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COVER STORY

03-03-2000

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Briefing

THE ROCKY ROAD TO REFORMS II

After a decade dominated by the neo-liberal philosophy of economic reforms, the headlong plunge towards "Reforms Phase II" presages a period of growing political contention, acrimony and weakening solidarity between the States and the Centre.

THE dire warnings started coming a whole month before the presentation of the Union Budget, providing a stark contrast to otherwise upbeat claims that the country was firmly embarked upon a second phase of economic reforms that would consolidate on the g ains of the first.

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Finance Minister Yashwant Sinha sounded a note of buoyancy at the annual World Economic Forum meeting in Davos, Switzerland. There was no question now of either restraining or reversing the tide, he declared. And the Government would underline its irrevo cable commitment to the reform process by unfettering in the near future foreign investment in all but a handful of sectors.

Yashwant Sinha's announcement was not received very well in political circles, which thought it inappropriate for a Finance Minister to make a statement of this nature before a foreign audience when budgetary exercises are at an advanced stage. And short ly after arriving back in India and beginning to grapple with domestic economic realities, the Finance Minister seemed to revert to his usual sombre mood. The country had gone on for too long with easy options, he has repeatedly said in the past few week s. And these years of profligacy have taken a cumulative toll that the economy cannot bear any longer. There are now no options left but the hard ones, and the country would need to receive with appropriate impassivity and tolerance the bitter economic m edicines he is about to administer. Presumably speaking on behalf of the entire country, Yashwant Sinha said: "We are determined to bite the bullet. There are no soft options. What is left are only the hard options. Come February 29, we will spell them o ut."

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In assuming that his determination will be shared across the political spectrum, the Minister may well have taken too much for granted. But the reasons for his gloom are evident. After a succession of seeming virtuoso performances by his two predecessors as Finance Minister, Yashwant Sinha's own two budgets have been rather pedestrian in terms of their conception and execution. The Union Budgets presented in 1998 and 1999 won adverse notice in comparison to P. Chidambaram's exercise of 1997, which had b een effusively described by partisans of liberalisation as the "budget of the century".

Chidambaram had seemingly signalled the end of "zero-sum" economics. His budgetary calculations boldly challenged the notion that to improve the government's fiscal position, it was necessary to make certain sections worse off through taxation. In his fi ve budgets starting 1991, Manmohan Singh seemed to flirt with this idea, though he could not quite bring himself to embrace the gospel of supply-side economics with the alacrity of his successor.

Manmohan Singh had good reason to hesitate. His five budgets had failed to substantiate the fundamental axiom of supply-side economics that rather than curtail revenue, cuts in tax rates engender enhanced receipts for the government through heightened ec onomic activity. And Chidambaram's own experience was to prove chastening.

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Far from increasing, Central government revenues stagnated in nominal terms in 1997-98, indicating an absolute decline after adjusting for inflation. From a figure of 7.28 per cent of gross domestic product (GDP), the Centre's tax revenues fell to 6.91 p er cent. And the deficit on the current account of government (that is, the difference between total revenue and all current expenses) rose from 1.77 per cent of GDP to 2.52 per cent.

Substance had clearly been overwhelmed by artifice in the 1997-98 Budget, a crucial point of inflexion in the career of India's economic reforms. Put to the acid test, the fundamental axioms of the reforms process had come a cropper. Yashwant Sinha has s ince then been engaged in a dour exercise of staunching the flow of red ink that threatens to engulf government finances. Torn between an ideological commitment to the reforms and a pragmatic need to maintain solvency in government accounts, he has had f ew real options.

"Surcharge Sinha" was the unflattering epithet bestowed upon the Finance Minister after his 1999 Budget. The reasons were fairly clear. If Chidambaram represented the triumph of wishful thinking over substance, Yashwant Sinha in 1999 epitomised the virtu es of empty rhetoric. A large part of his budget speech had little to do with the actual details of fiscal policy. He made several verbal concessions to the need for a strong fiscal stimulus for the economy, but failed to back these up with any specific budgetary allocations. He emphasised more than once that he had no intention of departing from the trend of dwindling tax rates that his two predecessors in office had set. But apart from a rather indifferent effort to rationalise excise and customs duti es by reducing the number of applicable rates and reclassifying the various commodities, he sought to achieve very little.

Yashwant Sinha's key innovation was in levying a number of surcharges on excise and customs duties, effectively negating the loud assurances of stable tax rates that he had himself held out. Thus, after announcing all his measures of rationalising custom s duties, he slipped in a 10 per cent surcharge on all but a few commodities. And in another amazing pirouette, he first announced that the number of applicable excise rates would be reduced from 11 to three, and then imposed a number of surcharges that all but restored the number of rates to where it was earlier.

And with all these contortions, the results have been bleak. This admission was made by the Finance Minister in the course of a recent address to the All-India Conference of Corporate Managers and Tax Executives. The fiscal situation may compel the gover nment to reverse some of the tax exemptions and concessions in the coming Budget, he warned. Among other things, this meant that the surcharges introduced ostensibly as stop-gap measures would be maintained into the foreseeable future and perhaps integra ted into the basic tax rates.

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If that was the forecast, another of Yashwant Sinha's statements cast a retrospective - and somewhat regretful - eye over the entire track record of economic reforms initiated in 1991. Had the ratio of tax revenues to GDP prevalent in 1989-90 been mainta ined, he claimed, the Government would not be confronting the kind of revenue and fiscal deficits that it was today being compelled to grapple with. In fact, the ratio today was so adverse that his overriding objective in formulating his taxation proposa ls was to ensure that there was no further deterioration.

The record here is again fairly clear. In 1989-90, the Centre's gross tax revenues as a percentage of GDP stood at 9 per cent. In a decade dominated by the neo-liberal philosophy of economic reforms, the revenue situation has deteriorated alarmingly, wit h no mitigating gains on the expenditure side. No more effective comment is necessary on the founding premises of the first phase of reforms.

Crucial bridging manoeuvres devised to lessen the severity of the revenue shortfall have proven dismal failures. Disinvestment of public sector equity was budgeted this year to net an unprecedented Rs.10,000 crores for the government. The inflow so far i s only Rs.1,000 crores - almost entirely from the sale of shares in Gas Authority of India Limited and a limited volume of retail sales in Videsh Sanchar Nigam Limited. To these must be added the Rs.105 crores that were received from the sale of the gove rnment's stake in Modern Food Industries Limited to the private sector giant, Hindustan Lever Limited.

Even if the government were to put into effect its controversial plans to privatise rapidly some of the most high-profile public sector corporations - such as Indian Airlines - there is little likelihood that the yawning revenue shortfall will be anywher e near bridged. Estimates made for the first three quarters of 1999-2000 show that both direct and indirect tax receipts are running well below target. For instance, a revenue increase of over 18 per cent has been assumed in budgetary calculations on the direct taxes front. The figures available till December 1999 show a shortfall of over 5 percentage points.

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IT is important in this context to identify the precise sources of inspiration for the freshly minted phrase of "Reforms Phase II". In the light of the experience over the last decade, the phrase is little else than a transparent admission that the entir e course of reforms has run into a cul de sac. To avoid the consequences of this chastening realisation, the government will have to move recklessly into a phase of economic policy that does away with all residual controls on foreign capital. Conf ronted with a virtual investment famine in vital infrastructure sectors, it would have to open these up for private investment - from both overseas and domestic sources - with all the attendant risks of severe imbalances emerging between regions and sect ors.

The last week of January brought two major changes in the policy governing the inflow of foreign capital. First, the government removed all restrictions on Indian companies seeking to issue American Depository Receipts (ADRs) and Global Depository Receip ts (GDRs), whether through private placement or otherwise. These are financial instruments that have of late been in favour with some of the more profitable Indian firms seeking to broaden their capital base. In the aggregate, though, the impact has been marginal. To permit an even larger number of companies to issue global equity without prior scrutiny may in this sense be no more than a symbolic gesture.

The second measure taken could lead to a degree of buoyancy in the stock markets - on February 11, a bull frenzy pushed the Bombay Stock Exchange Sensitive Index past the 6000-point barrier - though again the long-term implications remain unclear. On Jan uary 25, the government gave its assent to the proposal by the Securities and Exchange Board of India (SEBI) to permit overseas corporate entities and individuals with a high net worth to invest directly in the Indian capital markets. The aggregate 24 pe r cent ceiling on equity would remain in effect though.

Despite their seeming isolation from a broad enunciation of policy or principle, these two moves provide crucial indications of the philosophy underlying Phase II of the reforms. More than ever before, foreign capital and the stock markets are going to b e the dominant motifs in policy formulation. And if the evidence of Phase I is anything to go by, the implications for the languishing infrastructure sectors are likely to be dismal.

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THE story of the Indian economy today is one of a low equilibrium trap. A relative dimunition of revenue collections, mounting expenditure commitments and an obsessive concern with trimming the fiscal deficit, even at the risk of making deep cuts in vita l capital investment, have plunged the economy into a state of chronic recession. Isolated instances of growth in certain sectors - notably information technology - do not alter the picture of an economy devoid of growth momentum on account of an investm ent famine. The flagging momentum is most evident in the infrastructure sectors, which private investment generally remains wary about entering.

The World Bank has identified the gradual supplanting of public investment by the private sector as the key structural transformation that the Indian economy has undergone in the 1990s. By this criterion, the turning point was 1995-96, when for the first time gross fixed capital formation in the private sector exceeded that in the public sector. Evidently, though, the spread of investment has remained skewed towards sectors without any great growth or public welfare implications. The most recent summary assessment of India's performance by the World Bank observes that despite the progress on the policy front, "the injection of private capital in key infrastructure subsectors has been slower than anticipated, and so have results. Few investments have be en brought to closure under the new national policies."

The antidote in the World Bank framework would lie in empowering "regulatory authorities" in all these sectors to promote efficient private sector participation. This is a blueprint that has been partly implemented in vital sectors such as telecommunicat ions, electricity and insurance, with ambiguous results so far. But few people seem to doubt that the long-term consequences would include a sharp increase in the price at which these services are provided. Just as reforms Phase I caused a radical shift in price parities between sectors, differentially affecting primary products, including foodgrain, Phase II could put basic services well beyond the reach of the lower income groups.

Increasingly it is clear that the fiscal crisis at the central level has percolated down and aggravated matters in the States. Grants to States and Union Territories from Central revenues have declined sharply in relative terms since the reforms process began. This has forced many States to cut back sharply on vital expenditure commitments, including in the sectors of health, education and social welfare.

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Where phrase-mongering flourishes, there is reason to believe that ideas of any worth have been all but extinguished. The headlong plunge towards "Reforms Phase II" presages a period of growing political contention, acrimony and weakening solidarity betw een the States and the Centre. And since the government and the main Opposition have discovered an identity of interests in hastening the country along this path, the challenge would have to come from elsewhere.

A critical stage

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What is at issue is not a new 'generation' of reforms, but the pursuit of a path that allows profligate use of foreign exchange with little concern about the costs of pursuing that path.

C.P. CHANDRASEKHAR

IF official spokesmen are to believed, the Atal Behari Vajpayee Government is busy putting in place a new generation of economic reforms. The coming Budget too, it is expected, will push ahead with what has been termed "second generation reform". And suc h expectations have been fuelled by a series of liberalisation measures announced in recent weeks.

The emphasis on a generational difference when speaking of the current reform effort is, however, not easy to comprehend. It seems to suggest that what is being implemented by the Central Government is not just more of the same set of policies adopted du ring much of the 1990s, but a qualitatively new set.

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The evidence to support that view is, however, hard to find. It is indeed true that among the economic "achievements" of this government during its "first 100 days" are counted its ability to pass, or revive discussion on, a set of economic bills. These include legislation to open up the insurance sector to private entities, which has been passed, and the revised Patents Act, which has been referred to a parliamentary select committee. However, the matters dealt with in these bills are by no means new. They have been periodically raised throughout the reform process and had to be shelved in the face of controversy. In fact, in some cases such as the revision of the Patents Act, efforts by the earlier Congress(I) government to push ahead with reform whe re stalled in part by the Bharatiya Janata Party itself.

The second area of "progress" in the current reform effort is the widening and intensification of trade liberalisation, by reducing quantitative restrictions (QRs) and reducing tariffs. In this area, there are two forms in which the reform is sought to b e "advanced": first, through the inclusion of a range of consumer goods in the list of freely importable goods; and second, through sharp reductions in customs tariffs. Tariff reduction has been effected in almost every Budget since 1991. And the liberal isation of consumer goods imports began in right earnest in the Exim Policy announced last year by the then Commerce Minister, Ramakrishna Hegde. Thus, the decision of the Vajpayee Government to succumb to U.S. pressure and advance the date (set by World Trade Organisation commitments) by which a range of quantitative restrictions are to be phased out, merely accelerates a process which has been under way for some time.

The third area of advance relates to regulations with regard to foreign direct investment (FDI). The number of areas where automatic approval is accorded to foreign investments, virtually independent of the share of foreign equity holding in the enterpri se concerned has been expanded so substantially, that the Foreign Investment Promotion Board (FIPB) has been reduced to a state of near non-existence.

Early in February, the Government increased the ceiling on FDI through the automatic route in eight sectors. These sectors, where ceilings have been enhanced by margins ranging from 23 to 100 per cent, are drugs and pharmaceuticals (revised ceiling of 74 per cent), pollution control machinery (100 per cent), coal and lignite (50 per cent) for operating power plant, mining and coal processing, tourism (51 per cent), mining (74 per cent), prospecting for gold and diamond (100 per cent), advertising (74 pe r cent) and film industry (100 per cent from zero per cent).

This, declared Industries Minister Murasoli Maran, was only a beginning. While this does constitute a significant shift in the attitude towards foreign investment, here again the trend towards greater and greater liberalisation of conditions and terms of entry, in pursuit of a $10 billion FDI target, has been visible for quite some time now.

Finally, recent weeks have seen a spate of measures aimed at liberalising financial sector controls. Not merely are the terms of profit repatriation by foreign entities in India being eased, but domestic corporates are now allowed to access freely equity capital from abroad, with no clearance required for the issue of ADRs and GDRs, as well as access international credit in larger volumes through a substantial relaxation of External Commercial Borrowing (ECB) guidelines. Now all end-use restrictions on the use of foreign loans, except for investment in real estate and the capital markets, have been removed. Further, companies are allowed to borrow up to $200 million to finance their equity investments in subsidiaries or joint ventures executing infrast ructure projects. And the ceiling on foreign exchange exposure to finance project costs in the insurance and export sectors have been raised from 30 per cent to 50 and 60 per cent respectively. Clearly, the earlier policy of permitting less restricted ac cess to international capital is being replaced by one of which opens the floodgates to foreign portfolio capital and credit inflow.

YET, put together these initiatives merely imply a change in the pace and extent of reform rather than a change in the direction of reform influenced by advice from the Bretton Woods twins. They could constitute a qualitatively new phase of reforms only inasmuch as it can be argued that quantitative changes result at some critical point in a qualitatively new economic environment.

There are, however, grounds to hold that such a critical stage has been reached. The first of these stems from the growing evidence that it is not just small and medium-sized domestic firms that are endangered by liberalisation, but large ones as well. T hrough takeovers of Indian firms, buy-outs of joint venture partners and a growing trend for international firms involved in joint ventures to establish wholly-owned subsidiaries, making use of the more liberalised dispensation, domestic big business is beginning to feel the heat of multinational competition. Second, with import liberalisation having reached critical levels, domestic industrial and agricultural producers are being devastated by international competition. This has resulted in a situation where not only is the government forced to impose relatively high duties on commodities such wheat and sugar, but even foreign automobile companies in India have begun to whine about the dangers of freeing imports of second-hand cars, for example.

But above all, a combination of import liberalisation, liberalisation of FDI rules and relaxation of controls on domestic private entities accessing international finance, has created a situation where the use of foreign exchange has been delinked from a ny responsibility to earn the foreign exchange to meet the costs of relying on foreign funds. The foreign exchange required to finance indiscriminate imports, service interest payments and amortisation costs on debt, and pay technical fees, royalties and dividends associated with FDI are to be drawn from the Central pool. Yet there are no measures to ensure that those drawing on that pool contribute to it as well.

Even foreign investors, who are being permitted better repatriation terms, are targeting the domestic rather than the export market. This reduces their contribution to the foreign exchange pool to the initial sum they bring in as investment, which, given time, falls short of the continuous outflows of foreign exchange associated with their operations in the country.

Thus far similar liberalisation efforts have not proved to be a problem since low oil prices and large inflows of remittances from Indian workers abroad (amounting to $10-12 billion annually) have helped shore up balance of payments and translate capital inflows into accumulated reserves. But with oil prices hardening and domestic foreign exchange demands increasing substantially in the wake of the new round of liberalisation, it is likely that autonomous inflows of foreign exchange could prove inadequa te to meet foreign exchange demands. India's external vulnerability, reduced because of a set of "unanticipated" benefits, is now once again on the rise, increasing the possibility of a financial crisis of the South-East Asian kind.

Thus, the qualitative change in the economic environment arises not because of new directions in reform, but because the rapid acceleration of the same old reform process is qualitatively changing the external environment facing the country. What is at i ssue is not a new "generation" of reforms, but the blind pursuit of a path that allows profligate use of foreign exchange with little concern for earning the wherewithal needed to meet the costs of pursuing that path.

Does this mean that a generational shift in the reform process is unlikely? It does not. One way in which such a shift is likely to occur is through a movement of the reform process from the Centre to the States. In India's quasi-federal system, there is a host of economic decisions that are made or implemented at the State level. The process of economic "reform" or liberalisation affects the States of the Indian Union in manifold ways. First, since reform has as its principal focus the liberalisation o f trade, exposure to competition from abroad can adversely affect economic activities that are of importance to or are even the mainstay of individual States. For example, the liberalisation of the edible oil trade and the trade in primary commodities ha s, in the recent period when international commodity prices have been on the decline, had damaging consequences on the incomes and livelihoods of sections in Kerala engaged in the production of a range of primary products.

Second, the process of fiscal adjustment at the Centre has involved reductions in per unit food subsidies and substantial cuts or stagnation in social and capital expenditures, resulting in inadequate social sector services and virtually no progress on t he poverty alleviation front. Most often it is the government at the State level that has had to deal with the likely social consequences of these developments, reducing their manoeuvrability.

Finally, with the recent reductions in interest rates on small savings instruments such as the Public Provident Fund, it is likely that small savings collections, much of which goes to the States, would fall. In addition, the direct tax and excise duty c oncessions that have accompanied reform have eroded the States' share in Central taxes. This together with the refusal, till recently, of the Centre to implement the new tax devolution principle (wherein 29 per cent of all tax revenues are transferred to the States) recommended by the Tenth Finance Commission, and accepted by the National Development Council meeting in July 1997, has involved a loss of revenues estimated at over Rs.4,000 crores a year for the States.

In a partial response to this situation, and under pressure from allies in the National Democratic Alliance, the government has decided to implement the revised revenue sharing formula recommended by the Finance Commission and approved by the National De velopment Council. But by choosing to apply the 29 per cent share principle to net rather than gross tax receipts, the Centre has retained almost 50 per cent of the States' dues. This implies that despite the recent announcement, the fiscal problems face d by the States would persist.

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There is enough evidence world-wide that a fiscal crunch, attributed to fiscal mismanagement, provides the basis for pressure to launch on economic reforms. In India, without revealing the actual processes by which the fiscal crunch at the State level ha s been generated and without examining its relation to reform at the Central level, the fiscal problems of the States have been attributed to fiscal mismanagement. In particular, the losses sustained by public sector corporations, State electricity board s and the inadequate recovery of costs by departments providing irrigation, health and primary education, have provided the basis for explaining the fiscal crunch in full.

This has led to a wholly new way in which the wave of reform has begun to affect the States. In some cases, individual States have turned to organisations like the World Bank for sectoral lending and have in return been required to adopt a more comprehen sive reform programme, involving above all else an across-the-board increase in user charges for public services, in order to restore fiscal health and build the capacity to meet the future repayment commitments associated with large-scale sectoral lendi ng. What therefore starts as a sectoral borrowing programme ends up being a larger State-level structural adjustment programme involving major restructuring of State finances.

The response of individual States to this situation has varied. Some have gone ahead with the reform programme, as in the case of Andhra Pradesh. Others have gone part of the way or, as in the case of West Bengal, have resisted intervention by the Bretto n Woods institutions. However, the protagonists of reform insist that an important component of "second generation reform" has to be Bretton Woods-style reform at the State level.

The implications of this for the cost of living in individual States, after they implement tariff hikes for public services, and for social expenditures, are obviously adverse. It is for this reason that many States are wary of treading the reform path. But if the fiscal squeeze on the States persists, many of them may be forced to accept far-reaching "reforms". In that event, India would have definitely entered a whole new phase in the reform process. In all probability, it is the effort to force such an outcome on the States that explains the hype surrounding what are being ambiguously termed "second generation reforms".

The development outlay disaster

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PRABHAT PATNAIK

THE decade of the 1990s, about which there has been so much hype, was actually nothing short of an economic development disaster for India, when the real per capita consumption expenditure in rural India went down in absolute terms. The figure (at 1987-8 8 prices), which stood at Rs.164 in 1991, according to the National Sample Survey (NSS), was lower in every subsequent year of the decade, except 1997 when it came up to Rs.167; in 1998 it was Rs.153. It is not surprising that the headcount ratio of pove rty for rural India showed an increase during the decade, reversing the declining trend of the 1980s. Such an increase in rural poverty in a country where rural poverty is already both massive and abysmal cannot but be called a disaster.

An important factor underlying this disaster was undoubtedly the sharp decline, relative to gross domestic product (GDP), in the development expenditure of the government. It is fashionable to decry government development expenditure as a "set of populis t gimmicks" and to point to the large "leakages" that occur from such expenditure as it makes its way towards its ostensible target. But the fact remains that there is an unmistakable correlation between government development expenditure and the magnitu de of rural poverty. Such expenditure, notwithstanding all "leakages", puts some purchasing power, directly or indirectly, into the hands of the rural poor; it does so inter alia by generating (again directly or indirectly) non-agricultural employ ment in rural areas. A curtailment in this expenditure both curtails the pace of (or even reverses) occupational diversification, and exacerbates poverty in the countryside. This is precisely what happened in the 1990s.

The reason for the relative decline in government development expenditure is not far to seek. From whatever data are available, it appears that during the 1990s the share of total government revenue in GDP (taking the Centre, the States and the Union Ter ritories together) has not declined; the share of tax revenue has declined slightly but this has been offset by an increase in the share of non-tax revenue (including the surpluses of the much-maligned public sector enterprises). The share of total gover nment outlay, however, has declined, since gross fiscal deficit as a proportion of GDP has been curtailed. In addition there has been a change in the composition of this outlay, where non-development outlay (including, in particular, interest payments by the government) has increased at the expense of development outlay. Now, the cut in the share of tax revenue, the curtailment in the share of fiscal deficit and the maintenance of a high interest rate regime are all associated with the process of econom ic "liberalisation".

Once the economy adopts a more liberal trade regime, customs revenue, and hence by implication the overall indirect tax revenue, tends to fall relative to GDP. (It may be thought that cuts in customs duties could be offset by increases in e xcise duties, but this would be pushing the economy quite gratuitously into de-industrialisation). Once the economy opens itself up for capital flows, then (even in the absence of full convertibility of the currency) it has to worry about the "confidence of foreign investors", and in order to boost such "confidence" keep interest rates high and the fiscal deficit low. In short, all the factors underlying the economic development disaster of the 1990s are associated with the policy of "liberalisation". T he disaster, in other words, is a direct fallout of this policy.

The usual justification advanced for "liberal policies" is that by attracting foreign investment they would lead to a faster rate of growth in the economy. The example of China is often invoked in support of this claim. Such invoking is not legitimate, s ince China's existing economic regime can by no stretch of imagination be called "liberal" in our sense; but let us leave this issue aside for the moment. There can scarcely be any dispute over the fact that China's phenomenal growth record is associated with its high investment ratios. It follows then that if "liberalisation" were to achieve higher growth a la China, it should be raising investment ratios here to start with. What is remarkable about the 1990s, however, is that the investment ratio has not shown an increasing trend; what is more, the ratio of gross capital formation to GDP has been lower in every year during the decade compared to the level attained in 1990-91. While the 1990-91 figure was 27.7 per cent, the figure for 19 97-98 has been 26.2 per cent and for 1998-99 a paltry 23.4 percent. Thus, the economic development disaster of the 1990s has not even had a silver lining by way of an increased investment ratio that could put the economy on a higher growth trajectory.

It is shocking in this context that the Finance Minister should say that "the overall economic situation in the country was healthy" (The Hindu, February 13). But if his perception is flawed insofar as he ignores poverty, his prescription is inade quate insofar as he talks of tackling poverty. At the same meeting (of the Parliamentary Consultative Committee attached to the Ministry of Finance) he reportedly said that "the country had to work towards a growth rate of 7 per cent to eradicate poverty in the next 10 years." Between 1993-94 and 1998-99, as per the statistics provided by the Central Statistical Organisation (CSO), the country has already achieved a growth rate in excess of 7 per cent; in fact the growth rates for these five years were 7.8, 7.6, 7.8, 5.0, and 6.8 per cent respectively. Yet, at the end of these five years, rural poverty is perhaps higher than what it was at any time during the decade. To believe that five more such years would eradicate poverty betrays naivete.

Poverty does not get eradicated merely through higher growth. What is important in this context is the nature of that growth, in particular the extent to which growth is employment-augmenting, since it is the using up of labour reserves that is critical for poverty eradication. By the same token, however, an attack on poverty can be made directly through employment-generating schemes, which have nothing to do with growth per se but which, if properly devised, can stimulate growth through capital formation in the countryside. In other words, instead of making higher growth the primary objective and hoping that poverty eradication would become a mere fallout of it, policy in India can and should aim at making poverty eradication the primary object ive and obtaining higher growth its fallout.

Fortunately, the conditions at present are favourable for a major thrust in this direction. The 1990s have also made the economy demand-constrained, that is, saddled it with unutilised industrial capacity and unsold foodgrain stocks owing to lack of suff icient demand; indeed the growing poverty and the inadequacy of aggregate demand represent two sides of the same coin. But this very fact, which has been a problem until now, can be converted into an opportunity if the government is willing to take a bol d policy initiative by stepping out of the theoretical straitjacket provided by the Bretton Woods institutions.

At the moment there are more than 32 million tonnes of foodgrain stocks with the Food Corporation of India (FCI). This is 12 million tonnes more than the stocks that the government considers necessary for this time of the year. These 12 million tonnes of surplus stocks imply not only enlarged indebtedness for the FCI but also additional interest payments over and above what the FCI would have incurred for holding its "normal" stocks. These stocks exist owing to inadequate demand for foodgrains in the pu blic distribution system (PDS), which in turn means that at the prevailing issue prices of foodgrains distributed through the PDS, the purchasing power of the rural poor is insufficient to lift these stocks. The situation therefore offers an ideal an opp ortunity to launch a major anti-poverty initiative by providing purchasing power to the rural poor.

Such an initiative, apart from effecting poverty reduction and bringing down surplus stocks, could, if properly conceived, result in substantial and useful capital formation in the countryside, in the forms of rural infrastructure, school buildings, and so on. It could even be combined with a programme for universalising primary education, since several of the infrastructural requirements of such a programme could be covered through the anti-poverty initiative. Moreover, as the foodgrain distribution ac companying the increased purchasing power injected through such an anti-poverty initiative would have to be done through the PDS, in large parts of North India, where the PDS is virtually absent, this would also provide an opportunity to instal or revamp the PDS itself. Since State governments that would neglect this task would fall behind in the implementation of the anti-poverty initiative and hence court political unpopularity, there would be some pressure on them to instal a reasonable PDS.

Two additional considerations favour such an initiative. First, the foreign exchange requirement of such an initiative would be virtually negligible, so that no extra pressures on the country's balance of payments would emerge as a consequence of it. Thi s contrasts with virtually any other way of stimulating the level of economic activity in the country. Secondly, since large sectors of industry are in recession still, the complementary industrial products that would be required if such an employment-ge neration programme is undertaken can be easily provided; what is more, the demand for such products would help industry to come out of the recession and hence stimulate the generation of second-round employment.

A major employment-generation programme can be one important component of the Budget. In addition, however, there is a need to revive of public investment, particularly in the area of infrastructure. If the financial resources for such an increase in pub lic investment are raised through direct taxes on the rich, so much the better. But even if the government is unwilling to raise larger tax revenue, given the fact that unutilised capacity exists in a host of public sector units producing equipment and c apital goods, it should still go in for increased public investment, financed, if necessary, through a larger fiscal deficit. As long as the deficit-financed public investment expenditure flows back to the public sector units, it cannot conceivably have any adverse consequences for the economy. No doubt, international speculators might get jittery in such a situation. But the Indian economy mercifully is not yet fully "liberalised"; sufficient instruments of control are still available to the government to deal with any adverse consequences of such nervousness. Besides, it is dangerous for the country if the government allows investors' jitteriness to come in the way of preventing an economic development disaster.

Prabhat Patnaik is Professor of Economics at the Jawaharlal Nehru University, Delhi.

Exchanging shadow for substance

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The ongoing financial sector reforms are making the economy vulnerable and volatile; they must be deemed to be against the interests of the long-term stability and development of the country.

ARUN GHOSH

ONE of the important segments of economic reform in India during the 1990s pertains to the financial sector; and these reforms are described succinctly in the Reserve Bank of India's Report of Currency and Finance for 1998-99. The process of fina ncial sector reforms has two aspects: first, reforms pertaining to the domestic capital and financial markets; and second, the progressive integration of the Indian capital and financial markets with global capital and financial markets. The RBI is expec tedly upbeat about all financial sector reforms; and, indeed, one must accept that some aspects of reform were long overdue. Yet, grave doubts arise in respect of several aspects of the reforms initiated, which lead to a wholly "market-led" patter n of economic development, and also tend to integrate the Indian financial market with the international financial system.

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The positive aspects, briefly, concern both the deepening of these markets and the focus on transparency and accountability, resulting in an increase in the reliability of these markets from the point of view of household savers in India. These are posit ive aspects of the reforms initiated. The positive role played by the Securities and Exchange Board of India (SEBI) in regard to certain norms for new issues (seeking to restore investor confidence); or, in the area of banking, the introduction of new no rms of 'capital adequacy' are obvious examples. There are others. This brief essay will not go into the positive aspects of financial sector reform in India during the 1990s. The focus here is on certain ill-advised (and premature) reforms which pose a s erious threat to the long-term development and, indeed, even the stability of the Indian economy, which is now being made increasingly vulnerable to the speculative ups and downs in the international financial markets.

The major threat to India's long-term development - through some part of the extant reforms - appears to stem from external pressure. Take the problem of the 'direction' of investments to infrastructure build-up and other high-priority areas. Under the W orld Trade Organisation (WTO) regime, the Agreement on Trade Related Investment Measures (TRIMS) makes nonsense of any domestic 'priorities' of development. Since the free flow of investments in tune with market demand and supply are supposed to make for optimality of investments, the 'direction' of investments, to accord with any set of priorities, is ruled out. Yet, the thesis of market-driven investments making for the most desirable pattern of development is both incorrect in theory and proven wrong historically. Even in theory, the problem of 'externalities', the inequalities in the distribution of income and wealth do not make for an investment pattern in developing countries that would lead either to steadily improving labour productivity or to improved employment and incomes. Historically, it is easy to see that long-term flows of international capital do not occur in response to 'liberal' economic policies; indeed, even 'conditionalities' - or the absence thereof - do not influence capital fl ows to developing countries. The recent trends of capital flows to China - where all policies are generally opaque and all external investments are individually screened even to this day - against negligible or even zero flows of external capital to the least developed countries (which follow the most liberal and open policies) is ample evidence of what really makes for the inflow of external capital. The problem of 'externalities', the lack of infrastructure, the inadequacy of home demand in the host c ountries are enough to make potential investors shy away from countries with the most liberal trade and investment regime.

Two further problems - which are now obvious from recent Indian experience - must be noted here. The pattern of external capital flows - the 'herd instinct' of investors - is exemplified by the rush of dozens of new 'models' of automotive passenger vehic les in India of late, largely by way of c.k.d./s.k.d. (completely knocked down/semi-completely knocked down) components imported lately (many, to be merely assembled in India). This is, so it seems, an offshoot of the TRIMS Agreement under the WTO regime . Clearly, many of these would soon disappear; but that may not affect the foreign car-maker. To the extent that domestic capital is deployed for these new investments, such capital would be wasted. While the automotive industry is doubtless a spinner of employment and industrial growth, the diversion of scarce domestic savings for wasteful investments can only be to the detriment of long-term development.

To the extent that the above example indicates the switch from 'state-directed' investments to the 'market-led' pattern of growth, it exemplifies the essential problem highlighted earlier; and considering the fact that in the post-Second World War period , no country (which had earlier missed the bus in regard to industrialisation) has developed without positive state direction and support - including South Korea, Taiwan, Singapore - the ongoing financial sector reforms must be deemed to be against the i nterests of the long-term development of the country.

There is yet another, and a deeper, reason why the present reforms (pertaining to long-term investments) is misguided. According to a 1993 report of the Organisation for Economic Cooperation and Development, the profitability of investment has steadily g rown from around 12 per cent in the early 1980s to around 15 per cent in the early 1990s; more recent OECD documents indicate a continuing trend in profitability, to nearly 16 per cent by the mid-1990s. This development has occurred, surprisingly, in the background of generally low growth in all OECD countries (other than the United States), and a slowing down in the growth rate of world trade. Analysing the reasons for such a development, experts have pointed to the increasing possibilities of profit-t aking (by intrepid 'fund' managers) in the 'assets market'; typically, in the stock markets and foreign exchange markets, especially in the developing countries.

The problems herein are manifold. First, with the 'expectations' of profitability on the increase - even as the problem of 'externalities' leads to low returns on long-term investments - the focus on the need to attract external capital at any cost leads to obvious aberrations in investment priorities in developing countries (which have characterised the 'reforms' in India also). Profit 'guarantees' - at a minimum of 16 per cent, effectively 20 per cent or more - to foreign investors leads to high-cost equity inflows in sectors where the marginal productivity of capital is much lower than the (guaranteed) cost of the capital; and such capital inflow can be serviced only by squeezing the already low domestic savings, thereby imparting a setback rather t han a positive thrust to the development process. The Enron power project at Dabhol in Maharashtra vividly exemplifies this pernicious effect; already, Enron power, sold at generation site, is priced at Rs.5 per unit; and Maharashtra State Electricity Bo ard (MSEB) has to incur further costs for transmission and distribution, even as it has to forgo the use of cheaper Tata power, available at Rs.1.80 per unit to the MSEB; and the MSEB is forced to shut down its own thermal power generation, at Rs.1.20 pe r unit. (For carefully documented details in this context, Power Play by Abhay Mehta, Orient Longman, 2000.) Thus, the inflow of external capital with high profit guarantees is tantamount to 'borrowings' at very high cost; and apart from these guaranteed returns being more than three times the rate at which funds could be borrowed with sovereign guarantees, there is a strong possibility of the external equity being 'padded'. The equipment financed by external capital without 'global tender ing' has a strong suspicion of being unduly high priced and 'padded', so that effectively, the profits remitted are much higher than even the high returns 'guaranteed'. (The capital cost of a similar capacity power plant set up in Malaysia by the same fi rm of Enron, at around the same time, has turned out to be some 60 per cent of the Dabhol plant.) But the worst feature of this investment is the resultant enforced shutdown of the much cheaper existing thermal power plants of the MSEB, which effectively makes Enron power that much more expensive, and therefore totally ill-advised.

Second - and importantly - to the extent that the pattern of economic reform of the finance and capital markets in India tends to follow the trend of 'global' developments, it leads to two totally misguided types of development in the formulation of econ omic policy in India. First, the very notion that external capital must play an important part in developing the Indian economy - the figure of foreign direct investment (FDI) import considered necessary and feasible is $10 billion annually - means that all investment policies, including investment priorities, must be attuned to attracting external capital; and that implies, in turn, 'globalising' the Indian capital market, and making all investments in India patterned on the forces of international sup ply and demand. The fact that in order to get over the problem of 'externalities', the Government must invest in developing both the social and economic infrastructure - that the returns herein simply cannot meet the test of current discount rates , that in fact the future generations' welfare would only be thrown to the wolves at the current market discount rates - is forgotten. The focus being on 'market-led' development, the focus on even capital market developments is on making that market res pond to market sentiments. Hence the ill-advised attempt to integrate the long-term and short-term financial markets; to make the Industrial Development Bank of India (IDBI), the ICICI, the Housing Development Finance Corporation (HDFC) get in the market for short-term loans also. This is the OECD pattern; and what is good for the OECD must be good for India also. This is 'aping' without any heed to the specific needs of economies at different stages of economic development; this is tantamount to giving up even the pretence of planning for development (although, in order to dupe the people, the facade of a Planning Commission must be maintained at public cost).

It is the same mindset that leads to the opening up of the capital market in India to global flows; the opening up of the insurance sector, for example - involving the handing over of scarce domestic savings to foreign investors - is simply a part of thi s frenzy, on the specious ground of problematic (or perhaps, temporarily) providing 'better service' to a small upper middle class in India. Thus, this pattern of development in effect involves the scuttling of the worldwide pattern of 'state-directed' p riorities of development. And, interestingly, it puts paid to the Pachmarhi Resolution of the Congress(I), adopted after much soul-searching, following the electoral debacle in 1996, which took note of the fractured economy that had gradually evolved - a nd got accentuated as a result of the process of 'economic reforms' initiated in 1991.

BUT we must return to the other segment of the money and capital market, namely, the market for finance, without further elaborating on the above (long-term) problem concerning the capital market. Herein, the recent reforms - tending to globalise the fin ancial market in India with the world financial market - have grave dangers; for what we are doing is not merely distorting the priorities of investment, thereby delaying economic development; we are opening up the economy to all the dangers of volatile flows of short-term capital, to the 'herd instinct' of finance managers of large liquid funds, floating around the world.

