology transfer for high-technology products should be looked at so that developing and least developed countries do not lose out because most of the products identified are high-technology products that are produced in the developed world. The modalities of the technology transfer can be worked out to help the companies that spend for developing these high-technology products.

There is no doubt that countries have to be vigilant about protecting the environment and if trade liberalisation can aid in that effort then the WTO can play a role on the issue. However, if environmental protection becomes an ally to boost market access for products then there is a need to step back and reconsider the issue. This issue can be a low hanging fruit for negotiators and a good confidence builder for the Doha Round if countries approach it pragmatically.

The author is Principal Adviser with APJ-SLG Law Offices

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BUSINESS STANDARD

COLUMN

REVIVING GROWTH

REDUCE INTEREST RATES AND UNDERTAKE SPECIFIC REFORMS TO REVIVE GROWTH

SHYAM PONAPPA

India's heady economic prospects of a year ago have deteriorated unthinkably. True, the rest of the world is wobbly, too, from America's unreconstructed and unsustainable headlong decline, to much of Europe's companion piece. But the possibility of some buffering for India seems to have evaporated. Expectations of better prospects were not so much from decoupling as from our limited dependence on exports, and headroom from activity levels with enormous scope for improvement and expansion — in basic infrastructure, housing, second-order infrastructure like education, sanitation and health care, as well as manufacturing, tourism and retail.

Rising input costs and interest rates started the decline in margins, and self-destructive actions made matters worse, epitomised by the implosion of the scams (2G, the Commonwealth Games, the Karnataka mining scandal, the land scams…). The Reserve Bank of India's (RBI's) actions of increasing interest rates when faced with inflation caused by factors beyond its ambit, such as food prices rising because of supply constraints, or energy prices on account of expensive imports, have amplified the negative sentiments.

THE BOGEY: GROWTH VERSUS INFLATION
The economy is slowing, and earlier estimates of well over nine per cent growth for 2011-2012 have gone overboard. In May, the Federation of Indian Chambers of Commerce and Industry's estimate was nine per cent; in August, an RBI survey consensus was under eight per cent; Morgan Stanley's was barely over seven per cent. Yet, policy makers maintain that despite the deleterious effects on growth, raising interest rates to control inflation through monetary policy is paramount.1 In absolute terms, the need for controlling inflation is incontestable, but societal needs provide an exigent imperative for making the trade-off in favour of growth. The consideration now needs to be of steps that could alleviate the slowdown, and the likely effects of such actions not only on inflation, but also in collateral damage to economic activity.

Consider India's shortcomings, namely, insufficient food production and associated storage and distribution, inadequate agricultural extension support services, expensive oil and coal imports, and lack of educational and vocational training facilities for a burgeoning, youth-dominated population. Add another level of inadequacy arising from our continuing lack of infrastructure, from basic sanitation, water and health care, extending through energy, transportation and communications (broadband). These structural bottlenecks exacerbate the negative aspects of our predicament.

The government's recalcitrance in acting against blatant corruption, until the scams erupted, had already unsettled markets. Even salutary developments like Anna Hazare's anti-corruption movement have added to the destabilisation, through attacks on parliamentary processes and the prospect of a breakdown in law and order.

Against this backdrop, we have a slowing economy, now threatened by a global slowdown. In the quarter ending March 2011, a third of the Sensex companies had missed their earnings estimates, while in the last quarter ending June 2011, nearly half of them were below estimates. With offshore revenues estimated to contribute nearly a third of FY12 profits, the threat of a global slowdown is ominous.

INAPPROPRIATE RATE HIKES
From this perspective, raising interest rates to combat inflation appears decidedly ill-advised. As expected, interest rate increases have not reduced inflation. The reduction can happen only when economic activity slows so much that demand for essentials falls, a horrific prospect. As for attracting foreign investment, rate hikes do little to induce confidence in foreign investors in skittish times, because they look to India and emerging markets for growth, not for stability. To be a safe haven, India has to be perceived not as a developing economy, but as an equivalent of the Organisation for Economic Co-operation and Development — a long way and many years ahead.

The economy, therefore, needs shoring up. Can RBI and the government take steps to reverse the decline? Consider the following corrective actions:

(i) Reduce rates to revive growth
In these circumstances, the priority has to be growth. Otherwise, apart from minimal foreign investment, domestic investment also is likely to be curtailed further, and social instability triggered by economic pressures could grab centre stage to devastating effect. International commodity prices are outside India's control, but RBI can reduce interest rates. Cutting rates can raise margins and revive consumer demand.

The central bank needs to reverse its repressive stance on rates, no matter what the textbooks say, so that enterprise profits recover to a high-growth trajectory.

An immediate cut in borrowing rates, together with a concerted move to reset positive expectations and sentiments, is an urgent requirement.

(ii) Selective credit controls for asset bubbles
Further, the RBI has avoided instituting selective credit controls to avoid asset bubbles, perhaps because of legacy reasons concerning commodity pricing and the potential for interference in markets. With smart e-governance at hand, this nettle must be grasped in place of the blunt instrument of overall rate increases, to use real-time, targeted additional margins, cash reserves and rate increases to defuse incipient asset bubbles.

(iii) Reforms to build momentum
In tandem, we need reforms to rebuild economic momentum. All sectors need reform, e.g., energy, communications, transport, sanitation/water/health and education. For instance, the energy/power sector sorely needs drastic reforms, but it is so complex, with so many layers that need disentangling, that while initiatives are necessary, they are unlikely to revive growth in a reasonable period. The need, therefore, is to focus on what is practicable with the likelihood of achieving results.

In practical terms, we have to prioritise, and focusing now on communications, specifically broadband, could yield results. Mobile communications grew phenomenally over the last decade. The meteoric rise stalled for a variety of reasons: excessive competition, ultra-low tariffs, saturation in urban markets, limited access to spectrum, no incentives for broadband, restrictive actions against BSNL and MTNL, scandals and policy uncertainties. Yet, if the government initiates appropriate reforms in spectrum policies with incentives for broadband delivery, prospects could revive. If the government can (a) formulate major reforms with a New Telecom Policy 2011 that achieves growth, while(b) resolving problems relating to past irregularities through sound legal processes and judgement, communications could go through another meteoric rise, becoming the growth engine for the economy.

shyamponappa@gmail.com

1"The policy dilemma",
C Rangarajan, Business Standard August 22, 2011 (http://www.business-standard.com/india/news/c-rangarajanpolicy-dilemma/446531/)

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BUSINESS STANDARD

COLUMN

NO RELIEF FOR BHARAT

INDICUS ANALYTICS

The new CPI series shows that rural India faces higher inflation pressures

The latest series of consumer price indices (CPIs) released by the Central Statistics Office (CSO) keep 2010 as the base year and are available for all states for rural and urban areas separately. Even as this is a vast improvement on the previous CPIs that have outdated base years and lag in release of data, annual inflation data will be released in January 2012. Despite the lack of time series, these estimates give a reasonable picture of the current inflation situation across the country. The latest provisional data for July shows the CPI at 110.4, with 2010 as the base year at 100. Rural India has seen higher inflation pressures compared to urban India — the CPI rural is estimated at 111.6 in July, 2.7 percentage points higher than the index in urban areas.

For almost all commodity groups – barring clothing, bedding and footwear – the index value in rural areas is higher than that in urban areas. The highest index value in rural areas is in the group of fuel and light, making it the strongest pressure point in this series. For July, the CPI in rural areas for fuel and light stands provisionally at 117.3, significantly higher than in urban areas where the index stood at 112.8. In urban areas, the highest index value is seen in case of clothing, bedding and footwear, while food, beverages and tobacco take the third spot. In July, the CPI for food, beverages and tobacco in rural areas was estimated at 110.6, while in urban areas it was 109.8. (Click here for graph)

PRICE PRESSURES Consumer price indices (Base: 2010=100) July 2011 provisional
Commodities	Rural	Urban
Food, beverages and tobacco	110.6	109.8
Fuel and light	117.3	112.8
Clothing, bedding and footwear	116.3	116.5
Housing		106.9
Miscellaneous	110.7	107.1
General index (All groups)	111.6	108.9
Source: CSO

A look at the state-wise CPIs shows that Meghalaya, West Bengal and Gujarat top the table for rural price indices in July, while Delhi, Nagaland and Chandigarh have the lowest estimated rural CPIs. In most of the states, the index values of rural areas are higher than that of urban areas, notable exceptions among the big states being Punjab, Uttarakand, Himachal Pradesh and Jammu & Kashmir. Urban indices are the highest in Andaman and Nicobar Islands, Kerala and Mizoram and lowest in Manipur, Goa and Nagaland. From May to July, the highest increase in rural indices has been in Meghalaya, Goa, Sikkim and West Bengal, each seeing more than a 3.5 per cent rise, while the lowest increase has been in Jammu and Kashmir and Dadra and Nagar Haveli, with Mizoram seeing a marginal decline in the rural CPI. When it comes to urban CPIs, six states have seen a rise of more than 4.5 per cent over the same period — Bihar, Jharkhand, Chandigarh, Sikkim, Chhattisgarh and Karnataka. A less than three per cent rise was estimated for three states — Tripura, Nagaland and Daman and Diu.

As noted at the beginning, the new CPI series presents a snapshot in time across states. Despite the lack of year-on-year inflation estimates, even at this juncture there is useful information on the price pressures in the groups of commodities across rural and urban areas for all the regions.

Indian States Development Scorecard is a weekly feature by Indicus Analytics that focuses on the progress in India and the states across various socio-economic parameters
sumita@indicus.net

This is the last report in the current series. The Scorecard will resume on November 3

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BUSINESS STANDARD

COLUMN

INSTITUTIONS MATTER

THE MONSOON SESSION OF PARLIAMENT WILL SHOW IF SMALL PEOPLE CAN PRESERVE GREAT INSTITUTIONS

SANJAYA BARU

In one of the most erudite, important and relevant public speeches of recent times, distinguished sociologist Andre Beteille has focused national attention on "the institutions of democracy". members of Parliament who gather today for the monsoon session would do well to read Dr Beteille's "Third Pravin Visaria Memorial Lecture" (delivered in Ahmedabad on March 1, 2011 and published recently in Economic and Political Weekly, July 16). "Parliament may still be a great institution," says Dr Beteille, "but its members are no longer great men. How long can a great institution remain great in the hands of small men?"

That is the question those occupying the front benches, both on the treasury side and in the Opposition, must ask themselves and to which they must provide a convincing and reassuring answer for the people of India. The monsoon session will go down in history as one that either repairs or grievously hurts the image, stature, reputation and legitimacy of Indian Parliament.

At a time when self-appointed spokespersons of the so-called "civil society" are challenging the government and Parliament's right to frame and legislate laws, at a time when the judiciary is increasingly stepping on the toes of the executive and the legislature, at a time when the government of the day appears to have tied itself up in knots through its various acts of omission and commission, and at a time when the media is under increased scrutiny for its own foibles and prejudices, no institution of democracy is able to inspire public confidence.

The one institution that can stand tall and rekindle public trust in democracy is Parliament itself. Small people in big chairs have made a difference to history and can continue to do so, as long as the institutions for which they work retain their legitimacy.

This is as true for the institution of Parliament as it is for any other institution, big or small. The institution of the traffic policeman is preserved and revitalised every time the traffic stops when a policeman's hand is raised. All civilisations are built on such small gestures.

This past month marked the 20th anniversary of the launch of economic reforms and liberalisation in India. Many still view that turn in the Indian economic policy in 1991 as signifying the "retreat of the state". However, a more balanced view would be that while the government did withdraw from certain kinds of activities, freeing private enterprise in the process, it also re-legitimised itself by moving forward in other lines of activity, like regulation.

The re-assertion of policy autonomy by the Reserve Bank of India in the post-1991 period, to cite just one example, or the status of new regulatory institutions like the Securities and Exchange Board of India and the Insurance Regulatory and Development Authority, points to the role institutions can play in ensuring better governance. The new regulatory framework for the Indian financial sector helped the Indian economy and ensured the rule of law in financial markets. India today has one of the best regulatory structures for banking and finance.

Another institution built in recent years that has acquitted itself well so far is the Election Commission of India. It was not "great men" who created these "great institutions". Rather, ordinary men began to be viewed as great because they took on themselves the responsibility to create, protect and promote these institutions and the rule of law.

What ordinary mortals in the Bharatiya Janata Party do in Karnataka while dealing with the political crisis at hand, and how they deal with the blatant assertion of casteism as a means to escape the charges of corruption, will have as profound an impact on popular regard for institutions as the respect Anna Hazare and his "team" show for an elected government and Parliament. As Dr Beteille reminds us in his speech, "The institutions of democracy have not served the people of India as well as they were expected to ... (but) the reasoned criticism of public institutions, no matter how severe, is one thing; their thoughtless and wilful denigration is another ."

In a fortnight's time, India celebrates yet another anniversary of her independence. This is as good a time as any to remind ourselves that the national movement and the struggle for Independence were not just part of the freedom struggle. The promise of the national movement was not just self-government, but also good government. The deliverables, so to speak, were not just adult franchise and the creation of a republic, but also the building of new institutions.

As Prime Minister Manmohan Singh said famously in a special at Oxford University in July 2005: "Today, with the balance and perspective offered by the passage of time and the benefit of hindsight, it is possible for an Indian Prime Minister to assert that India's experience with Britain had its beneficial consequences too. Our notions of the rule of law, of a Constitutional government, of a free press, of a professional civil service, of modern universities and research laboratories have all been fashioned in the crucible where an age old civilisation of India met the dominant Empire of the day. These are all elements which we still value and cherish. Our judiciary, our legal system, our bureaucracy and our police are all great institutions, derived from British-Indian administration and they have served our country exceedingly well."

The responsibility to preserve, protect and revitalise these great institutions passes from one generation to another. If our "small" representatives in Parliament appreciate this, they would help rescue and re-legitimise a "great" institution. It is not great men but great principles upheld by ordinary men that make great institutions.

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THE ECONOMIC TIMES

EDITORIAL

FIND THE SCAM

IT'S TIME TO GRANT BAIL TO THE 2G ACCUSED, AND RESTORE NATURAL JUSTICE

India's federal sleuth, the CBI, has told the court hearing the 2G lawsuit that it has no evidence to suggest that Unitech Wireless, one of the accused, paid bribes to former telecom minister Andimuthu Raja. It also said that three executives of Reliance-ADAG who're in jail were not part of any telecom conspiracy. They're in jail because they were involved in a transaction to sell Swan Telecom to Shahid Balwa's company DB. With these admissions, and telecom regulator Trai's recent report saying that there was no revenue loss while granting the 2007-08 licences, what case is the CBI investigating? Kapil Sibal, the present telecom minister and Trai have both argued, correctly, that all measures of the so-called loss to the exchequer were notional. For example, the CAG's estimate of a loss worth . 1,76,000 crore, benchmarked 2007's 2G revenues to the money that was raised three years later by auctioning 3G spectrum, a completely illogical comparison. If the government says that it suffered no loss and companies say that they simply followed existing policy to buy licences, where is the scam? The only case worth investigating is whether Raja allowed some players to jump the queue in return for backhanders. But the CBI seems to have nothing to prove this claim.

We now need to restore sanity to the judicial process. Some of the accused, including Raja, have been in jail for as long as six months. Kanimozhi, daughter of DMK chief M Karunanidhi, whose connections with the 2G case seem peripheral at best, has been locked up for three months now. Executives of Unitech and Reliance-ADAG, who the CBI now says cannot be linked to bribery, are also languishing in prison. Their continued incarceration without being convicted of any crime violates the fundamental principle of natural justice which states that everyone is innocent till proved guilty. In the course of the 2G trial, this principle has been mauled badly. The judicial system must wake up now and grant bail to the accused. This does not mean that the investigation or lawsuits have to stop. It means that people whose guilt has not been established can't be jailed indefinitely while their cases make their tortuous way through court.

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THE ECONOMIC TIMES

EDITORIAL

SIMILAR TREATMENT

TIGHTER REGULATION OF NBFCS WAS LONG OVERDUE AND IS WELCOME

The Reserve Bank of India's (RBI) working group on non-banking finance companies (NBFCs) has done well to suggest tighter regulation of the sector. The underlying rationale is sound. Banks and NBFCs are engaged in essentially the same business — lending and investing. They should be brought under similar regulations,like similar prudential norms for asset classification, income recognition, provisioning, capital adequacy and so on. Now, the regulatory regime for NBFCs is far more lax than for banks. This has resulted in regulatory arbitrage, with NBFCs — often bank-promoted, like Citi Financial — indulging in activities that are out of bounds to banks. The new recommendations are intended to plug this gap by bridging the regulatory divide between banks and NBFCs. The idea that the RBI should have the power to lay down 'fit-and-proper' criteria and have the power to remove NBFC directors in the event of their not meeting the criteria and even appoint directors where it is necessary to do so in public interest or for financial stability is in tune with this. Rules saying that the RBI should have the power to supersede NBFC boards in the interest of financial stability and constitute a fresh board, if necessary and any significant acquisition of ownership and control in NBFCs should have the prior approval of the RBI are to ensure safety.

The financial crisis in the West was as much a crisis of banks as of shadow banks. So, the working group wants to dispense with the somewhat artificial distinction between banks and NBFCs. The latter will, no doubt, have to work under a tighter leash. But there will be some positives too. Today most NBFCs are unable to recover bad debts using the enabling framework of the Sarfaesi Act even though their borrowers may be exactly the same as those of banks. The working group, rightly, recommends that the Act be extended to NBFCs as well. Also, the tax treatment for provisions, it suggests, should be the same for banks and NBFCs. The aim, quite clearly, is to ensure a level playing field as far as possible; without jeopardising the safety of the system.

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THE ECONOMIC TIMES

EDITORIAL

SIMPLY OBVIOUS

TORTUOUS PROSE COULD MAKE ARTHAPEDIA'S USERS RECHRISTEN IT ORTHOPEDIA

The launch of Arthapedia by the learned members of the Indian Economic Service to give outsiders an Internetenabled Rosetta Stone to decode jargon is revolutionary in concept, not in execution. Governments worldwide have prided themselves in keeping their affairs comprehensively out of the ambit of the public simply by the denseness of their prose. By the time the layman negotiated the commas and abbreviations, qualifications and subparas, the plot (and line of thought) was well and truly lost. Erudite officials may earnestly want their esoteric cerebrations to be accessible, but any great task is easier said than done. Unfortunately, Arthapedia, while claiming and aiming to "simplify indigenous concepts" has not been able to rise above its content creators' penchant for multi-syllable words and convoluted sentences. In fact, some precepts leave the reader literally blank — like the currently empty page titled 'uncategorised category'.
The focus, though, seems to be on expansivity and exhaustivity rather than brevity or clarity. Why else would its elaboration of 'factory' as defined by our Factories Act be a 75-word sentence that includes four mentions of 'working' and two each of 'workers', 'manufacturing process', 'power', 'wherein' and 'is/was', besides the usual overdose of prepositions? It is no more simply elucidated than the original definition in officialese. It could be argued that some target users of the site (namely, "academicians, economists, policy practitioners, financial journalists, students") would be used to obtuse and abstruse intellection. But for the sake of the rest of that list — "any interested citizen both within the country and abroad" — Arthapedia should take Henry David Thoreau's advice: Simplify, simplify!