Some of the 'financial sector' reforms - purporting to 'integrate' the Indian financial system with the global financial system (and developments therein) - are likely to increase only the volatility of India finance. Again, one must start by saying that some part of the reforms pertaining to the stock exchanges were overdue and were necessary. Yet, recent developments - as well as the recent focus - appear to be wrongly focussed; and, indeed, the present focus of the Indian policymakers (on the stock m arket developments, including the present, ongoing boom in stock prices) is ill-advised and wrongly directed.

Take but two examples: the extraordinary attention to introducing trade in 'derivatives', and the enormous effort to promote 'dematerialised' stock market transactions. For whose benefit, and for what purpose are they designed? These developments help only the professional speculator; and the deliberate encouragement (through all manner of means, including the steep reduction of capital gains tax to a nominal 10 per cent) to foreign institutional investors (FIIs) to invest in portfolio investment s is symptomatic of the effort to attract even 'short-term' external capital to India, in order to meet a fundamental, long-term disequilibrium in the current balance of payments caused by a mounting deficit in the trade balance.

The focus of not only the speculator but unfortunately even the policymaker appears to be on the growing 'market capitalisation' of the corporates listed on the stock exchanges. A speculative boom in the stock market is taken to reflect 'real progress'; and this incorrect (and unreal) approach started as far back as 1992 is unfortunately the focus even to this day. The fact that the 'market cap' of Wipro or Infosys exceeds Rs.2,00,000 crores is hailed as a sign that the Indian corporate sector - or at l east a major part of it - has already achieved such maturity as to warrant the integration of the entire corporate sector into the world financial system. More immediately, it does not obviously occur to anybody that at the current share price of either Wipro or Infosys, an investor buying shares in these companies can at best hope to make a capital gain (by selling while the share is on an upswing); long-term investment in these shares would fetch a return of perhaps less than one per cent.

Or again, as per the RBI Currency and Finance Report, by October 1999, FII investments in the Indian stock market (by way of portfolio shares) aggregated Rs.32,391 crores; and this is treated as a highly positive development. The fact remains that as of today, all bullish and bear market pressures on the stock markets are almost entirely driven by FII activity. And, even though FIIs can suddenly withdraw only at considerable cost (to them), by way of both depressed share values and a depreciated exchange rate, as the Asian currency fluctuations over 1996-98 have shown, such potential dangers are always present.

To take another related issue: what precisely does the increase in the 'turnover ratio' on the stock market, from 34.4 per cent in 1994-95 to 178.3 per cent in 1998-99, indicate? It indicates increased investor interest and activity only in the secondary market, especially when seen in the context of the steep decline in the new capital raised (from the primary market) by non-government public limited companies from Rs.26,417 crores in 1994-95 to Rs.3,138 crores in 1997-98, which increased only marginal ly to Rs.5,015 crores in 1998-99 and to Rs.2,438 crores during April-October 1999 (or an annual rate of Rs.4,180 crores this fiscal year).

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We are thus exchanging the shadow for the substance, erroneously treating a speculative boom in the 'secondary' market as a sign of strength, of development, even as primary market raisings of capital are declining steeply. One unfortunate effect of thes e developments is that an increasingly larger part of household savings is now deployed in the 'assets market' rather than deployed for new investments. In effect, savings so deployed take on the character of a 'hoard', and are thus lost for purposes of new investment. Ex-ante savings do not fructify as ex-post savings.

Finally, with daily cross-country flows of (short-term) capital now approximating $1,500 billion (let us repeat, daily), as given in the 1999 Human Development Report of the United Nations Development Programme (UNDP), the increasing financial integration of the Indian financial sector with the international financial market has grave potential danger for the economy in that it is increasingly becoming subject to the 'volatility' which is a characteristic of international finance ca pital.

Arun Ghosh has been associated with economic policymaking in India for more than two decades, including as a member of the Planning Commission.

'Economy may deteriorate further'

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M.K. Pandhe, general secretary of the Centre of Indian Trade Unions (CITU), is of the view that if the second phase of economic reforms are pursued doggedly, the growth of the economy will slow down. It would enable foreign financial investors to increase their grip over the Indian financial sector, he cautioned.

Official statements indicate that the government intends to initiate a new phase of economic reforms, titled reforms II. What is your view on this matter?

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The second generation reforms essentially deal with the financial sector. The process was heralded with the Insurance Regulatory and Development Authority Bill, and will cover banking and other financial sectors. It seeks to boost the entry of foreign pr ivate capital by removing the "hindrances"that appear to have been noted by multinational companies.

It visualises modification of labour laws that would facilitate the implementation of the reforms. The appointment of the Second National Labour Commission and the terms of reference finalised by the government are clear indications of this.

The Government is resorting to this exercise without properly studying the impact of the first generation of reforms. Nine years of that reforms process has not yielded the projected results. On the contrary, in certain respects it was responsible for se veral repercussions for the economy. Despite periodic statements about the negative aspects of the reforms no corrective measures have been. The studies conducted by the World Bank and the IMF have clearly indicated that the structural adjustment program me has not yielded the desired results. Yet, the government is doggedly pursuing the reforms, which may result in further deterioration of the economy.

If the second phase of reforms is carried out, foreign financial investors will strengthen their grip over the financial sector and utilise the credit flow in their favour.

Broadly, how do you assess the track record of the first phase of reforms?

The first phase of reforms clearly indicated a considerable slowing down of growth. Foreign investments are coming in without taking into account the needs of our economy. They are entering the food processing industry, share market operations and sector s where India has already built a sizable production capacity. The MNCs prefer to purchase Indian units and use the infrastructure built up by them rather than build up new units.

Industrial sickness increased substantially during the last nine years, resulting in an estimated six lakh units facing sickness and closure. The rate of unemployment has risen alarmingly with every industry talking of downsizing to cut costs. New entran ts in the employment market find it extremely difficult to get a job.

Reckless disinvestment in the public sector, ignoring even the observations of the CAG (Comptroller and Auditor-General) report has led to the sale of valuable assets at throwaway prices. The sale proceeds were used only to meet the budgetary deficit. Ev en the Chairman of the Disinvestment Commission criticised this approach.

Failure to boost exports in comparison with growing imports has led to a widening of the trade deficit. It generated pressure to devalue the rupee to an alarmingly low level.

The bulk of the foreign investments has hardly brought new technology or the needed investment to boost the economy. These developments have led to an increase in the size of the population below the poverty line.

The fiscal concessions have been used to boost profit, not for the advancement of the economy.

The fiscal situation remains extremely difficult. What in your view are the taxation (or other revenue mobilisation) options available to the government to deal with it?

If the government is keen to raise resources, ways and means are available. The profits earned by several big business houses, despite recessionary trends, should be taxed.

Most of the big business houses which are responsible for adding to the non-performing assets (NPAs) of the banking industry, have increased their assets substantially in the recent past. If these NPAs are recovered from other assets of the defaulters, t he government can mobilise more revenue.

The imposition of agricultural income tax on rich farmers has been debated for several years, but the government does not show the political will to take a firm measure. The Government has failed miserably to take action against big tax evaders. Amnesty schemes have not yielded results to the desired degree. Firm action against tax evaders will help mop up additional revenue.

Action can be initiated against traders who indulge in underinvoicing and overinvoicing during export-import operations.

The taxation on white goods and luxury items is minimal, while the burden on the poor is higher. This policy should be reversed.

All imports are not useful for the common man. Additional customs duty to restrict import of such items will help the economy. Similarly, reduction in customs duty on steel, coal and other items, which have rendered the units sick, should be restored to previous levels.

The exemption limit for income tax should be enhanced. Higher levels of tax in the top brackets will yield more revenue.

Do you think some measures could be initiated on the expenditure side to deal with the fiscal crisis?

Administrative expenditure is increasing disproportionately. The perquisites given to members of Parliament, Ministers and top bureaucrats can be brought down. There should be a ban on advertisements by Ministries; foreign and Indian tours of Ministers s hould be made need-based. Expenditure on these trips should be brought down to the minimum.

Jumbo Cabinets are responsible for heavy administrative expenditure. The size of the Cabinet should be restricted. Misuse of funds given to MPs for local development should be checked.

What have been the growth implications of the fiscal correction? Do you think there has been an investment deficit in the infrastructure sectors because of the fiscal correction?

In the name of fiscal correction, the government has taken a decision to invite more foreign capital for infrastructure development. However, that capital has not come. On the other hand, the government has scaled down its own investment in this sector, resulting in the slowing down of the economy. The Budget should provide more funds for infrastructure development in the public sector. Otherwise the fiscal mismanagement of the economy will only add to further slowing down of the economy.

What specific measures do you envisage for boosting investment in the infrastructure sectors?

In the case of infrastructure development, the gestation period is high and the private sector will not come despite the policy framework. The Government will have to augment revenue so that more infrastructure can be developed at an early date. Several schemes have remained on paper. The report of the National Transport Policy committee is an example. The shortfall in the power sector is also glaring with the result that even government-sponsored schemes have not been fulfilled. Budget should pay more attention to it. The leasing of airports and ports will only cause further stagnation in infrastructure development.

Do you think there is a need for specific incentives for savings and/or capital market investments? Is the current pattern of incentives provided appropriate?

There is a paramount need to give incentives to small investors. However, the government's decision to reduce the interest rate on Public Provident Fund by one percentage will reduce investment in this sector. Other small savings schemes should be made a ttractive to generate more savings.

Experience has shown that whatever concession was given in the previous budgets to savings, it has not resulted in increasing investment. It has only led to an increase in speculative share market activity. Despite more concessions being given to this st rata, the slowdown of the economy co could not be checked. There is, therefore, an urgent need to review the concessions given to this sector. The money garnered by this strata should be mopped up through suitable tax measures, and the funds generated sh ould be utilised for infrastructure development.

What implications do you see for the labour market from Reforms Phase II?

In the name of labour flexibility, an attempt is being made to reduce the number of regular jobs and convert them into temporary or contractual jobs in the informal sector. On the plea of downsizing, voluntary retirement schemes are being introduced in a big way in the public and private sectors. There has been a "wage restraint" with a view to keeping the wage cost low in a "competitive environment". In several cases, the working conditions are more unfavourable to the working class, while managerial r emuneration and perks are on the rise.

The growing rate of unemployment is being used to keep working conditions at low levels. Existing fringe benefits are being curtailed, step by step.

The Government has already announced its intention to amend the Contract Labour (Regulation & Abolition) Act to enable employers to engage more contract labour. Section 25(O) of the Industrial Disputes Act is being deleted to enable employers to close do wn units.

These measures will make the labour market favourable to the employers. Naturally, there is bound to be stiff resistance from the working class to these measures at all levels.

The pre-Budget charade

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D. SAMPATHKUMAR

IT is the Budget season, a season for all manner of interest groups, from dhoti-clad manufacturers to presidents of chambers of commerce in their pin-stripes, to seek budgetary favours from the Finance Minister. The art of presenting pre-Budget memoranda has been perfected even as its utility has been considerably discounted by those in the know of things in the Central administration. As one senior civil servant remarked: "These memoranda are never read. They are simply consigned to the Finance Ministr y's archives. If at all any policy change is incorporated in the Budget, it is due more to private lobbying than as a result of any reasoned argument in the pre-Budget memorandum."

Although industry is aware how such memoranda are handled, it finds it difficult to break the practice. But more important, as an exercise in public relations and because of the innumerable photo opportunities that it offers, the occasion of presenting a pre-Budget memoranda is hard to beat. Of course, the government does not complain either. On the contrary, it has every reason to welcome it, for such an exercise gives it an opportunity to present before the public an image of being responsive and sens itive to the needs of industry and other agents of the economic process.

As demands go, the industry wish-list is not much different from those presented in the past. These include a reduction in excise duties (some industrialists prefer abolition of duty in their case), a hike in the import duties on competing products, and a reduction in the import duties on raw materials used by it; a simplified tax administration; and the easing of conditions to access overseas capital.

The Finance Minister has an unenviable task on hand. He has to accept the needs of individual sections of industry for some fiscal protection, with possible adverse consequences for downstream/upstream industries of such a concession. Above all, he must not strain the government's revenues. Protection in the form of lower import duties on inputs to one section of industry means that domestic manufacturers of these goods have to contend with a lower cost of imported goods that compete with his/her own ma nufacture. On what basis does the Minister overlook the claims of domestic industry for a higher tariff wall against imports in the context of securing through fiscal policy cheaper raw material for downstream industry? If that is not difficult enough, t he presence of a public sector unit in the upstream sector producing raw material makes the decision even more so.

A classic example is that of the demand of the synthetic detergent industry that its raw material inputs must suffer a rate of duty that is not more than 60 per cent of the import duty on the product that it manufactures, should it be imported. While thi s is largely in place now, there is still an excess levy of three percentage points or so. Linear alkyl benzene (LAB), a principal raw material, is manufactured by Reliance Industries and by Tamil Nadu Petroproducts. How will the Finance Minister adjudic ate the conflicting claims of two sets of manufacturers? True, fiscal policy provides a broad framework: that inputs should suffer a lower rate of import duty than the end products so that indigenous manufacture is encouraged. But the question of the exa ct differential that should prevail between the two commodities remains. The affected units in the two industries and their political sponsors could still debate the question endlessly. In the world of realpolitik, even the basic principle may be given t he go by. The presence of a public sector unit may further complicate matters. In the present case, Indian Petrochemicals Limited, a public sector unit, albeit a marginal player, is also in the fray. The Ministry of Petroleum and Natural Gas would not ex actly be happy with a fiscal structure that prunes three percentage points of its profits on the sale of LAB.

An inverted duty structure, where end products enjoy a lower rate of duty while the input raw material or semi-finished components suffer a higher rate of duty, was inevitable. The manufacture of industrial raw materials typically involves the employment of a large workforce, often in the public sector. They are thus more vulnerable to competition from imports. Steel is a typical example. The engineering industry wants steel at a cheaper price, and this can be made possible by lowering the import duty o n steel. Domestic manufacturers would then have to peg their prices down to stay competitive vis-a-vis foreign suppliers. But such a policy could spell disaster for domestic steel manufacturers, especially the public sector Steel Authority of Indi a Limited (SAIL). Steel import suffers a basic customs duty of 35 per cent, that is close to the ceiling rate of 40 per cent which India has committed to the World Trade Organisation (WTO). Common sense suggests that as a principal input in the manufactu re of a whole range of goods, steel should attract a duty starting from 10 to 15 per cent, so that manufactured articles can be pegged at rates close to 40 per cent. But the government is in no position to do this.

Even with a 35 per cent duty protection for domestic steel, SAIL has posted a loss of approximately Rs.2,050 crores. Any further reduction in import duty will ruin SAIL. No government can order a fiscal policy that runs a public sector company to ground and hope to stay in power. So, there is very little chance of the government paying heed to downstream users' pleas for a more rational duty structure between raw materials and processed goods.

The solution lies in the core sectors of manufacturing becoming more competitive globally. If steel has to become competitive, the power and mining sectors should first become competitive. This apart, the intrinsic process of steel-making should itself b ecome more cost-effective. Questions of competitiveness raise issues of social and political processes that currently appear to defy solution. Therefore, Budget preparation and the submission of pre-Budget memoranda will remain a charade rather than an a id to policy-making.

'The basic fiscal structure needs correction'

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Satish Kumar Kaura is Chairman, Economic Affairs Committee, Confederation of Indian Industry (CII). He talked to V. Venkatesan on the Second Phase of economic reforms.

On Economic Reforms Phase II:

The second phase of reforms is more about going deeper into reforms. If you look at direct taxes, it is about building a bigger base of tax payers. It is about developing a more progressive income tax law and about the need to develop a more tax-payer fr iendly, and more progressive, income tax base where there is less litigation and where the tax payer finds things easier, and continue with low taxation rates. If you look at indirect taxes, it is about simplification of procedures in both customs and ex cise. A substantial reduction in litigation, without frustration among corporates about the delays that are involved in red-tapism should be the feature.

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On excise, reforms are about quickly moving towards VAT (value added taxation), and single rate of excise. On customs it is about a substantial reduction in the number of tax rates.

In the next couple of years, we believe that the tax rates will have to go down, and come to the level of the ASEAN (Association of South East Asian Nations) countries. We also believe that the Government needs time-bound, programmes, time-bound long-ter m fiscal policies and discipline itself to follow them. Right now, there is lot of ad hocism, although we are all clear how we should move towards the overall goal. It is creating lot of uncertainty for the corporates.

Even if the economy grows at a very high rate, the basic fiscal structure needs correction. At present, deficit budgeting can only be corrected by two major steps that the government can take. One is very aggressive privatisation. Unlike the half-hearted disinvestment efforts the government has made, there is a need for it to locate strategic partners, and pass on the management of disinvestment. That is bound to give a very good valuation of many companies.

The second is the implementation of the recommendations of the Fifth Pay commission. While the government implemented the salary increases, it did not do enough about the surplus manpower that exists. The government will have to take strong steps to redu ce the number of employees. There are many ideas being floated around such as the VRS (Voluntary Retirement Scheme). In South America, countries such as Chile and Argentina have reduced the number of government employees very successfully. Twenty to 30 p er cent reduction will have a very substantial impact. It depends on how the idea is sold. It would be possible to attempt on very creative ideas. There are a whole lot of departments which have no relevance in today's world. The government needs to get out of many activities when the economy is growing at seven per cent.

On Economic Reforms Phase I:

The first phase of reforms was started while the country was passing through a very dire phase. And reforms were more about licensing. They were more about just reducing the cobwebs, such as sub-rates and very high rates. A little bit of simplification o f the tax regime took place. But very little happened in the financial sector. The nation became more sensitive to the need for reforms. The economy moved from a four per cent rate to the six to seven per cent. There was a jump in GDP growth, even when w e talked about recession in 1999. It was a stage when we realised that the reforms do help to go to a high-growth stage. But the reforms that were attempted in the industrial sector, in the corporate sector, in the infrastructure and in the financial sec tors were not deep enough.

In the infrastructure sector, India has to create more transparency. India has not created a framework that is transparent and stable enough for somebody to say that for the next 15 to 20 years he will get a safe return. One is still not convinced that i nputs in infrastructure are all going to be available through the market mechanism. There is still worry about political interference. Ports, telecommunications, power, roads, all share this issue.

In telecommunications, for instance, let the regulatory authority take independent decisions. The people in power were not comfortable enough to do what was expected of them. The change was rather dramatic for them. The first phase of reforms was used to adjust themselves to the change.

Competition between States is emerging. If you look at Andhra Pradesh, Karnataka and Madhya Pradesh, they have caught the eyes of the investors. This will push other States to follow suit.

On taxation and other revenue mobilisation options:

If you look at the structure of our revenues, we have to move away from indirect taxes to direct taxes. India has to move towards much bigger, broader phase of direct taxation. It is not growing rapidly. The need here is to create a massive infrastructur e, information technology and offices. The agricultural tax base must be broadened. They can start with very rich agriculturists and agricultural areas where big corporates are involved. There are more things like that, in self-employment, for instance. Indirect taxation has to go down.

If you look at countries in Asia, the total tax, VAT, is between 16 and 18 per cent rate. That is what we are also talking about. In addition to that, India has a very high rate of customs duty. It has octrois and sales taxes. India's taxation is in the range of 40 per cent. In indirect taxes, there is no room to increase taxation. But the authorities have to tighten up their compliance. But actually, revenues are going to come from direct taxation.

On fiscal deficit correction:

The main area for fiscal deficit correction is that the government should try to cut down expenditure. There is no choice. They can ensure better utilisation of subsidies for the purposes they are meant for. Transparency in the prices of services that ar e available from the government is another step. The simplest example is water. People do not pay for the real cost of water. If the pricing is made more transparent, there will be a major change, a very desirable one.

As we move ahead with reforms, we also have to take care of the weaker sections. The government cannot run away from that. The public distribution system may require a little bit of fine-tuning; it needs to be more focussed towards weaker sections and to be more efficient. Maybe the government has to privatise it.

When the reforms began, the government, in its enthusiasm to correct the fiscal deficit, started cutting down its investments in infrastructure. And it decided that investment in this sector should come from the private sector. The tragedy is that the fr amework that would create the transparency in the sector, that would ensure investment-flow, did not happen. On the other hand, the government did not put in sufficient effort to cut down its wastages in expenditure. As a result, long-term developmental investments suffered very badly. Our ability to grow as an economy will be very limited because of this.

There are lessons to be learnt from the country's experience in the telecom sector. The government kept changing the ground rules. Long-term investors are looking for a level-playing field, stability and clarity.

On the need to stimulate savings:

The savings rate in the country is not that unhealthy. It is about 26 per cent overall. The real issue is stimulating growth rather than savings. Cutting down the interest rate on provident fund was very necessary. As inflation is settling down, it is es sential that we send a signal.

On the implications for labour from Reforms Phase II:

Industry needs to communicate more with labour. With the kind of unemployment rate India has, it is very difficult to ensure that. Unless we do some restructuring, it is difficult to compete. We will have to find some via media and hold talks with labour to find a way out. I worry about the right solutions. I do not have an answer. It is very complicated. This is what liberalisation with human face is all about.

Deals under scrutiny

Defence Minister George Fernandes orders an inquiry into all post-1985 defence procurement deals, but the case of Rear Admiral Purohit shows that he may have much to hide.

FOR sheer drama, few official announcements could quite match Defence Minister George Fernandes' decision to order a sweeping inquiry into all procurement deals in his Ministry since 1985. Requested to take up the onus of this inquiry, Chief Vigilance Co mmissioner N. Vittal accepted with little hesitation. Since his office lacks the resources and the machinery to conduct the inquiry, Vittal proposes to bring the Central Bureau of Investigation (CBI) into the picture. On a parallel track, the Ministry of Defence (MoD) has asked the Comptroller and Auditor General of India (CAG), to examine all the emergency procurement decisions that were made in connection with the Kargil conflict last year.

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The CAG is already investigating a number of minor purchases transacted over the years, which have allegedly created a massive stockpile of unused and worthless spare parts with the three services. The division of labour between the investigating agencie s is clear - the CVC will handle the high-value acquisitions of major equipment and munitions, while the CAG will look into the smaller-scale everyday purchases of the supplies and spares that keep the armed forces functioning.

Alleged improprieties in defence purchases were always a subject of murmured conversation. The Bofors howitzer deal made them a topic of political heat and acrimony, of elaborate investigations and complicated judicial processes straddling the globe. Fer nandes' action has now transformed defence procurement into an open-ended political controversy which could rage indefinitely and consume several reputations.

In a note detailing the rationale of the decision, the MoD drew attention to the numerous questions that were raised in connection with contracts yet to be finalised. These include the Air Force's long-pending project to acquire an advanced jet trainer ( AJT), the Army's intent to purchase a number of T-90 battle tanks from Russia, and the Navy's proposal to buy the decommissioned Russian aircraft carrier, the Admiral Gorshkov.

On a note of pique, the MoD states: "While on the one hand the Government is criticised for not expediting decisions on these vital projects, which have in some cases been pending for years, on the other hand, completely unsubstantiated allegations and i nsinuations are levelled, even though final decisions are yet to be taken." The parallel probes by the CVC and the CAG, the note concludes, would help to "ascertain the truth about such allegations and introduce transparency in defence purchases."

SUSPICIONS that defence procurements were a domain of rampant irregularities were considerably aggravated by the events following the precipitate dismissal of Chief of the Naval Staff Admiral Vishnu Bhagwat in December 1998. Since then, there has been a flurry of correspondence at the highest level and much media attention on the propriety of various defence purchase plans. In the battle for pre-eminence between the MoD and service headquarters, there was an unseemly torrent of adverse stories on corrup tion at high levels. Former Prime Minister H.D. Deve Gowda's intervention in the debate over the acquisition of the T-90 battle tank and Fernandes' retaliatory effort casting aspersions on the probity of the Sukhoi Su-30 deal, kept these issues in public focus.

Away from the glare of publicity, Jayant Malhoutra, an independent member of the Rajya Sabha, began peppering the Defence Minister with letters. In March 1999, he placed on record a number of reservations about the proposal to buy the T-90 battle tank. T o Fernandes' protestations that the "ongoing controversy" was misplaced since a decision was yet to be taken, the M.P. responded with a broader thrust. Was it a fact, Malhoutra asked, that a number of overseas defence contractors were blacklisted by the MoD, leaving the field clear for middlemen who operate through circuitous routes and enjoy a large slice of the take from each purchase. Further, he asked, could the MoD clarify whether large quantities of spare parts were bought with little regard for t heir technical specifications, contributing to an accumulation of useless inventories that cost several thousand crores.

Malhoutra also urged a review of the blacklisting of Bofors AB of Sweden, which he alleged, had ceased to have any practical benefit. Following a succession of corporate mergers and acquisitions, Bofors had mutated into Celsius AB, a company controlled b y the Swedish Government. Rather than sustain the blacklisting, which only contributed to the enrichment of various middlemen, Malhoutra urged that the MoD resume commercial transactions with the successor company.

In his replies, Fernandes sought to reassure Malhoutra on the various points he had raised. He did though demur at the proposition that normal trading relations be resumed with Bofors' firm. This would, he said "be violative of the existing ban on dealin gs with this company."

Malhoutra though was playing for bigger stakes. In a letter dated April 21, 1999, he went beyond mere allegation: "I am charging that there is no defence deal without the presence of middlemen, agents, traders and middle companies... I would suggest that you ask your senior officials as to the role of the Nanda's, the Chaudhary's, the Khanna's, the Jajodia's, the Hinduja's and the Mittal's etc. (sic) in the procurement of strategic defence equipment."

As the Kargil war overwhelmed all other concerns and the country moved in its aftermath into the electoral mode, Malhoutra's letter-writing zeal waned. He returned to these themes though during the winter session of Parliament, vigorously joining a Rajya Sabha debate on defence procurement with the demand for a comprehensive inquiry by a Joint Parliamentary Committee. In raising the supposed intimacy between various arms dealers and Deputy Chief of Naval Staff Vice Admiral Harinder Singh, Malhoutra also gave a clear signal that the ghosts of the Bhagwat matter are yet to be laid to rest.

SIMMERING controversies over the high-profile defence purchases - such as the AJT, the T-90 and the Admiral Gorshkov - have undoubtedly motivated Fernandes. But there is little doubt that his main compulsion comes from a civil writ petition filed in the Delhi High Court by Rear Admiral Suhas V. Purohit, seeking a direction to the Defence Ministry that his long-delayed claim to promotion be granted.

As an issue, corruption may appear incidental to Purohit's claim for a promotion. The nexus emerges in all its stark details when it is recalled that Fernandes had himself, in his moral crusade against Bhagwat, repeatedly invoked the Purohit case as a ca se of wrongdoing by the former Naval chief. Bhagwat, in the Defence Minister's narration of matters, was unduly protective towards a subordinate officer who had been accused of serious corruption. Fernandes in an extensive interview with a national newsp aper sought to justify his actions against Bhagwat saying: "One of the first things that the Prime Minister spoke to me personally about was the Purohit matter. And it was stonewalled. So I went back to what had happened earlier, the CBI inquiry that had been ordered by my predecessor. The CBI wanted files, they were refused. And the responses that one got was (sic) that the Chief of the Naval Staff has taken a decision and that is the final decision... The PMO was still after me, the CBI was doing its inquiry, they had not closed the case. But the Chief of the Navy was to tell me that 'I have closed the case, and there was nothing to it"' (The Indian Express, Delhi, April 19, 1999, page 9).

THE allegations against Purohit first surfaced in the form of an anonymous letter dated June 21, 1997, which was delivered to the MoD, the Naval Headquarters (NHQ) and also reportedly, the Prime Minister's Office. The letter made out a case that as Assis tant Chief of Logistics in the NHQ, Purohit was sustaining an unsavoury relationship with various arms brokers, notably Super Trade, Alfa Stone and Makalu.

Despite a clear-cut government directive that anonymous complaints should not be dignified with an official inquiry, the NHQ was compelled to institute an investigation headed by chief of personnel Vice-Admiral J.C. DeSilva. In October 1997, NHQ replied to persistent inquiries from the MoD, and dismissed all the charges against Purohit as baseless. Shortly afterwards, Purohit was cleared for the next higher rank of Vice-Admiral by the Navy's Promotion Board. He was to assume the rank with the responsibi lity of Controller of Logistics, on the retirement of the incumbent, Vice-Admiral Verghese Koithara on January 31, 1998.

The MoD, for reasons unclear, refused to accept the Promotion Board's recommendations, insisting instead that the full record of the NHQ's internal inquiry be placed before it. The NHQ responded, with some asperity, that the demand was "violative of the basic principles of administrative law".

As the stalemate persisted, the NHQ relented. On April 14, 1998, Admiral Bhagwat and the chief of personnel met the Defence Minister and handed over a copy of the findings in the Purohit matter. It was around this time that the CBI was brought into the p icture, although the official record fails to register this decision. To date, there has been no communication from the MoD to the NHQ about the reference of the matter to the CBI. This is, as experts in administrative law maintain, a gross contravention of norms.

In June 1998, a committee comprising the Defence Secretary, the Financial Advisor (Defence Services) and the Vice-Chief of Naval Staff, completed its own inquiry, holding all allegations against Purohit to be baseless. The MoD showed little inclination t o listen. In August, it demanded that the NHQ hand over all the relevant records immediately for scrutiny and investigation. Another long standoff ensued, with the NHQ repeatedly protesting against the Ministry's "delaying tactics". Again, it was forced to relent and hand over all the required documents in October 1998 for perusal by the CBI.

There are indications that the CBI inquiry has failed to unearth anything adverse against Purohit. But this did not prevent Fernandes from tampering with the truth in his crusade against Bhagwat. In a self-justificatory document circulated to members of Parliament in April 1999, the Defence Minister made the astounding claim that a "self-contained note" had been submitted by the CBI in the Purohit matter. The contents of the supposed note were damning, and should have in normal circumstances, warranted summary dismissal: "Requisitions/orders placed on suppliers in Russia by Naval Headquarters are conveyed in advance to the above mentioned firms (i.e., Super Trade, Alfa Stone and Makalu) to enable these firms to manipulate their prices to the disadvanta ge of the Indian Navy. CBI has obtained copies of fax messages exchanged between the trading firm and the supplier, which on comparison with the Naval Headquarters request and the date of such requests corroborate this information. Sources have also info rmed that such advance information is passed on by (Rear Admiral) S.V. Purohit from the fax machine installed at his residence or through an officer".

Curiously though, with such a scathing indictment in its possession, the MoD chose not to proceed against Purohit. Instead, it lapsed into its accustomed pattern of stonewalling his promotion.

On June 16, 1999, chief of personnel in the NHQ Vice-Admiral Arun Prakash wrote to the MoD asking among other things, for definitive confirmation of a CBI inquiry against Purohit. If such was indeed the case, suggested Vice-Admiral Prakash, then it would be necessary "in the interest of natural justice that a formal query be made of the CBI, regarding the progress (if any) of their investigations and whether there is a likelihood of a chargesheet being filed within a reasonable time frame".

The query remained unanswered. On September 6, Vice-Admiral Prakash wrote to Purohit, virtually conceding defeat: "NHQ has so far received five representations from you in a period of three months. All issues of relevance raised by you have been forwarde d in writing to MoD and regular queries are being made to elicit a response from them. The undersigned has personally brought to the notice of the RM (Defence Minister) and Defence Secretary the long delay that has occurred in the CBI secret verification as well as on the question of your promotion to the rank of Vice Admiral. It is for your information that no written response has been received from the MoD to date. You may also note the NHQ view that nothing more can be done at this juncture to progre ss the case".

It was this final capitulation of NHQ that compelled Purohit to move the Delhi High Court for redress. Abruptly awakening to the inherent hazards, the MoD served him with a show-cause notice on November 24. As his petition shows, the notice pertains to a transaction effected in November 1997, in which the aggrieved party had failed to win sustenance from a single-judge bench and a division bench of the Delhi High Court. A subsequent effort to take the matter to the Supreme Court through special leave pe tition was also dismissed.

IF the evidence marshalled by Purohit in his petition is any indication, then his principal fault has clearly been his expertise in naval logistics and his sense of probity. The boot, in other words, is on the other foot. Far from being complicit in wron gdoing, Purohit's fault was that he has often blocked the efforts of the flourishing nexus between arms dealers and certain officials in NHQ and the MoD, to fix procurement decisions to their mutual pecuniary advantage. Far from being in league with firm s such as Makalu, Purohit was the first to blow the whistle on their unsavoury business practices. His continuing victimisation is perhaps as good an indication as any, of the bizarre inversions of values and procedures in the MoD under George Fernandes.

In ordering a sweeping inquiry into all defence deals since 1985, Fernandes is clearly seeking to divert attention and to create a bond of culpability with some of his predecessors. The effort will not wash. Irrespective of what the CVC or the CAG find, the Purohit matter has acquired its own momentum which can no longer be stalled.

A controversial review

Prime Minister A.B. Vajpayee has stated that the proposed review is not meant to tinker with the basic features of the Constitution, but doubts persist in the wake of opinions aired by other BJP leaders.

EVEN as the echoes of the conflicting perceptions of President K.R. Narayanan and Prime Minister Atal Behari Vajpayee on the need for a "review" of the Constitution rang out, the Bharatiya Janata Party-led government announced on February 1 the formation of a National Commission to review the working of the Constitution. The Union Cabinet went a step further by resolving the same day to frame the terms of reference of the commission.

Taking its cue from the President's warning against any tinkering with the parliamentary system, the Government made it clear that the commission would function within the framework of parliamentary democracy. Parliamentary Affairs Minister Pramod Mahaja n outlined its terms of reference as follows: "To examine in the light of the experience of the past 50 years as to how best the Constitution can respond to the changing needs of an efficient, smooth and effective system of governance and socio-economic development of a modern India within the framework of the parliamentary democracy, and to recommend changes, if any, that are required, in the Constitution without interfering with its basic structure or features."

These terms of reference marked an improvement over indications given earlier by Union Law Minister Ram Jethmalani. Jethmalani had claimed that the commission would be free to consider proposals for a presidential system, even though the Government was c ommitted to defending the basic structure of the Constitution as enunciated by the Supreme Court in the Keshavananda Bharati case. The parliamentary system form of government is an essential component of the basic structure doctrine, the other fea tures being an independent judiciary, separation of powers among the executive, the legislature and the judiciary, and vital concerns such as secularism and fundamental rights.

Although the Prime Minister promised that the proposed review was not meant to tinker with the basic features, doubts persisted in the wake of other BJP leaders airing their opinion. Union Home Minister L.K. Advani, for instance, suggested that the presi dential system would better suit India, which has been plagued by political instability in recent years. Sections of the Sangh Parivar, particularly the Rashtriya Swayamsewak Sangh and the Vishwa Hindu Parishad, called for changes in the Constitution to make it more representative of the Indian ethos, though they have refrained from making any specific demands so far.

In order to strengthen its alliance with its partners in the National Democratic Alliance, the BJP has agreed to shelve its three major demands, namely, abrogation of Article 370 which confers special status on Jammu and Kashmir, enactment of a uniform c ivil code, and the building of a Ram mandir at the site of the Babri Masjid in Ayodhya. The BJP adopted the National Agenda for Governance in lieu of its own manifesto on the eve of the Lok Sabha elections, but there is renewed fear that these contentiou s issues will be revived under the guise of a review of the Constitution.

Although the BJP no longer advocates the abrogation of Article 370, senior vice-president Jana Krishnamurthy expressed the hope that the Article would become a "dead letter" as a result of the way in which the NDA Government was dealing with the Kashmir issue. He reiterated the BJP's "belief" that no State, including Jammu and Kashmir, should be given any special privilege. It is unlikely that its coalition partners will place any restriction on the BJP expressing its views on this issue and its other p et themes such as uniform civil code and secularism. Jethmalani has said that there is a need to look at the Supreme Court's Bommai judgment which justified the dismissal of the BJP Governments in Madhya Pradesh, Himachal Pradesh and Rajasthan on the grounds of threat to secularism, following the demolition of Babri Masjid. Besides, the issue of barring persons of foreign origin from occupying high constitutional posts is also expected to come up before the commission.

Although former President R. Venkataraman was widely tipped to head the commission, the Government hesitated on choosing him because of reservations expressed in some quarters. It is known that Venkataraman favours the presidential system. The Dravida Mu nnetra Kazhagam (DMK), an ally of the BJP, opposed Venkataraman's choice for its own reason: it is displeased with the former President for his role in the dismissal of the DMK Government in Tamil Nadu in 1991. Another BJP ally, the Telugu Desam Party, q uestioned the propriety of establishing such a commission without consulting all political parties.

These objections put Vajpayee, and Advani, who had apparently extended an invitation to Venkataraman, in an embarrassing position; they even considered putting off the entire exercise for the time being. However, they veered round to the view that the co mmission could be formed with apolitical persons, especially jurists are known for their neutrality and integrity.

That is how the Government approached Justice M.N. Venkatachaliah, former Chairperson of the National Human Rights Commission and former Chief Justice of India with the request to head the commission. Lest it should be construed as just a post-retirement job for persons who served on the Bench, Venkatachaliah made it clear to the Government that he would accept the post in his own terms. His conditions included the acceptance of the inviolability of the basic structure doctrine, including the parliament ary system, and the choice of other members of the commission, after his due concurrence.

Venkatachaliah then agreed to head the commission, which, besides the Chairman, will have a member-secretary and not more than nine members, who would be eminent persons from different spheres and would include persons from the underprivileged sections. The commission is expected to complete its work within a year, and its recommendations would be placed before Parliament.

POLITICAL reaction to the formation of the commission hinged on what the Government proposed to review. Broadly, however, the Congress(I), which had formed a similar commission under Swaran Singh during the Emergency, presented a picture of confusion. Th e Swaran Singh Committee had recommended the inclusion of terms such as "socialism" and "secularism" in the Preamble to the Constitution, and this was implemented as the Congress(I) had a clear majority in both Houses of Parliament.