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THE ECONOMIC TIMES

DIMMING OF THE STARS AND STRIPES

WITH THE US' POWER ON THE DECLINE AND CHINA'S ON THE RISE, THE WORLD WILL WITNESS ANXIOUS

It has become second nature to most of the world to accept the US as the undisputed hegemon of the global order. The combination of an economy twothree times larger than its nearest contender, and a state-of-the-art military, is unchallengeable.

The unipolar phase began when the Berlin Wall came tumbling down in 1989 and the mighty Soviet Union died in its aftermath. The vector is now changing and in the economic rebooting, China's international prestige and power have received a boost. Last month's downgrade of US long-term debt from AAA to AA+ by rating agency Standard & Poor's came as no surprise. Yet, it sent world markets into a tailspin, for never before had a major rating agency dared downgrade the mighty power.

The future of the sole superpower that today can militarily intervene in any part of the world, put boots on ground at will and undertake bombing missions from mainland US to Afghanistan, and return to base flying non-stop for 31 hours for instance, can only be assured if the economy can support it. The US is still the largest economic power today. It has spent on welfare schemes and wars in Iraq and Afghanistan, more than it was willing to tax its people, resulting in a burgeoning debt. In 1980, US federal receipts were 19% of GDP and debt was $0.9 trillion. Today, the share of federal receipts to GDP is nearly 5 percentage points lower and debt, nearly 15 times higher. Consequently, the US is currently on debt steroids. Debt per se may not be a problem. But when borrowings mount and political parties prevent tax increases or expenditure cuts that affect partisan interests, there is a real problem.

The US predicament drew sharp reaction from China. Besides downgrading the US before S&P did, China used its official mouthpiece, Xinhua, to chastise and tarnish US reputation. China may have had reason to complain about US structural debt problems. Its holding of $1.2 trillion in US Treasuries, the largest held by any nation, has eroded in value on account of the downgrade.

Xinhua warned that the days when the US could "just borrow its way out of messes of its own making are finally gone," even hinting that an option to replace the dollar as the global reserve currency exists.
Referring to the US military power that China sees as a countervailing force to its undecipherable "peaceful rise", the criticism was less bridled. It exhorted the US to slash its "gigantic military expenditure", perhaps hoping to exert some influence in reducing US military strength that has been the grid on which the US has been able to secure access to economic resources, such as oil from the Gulf.

The armed forces of both nations are deeply suspicious of each other. China is fervently working to expand its military reach and the US, to contain it. China had tested US President Barack Obama's resolve by harassing US naval vessels in South China Sea. It had even made a futile attempt to strike a bargain with the US to split the Pacific Ocean into their spheres of influence.

The US faces some hard choices: a) cut expenditure, b) raise taxes and c) get the economy to grow fast enough to pay its expenses. The first two are difficult to achieve, the third, more so.

First, in the agreement to cut as much as $2.5 trillion over the next 10 years, defence and social welfare programmes could face the brunt. Specifically, if a congressional committee does not agree by November to reduce deficit by $1.2 trillion, defence and Medicare could face be an automatic cut of $500 billion each. Cuts in the latter would be easier to make than in welfare schemes in the classic gunsversus-butter trade-off, especially at a time of high unemployment and when the battle for the White House is heating up.
Complete withdrawal from Afghanistan appears unfeasible and it would continue to bleed the US treasury. It could result in scarce funding for new military acquisitions, eroding US power.
Second, Republicans, who control the US House of Representatives, have vowed to fight any tax increase.

Third, the prospects of additional yield from an economy struggling to achieve even a 1% growth rate are also bleak. US GDP as a share of world GDP has already given up 3.41 percentage points from 2000 to 20.22% in 2010. While this drama plays out in Washington, China could grow at a sizzling 9.66% over the next five years. Its defence budget, which grew over fourfold in the first decade of 2000, could grow faster. Deploying its huge reserves ($3.2 trillion), China will also snap up resources and make investments across the globe.
All these have implications for India too. China's increasingly powerful navy, that just received a boost with the induction of an aircraft carrier, is steadily extending its reach to the Indian Ocean and its precincts. India is much too dependent on the sea lines of communication for its external trade to ignore this development. As the US capacity to act as a strategic balancer in the region diminishes, India will have to play a more active role in the area.

In the recent past, talk has centred on the rise of the East, rather than the decline of the West. Today, the talk is of both the rise of the East and the decline of the West. With pressure on the defence budget and an economy that is failing to gain traction, the US may be in for dim times and the world for some anxious moments.

THOMAS MATHEW

FORMER DEPUTY DIRECTOR GENERAL, INSTITUTE FOR DEFENCE STUDIES AND ANALYSES

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THE ECONOMIC TIMES

NEURAL NET

WHEN PARLIAMENTARIANS HIDE IN PARLIAMENT

AMRITH LAL

Thanks to Anna Hazare, Parliament has got a new lease of life. When the masses swelled in the streets in support of his fast for the Jan Lokpal Bill, many politicians started to stress the primacy of Parliament in making laws. How dare the common man say what a law ought to be like, they growled. Such concern for institutional propriety and processes, of course, was touching. The Anna movement, sure, didn't care much about the respect that parliamentary democracy insists on for its institutions. The wholesome faith of Anna and others in an overarching, and in many ways draconian, law as panacea for all forms of corruption is to say the least naïve. But is that why our politicians, cutting across the ideological spectrum, sought to dismiss the movement as dangerous to democracy and privilege parliamentarians over voices representing the civil society? Not really.
In the Anna movement, the political mainstream saw a challenge to the way it has managed politics in the recent past. It saw the legitimacy that legislators had claimed by virtue of being elected representatives being undermined by the movement. True, it was an inchoate mass that crowded the streets of urban India. Many political streams had fed into the river of anger that swelled in our cities. Few in the crowd knew what the proposed law was and if it could change their lives. That, however, didn't matter. What the masses meant intelligent politicians instinctively sensed. They understood the anger simmering among people. Their claim to represent the people was being challenged.

Over days, Anna turned into a symbol, his fast a catalyst that transformed the people on the street to political beings. For the people who thronged the streets, it was a cathartic process of discovering new forms and agencies to raise their concerns, new methods to organise themselves and reclaim their space in the public sphere. When political parties were finding it difficult to gather crowds for a public meeting or rally on issues like inflation, the Anna movement saw a large numbers of young people gathering at designated places, sloganeering, singing and dancing.

There were hardly any designated leaders or organisers behind these gatherings. People had met on social networking sites and chat rooms, got themselves invited through chain SMSes, old word-of-mouth and media-informed awareness. Some charlatans also made their bid for limelight, of course. But more or less, the gatherings evolved in autonomous ways with no place for any hierarchy at the organisational level.
Anna was a figurehead and acceptable because he had shown that one could talk back to the state as an equal, as a citizen unattached to any political party. People in the street, who had declared 'I am Anna' were not just deferring to Hazare but declaring their autonomy in the search for a different, if not better, political practice.
The agents of representative democracy must recognise this moment. Representation legitimised through elections has been the mainstay of parliamentary practice so far. But its failings and the decay that has set in among the agencies and institutions that monopolise electoral democracy are too serious to be ignored. The idea of the political party as the sole agency to represent people in a democracy is under serious threat.
The many insurgencies and new social movements that emerged in the last few decades have amply demonstrated that representative democracy in our country is not as inclusive as it claims to be. Elections per se have become a game of money and muscle and people are well aware of it. People in large parts of the country see the elected representative as a symbol of state power and the arbiter of statedirected patronage. They also participate in the electoral process as voters to influence the patronage-dispensing mechanism. This is far from the idea of electoral democracy as a process where citizens vote to choose a representative to speak up for their rights.

So far, the illegitimisation of representative democracy was happening in the peripheries of the nation.
Crowds that assemble in Kashmir or in Kalinganagar to protest could be ignored because they spoke for their little, big worlds. But when people assemble in urban India and protestors are drawn from those sections of society who are thought to have a stake in the status quo, the stakeholders are forced to sit-up and take note. The periphery has just arrived at the centre. Engage with the sentiment and open up parliamentary democracy to new forms and platforms of dialogue and discourse.

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THE ECONOMIC TIMES

THE BIG PICTURE

IMF'S BOLD RECIPE FOR RECOVERY

T T RAM MOHAN

How to prevent a slide into another recession is the question that is engaging the world's policymakers. At the meeting of central bankers at Jackson Hole in the US last week, all eyes were on the holy trinity of international economic policy — the chairman of the Fed, the president of the European Central Bank and the managing director of the IMF. Surprise, surprise, it was the head of the notoriously conservative IMF who came up with the boldest proposals for tackling the present crisis.
At the same venue last year, Bernanke had indicated plans for another bout of quantitative easing. Many expected a similar indication this time. The Fed chief disappointed them. Bernanke said that the Fed had committed itself to "exceptionally low levels" (meaning, close to zero) for the short-term interest rate until mid-2013, implying he did not intend to do more right now. To those looking for a way out for the faltering world economy, Bernanke's stark message was, "Hang in there".

The president of the European Central Bank, Jean-Claude Trichet, did not offer any comfort to nervous investors either. Trichet's discourse on the long-term factors that drive economic growth, structural reforms and price stability may have enthused students of Economics 101 but one could not see investors cheering wildly.
Enter the recently appointed IMF chief and former French finance minister, Christine Lagarde. The IMF chief outlined a menu of tough decisions the world' s leaders need to take if the present recovery is not to be derailed — and she did so in plain English.

One item in the menu stands out: the "urgent recapitalisation" of banks in Europe. Private capital was welcome, Lagarde said, but we should not shy away from using public funds if necessary. The European Financial Stability Facility could be used to directly capitalise banks in Europe. This would "avoid placing even greater burdens on vulnerable sovereigns."