While the Congress(I) opposed the "review", it urged the Government to hold talks with all political parties on the commission's proposed terms of reference. The party also said that it would back any amendment in the interests of the socially and econom ically backward sections. The party urged a clear definition of the basic features of the Constitution.

The Polit Bureau of the Communist Party of India (Marxist) remarked that "an executive decision will have no legitimacy, as only Parliament is competent to undertake such a review". The CPI(M) made a distinction between specific amendments by Parliament and a roving review, which it said was unwarranted. The CPI demanded that the move be put off and Parliament be taken into confidence. The party's Central Secretariat alleged that the objective of the BJP-led government clearly was to tamper with the Con stitution and create an atmosphere of doubt about its republican character.

Former Prime Minister V.P. Singh, while referring to Vajpayee's view that even the strongest fort needed repairs, said that "in the name of repairs, there should be no rebuilding. Sometimes, tenants go for rebuilding in the name of repairs." He said tha t it was wrong to link political instability to provisions of the Constitution. "Inequity is the root cause of instability", he argued.

Another former Prime Minister, I.K. Gujral, warned against vague and free-fishing attempts to review the Constitution. He called for more urgent legislative measures, such as electoral reforms.

Considering that the Government is going ahead with the setting up of the commission despite the lack of political consensus on its terms of reference and composition of the commission, it may be heading for trouble when Parliament convenes for the Budge t session.

Taking on the corrupt

UNDER the stewardship of Nagarajan Vittal, the Central Vigilance Commission (CVC), which was reconstituted through an ordinance 19 months ago, is acquiring a persona that compels attention. Sneers at some of his orders that were perceived to be of mere c osmetic value have given way to dismay in some quarters and admiration in others even as the ex-bureaucrat continues his relentless drive. Recently he wrote to 60 departments of the Government asking them to include in their Citizens' Charter a statement that the services they offered to the public would be available without the payment of bribes. He directed them to display this message prominently in their offices.

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The CVC also wants certain groups of citizens to be empowered to trap and arrest officials who demand bribes.

In January, Vittal put on the CVC's Web site the names of about a hundred officers of the Indian Administrative Service and the Indian Police Service, against whom the Commission had initiated action on the basis of prima facie evidence. It create d a furore among the bureaucrats, who had hitherto succeeded, by and large, in placing themselves above the law. Sanction for prosecution/departmental action against officers found guilty of corruption still subsists under Section 19 of the Prevention of Corruption Act (PCA) and Section 197 of the Criminal Procedure Code (CrPC) although the odious "single directive" that required investigative agencies to obtain departmental sanction even to begin investigation against corrupt officials has been done aw ay with in the new CVC Act. Vittal told Frontline that departmental sanctions took an enormous amount of time practically in every case. "There are cases where sanction is pending for 15 years now. Often it happens that the official has already ho nourably retired or is, in some cases, even dead." "Delay breeds corruption," he said, and added that exposing such delays should force the departments to grant sanction promptly. "After all, secrecy and delay are at the root of corruption," he said.

Vittal also said that he planned to put on the Net the names of another 2,000 officers of other Central services who were under the CVC's scrutiny for corruption charges. The cases of persons whose names were already on the Web site were in the first sta ge of action, he said. "That is, the CVC has found prima facie evidence to proceed against them." He also plans to put the names of persons who face cases that are in the second stage of action and finally the names of those who have been recommen ded for prosecution. There will also be a list of officers who are acquitted of charges.

Many officers named in the CVC's Web site and others who perhaps fear that their names will soon figure in the list are up in arms against Vittal for what they consider his "high-handedness".

The CVC Bill is yet to be passed by Parliament. The two earlier ordinances that set up the CVC in the first place have lapsed and the present CVC is virtually a toothless, non-statutory body. Vittal, however, maintains that the Commission he heads now dr aws its powers from the judgment of the Supreme Court in the Jain hawala cases. The court ordered the setting up of an autonomous CVC with supervisory powers over the corruption cases investigated by the Central Bureau of Investigation (CBI) and expressl y stated that until such time the statute was passed, its own judgment would be law.

The CVC recently directed the CBI to look into the possibility of reopening the Jain hawala case, now that Amir Bhai, an accomplice of S.K. Jain, is in police custody and that his statement could corroborate the entries in the Jain diary (Update, Fron tline, February 4). The CVC has also directed the CBI to look into the possibility of finding corroborative evidence to the diaries in income-tax records.

With a partisan motive

the-nation

The timing of the BJP-led Government's move for constitutional review, a move marked by tearing hurry and lack of candour, reveals an intent to deceive.

A.G. NOORANI

"THE Constituent Assembly in making a Constitution has no partisan motive... The future Parliament, if it met as a Constituent Assembly, its members will be acting as partisans seeking to carry amendments to the Constitution to facilitate to (sic) the pa ssing of party measures which they have failed to get through Parliament by reason of some Article of the Constitution which has acted as an obstacle in their way. Parliament has an axe to grind while the Constituent Assembly has none." B.R. Ambedkar's r emarks, made as he introduced the Draft Constitution in the Assembly on November 4, 1948, prophetically described the moves being made by the Bharatiya Janata Party-led Government to "review" the Constitution.

No other political party in the country has shown the same ardour for its revision as the BJP has, with increasing insistence in the last decade. No other party prides itself on being different from the rest and flaunts its triple demands which none else accepts - Ram temple at Ayodhya, uniform civil code and repeal of Article 370 of the Constitution (special status of Kashmir). It lacks the requisite two-thirds majority in the Lok Sabha, despite its allies, and even a simple majority in the Rajya Sabha . Yet, it flatly refused to consult the other parties either on the terms of reference or the composition of the Commission it set up on February 1 to review the Constitution. The Hindu's Special Correspondent reported (February 5) that the BJP ha s rejected the demand of the Opposition that the Government evolve a political consensus on the terms of reference and members of the Commission.

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That was the prerogative of the executive, it claimed. As for political consensus, "without that no change could be made in the Constitution for it would require approval by at least two-thirds of members of Parliament." But that would be an ineluctable necessity. Given the numbers, the BJP knows that the fait accompli of a tailored report would be rejected. It would be used to serve as its own election plank.

There is no rational explanation why at a time when there is dire need for a national consensus on the pressing problems that face the nation, the BJP-led regime is out to break it and go it alone. Has it the ace of a dissolution of the Lok Sabha up its sleeve in order to discard allies one day? The timing, the tearing hurry and the utter lack of candour reveal an intent to deceive. Nothing is being done about electoral or other reforms which are urgently needed and on which proposals and drafts are rea dy. Constitutional revision is a national undertaking in which all should be on board at the time of the take-off.

Determined to accomplish partisan ends, the BJP is utterly clueless about the nature of the process and gives contradictory explanations. No government would promote labour legislation without consulting trade unions and major firms or amendments to the Companies Act without similar consultation. All the major parties were represented on the Goswami Committee on electoral reforms. But we are promised a Committee of "experts" uncontaminated by the presence of the major elements who will work the Constitu tion - political parties. On January 19, Law Minister Ram Jethmalani said, "the committee would be given six months' time to review all aspects of the Constitution. The founding fathers took three years to frame the Constitution and its review should not take more than six months." The Sarkaria Commission on Centre-State relations took nearly five years. Will his "experts" invite memoranda and hear others? Jethmalani added that the committee will "comprise experts from all fields and most political p arties will be represented" (The Telegraph, January 20) (emphasis added throughout).

It was a premature, if not irresponsible, announcement. For, only a few days later when the Government announced the setting up of its committee, it became known that "the opposition has refused to nominate representatives to the panel" and that it would have a one-year term (The Telegraph, February 2)

That the former Chief Justice of India, Justice M.N. Venkatachaliah, has been handpicked to preside over the body is perfectly understandable. In an interview to Press Trust of India on October 31, 1994, only a week after he retired, he made a remark whi ch bared his outlook: "In my opinion, secularism cannot mean anti-majority". None in his senses ever said that it did. But that was the very formulation of the Sangh Parivar to cover Hindutva under the cloak its brand of "secularism". Hence the cries for "redefining" the concept while dubbing the accepted meaning of the concept as "pseudo-secularism".

It was unwise of him to defend his judgment in the Ayodhya case in a press interview. The remark was made in a specific context - a laboured and utterly disingenuous argument which PTI reported thus: To stop the "limited" worship going on since January 1 9, 1993 at the make-shift temple set up the moment the Babri Masjid was demolished, "would have meant taking away the undisputed (sic) right of the majority of Hindus who were not parties to the 'despicable' act of demolition". The fruits of crime must b e preserved and protected.

He exulted in his conviction of the Chief Minister of Uttar Pradesh, Kalyan Singh, for contempt of court on October 24, a day before he retired, for violation of the Supreme Court order of November 25, 1991 and of the Allahabad High Court order of July 1 5, 1992. The Bench over which he presided with Justice G.N. Ray was seized of petitions for contempt for violations of these orders for over two years, but did not punish him earlier. Had it done so in time, Kalyan Singh would not, could not, have demolished the Babri mosque on December 6, 1992 - a contempt for which he is yet to be punished. In a three-part article in The Statesman (January 18-20, 1995) entitled "CJI & Ayodhya" this writer has traced in detail the indulgence Venkatachaliah gave despite warnings of imminent danger from the Attorney-General (A.G.), Milon Bannerjee. On November 25, 1992, he asked the A.G., "have you facts to show that the situation is deteriorating"? He held that "preparation is not an offence ." Venkatachaliah had before him the experts' report of August 1992 showing Kalyan Singh's violations of his undertakings to the court. On December 1, the A.G. warned that the consequence of the Court's inaction "may be too hideous to contemplate."

On December 4, only two days before the demolition, Venkatachaliah expressed his concern for the health of, and sanitation facilities for, the kar sevaks - the hoodlums who perpetrated the crime.

VENKATACHALIAH is, therefore, ideally suited for the job. His press interviews are noteworthy in the context of the famous speeches made by President K.R. Narayanan and Prime Minister Atal Behari Vajpayee on January 27. The President made three points, i n the main. First, "we have to consider whether it is the Constitution that has failed us or whether it is we who have failed the Constitution". Secondly, he stressed the merits of the parliamentary as opposed to the presidential system. Lastly, he asked that it be ensured that "the basic philosophy behind the Constitution and the fundamental socio-economic soul of the Constitution remain sacrosanct." He had no objection to amendments to remove "shortcomings or lacunae". L.K. Advani's claim to Organi ser (February 6) that "even the President of India had suggested the setting up of a review committee" is a falsehood.

On the first point, the role of the political parties, the Prime Minister not only agreed with the President's view but quoted in its support Ambedkar's historic speech on November 25, 1949, as the Assembly was about to end its task: "However good a Cons titution may be, it is sure to turn out bad because those who are called to work it happen to be a bad lot. However bad a Constitution may be, it may turn out to be good if those who are called to work it happen to be a good lot... it is futile to pass a ny judgment upon the Constitution without reference to the part which the people and their parties are likely to play." Vajpayee accepted that "there is one great test for a Constitution, for any system of governance. It must deliver and it must be durab le. Our Constitution has stood this test."

Why then the review? He cited two reasons. First, because we are "faced with a new situation. The need for stability, both at the Centre and in the States, has been felt acutely." Is this due to any lacuna in the Constitution or to our volatile po litics in which, bar the Left and the Hindutva Right, the centrists are not only rudderless but have torn apart? A limited amendment providing for a constructive vote of confidence, on which there is substantial consensus, will help. But nothing will wor k well unless the centrists learn to behave themselves.

Vajpayee's second reason is, likewise, based on policy failures, not constitutional defects. It bears quotation in extenso: "The people are impatient for faster socio-economic development. The country is also faced with a pressing challenge to qui ckly remove regional and social imbalances by reorienting the development process to benefit the poorest and the weakest."

"This is the purpose for which a commission to review the Constitution is proposed to be set up. The basic structure and the core ideals of our Constitution, however, will remain inviolate. Let us not forget that in the end a Constitution is only as good as the ones who work the institutions which it has set up." Precisely.

It is no consolation that the "basic structure" of the Constitution will not be disturbed. It cannot be even by unanimous votes of both Houses of Parliament and endorsement by the State legislatures, thanks to a series of rulings of the Supreme Court sin ce 1973. But Vajpayee's averment, immediately after his reference to removal of imbalances - "that is the purpose for which a commission to review the Constitution is proposed to be set up" - suggests that he does not realise that no Constitution can acc omplish that goal. It can be realised only through policies pursued by men who work the Constitution. The misconception is common. A singularly obstreperous "expert" angrily asked at a seminar whether, after 50 years, the Constitution had "abolished pove rty." He has a deserved place on the commission, judging by the press reports.

Venkatachaliah is as clueless. He was asked: "Why did you decide to take up the assignment to head the Constitution review panel?" He replied: "It was a difficult decision. But then if India is to join the new world order under the World Trade Organisati on (WTO) dispensation, we have to be prepared and be competitive. It is important to find out how we have fared in the past 50 years and assess why we have not been able to develop an egalitarian society. Are we sliding rapidly? These are matters of nati onal concern." And also, a provocation for constitutional revision!

He added, very significantly, "we have to examine if our achievements are consistent in (sic) a parliamentary form of democracy. Crucial areas where the socio-economic reforms have not had its impact need serious thought. The quality of education, banking system, the necessity for constitutional watchdogs, marginalised segments of society, electoral system and economic federalism are all areas which need to be looked at. We have also to find out if the systems incorporated in the constitutional m echanism can cope with the process of globalisation. Then, we also have to ascertain whether there should be constitutional limits on public expenditure. If there is disenchantment, it is necessary to find out why" (Outlook, February 14).

That he is very much at sea is evident from another press interview also: "There is a vast array of issues that may need to be looked into, such as the electoral system, administration of justice, economic development and social opportunity, environmenta l safeguards, sustainable development" (The Hindustan Times, February 6). Every thing except the kitchen sink. So far removed is he from the realities that in the case concerning the validity of the anti-defection law, the Tenth Schedule to the Co nstitution, he upheld the Speakers' status as judges in disputes in his majority judgment (3-2) certifying their impartiality with great enthusiasm despite 10 years of Balram Jakhar as Speaker of the Lok Sabha and decades of other performers.

In the last decade, every single Lok Sabha election manifesto of the BJP has repeated the obnoxious triple demands coupled with the pledges for constitutional revision in varying forms. The one for 1989 asked for "a commission to examine the Constitution of India for making it an effective instrument for containing centrifugal tendencies". It was then an avowedly centrist party which believed that "the Indian Constitution is quasi-federal" - not federal. In 1991, it promised to implement the Sark aria report on Centre-State relations. The three controversial pledges were repeated but there was a variation of the pledge for constitutional review. The commission would study "whether the presidential system of government will give us a more stable g overnment than the present parliamentary system." This explains the implications underlying pleas for "stability." In 1996, the three controversial demands remained. The plank on constitutional review was dropped, only to be revived in 1998: "The BJP wil l appoint a commission to comprehensively review the Constitution of India, in the light of the experience of the past 50 years and make suitable recommendations. The commission will comprise constitutional experts and eminent parliamentarians." A s in the past, the three controversial pledges remained.

They were omitted in the National Agenda for Governance it adopted along with its allies in the Government on March 18, 1998, while the pledge for a review of the Constitution was taken over almost in identical terms from the BJP's manifesto.

The BJP did not issue an election manifesto for the 1999 Lok Sabha elections. Only the National Democratic Alliance did, omitting, as before,the BJP's three controversial demands but repeating the pledge for "a Commission to review the Constitution of In dia in the light of experience since Independence."

The Sangh Parivar has never been comfortable with the Constitution or, indeed, with Indian democracy and its secular credo. Remember the White Paper on New Year's Day 1983 on The Present Constitution by Swami Muktanand Saraswati. His complaint was that it was an Indian, not a Hindu Constitution (see this writer's article, "Targeting the Constit-ution", Frontline, May 7, 1993, reproducing large extracts from the pamphlet).

What was the reaction of the Rashtriya Swayamsevak Sangh (RSS) and the BJP to the pamphlet? The Parivar came out of the closet and declared in clearest terms its resolve to wreck the Constitution. Fittingly enough, the mother of the Parivar, the RSS, was the first to speak. Indian Express of January 14, 1993 published an article by the RSS supremo, Rajendra Singh. One has only to compare his formulations with those of the pamphlet, and the design stands exposed. They are so strikingly alike.

Rajendra Singh wrote: "The present conflict can be partially attributed to the inadequacies of our system in responding to the needs of the essential India, its tradition, values and ethos. At the time of Independence, the 1935 model was adopted wholesal e with some modifications here and there. Scores of amendments to the Constitution that have been enacted point to the need for change.

"Certain specialities of this country should be reflected in the Constitution. In place of 'India that is Bharat', we should have said 'Bharat that is Hindustan'. Official documents refer to the 'composite culture', but ours is certainly not a composite culture. Culture is not wearing of clothes or speaking languages. In a very fundamental sense, this country has a unique cultural oneness. No country, if it has to survive, can have compartments. All this shows that changes are needed in the Constitution . A Constitution more suited to the ethos and genius of this country should be adopted in the future". The plea for "changes" is swiftly altered to one for a new Constitution, suited to "the ethos and genius" of the RSS, no doubt.

The then BJP president, Murli Manohar Joshi, did not lag behind, either. On January 24, 1993 at Anantapur, Andhra Pradesh, he said the present situation was owing to the neglect of Hindutva. Indian Express reported (January 25) that "he harked bac k to what he said was the glory of India during the Vedic period and said that the need of the hour was to 'revive that glory'. Joshi reiterated the demand for a fresh look at the Constitution."

On May 17, 1996, even in the brief uncertain days in office, Law Minister Jethmalani "initiated an exercise to ascertain the research work done by the Ministry on the feasibility of a uniform civil code", PTI reported (The Statesman, May 18, 1996) . In 1998, no sooner did he become Home Minister, Advani selected as the topic for the Thakur Prasad Memorial Lecture at Patna on April 26 "Need for a Commission to review the Constitution." He said in so many words that "the basic structure doctrine does not bind us to parliamentary democracy". (The Hindu, April 27, 1996). What, then, is the worth of the assurances of today that "the basic structure" would not be disturbed?

The current debate began last month when it became known that the Law Ministry had prepared a background paper. R. Venkatraman of The Telegraph had a copy and revealed its contents in the issue of January 6. The Committee would "scrutinise almost all its (the Constitution's) contours" the powers of the President included. It proposed two alternatives - a committee with a judge at its head or a parliamentary committee. The background paper has not been published by the Government. It railed against the "increasing pro-active judiciary". Was a copy furnished at least to the leaders of the Opposition parties? Article 370 as well as a uniform civil code were also covered (The Telegraph, January 20).

Jethmalani's remarks on January 28 are noteworthy because they came a day after speeches by the President and the Prime Minister. The Supreme Court's notions of "misguided secularism" as the basis for imposition of President's Rule (in the aftermath of t he demolition of the Babri mosque) needed to be "reviewed" (The Hindu, January 29). His remarks on secularism and on the President's powers are noteworthy (The Statesman, January 29). Whether it was meant as a jibe or not, he made a puerile comment: "If the President was opposed to any amendment of the Constitution per se, he would have been highly critical of what has been done to the Constitution almost 80 times in a span of 50 years". K.R. Narayanan was in Foreign Service for mos t of his life. For all his quibble about "uniform justice" it is a uniform civil code that Jethmalani is clearly after as also a "redefinition" of secularism. (The Telegraph, January 29). Elected on the Shiv Sena ticket, he wants "the correct pers pective of true secularism."

The Statesman reported (January 30) that the Law Ministry's note was based on a "background paper" drafted by "a committee with 'a saffron complexion', as a Ministry official put it." (Their names were also mentioned). It covered the presidential system as well as a uniform civil code.

The committee's terms of reference are vague enough to include them. "To examine in the light of the experience of past 50 years as to how best the Constitution can respond to the changing needs of efficient, smooth and effective system of governance and socio-economic development of modern India within the framework of parliamentary democracy and to recommend changes, if any are required, without interfering with its basic structure or feature."

Official sources said religious practices "perceived to come in the path of the working of the Constitution would certainly be examined." (The Telegraph, February 2; see also The Statesman, February 2). They exclude, apparently, the preside ntial system; but, neither repeal of Article 370 nor adoption of the uniform civil code, nor a redefinition of secularism to which Murli Manohar Joshi is committed (The Statesman, February 3).

Meanwhile, the Constitution is being "amended" in actual practice. "It is perfectly possible to pervert the Constitution, without changing its form, by merely changing the form of the administration and to (sic) make it inconsistent and opposed to the sp irit of the Constitution." Ambedkar's prescient words in the Assembly on November 4, 1948 are being proved right. It was Advani's letter of July 13, 1999 which gave Gujarat the green signal for inducting the RSS into the civil service. He and Vajpayee ha ve cocked a snook at the President and the nation. The well-meaning ones and others not so well-meaning who have gone on board the ship of constitutional revision will find that it had sprung a leak before it left port.

THE impression that the Commission will be free to review Article 370 as well as a uniform civil code is confirmed by Law Minister Ram Jethmalani's interview to the Press Trust of India on February 11. "As far as our government is concerned, a review of Article 370 is not on the agenda."

Indeed it is not, but see how he brings it in through the back door. "However, if any person represents the commission on the issue, the same could be considered by the expert body." The cat is out of the bag. The commission will be free to go into the i ssues which were formerly out of the government's agenda, but the review commission is an instrument for implementing the BJP's hidden agenda.

'There are some things of eternal verity'

the-nation

Justice M.N. Venkatachaliah, former Chief Justice of the Supreme Court and former Chairman of the National Commission on Human Rights, who has been asked by the government to head the commission to review the Constitution, spoke to Parvathi Men on on various issues that a review Commission could address in respect of the working of the Constitution. Excerpts from the interview:

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After your name was proposed as chairperson of the commission to review the Constitution, you were quoted in the media as having said that you would accept this on two conditions, the first that the basic features of the Constitution would not come u nder review, and second that the system of parliamentary democracy would remain untouched. What in your view constitute the basic features of the Constitution, and is there a legal consensus on this?

At the outset I must tell you that I did not stipulate any conditions. I said that if I know the terms of reference it will be easier for me to make up my mind, and I wanted to know whether the terms of reference included a discussion on the basic featur es of the Indian Constitution. I also thought that I may as well know with whom I am working. These are not conditions, but things that would enable me to make up my mind.

So far as the basic features are concerned, the Supreme Court in the Keshavananda case, while dealing with what matters are amenable to the amending process under the Constitution, and what matters are not amenable to the amending process under th e Constitution, held certain constitutional fundamentals of the Indian Constitution as immutable in relation to the power of Parliament to change the Constitution. For example, we have republicanism, we have secularism, we have independence of the judici ary, the rule of law, judicial review, and certain values of the Constitution which form the substratum of the constitutional edifice. These are some of the things which are of eternal verity, some things we can't debate. Every civilised country has to h ave these values. Therefore some of these things are not open to debate, and naturally, if you want to amend the Constitution, you can't take up things that you can't amend at all.

Was the Keshavananda ruling the only one that defined the basic features or were there other rulings?

Quite true. But there are certain things that are clearly not basic features which can be amended. For example, adult franchise is a basic feature, but how you regulate the constituencies is not. Today the working of the Constitution is the issue. How ha ve we worked the Constitution? There are matters which can acquire the complexion of basic features, there are matters which cannot obviously acquire the complexion of basic features, for example, say, matters of procedure. I don't think there is a grey area here. There is a potential area depending upon the way we work the Constitution. The courts might say you can't lay down everything exhaustively, enumerate everything once and for all. In this context we confine normally to what the courts have alre ady said are the basic features, that is the point. If we are suggesting an amendment then it must be amenable to the amendment. If it is not amenable to the amendment because it is a basic feature, then where is the question of the Commission discussing it?

There are two clear views on the question of a constitutional review. One which says that for a variety of reasons (including the need for political "stability" at the Centre) the Constitution needs to be reviewed - the view articulated by the Prime Minister who talked of the need to "repair the mighty fort". The other view is that it is not the Constitution which has failed us, but we who have failed the Constitution, and that there is no need for a comprehensive review. What are your views on this ?

I think that there is some substance to both views. Speaking personally and not as chairman-designate of this Commission, what I would wish to say is that we have failed the Constitution in a substantial measure in working the Constitution, our whole app roach to administration and governance. We have never thought that we are discharging our constitutional obligations and duties, and responding to the constitutional rights of people. That kind of mindset - that the Constitution is our fundamental law an d all that we do must comport with the constitutional aspirations of the people - has not yet come in.

There are some spectacular achievements the Indian democratic polity has brought about. Life expectancy at birth was 27 years when we got Independence. Today it is 74 years for women in Kerala. We had 1,362 MW of power in 1947, we have more than 90,000 M W of power today. Our literacy was 10 per cent when the British left us, today it is 60 per cent. Our infant mortality used to be 160-170 per thousand live child births, today it is 65. But all these benefits are neutralised as a result of the explosion in the population. And I think we have failed in controlling this problem. I feel that the one route to control the population was the literacy route, as Kerala has demonstrated. Literacy, education of the child, particularly the girl child, would be the surest way of empowering civil society and making it strong enough to demand and exact its entitlements of the political society.

So there are areas in which we have enormously failed. It is true that the philosophical foundations of the Constitution are sound, its mechanisms are sound. But maybe as the new South African Constitution has demonstrated, there are not enough watchdog mechanisms built into the Constitution which will oversee and enforce the performance of translation of constitutional phrases into constitutional realities. Therefore an examination of how the Constitution has worked over the last 50 years may indicate whether there are areas where the Constitution also needs to be supplemented. For example, women and child care, population control, all these mechanisms require specific constitutional controls and devices and mechanisms to achieve the result. That is o nly an example.

Will you have a say in the selection of the other members of the Commission?

Strictly speaking, it is the prerogative of the government to make nominations to the Commission. I expect as a person who is supposed to work with them, to be told who the members would be so that the common purpose of both the government and mine would be ensured, so that the composition reflects in a substantial measure, the ethnic, religious, linguistic and cultural diversity of Indian polity and its pluralist society.

The Constitution was drafted by the Constituent Assembly which was a very representative body. This is the first time that the Constitution is sought to be subjected to a comprehensive review. How representative do you think this Commission is of Ind ia's pluralist society and its requirements?

Your question presupposes that the work of this Commission is equivalent to the work of the Constituent Assembly. This Commission is to review substantially the way the Constitution has worked. It can only give a feedback from the civil society. It acts as a conduit or a channel to formulate the experience of the civil society in the working of the Constitution - its hopes, despairs and disenchantments - and pass it on to the political society. And these 11 members are not the ones alone who will do it. They will go to the society, collect statistics, have research backup on socio-economic progress and what was absolutely necessary to have been achieved, whether those benchmarks have been reached, and then say why in their opinion, aided by experts who se help they would take for their research backup, whether any of the failures are attributable to the absence of constitutional support.

This is essentially an academic exercise. It is some kind of a feedback to the powers-that-be to deal with the matter. It is not a body which is empowered to alter the Constitution. It does not have the capacity, the competence, the sanction or the legit imacy to go into that aspect of making amendments. During the bicentennial of the American Constitution a committee went into it and there are excellent articles written on how and whether the blessings of the Constitution have reached the populace. This is the example. To mistake it is to equate its work with that of a Constituent Assembly.

What is not clear is whether the Commission is merely reviewing the working of the Constitution or reviewing it with a view to amending it.

As I understand (of course you must make it very clear that I have repeatedly said that it is for the Commission as and when it is constituted to understand the dimensions of the task. I am only anticipating as I have got to answer your question) the Com mission is to review the working of the Constitution in key social and economic areas, and key areas of public welfare, and whether even a modicum of the constitutional expectations of large masses of people have been fulfilled or not.

Today we have the dismal situation of a social infrastructure where 670 million people in this country don't have basic sanitary facilities, and 260 million don't have potable water. Forty per cent of the world's tuberculosis patients are in India, 25 pe r cent of the world's blind are in India. Fifty per cent of the world's illiterates are in India. Fifty per cent of the world's leprosy afflicted are in India. So can you say that this kind of thing could have been managed (or mismanaged) better? This is the basic thing. This is an introspection through a body of experts. And experts who as far as possible represent the diverse composition of Indian society. These 11 people in turn depend on society at large... there must be research backup and interact ion with society. Then there is the issue of the enormous corruption in public life, electoral malpractices, the tyranny of wealth, and the insolence of authority. They have all made the life of the common man one of disenchantment with the institutions of democracy.

Since parliamentary democracy is seen as one of the basic features of the Constitution, do you think that there should have been a consensus in Parliament on the need to set up such a review commission?

Parliament is supreme and it could have done it. But today we are considering whether the existing government wanted to educate itself on this issue and how valid or how legitimate that exercise is. You must test it on the merits of that issue. This to m e appears to be an academic exercise, I don't want to be drawn into the ideological or political differences aired about it. I am looking at it as a citizen and as a judge.

Will the terms of reference of the Commission not merely indicate its aims and objectives but also indicate what is not negotiable?

Quite right. I told somebody that in specifying a legal requirement you must specify it with such degree of precision that not only those who read in good faith must understand but also those who read in bad faith don't misunderstand! So if you read it < I>bona fide, it gives obviously certain meanings. If you want to read it in bad faith it may mean many things. It is for the Commission ultimately to understand the contours of the reference.

In one of the interviews you gave you said that you would get a feedback from various sections of society by the circulation of a comprehensive questionnaire.

Well, that is my idea, not the Commission's idea, please make that clear. This is one of the methodologies by which a small 11-member group can get feedback from trade unions, panchayati raj institutions, minorities, backward people, and other affected i nterests in society; how they visualise the 50 years of their lives under the Constitution. To get that and collate it, that is my idea and not the Commission's idea because at this stage I am not competent to speak on behalf of the Commission which is n ot yet constituted. In my view this is only a concomitant of my observation that we must act as a connecting car between political society and the civil society.

It is a feedback from civil society as to the degree of success of the working of the Constitution, and also the areas where we have failed, and ascertain and interpret why such failures have occurred. Is anything attributable to the absence or inadequac y of constitutional supports, then formulate your recommendations which eventually will have to go through the fire of a parliamentary debate.

Do you think that the directive principles should become justiciable?

I think it is time that some of the directive principles became directly justiciable. In fact it was again in the Keshavananda case that the great contribution was made that the concept of mere non-justiciability of directive principles was not accepted but they were taken as important principles in the governance of the country, and therefore they should necessarily influence the interpretation of the fundamental rights themselves. They should supply the content, pour meaning into the fundamental right s. This was the great contribution of the Supreme Court which synthesised the non-justiciable directive principles and fused them with the fundamental rights, bringing about law and justice, constitutionality and justice, on speaking terms. That was the most fundamental contribution of the Supreme Court.

In fact, the Supreme Court itself elevated universal compulsory primary education to the level of fundamental rights. You must realise that in the draft Constitution the obligation for primary education was in the fundamental rights chapter and inequalit y clause was in the directive principles chapter.

One of the government's stated reasons for the review was the need to bring stability into the political system... the need to prevent a situation where a government does not fall on one vote and without a viable alternative. Would you allow for tink ering with the system of parliamentary democracy to bring in short term stability?

The Commission is not committed to, I'm sure, any pre-set ideas or ideology of any particular party. Nobody says that stability is an undesirable quality. Nobody says that the price you must pay for stability is democracy itself. Therefore in between the two perhaps there may be many ideas that experts and political scientists will offer as to how to work the system with reasonable stability without sacrificing the fundamental democratic principles. This is a matter which if it comes up - I can't say if it will or not - I have my own notions which are not binding on the Commission. I am discussing this at a stage that is perhaps premature, please make the point that whatever I have said is absolutely premature.

Vajpayee's two faces

other
A. G. NOORANI

ON August 2, 1979, Atal Behari Vajpayee wrote in a famous article in Indian Express entitled "All responsible for Janata crisis" that the Rashtriya Swayamsevak Sangh (RSS) was not responsible for the crisis in the Janata Party. But, he added:

"Having said this, I must also add that the RSS, claiming to be a social and cultural organisation, should have taken greater pains to demonstrate that they did not seek a political role. Patronising a press that takes sides in the sordid politics of pow er, involvement in youth bodies that interact with political parties, participating in trade union rivalries such as the one which recently brought enormous misery to the people of Delhi by callously cutting off the water supply - these do not help the o rganisation to establish its apolitical credentials.

"It is possible that some people genuinely feel apprehensive about the RSS. A certain onus accordingly devolved on the RSS, an onus that has not been discharged effectively by the RSS. Its repudiation of the theocratic form of the state was welcom e, yet the question could legitimately be asked - why does it not open its doors to non-Hindus? Recent statements of the RSS Chief, Mr. Deoras, indicates that non-Hindus are being encouraged to join the organisation. A natural corollary of this pr oposal would be clear enunciation by the RSS that by Hindu Rashtra it means the Indian nation which includes non-Hindus as equal members.

"The other course of action open to the RSS could be to function only as a Hindu religion-cum-social-cultural organisation wedded to the task of eradicating the evils, revitalising it to face the challenges of modern times. The kind of selfless service t hat the RSS has rendered in times of natural calamities has endeared it even to its critics and has established beyond doubt its capacity for constructive work for ameliorating the suffering of those who are in need of help. Such an organisation will dra w support and sustenance from members of various political parties as has been the case with institutions like the Arya Samaj."

To this day the RSS refuses to accept non-Hindus as its members. Deoras even said on November 15 and 16, 1987 that it planned to enter politics (see the writer's "A threat comes true: RSS & elections": Frontline; May 3, 1996). It became more braze nly communal and political since 1979.

The RSS did not mend its ways. Vajpayee mended his. He said on February 5: "The RSS is not a political organisation but a cultural and social one."

This is not only in defiance of the President whose anxieties over the Gujarat order and Advani's prior green signal to it are no secret. It is Vajpayee's surrender to Advani and the RSS who are using his Kandahar humiliation to show him his place in the set-up.

Disturbing polemics

The Prime Minister's defence of the Gujarat Government's decision to lift the ban on State government employees taking part in RSS activities and the proposal to review the Central Civil Servies (Conduct) Rules point to a worrisome move that may have the effect of communalising the all-India services.

THE Gujarat Government's decision to lift the ban on State government employees taking part in the activities of the Rashtriya Swayamsevak Sangh (RSS), the ideological fountainhead of the organisations in the Hindutva fold, has triggered an intense polit ical debate. In some ways, it is reminiscent of another such debate in the late 1970s when the Janata Party Government at the Centre was wracked by convulsions over the issue of dual membership: disagreements over the propriety of some Janata Party membe rs retaining their membership of the RSS eventually contributed to the collapse in 1979 of the first non-Congress government. This time, however, the debate has so far not directly threatened the cohesiveness of the ruling National Democratic Alliance (N DA), since the Bharatiya Janata Party and its allies have taken the view that the RSS is not a political organisation.

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Prime Minister Atal Behari Vajpayee, who had for a few days maintained a studied silence on the BJP-ruled Gujarat Government's decision, revealed his mind on February 5. "The RSS," he told newspersons, "is not a political outfit. It is a cultural and soc ial organisation and I don't think objections should be raised to anybody joining it."

The remark, which was seen as an ill-conceived defence of the Gujarat Government's ill-advised decision, surprised many who had convinced themselves that Vajpayee was cultivating a "liberal" political constituency so as to defend himself against the dieh ard and rather more militant votaries of Hindutva within the Sangh Parivar. Opposition parties were outraged by Vajpayee's defence of the indefensible; Opposition leaders read the development as an indication that Vajpayee was perhaps feeling boxed in by the hardliners and was preparing to rip off his "liberal" mask and be counted as one whose loyalty to the Sangh was undiminished.

Vajpayee's remarks struck a discordant note on another count as well. For the Centre to defend the Gujarat Government's decision was illogical since a similar ban is in place at the Central level: the Central Civil Services (Conduct) Rules and the All In dia Services (Conduct) Rules forbid Central services employees to participate in the activities of the RSS. In Gujarat, the Government amended the State Civil Services (Conduct) Rules in order to permit government staff to associate themselves with the R SS. In defence of its action, the Gujarat Government cited the findings of the Bahri Tribunal, which quashed the ban imposed on the RSS in December 1992 in the wake of the demolition of the Babri Masjid.

The BJP's allies seemed overly eager to accept the argument that the RSS was not a political party or a banned organisation and that there was therefore nothing wrong in government servants participating in its activities. Perhaps emboldened by this, Uni on Home Minister L.K. Advani said in a television interview that there was a case for reviewing the Central Civil Services (Conduct) Rules in order to lift the restrictions on government servants participating in the activities of organisations that were no longer banned.

Sub-rule (1) of Rule 5 of the Central Civil Services (Conduct) Rules, 1964 states that no government servant shall be a member of, or be otherwise associated with, any political party or any organisation which takes part in politics nor shall he take par t in, subscribe in aid of, or assist in any other manner, any political movement or activity.

In 1966, the Union Government clarified that the government had always held the activities of the RSS and the Jamaat-e-Islami to be of such a nature that participation in them by government servants would attract the provisions of Sub-rule (1) of Rule 5 of the CCS (Conduct) Rules. It warned that any government servant who was a member of or was otherwise associated with these two organisations or with their activities was liable to disciplinary action.

Significantly, there was no ban on the RSS in 1966. The RSS was banned following the assassination of Mahatma Gandhi in 1948 (his assassin, Nathuram Godse, was a former activist of the RSS), but that ban was lifted a year later. Although the RSS was form ally exonerated of the charge of complicity in the assassination, the then Home Minister, Sardar Vallabhbhai Patel, had charged the RSS with whipping up a communal atmosphere in the country in the wake of Partition, which had resulted in Gandhi's killing .