Regulators and bankers in Europe were rattled. Urgent recapitalisation? European banks have enough capital to cope with a possible crisis, they said. In the most recent stress tests, only nine out of 91 European banks tested had failed, with a core tier one capital ratio of less than 5%. The problem at European banks today was lack of liquidity, not lack of capital.

This is sheer quibbling. All of us know that in a bank, a problem of liquidity can quickly turn into a problem of solvency. This happened in 2007-08 and it can happen again. There are concerns about solvency because European banks are holding large amounts of government debt. Some of this debt has to be written off if the weaker economies of Europe are to return to growth. Banks will face significant losses as a result.
Lagarde's proposal faces up squarely to the inevitability that European debt has to be restructured. It ensures that the banking system is not caught up in a crisis when that happens. The present economic crisis flows from a financial crisis. It is the prospect of another financial crisis that is giving the markets and businesses the jitters and stalling the recovery. Lagarde's proposal thus provides a basis for recovery in Europe while containing the fall-out on its fragile financial sector.

Lagarde was equally forthright in addressing the issue of reviving the US economy. The key was "halting the downward spiral of foreclosures, falling house prices and deteriorating household spending." This would involve writing off some of the debt of mortgage owners, again with help from the government.
Thirdly, governments in both Europe and the US must balance long-term fiscal consolidation with the need for shortterm fiscal stimulus. The two are not contradictory, indeed they can be "mutually reinforcing". The long-term fiscal risks are rising pensions and healthcare. If these are tackled, there will be space to support growth in the short-run. One element is common to the three proposals made by the IMF chief: public spending. Most people are of the view that fiscal stimulus has run its course; whatever little can be done for shoring up the recovery falls in the realm of monetary policy. Lagarde has taken a refreshingly different line. She clearly accords primacy to fiscal policy in the present scenario. This is interesting. The IMF, which was a staunch advocate of fiscal austerity not long ago in the East Asian crisis, favours public spending as the answer to the present crisis. In recent years, the IMF has moved away from its longheld position on the free flow of capital. Are we now seeing a shift in its position on fiscal austerity in times of crises? The head of the IMF is a lawyer and politician by training, not an economist. And yet she has come out with a clearer enunciation of steps needed to bolster the global economic recovery than the heads of the world's two leading central banks and indeed most professional economists. Whatever happens to the world economy, it does look as though the world of economic policymaking is in for a shake-up.

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BUSINESS LINE

OPINION

THE SLOWDOWN HAS ARRIVED

Many analysts feared it; some expected it, but almost everyone will be surprised at the extent of the fall in GDP in the first quarter of the current fiscal — a hefty one percentage below the level in the same quarter of 2010-11. No one expressed it better than the Finance Minister, Mr Pranab Mukherjee, who was in no doubt that that 7.7 per cent growth was "disappointing". This, despite the bumper rabi crop and, relative to last year, better growth in electricity, gas and water supply. That agriculture with improved quarterly results at 3.93 per cent could not help pull GDP to higher levels only confirms the place it occupies in the national output.

What proved disappointing were growth rates of the two main contributors to GDP — manufacturing and services. From a little over 10 per cent to 7.2 per cent in 12 months is a steep fall for the former. For mining and quarrying to fall from 7.36 per cent to 1.81 per cent is even steeper but, then, that decline is not unexpected. What it indicates, as usual, is the dismal failure of policymakers to get the new mining policy into operational mode. Services growth also declined but less sharply than manufacturing with all segments other than construction — trade, hotels, financial services — holding up the sector average. The most dramatic decline was in construction from 7.66 per cent last April-June to 1.2 per cent in the current first quarter. So, what pulled down the GDP to disappointing levels were manufacturing and construction. Both growth drivers have turned into agents of GDP fall. Neither performance is really surprising, and to understand the numbers is to appreciate just how successful the Reserve Bank of India's monetary tightening has been in combating what it has considered for the last eight months, the principal impetus for inflation: Excessive demand driving the two aforementioned sectors. So, Mr Mukherjee should not be disappointed since the drop in GDP is the outcome of an evidently successful monetary intervention. And neither should Mr Kaushik Basu expect things to get better this year, because the next sector to be hit with falling demand, again in line with the RBI's expectations, will be "interest-sensitive" automotive sales.

The decline in GDP growth may turn into a sustained trend — unless the RBI realises its hawkish policy has served its purpose. Even if the RBI does reverse its policy stance at the earliest, the transmission of lower interest rates will take some time. However, the reversal will have perked up business sentiment. Stakeholders would know the RBI does not intend to starve the patient it had put on a diet.

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BUSINESS LINE

OPINION

HE'S GOT THE ACTION, HE'S GOT THE MOTION…

EKALAVYA

… Oh yeah, the boy can play.

Two weeks ago, this column had suggested that the time had come for the Prime Minister to redeem himself. He has done so with such a characteristically quiet flourish that even his worst critics are now conceding what a rock musician once sang:

"He got the action

he got the motion,

Oh yeah, the boy can play

dedication, devotion;

turning the night time into the day…"

And thereby hangs a tale.

For several years after he became the finance minister in 1991, the Prime Minister, Manmohan Singh, when he met his economist friends would sheepishly tell them that he was now a politician and, therefore, immune to sound economic advice. Not many took him seriously but a few amongst the lowlife of Lutyen's Delhi knew that he had always been one.

How else, they would snigger, would a mere economic advisor (1971), that too in the ministry of commerce become, first, the chief economic advisor in three years (1974), then a secretary to the Government of India in two more (1976), then Reserve Bank Governor in six more (1982), then deputy chairman of the Planning Commission (Cabinet rank, mind) in three (1985) and, finally, finance minister in a mere 20 years from the time he left the teaching profession — that too immediately after having served as economic advisor for four months to Prime Minister, Chandra Shekhar, in 1991? And then, in 2004, just eight years after he ceased to be finance minister in 1996, there he was as Prime Minister! This, after not having had anything to do with 10, Janpath between 1987 and 1997. And this after having had his Planning Commission called a 'bunch of jokers' by Rajiv Gandhi in 1987.

His trump card

Dr Manmohan Singh's great strength lies in the fact that his rivals and opponents always underestimate him. He manages to lull them into a sense of complacency by his outwardly meek demeanour, good manners and seemingly hesitant ways.

In fact, however, Messrs Hazare and Co have discovered what the Comrades of the Left did in 2008 — that Dr Singh is deadly as the cats that wait patiently in the grass for hours, unmoving, silent, watchful and which finally spring like a fork of lightning at the bird which thinks it is safe.

Indeed, even the malcontents in the Congress, who were sniping at Dr Singh, have had a rude shock. He is now fully in command because Sonia Gandhi is unwell; Rahul Gandhi is too wet behind the ears and reluctant to face genuine fast bowling; Pranab Mukherjee is not trusted by the Family — and the rest, oo la la, don't matter.

Suddenly, he is able to keep A. K. Antony waiting outside the room for not having countered the talk about succeeding him as PM; he is able to make a passionate speech in the Lok Sabha about what a nice guy he is, leaving the Opposition furtively wiping its eyes even as Congressmen weep buckets in sympathy; he is able to get Rahul Gandhi to read out the Government's position on the Lokpal which, amazingly, negates his own speech, leaving the Hazare camp in total disarray; before that he inserts Pranab Mukherjee to negotiate the deal with a clear instruction: split, isolate and pick off.

Match over

And split, isolated and picked off they were.

Swami Agnivesh went one way, Kiran Bedi and Arvind Kejriwal another. That isolated Prashant Bhushan and Anna Hazare, who cried victory and ran.

One can only quote from the song once again:

After all the violence and the double talk;

There's just a song in all the trouble and the strife;

He can do the walk,

He can do the walk of life.

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BUSINESS LINE

STEP UP TIES WITH BANGLADESH

G.PARTHASARATHY

Neighbouring countries often face the challenge of reconciling their identities as distinct nations with their common historical and cultural heritage. Six decades after its independence, Pakistan's quest for a separate identity from India, while rejecting all manifestations of a shared cultural and spiritual ethos, has rendered the country schizophrenic.

Bangladesh, born barely four decades ago, on the other hand, feels quite comfortable sharing its cultural values and ethos with its neighbours across its borders, while zealously protecting the separate national identity it assumed since 1971. Both India and Bangladesh are this year separately and jointly celebrating the 150 {+t} {+h} birth anniversary of Gurudev Rabindranath Tagore. Tagore was the composer of the national anthems of both nations.

Sharing much in common, while being sovereign and independent nation-states, is a challenge that Bangladesh and India will confront in an era when religious beliefs across the world are assuming salience.

WELCOME CHANGE

India's Vice President, Mr. Hamid Ansari, led a high-level delegation to Bangladesh in May this year to mark Tagore's birth anniversary celebrations. There is also much else that has transpired in relations between the two neighbours that deserves to be welcomed.

Bangladesh has cracked down on Indian separatist groups, which had become used to operating from its soil, with state support. India, in turn, has reciprocated by becoming more forthcoming on resolving complex problems of river waters and border management, which have bedevilled relations between the two neighbours.

India has also realised that it has a vital interest in the economic progress of Bangladesh. The recent $1 billion Line of Credit extended to Bangladesh seems, at long last, to be coming in place to foster cooperation in areas ranging from railways to infrastructure development. India unfortunately has a reputation of being slow and tardy in implementing developmental projects in its neighbouring countries. One hopes that arrangements for supplying 250 MW power promised to Bangladesh are put in place expeditiously.

BORDER, WATER DISPUTES

The Prime Minister, Dr. Manmohan Singh, will arrive in Bangladesh on a two-day visit beginning September 6. This is a visit preceded by meticulous preparations. Cabinet Ministers Mr. Pawan Bansal, Mr P. Chidambaram and Mr. S.M. Krishna have already paved the way for the forthcoming summit, through discussions on border management, sharing of river waters and South Asian connectivity. An agreement on transportation and transit for exports from Bhutan has been signed.