THE attempt by Vajpayee and Advani to portray the RSS as an apolitical organisation and as a cultural outfit is far from convincing in the light of the RSS' statements and actions over the years. Although the RSS has not directly taken part in elections, it is known to have lent the services of its pracharaks (full-time propagandists) to the erstwhile Jan Sangh and the BJP for party work. These pracharaks maintain their links with the RSS and provide an interface between the RSS and its po litical arm of the day. K.N. Govindacharya, Narendra Modi, Sunder Singh Bhandari and Kushabhau Thakre are RSS pracharaks who were at various times deputed to the BJP. Both Advani and Vajpayee were once RSS pracharaks. As the Jan Sangh and l ater the BJP groped for a mass base, these pracharaks brought with them their grassroots-level political experience they had gained in the RSS.

The RSS has for long had a say in the BJP's affairs - in determining the party's office-bearers, in the choice of candidates for elections, and so on. It may be true that RSS leaders do not directly take part in election campaign meetings, but Sangh acti vists have been central to the BJP's campaign network. Moreover, RSS leaders miss no opportunity to express their views on political issues.

The restrictions placed in the Central Civil Services (Conduct) Rules were meant to prevent civil servants from associating themselves even remotely with political organisations or functions. Of course, civil servants are free to vote in elections, atten d public meetings organised by political parties, and listen to political leaders. The Centre had clarified in 1969 that the restrictions in the CCS (C) Rules were essential to ensure that government servants not only maintained political neutrality, but were seen to be doing so and that they did not participate in the activities of, or associate themselves with, any organisation in respect of which there was the slightest reason to think that it had a political aspect.

In 1980, the Centre reiterated its decision not to permit civil servants to participate in the activities of the RSS and the Jamaat-e-Islami. "In the context of the current situation in the country, the need to ensure secular outlook on the part of gover nment servants is all the more important. The need to eradicate communal feelings and communal bias cannot be overemphasised," the Government said.

VAJPAYEE'S and Advani's defence of the Gujarat Government's decision drew flak from Opposition parties.

The Congress(I) submitted a memorandum to President K.R. Narayanan, in which it sought a reversal of the Gujarat Government's order. The President forwarded the memorandum to the Government, and although no explanation was sought from it, the Prime Minis ter asserted that the Government would offer him a satisfactory explanation.

Congress(I) spokesperson Anil Shastri wanted the BJP's allies in the NDA to take note of Vajpayee's remark, which he said marked a "major deviation". The Congress(I) launched a campaign to protest against the Gujarat Government's decision. Party presiden t and Leader of the Opposition Sonia Gandhi led a march by party workers to the Prime Minister's residence in New Delhi on January 30, the anniversary of Mahatma Gandhi's assassination. She broke through a police barricade, courted arrest, and exhorted p arty workers to campaign aggressively on the issue, if necessary by "filling the jails". Later in the day she addressed a rally in Ahmedabad.

Madhya Pradesh Chief Minister and Congress(I) leader Digvijay Singh said the Prime Minister had adopted a "benign attitude" towards his party's government in Gujarat.

Communist Party of India national secretary D. Raja warned that the Prime Minister's action in giving a clean chit to the RSS would open a Pandora's box and embolden other communal and fundamentalist organisations to demand a similar relaxation of rules. The Janata Dal (Secular) said that Vajpayee's description of the RSS as a non-political outfit that was active only in the social sphere was fallacious. Party spokesperson Kunwar Danish Ali said that several commissions of inquiry had indicted the RSS f or its role in communal clashes.

The Polit Bureau of the Communist Party of India (Marxist) refuted the Prime Minister's claim that the RSS was a "social outfit" and said there was no doubt that the Sangh had a "clear-cut political-ideological perspective though working in the guise of a social outfit". It suspected that the Gujarat Government's order was aimed at infiltrating the State administration with RSS elements and communalising it.

THE BJP's allies in the NDA seemed an excessively eager to accept the alibi put out by Vajpayee in defence of the RSS. Tamil Nadu Chief Minister and Dravida Munnetra Kazhagam (DMK) president M. Karunanidhi said he found nothing wrong in the Prime Ministe r's characterisation of the RSS (see box). Janata Dal (United) vice-president Jeevaraj Alva defended the Prime Minister's remark.

The Gujarat Government, which had come under attack following its controversial order, seemed relieved by Vajpayee's and Advani's defence of its action. The Government and the BJP's State unit dismissed the Congress(I)'s protests as of no consequence.

Karunanidhi on RSS

other
T.S. SUBRAMANIAN

THE Gujarat Government's decision to allow its employees to participate in the activities of the Rashtriya Swayamsevak Sangh (RSS) and Prime Minister A.B. Vajpayee's defence of it have sparked a controversy in Tamil Nadu involving Chief Minister and Drav ida Munnetra Kazhagam (DMK) president M. Karunanidhi. Karunanidhi, who first declined to comment on the issue, later endorsed Vajpayee's remark that the RSS was a "social" and not a political organisation.

The DMK chief's political opponents were quick to pounce on his seeming equation of the RSS with the Dravidar Kazhagam (D.K.). This invited sharp criticism especially from Tamil Maanila Congress (TMC) president G.K. Moopanar. (Karunanidhi has since denie d that he made such a comparison.)

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It appeared as if Karunanidhi was equivocal in his characterisation of the RSS, but clear that government employees should not be allowed to take part in RSS activities. He explained that "even if it is accepted that the RSS is not a political organisati on, just as some social organisations are taking part in politics the RSS is also taking part in politics. I have made it clear that I cannot accept the view that government employees can join the RSS. I still hold this view."

Newspapers on February 6 reported that the Prime Minister had upheld Gujarat's decision. Vajpayee was quoted as having said that the RSS "is a cultural and social organisation, and I do not think objections should be raised against anybody joining it."

Speaking at a function in Chennai on that day, Karunanidhi said: "The Government at the Centre will remain secular because we are aligned with it." He denied that the BJP-led government was opposed to minority communities. In this context he referred to the reception accorded to Pope John Paul II on his visit last year. When reporters sought his views on the Prime Minister's statement, he said tersely: "I do not want to comment on it."

Two days later, Karunanidhi told mediapersons that no communal organisation was acceptable to the DMK. "In Tamil Nadu, some outfits calling themselves social organisations are taking part in political activities. Perhaps, in Gujarat too, the RSS is calli ng itself a social organisation and participating in politics." Asked specifically whether he endorsed Vajpayee's argument that the RSS was a social organisation, the Chief Minister said: "I accept it." He added: "The Dravidar Kazhagam is a social organi sation. But there are big ideological differences between the RSS and the Dravidar Kazhagam. Both call themselves social organisations. Yet they are not the same. I came from the Dravidar Kazhagam."

This invited a broadside from Moopanar, who said that "compulsions of power" had forced Karunanidhi to describe the RSS as a social organisation. He reminded Karunanidhi of an article he had written in the March 7, 1999 issue of Murasoli, the DMK organ, in which he had said: "They (the RSS members) do not respect humanitarianism. Nor do they love humanitarianism. They do not subscribe to communal harmony or to the belief that all religions are one. Such persons are in power today. In support of s uch a regime, there are some parivars and retinue. Their atrocities and high-handed acts have made India bow its head in international forums."

Moopanar said that he was not angry with Karunanidhi for changing tack. "I am only pained that this misfortune has befallen Tamil Nadu. Karunanidhi has equated the RSS with the Dravidar Kazhagam. If Periyar (E.V. Ramasamy, leader of the Dravidian movemen t) and Anna (C.N. Annadurai, the first DMK Chief Minister) had been alive today, they would have shed tears of blood." It was a "travesty of the times" that Karunanidhi, a "senior disciple" of Periyar, should call the RSS a social organisation, Moopanar remarked.

IN a letter to Vajpayee on February 9, Karunanidhi proposed that a national consensus be evolved to forbid government servants from joining social organisations having links with political parties. The letter noted: "... Both the Government of India as w ell as the State governments have already framed Conduct Rules for government servants. ...all State governments and the Government of India, in their rules, specifically prohibit government servants (from) joining political parties."

The Chief Minister hoped that the Prime Minister would agree with him that government servants should not take part in political activities and that people should not lose faith in the impartial and apolitical nature of the administrative machinery.

The conviction of Jayalalitha

AIADMK leader and former Chief Minister Jayalalitha is sentenced to one year's rigorous imprisonment on charges of criminal misconduct and criminal conspiracy in what is known as the Pleasant Stay Hotel case; she has appealed and the sentence ha s been stayed by the Madras High Court.

ON February 2, All India Anna Dravida Munnetra Kazhagam (AIADMK) general secretary Jayalalitha became the first former Chief Minister to be punished under the Prevention of Corruption Act (PCA), 1988 when Special Judge V. Radhakrishnan in Chennai convict ed and sentenced her to one year's rigorous imprisonment for her role in granting illegal exemption in 1994 to Pleasant Stay Hotel, Kodaikanal from building and hill area development control rules. The exemption related to the unauthorised addition of fi ve floors to the hotel building. The judge sentenced Jayalalitha, the first accused, to one year's rigorous imprisonment each on the charges of criminal conspiracy under the Indian Penal Code (IPC) and criminal misconduct by a public servant under the PC A. She was also asked to pay a fine of Rs.1,000 on each of these counts.

Radhakrishnan sentenced four other accused to rigorous imprisonment for one year and six months on different charges and asked them to pay varying amounts as fine. The sentences of imprisonment were to run concurrently. These accused were T.M. Selvaganap athy, former Local Administration Minister and now the Lok Sabha member from Salem (A-2); H.M. Pandey, former Secretary, Municipal Administration and Water Supply (A-3); Rakesh Mittal, executive director of the hotel (A-4); and Palai N. Shanmugham, its c hairman and managing director (A-5).

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Radhakrishnan convicted all the five accused under Section 120-B (criminal conspiracy) and sentenced them to one year's rigorous imprisonment each. He held them guilty of conspiring to grant the exemption. While the judge gave the benefit of the doubt to Jayalalitha and acquitted her under Section 477-A of the IPC (falsification of records), Selvaganapathy was sentenced to imprisonment under that section. Jayalalitha, Selvaganapathy and Pandey were convicted under Section 13(2) read with Section 13(1)(d ) of the PCA and sentenced to one year's rigorous imprisonment each. Mittal and Shanmugham were convicted under Section 109 of the IPC (punishment for abetment) read with Section 13(1)(d) of the PCA and sentenced to one year's rigorous imprisonment each.

The Special Judge said: "We have sufficient circumstantial evidence which proves beyond any reasonable doubt that A-1 to A-3 committed criminal misconduct abetted by A-4 and A-5, and A-1 to A-5 were party to the criminal conspiracy. Hence I am inclined t o impose the minimum sentence contemplated under Section 13(2) of the Prevention of Corruption Act."

Section 13(1)(d) of the PCA says: "A public servant is said to commit the offence of criminal misconduct if he (i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public in terest..."

Section 13(2) states that "any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine."

Jayalalitha was Tamil Nadu's Chief Minister from 1991 to 1996 and Selvaganapathy was a Minister in her Cabinet. Pandey is an Indian Administrative Service (IAS) officer. As such, they were all public servants as defined by the law.

The judge said the file relating to the hotel should have reached the Chief Minister through her office if the usual procedure had been adopted. However, evidence from three prosecution witnesses showed that it had gone directly to her table from Selvaga napathy. She gave her approval to the exemption by affixing her signature. The judge, therefore, concluded that circumstances clearly indicated that Jayalalitha had conspired with Selvaganapathy, and also Mittal and Shanmugam, to grant pecuniary advantag e to the hotel by passing orders and she thus had abused her position as a public servant.

The Dravida Munnetra Kazhagam (DMK) Government headed by M. Karunanidhi, which assumed office in 1996 after Jayalalitha lost the Assembly elections, filed 46 cases of corruption against her, her Ministers and some bureaucrats. Eight cases of corruption w ere filed against Jayalalitha alone.

The Pleasant Stay Hotel case was the focus of attention after Justice S. Thangaraj of the Madras High Court discharged Jayalalitha on January 13 in the "Jaya Publications case" and "Sasi Enterprises case", together called the "TANSI case" (TANSI is the a cronym for Tamil Nadu Small Industries Corporation). The same day, Justice Thangaraj upheld Special Judge Radhakrishnan's order discharging Jayalalitha in a case relating to alleged irregularities in the import of coal by the Tamil Nadu Electricity Board .

ON February 2, hundreds of policemen were massed around the building where the courts of three special judges are located. Supporters of the AIADMK had gathered in large numbers. Jayalalitha arrived in the court hall at 10-10 a.m., accompanied by her ass ociate Sasikala Natarajan and AIADMK Lok Sabha member T.T.V. Dinakaran. The court hall was packed with advocates and AIADMK members.

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At 10-30 a.m., the judge began to pronounce the orders. When he first said he acquitted A-1 (Jayalalitha) of charges under Section 477-A of the IPC (falsification of records), she looked relieved. Jubilant AIADMK members ran out of the court, shouting, " acquitted, acquitted." Outside the complex, party men fired crackers and distributed sweets. But their joy was short-lived.

When the judge said next that he found all the accused guilty of charges under Section 120-B of the IPC, Jayalalitha looked shocked. Then he read out the sentences of imprisonment and the fine amounts. The judge suspended his order until March 3 for the accused to appeal to the High Court.

According to the Directorate of Vigilance and Anti-Corruption (DVAC), which filed the case, the hotel management was permitted to build only the ground and first floors but it constructed seven floors. The DVAC filed the charge-sheet on January 18, 1997.

In April 1991, Mittal was granted permission by the Kodaikanal township to construct the ground and first floors. In January 1992, he submitted a revised plan to construct seven floors but it was rejected as violative of rules. Mittal appealed against th e decision and went ahead with the construction without waiting for an order. When he was building the fourth floor, the Palani Hills Conservation Council (PHCC) obtained a stay from the Madras High Court. Navroz Mody and Tara Murali of the PHCC led the legal battle against the hotel and ultimately won (Frontline, December 26, 1997).

To legalise the illegal construction, the Jayalalitha Government surreptitiously brought in a Government Order, G.O. Ms. No.126, on May 13, 1994, granting Mittal permission for the construction of seven floors. The G.O. was not gazetted. In December 1994 , the State Assembly passed the Tamil Nadu District Municipalities (Second Amendment and Validation) Act, amending Section 217 Q. The amended section gave powers to municipalities to exempt or relax any rule made under Chapter X of the Act for even priva te buildings if they did not affect the ecology of a hill station.

P.C. Cyriac, the then Secretary, Municipal Administration and Water Supply, declined to legalise the unauthorised construction. He was transferred and Pandey was brought in in his place.

The exemption was granted by Jayalalitha, Selvaganapathy and Pandey in spite of objections from the Architectural and Aesthetics Aspects Committee (AAAC) headed by the Chief Secretary.

The AIADMK Government passed another G.O., Ms. No.317, dated December 6, 1994, exempting the building from the provisions of the Development Control Rules, relating to commercial use zone side setback and floor space index. It was given retrospective eff ect from May 13, 1994, when the earlier G.O. was passed. The PHCC challenged the second G.O. also.

On March 31, 1994, Justice J. Kanakaraj of the Madras High Court directed Mittal not to use any floor other than the ground and the first floors. Justice Kanakaraj dismissed as a "cock and bull story" Mittal's claim that all he did was to build a "baseme nt" with five floors, and that the sixth and seventh floors were the ground and first floors.

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Mittal went on appeal and Justice M. Srinivasan and Justice S. Jagadeesan dismissed the appeal. The Bench ordered the demolition of the illegal floors. It quashed the G.O. of May 13, 1994. The two judges indicted Jayalalitha and Selvaganapathy for "not a pplying their minds" when they approved the illegal construction.

IN his order, Special Judge Radhakrishnan said that in order to prove the conspiracy, it was not mandatory that the prosecution should prove that all the conspirators met each other. He pointed out that the First Information Report was filed about two ye ars after the offence took place. When the conspiracy involved high officials and politicians, it was difficult for the investigating officer to obtain incriminating material, especially two years after the offence. The special judge said, "If the prosec ution is able to prove through circumstantial evidence that there was a meeting of minds between the conspirators, it will be sufficient to prove the criminal conspiracy."

He held that despite the well-founded objections by the Department Secretary (Cyriac), Jayalalitha and Selvaganapathy gave exemption to the hotel, enabling it to gain pecuniary advantage. Although it had not been proved that they received any "reciprocal benefit" in granting the exemption, Radhakrishnan said, "the question always remains why the two and Pandey, by going out of the way and against the existing rules, should issue two G.Os to obtain pecuniary advantage for Mittal and Shanmugham." Jayalali tha, as Chief Minister, could not shift the blame to Selvaganapathy by claiming that she relied on his wisdom. That she transferred Cyriac, brought in Pandey and ignored the High Court's orders would "clinchingly prove that she had acted dishonestly by a busing her position as a public servant," the judge held.

He added that Jayalalitha and Selvaganapathy interpreted the High Court orders - that if the hotel was able to receive approval, it could complete the construction - in an improper manner to suit their convenience.

Pandey, who knew the history of the hotel file, was aware that the exemption orders by Jayalalitha and Selvaganapathy were passed without any public interest, the judge said. Although Pandey had the power to recirculate the file, he did not follow the Se cretariat instructions and willingly directed his subordinates to issue the order as desired by Selvaganapathy. The judge said that therefore Pandey became a party to the criminal conspiracy.

This was the third successive case in which the DVAC has been able to secure a conviction. Earlier, another special judge, S. Sambandham, had convicted and sentenced to imprisonment former AIADMK Minister Nagoor Meeran, his wife, Dr. Jameela Meeran, and former AIADMK legislator Malliga, who were charged with accumulating wealth disproportionate to their known sources of income. The DVAC team comprised Inspector-General of Police V.C. Perumal, Superintendent of Police N. Nallamma Naidu, Deputy S.P. S. Ra dhakrishnan and Inspector R. Venugopal.

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On the legal side, the prosecution was led by N. Natarajan, Senior Special Public Prosecutor for corruption cases against Jayalalitha. The prosecution case was conducted by Special Public Prosecutors S. Ramasamy and K.E. Venkataraman. Special Public Pros ecutor R. Karunakaran and advocate Sunder Mohan assisted Natarajan.

On an appeal from Jayalalitha, the Madras High Court suspended on February 9 the implementation of Judge Radhakrishnan's order convicting and sentencing her. Justice I. David Christian granted her bail on her executing a bond for Rs.2,000 and two suretie s for a like amount. He ordered notice to the DVAC, returnable in two weeks. In her appeal, Jayalalitha said the prosecution could not produce evidence to show any illegal motive on her part in signing and approving the G.O. of May 13, 1994.

Peace-time manoeuvres

the-nation

In a development of great importance, the Indian Navy, which is holding one of its biggest ever exercises, will soon conduct a joint exercise with the French Navy.

JOHN CHERIAN

IT is billed as one of the biggest ever exercises undertaken by the Indian Navy. Forty warships and 45 combat aircraft from the Navy and the Indian Air Force (IAF) are participating in the exercises currently under way in the Arabian Sea. The event, whic h started in the first week of February, will last until April. Codenamed Springex-2000, it will witness for the first time the IAF's Sukhoi-30s and Jaguars in action along with the Navy's Sea Harriers, the T-142M and the IL-38. The latter two are used f or long-range surveillance. Warships and submarines from both the western and the eastern fleet of the Navy will join in the exercises. The Coast Guard will also participate.

Chief of the Naval Staff Admiral Sushil Kumar said at a press conference in the first week of February that the manoeuvres would culminate in the Andaman Islands. The exercises were "aimed at validating existing and future tactical doctrines along with n ew weapons and sensors".

The Navy chief said that the country would shortly acquire a Russian-made submarine (it will be named Sindhushastra) equipped with a highly accurate weapons system. The Navy has in recent years inducted state-of-the-art weapons and vessels. INS Brahmaput ra, a guided missile frigate, and Aditya, a tanker, both built at the Garden Reach Shipyard, Calcutta, will soon join its fleet. The Brahmaputra class of frigates will also be put to test during the exercises.

For the first time a seaward attack on land by cruise missiles will be simulated during the course of Springex-2000. A senior naval officer informed that India would induct the Russian Klub cruise missile into the new Kilo class submarines such as the Si ndhushastra.

Nine Kilo class submarines are already in service with the Indian Navy, and experts are of the opinion that they could be retrofitted to carry the cruise missile. These missiles will also be fitted into the Khrivak class frigates, which India will acquir e from Russia shortly. With the induction of cruise missiles, the Navy will now have a weapon capable of striking targets deep inland. The cruise missile has a range of 300 km and comes in different variants that are capable of striking at both marine an d land-based targets.

There are also reports that the naval variant of the Prithvi, the Dhanush, will be test-fired at sea shortly. A ship has already been modified to accommodate the launch platform. The missile has a range of between 200 km and 250 km. If the launch is succ essful, the Dhanush can be serial-produced and fitted on some of the ships already in service.

Commander of the Western Naval Command, Vice-Admiral Madhavendra Singh, who also addressed the press conference, said that India would host the International Fleet Review for the first time. The Fleet Review, called "Bridges of Friendship", will take pla ce at the Mumbai harbour in February next year. More than 40 countries, including the United States, Britain, France and South Africa, have announced that they would participate in the five-day event. According to informed sources, the Pakistan Navy has not been invited.

SIGNS are that the post-Pokhran diplomatic chill that New Delhi has experienced is slowly dissolving. The joint naval exercises, coupled with the International Fleet Review, are seen as an important diplomatic development. The Indian naval establishment has tried to play down the significance of the Indo-French naval exercise, preferring to describe it as a normal peace-time activity. A senior Navy officer said that joint exercises were a normal feature since the early 1960s when the navies of Commonwea lth countries came calling to Indian ports.

In the 1970s and 1980s, the Indian Navy went into a sort of hibernation. There were no joint exercises even with the navy of the Soviet Union, India's closest strategic and political ally then. Joint exercises were revived in the early 1990s; the navy ha s been involved in 20 major exercises since then. The largest number of joint exercises in the 1990s have been conducted with the navy of Singapore, a close military ally of the West in Asia. Other countries with which the Indian Navy has conducted joint exercises are Malaysia, Oman, Seychelles, Sri Lanka, the United Arab Emirates, Kenya, Saudi Arabia, Iran, Indonesia, Thailand, Kuwait and Bangladesh. Western powers with which joint exercises have been conducted are the U.S., the United Kingdom, Austral ia, France, Germany and Italy.

Interestingly, the French Navy will not have its annual joint exercises with the Pakistan Navy this year.

The joint exercise has been planned to take place in two phases - one in the Arabian Sea and the other in the Bay of Bengal. In the first phase, Foch, the 32780-tonne French aircraft carrier which has a range of 7,500 nautical miles, Duquesue, the escort destroyer and Jules Verne, the logistic ship, along with fighter jets and helicopters would participate in a three-day exercise from February 24.

It will be a highly symbolic visit for the Foch, as it will be phased out soon after the exercise. From the Indian side, Rajput class destroyers, Godavari class frigates, Kilo, Foxtrot and SSK class submarines, and Sea Harrier, Sukha and Jaguar fighters will participate in the exercise. In the second phase, which will start on February 28 off Visakhapatnam, France's Indian Ocean Group, which involves the missile destroyer Commandant Blaison, the missile frigate Tour Ville, and a tanker will exercise alo ng with Indian Rajput class carrier destroyers, frigate corvettes and submarines.

After Pokhran-II France has actively kept engaging India in the diplomatic field. The French seem to have decided to play an active role in Asia. Their Navy has immense reach, mainly because of the fact that the French have clung on to many of their over seas positions from Latin America to Polynesia in the South Pacific. They still consider themselves active global players, although when it comes to crunch situations, they end up kowtowing to Washington.

A violent turn

other
T.S. SUBRAMANIAN

IT took the burning of three young women students in a bus, allegedly by All India Anna Dravida Munnetra Kazhagam (AIADMK) men, to ignite student activism in Tamil Nadu after nearly 30 years. The burning alive of Hemalatha, Kokilavani and Gayathri took place at Lakkiymapatti, near Dharmapuri, on February 2 when AIADMK supporters went on the rampage in different parts of the State, following the sentencing of party general secretary and former Chief Minister Jayalalitha in the Pleasant Stay Hotel case.

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The three young women and their classmates in the Tamil Nadu Agricultural University (TNAU), Coimbatore, were on an educational tour in two buses. Three men, who allegedly belonged to the AIADMK, came on a motorbike and set the bus transporting the young women on fire. While some young women scrambled out through one exit that was open (the other one was locked), Hemalatha, Kokilavani and Gayathri, trying to retrieve their luggage, were trapped inside.

The incident led to angry protests by students all over Tamil Nadu. They wore black badges, took out processions, blocked traffic and formed human chains in Chennai, Coimbatore, Tiruchi, Madurai, Tirunelveli, Dharmapuri and other places. Chief Minister M . Karunanidhi's handling of the situation defused a crisis that was building up as the students' protests gathered strength, but the political implications of the tragedy and the Special Judge's verdict are difficult to predict. Byelections to the Assemb ly seats of Tiruchi-II, Aranthangi and Nellikuppam are are to be held on February 17. These seats will witness virtually a direct contest between the ruling Dravida Munnetra Kazhagam (DMK) and the AIADMK, although candidates of Puthiya Tamilagam, essenti ally a Dalit organisation, are also in the fray. While the Chief Minister asserted that "people know that it was AIADMK men who burnt the bus at Dharmapuri" and reeled out that party's record of violence", the AIADMK, unable to come up with a credible ex planation for the burning of the bus, was on the defensive. All the nine persons arrested until February 9 and the seven who surrendered before courts belonged to the AIADMK. Jayalalitha claimed that they had surrendered in order to avoid embarrassment t o the AIADMK leadership.

Although an anti-incumbency sentiment seemed to be building up against the DMK following the increases in bus fares and power tariffs and the stoppage of sale of Rs.2-a-kg rice in ration shops, the death of the three young women has directed anger at t he AIADMK whose cadres had unleashed violence across the State soon after the Special Judge sentenced Jayalalitha to one year's imprisonment.

However, the court verdict and the violence have not caused any fissures in the AlADMK-led front, which includes the Congress(I), the Communist Party of India (Marxist), the Communist Party of India and the Indian National League (INL). The Tamil Maanila Congress (TMC) headed by G.K. Moopanar supports the AIADMK. When Moopanar was asked whether his party would review its support to the AIADMK, he quoted a Tirukkural couplet which means that any decision should be preceded by keen application of o ne's mind and once a decision is taken, one should on no account back down. Hours after the Special Judge gave his verdict on February 2, the leaders of all these parties attended a meeting to condole the death of former Minister and AIADMK leader V.R. N edunchezhiyan. This was an indication that they would stand by Jayalalitha, given the importance of the byelections. Elections to the Assembly are due in April 2001.

Taking their cue from Jayalalitha, leaders of the AIADMK's allies said that she could go in appeal to the High Court and the Supreme Court. They also echoed her demand for an investigation by the Central Bureau of Investigation (CBI) into the death of th e students. They said that they had no faith in an inquiry by the Crime Branch-Criminal Investigation Department (CB-CID) of the State police.

The AIADMK leadership may find it difficult to explain away the violence. A few minutes afer Jayalalitha left the court, there were dark hints of what was to happen soon. Hundreds of AIADMK supporters, both men and women, gathered outside the court and b locked traffic. They threw stones at State-owned buses and got shopkeepers to lower their shutters. When the violence escalated, the police resorted to a lathicharge.

Violent incidents were reported from the suburbs of Chennai and from Tiruchi, Madurai, Coimbatore, Tirunelveli and Dharmapuri districts.

Around 2 p.m., TNAU students, who were heading back to Coimbatore, ran into a roadblock put up by AIADMK men at Lakkiyampatti. The girls were in one bus and the boys followed in another bus. According to the students, three men came on a motorbike, got i nto the girls' bus through the driver's door, sprinkled petrol and set the vehicle on fire. Another version said that the men poured petrol on the bus from outside. The boys, standing some distance away, saw smoke coming from the rear of the bus. They ra n ahead and rescued a few girls by tearing down the shutters, which had been lowered because of stone-throwing.

The students said that a police jeep that passed by at that time did not stop to help. They also said that a policeman who had been standing nearby was rude to them. The students gheraoed for four hours District Collector Sai Kumar who came to the site. Students from Dharmapuri soon gathered there in their support. They broke the windshield of the Collector's car. The police fired buckshots and used teargas to disperse the students.

As news of the tragedy spread, students in various towns of Tamil Nadu came out in protest. In Coimbatore, students boycotted classes and took out processions. The TNAU was closed. M. Karunanidhi sent Forest Minister Pongalur N. Palanisamy to talk to the students, who wanted the Chief Minister to come to Coimbatore for discussions.

While Karunanidhi asserted that the AIADMK was behind the killing of the students, Jayalalitha claimed that the DMK was instigating violence. She submitted to Governor Fathima Beevi a memorandum demanding a probe by the Central Bureau of Investigation in to the incidents. Karunanidhi alleged that this demand was intended to delay the investigation that was already on.

A row also broke out between Jayalalitha and Sun TV (owned by relatives of Karunanidhi). She asked, "How was it that Sun TV crew were accurately positioned at the site, in all readiness to film the happening? How did Sun TV know beforehand that such an i ncident was going to take place?" CPI(M) State secretary N. Sankaraiah too raised similar questions. Jayalalitha added, "The Sun TV's crew must have filmed the torching from the start to the finish. Why did it then not show the persons who threw the petr ol bombs?"

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Sun TV's reply was to demand Rs.5 crores as damages and an unconditional apology from Jayalalitha for making "defamatory" statements about the channel, failing which it would launch civil and criminal proceedings against her. Sun TV explained that its cr ew was there along with reporters of other television channels and newspapers because a dharna by AIADMK supporters was under way. Their attention turned to the bus only after they saw the flames, it explained. Although Sun TV, Raj TV and Jaya TV crew an d newspaper photographers had filmed the burning of the bus, Jayalalitha accused only Sun TV of spreading false information, Sun TV said.

The students of the TNAU agreed to return to their classrooms from February 16 after their delegation met Karunanidhi in Chennai on February 7. Karunanidhi conceded their demands: the Government would meet the medical expenses of the injured students; co mpensation would be paid to those who lost their belongings; the burnt bus would be replaced by a new bus; jobs would be given to a family member of each of the girls killed; the Government would meet the educational expenses of one of the kin of each of the girls who died; and disciplinary action would be taken against Sub-Inspector K. Lakshmanan (who was rude to the students at Lakkiyampatti).

On February 10, the Tamil Nadu Police claimed in a press note to have established the indentities of the three accused. One of them, C. Muniappan, a panchayat president, had been arrested at Salem.

The state strikes back

world-affairs

The Mexican Government cracks down on students, forcing them to end a nine-month protest against its neo-liberal economic policies that have put an end to free public education.

VIJAY PRASHAD

ON February 6, the Mexican police entered the vast campus of the National Autonomous University of Mexico (UNAM) and arrested over 700 students to end the historic nine-month strike by students (Frontline, July 30, 1999). On April 20, 1999, the 27 0,000 students of UNAM launched a protest against the Government's attempt to charge fees at this state-owned but self-governing educational institution. The university was closed down. In Latin America, the UNAM struggle represented a fight for the peop le's right to education and reflected an extreme disenchantment with the neo-liberal policies of the Mexican government.

The arrests began on February 2, when striking students clashed with the strike-breakers. Interior Minister Diodoro Carrasco sent in the Federal Preventive Police, an elite force which executed youth in death-squad style in the Buenos Aires neighbourhood of Mexico City in 1997. For the past several months, the students received assistance and protection from the defence guards they had formed in alliance with the university workers' union, the Mexican electrical workers' union and the National Organisin g Committee of Mexican educational workers.

By early February, the Government's forces proved no match for the worker-student guards.

Alliances with the trade unions and with the Amerindian struggles led by the Zapatistas (EZLN) and Subcommand-ante of the EZLN Marcos illustrated the political nature of the UNAM strike. The struggle was not merely over the issue of fees, but also agains t the dynamic of privatisation and the dominance of neo-liberal thought in public policy and private enterprise.

Marcos, for instance, dashed off an early communique to warn the students that the introduction of fees was a harbinger of the eventual privatisation of UNAM. The students, organised into a Strike General Council (CGH), took pains to emphasise this centr al aspect of their struggle. The end of the strike, in this armed manner, augurs ill for the democratic struggle in Mexico.

When the students took control of the campus with a massive demonstration in which about 100,000 participated, the state began a covert operation to undermine the struggle. Many feared a repeat of October 2, 1968 when the military assaulted a student dem onstration killing over 60 people and injuring hundreds. Novelist Josi Revueltas wrote, after the 1968 assault, that "the gentlemen of the government are dead. For that, they kill us." This time the government was far more circumspect. On July 7, 1999, t he conservative paper Excelsior not only denounced the "student violence," but also the state for its "reluctance to use police force" against them. The state was less eager to act that it was in 1968, but it did beef up the Federal Preventative P olice with a military police brigade numbering 5,000 troops.

Thugs in civilian clothing ('porros') attempted to instigate violence and, given the opportunity, roughed up numerous students including student leaders Juan Carlos Zarate, Rodrigo Figueroa, Ricardo Martmnez and Alejandro Echevarria.

Meanwhile, over the nine-month period the students let their creative energy run riot. They ran collective kitchens with tonnes of food donated by parents, unions and well-wishers. During the heat of the struggle, journalist Jeremy Simer reported that "p ress conferences are held almost daily and committees constantly discuss new developments, produce banners, leaflets and other propaganda material, and hold workshops on eclectic subjects, from foreign languages to pedagogical theory." The students held several marches. On October 2, 60,000 people took out a 15-km hike down the two longest, and aptly named, urban avenues, Insurgentes and Reforma, from UNAM to the Plaza of the Three Cultures, site of the 1968 massacre. About a month earlier, 30,000 stude nts joined electrical workers in their fight against the state's attempt to privatise power utilities. To demonstrate their commitment to democracy, the CGH held several National Student Encounters, assemblies of students from across Mexico, to defend pu blic education. The tactics of the students enthralled and impressed many people.

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But the Government's obduracy and a few tactical errors from the CGH drew popular support away from the students. In early May, the Government asked UNAM's Rector Francisco Barnis de Castro to lower the fee by 30 per cent. Barnis had planned to raise the fees from virtually nothing to $80 in line with the International Monetary Fund's prescription that the Government cut subsidies to public universities. The students rejected this as a ploy, since they surmised that the fees would be raised the followin g year (after the momentum of the strike was over). Also, the CGH was committed to the principle of free public education, so this was not to be a negotiation point. Barnis decisively announced that the payment of fees would be voluntary. The CGH rejecte d this offer too. Critics of the CGH argued that the students could have accepted the offer and then begun a nation-wide campaign urging students to "volunteer not to pay the fees". With this, they said, the students would have captured the hearts of the masses at the same time as they would have appeared reasonable.

With little tactical space to manoeuvre, the CGH escalated its demands. The main point it added was that the university administration should be restructured with the students, workers, teachers and administrators on a par to govern UNAM together.

The administration would have none of it, and the CGH announced that the students would have to dig in for a protracted strike. Students continued to give massive support to the CGH and to the strike, as was illustrated by a march by tens of thousands of students on July 28 to mark the first 100 days of the shutdown of the university. In the aftermath of that march, eight senior members of the faculty proposed a plan to end the strike. They rejected the proposal on fee and called for a congregation of t he students, teachers, workers and administrators. The CGH rejected the plan, since it did not include demands such as reform of the admissions process.

Even at this stage, the CGH retained the support of the students. The reasons for their continued support can be traced to the state of Mexico's economy. In 1994, the Mexican economy required a $50-billion bailout package from the IMF and the U.S. Treasu ry. By 2000, the economy seems to be far from a crisis. The annual growth rate is 3.4 per cent, exports have doubled and the gross domestic product has grown by 20 per cent since 1994. Under President Carlos Salinas (1988-94), foreign direct investment w as $5 billion, and under President Ernesto Zedillo (1994-2000) it reached $10 billion. About 60 per cent of this capital comes from the U.S., mainly owing to the integration of the two economies since the North American Free Trade Agreement (NAFTA) was f ormed. Notwithstanding all these figures, the wages of Mexican workers remain almost 40 per cent lower than what they were in 1994. Despite a low official unemployment rate of 2.5 per cent, half the working population of 38 million work in the unregulate d economy without any benefits. One political observer, Ignatio Rodriguez Reyna, notes that the students "know that even if they have some superior education they wouldn't have any future. It creates social frustration." If Rodriguez is too pessimistic, one might see in the students' frustration the roots of their lingering support for CGH regardless of its tactical blunders.

Down the southern cone of South America, student launched strikes against the IMF-dictated policies on education. On May 20, students in Chile's four main cities - Santiago, Valparaiso, Concepcion and Arica - fought against cutbacks in educational expend iture. In Bolivia, in November, students and teachers of Gabriel Rene Moreno University in Santa Cruz protested against budget cuts and laws that threatened their autonomy. Steeled by this continent-wide struggle, the UNAM students lunged forth in Novemb er with a rally that blocked traffic in Mexico City. "We've knocked on doors, we have looked for dialogue with our government. Our government says that it respects the university, but in reality it is cruel and corrupt," said one marcher. The statement i s a sign of the frustration and disillusionment of the students. A week later, Barnis resigned as Rector, saying that he hoped his resignation would "open new avenues for resolving this conflict".

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The Government ceded the peaceful route and began to plan for the February assault on the barricaded campus. On February 1, the Federal Preventative Police violently took hold of a few buildings on the campus. Political scientist Jorge Castaneda noted th at "the Government has failed to solve problems politically. This is a failure on the Government's part." The Government increased its attacks until the campus was taken over a few days later. The Interior Minister and new Rector called upon the students to look forward to the opening of the campus, but, as Rodolfo Hernandez said for his fellow students, "we cannot have a dialogue with the police in our classrooms, with hundreds of our comrades under arrest." It seems that classes will start and many st udents will indeed return to their studies.

Joel Estudillo of the Mexican Institute of Political Studies noted that the Government's violence has "braked the strategy of seeking dialogue". The problems that led to the strike remain. At the start of the strike, President Zedillo called it a "brutal aggression". However, Mexico spends less than 4 per cent of its GDP on education, putting it behind Costa Rica, Panama, Chile, Brazil, Uruguay and Argentina in budget outlay for education. Since these countries do not spend much either, the record is di smal. At the same time, the Mexican Army reaps about half the GDP. In its first statement, the CGH noted that the IMF "expects from Mexico a cheap source of labour, not educated people with the capacity to reason." The "brutal aggression" of the Mexican state against its people was the issue raised by the UNAM strike. Its collapse augurs poorly for the democratic movement in that country. Nevertheless, the Zapatistas called for a "continuous campaign of peaceful protests" against the police action. The police withdrew from UNAM on February 9.

Vijay Prashad is an Assistant Professor, International Studies, Trinity College, Hartford, Connecticut.

Continuous war or sustainable peace?

world-affairs

On a cheerless Independence Day, President Chandrika Kumaratunga extends an olive branch to the Liberation Tigers of Tamil Eelam which has stepped up its terror campaign against civilian targets in southern Sri Lanka.

D.B.S. JEYARAJ

THE extent of terror imposed upon the Sri Lankan polity by the Liberation Tigers of Tamil Eelam (LTTE) was brought into focus on the island nation's 52nd Independence Day. On February 4, the country did not commemorate the anniversary of gaining freedom from the British in the customary atmosphere of festivity and jubilation.

For the first time, Independence Day was observed without the head of state participating in the official function and unfurling the national flag. With neither President Chandrika Kumaratunga nor her mother, Prime Minister Sirima Bandaranaike, attending the function, it was the lot of the Speaker of the Legislature, K.B. Ratnayake, to do the honours at a ceremony inaccessible to the public for security reasons. The venue was the Parliament complex, not the Independence Square with the usual march pasts . With the Opposition United National Party (UNP) and the Tamil parties boycotting the event, only a small group of government personalities was present. The Independence Day message to the nation by President Kumaratunga was issued from her official abo de, "Temple Trees".

The general movement of the public too was quite restrained on the day. Bombs had exploded in public buses in different parts of the country in the days preceding Independence Day. It was also widely feared that the LTTE would launch a fierce attack on s ome major target in Colombo. Although nothing of that sort happened, the trepidation was enough to curb public activity. Also, elaborate security arrangements prevented traffic on several roads. Ever since the ethnic crisis escalated, the Tamils of Sri L anka have not been observing Independence Day with enthusiasm and Tamil politicians have tended to describe it as a 'black day' on which Sinhala hegemony took over from the British. Now even the Sinhala people found themselves restricted on Independence Day on account of the security situation.

President Kumaratunga's Independence Day message was notably statespersonlike. Although she made no reference to the UNP offer to support her draft Constitution, she extended an olive branch to the LTTE publicly, inviting it to enter negotiations for pea ce. This gesture was reassuring in comparison with earlier pronouncements that seemed to reflect a tough line. Reiterating her intention of talking to the Tigers, Kumaratunga said: "The LTTE has a vital role to play in concluding this extended sadness fo r the Tamil people. The LTTE must also recognise that assassinating Sinhala and Tamil leaders and innocent citizens can never resolve the problems of the Tamil people or the minorities. It is urgent that we end this heartless violence of terror and its r esult, the war."

In spite of this public invitation, it was apparent that the Sri Lankan President was not taking any chances with the LTTE. She had in the previous week met her top defence officials and military top brass and stressed that possible negotiations would no t affect any preparations or strengthening of the armed forces. There would be no declaration of ceasefire or pulling back from entrenched territorial positions to facilitate talks.

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In addition to this, there were media reports of the Army embarking on an ambitious bid to recruit a further 15,000 to enhance the ranks. Also, increased acquisition of arms and armaments was on the cards. A notable feature in this respect was the propos ed purchase of AN/TPQ-36 Firefinder Weapon locating systems from the United States. This would enable the Sri Lankan armed forces to detect and pinpoint enemy artillery and target them with precision. It is expected that this sophisticated and expensive equipment would help counter the LTTE artillery that has mainly contributed to the LTTE's recent military successes. Increased cooperation with and assistance from the U.S. in defence matters was also envisaged.

ON the political front, the People's Alliance Government decided to go ahead with the objective of seeking a wider consensus on the constitutional proposals. Interestingly, the Government seems to have restarted the process of consensus-seeking. The firs t stage of intra-government discussions is over and the second stage of consulting Tamil political parties has begun. Thereafter, the UNP and the LTTE will be consulted. One aspect that will be closely watched will be the proposed structure of the Sri La nkan state. Any intervention by Sinhala hawks to get the Union of Regions concept diluted will not be well received on the Tamil side.

On the other hand, the conduct of the LTTE too has not been encouraging in the least. When the Catholic Bishop of Jaffna, Rev.Fr.Thomas Soundra-nayagam, visited the LTTE-controlled regions of the Northern mainland of Wanni recently, he found the Tigers p reparing more for war than peace. The Bishop found it difficult to meet the hierarchy of the LTTE's political wing with which he wanted to pursue initiatives for a peace dialogue. Mid- level LTTE leaders informed the Bishop that the LTTE had declared 200 0 as "Por Aandu" or the Year of War. There were also reports of posters in the Tiger-controlled areas outlining "conditions" for the resumption of peace talks. Chief among these "conditions," according to newspaper reports, was a demand that the Army wit hdraw from some of its present positions.

The LTTE has also begun an intensive campaign in recent times. Though it has been unable to dislodge the Army from the strategic Elephant Pass camp, it has attempted to establish fixed positions in several coastal areas of the peninsula. The LTTE conduct s limited guerilla attacks and also launches artillery barrages from these positions.

Disturbingly, the LTTE has also begun a series of bomb attacks against civilian targets. The most lethal attack was the one at the Vavuniya Post Office. It is said that it was aimed at soldiers who were there to remit money home. Several civilians were k illed and injured in the attack. There have also been several instances of bombs exploding at random in crowded public buses. These have been in the predominantly Sinhala Southern areas.

There have also been several areas of friction between the Tamil public and the security forces. Faced with the phenomenon of suspected LTTE suicide squads infiltrating Colombo and its suburbs, the authorities have been conducting several counter-operati ons that cause hardship to the Tamil people. Sudden curfews are declared, areas cordoned off and house to house searches conducted. A number of young Tamils are hauled off to police stations or public schools and detained, pending investigation. The obje ctions raised are less to the anti-LTTE operations than to the insensitive manner in which they are conducted. There have also been some incidents in the North-East and in Jaffna which have complicated the situation on the ground.

In this difficult situation, the one bright spot is the expected peace initiative by Norway. Norwegian Foreign Minister, Knut Vollebaek, with a track record of peacemaking, was expected last month in Colombo but the trip was postponed because his Sri Lan kan counterpart Lakshman Kadirgamar was indisposed. Nevertheless, the Norwegian State Secretary for Development Cooperation and Human Rights, Leiv Lunde, was in Sri Lanka recently and met a cross section of Sri Lankan political opinion, including Tamil p oliticians.

Norway is engaged in preparatory work to play the role of a facilitator who hopes to arrange negotiations between the government and the LTTE. Norwegian representatives have interacted in this regard with the LTTE's political adviser Anton Balasingham in London, according to an LTTE press release. The general expectation in Sri Lanka is that this initiative by Norway may pave the way for a resumption of direct talks. Only time will tell whether the new third party initiative can produce positive results .

'Economy may deteriorate further'

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M.K. Pandhe, general secretary of the Centre of Indian Trade Unions (CITU), is of the view that if the second phase of economic reforms are pursued doggedly, the growth of the economy will slow down. It would enable foreign financial investors to increase their grip over the Indian financial sector, he cautioned.

Official statements indicate that the government intends to initiate a new phase of economic reforms, titled reforms II. What is your view on this matter?

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The second generation reforms essentially deal with the financial sector. The process was heralded with the Insurance Regulatory and Development Authority Bill, and will cover banking and other financial sectors. It seeks to boost the entry of foreign pr ivate capital by removing the "hindrances"that appear to have been noted by multinational companies.

It visualises modification of labour laws that would facilitate the implementation of the reforms. The appointment of the Second National Labour Commission and the terms of reference finalised by the government are clear indications of this.

The Government is resorting to this exercise without properly studying the impact of the first generation of reforms. Nine years of that reforms process has not yielded the projected results. On the contrary, in certain respects it was responsible for se veral repercussions for the economy. Despite periodic statements about the negative aspects of the reforms no corrective measures have been. The studies conducted by the World Bank and the IMF have clearly indicated that the structural adjustment program me has not yielded the desired results. Yet, the government is doggedly pursuing the reforms, which may result in further deterioration of the economy.

If the second phase of reforms is carried out, foreign financial investors will strengthen their grip over the financial sector and utilise the credit flow in their favour.

Broadly, how do you assess the track record of the first phase of reforms?

The first phase of reforms clearly indicated a considerable slowing down of growth. Foreign investments are coming in without taking into account the needs of our economy. They are entering the food processing industry, share market operations and sector s where India has already built a sizable production capacity. The MNCs prefer to purchase Indian units and use the infrastructure built up by them rather than build up new units.

Industrial sickness increased substantially during the last nine years, resulting in an estimated six lakh units facing sickness and closure. The rate of unemployment has risen alarmingly with every industry talking of downsizing to cut costs. New entran ts in the employment market find it extremely difficult to get a job.

Reckless disinvestment in the public sector, ignoring even the observations of the CAG (Comptroller and Auditor-General) report has led to the sale of valuable assets at throwaway prices. The sale proceeds were used only to meet the budgetary deficit. Ev en the Chairman of the Disinvestment Commission criticised this approach.

Failure to boost exports in comparison with growing imports has led to a widening of the trade deficit. It generated pressure to devalue the rupee to an alarmingly low level.

The bulk of the foreign investments has hardly brought new technology or the needed investment to boost the economy. These developments have led to an increase in the size of the population below the poverty line.

The fiscal concessions have been used to boost profit, not for the advancement of the economy.

The fiscal situation remains extremely difficult. What in your view are the taxation (or other revenue mobilisation) options available to the government to deal with it?

If the government is keen to raise resources, ways and means are available. The profits earned by several big business houses, despite recessionary trends, should be taxed.

Most of the big business houses which are responsible for adding to the non-performing assets (NPAs) of the banking industry, have increased their assets substantially in the recent past. If these NPAs are recovered from other assets of the defaulters, t he government can mobilise more revenue.

The imposition of agricultural income tax on rich farmers has been debated for several years, but the government does not show the political will to take a firm measure. The Government has failed miserably to take action against big tax evaders. Amnesty schemes have not yielded results to the desired degree. Firm action against tax evaders will help mop up additional revenue.

Action can be initiated against traders who indulge in underinvoicing and overinvoicing during export-import operations.

The taxation on white goods and luxury items is minimal, while the burden on the poor is higher. This policy should be reversed.

All imports are not useful for the common man. Additional customs duty to restrict import of such items will help the economy. Similarly, reduction in customs duty on steel, coal and other items, which have rendered the units sick, should be restored to previous levels.

The exemption limit for income tax should be enhanced. Higher levels of tax in the top brackets will yield more revenue.

Do you think some measures could be initiated on the expenditure side to deal with the fiscal crisis?

Administrative expenditure is increasing disproportionately. The perquisites given to members of Parliament, Ministers and top bureaucrats can be brought down. There should be a ban on advertisements by Ministries; foreign and Indian tours of Ministers s hould be made need-based. Expenditure on these trips should be brought down to the minimum.

Jumbo Cabinets are responsible for heavy administrative expenditure. The size of the Cabinet should be restricted. Misuse of funds given to MPs for local development should be checked.

What have been the growth implications of the fiscal correction? Do you think there has been an investment deficit in the infrastructure sectors because of the fiscal correction?

In the name of fiscal correction, the government has taken a decision to invite more foreign capital for infrastructure development. However, that capital has not come. On the other hand, the government has scaled down its own investment in this sector, resulting in the slowing down of the economy. The Budget should provide more funds for infrastructure development in the public sector. Otherwise the fiscal mismanagement of the economy will only add to further slowing down of the economy.

What specific measures do you envisage for boosting investment in the infrastructure sectors?

In the case of infrastructure development, the gestation period is high and the private sector will not come despite the policy framework. The Government will have to augment revenue so that more infrastructure can be developed at an early date. Several schemes have remained on paper. The report of the National Transport Policy committee is an example. The shortfall in the power sector is also glaring with the result that even government-sponsored schemes have not been fulfilled. Budget should pay more attention to it. The leasing of airports and ports will only cause further stagnation in infrastructure development.

Do you think there is a need for specific incentives for savings and/or capital market investments? Is the current pattern of incentives provided appropriate?

There is a paramount need to give incentives to small investors. However, the government's decision to reduce the interest rate on Public Provident Fund by one percentage will reduce investment in this sector. Other small savings schemes should be made a ttractive to generate more savings.

Experience has shown that whatever concession was given in the previous budgets to savings, it has not resulted in increasing investment. It has only led to an increase in speculative share market activity. Despite more concessions being given to this st rata, the slowdown of the economy co could not be checked. There is, therefore, an urgent need to review the concessions given to this sector. The money garnered by this strata should be mopped up through suitable tax measures, and the funds generated sh ould be utilised for infrastructure development.

What implications do you see for the labour market from Reforms Phase II?

In the name of labour flexibility, an attempt is being made to reduce the number of regular jobs and convert them into temporary or contractual jobs in the informal sector. On the plea of downsizing, voluntary retirement schemes are being introduced in a big way in the public and private sectors. There has been a "wage restraint" with a view to keeping the wage cost low in a "competitive environment". In several cases, the working conditions are more unfavourable to the working class, while managerial r emuneration and perks are on the rise.

The growing rate of unemployment is being used to keep working conditions at low levels. Existing fringe benefits are being curtailed, step by step.

The Government has already announced its intention to amend the Contract Labour (Regulation & Abolition) Act to enable employers to engage more contract labour. Section 25(O) of the Industrial Disputes Act is being deleted to enable employers to close do wn units.

These measures will make the labour market favourable to the employers. Naturally, there is bound to be stiff resistance from the working class to these measures at all levels.

The pre-Budget charade

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D. SAMPATHKUMAR

IT is the Budget season, a season for all manner of interest groups, from dhoti-clad manufacturers to presidents of chambers of commerce in their pin-stripes, to seek budgetary favours from the Finance Minister. The art of presenting pre-Budget memoranda has been perfected even as its utility has been considerably discounted by those in the know of things in the Central administration. As one senior civil servant remarked: "These memoranda are never read. They are simply consigned to the Finance Ministr y's archives. If at all any policy change is incorporated in the Budget, it is due more to private lobbying than as a result of any reasoned argument in the pre-Budget memorandum."

Although industry is aware how such memoranda are handled, it finds it difficult to break the practice. But more important, as an exercise in public relations and because of the innumerable photo opportunities that it offers, the occasion of presenting a pre-Budget memoranda is hard to beat. Of course, the government does not complain either. On the contrary, it has every reason to welcome it, for such an exercise gives it an opportunity to present before the public an image of being responsive and sens itive to the needs of industry and other agents of the economic process.

As demands go, the industry wish-list is not much different from those presented in the past. These include a reduction in excise duties (some industrialists prefer abolition of duty in their case), a hike in the import duties on competing products, and a reduction in the import duties on raw materials used by it; a simplified tax administration; and the easing of conditions to access overseas capital.

The Finance Minister has an unenviable task on hand. He has to accept the needs of individual sections of industry for some fiscal protection, with possible adverse consequences for downstream/upstream industries of such a concession. Above all, he must not strain the government's revenues. Protection in the form of lower import duties on inputs to one section of industry means that domestic manufacturers of these goods have to contend with a lower cost of imported goods that compete with his/her own ma nufacture. On what basis does the Minister overlook the claims of domestic industry for a higher tariff wall against imports in the context of securing through fiscal policy cheaper raw material for downstream industry? If that is not difficult enough, t he presence of a public sector unit in the upstream sector producing raw material makes the decision even more so.

A classic example is that of the demand of the synthetic detergent industry that its raw material inputs must suffer a rate of duty that is not more than 60 per cent of the import duty on the product that it manufactures, should it be imported. While thi s is largely in place now, there is still an excess levy of three percentage points or so. Linear alkyl benzene (LAB), a principal raw material, is manufactured by Reliance Industries and by Tamil Nadu Petroproducts. How will the Finance Minister adjudic ate the conflicting claims of two sets of manufacturers? True, fiscal policy provides a broad framework: that inputs should suffer a lower rate of import duty than the end products so that indigenous manufacture is encouraged. But the question of the exa ct differential that should prevail between the two commodities remains. The affected units in the two industries and their political sponsors could still debate the question endlessly. In the world of realpolitik, even the basic principle may be given t he go by. The presence of a public sector unit may further complicate matters. In the present case, Indian Petrochemicals Limited, a public sector unit, albeit a marginal player, is also in the fray. The Ministry of Petroleum and Natural Gas would not ex actly be happy with a fiscal structure that prunes three percentage points of its profits on the sale of LAB.

An inverted duty structure, where end products enjoy a lower rate of duty while the input raw material or semi-finished components suffer a higher rate of duty, was inevitable. The manufacture of industrial raw materials typically involves the employment of a large workforce, often in the public sector. They are thus more vulnerable to competition from imports. Steel is a typical example. The engineering industry wants steel at a cheaper price, and this can be made possible by lowering the import duty o n steel. Domestic manufacturers would then have to peg their prices down to stay competitive vis-a-vis foreign suppliers. But such a policy could spell disaster for domestic steel manufacturers, especially the public sector Steel Authority of Indi a Limited (SAIL). Steel import suffers a basic customs duty of 35 per cent, that is close to the ceiling rate of 40 per cent which India has committed to the World Trade Organisation (WTO). Common sense suggests that as a principal input in the manufactu re of a whole range of goods, steel should attract a duty starting from 10 to 15 per cent, so that manufactured articles can be pegged at rates close to 40 per cent. But the government is in no position to do this.

Even with a 35 per cent duty protection for domestic steel, SAIL has posted a loss of approximately Rs.2,050 crores. Any further reduction in import duty will ruin SAIL. No government can order a fiscal policy that runs a public sector company to ground and hope to stay in power. So, there is very little chance of the government paying heed to downstream users' pleas for a more rational duty structure between raw materials and processed goods.

The solution lies in the core sectors of manufacturing becoming more competitive globally. If steel has to become competitive, the power and mining sectors should first become competitive. This apart, the intrinsic process of steel-making should itself b ecome more cost-effective. Questions of competitiveness raise issues of social and political processes that currently appear to defy solution. Therefore, Budget preparation and the submission of pre-Budget memoranda will remain a charade rather than an a id to policy-making.

'The basic fiscal structure needs correction'

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Satish Kumar Kaura is Chairman, Economic Affairs Committee, Confederation of Indian Industry (CII). He talked to V. Venkatesan on the Second Phase of economic reforms.

On Economic Reforms Phase II:

The second phase of reforms is more about going deeper into reforms. If you look at direct taxes, it is about building a bigger base of tax payers. It is about developing a more progressive income tax law and about the need to develop a more tax-payer fr iendly, and more progressive, income tax base where there is less litigation and where the tax payer finds things easier, and continue with low taxation rates. If you look at indirect taxes, it is about simplification of procedures in both customs and ex cise. A substantial reduction in litigation, without frustration among corporates about the delays that are involved in red-tapism should be the feature.

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On excise, reforms are about quickly moving towards VAT (value added taxation), and single rate of excise. On customs it is about a substantial reduction in the number of tax rates.

In the next couple of years, we believe that the tax rates will have to go down, and come to the level of the ASEAN (Association of South East Asian Nations) countries. We also believe that the Government needs time-bound, programmes, time-bound long-ter m fiscal policies and discipline itself to follow them. Right now, there is lot of ad hocism, although we are all clear how we should move towards the overall goal. It is creating lot of uncertainty for the corporates.

Even if the economy grows at a very high rate, the basic fiscal structure needs correction. At present, deficit budgeting can only be corrected by two major steps that the government can take. One is very aggressive privatisation. Unlike the half-hearted disinvestment efforts the government has made, there is a need for it to locate strategic partners, and pass on the management of disinvestment. That is bound to give a very good valuation of many companies.

The second is the implementation of the recommendations of the Fifth Pay commission. While the government implemented the salary increases, it did not do enough about the surplus manpower that exists. The government will have to take strong steps to redu ce the number of employees. There are many ideas being floated around such as the VRS (Voluntary Retirement Scheme). In South America, countries such as Chile and Argentina have reduced the number of government employees very successfully. Twenty to 30 p er cent reduction will have a very substantial impact. It depends on how the idea is sold. It would be possible to attempt on very creative ideas. There are a whole lot of departments which have no relevance in today's world. The government needs to get out of many activities when the economy is growing at seven per cent.

On Economic Reforms Phase I:

The first phase of reforms was started while the country was passing through a very dire phase. And reforms were more about licensing. They were more about just reducing the cobwebs, such as sub-rates and very high rates. A little bit of simplification o f the tax regime took place. But very little happened in the financial sector. The nation became more sensitive to the need for reforms. The economy moved from a four per cent rate to the six to seven per cent. There was a jump in GDP growth, even when w e talked about recession in 1999. It was a stage when we realised that the reforms do help to go to a high-growth stage. But the reforms that were attempted in the industrial sector, in the corporate sector, in the infrastructure and in the financial sec tors were not deep enough.

In the infrastructure sector, India has to create more transparency. India has not created a framework that is transparent and stable enough for somebody to say that for the next 15 to 20 years he will get a safe return. One is still not convinced that i nputs in infrastructure are all going to be available through the market mechanism. There is still worry about political interference. Ports, telecommunications, power, roads, all share this issue.

In telecommunications, for instance, let the regulatory authority take independent decisions. The people in power were not comfortable enough to do what was expected of them. The change was rather dramatic for them. The first phase of reforms was used to adjust themselves to the change.

Competition between States is emerging. If you look at Andhra Pradesh, Karnataka and Madhya Pradesh, they have caught the eyes of the investors. This will push other States to follow suit.

On taxation and other revenue mobilisation options:

If you look at the structure of our revenues, we have to move away from indirect taxes to direct taxes. India has to move towards much bigger, broader phase of direct taxation. It is not growing rapidly. The need here is to create a massive infrastructur e, information technology and offices. The agricultural tax base must be broadened. They can start with very rich agriculturists and agricultural areas where big corporates are involved. There are more things like that, in self-employment, for instance. Indirect taxation has to go down.

If you look at countries in Asia, the total tax, VAT, is between 16 and 18 per cent rate. That is what we are also talking about. In addition to that, India has a very high rate of customs duty. It has octrois and sales taxes. India's taxation is in the range of 40 per cent. In indirect taxes, there is no room to increase taxation. But the authorities have to tighten up their compliance. But actually, revenues are going to come from direct taxation.

On fiscal deficit correction:

The main area for fiscal deficit correction is that the government should try to cut down expenditure. There is no choice. They can ensure better utilisation of subsidies for the purposes they are meant for. Transparency in the prices of services that ar e available from the government is another step. The simplest example is water. People do not pay for the real cost of water. If the pricing is made more transparent, there will be a major change, a very desirable one.

As we move ahead with reforms, we also have to take care of the weaker sections. The government cannot run away from that. The public distribution system may require a little bit of fine-tuning; it needs to be more focussed towards weaker sections and to be more efficient. Maybe the government has to privatise it.

When the reforms began, the government, in its enthusiasm to correct the fiscal deficit, started cutting down its investments in infrastructure. And it decided that investment in this sector should come from the private sector. The tragedy is that the fr amework that would create the transparency in the sector, that would ensure investment-flow, did not happen. On the other hand, the government did not put in sufficient effort to cut down its wastages in expenditure. As a result, long-term developmental investments suffered very badly. Our ability to grow as an economy will be very limited because of this.

There are lessons to be learnt from the country's experience in the telecom sector. The government kept changing the ground rules. Long-term investors are looking for a level-playing field, stability and clarity.

On the need to stimulate savings:

The savings rate in the country is not that unhealthy. It is about 26 per cent overall. The real issue is stimulating growth rather than savings. Cutting down the interest rate on provident fund was very necessary. As inflation is settling down, it is es sential that we send a signal.

On the implications for labour from Reforms Phase II:

Industry needs to communicate more with labour. With the kind of unemployment rate India has, it is very difficult to ensure that. Unless we do some restructuring, it is difficult to compete. We will have to find some via media and hold talks with labour to find a way out. I worry about the right solutions. I do not have an answer. It is very complicated. This is what liberalisation with human face is all about.

'There are some things of eternal verity'

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Justice M.N. Venkatachaliah, former Chief Justice of the Supreme Court and former Chairman of the National Commission on Human Rights, who has been asked by the government to head the commission to review the Constitution, spoke to Parvathi Men on on various issues that a review Commission could address in respect of the working of the Constitution. Excerpts from the interview:

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After your name was proposed as chairperson of the commission to review the Constitution, you were quoted in the media as having said that you would accept this on two conditions, the first that the basic features of the Constitution would not come u nder review, and second that the system of parliamentary democracy would remain untouched. What in your view constitute the basic features of the Constitution, and is there a legal consensus on this?

At the outset I must tell you that I did not stipulate any conditions. I said that if I know the terms of reference it will be easier for me to make up my mind, and I wanted to know whether the terms of reference included a discussion on the basic featur es of the Indian Constitution. I also thought that I may as well know with whom I am working. These are not conditions, but things that would enable me to make up my mind.

So far as the basic features are concerned, the Supreme Court in the Keshavananda case, while dealing with what matters are amenable to the amending process under the Constitution, and what matters are not amenable to the amending process under th e Constitution, held certain constitutional fundamentals of the Indian Constitution as immutable in relation to the power of Parliament to change the Constitution. For example, we have republicanism, we have secularism, we have independence of the judici ary, the rule of law, judicial review, and certain values of the Constitution which form the substratum of the constitutional edifice. These are some of the things which are of eternal verity, some things we can't debate. Every civilised country has to h ave these values. Therefore some of these things are not open to debate, and naturally, if you want to amend the Constitution, you can't take up things that you can't amend at all.

Was the Keshavananda ruling the only one that defined the basic features or were there other rulings?

Quite true. But there are certain things that are clearly not basic features which can be amended. For example, adult franchise is a basic feature, but how you regulate the constituencies is not. Today the working of the Constitution is the issue. How ha ve we worked the Constitution? There are matters which can acquire the complexion of basic features, there are matters which cannot obviously acquire the complexion of basic features, for example, say, matters of procedure. I don't think there is a grey area here. There is a potential area depending upon the way we work the Constitution. The courts might say you can't lay down everything exhaustively, enumerate everything once and for all. In this context we confine normally to what the courts have alre ady said are the basic features, that is the point. If we are suggesting an amendment then it must be amenable to the amendment. If it is not amenable to the amendment because it is a basic feature, then where is the question of the Commission discussing it?

There are two clear views on the question of a constitutional review. One which says that for a variety of reasons (including the need for political "stability" at the Centre) the Constitution needs to be reviewed - the view articulated by the Prime Minister who talked of the need to "repair the mighty fort". The other view is that it is not the Constitution which has failed us, but we who have failed the Constitution, and that there is no need for a comprehensive review. What are your views on this ?

I think that there is some substance to both views. Speaking personally and not as chairman-designate of this Commission, what I would wish to say is that we have failed the Constitution in a substantial measure in working the Constitution, our whole app roach to administration and governance. We have never thought that we are discharging our constitutional obligations and duties, and responding to the constitutional rights of people. That kind of mindset - that the Constitution is our fundamental law an d all that we do must comport with the constitutional aspirations of the people - has not yet come in.

There are some spectacular achievements the Indian democratic polity has brought about. Life expectancy at birth was 27 years when we got Independence. Today it is 74 years for women in Kerala. We had 1,362 MW of power in 1947, we have more than 90,000 M W of power today. Our literacy was 10 per cent when the British left us, today it is 60 per cent. Our infant mortality used to be 160-170 per thousand live child births, today it is 65. But all these benefits are neutralised as a result of the explosion in the population. And I think we have failed in controlling this problem. I feel that the one route to control the population was the literacy route, as Kerala has demonstrated. Literacy, education of the child, particularly the girl child, would be the surest way of empowering civil society and making it strong enough to demand and exact its entitlements of the political society.

So there are areas in which we have enormously failed. It is true that the philosophical foundations of the Constitution are sound, its mechanisms are sound. But maybe as the new South African Constitution has demonstrated, there are not enough watchdog mechanisms built into the Constitution which will oversee and enforce the performance of translation of constitutional phrases into constitutional realities. Therefore an examination of how the Constitution has worked over the last 50 years may indicate whether there are areas where the Constitution also needs to be supplemented. For example, women and child care, population control, all these mechanisms require specific constitutional controls and devices and mechanisms to achieve the result. That is o nly an example.

Will you have a say in the selection of the other members of the Commission?

Strictly speaking, it is the prerogative of the government to make nominations to the Commission. I expect as a person who is supposed to work with them, to be told who the members would be so that the common purpose of both the government and mine would be ensured, so that the composition reflects in a substantial measure, the ethnic, religious, linguistic and cultural diversity of Indian polity and its pluralist society.

The Constitution was drafted by the Constituent Assembly which was a very representative body. This is the first time that the Constitution is sought to be subjected to a comprehensive review. How representative do you think this Commission is of Ind ia's pluralist society and its requirements?

Your question presupposes that the work of this Commission is equivalent to the work of the Constituent Assembly. This Commission is to review substantially the way the Constitution has worked. It can only give a feedback from the civil society. It acts as a conduit or a channel to formulate the experience of the civil society in the working of the Constitution - its hopes, despairs and disenchantments - and pass it on to the political society. And these 11 members are not the ones alone who will do it. They will go to the society, collect statistics, have research backup on socio-economic progress and what was absolutely necessary to have been achieved, whether those benchmarks have been reached, and then say why in their opinion, aided by experts who se help they would take for their research backup, whether any of the failures are attributable to the absence of constitutional support.

This is essentially an academic exercise. It is some kind of a feedback to the powers-that-be to deal with the matter. It is not a body which is empowered to alter the Constitution. It does not have the capacity, the competence, the sanction or the legit imacy to go into that aspect of making amendments. During the bicentennial of the American Constitution a committee went into it and there are excellent articles written on how and whether the blessings of the Constitution have reached the populace. This is the example. To mistake it is to equate its work with that of a Constituent Assembly.

What is not clear is whether the Commission is merely reviewing the working of the Constitution or reviewing it with a view to amending it.

As I understand (of course you must make it very clear that I have repeatedly said that it is for the Commission as and when it is constituted to understand the dimensions of the task. I am only anticipating as I have got to answer your question) the Com mission is to review the working of the Constitution in key social and economic areas, and key areas of public welfare, and whether even a modicum of the constitutional expectations of large masses of people have been fulfilled or not.

Today we have the dismal situation of a social infrastructure where 670 million people in this country don't have basic sanitary facilities, and 260 million don't have potable water. Forty per cent of the world's tuberculosis patients are in India, 25 pe r cent of the world's blind are in India. Fifty per cent of the world's illiterates are in India. Fifty per cent of the world's leprosy afflicted are in India. So can you say that this kind of thing could have been managed (or mismanaged) better? This is the basic thing. This is an introspection through a body of experts. And experts who as far as possible represent the diverse composition of Indian society. These 11 people in turn depend on society at large... there must be research backup and interact ion with society. Then there is the issue of the enormous corruption in public life, electoral malpractices, the tyranny of wealth, and the insolence of authority. They have all made the life of the common man one of disenchantment with the institutions of democracy.

Since parliamentary democracy is seen as one of the basic features of the Constitution, do you think that there should have been a consensus in Parliament on the need to set up such a review commission?

Parliament is supreme and it could have done it. But today we are considering whether the existing government wanted to educate itself on this issue and how valid or how legitimate that exercise is. You must test it on the merits of that issue. This to m e appears to be an academic exercise, I don't want to be drawn into the ideological or political differences aired about it. I am looking at it as a citizen and as a judge.

Will the terms of reference of the Commission not merely indicate its aims and objectives but also indicate what is not negotiable?

Quite right. I told somebody that in specifying a legal requirement you must specify it with such degree of precision that not only those who read in good faith must understand but also those who read in bad faith don't misunderstand! So if you read it < I>bona fide, it gives obviously certain meanings. If you want to read it in bad faith it may mean many things. It is for the Commission ultimately to understand the contours of the reference.

In one of the interviews you gave you said that you would get a feedback from various sections of society by the circulation of a comprehensive questionnaire.

Well, that is my idea, not the Commission's idea, please make that clear. This is one of the methodologies by which a small 11-member group can get feedback from trade unions, panchayati raj institutions, minorities, backward people, and other affected i nterests in society; how they visualise the 50 years of their lives under the Constitution. To get that and collate it, that is my idea and not the Commission's idea because at this stage I am not competent to speak on behalf of the Commission which is n ot yet constituted. In my view this is only a concomitant of my observation that we must act as a connecting car between political society and the civil society.

It is a feedback from civil society as to the degree of success of the working of the Constitution, and also the areas where we have failed, and ascertain and interpret why such failures have occurred. Is anything attributable to the absence or inadequac y of constitutional supports, then formulate your recommendations which eventually will have to go through the fire of a parliamentary debate.

Do you think that the directive principles should become justiciable?

I think it is time that some of the directive principles became directly justiciable. In fact it was again in the Keshavananda case that the great contribution was made that the concept of mere non-justiciability of directive principles was not accepted but they were taken as important principles in the governance of the country, and therefore they should necessarily influence the interpretation of the fundamental rights themselves. They should supply the content, pour meaning into the fundamental right s. This was the great contribution of the Supreme Court which synthesised the non-justiciable directive principles and fused them with the fundamental rights, bringing about law and justice, constitutionality and justice, on speaking terms. That was the most fundamental contribution of the Supreme Court.

In fact, the Supreme Court itself elevated universal compulsory primary education to the level of fundamental rights. You must realise that in the draft Constitution the obligation for primary education was in the fundamental rights chapter and inequalit y clause was in the directive principles chapter.

One of the government's stated reasons for the review was the need to bring stability into the political system... the need to prevent a situation where a government does not fall on one vote and without a viable alternative. Would you allow for tink ering with the system of parliamentary democracy to bring in short term stability?

The Commission is not committed to, I'm sure, any pre-set ideas or ideology of any particular party. Nobody says that stability is an undesirable quality. Nobody says that the price you must pay for stability is democracy itself. Therefore in between the two perhaps there may be many ideas that experts and political scientists will offer as to how to work the system with reasonable stability without sacrificing the fundamental democratic principles. This is a matter which if it comes up - I can't say if it will or not - I have my own notions which are not binding on the Commission. I am discussing this at a stage that is perhaps premature, please make the point that whatever I have said is absolutely premature.

Peace-time manoeuvres

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In a development of great importance, the Indian Navy, which is holding one of its biggest ever exercises, will soon conduct a joint exercise with the French Navy.

JOHN CHERIAN

IT is billed as one of the biggest ever exercises undertaken by the Indian Navy. Forty warships and 45 combat aircraft from the Navy and the Indian Air Force (IAF) are participating in the exercises currently under way in the Arabian Sea. The event, whic h started in the first week of February, will last until April. Codenamed Springex-2000, it will witness for the first time the IAF's Sukhoi-30s and Jaguars in action along with the Navy's Sea Harriers, the T-142M and the IL-38. The latter two are used f or long-range surveillance. Warships and submarines from both the western and the eastern fleet of the Navy will join in the exercises. The Coast Guard will also participate.

Chief of the Naval Staff Admiral Sushil Kumar said at a press conference in the first week of February that the manoeuvres would culminate in the Andaman Islands. The exercises were "aimed at validating existing and future tactical doctrines along with n ew weapons and sensors".

The Navy chief said that the country would shortly acquire a Russian-made submarine (it will be named Sindhushastra) equipped with a highly accurate weapons system. The Navy has in recent years inducted state-of-the-art weapons and vessels. INS Brahmaput ra, a guided missile frigate, and Aditya, a tanker, both built at the Garden Reach Shipyard, Calcutta, will soon join its fleet. The Brahmaputra class of frigates will also be put to test during the exercises.

For the first time a seaward attack on land by cruise missiles will be simulated during the course of Springex-2000. A senior naval officer informed that India would induct the Russian Klub cruise missile into the new Kilo class submarines such as the Si ndhushastra.

Nine Kilo class submarines are already in service with the Indian Navy, and experts are of the opinion that they could be retrofitted to carry the cruise missile. These missiles will also be fitted into the Khrivak class frigates, which India will acquir e from Russia shortly. With the induction of cruise missiles, the Navy will now have a weapon capable of striking targets deep inland. The cruise missile has a range of 300 km and comes in different variants that are capable of striking at both marine an d land-based targets.

There are also reports that the naval variant of the Prithvi, the Dhanush, will be test-fired at sea shortly. A ship has already been modified to accommodate the launch platform. The missile has a range of between 200 km and 250 km. If the launch is succ essful, the Dhanush can be serial-produced and fitted on some of the ships already in service.

Commander of the Western Naval Command, Vice-Admiral Madhavendra Singh, who also addressed the press conference, said that India would host the International Fleet Review for the first time. The Fleet Review, called "Bridges of Friendship", will take pla ce at the Mumbai harbour in February next year. More than 40 countries, including the United States, Britain, France and South Africa, have announced that they would participate in the five-day event. According to informed sources, the Pakistan Navy has not been invited.

SIGNS are that the post-Pokhran diplomatic chill that New Delhi has experienced is slowly dissolving. The joint naval exercises, coupled with the International Fleet Review, are seen as an important diplomatic development. The Indian naval establishment has tried to play down the significance of the Indo-French naval exercise, preferring to describe it as a normal peace-time activity. A senior Navy officer said that joint exercises were a normal feature since the early 1960s when the navies of Commonwea lth countries came calling to Indian ports.