Mr. Chidambaram's assurance that India's Border Security Force has been barred from shooting at people crossing the border has been welcomed in Dhaka. The most visible symbol of Indian goodwill for Bangladesh Prime Minister Sheikh Hasina would be the signing of an agreement finally demarcating the entire India-Bangladesh border and resolving other long-pending differences in implementing the 1974 Indira-Mujib Agreement.

India is required to hand over 111 enclaves to Bangladesh and in return get 51 enclaves under the 1974 agreement. It took us 18 years to lease a small corridor of land which we were required to, under the 1974 Agreement to Bangladesh, giving it access, in perpetuity, to its Dahagram-Angarpota enclave.

An ingenious solution has now been found to enable Bangladesh nationals to travel to this enclave at all times instead of the present restricted dawn-to-dusk arrangement.

All these moves will help Sheikh Hasina silence her critics in Bangladesh of her policies towards India. Differences over the transfer of enclaves and adverse possessions have also been amicably resolved. Bangladesh will get 10,048 acres of land and India receives 7,110 acres when the exchange of enclaves takes place.

It is not likely that significant numbers of people will leave their homes once these transfers occur. Barely 6.5 kilometres of the 4,096 kilometre India-Bangladesh border remained undemarcated after the 1974 Agreement. Thanks to some hard and dedicated work by the Ministries concerned in Delhi and the West Bengal Government, differences on border issues will stand resolved soon.

Dr. Singh's visit will also see the signing of agreements for resolving long-pending differences on sharing of the waters of the Teesta and Feni Rivers, with the signing of a 15-year interim accord that caters for the needs of West Bengal and Bangladesh equitably. If Mr. Jyoti Basu played a key role in fashioning the 1996 Agreement for sharing of the waters of the Ganga, Chief Minister Ms. Mamata Banerjee will inevitably be a key player in taking forward the India-Bangladesh relationship in areas like border management and sharing of river waters.

BILATERAL TRADE

A remaining area on which Bangladesh has a legitimate grievance will hopefully be addressed during Dr. Singh's visit. This is the growing trade deficit — Indian exports to Bangladesh in 2010-11 stood at $ 3.84 billion, while we imported barely $ 406.3 million of Bangladesh's products. Bangladesh has been asking us to relax our garment import curbs. While the Commerce Minister, Mr Anand Sharma, demurred, one hopes Dr. Singh will show accommodation on this score.

The India-Bangladesh relationship has to be strong enough to withstand changes in Government on both sides. It was only appropriate for Mr S. M. Krishna to have called on the leader of the opposition, Begum Khaleda Zia, when he visited Dhaka, despite her known her known anti-India propensities.

We need to build on this through more multi-Party parliamentary exchanges. It is unfortunate that sustained efforts are not being made to cultivate Parliamentarians from Bangladesh, irrespective of their political affiliations.

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DECCAN CHRONICAL

EDITORIAL

RAJIV KILLING CASE: KEEP POLITICS OUT

The Madras high court granting an eight-week stay of execution to the three convicts on death row for helping to assassinate former Prime Minister Rajiv Gandhi will leave many questioning it, although it is evident that there is something quite seriously wrong with the system at present. The three — Murugan, Santhan and Perarivalan — were convicted by the Supreme Court in 1999. Their guilt cannot thus be a matter of conjecture, as many in Tamil Nadu are now trying to suggest. The three sought a presidential pardon after being sentenced. It is a sad commentary that it took Rashtrapati Bhavan close to 12 years to decide to confirm the death sentence and deny clemency. Since so much time has elapsed, the counsel for the convicts have pleaded that their clients had undergone deep "mental agony" and should be spared death. Their plea is that the death sentence be commuted to life imprisonment. If this is granted, we may be quite certain that the three will then seek discharge from prison on the grounds that they have already been in prison for 20 years since being committed, following the dastardly crime. It is clear enough that Parliament should step in and lay down that the President must take a view on clemency pleas within a stipulated time so that there is no scope for absurdities to be entertained, as we are now witnessing in Tamil Nadu. Twelve years is long by any stretch of the imagination. In effect, the delay has been that of the Union home ministry, which has to advise Rashtrapati Bhavan on such matters. L.K. Advani, Shivraj Patil and P. Chidambaram, who have held that charge in this period, have some answering to do. We also do not know if Rashtrapati Bhavan made enquiries with the home ministry in this matter and in respect of other long-pending cases. The President cannot in such matters remain a passive recipient of advice. It is a great pity that political elements in Tamil Nadu have summoned parochial and communal grounds to intervene in this discussion. It is this that has given rise to the political sentiment that parties like the DMK and MDMK are seeking to irresponsibly spread. By implication, such elements are suggesting that the Tamil people were being sought to be penalised for the crime of killing a former Prime Minister. The passage of the resolution in the state Assembly urging commuting of the SC verdict unfortunately invokes the same imagery. Under our law, individuals are charged with a crime, not their communities. If the matter is not allowed to rest on this premise, we will be opening a Pandora's box.

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DECCAN CHRONICAL

EDITORIAL

007 IS COMING

The last time James Bond came to India to tackle dastardly villains, he encountered snake charmers, musket-wielding turbanned soldiers and harem girls living in luxurious palaces. That was the India the world knew, and the producers of Octopussy weren't going to play around with that clichéd image. Nearly 30 years later Bond is heading here again, and this time his destinations are a little more down to earth. The 23rd Bond film will be shot in places like New Delhi's Sarojini Nagar Market, Old Delhi's Daryaganj, railway yards near Ahmedabad, Mumbai's crowded business areas and, of course, the sun-kissed beaches of Goa. No word yet whether the evil adversary will be a software genius planning world domination through his call centres, but no doubt news of the coming production must have left many an Indian actress shaken and stirred, and hopeful of a role opposite the superspy. But 007 must still tackle several obstacles. While New Delhi's I&B mandarins have given a go-ahead, others like the Indian Railways are yet to give the green signal. And Bond may discover that while women and villains both succumb to his easy charm, the Indian babu might not be such a pushover. We await the final decision with bated breath; but what we really want to know is: will Bond dance around trees and sing a song?

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DECCAN CHRONICAL

EDITORIAL

THE RAJAPAKSE WAY

To most Sri Lankans, Anna Hazare's name would be unfamiliar, his Jan Lokpal Bill even more so. But the veteran social activist's marathon fast did have an (unintended) effect on Sri Lanka. India's preoccupation with the Hazare crisis turned the much-hyped discussion of the Lankan issue in the Rajya Sabha into a damp squib. In the electric atmosphere of the fast, the problems of Lankan Tamils would have seemed rather distant and insignificant to most Indian parliamentarians. For the beleaguered Rajapakse administration in Colombo, this turn of events would have come as an unlooked-for reprieve. For months, the regime has been buffeted by adverse external winds (mainly from Tamil Nadu and the West). Now, with the danger of a full-throated debate on Sri Lanka in the Indian Parliament out of the way, Colombo is free to focus on the next pitfall — the possibility of the Lankan issue coming up during the September session of the United Nations Human Rights Council (UNHRC). Friendly countries are being lobbied, a highly capable Lankan Tamil diplomat appointed as the permanent representative in Geneva and a top-level delegation selected to represent the island-nation. The hurried ending of the three-decade-old Emergency Rule was a pre-emptive exercise aimed at the UNHRC, intended as a token of Sri Lanka's bona fides, an indication of the Rajapakse administration's responsiveness to international concerns. Unfortunately there are signs that this measure may turn out to be more of a smoke-and-mirror affair rather than a real change. The ministry of justice has already announced that around 6,000 Lankans imprisoned under the Emergency will not be released, but be detained under other laws. This would be easy as the draconian Prevention of Terrorism Act is still in place. According to local media, new laws are to be introduced to fill any gap created by the removal of the Emergency. The Rajapakse siblings (President Mahinda, defence secretary Gotabhaya and economic development minister Basil) are pursuing a political project that is inherently centripetal since it aims at establishing familial rule and dynastic succession. Their record demonstrates intolerance of criticism, hostility to dissent and unwillingness to delegate real authority to anyone outside a closed circle of family members and trusted aides. The 18th Amendment to the Constitution, which removed presidential term limits while immeasurably enhancing presidential powers, was symbolic and symptomatic of these dominant tendencies. Two years and four months after defeating the LTTE, normalcy and a consensual peace elude Sri Lanka. The Tamil-majority north remains under de facto military occupation and a political solution to the ethnic problem is conspicuous by its absence. These twin outcomes stem from the very essence of Rajapakse-thinking. The siblings do not believe in the existence of an ethnic problem; in their perception, the north-eastern issue was a terrorist problem which was resolved when the LTTE was defeated. Consequently, peace-building is a law and order exercise with some development thrown in as relish. The Rajapakse siblings are adept at creating an impression of extreme flexibility while remaining absolutely immovable. External pressure will be dealt with by making sincere-sounding promises and occasional cosmetic changes. The best case in point is the changed mandate of the new All Parties Conference. This was promised to India as a vehicle to arrive at a political solution to the ethnic problem. But subsequently its mandate was changed into the far more amorphous one of promoting "national unity". This shift in emphasis tallies with the oft-repeated Rajapakse assertion that the Tamils (and the Muslims) do not have any special problems or insecurities. A key external advantage the Rajapakses enjoy is India's confused and confusing Lankan policy. Delhi is facing a geographic-demographic conundrum in dealing with Colombo. India wants to prevent Sri Lanka from becoming a Chinese satellite and is obviously concerned about the rapidly growing politico-economic ties between Colombo and Beijing. But India cannot give Sri Lanka the satisfaction it gets from China because of the Tamil Nadu factor. With 60 million Indian Tamils, Delhi can ignore Chennai's concerns only up to a point. Giving the Rajapakses carte blanche on devolution and human rights in order to wean Sri Lanka away from China is thus a non-option, for electoral and political reasons. China is not burdened by such handicaps. There are no Chinese Tamils; and human rights and democracy are of no interest to China. Thus, it can offer the Rajapakse regime uncritical support, plus almost unlimited cash. China's political and demographic realities and economic and financial strength enable it to indulge Colombo to a degree that Delhi can never equal. India's manifest incapacity to deal with Sri Lanka has created a void into which the US is slowly stepping. The recent American demarche to Sri Lanka on human rights issues was unprecedented. Washington's response to the ending of Emergency Rule is another indication of this increased assertiveness; the US welcomed the move but warned that the international community will have to step in if Lanka fails to comply with "international humanitarian laws and obligations". Sri Lanka as a Chinese satellite would be as unacceptable to the US as it is to India. While India is trying (unsuccessfully) to prevent such an outcome via a policy of friendly engagement, the Americans seem increasingly willing to opt for a harder line. The Rajapakses' unwillingness to share power with the minorities and dependence on China may well turn Sri Lanka into an unconscious pawn in the power games of other far bigger players. For Sri Lankans it would not be a felicitous prospect. Tisaranee Gunasekara is a writer based in Colombo

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DECCAN CHRONICAL

OPED

ONE OF A MILLION MUTINIES?