In the 1970s and 1980s, the Indian Navy went into a sort of hibernation. There were no joint exercises even with the navy of the Soviet Union, India's closest strategic and political ally then. Joint exercises were revived in the early 1990s; the navy ha s been involved in 20 major exercises since then. The largest number of joint exercises in the 1990s have been conducted with the navy of Singapore, a close military ally of the West in Asia. Other countries with which the Indian Navy has conducted joint exercises are Malaysia, Oman, Seychelles, Sri Lanka, the United Arab Emirates, Kenya, Saudi Arabia, Iran, Indonesia, Thailand, Kuwait and Bangladesh. Western powers with which joint exercises have been conducted are the U.S., the United Kingdom, Austral ia, France, Germany and Italy.

Interestingly, the French Navy will not have its annual joint exercises with the Pakistan Navy this year.

The joint exercise has been planned to take place in two phases - one in the Arabian Sea and the other in the Bay of Bengal. In the first phase, Foch, the 32780-tonne French aircraft carrier which has a range of 7,500 nautical miles, Duquesue, the escort destroyer and Jules Verne, the logistic ship, along with fighter jets and helicopters would participate in a three-day exercise from February 24.

It will be a highly symbolic visit for the Foch, as it will be phased out soon after the exercise. From the Indian side, Rajput class destroyers, Godavari class frigates, Kilo, Foxtrot and SSK class submarines, and Sea Harrier, Sukha and Jaguar fighters will participate in the exercise. In the second phase, which will start on February 28 off Visakhapatnam, France's Indian Ocean Group, which involves the missile destroyer Commandant Blaison, the missile frigate Tour Ville, and a tanker will exercise alo ng with Indian Rajput class carrier destroyers, frigate corvettes and submarines.

After Pokhran-II France has actively kept engaging India in the diplomatic field. The French seem to have decided to play an active role in Asia. Their Navy has immense reach, mainly because of the fact that the French have clung on to many of their over seas positions from Latin America to Polynesia in the South Pacific. They still consider themselves active global players, although when it comes to crunch situations, they end up kowtowing to Washington.

Balance sheet of the Left

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A reflection on our times - II. AIJAZ AHMAD

A HUNGARIAN historian coined the phrase "The Short Twentieth Century, 1914-1989", which the British historian Eric Hobsbawm then made famous, to indicate that the real dynamic of the 20th century is the one that was set in motion by the First World War a nd the Bolshevik Revolution, and that the dynamic then ended with the collapse of the Soviet Union. To grasp this dynamic, then, we need something resembling a balance sheet of the Left. Such a narrative would take into account the lasting achievements o f socialism in this century as well as some of the key problems and failures, but above all it will spell out the material and historical conditions in which the whole dynamic unfolded.

First, then, the historical conditions! The great success of the Bolshevik Revolution has obscured from later memory the fact that the years 1917-1921 were a period of general upsurge in several countries: Germany, Hungary, Italy and so on. Lenin had ass umed that Moscow would be a temporary headquarter which would then move to Berlin; German was adopted, and remained, as the main language of the communist International. In this perspective, then, the fact that the revolution was beaten back across Europ e, in countries economically and socially much more advanced, proved to be as decisive a fact as that it succeeded in Russia, which had been a serf society only two generations earlier, had no prior structures of democratic governance, and only a rudimen tary knowledge of industrial or bourgeois culture, in a couple of cities. For comparison, one could recall that the Iran which Ayatollah Khomeini took over was socially, culturally, educationally, industrially and in its level of urbanisation much more a dvanced, with a modern proletariat comprising a much larger proportion of the population, than was the case of the Russia of 1917. As late as 1926, only 7.6 per cent of the population was employed outside agriculture. This same historic condition was to be repeated in China where at the time of the 1949 Revolution, an average Chinese survived on half a kilogram of rice per day, bought one pair of footwear every five years, and had a life expectancy of 35 years.

Second, a country already ravaged by the First World War was then devastated by a massive Civil War (1918-1920) and a foreign intervention that witnessed the introduction of British, French, American, Japanese, Polish, Serb, Greek and Romanian troops on Soviet soil. A majority of the Bolsheviks died in battle, so that, as Charles Battleheim, the French economist, has estimated, some three-fourths of the state personnel that was subsequently directed to start building socialism in the USSR was comprised of former members of the Czarist bureaucracy - hardly the human raw material to build a revolutionary society. By then, the Soviet economy had fallen to 10 per cent of its pre-war size. Thanks to this hardship, two million people emigrated from Russia, i ncluding most of the educated people, who were able to re-make their lives elsewhere.

Third, there was great isolation symbolised by the fact that the United States did not even recognise the USSR until 1933, just as it has forced Cuba to live under an economic embargo for over 40 years. No more socialist revolutions occurred until after the Second World War. When social democratic governments or coalition governments were formed - Sweden, Finland, Germany, Belgium during 1917-1919; somewhat later in Britain, Denmark and Norway - they were deeply hostile to the Bolshevik Revolution and w ere quick to shed whatever Marxist heritage some of them had heretofore claimed. When Lenin promulgated the New Economic Policy after the Civil War, planning a mixed economy and inviting foreign investments, none of the capitalist countries, including th e social democratic ones, responded, and the denial of technologies, investments and materials continued. As late as 1933, Churchill was praising Mussolini as a bulwark against bolshevism, and even though Stalin incessantly offered a pact of "Collective Security" against fascism after 1934, the West kept open its option of alignment with fascism against the USSR up to 1938-39. After the Second World War, Soviet policy advocated the formation of states throughout Europe, west as well as east, not on the model of the USSR but multi-party parliamentary democracies. Only after the promulgation in 1947 of the Truman doctrine, calling for a "roll-back" of communism, did the policy change in Eastern Europe.

Fourth, at no point in its history until about 1970 was the Soviet Union free of the fear of imminent military destruction. Ten weeks after the end of the Second World War, the U.S. chiefs of staff made a covert plan to prepare the United States to drop atomic bombs on 20 key Soviet cities, in sharp contrast to the USSR which reduced the size of the Red Army from 12 million persons in 1945 to three million in 1948. Soviet re-armament and the race for atomic and nuclear technologies were reactive strateg ies, against a declared policy of encirclement, symbolized by the Truman Doctrine and the Marshall Plan of 1947 and the formation of the North Atlantic Treaty Organisation (NATO) in 1949, not to speak of the American threat, on the eve of the Italian ele ctions of 1948, of military intervention if the communists, with two million members, won the elections. Even after the USSR had developed its nuclear deterrence and delivery system, some of the fear remained, because there persisted an opinion at the hi ghest levels of the U.S. policy establishment, including such illustrious figures as Defence Secretary Caspar Weinberger, who seriously considered a nuclear option in which much more of the USSR but much less of the U.S. would be destroyed.

Fifth, there was the fact of war itself. During the 1930s the Soviet economy grew faster than that of any country except Japan, but then a quarter of the Soviet industrial assets were destroyed during the Second World War, while during that same War the U.S. economy grew at the rate of 10 per cent per annum - faster than ever before or since. Out of 5.7 million Russian prisoners of war in Germany, 3.3 million died. In all, the Soviet Union lost 20 million lives, in addition to 50 million injured - by fa r the greatest single catastrophe any country has suffered in human history. Even the demographic result was such that as late as 1959 the USSR had seven women between the age of 35 and 40 for every four men of the same age. Nor was the human toll limite d to the USSR alone. In the three regions where the issue of socialism was most sharply posed after 1950 - Korea, Indochina and Portugal's African colonies - death toll was estimated at close to eight million. This does not include scores of wars around the globe, from Malaya to El Salvador, that the West fought for the containment of communism - for example, the Greek Civil War which took 80,000 lives.

Sixth, this combination of extreme initial backwardness, unremitting subsequent carnage and unbearable defence expenditures left behind lasting effects, restricting the overall significance even of the stupendous rates of growth that the socialist countr ies actually achieved. According to Angus Maddison, the distinguished economic historian, Soviet per capita economic growth in the half century up to 1965 was the fastest in the world, faster than Japan; during the 20 years after 1950, Soviet food consum ption doubled, disposable incomes rose by 400 per cent and purchase of consumer durables by 1200 per cent. Between 1950 and 1980, the rate of growth in East Germany was as fast as in West Germany while economies in virtually the whole of Eastern Europe g rew faster during this period than did that of the United Kingdom. Even so, per capita gross national product (GNP) in the Soviet Union in the mid-1970s was only equal to that of Spain and half of West Germany. At no point did the annual aggregate produc t of the countries of the Comecon (Council for Mutual Economic Assistance, the economic association of east European countries) equal one-fourth of the NATO countries, and if one includes Japan the ratio declines further. In such circumstances, even a se mblance of parity with NATO's war machine absorbed much higher proportions of the resources in these much poorer economies, and yet NATO's military technology remained so superior that every one of the innovations in nuclear technology and most in conven tional warfare originated there.

WE shall come now to the immensely impressive achievements of socialism. It needs to be said, however, that the cumulative effects of factors that we have summarised above produced enormous distortions. It is virtually impossible to build a socialist dem ocracy superior to the liberal democracy that was already evolving in parts of the capitalist world with a political party whose best rank-and-file cadres have been killed in war, which has always lived under siege and never in an environment of democrat ic constraint and civility, which has set out to build a socialist society with a state apparatus comprised largely of the remains of the Czarist bureaucracy, and which continues to live under threat of annihilation. An extreme centralisation of authorit y, which then has a disastrous logic of its own, would seem to flow from the circumstance itself. And, if break-neck industrial development is quite accurately seen as the only guarantee of survival when there are no resources available for such a develo pment, would there not be a temptation to break the worker-peasant alliance, subjecting the working class itself to maximisation of industrial production and the peasantry to a collection of tribute that for some years came to be called 'primitive social ist accumulation', recalling the brutality that Marx had described in his famous chapters on primitive accumulation of capital? And, since all the states of the world had openly adopted the objective of annihilating the Soviet state, it seemed logical an d sensible to organise society not on lines of socialist democracy, as theoretical Marxism had always envisioned, but on a war footing, on the single criterion of efficiency and productivity.

In the realm of theory, then, almost the worst consequence was that methods and models that were adopted under sheer historical compulsion were then internalised and presented as the very essence of socialism, so that alternative models from the socialis t perspective became very scarce, especially inside the socialist countries, which were the only countries where these alternative models could have been tested concretely. Meanwhile, complete identification of party and state, which was itself a result of an objective circumstance, resulted in the disappearance of the distinction between the political realm and the executive function.

Similar distortions occurred in the ideological realm as well, two of which we might mention for illustrative purposes. When standards of living in the Soviet bloc remained far inferior to those of the core countries of advanced capital, despite herculea n efforts to increase production and highly impressive gains in per capita GNP, a sense grew that this disparity after some 50 years or more of revolution was indicative of the superiority of the capitalist system. Bulgaria was not compared with Turkey, or Russia with Greece and Spain; nor did it matter that East Germany had inherited a far inferior economic base than West Germany; nor that the socialist countries did not plunder Third World resources as advanced capitalism did. What mattered was that t he average Soviet or East European citizen did not live as well as the American or the Japanese. In this condition, then, Soviet military and economic aid to national liberation movements and some countries of the Third World became increasingly unpopula r as a very great but unnecessary drain on scarce national resources, reinforcing trends of xenophobia and political conservatism that were rising owing to other causes as well. Indeed, chauvinistic Russian nationalism grew on this soil as well as with t he resentment that East European allies themselves were receiving very considerable economic aid and subsidies from the Soviet Union.

One needs to keep in view this whole range of problems in assessing the achievements of socialism. From the world-historical perspective, one of the central achievements of the USSR was that it saved the world from fascism. As Eric Hobsbawm, hardly an ad mirer of the Soviet Union, has put it: "The institutions of liberal democracy virtually disappeared from all but a fringe of Europe between 1922 and 1942 as fascism and its satellite authoritarian movements and regimes rose. But for the sacrifices of the USSR and its peoples, Western liberal capitalism would probably have succumbed to this threat and the contemporary Western world (outside an isolated USA) would now consist of a set of variations on authoritarian and fascist regimes rather than a set of liberal ones. Without the Red Army the chances of defeating the Axis powers were invisible."

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It is a very cruel irony of history that the liberal capitalism that had been thus saved by the Soviet Union then turned against that same saviour the mightiest military machine and economic power that the world has ever known.

Socialism created the world's first state system based on the most extensive collective and re-distributive economic rights, namely the "social state", against the state of liberal capitalism based on possessive individualism. It demonstrated how such fu ndamental human rights as free universal education at all levels and free universal health, not to speak of full employment, could be achieved at relatively low levels of economic prosperity. It was the first system ever to set out on the premise that, f ar from leaving personal well-being to the vagaries of the market and its endless competitions, socio-economic systems could be planned for the common good. Socialist societies were also the modern world's first relatively egalitarian economies, based on modern industrial production, until the bureaucratic corruptions of the 1970s set in. On gender issues, the record of socialist societies was at best ambiguous. It is worth recalling, however, that legislation on women's issues in the first years of the Bolshevik Revolution, before the later deformations began, was more advanced than in any of the most advanced of the capitalist countries of that time; that Muslim women always had more rights in the Asian republics of the Soviet Union than in any other Muslim country, Turkey and Tunisia included; and that, after the collapse of communism, people like Jurgen Habermas, the German philosopher whose anti-communist sentiments are well-known, opposed the unification of Germany on the ground, among others, t hat legislation for East German women was far superior to the West and that those women were likely to lose security and status as a result of the unification.

THE demonstration effects of the socialist experience, combined with the threat of socialist revolution elsewhere, had a deeply civilising influence on capitalism itself. In response to the Depression, capitalism was already imbibing from the Soviet Five Year Plans a tendency to nationalise, municipalise and otherwise regulate economies in the direction of greater state responsibility for planning and social provision. In mobilising the peasantry as a revolutionary class across continents, socialism pus hed the agrarian question to the heart of the democratic question. The most far-reaching land reforms were undertaken in Asia and Africa either by communists themselves or by anti-communists out of their fear of communism: in South Korea because of North Korea, in Taiwan under pressure from China, in Malaysia thanks to the great (eventually defeated) communist insurgency. In other countries, notably India, some partial agrarian reforms were attempted thanks to a combination of communist pressure and a r adical nationalism that was inspired by socialist example. Where communist movements were very weak or non-existent, such as Pakistan or pre-1978 Afghanistan, no land reforms took place.

What we have said here about the more radical agrarian reforms from which the Asian peasantries have benefited can be said equally for the gains the working classes made in the capitalist zones of Europe. One now forgets that in Europe the line against c ommunist revolution was drawn in the Greek Civil War, with 80,000 people dead; that in both France and Italy, the communist parties had emerged from the War and anti-fascist Resistance as the largest parties in their respective countries; and that the qu estion of communism was not settled in southern Europe until after the containment of the Portuguese Revolution of 1974 and the decisive electoral defeat of the Italian communists in 1976. The West European welfare state arose within this perspective, fa cilitated undoubtedly by Keynesian economics and American financing of West European reconstruction through the Marshall Plan, but with the express objective of immunising the working classes there against communist ideas. This type of state arose under social democratic management of the state in Scandinavia, under conservative government in Germany, and under Christian democrats with communist pressure in Italy, but the social democratisation of the working class was everywhere seen as an imperative i n the containment of communism.

It was under this imperative that the bourgeoisies there accepted far-reaching increases in social spending and equally far-reaching cuts in their own share of the value-added, in the shape of higher workers' wages and higher taxes to underwrite the welf are state. One can plausibly argue, I think, that in economic terms and social rights the West European working class perhaps gained more from communism, indirectly, than did the working classes of Eastern Europe - precisely because Western Europe was so much richer and could pay much more. Until the collapse of the Soviet Union, and with the exception of Britain where attacks came earlier, that settlement remained intact throughout the northwestern parts of the Continent and was extended to Spain and P ortugal as well, both of which had considerable communist parties. Now that the communist threat has been removed, and as Keynesianism becomes less and less possible, that compact can be repudiated under the rhetoric of fiscal responsibility, restructuri ng and the like. Or to put it differently: now that the Third International has been defeated, the Second International itself can supervise the emergence of what I have called a 'banker's Europe'. And yet I believe that the great experience that the Eur opean working classes have gained during that whole period will mean that any big attacks on them will necessarily radicalise at least some sections of them. Across the Atlantic, a 5 per cent increase in unionisation in the U.S. last year after two decad es of dormancy, in response to the more radical stance of the new AFL-CIO leadership, is hopefully a small sign of the times yet to come.

THE international socialist current has also gained a whole range of experiences that are likely to remain a part of our legacy. The very fact that roughly a third of humanity passed through this experience, memory and critical assessment of that experie nce - the best and the worst of it - shall remain an integral part of the emancipatory politics of the future; there are said to have been some 200,000 workers' actions in China over the past couple of years, and one can safely surmise that these actions were in memory of the revolution that once was, and in defence of what little of it still remains. Once the dust of the present conflagrations settles in parts of eastern Europe, it will again be remembered that an advanced full-employment welfare state , with low levels of crime or industrial accident or work-related psychological derangements, and with little of the pathologies of American mass culture, was achieved there at levels of economic development much lower than in western Europe; movements w ill undoubtedly grow to revive that experience, at a higher level of development than before. The workers' self-management experience in Yugoslavia has much to teach us about how to conceive of democracy at the point of production, how to fight against a lienation in the belly of industrial work, and how to struggle for a workers' state where the power of the working class may actually be greater than that of the bureaucracy that may yet be needed, provisionally, for some executive functions. From Cuba t o Kerala, we have gained much experience in how to produce and maintain literate, healthy, politically participating citizenries despite great resource crises - and in Kerala, of course, this experience has been gained within the belly of the Republic of the bourgeoisie.

In numerous countries, Marxism has learned the tough lessons as to how not to concede the power of religion entirely to the Right. Liberation theology is inconceivable except in the perspective of the global outbreak of socialist and national liberation movements across the globe, in which the Catholic nuns and priests who were working on the ground had to choose sides. Across the Catholic world, from remote barrios in Latin America to the jungles and shantytowns of Philippines, this is a gloriou s chapter of resistance against dictatorship, fascism and the rule of property which was shared by socialists with religious personnel. One now forgets that key Ministries in the Sandinista Cabinet were held by Jesuit priests, including the great poet Er nesto Cardenal. Nor is it peculiar to Catholicism. Numerous people associated with both the Protestant and Catholic churches in the U.S. played a key role in the movement against the war in Vietnam, in a far-reaching alliance in which communists, former Communists and independent Marxists were the other main element.

We may briefly refer to some other conceptual features which were specific to socialist theory but which have now become common features in a broad range of emancipatory movements. There was, first, the culture built around a specific identity, that of t he 'working class', which then was expanded to broader categories of 'the oppressed' or the 'the people'. Second, there was an explanation of inequality and injustice in relation to the capitalist system, property relations, exploitation and the like. Th ird, it located the possibility of revolutionary change within capitalism itself and, further, the agency of change in the capacities of the oppressed themselves. Fourth, it assigned enormous importance to ideology and consciousness, arguin g that ideological domination was as important as political or economic domination, and that no collective social change was possible without a fundamental change in structures of collective consciousness; hence the great emphasis on 'proletarian conscio usness', 'study group', 'party school' and so on.

The striking feature of modern struggles for justice is that these ideas, which are of classical Marxist vintage, are now deeply permeated in all those struggles, be it for racial justice, gender justice, defence of the human environment against blind pr ofiteering, or other 'social movement'. Feminist 'consciousness raising' was modelled on the communist 'study group', and when radical feminism speaks of women's oppression it speaks of unequal wages, unpaid domestic labour, the cost of reproduction, une qual property rights, alienation of the body through sexual exploitation and the like.

Finally, an attribute that is peculiar to Marxism is the attempt to combine a politics that is based squarely within the working class with the greatest achievements of 'high culture'. Hence comes Marxism's distinctive contributions to scientific thought , economic science, social and political philosophies, cultural theory and the arts. Marx was so formidable a philosopher that even The New Yorker, the magazine par excellence of the American bourgeois literati, was constrained to nominate him as the likely philosopher of the 21st century. Similarly, no roster of the great decisive poets of the 20th century would be possible without the commanding presence of Vladimir Mayakovsky, Aime-Fernand Cesaire, Bertolt Brecht, Pablo Neruda, Cesar Va llejo, Ernesto Cardenal, Nazim Hikmet and Faiz Ahmed Faiz. With the exception of Cardenal and Vallejo, they were all members of communist parties; Vallejo himself went off to fight in the Spanish Civil War, and Cardenal was an illustrious Minister in San danista's Nicaragua. Coming from Latin America, the Arab world, the Caribbean, Europe, Central America and South Asia, these are a small number of the great figures in what one may call 'Poetry International'. Indeed, it is a fundamental feature of the M arxist intelligentsia that every member of it, anywhere in the world, has always considered him/herself as part of a global fabric. I could equally well give the example of modern cultural theory where most of the commanding figures also turn out to be s omething of a debating society within the broad parameters of Marxism: V.N. Voloshinov, Georg Lukacs, Antonio Gramsci, Walter Benjamin, Louis Althusser, E.P. Thompson and Raymond Williams. One could offer many such examples. The point nevertheless is tha t it is this combination of a working class politics and the most advanced thought of the age which accounts for socialism's reach far, far beyond its distinctive precincts.

For farmers or for corporations?

the-nation

India needs a radical system that protects the rights of its farmers, encourages them to grow more and preserves the tradition of not accepting privatised IPRs on life forms. What does the Plant Varieties Bill offer in this regard?

ASHISH KOTHARI

ONCE again the Government of India is introducing a significant piece of legislation in the name of the masses, one that could, in its present form, make it almost impossible for the masses to be in control of their own lives. And once again there is the danger of the government submitting to international pressures and undermining national security, this time in the arena of perhaps the most critical element in our lives - food.

On December 14, 1999, the Protection of Plant Varieties and Farmers' Rights Bill (PPV Bill) was introduced in Parliament. Thereafter, the bill was submitted to a Joint Committee of Members of Parliament. The immediate question before the committee, which is expected to complete its appraisal by February end, should be: does the bill meet the Government's claims of aiming at improving food security by providing incentives to breed new crop varieties?

But first, a more fundamental question: what constitutes a nation's food security? By now it is clear that the total grain output is not an adequate measure of food security. What one needs to know is whether the food produced reaches where it should, na mely, the poor; whether farmers are empowered to manage their own livelihoods; and whether the costs incurred in producing food are ecologically and financially sustainable. The current models of agricultural development do not fulfil these conditions, e ven if they result in higher aggregate foodgrain output. A third or more of the country's population still does not have enough quality food, or simply, enough food. Further, factors such as soil degradation, pollution of surface and groundwater, contami nation of food by chemical residues, the debilitating dependence of farmers on centralised bureaucracies and markets, and the reduction in the diversity of seeds, livestock and farm practices are increasingly pushing us to a dead end.

National food security can be achieved only if these issues are addressed. It would be unfair to expect the PPV Bill to do this all by itself. But is the bill even oriented towards resolving these issues? Does it enable farmers to stand on their own feet (is it truly a "Farmers' Rights' Bill as it claims?), and the indigenous seed breeding and production sector to blossom in the service of the farmer and the nation's consumers? Will it actually lead us to greater food security?

Unfortunately, despite a number of progressive clauses in the bill, the answer is a clear no. The bill may well end up benefiting the large seed corporations, some large farmers and corporate farming agencies. In doing so, it will be playing into the han ds of international operators who pushed for agreements and arrangements such as the Trade Related Intellectual Property Rights (TRIPs). This is a pity, since India could well exploit the loopholes in TRIPs and the solid mandate given to it by the U.N . Convention on Biological Diversity to push a boldly different plant varieties protection legislation. Such a step is still possible if the parliamentary committee is apprised of the issues involved and it, in turn, is willing to take cognisance of them.

LARGELY modelled on the 1978 version of the International Convention for the Protection of New Plant Varieties (UPOV), an agreement signed mostly by developed countries, the PPV Bill contains the following provisions:

1. Registration of new varieties of plants by their breeders, provided they fulfilled the NDUS (Novelty, Distinctive-ness, Uniformity and Stability) requirements;

2. Protection for registered varieties for periods ranging from 15 to 18 years; this protection would include the exclusive rights (called plant breeders' rights, or PBRs) to produce, sell, market, distribute, import or export the variety or its propagat ing material, and to give licence to other persons to do the same;

3. Exclusion of plant varieties from registering, if necessary, in public interest, or if commercial utilisation of such varieties threaten human, animal, or plant life or the environment in general;

4. Rights of researchers to use the registered variety for experiments;

5. Rights of farmers to save, use, exchange, share, or sell the produce of any registered variety (except selling for the purpose of reproduction under commercial marketing arrangements);

6. Revocation of protection if it is found that the breeder has violated the provisions of the bill, or if the registration was found not to be in the public interest;

7. Compulsory licensing in cases where the breeder fails to make the seed available at reasonable price, or quantity, or regularity;

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8. Benefit-sharing arrangements with those claiming to have contributed genetic material to the registered variety;

9. Rights of communities and persons to claim significant contribution to a registered variety, and payment of compensation if such a claim is upheld;

10. Creation of a National Gene Fund for benefit-sharing and providing compensation to the farming communities, and for conservation and sustainable use of genetic resources.

The bill also provides for the establishment of a Plant Varieties and Farmers' Rights Protection Authority and a Plant Varieties Registry, which will maintain a National Register of Plant Varieties that are protected under the bill.

THE bill is meant primarily to provide incentives, particularly financial, to seed-breeders. This, it is hoped, will lead to continued and increased investment in plant-breeding and innovations in the field. The agricultural establishment hopes that farm ers will indirectly benefit from gaining access to improved seed varieties.

The bill actually adopts a rather casual approach to the farming community. A Background Note circulated to the JPC recognises that the public sector breeding programmes are not meeting the increasing needs of farmers, and hence the growing importance of private (read corporate) sector breeding. Unfortunately, such an assessment entirely ignores the critical importance of a third sector, the farmers themselves.

Considering that for thousands of years Indian farmers have selected, bred and used hundreds of thousands of varieties of crops, it is amazing that they are not even mentioned as breeders. This only reinforces the dominant image of farmers as simp ly suppliers of 'raw material', which the formal-sector breeders use to develop new varieties.

This bias permeates the bill, although there are some well-meaning attempts to reduce it. Consider the following:

1. Does the PPV Authority include farmers' representatives? The Authority has representatives of neither farmers nor non-governmental organisations (NGOs); it is made up entirely of government officials (Section 3);

2. Can crop varieties get protection? In theory, farmers are included in the category of breeders and can apply for PBRs. However, their applications are unlikely to fulfil the stringent NDUS requirements for obtaining PBRs (Section 14); these req uirements that are expensive and are technologically easier to achieve in the laboratory or in highly controlled conditions than in the fields. This can happen only if the state assists in carrying out the tests to prove these characteristics on behalf o f the farmers. But the bill does not mandate this.

3. Will farmers' permission be taken? India is legally obliged, under the Convention on Biological Diversity, to ensure that local community consent is sought and equitable benefit-sharing arrangements are made before wider use is made of its kno wledge and practices. Yet applicants for PBRs, under the provisions of Sections 17/18 of the bill, are not required to prove that such consent has been sought and benefit-sharing worked out. Section 48 enables communities to make claims if they believe t hat they have contributed to the development of a registered variety. But the onus to prove this rests with these communities. How many farmers will ever know that their varieties and knowledge have been used in registered varieties? The bill makes it ma ndatory for applications to be advertised (Section 17); but again, will such advertisements even reach the rural population? The only consolation is that NGOs have been authorised to make claims on behalf of the aggrieved farmers. If the farmers or the a gencies acting on their behalf manage to make such a claim and the claim is upheld, they may get some compensation, largely at the discretion of the Authority (Section 48(3)). There is no enabling clause to revoke the protection if the applicant is found to have appropriated unfairly farmer/community resources or knowledge.

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4. Is the provision on farmers' rights adequate? The PPV Bill has a single paragraph on farmers' rights (Section 31), and it protects their ability to save, use, exchange, share and sell protected varieties. This is commendable, given the growing international trend to exclude even such basic rights. However, 'farmers' rights' should go beyond this and include the right to protect their varieties and knowledge, as also guarantee access to biological, cultural and economic resources that allow far mers to innovate and use crops sustainably. Such a definition has been proposed worldwide by farmers' groups.

5. Is the benefit-sharing provision adequate? To its credit, the Government has introduced a provision (Section 26) for benefit-sharing arrangements between breeders and farmers. However, the onus of claiming that they have contributed to register ed varieties rests with the farmers. Moreover, claims can only be made for contributions of genetic material, not for knowledge - a rather strange oversight considering that information taken from local communities is a very common ingredient in breeders ' work. Nor is there any requirement for this benefit-sharing arrangement to be "equitable", although the Statement of Objects and Reasons attached to the bill states that this will be the case.

6. Will the national registration process cover farmers' varieties? Unfortunately, the bill's registration process is not open to farmers, unless they apply for PBRs. The NGOs have for many years been demanding such a registration process so that there is proof of 'prior existence' of a variety and its related knowledge, making it easier to contest biopiracy. The PPV Authority is obliged to adopt measures for "compulsory cataloguing facilities for all varieties of plants, seeds, and germplasm". In theory, this could be used to register farmers' varieties, but the bill does not provide any legal protection to such a catalogue against piracy and misuse.

EVEN within the formal seed sector, the bill is likely to benefit primarily large private corporate houses. Public sector seed breeding has been the backbone of official agricultural programmes. Although these programmes have not involved farmers in rese arch and development, they have at least been motivated by public needs. Secondly, reaching laboratory-bred seeds to farmers has been done mainly by small-scale seed industries. The bill not only acknowledges a move away from this, but encourages it. The Background Note with the bill states that the public research system will have to be made more "self-sustainable" owing to "decreasing levels of government support" (itself an outcome of the economic liberalisation and structural adjustment programmes o f the 1990s). Doing this through intellectual property rights (IPRs) is a sure-fire way of increasing the role of the private sector, both in itself and in funding research in agricultural universities. Will corporate interests in seed-breeding allow far ming populations to benefit, especially those farmers in the so-called 'marginal' areas (coastal areas, mountains) where profit margins for private companies may be extremely low if not negative? And if the small-scale seed sector has to pay increasing a mounts of PBR-related royalties, will they be able to cope with the competition from big seed industries?

PROGRESSIVE clauses in the bill give the government the right to refuse or revoke registration of a variety that may in some way be contrary to the "public interest", or whose commercial exploitation may be harmful to human/animal/plant health and the en vironment. In extreme cases, these provisions may be effective. For instance, the bill justifiably prohibits registration of varieties that use genes involving the 'terminator' technology (which will render a crop sterile after the first generation). How ever, there are many other ways in which registered varieties may be harmful, but in the absence of a provision for a thorough Environmental Impact Assessment (EIA) of varieties proposed for registration, how will the Authority judge this?

In a way, all seeds on which PBRs are obtained could cause genetic erosion. For, obtaining protection under the PPV Bill will be an expensive proposition, and the holders will surely want to push their registered varieties into as large a farming populat ion as possible. What is happening already with the Green Revolution thrust - the replacement of a large diversity of indigenous crop varieties that farmers had been growing by a handful of formal-sector-generated varieties - will only increase with the introduction of plant breeders' rights.

International obligations under TRIPs allow India to develop an "effective" sui generis (of new origin) system of plant variety protection. As the government has stated, what is "effective" should be judged nationally, not internationally. India c ould well develop a radical alternative system that protects the rights of its farmers and encourages them to grow more, preserves the tradition of not accepting privatised IPRs on life forms, and encourages seed breeders who are interested in contributi ng to the welfare of the nation. The following modifications in the PPV Bill would transform it into such a system:

1. Including farmers' representatives and NGO activists in the Authority and other institutional bodies set up under the bill;

2. Making it explicit that farmers are also breeders and researchers in their own right;

3. Building in a more comprehensive definition of farmers' rights, which includes the right to protect their varieties and knowledge and guaranteed access to biological material and other conditions that are important inputs for the farming system;

4. Making mandatory the consent of and appropriate benefit-sharing arrangements with farmers and communities whose varieties and knowledge are accessed in formal-sector breeding (and not leaving on the farmers the onus to claim such benefit-sharing);

5. Placing on formal-sector breeders the onus to prove that they have not wrongly or unfairly appropriated farmers' varieties and knowledge in developing a new variety, if such complaints are made;

6. Making the use of farmers' varieties and knowledge without prior consent a ground for opposition to and revocation of a variety;

7. Making the use of existing farmers' 'denominations' by plant breeders, without seeking the former's permission, a violation of farmers' rights;

8. Providing legal status to local, state, and national-level registers of farmers' varieties and knowledge, and not insisting on expensive-to-prove characteristics to accept such varieties for registration (where characteristics such as stability have t o be demonstrated, it should be made obligatory for the state to help farmers conduct the necessary tests);

9. Making compulsory some kind of benefit-sharing arrangements in all further use of seeds and other genetic material already stored in ex situ gene banks (for instance, the National Bureau of Plant Genetic Resources). In the case of varieties who se origin can be traced to particular farmers or communities, such benefits should go to them; whereas in the case of other varieties the benefits can accrue to the National Gene Fund;

10. Facilitating a range of incentive measures for farmers and local communities to revive or continue practices and knowledge systems that promote the conservation and sustainable use of biological diversity. For instance, linkages with consumers wantin g organic and diverse foods;

11. Making environmental impact assessments mandatory for any new variety for which a claim is made, in order to ensure that it does not in any way undermine the maintenance of biological diversity in the farms, or in other ways harm human/animal/plant h ealth;

12. Reintroducing provisions for an Appellate Tribunal in order to settle disputes regarding plant variety protection, particularly complaints from aggrieved farmers (such a Tribunal was envisaged in a previous version of the PPV Bill but was dropped sub sequently);

13. Providing formal-sector breeders incentives and protection, and taking measures to ensure that they are rewarded in proportion to their contributions, at the same time ensuring that compulsory licensing is done for every variety that is given protect ion so as to guard against monopolies and benefit the small-scale seed sector. A partial step towards this already exists in Section 45(1) of the bill.

India has the option to develop a truly unique law that suits its social and ecological conditions. What is stopping it from doing so?

Ashish Kothari, a founder-member of Kalpavriksh, is Coordinator of the Technical and Policy Core Group formulating India's National Biodiversity Action Plan.

The tale of Lalita Oraon

the-nation

Five months after the situation of the Indian maid who walked out of the home of her employer, an Indian Embassy official in Paris, created a furore in France, questions remain as to what exactly happened to her.

VAIJU NARAVANE in Paris and in Ranchi

A HURT, frightened and traumatised tribal young woman from Bihar, one who grew up in ignorance, deprivation and utter poverty. She was denied the love and affection of her parents, separated from her brother and sisters, and pressed into domestic work ev en before she had entered her teens. Sexually mutilated, terrified and confused, she now remains in the care of a special judge for minors in Paris because French officials believe she is only 17 years old....

So went the story of Lalita Oraon last September. But it is a mystery even today as to who mutilated her, for what reason and when. The French press and the Committee Against Modern Slavery (CCEM), a Paris-based non-governmental organisation (NGO) that h ad Lalita in its care when her injuries came to light, have pilloried Amrit Lugun, Lalita's employer who is First Secretary, Economic, at the Indian embassy in Paris, more or less accusing him of being a torturer.

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A criminal case has been registered by the French police but the inquiry seems to be leading nowhere. Lalita remains silent: she has made no accusations against her employer, nor has she said anything about how she received the injuries, which an inquiry commission has said "could not be self-inflicted."

Lalita's story begins in Seeramtoli, an Adivasi settlement not far from Ranchi. Her family comes from the Oraon tribe. The Santhals, Mundus and Oraons, who live in this part of south Bihar, practise the Sarna religion. Many of them have converted to Chri stianity. Lalita's mother is a Roman Catholic while her father Jeetu remained a Sarna. The children were not baptised and were named according to Sarna rites.

All but the last child were born at home. In the absence of church or hospital records, it is difficult to fix their age. The testimony of village elders is the only reliable source of information. Most village elders concur that Lalita is today almost 2 0 years old.

The French authorities, applying Western growth standards to Lalita, concluded that she is a minor. The Oraons are small-built. Lalita's 17-year-old brother Alois looks no bigger than 13 or 14.

This correspondent has been able to ascertain that Lalita was born on February 20, 1980 as stated in her passport. Her mother Karmi alias Flora Oraon Toppo had filed an affidavit to this effect but Judge Josie, the examining magistrate investigating the case, questioned its validity.

The affidavit, bearing reference number 21596, was filed on October 27, 1999 in the Ranchi Civil Court and was registered by Janeshwar Mahto, Notary Public. This correspondent met Karmi, Mahto, and witness Sushil Kumar Barla and verified the authenticity of the document and its contents. These facts, according to lawyers in Paris and Ranchi, raise questions about the legality of Lalita's detention, her placement in care and the Indian embassy being refused access to her.

Lalita's father was a rickshaw-puller while her mother worked as domestic help. They had five children, born within two to three years of each other. The oldest child, a daughter called Sugan, died young. Next is Lalita, followed by brother Alois (pronou nced Albis) and sisters Magdali and Anjali. "She (Karmi) would come here to work with them trailing her. They were always famished, often sick and ill-clothed. We helped them as much as we could," says the wife of the Toli mukhi (tribal head) Suha van Horo.

The family's situation worsened after Jeetu's death, when Lalita was 11 or 12. Karmi Oraon disappeared, some say to Delhi, with a new man. Says Alois bitterly: "She abandoned all of us, Even Anjali who was then a baby. If Lalita refuses to recognise her mother, even to admit that she has one, it is because of this. She left us to our fate." But the mother protests: "I was destitute. My husband's cousin threw me out of the house. I had nowhere to go. I had to parcel out the children. Where would I have k ept them?"