It will change India By Kiran Bedi I strongly feel that what this country has witnessed in the last few days is not merely an agitation but a revolution that will change the way India functions. It will not merely help in improving the overall functioning of the government but also provide justice to the most deprived sections of the society. For me, the crusade against corruption has been an amazing journey since October last year when I got a call from Arvind Kejriwal to join him for a press conference on corruption in the organisation of Delhi Commonwealth Games. I knew at that time that the fight against corruption was going to be a long drawn one. But we started working on it, bringing like-minded people together. I still remember the first time when Anna Hazare joined us on November 10, 2010, at the Parliament Street police station, where we had gone demanding that an FIR be lodged for corruption in the CWG. Though by then scores of people from different walks of life had started lending their support to the cause, I never realised that it would eventually go on to become a revolution that not only caught the imagination of the country but of Indians across the globe. I remember how till April this year, when Anna began his fast at Jantar Mantar, we ran from pillar to post meeting a cross-section of political leaders, and even the Prime Minister, stressing on the need for an effective and strong Jan Lokpal Bill. But no one listened at the time. I feel the seventh and the 11th day of Anna's fast in August were the most crucial. On the seventh day, the crowd started getting restive seeing the police build up. This is where my association with the police helped. I told the police they should simply follow law and not their political masters. I strongly feel that the saddest day of my life was the day when I had to do the "ghoongat act" at Ramlila Maidan. I was sad to see a frail Anna on the 11th day of his fast with no help coming from any quarter. The government was only interested in seeing how long the protest could last and to keep an eye on the head count there. But talking to senior BJP leader Advaniji helped; he assured that the resolutions would be passed in Parliament. I think the one thing that stands out in this agitation, which became a revolution, is non-violence. The media played a tremendous role by sending out the message of what Anna stood for. It has been an enriching experience, and I hope the government will finally listen to the people's voice and Jan Lokpal Bill will reach its logical conclusion. (As told to Rajnish Sharma) Kiran Bedi, former IPS officer * * * It reflects people's anger Basudeb Acharia We do not see the Anna Hazare agitation as a revolution. It is a reflection of the anger of people against corruption as the government in power failed to take any remedial action. In the last seven years, people have seen how ministers, bureaucrats and people's representatives at various levels indulge in corruption and the strong nexus between corporate houses, corrupt politicians and bureaucrats. Because of people's anger against this state of affairs, Mr Hazare's agitation received a huge support. This is the key factor behind the huge mobilisation of support across the country. But here we must not ignore the fact that the agitation was largely supported by the middle class, and not by all sections of the society, particularly the weak and the poor. The poor people of this country also bear the brunt of corruption but they were largely missing. Almost 77 per cent of the population in the country earns less than Rs 20 per day. So if you launch a movement against corruption, there is a need for mobilisation from all sections. We also did not see Muslims and other minorities coming out in support of the agitation. Nor did the movement see dalits or other weaker sections participating in the protests. The Bharatiya Janata Party and the RSS took part in the agitation but they remained quiet about corruption in Karnataka. We must understand that it is the neo-liberal policies of the government that gives rise to corruption. Natural resources like mines, mineral, water and other assets are public assets that are being allowed to be looted by corporate houses who have the support of corrupt politicians and bureaucrats. And yet, Team Anna has not demanded government control of these national resources and there was no mention of corporate houses. We are for a strong, effective and credible Lokpal, but even such an institution will not be able to eradicate the all-pervading and rampant corruption. We need several other reforms along with the Lokpal. The day is coming when instead of an expansion of our democracy, it will be controlled by a few rich people because to contest elections candidates need to spend crores of rupees. This naturally excludes the poor and the middle class. There is an urgent need for electoral reforms — elections should be funded by the state and donations from companies to political parties must be stopped. We also need reform in the tax system, which again encourages the proliferation of black money. Basudeb Acharia, CPM politburo member

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THE STATESMAN

EDITORIAL

MAKEN MAULED

RIGHT DECISION, WRONG REASONS

WHEN Ajay Maken was entrusted with the portfolio, he admitted he knew little about sport ~ he has learnt little thereafter. The snub he has suffered in having his much-trumpeted Sports Development Bill rejected by the Cabinet follows his merger formula for the hockey federations proving a non-starter. The reasons for the failures are common ~ an authoritarian, bureaucratic approach. For the present, the prevailing anti-politician sentiment running strong in the country has caused many to slam the blocking of the Bill by ministers who control various federations, cricket bodies in particular: but that is a myopic view.
It is far removed from the hallowed Olympic principle of sports administration being government-free. The sins of the Commonwealth Games cannot be used to crucify all the federations ~ it was, after all, a Congressman who led the bandit gang. Certainly there is need for greater transparency, democracy and accountability in the federations, but accountable to who? A neta led by the nose by crafty babus who want a finger in every pie despite having made a mess of almost all they touch? Like some of his arrogant mates in the ministerial council who have just been cut to size, Maken sought to muscle his legislation through: even the courtesy of a dialogue with the federations was deemed unnecessary. The fact that government funds most sporting activity ~ significantly the financially independent federations perform much better ~ prompted the "tough" provisions of the Bill. The facilitator sought to become the dictator. And the targeting of the BCCI ~ no doubt in need of comprehensive reform ~ is rooted in jealousy over its commercial success and the fact that (despite the recent drubbing in England) Indian sides are world-class without taking a paisa from government. The babus do not get their desired quota of complimentary tickets!

Maken has yet to appreciate that any action he takes must be in conformity with the Olympic charter and the codes followed by the international federations. That apart, he has to understand that rather than be autocratic he must learn to persuade, pressure but not bully others to improve their functioning. It is a silly over-simplification to sympathise with him because the "old guard" refused to play ball. Take personality out of the equation and his Bill has pernicious implications. It is rooted in a bygone age of "big" government, and the mistaken belief ~ as everyone in India will aver ~ that the sarkar is sinless.

PREPOSTEROUS PROPOSAL

LEAVE JU AND BESU ALONE

THE proposal will turn out to be a conscious blunder, reminiscent of the Left Front, and ought urgently to be dropped. It is of a piece with the overwhelming confusion in the sphere of education, contending as it does with a turmoil of ideas. The higher education department wants vacant seats in the engineering courses at Jadavpur University and Bengal Engineering and Science University to absorb those students who couldn't make it to the counselling session because of their poor ratings in the JEE. Worse, students who have scored a below-average 45 per cent in the school leaving exam should also be admitted even if they haven't cleared the JEE. The rationale behind filling the vacant seats is to maximise the number of engineers on the make, regardless of merit and the reservations of the campus authorities. The proposal has been advanced when the new session is underway and the first semester exam is scheduled for 5 September. Minister Bratya Basu's suggestion is preposterous, a conscious move to denude the standards of the state's two premier technological institutes. It recalls the CPI-M policy on mechanical transfer of teachers at Presidency College, one that compromised the standard of instruction. Yet the admission criteria was never relaxed in Presidency; this time around, the minister wants JU and BESU to drastically lower their standards! Both institutions have summarily rejected the proposal. The department's principal secretary merely goes through the typical bureaucratic motions by asking the authorities of JU and BESU to express their objections in writing. Both have iterated their reservations, and the higher education department has been urged to revoke its decision. The government should get the message and stop this convoluted interference in the running of these two premier universities.
The minister has sparked an unseemly controversy in the midst of the academic session. The two centres of excellence can't afford to waste time in the pursuit of learning though this may be part of the furniture in government departments. If the minister wants to take care of those who have flunked or have scored dismally in the JEE, he can well approach some private engineering colleges that have no objection and accord scant regard to merit. But he hasn't, acutely aware that some of them are below par. Jadavpur University and BESU are on an exalted pedestal; they will not denude their standards; and the Trinamul government must stop short of interference in matters academic.

ASSAM'S WATERY ORDEAL

ANNUAL PHENOMENON HAS COME TO STAY

ACCORDING to an official estimate, floods in the current monsoon season have affected more than 9.1 lakh people in 12 of Assam's 27 districts, ravaged standing crops in 65,000 hectares and so far killed nine people. The worst affected regions are Dhemaji and Lakshimpur. Ostensibly, after an on-the- spot assessment of the magnitude and intensity of the devastation, Dispur has undertaken relief measures and also announced a compensation of Rs 1 lakh each to the kin of the victims. But they are now reportedly demanding the amount be raised to Rs 500,000, something which the authority is unlikely to meet. Those taking shelter in different government relief camps will have to return to their homes after the waters subside but for the greater part of the year and until they are able to harvest the next crop, they possibly will have to depend solely on relief. Of prime importance now is to restore the damaged road and rail communication networks for which the Railways and highway authorities might have to coordinate their efforts for quick results.

This is an annual phenomenon; last year about 1.8 million people faced the ordeal. According to a Planning Commission estimate the trail of devastation ~ damage to crops, infrastructure and the loss of livestock ~ often touches Rs 650 crore a year and since 1953 it could be more than a total of Rs 4,440 crore. Dispur has so far taken only temporary measures like the construction and annual repair of embankments and bunds at huge cost. Even admitting that there can be no permanent solution to floods in the region, some have suggested that at least its intensity can be controlled by constructing some reservoirs in the upper reaches. Investments on such a scheme could far outweigh the annual losses and also help lessen the burden of the people living in the low-lying areas.

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THE STATESMAN

ARTICLE

GADDAFI ENDGAME

THE EXTERNAL SUPPORT FOR REGIME CHANGE

BY SALMAN HAIDAR

AS of this writing, Muammar Gaddafi of Libya has been forced out of his stronghold and is under chase from the triumphant rebels. His defiant statements have died away while his opponents have penetrated into and devastated his private sanctum in Tripoli. The fighting may not be wholly over and done with, and the risk of fresh armed assaults still exists; yet the longest, most confused and most bloody of the outbreaks spawned by the Arab Spring is now inexorably approaching its end.

On either side of Libya lie countries where the Arab awakening came with irresistible force and led to relatively swift and bloodless ejection of seemingly immoveable tyrannies. It seemed inevitable that something similar would take place in Libya, and indeed popular outbreaks in the eastern region of Cyrenaica, with plenty of external support, soon detached that part of the country from the control of the Gaddafi regime. It seemed like the start of an unstoppable surge but the regime dug in, resisted, and only now, several months later, has it run out of options.

The fighting has cost Libya heavily, as may be witnessed in the many scenes of damage and destruction on TV screens everywhere. There has been substantial loss of life amidst the fierce and widespread fighting across the country. When armed struggle first erupted, accusations of genocide against the regime were freely made to justify calls for external intervention, but these accusations were not substantiated and have died away. Libya is large and sparsely populated, seemingly designed for swift moving battles as seen in World War II when the Indian army was deployed there. This time, too, it has been a shifting battle, with no clear front, outbursts here and there, action shifting forward and back. Only now, after prolonged strife, has the noose tightened inexorably around Gaddafi and his supporters.

Muammar Gaddafi ran affairs in Libya for over four decades after he and other military officers overthrew King Idris, who was the last of an ancient dynasty of North African rulers. A charismatic leader, Gaddafi followed an unpredictable course from the start, seeing the revolution over which he presided as the harbinger of something dramatically new in international affairs. Buoyed by constantly increasing oil revenues, he followed an active and changeable path, becoming one of the world's most distinctive and best known leaders. However, there was a darker side to it and Gaddafi's Libya became a marshalling ground for international terrorist activity. The bombing of two civilian airline flights, and other deadly strikes, drew on him the collective wrath of the international community, bringing Libya under severe sanctions. A wrathful USA even launched a missile at him in an attempted assassination that he was lucky to escape. Yet after a decade of bitter strife, Gaddafi succeeded in making peace with his opponents and bringing to an end his international ostracism, by moderating aggressive policies and proffering substantial compensation to affected families. Relations between Libya and its Western, mainly European, partners were thus restored but there was little love lost between them and when the Gaddafi regime came under pressure as a result of popular demonstrations during the spreading Arab Spring, it did not take long for the erstwhile partners in Europe to come out in vigorous support of the rebels.

It is this external support for regime change in Libya that has raised important and difficult questions. In other parts of the Arab world, old tyrannies were cast out by popular revolt, and while the people came out in Libya as they did elsewhere, they could not initially force out the old. It took sustained military effort by the rebels before that could be achieved, and the rebels' efforts may not have prevailed at all without active and coordinated external support. As it became evident, battlefield support from NATO, especially air support, was the decisive element in the combat. It is not clear how NATO ~ in effect UK and France under NATO colours ~ assumed this role, for its intervention was supposed to be humanitarian in purpose and there was no mandate for regime change. Unhappily, what has just been seen in Libya brings echoes of what took place just a few years ago in Iraq, where, too, external intervention with flimsy justification, in that case ostensibly to remove weapons of mass destruction (WMD) which did not exist, had terribly damaging consequences that are even now not fully resolved. There is a further uneasy echo of the past in that the two European countries most prominent in attacking Gaddafi are the same two that, half-a-century ago, were hammering at Nasser's Egypt. Who would have thought that they could make such a comeback from the Suez debacle of 1956.
The Transitional National Council (TNC) now in command is not clearly structured and may well have problems of establishing control. It may even require foreign forces, even if limited to a few 'advisers', to be around for longer than presently anticipated, for restoring law and order will be no easy matter: tribal divisions in Libya run deep and armed elements from Gaddafi's tribe, the country's most dominant, may not be ready to give up the fight, no matter what. It will be a real challenge to avoid the uncertainty and disorder that so often follow the kind of civil strife that Libya has suffered, and problems could be exacerbated by foreign intervention.

The immediate problem for the TNC is to provide relief and rehabilitation to those affected by the destruction and disorder. Libya has run out of the basic amenities of daily life. It seems that the country is not so much in need of an international relief effort as of a repaired and restored supply network. In the last few months as battle raged, Libyan assets abroad were frozen in order to weaken the regime and aid the rebels. Some portion of the frozen assets seems to have been released for immediate needs and doubtless more will follow. However, the issues of governance before the TNC are tough and the new rulers will be severely tested. By and large, the people of Libya have shown their satisfaction at being rid of the wayward dictator who ruled them for so long. But the manner of his removal has raised a whole range of difficult issues to complicate the process of restoration of peace and order.

Most important, those elements abroad that have so vocally hailed Gaddafi's removal should not be tempted by what took place in Libya into contemplating some sort of direct action to dislodge unpopular dictators elsewhere. It should be well understood that if forced change is to take place, it should be at the hands of the affected people themselves, and not through external intervention.

The writer is India's former Foreign Secretary

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THE STATESMAN

INDIA REMAINS A SOFT STATE

BETWEEN THE LINES ~ KULDIP NAYAR

The truth is that we Indians do not allow things to reach a boiling point because we are not prepared to face the consequences. True, we are not radicals. Nor do we favour changing the status quo.

In the 50s and the 60s, India was known to be a soft state. The allegation was that it could not take hard decisions because of "unfavourable environment in attitudes, cultures and institutions".
The entire Anna Hazare phenomenon shows that we continue to be a soft state. On the 12th day of the fast, both the government and Mr Anna Hazare, along with his team, were bending backwards to have parliament pass a resolution so that the fast would end by that afternoon. The government's stand only 24 hours earlier was that no resolution was possible but a discussion could be accommodated "under some rule."
Mr Anna Hazare's side was adamant that the anti-corruption ombudsman (Lokpal) Bill must be passed before he could break the fast. He himself did not insist on having his version of the Bill passed, but surprisingly wanted only a resolution enunciating his demands. Some say it happened that way because Union minister Mr Vilasrao Deshmukh, who knows Mr Hazare personally, went straight to him with Prime Minister Dr Manmohan Singh's assurance on the resolution. This was how the "stumbling block" that Mr Hazare's team had become was bypassed. Many insiders maintain what weighed with Mr Hazare was the unanimous appeal by Parliament to break his fast. Yet, it turns out that Mr Hazare wanted only to see that Parliament would take up the Lokpal Bill, even if it is not his version.
The fact is that members of civil society had lost stamina. I heard in many drawing rooms that they had had enough of Mr Hazare and wanted to "hear something else". That was expected from a soft state. Over the years, I have felt that the society was willing to strike but afraid to wound. By temperament, we do not join issue. If ever it comes to that, we try to find a compromise which would be nearer to our demand or gives us an illusion of winning. The truth is that we do not allow things to reach a boiling point because we are not prepared to face the consequences.
True, we are not radicals. Nor do we favour changing the status quo. Yet, this time, the movement had the stirrings of a revolution. It could have achieved something in the shape of parivartan (change). Whether the system delivered or not was not an issue for the fast. The issue was that people were expecting something that would change their life.
It meant different things to different people. But the common factor was the change. Still there is no running away from the fact that the Hazare movement against corruption had galvanised the middle class youth for the first time since Gandhian Jayaprakash Narayan's call for a change in 1974. Yet neither movement allowed the people's anger and anguish to concretise and saw to it that they did not go beyond "control". Had the JP movement lasted longer, the nation would have steeled itself to fight against the undesirable elements, parading themselves as votaries of change but perpetuating the status quo. They were the beneficiaries and falsified JP's dreams. In Mr Hazare's case, the disconcerting part was the fast. Otherwise, his movement would have ushered in a revolutionary era, the dawning of the second Independence. I wish Mr Hazare had separated the movement from the fast.
I am told this was initially stressed upon by some older NGOs. But the people surrounding him wanted a dramatic step to attract attention and made the fast an integral part of the movement. The result has been mishmash, neither fish nor fowl. It promises a lot but doesn't look like delivering much. And there should be no surprise that it is business as usual. Had the movement by itself reached the proportion which the fast did, the government would have feared people's threatening mood.
True, Mr Hazare is honest when he says that he will resume his fast if and when he finds his expectations had not been met. But I am not sure whether the popular response some months later would be of the same scale. I was in Mumbai when more than one lakh people marched in rains as a victory procession. I could see that Mr Hazare had come to symbolise the aspirations of hundreds of thousands of people who came on the streets to support him throughout the country. Yet it is difficult to see whether the same number of protesters would respond if and when the government does not meet his demands. That Parliament is supreme does not need to be repeated because it is an apex body in the parliamentary democracy. People elect its members.
Yet, what should not be forgotten is that they continue to be supreme even when they demand circumventing of an institution like the standing committee of Parliament discussing the Lokpal Bill. The Constitution says: "We, the people…" Therefore, their assertion should not be an affront to Parliament or state legislatures. This is only a reminder to the elected representatives that sovereignty lies with the people. The Lokpal Bill or other steps have to ensure that. The right to recall may not be an ideal way but it at least keeps the sword of public sanction hanging over the head of the elected.
I was amused by actor Om Puri's argument that a Parliament member must be literate. India has been served well by the earlier Lok Sabhas which had at least one fourth of 545-members illiterate. Dr Rajendra Prasad, chairman of the Constituent Assembly, wanted to have a provision to lay down the minimum educational qualification for legislators. India's first Prime Minister, Jawaharlal Nehru, opposed the proposal. His argument was that when they were engaged in freedom struggle, the illiterate and the backward were the ones who followed them while the literate were toadies, on the side of the British rulers. Should he deny the illiterate their right after winning freedom? The proposal was dropped.
Mr Hazare's movement has been supported as much by the illiterate as the literate. The effort should be to make everyone literate, not to punish the illiterate who have had no opportunity to go to school. The Lokayukta (state ombudsman) should see to it that everyone goes to school and ensures at the same that that there are teachers in schools. However, the quality of teachers is another story altogether.
What does not come in the ambit of Lokpal is poverty. Electoral reforms are essential so that the right type of people reach the Lok Sabha and the state legislatures. Yet, more important are measures to enable the have-nots to become the haves. Like corruption, poverty in India is indelible. There are no soft options.