Alois became a tea boy, sleeping in the streets and surviving on scraps. Lalita was sent to the house of Namita Topnu, the maternal aunt of the diplomat's wife - Asha Lugun.

The Topnu residence is a modest top-floor flat in a two- storey house in Ranchi's Pathalkudwa area. Namita's brother-in-law Pradeep Topnu said: "Lalita stayed here for several years. She was fine, we had no problems with her. We then sent her to Vizag to my brother. There she became insolent and started acting up. So we brought her back. When Amrit was posted to Paris they needed a maid. Asha was expecting a second baby; and the first child was just a year old. We told her that Lalitha had become moody and strange. But the girl was eager to go and Asha was willing to take her. We trained her for three months. She stayed with Asha at her mother's house for some weeks. Amrit was already in Paris. Asha found her satisfactory and she went. Then a week befo re the incidents we were told that she was behaving badly again. She dumped the baby several times in the bathtub and was rude and Asha wanted to send her back. You know, we are tribal people and we do not have problems of caste. So there is more familia rity, much less distance between employers and servants. Lalita has always been treated as a family member by us."

This is at variance with what Lalita allegedly experienced in Paris. According to Philippe Boudin, director of the CCEM, Lalita was slapped, beaten and threatened by the Luguns.

LALITA arrived in Paris in January 1999 and soon afterwards Asha gave birth to her second child. Everything seemed normal until September 5 when Lalita fled the household.

What actually happened in the week preceding Lalita's flight remains unknown. But a source close to the couple told this correspondent that on Friday, September 3, there was violent altercation between Lalita and Asha. As a result, the Luguns decided to send Lalita back to India.

But before they could do that Lalita fled. Taken to the police station in a hysterical state by a passerby, she alleged ill-treatment by her employer and refused to return with him.

Lalita had travelled on an official passport issued to government servants. When no longer in the employ of the government, the passport has to be surrendered since it is linked not to the individual but to the function the holder performs.

The Public Prosecutor's Office in Paris ordered the Brigade for minors to release the girl despite arguments that she was a minor. The Brigade based its assumptions on Lalita's statements and a wrist X-ray of her. It is unclear as to who decided to flout the orders from the Prosecutor's Office, but Lalita ended up spending the night at the police station. The next day the police called the CCEM who found her shelter in the convent of Saint Joseph de Cluny.

Lalita's case drew wide attention when the Paris daily Liberation published an article on September 11, 1999 entitled "Slave Girl Lalita's Mad Dash for Freedom." It said that the police was sticking to the theory of an accidental injury.

However, Boudin, told this correspondent that a journalist from Liberation (Patricia Tourencheau) had been manipulated by the police who wished to keep a lid on the case in the interest of burgeoning Indo-French ties. "Professor (Bernard) Debre (t he surgeon who operated on her at the hospital Hotel Dieu, where she was admitted) also felt the same way. It was he who contacted the journalist from France Soir. I had told Patricia that Lalita had said her employer and a doctor friend cut open her stomach to prevent her from getting pregnant. But she retained the police version. Patricia now admits she was wrong."

But when this correspondent contacted Patricia Tourancheau she admitted no such thing. "I have certainly not been manipulated," she said. "Speak to the Brigade directly. Philippe Boudin has his own agenda," she remarked.

The policewoman from the Brigade said : "We were shocked when we heard of her genital injuries. We had no hint of that when she was here. She was certainly disturbed and emotionally overwrought but walked and sat normally and did not appear to be in any pain. What we told Liberation was the facts as we knew them then. No one can accuse the Brigade of a cover-up. In fact we stuck our necks out by refusing to send her into the street."

What shocked people in France and India was the statement on television by Prof. Debre that Lalita's sexual injuries was not the result of an accident but were caused by torture. It was as if someone had tried to cut out her genitals, which had suffered deep gashes.

Debre, one of France's most eminent urologists, has treated President Francois Mitterrand for prostrate cancer. But he has also been a politician and a Minister. Sources close to the prosecution say that he stood to gain from the attendant publicity.

AMRIT LUGUN has continued to proclaim his innocence. "I shudder when I think of my children's future. People are going to look at them and call them the children of a torturer," he agonised to a close friend.

The Luguns have received nasty telephone calls, even death threats. They feel they are being watched and followed. "It is terrible. But they must stick it out over here if only to prove their innocence," the friend said.

Here is one of hundreds of letters that have filled the mailbox of the Indian embassy:

"Dear Sir,

Sorry to remain anonymous - that's not my style - but from your country I fear the worst. Please find enclosed an article from Le Monde dated 15.09.1999 that your press service has undoubtedly given you. That there are barbarians in every country is a sad reality. But when one adds to it abject cynicism, as your embassy has dared to do, one goes beyond that. What else can one expect from a country where the majority dies of hunger, disease, war and ill-treatment. The suffering inflicted on Mademo iselle Lalita (you have even stolen her name!) are nothing but the true reflection of the bestial practices of your "culture" towards women. Gandhi and Tagore spit on this India from the depths of their tombs. I do not salute you and I have just cancelle d my trip to India."

The Lalita Oraon case has obviously dented India's image in France as no other incident in recent times. France was shocked by the extent and nature of Lalita's injuries. The French are a generous people, who willingly contribute to humanitarian causes. Their sense of outrage as the gory details of the injuries were made public was natural and understandable.

Lalita was described as a minor. By her own admission she was poor, oppressed and downtrodden. Slavery, mutilation, exploitation and possibly sex - all the ingredients of a great press story coalesced in Lalita's case. The media onslaught - and there is no other word for it - against Amrit Lugun was relentless, extreme and sensationalist.

What really happened to Lalita, however, remains a mystery.

Gynaecologists in both India and France contacted by this correspondent say that it would be difficult for any woman, howsoever brave, to act and move normally with the kind of injuries described by Prof. Debre. He initially agreed to an interview with t his correspondent, but when called to fix an appointment his secretary said that he would not be free until March, "not even for ten minutes".

Media reports have condemned what they describe as the Indian Embassy's callous attitude towards Lalita. But the Indian mission has been angered by the presumption of guilt contained in many of the reports. "Amrit Lugun has been given no chance to defend himself. His career is in ruins, his reputation is mud," an embassy employee said.

"It is also very unusual for a country to set aside as fake or untrue a genuine, official and valid identity and travel document issued by a government with which it enjoys friendly relations. Suppose a 16-year-old French boy were to go to India tomorrow and was caught with a marijuana cigarette in his pocket. What would happen if the Indian authorities were to say 'You look too hefty and big to be a minor even if your passport says so. We shall do an X-ray'? They then declare him to be a major and try him for the possession of narcotics. That would be highly arbitrary and dangerous. The French action has set a dangerous precedent," says Paris lawyer Michel Puechavy.

In Siramtoli, Lalita's friends and relatives are worried and angry. They would like the Indian Government to act. They want Lalita home. Dayamani Bahra, who organised a demonstration last September for the return of Lalita and against the exploitation of tribal girls, said: "Lalita is a tribal girl. She will not talk to foreign judges, especially given the nature of her injuries. Let her come home. Only then can we get to the bottom of the story and if Amrit Lugun is guilty he must be given the most sev ere punishment possible."

What is puzzling is that French judges have so far made no effort to verify Lalita's claims that she is a minor and an orphan. But investigations by this correspondent have disproved both these assumptions.

Informed sources close to the prosecution say that Boudin too has not been allowed to meet Lalita for several weeks. "We are not very sure of his motives. He has flogged this story for all the publicity he can get so the judges have decided to keep him a way from her," a source said. Contrary to what the embassy believes, it is not the judges who are keeping consular officers or journalists away from her. Lalita has reportedly refused to see anyone from India.

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Lalita obviously does not wish to return to India. Why should she, when all that awaits her here is grinding poverty and a slur on her name? The CCEM would like her to become an icon in its drive against the exploitation and ill-treatment of hapless wome n from poor countries. The Committee is attempting to persuade the French government to give Lalita a work permit. She is reportedly learning French and has recovered from her injuries, and is happy. The French Foreign Office has told the Indian Governme nt that the girl has made no charges against Amrit Lugun. The judge would now like to hear him as a "witness". The Indian Government says that unless there is a substantial case against the officer, his diplomatic immunity cannot be waived. In any case, no such request has been formulated by the French.

The two governments must cooperate to shed light on what really happened to Lalita. The French Foreign Minister's visit to India starting February 17 might provide the opportunity for serious discussions on the best way to end the impasse.

A chronology

the-nation
VAIJU NARAVANE

Sunday, September 5, 1999: Lalita Oraon, slips out of Amrit Luguns' flat in rue Camille St. Saens, clutching a knife, and heads for the nearby Tour Eiffel. She tries to talk to an Indian-looking passer-by, who takes her to the police. The police i n the 15th district fear that she is a minor and they call in the Brigade des mineurs.

Lalita is taken to the Hotel Dieu hospital which deals with medico-legal cases. Her wrist is X-rayed and a doctor examines her to verify if she has reached puberty. The doctors note that she is disturbed and nearly hysterical but there is no suspicion of pain as she walks and sits normally.

Through a Bengali interpreter the police learn that Lalita works at the house of Amrit Lugun.

Lalita's employer is summoned. He arrives with the girl's passport - an official white passport. He is not allowed to speak to the girl directly. She is in another room and the interpreter goes to and fro, translating for the police. Lugun tells the poli ce that he and his wife are unhappy with the girl's work and that she is being sent back to India on September 7, that the girl has overheard his wife talking over the telephone about her imminent departure and has run away since she does not want to lea ve Paris. The passport gives the girl's age as 19. She refuses to return with Lugun and the police say they cannot force her because she is a major. Lugun returns home without the girl.

The Brigade contacts the Prosecutor's office, which says: "Officially the girl is a major. Release her." But the Brigade feels a semi-hysterical girl speaking no French cannot be allowed to go just like that. Lalita spends the night at the police station .

September 6: The Committee Against Modern Slavery receives a call from the Brigade asking whether it will take in Lalita. The CCEM says yes. The police informs the embassy that the girl has been sent to the CCEM. The embassy calls the CCEM trying to get Lalita back. The committee says she has not been paid and should be paid according to minimum wage laws for eight months' work in Paris. The committee talks to the girl. She tells it she is an orphan, works 12 hours a day, and is slapped and threa tened by her employers who do not pay her. She is agitated and hysterical. The committee calls a doctor to give her a valium shot. Then it takes her to the convent of St. Joseph de Cluny. The embassy has been trying to get the girl back saying she has to be sent home. The CCEM refuses to hand her over. She is a major, they say, and does not want to go back to the embassy.

Foreign Ministry sources say that Indian Ambassador Kanwal Sibal is having lunch at the French Foreign Ministry and is informed of the situation. He talks to Francois Dopfer, who heads the Asia and Oceania division. The Ambassador says the girl can be ke pt in his residence for the night and be put on the plane the next day. The latter tells Sibal that the matter is extremely grave. At this time Lalita supposedly has no injuries, or at least none have been detected.

September 7: Lalita has spent a peaceful night at the convent, but becomes agitated again in the afternoon. She goes to bed at 9 p.m. A nun looks in on her at 11 p.m. She is agitated but refuses a sleeping pill.

September 8: The nuns call the CCEM. Lalita has vanished. CCEM director Philippe Boudin reaches the convent, then calls the police. Lalita is in hospital. She was found grievously hurt. She is taken first to Hotel Dieu. She has broken both her ank les, a few vertebrae and has dislocated her urethra. So she is rushed to Hospital Cochin where Professor Debre, a renowned specialist of the urinary tract, operates on her. Besides her other injuries, he finds a serious wound on her genitals. The gashes have been caused by a sharp instrument. It is as if someone has tried to cut out her vagina. There are signs of septicaemia. Twenty-five centimetres of sutures are needed.

September 9-10: Lalita is recovering from post-operative shock. The police are not allowed to question her until the afternoon of September 10.

September 11: Patricia Tourencheau of the daily Liberation files a story. Entitled "Slave Girl Lalita's Mad Dash for Freedom", she quotes Boudin and a doctor from Professor Debre's unit. The doctor says that the wound in her private parts d oes not appear to be caused by a sharp instrument. Nor is it a case of rape, the doctor says, because the hymen is intact. The Police wonder whether the runaway girl mutilated herself or if she hurt herself falling off a five-metre-high wall. The CCEM th inks it could be an old wound which has reopened. On Friday, Lalita speaks: To descend the wall she slid along it and in doing so ripped her genitals. She ran away from the convent because she was afraid of her interrogators.

September 12: Prof. Debre reads the report and decides he has to break the confidentiality oath and go public because he fears a cover-up. He calls journalists from the newspaper France-Soir. They are allowed into the hospital ward and phot ograph Lalita in her bed.

September 13: France-Soir's story causes a furore. The newspaper quotes the doctor as saying, "I find it very difficult to believe that the severe genital wounds have been caused by her attempt to escape. One can suppose an act of barbarism or torture which goes back several days." The doctor complains that the police no longer guard her. He is afraid someone will attempt to "recover" her. He goes on national television detailing the girl's injuries and says he has "never seen anything lik e this in his 20 years as a medical practitioner". Nagui, a popular presenter of entertainment programmes, urges viewers to call the Indian Embassy and protest. The embassy lines are jammed with calls. Hate mail pours in.

The embassy releases its first press communique denying the charges levelled against Amrit Lugun. "Any allegations and innuendoes of maltreatment by her employer are false and are strongly denied... As her performance was not up to the mark, her employer had decided to repatriate her on September 7. She had overheard her employer's wife talking to her family in India about her repatriation and presumably this led to her action to leave the house on that day," it said.

September 14: Allegations continue to appear through the press. Philippe Boudin of the CCEM tells journalists that Lalita said, pointing to her genitals: "My employer and a doctor friend of his drugged me and cut open my stomach to stop me from ge tting pregnant." As a result the Public Prosecutor names a two-member committee to examine Lalita.

This time the embassy pulls out all the stops. Its communique directly accuses Boudin of spreading falsehoods. "...To protect themselves from their own culpability in the matter, Mr Philippe Boudin,... is putting out gross and malicious fabrications whic h are truly shocking. His comments to the journalist from France-Soir to the effect that her employer and a doctor friend mutilated her is an utterly contemptible lie... We are also surprised that Professor Debre should make remarks about the orig ins of Ms. Oraon's sexual injuries, which are totally without foundation, unless the motivation behind these lies is to obfuscate the responsibility of the French authorities and that of the Committee against modern slavery for Ms Oraon's injuries to her ankles, backbone and sexual parts." The communique reiterates that when Lalita was taken to the police "she was in normal health and had no physical injury on her."

September 15: The French Foreign Ministry says the embassy's comments are unwelcome. Two doctors, one of them a forensic expert, examine Lalita.

September 17: New Delhi raps Ambassador Sibal on the knuckles. No more communiques. Keep your head down, is the order. There is an attempt from the French to seek the withdrawal of Lugun. But Sibal, who believes he is not guilty of sexually mutila ting the girl, urges New Delhi to keep him on since withdrawing the diplomat will be an admission of guilt.

September 20: The Public Prosecutor opens a criminal investigation against X for violence with a sharp weapon. (When there is a suspected criminal intent but no clear suspect, a case is registered as being against X) The decision is based on the e xperts' report, which describes Lalita's injuries as "injuries to the vulva... with clean incisions... made with a sharp instrument... of recent date." Ruling out an abortion attempt, the report concludes that it is difficult to explain the wounds as aut o-mutilation.

September 22: Satirical weekly Charlie Hebdo accuses Amrit Lugun of having mutilated Lalita. "After the rescue of yet another victim of modern slavery, mutilated on the sex by a member of the Indian Embassy, France has decided to exert dipl omatic pressure on India so that diplomatic immunity may be lifted from the 'employer'..." India denies it is sending a special envoy to Paris to deal with the Lalita case.

Lalita is placed under the care of a special judge for minors.

The situation today: Lalita is recovering. She can walk about and her wounds have healed. She is learning French and is reported to be happy. The judge has appointed an administrator to look after her. No one from the Indian Embassy has been able to see her. The embassy has been informed that Lalita has made no charges against Amrit Lugun. Lugun remains in his post in Paris and goes about his duties normally. The CCEM is trying to obtain resident papers for Lalita. This correspondent has just rev ealed that Lalita is not a minor. Nor is she an orphan.

A violent turn

other
T.S. SUBRAMANIAN

IT took the burning of three young women students in a bus, allegedly by All India Anna Dravida Munnetra Kazhagam (AIADMK) men, to ignite student activism in Tamil Nadu after nearly 30 years. The burning alive of Hemalatha, Kokilavani and Gayathri took place at Lakkiymapatti, near Dharmapuri, on February 2 when AIADMK supporters went on the rampage in different parts of the State, following the sentencing of party general secretary and former Chief Minister Jayalalitha in the Pleasant Stay Hotel case.

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The three young women and their classmates in the Tamil Nadu Agricultural University (TNAU), Coimbatore, were on an educational tour in two buses. Three men, who allegedly belonged to the AIADMK, came on a motorbike and set the bus transporting the young women on fire. While some young women scrambled out through one exit that was open (the other one was locked), Hemalatha, Kokilavani and Gayathri, trying to retrieve their luggage, were trapped inside.

The incident led to angry protests by students all over Tamil Nadu. They wore black badges, took out processions, blocked traffic and formed human chains in Chennai, Coimbatore, Tiruchi, Madurai, Tirunelveli, Dharmapuri and other places. Chief Minister M . Karunanidhi's handling of the situation defused a crisis that was building up as the students' protests gathered strength, but the political implications of the tragedy and the Special Judge's verdict are difficult to predict. Byelections to the Assemb ly seats of Tiruchi-II, Aranthangi and Nellikuppam are are to be held on February 17. These seats will witness virtually a direct contest between the ruling Dravida Munnetra Kazhagam (DMK) and the AIADMK, although candidates of Puthiya Tamilagam, essenti ally a Dalit organisation, are also in the fray. While the Chief Minister asserted that "people know that it was AIADMK men who burnt the bus at Dharmapuri" and reeled out that party's record of violence", the AIADMK, unable to come up with a credible ex planation for the burning of the bus, was on the defensive. All the nine persons arrested until February 9 and the seven who surrendered before courts belonged to the AIADMK. Jayalalitha claimed that they had surrendered in order to avoid embarrassment t o the AIADMK leadership.

Although an anti-incumbency sentiment seemed to be building up against the DMK following the increases in bus fares and power tariffs and the stoppage of sale of Rs.2-a-kg rice in ration shops, the death of the three young women has directed anger at t he AIADMK whose cadres had unleashed violence across the State soon after the Special Judge sentenced Jayalalitha to one year's imprisonment.

However, the court verdict and the violence have not caused any fissures in the AlADMK-led front, which includes the Congress(I), the Communist Party of India (Marxist), the Communist Party of India and the Indian National League (INL). The Tamil Maanila Congress (TMC) headed by G.K. Moopanar supports the AIADMK. When Moopanar was asked whether his party would review its support to the AIADMK, he quoted a Tirukkural couplet which means that any decision should be preceded by keen application of o ne's mind and once a decision is taken, one should on no account back down. Hours after the Special Judge gave his verdict on February 2, the leaders of all these parties attended a meeting to condole the death of former Minister and AIADMK leader V.R. N edunchezhiyan. This was an indication that they would stand by Jayalalitha, given the importance of the byelections. Elections to the Assembly are due in April 2001.

Taking their cue from Jayalalitha, leaders of the AIADMK's allies said that she could go in appeal to the High Court and the Supreme Court. They also echoed her demand for an investigation by the Central Bureau of Investigation (CBI) into the death of th e students. They said that they had no faith in an inquiry by the Crime Branch-Criminal Investigation Department (CB-CID) of the State police.

The AIADMK leadership may find it difficult to explain away the violence. A few minutes afer Jayalalitha left the court, there were dark hints of what was to happen soon. Hundreds of AIADMK supporters, both men and women, gathered outside the court and b locked traffic. They threw stones at State-owned buses and got shopkeepers to lower their shutters. When the violence escalated, the police resorted to a lathicharge.

Violent incidents were reported from the suburbs of Chennai and from Tiruchi, Madurai, Coimbatore, Tirunelveli and Dharmapuri districts.

Around 2 p.m., TNAU students, who were heading back to Coimbatore, ran into a roadblock put up by AIADMK men at Lakkiyampatti. The girls were in one bus and the boys followed in another bus. According to the students, three men came on a motorbike, got i nto the girls' bus through the driver's door, sprinkled petrol and set the vehicle on fire. Another version said that the men poured petrol on the bus from outside. The boys, standing some distance away, saw smoke coming from the rear of the bus. They ra n ahead and rescued a few girls by tearing down the shutters, which had been lowered because of stone-throwing.

The students said that a police jeep that passed by at that time did not stop to help. They also said that a policeman who had been standing nearby was rude to them. The students gheraoed for four hours District Collector Sai Kumar who came to the site. Students from Dharmapuri soon gathered there in their support. They broke the windshield of the Collector's car. The police fired buckshots and used teargas to disperse the students.

As news of the tragedy spread, students in various towns of Tamil Nadu came out in protest. In Coimbatore, students boycotted classes and took out processions. The TNAU was closed. M. Karunanidhi sent Forest Minister Pongalur N. Palanisamy to talk to the students, who wanted the Chief Minister to come to Coimbatore for discussions.

While Karunanidhi asserted that the AIADMK was behind the killing of the students, Jayalalitha claimed that the DMK was instigating violence. She submitted to Governor Fathima Beevi a memorandum demanding a probe by the Central Bureau of Investigation in to the incidents. Karunanidhi alleged that this demand was intended to delay the investigation that was already on.

A row also broke out between Jayalalitha and Sun TV (owned by relatives of Karunanidhi). She asked, "How was it that Sun TV crew were accurately positioned at the site, in all readiness to film the happening? How did Sun TV know beforehand that such an i ncident was going to take place?" CPI(M) State secretary N. Sankaraiah too raised similar questions. Jayalalitha added, "The Sun TV's crew must have filmed the torching from the start to the finish. Why did it then not show the persons who threw the petr ol bombs?"

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Sun TV's reply was to demand Rs.5 crores as damages and an unconditional apology from Jayalalitha for making "defamatory" statements about the channel, failing which it would launch civil and criminal proceedings against her. Sun TV explained that its cr ew was there along with reporters of other television channels and newspapers because a dharna by AIADMK supporters was under way. Their attention turned to the bus only after they saw the flames, it explained. Although Sun TV, Raj TV and Jaya TV crew an d newspaper photographers had filmed the burning of the bus, Jayalalitha accused only Sun TV of spreading false information, Sun TV said.

The students of the TNAU agreed to return to their classrooms from February 16 after their delegation met Karunanidhi in Chennai on February 7. Karunanidhi conceded their demands: the Government would meet the medical expenses of the injured students; co mpensation would be paid to those who lost their belongings; the burnt bus would be replaced by a new bus; jobs would be given to a family member of each of the girls killed; the Government would meet the educational expenses of one of the kin of each of the girls who died; and disciplinary action would be taken against Sub-Inspector K. Lakshmanan (who was rude to the students at Lakkiyampatti).

On February 10, the Tamil Nadu Police claimed in a press note to have established the indentities of the three accused. One of them, C. Muniappan, a panchayat president, had been arrested at Salem.

Portrait of a friendship

other
SUSAN RAM

The Tennis Partner by Abraham Verghese; Chatto & Windus, London, 1998; pages 345; 16.99 (hardback) (special price in India: 8.50)

A FEW days before I sat down to read this book, a British medical practitioner, Dr. Harold Shipman, was sentenced to life imprisonment for murdering 15 elderly women patients. With the trial over and the jury released, the Manchester doctor's extraordina ry past erupted on newspaper front pages: how past suspicions about his conduct had never coalesced into any full-fledged inquiry; how his thirst for killing, his fascination with the power over life and death, might have led him to dispatch scores more of his patients (150 according to some estimates) - placing him in a league of his own among British serial killers. But it was not Dr. Shipman's career of murder, with its strong misogynist overtones, that brought him to mind as I read The Tennis Pa rtner. It was rather the revelation that back in the 1970s, when he was a newly qualified general practitioner (or G.P.), Shipman obtained by deception supplies of the pain-killing drug pethidine, to which he was addicted. At the time, the newspaper story had it, he admitted his addiction, saying he was "seriously depressed and confused".

Abraham Verghese, a U.S.-based doctor with a similar power over life and death, believes his profession to be particularly, if not uniquely, vulnerable to drug (including alcohol) abuse. The danger for doctors, he says, lies not so much in the long hours , the stress or even the ease of access to controlled substances. It lurks rather in the essential loneliness of their professional ethos and world, in the routine suppression of intimacy and denial of feeling. Within the culture of modern medicine, sugg ests Verghese, there is "a silent but terrible collusion to cover up pain, to cover up depression; there is a fear of blushing, a machismo that destroys us... We trust our colleagues, we show propriety and reciprocity, we have the scientific knowledge, w e learn empathy, but we rarely expose our own emotions."

In The Tennis Partner Verghese chronicles, in a prose style that combines clinical precision with lyricism, a doctor colleague's battle to come to terms with a turbulent inner life and hold his cocaine addiction at bay. One senses in Verghese's wr iting a determination to break the mould, to smash through accumulated professional convention and complacency with an unstoppable outpouring of feeling. This, he tells us, is what it actually feels like at the other end of the stethoscope. This is how I , a doctor, cope not just with professional challenge but also with failed personal relationships. This is how I grapple with my daily routine, with a myriad tragedies, big and small, with the flush of my victories, with the heartbreak and the loss.

In an earlier and much acclaimed book, My Own Country (1994), Verghese presented, in beautiful prose redolent of feeling, his experience of working among AIDS victims in a small town in Tennessee. The time was the mid-1980s, America's "plague year s" where AIDS sufferers were still routinely stigmatised and shunned, the more so in the Bible Belt of the deep south. For Verghese, a doctor of Indian origin (his parents, Syrian Christians from Kerala, worked for many years in Ethiopia, where he grew u p), his status as an outsider seemed to offer his patients a point of connection: many of them were young men returning from big city America to die amid their families in a community they had once regarded as "home". What was striking about Verghese's n arrative was its ability to look both inwards and outwards. This was no simple compilation of case histories. Carefully structured, artfully incorporating novelistic techniques and devices, and disarmingly frank in its exposure of the author's own griefs (specifically his crumbling marriage) the book transformed its grim subject matter into something life enhancing, echoing long in the reader's memory.

In his new book, Verghese conjures up the magic again. The setting has shifted: several years have elapsed and the doctor and his family have moved to El Paso, a town at the westernmost point of Texas, on the very threshold of Mexico. Newly appointed to a senior post in internal medicine at the town's teaching hospital, Verghese, ever the outsider, soaks up the mountainous splendour and the human variety that surround him. In this border town, mainstream America, with the casual ugliness of its freeways , marts, condominiums and advertising hoardings, comes face to face with larger realities: mass poverty just across the Rio Grande, desperate people not to be held back by porous frontiers. Here, "foreignness" seems less of an issue than it did in rural Tennessee. "One took a different view of foreignness when many of one's patients were wading across the river for care. By county edict, the hospital didn't ask for proof of citizenship. A billing address sufficed."

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In this new setting, with his marriage now a shell beyond reclamation, Verghese seeks to give expression to his lifelong passion for tennis. As a boy growing up in Ethiopia, he had turned to the sport as a means of escape from a suffocating home life, im bibing the artistry and grace of his tennis instructor, Mr. Swaminathan. A moderately talented club player, he became an aficionado, following the fortunes of his idols: Laver, Lendl, Pancho Segura. His need now is for a tennis partner, but among El Paso 's medical fraternity, golf is the sport of choice, or rather convention. Then he discovers that one of his students, an Australian called David Smith, once played professional tennis. The two test each other out across the nets, and a friendship is born .

AT one level, the book is a chronicle of friendship, set down with meticulous, at times frightening attention to detail. Early on, Verghese reveals the secret of his unnerving ability to recall not just the gist of conversations but also precise inflecti ons, mannerisms, and the minutiae of body language. Back in his Ethiopian childhood he developed the habit of jotting things down, obsessively recording the texture of life and the passing moment in dozens of notebooks. The practice would flow into his c areer as a doctor: in El Paso, he urges his students to maintain their own notebooks and to "observe everything. If you get on a hospital elevator, don't get off without making at least one diagnosis on your fellow travellers."

With observation powers of this acuity, it does not take Verghese long to realise that his new tennis partner is battling with a drug habit that undermines his personal relationships and threatens to destroy his career as a doctor. But the problem is now in remission; David has been given a fresh start, and hope builds as he performs strongly in his final year of medical studies. Through their encounters on the tennis court and in the hospital wards, Verghese and David construct a friendship apparently rooted in intimacy and the ability to talk openly of insecurities and sadness. Here, the playing of tennis transcends mere physical activity to become, for both men, a form of therapy, an attempt to impose order "on a world that was fickle and capricious ".

When David's drug habit resurrects itself to reclaim him, Verghese reacts with a desperate evaluation of his own role. Could he not have foreseen the relapse and done more to prevent it? Was he not in some degree responsible? Sustained reflection, encoun ters with the women close to David, and the very process of writing the book allow him, towards its end, to draw some tentative conclusions. But, with the game ended and the tennis court silent, the reader can only share his sense of loss. "I had no soli tary ambition with the tennis itself," Verghese tells us. "Yet it was terribly important to keep playing with David, to play beautifully, to play exquisitely, and with great care, as if the universe rested on the flight of a ball.'

As in his earlier book, Verghese applies his novelist instincts: like the tennis games with David relived in intimate detail across the pages, his prose leaps back and forth, summoning flashbacks, fastening on to the small but telling detail, projecting volleys into the writer's personal life. Out of this emerges not simply a portrait of a friendship but also an evocation of its context: the hospital, the experience of home life, the larger community beyond. Delving into his notebooks, Verghese shares w ith us the little ideas and insights that are, for most of us, a fleeting and unremembered part of the passing moment: supermarket signs "beckoning like listless whores from both sides of the freeway", or how, when we move to a new locality, the vocabula ry shifts in turn, presenting us with new words that feel "as strange as a new filling on a tooth." Through his eye for detail, his refusal to succumb to the fading memory, his capacity for reflective engagement with everything about him, Verghese sets b efore us, and invites us to celebrate, the pain and the beauty and the essential fragility of being human.

A legend is born

obituary
Alla Rakha Khan, 1919-2000. R. RAMACHANDRAN

ON February 3, one of the greatest percussionists of the country, indeed of the world, the tabla wizard Ustad Alla Rakha Khan passed away leaving behind a legacy of magical sounds of laya on tapes and records and in the memories of unforgettable c oncerts. His nimble-fingered artistry on the twin-drum instrument of North India would remain unmatched. His son Zakir Hussain, a tabla virtuoso in his own right, would, of course, carry on the tradition of the Punjab gharana, which his mentor-fat her represented and raised to great heights.

Alla Rakha brought on to the concert platform the Panjab baaj or style in all its splendour with such skill and virtuosity that it has perhaps overshadowed all other schools of the art, such as Ajrada, Delhi, Purabiya (Lucknow and Benares) and Far rukhabad, notwithstanding such stalwarts as Pandit Kishen Maharaj and Pandit Samta Prasad of the Purabiya baaj school or Ustad Ahmad Jan Tirakhwa of the Delhi baaj who were his contemporaries. If Punjab's greatest contribution to Hindustani music, as the Ustad used to say, was the Panjab baaj of tabla playing, Alla Rakha was solely responsible for making it a distinct concert platform art. For the current crop of tabla artists, the contemporaneous art of Zakir has become the benchma rk for excellence. But it would only be fair to say that the son's skills are as yet a notch below the father's supreme mastery of the craft.

Rhythmic accompaniment to Hindustani classical music has never been the same after Alla Rakha. He elevated the instrument to a high pedestal of artistic expression, a place that the richness of the instrument truly deserved. If today the tabla has acquir ed the stature of a solo instrument alongside the sitar and the sarod on the concert platform, it is largely due to the Ustad. Even when he was a staff artist at the Lahore station of All India Radio (AIR) in the 1930s, his superlative skills earned him radio broadcasts of tabla solo twice a week. Before him, tabla had been relegated to the shadow status of an instrument of accompaniment - merely to provide tekha or mark the beats - to the main vocalist or instrumentalist.

The role of Pandit Ravi Shankar in this emergence of the tabla player as an artist in his own right, the notion of an independent tabla Ustad, cannot be underestimated. His association with the Ustad was particularly instrumental in realising his vision of widening the horizons of Hindustani classical music on the concert platform in which percussion was seen as enriching the music of the lead artist. He gave equal prominence to the tabla on the stage, a practice hitherto confined to Carnatic music wher e the autonomous art of the mridangam was allowed its full play and the mridangam solo or the tani-avartanam was an essential and integral component of concerts.

It was Ravi Shankar's two decades (1965-85) of unbroken and exclusive collaboration with the Ustad that allowed full rein to Alla Rakha's artistry and innovation. Despite his rising fame and status, Ravi Shankar recognised the Ustad's mastery over the in strument and saw this collaboration as a journey together into the unbounded world of music, a journey of musical discovery. He encouraged and goaded the Ustad to let himself into artistic abandon - Ravi Shankar used to put his sitar down and let the tab la a solo run, until then an unheard of practice on stage. Alla Rakha's fingers elevated tabla accompaniment from the subservient to the sublime. An appreciation of the delicate artistry began to grow amongst concert audiences. It may be true that in rec ent times this apparent freedom for individual expression of the tabla artist frequently degenerates into gimmicky sawal-jawab kind of jugalbandi, a far cry from the musical explorations of the Ravi Shankar-Alla Rakha duo. Until the very last, All a Rakha exercised that restraint so necessary to lend respectability to the tabla.

His was a rich and full life. His passion for the tabla was the common thread through the many parts he had in his musical career spanning six decades - as a classical vocalist, an instrumentalist, stage actor, composer of film music, music director and a teacher. Alla Rakha was born in 1919 into an artistic family in Phagwal, a village near Jammu, in which tabla playing had been a passion for generations. His father Hashim Ali was involved in theatre and was a lead player on the stage. Alla Rahka was t he only musically inclined child in a family of seven brothers and two sisters, and wanted to pursue a career in music and especially in playing the percussion instruments. He had a natural flair, particularly for the tabla. He began learning tabla at th e age of six. However, elders in his family who were not pleased with his tendencies did not quite approve of a career as a tabla accompanist. They wanted him to become a vocalist and even arranged for his training in dhrupad singing - the traditi onal and ancient form of Hindustani music before it came under Mughal influence - under Pandit Vir Chand, a local musician and teacher. Only his mother, Alla Rakha has once said, was supportive of his wishes.

Alla Rakha learnt the basics of singing dhrupad and dhamar from Pandit Vir Chand. But, the Ustad once remarked, this was to his great advantage in his later career as a tabla player. Initiation into Hindustani music in the early days was on ly dhrupad and dhamar, to the accompaniment of pakhavaj, a percussion instrument similar to the mridangam whose autonomy is maintained in dhrupad renditions and is a tradition still found in Carnatic music. This method, according to Alla Rakha, serves to lay a firm foundation in sur, laya and taal for anyone who aspires to become a musician, a vocalist or an instrumentalist. But at that time Alla Rakha was only in search of a guru who would teach him the art of tabla p laying. He felt that he was cut out for a career in the art of the tabla.

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He came under the influence of Ustad Lal Mohammed, a disciple of the Great Ustad Mir Kadar Baksh, a renowned exponent of the Punjab gharana of tabla playing. Alla Rakha became his disciple and gave his first solo recital in his home town when he w as barely 12. Those days Ustad Kadar Baksh's name was to be reckoned with in percussion, and fate beckoned Alla Rakha to move from the isolation of his village in search of the master, Kadar Baksh, himself. At the age of 15 he ran away from Phagwal to La hore where his accompaniment at a small concert led him to Kadar Baksh himself.

The incident which took him to Kadar Baksh is interesting and worth recounting. Vocalists of those days used the dhrupad ang a lot in their singing. At a programme which Alla Rakha went to attend, there was no tabla player to accompany a certain v ocalist who speacialised in the dhrupad ang. So Alla Rakha volunteered - "A rash confidence of youth," he has said. The organisers reluctantly agreed and warned him that it was going to be difficult. He played well and executed the different ta als with the deftness of a seasoned player. This impressed everyone and the matter reached Kadar Baksh's ears. Alla Rakha was escorted to Kadar Baksh as "a boy of 15 from an unknown village".

Kadar Baksh asked him whose disciple he was, and Alla Rakha unfazedly told him "yours". Kadar Baksh immediately accepted him as his disciple and it is here that Alla Rakha's grooming as a tabla player began. Alla Rakha learnt from him for six years.

Dhrupad was popular in Punjab and the Panjab baaj is thus oriented towards the pakhavaj's style of percussion. It, therefore, integrates that open style (khuli awaz) of the pakhavaj into tabla playing unlike the other schools. Kadar Baksh himself was the unquestioned master of the pakhavaj and the tabla alike from that region of the country. Kadar Baksh's father Faqir Baksh himself was a renowned pakhavaj player and this integration of the pakhavaj style into tabla playing comes fro m there - it is said that he designed a kind of tabla by simply breaking a pakhavaj into two halves.

The basic bol or the beat syllables of the normal tabla playing, say of the Delhi school, are na-din-din-na. The Purabiya or the Eastern school does incorporate the open style of the pakhavaj to an extent that changes the basic bol t o na-din-na-da. But it uses this only sparingly. It is the Punjab school that integrates it as the basic unit of tabla playing and here the bol is na-din-chi-te. This, people who understand the nuances of the table point out, enables a faster tempo in the rhythmic accompaniment, lending the quality of stupendous speed to tabla playing, a hallmark that has come to be synonymously associated with both Alla Rakha and Zakir Hussain.