The writer is a veteran
journalist and commentator

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THE STATESMAN

PERSPECTIVE

AN EXISTENTIAL ANGST

NOW & AGAIN

SUNRIT MULLICK

Marufa's mother peeled the onions, cleaned the fish, sliced the potatoes, marinated the chicken, and after cleaning up the kitchen counter, told my wife it had to be Rs 600 every month for her services. My wife said Rs 500 was enough for a couple of hours of work in the morning, and would she come tomorrow for that amount? Marufa's mother mumbled something and left her wondering whether she would. She turned up this morning all right and did her chores, and while washing the dishes, repeated her demand for Rs 600. The wife said five hundred. Marufa's mother said with times being what they are, it was so difficult with only five hundred. She said she had been working for Mrs Khatoon down on the first floor and drawing Rs 800 but got fired because she missed worked once in a while.
It's a tough saga for these working women from the villages around Kolkata ~ they come from Budge Budge, Basirhat, Canning, Garifa and such far off places by train, travelling ticketless most of the time. When there's a raid, as happened with our help Saira early one morning, it seems all the ticketless maids are shunted into a special train that takes them to some far-off place on the Sealdah line and dumped in a station from where they have to walk back to their places of work, or walk back home.
I'll tell you Saira's story some other time, but this one's about Marufa's mother. She has six children, all girls. One died as a baby, apparently owing to anaemia. Marufa came as a small girl to work for our neighbour the Captain's family. She stayed in their home and did odd jobs other than providing company to the Captain's daughter. She also gave company to another full-timer in the Captain's household, a once-married young woman named Sujan who, when she's mad with the Captain's wife, screeches out her petulance in a very rapid Bengali dialect that I don't understand at all. After a couple of years of working for the Captain, Marufa's mother sent her back to the village to live with her own mother.
Marufa's mother sent her eldest daughter Afreen to work in Mumbai. Her employers happened to be relatives of the Captain, so Marufa's mother sent her out with a somewhat easy mind. However, nowadays one just can't tell with one's health ~ the young girl was diagnosed with diabetes. Sadder still is the case of Afreen's younger sister Sadia. It seems a moulana from Hyderabad was visiting Marufa's village to preside over the wedding of one of their neighbours. He took pity on the family of females offered to take Sadia to Hyderabad to work as a domestic at an acquaintance's home. Marufa's mother parted with her daughter with a heavy heart. One day, while she was swabbing the floor, Sadia's stomach starting aching. After a while she began writhing on the floor and foaming at the mouth. They rushed her to the hospital, but it was too late. The young girl died in the prime of her youth.
Marufa's mother sent her next daughter Noori to work for a family at Park Circus. This family squabbles all the time, giving Noori a hard time. It seems that groceries are perpetually in short supply in the house, even though the son purchases groceries regularly. One day, he caught his wife passing the groceries to her mother, and that was the beginning of interminable arguments in the household. Noori continues to endure the situation, because at least here she's got a roof over her head, food, and a regular salary.
The Captain's sister-in-law is a very kind lady and does a lot of charity. She decided to take the fifth daughter Mumtaz under her wing. So she contacted a residential school and got her admitted in it. Apparently, Mumtaz is doing well, and among all of her sisters, she may well turn out to be the one with an education. I believe the Captain's sister-in-law is trying to bring up the last of the six siblings, Ayesha, in the same way, but she says it's difficult.
It's not that Marufa's mother is alone in her suffering ~ there are millions of such parents in India. What's despairing is that very few of them can dare to hope for a difference.

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THE STATESMAN

PERSPECTIVE

PUT FINANCE TO WORK FOR THE REAL ECONOMY

ANDREW SHENG

Finance is a service industry, but in the past three decades it seems to have gone its own way. The functions of the finance sector are to protect property rights for the real sector, improve resource allocation, reduce transaction costs, help manage risks and help discipline borrowers. Financial intermediaries are agents of the real sector. Bankers were traditionally among the most trusted members of the community because they looked after other peoples' money.

The divide between bankers and their customers (the real sector) is epitomised by a recent report which said that the mantra of a large British bank is about "increasing share of wallet of existing customers". It recalls Woody Allen's joke that the job of his stockbroker was to manage his money until it was all gone. And despite what bankers say, a lot more would have gone between 2007 and 2009 without massive bailouts from the public purse.

The heart of the problem is the principal-agent relationship, where trust is everything. The real sector ("the principal") trusts the finance sector to manage its savings and the banks, as agents, have a fiduciary duty to their customers. Agency business is a big public utility because the intermediary does not take risks, which are those of his customers. All this changed when the drive for short-term profits pushed banks more and more into proprietary trading for their own profits. All this was in the name of capital efficiency, a misnomer for increasing leverage.

In the past 30 years, with growth in technology and financial innovation, finance morphed from a service agent to a self-serving principal that is larger than the real sector itself. The total size of financial assets (stock market capitalisation, debt market outstanding and bank assets, excluding derivatives) has grown dramatically from 108 per cent of global GDP in 1980 to over 400 per cent by 2009. If the notional value of all derivative contracts were included, finance would be roughly 16 times the size of the global real sector, as measured by GDP. The agent now dwarfs the real sector in economic and, some say, political power.

Can finance be a perpetual profit machine that makes more money than the real sector? In the USA, finance's share of total corporate profits grew from 10 per cent in the early 1980s to 40 per cent in 2006. Since wages and bonuses make up between 30 to 70 per cent of financial sector costs, there are tremendous incentives to generate short-term profits at higher risks, particularly through leverage.

The key thrusts of the post-crisis reforms in the financial sector are: caps on leverage, strengthened capital and liquidity, more transparency in linking remuneration with risks, and a macro-prudential and counter-cyclical approach to systemic risks. What the current reforms have not addressed is the increasing concentration of the finance industry at the global level and increasing political power that may sow the seeds for another Too Big to Fail (TBTF) failure in the next crisis.

In 2008, the 25 largest banks in the world accounted for US$44.7 trillion in assets ~ equivalent to 73 per cent of global GDP and 42.7 per cent of total global banking assets. In 1990, none of the top 25 banks had total assets larger than their "'home"' GDP. By 2008, there were seven, with more than half of the 25 banks having assets larger than 50 per cent of their "home" GDP. Post-crisis, the concentration level has increased as there were mergers with failed institutions. With this rate of growth and concentration, the largest global financial institutions simply outgrew the ability of their host nations and the global regulatory structure to underwrite and supervise them. Such concentration of wealth and power is a political issue, not a regulatory one.
Finance is not independent of the real sector, but interdependent upon the real sector. It is a pivotal amplifier of the underlying weaknesses in the real sector that led to the financial crisis ~ over-consumption, over-leverage and bad governance. In the past 30 years, the finance sector has helped print money, encouraging its customers and itself (particularly through shadow banking) to take on more leverage in the search for yield. Instead of exercising discipline over borrowers and investors, it did not exercise discipline over its own leverage and risks. Unfortunately, there was also supervisory failure. To bail out the financial sector from its own mistakes, advanced countries, already burdened by rising welfare expenses, have doubled their fiscal deficits to more than 100 per cent of GDP.

In spite of these trends, we should not demonise finance or blame the regulators, but examine the real structural and systemic issues facing the world and how should finance respond.

The greatest opportunity for finance is the rise of the emerging markets. An additional one billion in the working population and middle class over the next two-to-three decades will have more to spend and more to invest. At the same time, the world needs to address the massive stress on natural resources arising from new consumption, which is likely to be three times of current levels. Ecologically, financially and politically, the present model of overconsumption funded by over-concentrated leverage is unsustainable.

Indeed, to replicate the existing unsustainable financial model in the emerging markets may invite a bigger global crisis. Sustainable finance hinges on sustainable business and on a more inclusive, greener, sustainable environment. Financial leaders need to address a world where consumption and investment will fundamentally change.

EDITORIAL SAMARTH

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Thursday, September 1, 2011

EDITORIAL 01.09.11