Mir Kadar Baksh, Alla Rakha has said, taught him to execute the most difficult and intricate taals. He also encouraged him to try his hand at many other instruments. It is this training and nurturing with a wider perspective to percussion that had lent versatility and vitality to Alla Rakha's tabla playing and repertoire in general. It is this perspective that made his experiments in the West along with Ravi Shankar such a success. And this tradition continues with Zakir who takes in various form s of percussion into his style.

After his training under Ustad Kadar Baksh, Alla Rakha got a job as a staff artist at the Lahore station of the AIR in 1936. The Director-General of AIR, Zulfikar Ali Bukhari, happened to hear him in Lahore and called him over to Delhi. He was in Delhi f or two years, and in 1938, on the retirement of percussionist Kamu Rao in Bombay, Alla Rakha was transferred to that city. Apparently, the initial reception he got in Bombay was negative and hostile and he had to prove himself by playing all the composit ions from Pandit Bhatkande's book Marful Nagmat. But, within a span of three months, Alla began to be recognised as a major talent. Alla Rakha believed that his five-year association with AIR helped him widen his perspective.

In 1938, Alla Rakha began to learn vocal music. He became a student of the vocalist Ustad Ashiq Ali Khan, son of the pioneer of the Patiala gharana of vocal music Khan Saheb Fateh Ali Khan, to learn khayal and thumri. Ashiq Ali Khan was one of the mentors of Ustad Bade Ghulam Ali Khan.

Following this training, Alla Rakha started giving light music programmes on the radio - singing and composing ghazals. It was the Ustad's desire to do something new that took him to the film world where he took up music direction. He scored music for ov er 30 films under the name of A.R. Qureshi, working with such stalwarts as Naushad Ali and Khemchand Prakash. He was particularly close to Avinash Vyas. In 1958 he decided to quit the industry, unhappy over the way producers treated music directors. His passion continued to be the tabla.

ALLA RAKHA met Ravi Shankar as part of a cultural delegation sent by the government to Japan in 1958. The association that began at their performances during this tour was to last over 25 years. And in the 1960s and the 1970s, this relationship took Alla Rakha to the West, in particular the United States, as Ravi Shankar's regular partner. Under Ravi Shankar's influence, this association helped him market his art in the West. During his frequent visits abroad, Alla Rakha taught several Western disciples , some of whom including Johnny Card, Ed Shansi and Ray Spiegel, he was particularly proud of. Even after quitting the concert platform, Alla Rakha continued to teach tabla to Western students, spending four to five months every year in the U.S. He also used to teach at the music institute of Hashim Chaudhury at San Francisco.

The Ustad also opened a school of Indian classical music in Mumbai. He is said to have been a very serious and demanding teacher and, besides Zakir, other promising students are Yogesh and Anuradha Pal. The latter has begun to make a mark. For the wide p erspective, intense musicality, superlative virtuosity and, above all, the high degree classicism that he brought to the art of the tabla, it is unfortunate that he was decorated by the government only with a Padma Shri in 1977. Perhaps in the bureaucrat ic perspective of the state, Alla Rakha was a mere accompanist. He received the Sangeet Natak Akademi award in 1982.

Creativity for him was "instinctive introspection" and it is this attitude that lent sheer spontaneity to his tabla performances. He lived for tabla and sacrificed everything else to propagate the art in India and abroad. As a person he led a simple life and was a great raconteur. Alla Rakha used to say he led a good life; a fulfilling life. Sadly, that has come to an end. With that, however, a legend is born - the legend of Alla Rakha.

Remembering Neelan Tiruchelvam

A wide cross-section of intellectuals meet in Colombo to commemorate the life and work of Dr. Neelan Tiruchelvam.

SIX months after Sri Lanka lost one of its foremost political thinkers in contemporary times, intellectuals from across the globe gathered in Colombo in the first week of February to commemorate, and, in the process celebrate the life and contributions o f Dr. Neelan Tiruchelvam.

Assassinated by a suicide-bomber on July 29 in the Sri Lankan capital, Neelan Tiruchelvam was a person who believed not in the glorification of death but in the celebration of life. And in a befitting honour, the organisers, the International Centre for Ethnic Studies (ICES), the Law and Society Trust (LST) and Tiruchelvam Associates, celebrated the life of Tiruchelvam with a three-day programme that highlighted his intellectual and cultural essence.

Inaugurated by former Indian Prime Minister I.K. Gujral, the programme comprised a two-day workshop that discussed diverse topics that had a direct bearing on the course of the separatist conflict which has plagued the island since the early 1980s. Human Rights, Diversity and Plurality, Constitutionalism, and Civil Society - issues on which Neelan contributed immensely, not only in the tear-drop island but also across the globe - were deliberated upon. His pursuit of excellence was also reflected in per formances by singer M. Balamuralikrishna and dancer Alarmelvalli.

In what was perhaps the most significant contribution that emerged from the workshop, Aisbjorn Eide, chairman of the United Nations Sub-committee on Minorities and a Sri Lanka watcher since the outbreak of the conflict, mooted the formation in the countr y of a body similar to the Truth and Reconciliation Commission (TRC) of South Africa. (This suggestion apart, a significant departure, not missed by the discerning audience, was Eide's open criticism of the Tigers for acts of terror against the civilian population.)

Tracing the fierce and until now intractable nature of the conflict to mutual mistrust, Eide said that the creation of such a body would go a long way in rebuilding trust within the nation. Moreover, with most of the killings in the earlier days targeted at Tamil civilians, the need for such a body was seen as being even more crucial.

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Commenting on the South African experience, Justice Albie Sachs of the South African Constitutional Court observed that the TRC there had helped in bringing to the surface buried emotions and providing a sense of relief to the relatives of victims. While the TRC was not empowered to pass sentences, the very act of public acknowledgement of crimes committed against civilians was seen as the beginning of a process of self-healing.

The move for a similar apparatus for the island-nation is also to be seen in the context of the twin internal conflicts the nation has faced since the 1970s - the continuing northern separatist conflict and the aborted southern insurgencies by the Left-r adical Janatha Vimukthi Peramuna (JVP) in the 1970s and the 1980s.

The JVP experience and the crackdown by the state continue to create nightmares for the southerners. Horror tales are narrated of midnight knocks and tyre-pyres. In the northern conflict, tales of disappearances haunt the minds of civilians.

In this backdrop of continued mistrust, Eide's suggestion came as a fitting tribute to Neelan, who saw human rights violations in any form as being objectionable. The suggestion for the constitution of a Truth Commission in Sri Lanka would have to be see n in the backdrop of several internal political compulsions in a sharply polarised polity.

Yet another concept mooted at the workshop, by Pakistani Human Rights activist Asma Jehangir, was for a cross-border approach to human rights violations. Human rights, she said, should not be the exclusive prerogative of only the nations involved, but sh ould engage the attention of civil societies across the region.

The suggestion, viewed in the backdrop of continued India-Pakistan tensions, requires deft handling. The issue of human rights violations and the concerns raised at international forums are also to be seen in the backdrop of the recent posturing by the U nited Nations on questions of sovereignty and human rights. Clearly, with external military interventions rationalised along human rights lines, the suggestion for a cross-border approach to human rights violations would have to be addressed in the more immediate neighbourhood and in regional contexts.

With constitutional reform forming the core of the Sri Lankan peace initiatives, the workshop saw considerable exchange of opinion on issues ranging from the nature of the state to the steps involved in rewriting the laws of the land.

With the Government currently involved in working out a southern consensus to address the conflict, a fitting tribute by the nation to Tiruchelvam, the pacifist and the constitutional expert, would be for it to arrive at a practical way to see the Consti tution passed in Parliament. Recent public postures in the south favouring joint movement on this count provides for optimism, albeit guarded.

While he continues to be remembered by intellectuals from the nation and in many parts of the globe, the ultimate celebration of the life of Neelan Tiruchelvam - who lived and died for the cause of a united Sri Lanka - would be the coming together of the divided nation.

Strategic equations

other

This has reference to the Cover Story ("Strategic games", February 18). Without making sufficient diplomatic efforts, India requested the United States to declare Pakistan a terrorist state. It was not a correct approach. In his final year in office, Pre sident Bill Clinton is not going to leave a dissatisfied Pakistan for his successor to handle. And the U.S. will not squander the immense advantage it gained in South Asia in the past 50 years by cultivating Pakistan.

The U.S. might have cultivated the Taliban and Pakistan in order to counter the Soviet Union. Today it talks about Kashmir more than ever before. It is evident that the present Government of India has not studied India's past policy on China and Pakistan . Instead, it struck a belligerent posture and the country is facing the consequences.

Sqn.Ldr. B.G. Prakash (Retd) Bangalore Narmada

I appreciate Arundhati Roy for her brilliant essay on the sufferings of the people who are going to be displaced by big dams ("The cost of living", February 18).

Abhijeet D. More Nashik * * *

Arundhati Roy tends to be irreverent when she observes that "for a whole half century after Independence Nehru's foot-soldiers sought to equate dam-building with nation-building". This could be taken as a fiction-writer's licence, since she has observed in her essay that "Narmada valley needed a writer, not just a writer, a fiction-writer."

In the early years of Independence, the focus was on multipurpose exploitation/utilisation of riverine resources and the investment was, therefore, based on a cost-benefit analysis in which only tangible benefits and tangible costs figured by and large. Economic development was then reckoned as economic growth per se, whereas now, thanks to economists who promoted an alternative school of thought (which is still in a process of evolution), it is accepted that development and growth cannot be equated. En vironmental and ecological concerns and considerations such as the quality of life entered the debate only after the 1970s.

Deliberations should not centre round a 'dams or no dams' proposition. It will be sagacious to discuss how riverine resources could be optimally utilised for the common good of India's population, which has grown from 300 million in the early 1950s to al most 1,000 million now.

K. John Mammen Thiruvananthapuram * * *

I was astonished to see that even a leading national magazine like Frontline could not resist the temptation to give liberal space once again to a celebrity like Arundhati Roy. Or is it really 'The cost of living' for Frontline too?

Having no answer to the response from B.G. Verghese, Gail Omvedt, Sunil Jain, S.S. Bhalla, P.V. Indiresan and others to her previous writings, Arundhati Roy has misused the opportunity to deliver the Nehru Memorial Lecture at the prestigious Cambridge Un iversity. Discussing an internal issue of the country at such a forum by presenting the same misguiding arguments not only is unfortunate but is also hurtful to the national image. It is more so when the Grievances Redressal Authority (GRA) constituted u nder Supreme Court directives already listens to all kinds of representations regarding the rehabilitation of people affected by the Sardar Sarovar Project. What prevents Arundhati Roy right now from using the right forums, such as the GRA, to air her vi ews? It may not make her popular, maybe. But as she said, she is not standing for elections, fortunately.

If it is just that somebody wants to voice the problems of the tribal people, are there not any other valley where life is miserable although no dam is planned there? Using her freedom of speech, why did Arundhati Roy not speak about the large dams in th e United Kingdom, although she was speaking at Cambridge University? The U.K. has 114 large dams (ICOLD World Register of Dams, 1998).

When Arundhati Roy says that big dams are monuments to corruption and bankers, politicians, bureaucrats, environmental consultants, aid agencies are all involved in the racket, does she mean that writers of her calibre also get attracted by dams just bec ause of this myth? I suggest that Arundhati Roy come out for a while from her fiction and watch the documentary on the Hirakud dam. A supplier from Calcutta sacrificed his entire bill when he came to know that the project for which he had supplied materi als would benefit millions of people. Of course, he did not receive any award, neither at the national level nor at the international level.

Aum Joshi Gandhinagar

In "The essential Gandhi on CD-ROM" (February 18), the reviewer refers to the omission of the name of Mahatma Gandhi's assassin. This should surprise no one. History is being rewritten in true Orwellian fashion and textbooks are re-crafted. Now we are to ld that Akbar was a good ruler but the sting is in the tail - "despite being a Muslim". The BJP and its fraternal outfits sound similar to the white supremacists in the U.S. who swear that non-whites are intellectually less endowed by birth.

R. Rajaraman Chennai Suicide terrorism

To address the problems presented by the Liberation Tigers of Tamil Eelam (LTTE), one must first offer a realistic assessment of the organisation, its capabilities, and its causes. Secondly, one must offer a realistic proposal, or set of proposals, to so lve what Sri Lankans euphemistically call "the problems".

In his article in Frontline, "The LTTE and suicide terrorism" (February 18), Rohan Gunaratna achieves neither task.

Gunaratna alleges that "suicide terrorism" a.k.a "the suicide bomb syndrome" poses a significant threat to national and international security. He further states that "in South Asia, the LTTE is the only suicide-capable group". He calls suicide bombing a "lethally accurate tactic". He says that the "mindset of the LTTE suicide bomber" is different from that of suicide bombers in other parts of the world. And he creates an image of the "suicide body suit" as a technologically sophisticated device. Each o f these claims is either unsubstantiated or untrue.

To create a suicide-bomber, one needs only two things: (a) a determinedly suicidal person, and (b) a home-made bomb. Entities belonging to category (a) are sadly abundant throughout South Asia, especially in Sri Lanka. Entities belonging to category (b) can be constructed by anyone who knows basic electronics and has access to explosives. Like any bomb, a "suicide bomb" is lethal, but it is not outstandingly accurate. Most attempted suicide bombings fail to achieve their mission. This is because the bom ber cannot take aim and must make a last-minute decision to detonate the bomb, often in chaotic conditions. Moreover, being inexpertly made, such bombs tend to go off by accident. All too commonly, young LTTE cadres blow themselves up in the process of c onstructing bombs, or while engaged in tasks as relatively trivial as trying to disable transformers. This pattern is a tragic waste of life, as is warfare generally, but it is not much more of a threat to the world than children playing with matches. Ex pertly manufactured weapons, developed and sold by rich companies, are infinitely more dangerous.

Gunaratna acknowledges that the "bulk" of suicide bombers come from impoverished places such as northeastern Sri Lanka. Persecuted ethnic minorities seeking freedom from persecution are hotbeds of suicide-bomber formation, he almost says. But he stops sh ort of drawing the obvious conclusions.

To reduce the incidence of suicide bombing, one must reduce the incidence of suicidal people. This does not mean killing those people or locking them up. It means leaving them with reasons to live. Reducing the quantity of explosive devices at large woul d probably also help.

Margaret Trawick New Zealand Creamy layer

This refers to "A dilemma in Kerala" (February 18). It is a national problem affecting the really poor among the Scheduled Castes, the Scheduled Tribes and Other Backward Classes. The need of the hour is to amend the Constitution and pave the way for the uplift of people identified as less privileged among Dalits and other backward sections.

In the matter of promotions in government service, merit should be the criterion. By and large the wards of people in the creamy layer have no moral right to enjoy reservations or automatic promotions in jobs.

K. Ramadoss Chennai Ordnance factories

As a retired Brigadier from the Army Ordnance Corps (the corps that deals with ordnance factories) I found your Special Feature disappointing ("Armour for defence", February 18).

Antiquated machinery, a lack of improvement in technology (Shaktiman and Nissan series are the world's most antiquated and "gas-guzzling" vehicles), inadequate R&D effort and general non-adherence to supply schedules have made most of these factories und ependable sources of supply. Trade unionism, a politicised work culture, and lack of quality awareness have turned them into white elephants with low capacity utilisation and price-inefficient products. Some of the ordnance factories have a laid-back app roach. With no competitive environment, and with managements held to ransom by trade unions, they are neither efficient nor cost-effective.

The Estimates Committee and the Public Accounts Committee of Parliament have commented on some aspects of these factories: (a) Target achievement in respect of ammunition ranged between 45.33 per cent and 60 per cent, and that in the case of 'B' vehicles between 33.33 per cent and 66.66 per cent. (b) Their inventory holdings continue to go up, which means more locked-up capital and, eventually, escalating costs. The money thus lost could have been used gainfully elsewhere by the resource-starved militar y. (c) Obsolete and surplus materials worth hundreds of crores of rupees, which are no longer required by the Army, are lying in the ordnance factories. This is one of the main reasons for ordnance factory products being costlier than those produced by t heir civilian counterparts. (d) There have been frequent delays and, consequently, cost overruns in the execution and completion of projects. The level of uncertainty is so high that the user is never sure of getting the products on the date fixed for su pply.

The ordnance factories expect the military to absorb these cost escalations, which are caused mainly by their inefficiency.

In the face of charges like these, the Department of Defence Production pleads that the ordnance factories have not been set up for purely commercial purposes and that a 'welfare' element is built into them. Therefore, it is argued, any elaborate system of monitoring man-hour and machine-hour utilisation in these factories is not needed, and "indirect devices" that are being followed are adequate for management control. This argument, however, is not likely to measure up to any economic or logical yards tick.

Successive governments and the Defence bureaucracy have fostered the idea that defence production has been reasonably successful over the years and that this sector is making a slow but steady progress towards self-sufficiency. The fact of the matter is that in many instances these public sector undertakings have not performed well. Claims that the systems are "indigenous" are in many instances misrepresentations, as the term 'indigenous' is being increasingly used to denote production that involves lit tle more than assembly, where the local content is minimal.

Despite the views of the government, several pundits and a good many external analysts, the defence industry would seem to be in poor shape and is clearly unable to reach the standards its architects had envisaged.

Indeed, India's ability to pass off equipment produced using foreign technology as home-grown is an extremely significant propaganda exercise. A classical example is that of the main battle tank (MBT) Arjun. A critical report on the project (1990) listed the following areas that relied upon foreign technology: engine, from MTU, Germany; transmission, from RENK, Germany; FWM fire control, from Germany; primary sight, OLDELFT, from the Netherlands; tracks, from DIEHL, Germany; TCM hydropneumatic system, f rom the United States. With so many countries and their 'defence industries' contributing such major sub-systems, it is impossible to achieve self-sufficiency. B.L. Sharma does not seem to have too many reasons to be happy over his factory's choice for t he production of MBT Arjun.

Brig. Parmodh Sarin (Retd) Noida, U.P. Guru Gobind Singh

In the article "The clergy vs the SGPC" (February 18), there is a reference to the Punjab Government announcing a holiday "to mark Guru Nanak's birthday". In fact, it is Guru Gobind Singh's birthday.

Rear Admiral Satyindra Singh (Retd) New Delhi The error is regretted. - Editor, Frontline. Correction - Editor, Frontline

A lasting contribution

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Neelan Tiruchelvam's assassination has not stopped the devolution package co-designed by him from working its way through the political process in Sri Lanka.

JEHAN PERERA

TIME and again, the Liberation Tigers of Tamil Eelam (LTTE) has shown itself to be capable of fighting, assassinating and bombing itself back to centre stage in Sri Lanka's politics. Six months ago, when an LTTE suicide bomber assassinated the Tamil Unit ed Liberation Front (TULF) lawmaker and think-tank Dr. Neelan Tiruchelvam (Frontline, August 27, 1999), it seemed that the organisation had succeeded once again in scuttling an emerging political solution that might exclude it. It was no secret th at Dr. Tiruchelvam was one of the two key persons behind the proposed constitutional reforms, better known as the "devolution package", the other being Constitutional Affairs Minister Prof. G.L. Peiris.

In July 1999, after nearly four years of fitful movement, there were signs that August 1999 would be a decisive month in which the government would present the new constitutional proposals before Parliament. Crucial to the presentation of the proposals w as the necessity of first generating a bi-partisan government-Opposition consensus on the changes. It was believed that behind the scenes, Dr. Tiruchelvam was urging the Opposition parties to support the proposals and make them into law. He had the force of intellect and the charm of personality to make a difference at this vital moment. It was at this moment that the LTTE struck in its trademark style.

But while Neelan Tiruchelvam's assassination may have delayed the political reform process by several months, it has not been killed. When a great debate arose in pre-Communist Russia about the efficacy of individual assassination, Lenin took a stand aga inst it. His own brother opposed him on the issue, got caught in an assassination attempt and was executed. Lenin mourned him as a comet that had burnt itself out in the night. Until the LTTE learns otherwise, the Tamil cause in Sri Lanka and the country itself will continue to suffer and not be at peace.

The LTTE has justified its protracted war against the Sri Lankan state on the ground that no viable alternative to Tamil Eelam has been put forward politically. The devolution package, which provides for the elimination of the unitary Constitution, would give ethnic regions considerable autonomy but not independence. The new constitutional design will give greater recognition to the plural character of Sri Lankan society in which ethnic regions will be entrusted with powers of self-governance. Perhaps b y assassinating him at the time it did, the LTTE believed that it had derailed a constitutional reform process that might put it on the defensive, if not exclude it entirely.

But the devolution package which Tiruchelvam co-designed is very much alive today. His assassination has not stopped the package from working its way through the political process. His loss is felt elsewhere. Despite fears that the government is divided within itself on the contents of the package, it appears that President Chandrika Kumaratunga's commitment to it is overcoming the obstacles within the government.

Late in January the co-architect of the devolution package, Constitutional Affairs Minister Peiris announced that the government would proceed on a process of political reforms. Gaining confidence from the Opposition United National Party's (UNP) sudden declaration that it would support the government's political initiative to end the conflict, Peiris spelt out the four-stage process as consisting of finalising the reform proposals within the ruling People's Alliance, followed by talks with the minority Tamil and Muslim parties, then with the UNP and finally with the LTTE itself. The political reform process has since reached its second stage, when the government began discussions with the Tamil parties.

In an ironic sense, it was perhaps the Tiruchelvam assassination that impressed upon the leadership of the two main political parties that the political challenge of the Tamil separatist cause had to be met politically rather than militarily. The near as sassination of the President in December 1999 may have further strengthened this resolve. As a person who was almost killed by the LTTE, the President has gained moral authority on the issue. Much to her credit, the President has not closed the door to n egotiations with the organisation that sought to kill her. Even those senior Ministers who oppose the devolution package are said to fall silent when she speaks the last word on the matter.

AMONG the many speakers at the Neelan Tiruchelvam commemoration events held in the first week of February, it was Albie Sachs of the South African Constitutional Court who made the most moving presentation. Delivering one of the inaugural addresses along with distinguished personalities such as former Indian Prime Minister I.K. Gujral and former Chief Justice P.N. Bhagwati, Justice Sachs was able to give what no one else could. Minus an arm, he shared his personal experience of being a victim of terrori sm and a target of assassins. A white man, he gave a glimpse of the great qualities of South African leadership across the black-white racial divide, as exemplified in the life of former South African President Nelson Mandela. This is a leadership that h as transformed bitter wounds and hate into reconciliation and love. Speaking to an audience bereaved by Tiruchelvam's assassination, Albie Sachs showed the way to understand the other who saw the truth in an opposite way, to reach out to the other who wa s poles apart and to transform hateful relationships.

The Neelan Tiruchelvam commemorative events brought together perhaps the largest number of internationally recognised intellectuals, civil society activists and academics ever to be seen in Sri Lanka. They all had some connection with the life and work o f the late Dr. Tiruchelvam even from unfamiliar corners of Africa such as Guinea, and large contingents from India and the United States, which included two former ambassadors.

Apart from the intellectuals there were also artists, including the renowned exponent of Indian classical dance, Alarmel Valli, whose commemoration of Tiruchelvam brought tears to the eyes of many in the audience, and musician Dr. M. Balamuralikrishna. T he intellectual and artistic excellence at the commemoration events contrasted strongly with the barrenness to which Tamil society, trapped in an endless war in Sri Lanka, has become doomed and which the loss of Tiruchelvam has made worse.

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What was striking about the gathering was the genuine sense of loss at Tiruchelvam's death among so many of the distinguished participants. It seemed as if they had been personally touched by Tiruchelvam and diminished by his death. Perhaps it was Tiruch elvam's complete absence of intellectual or social arrogance and his accessibility at short notice to those who had even the slightest acquaintance with him. In Sri Lanka's hierarchical society, this attitude contrasted sharply with the inaccessibility a nd arrogance of many of those who wield power. Perhaps Tiruchelvam's loss is also felt more strongly because he had a way of making every one of his friends feel that he or she was special to him.

For all these reasons and more, Tiruchelvam's assassination will be remembered for a long time by many influential people all over the globe.

The head of the United Nations Human Rights Commission, Mary Robinson, a former President of Ireland, said that the human rights community could not let those responsible for such a murder go unpunished. The Rajiv Gandhi assassination in Tamil Nadu would be another example. As a result the LTTE's support base in India was lost forever, or at least for a very long time.

The question is whether the LTTE will learn and change. It is a great irony that having achieved so much on the military battlefield through enormous sacrifices, the LTTE should squander its investments by believing that acts of individual assassination can indeed alter the course of history.

TIRUCHELVAM'S loss is also felt at a second level, apart from the personal, and despite the forward movement of the devolution package. With his great learning and personal charm, Tiruchelvam could exert considerable influence on politicians when they we re teetering on the brink of going one way or the other. About two years ago, for instance, when the concepts of judicial independence were being challenged by government leaders, he organised an international symposium on the rule of law. One of the mai n issues at this symposium was the question of judicial review.

In Sri Lanka, on the other hand, the politicians have constantly tried to suppress the judiciary and dominate it. The 1972 and 1978 constitutions even took away the power of judicial review, which enables judges to strike down laws that are unconstitutio nal. Instead, they only gave the judiciary the power to strike down a proposed law before it was ratified by Parliament. But the problem with this highly restricted power of judicial intervention in modifying or correcting proposed laws is two-fold.

First, some proposed laws (bills) which the government claims are urgent have to be challenged within 24 hours. Secondly, it is often the case that problems with laws only emerge a few years after they are passed into law. The government's present consti tutional reform proposals, benefiting from Tiruchelvam's contribution, envisaged giving the judiciary a restricted power of judicial review. The proposed change would give the judiciary the power to decide on the validity of laws affecting fundamental ri ghts for a period of two years after they have been passed into law. While this two-year period of possible review, and restricting it to fundamental rights, is not at all adequate or comparable to that existing in other democratic countries, it is certa inly better than the existing situation.

But now disturbing reports have emerged that even these limited powers of judicial review might be knocked out of the proposed new constitution. One of the weaknesses in today's constitutional reform process is that it is being undertaken almost exclusiv ely by politicians. It is natural that politicians should wish to give themselves as much power and privilege as possible, to the exclusion of checks and balances. The doctrine of "executive convenience" seems to be their motto, as pointed out by Rohan E drisinha, a leading constitutional scholar of the country.

Neelan Tiruchelvam was an exception to this lust for control that exists among many politicians and his loss is felt for this reason among a host of others. He did not make his name or money through politics. He was an international figure owing to his w ork in the realm of human rights and as a lawyer of eminence. He was content to work behind the scenes. He was preoccupied with designing institutions and frameworks within which a multi-ethnic and plural society could be governed, efficiently and equita bly. It is only a Tiruchelvam who could have stood in the path of ambitious politicians and persuaded them in his inimitably non-confrontational and charming way that judicial review was indeed in the public interest, even if it was not in their interest .

Jehan Perera, who works with the National Peace Council of Sri Lanka, is a columnist for The Island newspaper published from Colombo.

A Judge's strange sojourn

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A visit by a Judge of the Madras High Court to Malaysia raises a controversy.

T.S. SUBRAMANIAN

"A JUDGE shall not accept gifts of hospitality except from his family, close relations and friends." This is the tenth item of "Restatement of Values of Judicial Life," a code of conduct adopted by the conference of Chief Justices of High Courts in New D elhi in December 1999.

However, a sitting Judge of the Madras High Court, Justice S. Thangaraj, not only travelled to Malaysia in October last year in the company of S.K. Krishnamoorthy (50), a real estate dealer, against whom several cases of cheating, wrongful confinement an d rioting are pending but accepted the hospitality of one Jayabal at Ipoh, near Kuala Lumpur. Jayabal reportedly paid the hotel room bills of Krishnamoorthy, Justice Thangaraj, and two others during their 10-day stay at Ipoh from October 16 to 26, 1999. The other two were S. Selvarathinam, retired Deputy Commissioner of Police, Intelligence, and C. Selvaraj (45), a practising lawyer.

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Justice S. Thangaraj, by himself and, in the group picture, next to S. Krishnamoorthy (second from right) and others, photographed in Malaysia.

On February 11, Chennai Police Commissioner P. Kalimuthu ordered the detention of Krishnamoorthy under the Goondas Act. He was arrested on January 30, 2000 on a complaint from a financier, Veluchamy, that Krishnamoorthy threatened him by pointing a revol ver at his neck. According to informed sources, there were cases relating to the violation of immigration laws against Jayabal filed by Malaysian officials.

The Judge's name is found as "Thangaraj S. Justice" in the passenger manifest of the Air-India flight AI 483 from Kuala Lumpur to Chennai on October 26. It was Krishnamoorthy who bought the air tickets for himself, Justice Thangaraj and Selvarathinam. Ju stice Thangaraj later paid him for his tickets, Krishnamoorthy told the police.

Justice Thangaraj's conduct raises serious questions of propriety, especially in the context of Chief Justice of India (CJI) Dr. A.S. Anand emphasising that the need for "in-house procedures for higher judiciary cannot be doubted at the present juncture. " The CJI made this comment while inaugurating the conferences of Chief Justices. Dr. Anand added: "The existing situation in some high courts emphasises the need for serious consideration of this issue."

In January this year, Union Law Minister Ram Jethmalani, while reiterating the Centre's resolve to set up a National Judicial Commission, said he was not satisfied with the code of conduct evolved by the Supreme Court. Jethmalani said that "a list of dos and don'ts as to how a judge should behave will be specified" (The Hindu, January 6).

THE questions that need to be answered in this context are: Did Justice Thangaraj obtain the permission of the Chief Justice of the Madras High Court before travelling to Malaysia? Did he apply to the Reserve Bank of India for foreign exchange?

Justice Thangaraj's conduct has been widely reported in the Tamil press with pictures of the Judge, Krishanmoorthy, Selvarathinam and Selvaraj taken at different settings in Malaysia, but surprisingly there has been no response from the judiciary.

When reporters asked M. Karunanidhi on February 1 about Justice Thangaraj's trip, the Chief Minister replied, "What can I say about it? This is a matter to be gone into by the court and the Chief Justice. I cannot say anything." When a reporter said that he was raising the issue because the person with whom the Judge travelled had criminal cases against him, the Chief Minister said, "If the reports are true, it is highly condemnable and regrettable. When one takes into account the newspaper reports, it appears that they are true. I expect those concerned to take suitable action."

Krishnamoorthy runs S.K. Real Estates and S.K. Videos in Anna Nagar, Chennai. A press note issued by the Police Department on February 11, after Krishnamoorthy was detained under the Goondas' Act, said that he had pledged his house with industrialist (an d financier) Veluchamy for Rs.10 lakhs. When Veluchamy repeatedly demanded the money back, Krishanamoorthy said he would sell his house to Jayabal of Malaysia and return the money. Veluchamy then took legal steps to have the house auctioned.

Krishnamoorthy went to Veluchamy's office at Villivakkam, Chennai, and demanded the return of the house documents. When Veluchamy refused, Krishnamoorthy took out a revolver and threatened to kill him, the press note said.

On a complaint from Veluchamy, the Rajamangalam police registered a case against Krishnamoorthy under various sections of the Indian Penal Code (including attempt to murder and assault) and the Indian Arms Act, arrested him on January 30 and seized his u nlicensed revolver. There are several other cases pending against him.

Informed sources said Krishnamoorthy boasted to a police sub-inspector at Rajamangalam that he enjoyed a lot of clout with magistrates, IAS and IPS officers, and had gone to Malaysia with Justice Thangaraj. When the sub-inspector searched Krishna-moorthy 's house, he found goods obtained from Malaysia there. The sources said Krishnamoorthy took the police to his mother's house and gave them the photographs taken in Malaysia.

It was on October 16 that Justice Thangaraj, Krishna-moorthy and Selva-rathinam flew together to Malaysia. Selvaraj had flown to Kuala Lumpur earlier in the day to arrange for transport for them there. Krishnamoorthy, Justice S. Thangaraj and Selvarathin am stayed together in Malaysia and returned together to Chennai on October 26. They travelled both ways in economy class.

The sources quoted Krishnamoorthy as having said that he had bought the flight tickets but Justice Thangaraj paid him the sum later. Krishnamoorthy also reportedly told the police that he paid some of the Judge's bills in Malaysia and that the Judge retu rned the money later here. Jayabal reportedly settled the room bills for the four persons.

Informed sources said that Krishnamoorthy revealed to the police that he had paid the rent for the marriage hall where the wedding of Justice Thangaraj's son was celebrated on July 11, 1999. But the cheque that Krishnamoorthy gave for Rs.26,000 bounced. The cheque, drawn on HDFC Bank and dated April 21, 1999, bore the number 129994. He, however, paid up in cash on May 19, 1999. According to Krishnamoorthy, the Judge later paid the rent amount to him.

IT was Justice Thangaraj who, on January 13, discharged Jayalalitha, former Tamil Nadu Chief Minister and general secretary of the All India Anna Dravida Munnetra Kazhagam (AIADMK) from two corruption cases against her. He set aside the order of Special Judge P. Anbazhagan framing charges against her in the "Jaya Publications case" and the "Sasi Enterprises case", both together called the "TANSI cases" (Tamil Nadu Small Industries Corporation). The same day, Justice Thangaraj upheld the order of another Special Judge, V. Radhakrishnan, discharging Jayalalitha from another corruption case relating to the import of coal by the Tamil Nadu Electricity Board (Frontline, February 4, 2000).

In the High Court, Justice A. Ramamurthi and Justice Thangaraj were the Judges who heard criminal appeals. On August 3, 1999, when the TANSI case relating to Jayalalitha was posted before Justice Ramamurthi, her counsel N. Jothi mentioned that the matter had already been dealt with by Justice Ramamurthi when he was Principal Sessions Judge. So Justice Ramamurthi posted the matter to the Chief Justice. The then Chief Justice specially allotted the matter to Justice Thangaraj. The TANSI case was posted be fore him on October 7 and 14. But the hearing was adjourned on both days. The High Court had Dasara vacation from October 16 to 24. Justice Thangaraj went to Malaysia on October 16 and resumed duty on October 27. Hearings were completed in the TANSI and coal cases on December 20. On January 13, 2000, he passed orders discharging Jayalalitha from these cases. The Government has gone on appeal to the Supreme Court against these verdicts.

On February 3, Jayalalitha showed press reporters photographs of Krishnamoorthy with Karunanidhi and Marumalarchi Dravida Munnetra Kazhagam (MDMK) general secretary Vaiko. When reporters asked Karunanidhi about this on February 4, he said many people met Chief Ministers and Ministers on their birthdays. "It is not possible to ask them for their addresses and whether they have gone to jail, before they garland us. If the well-known sandalwood smuggler Veerappan comes, he can be prevented," the Chief Mini ster observed sarcastically.

Replying to a question on Krishnamoorthy, Karunanidhi said that several cases of cheating had been registered against him since 1991. Asked what Krishnamoorthy and others did in Malaysia for ten days, Karunanidhi replied: "It is said that all those thing s are being inquired into. Those who should inquire will properly inquire." On whether a police team had gone to Malaysia, the Chief Minister said: "No comments."

Of a code of conduct

AT a conference of Chief Justices of the High Courts held in New Delhi in December 1999, the Chief Justice of India, Dr. A.S. Anand, initiated a debate on "in-house procedures" to make the judiciary accountable. The conference unanimously resolved to ado pt the "Restatement of Values of Judicial Life", a code of conduct, which had been adopted at a full court meeting of the Supreme Court on May 7, 1997.

The code lists 16 principles to be followed by every Judge in order to reaffirm people's faith in the impartiality of the judiciary. One of the items (No. 16) of the code requires a judge to practise a degree of aloofness consistent with the dignity of h is (or her) office. Another item (No. 11) bars judges from accepting gifts of hospitality except from family members, close relatives and friends.

Every Judge must be conscious of the fact that he or she is under the public gaze and there should be no act or omission by him or her which is unbecoming of the high office, and the public esteem in which that office is held, the code says. This prescri ption is seen to be wide enough to prevent any misdemeanour on the part of a Judge, even one that is not listed in the code. What it means is that it is the public perception of the conduct of a Judge that matters, rather than whatever defence a Judge mi ght put forth in order to face any allegations levelled against him or her in public.

Not contesting any election, avoiding close association with individual members of the Bar, not permitting any member of the immediate family or any other close relative to appear before him or her in court, and not associating in any manner with a cause to be dealt with by that relative who is member of the Bar are some of the prescriptions.

The code prescribes that no member of the Judge's family who is a member of the Bar shall be permitted to share the Judge's residence or other facilities for professional work. A Judge should not hear and decide a matter concerning a company in which he or she holds shares or stocks. Also, he or she should not engage directly or indirectly in trade or business, or accept contributions, or actively associate with the raising of any fund for any purpose.

Though the 16-point code is silent on the issue, the conference of Chief Justices had unanimously resolved that every Judge should declare his or her assets in the form of real estate or other investments, held in his or her name or in the name of a spou se or a dependent. Thereafter, whenever any acquisition of a substantial nature is made, it should be disclosed within a reasonable time. The declaration should be made to the Chief Justice of the High Court. The Chief Justice himself or herself should m ake a similar declaration.

A report submitted by a committee constituted by the Chief Justice of India in October 1997 regarding the "in-house" procedure for taking suitable remedial action against judges violating this code and the universally accepted values of judicial life has not been made public. The Chief Justice of India, A.S. Anand, has called for the circulation of this report among the Chief Justices of the High Courts. The Chief Justices are expected to ascertain the responses of the Judges of the respective High Cour ts and send these, along with their own response, on the code to the CJI within a period of eight weeks (counted from the first week of December 1999). The CJI should convey the information to the government.

According to informed sources, it has been set down that in the High Courts, the Chief Justice and two other senior Judges will form a committee to hear and decide any complaints against errant Judges. A Judge in the Delhi High Court told Frontline that the committee will decide the 'remedial action' to be taken against any errant judges on a case-to-case basis. "No uniform punishment is contemplated," he said. "After all, judges would be reasonable enough to listen to the committee and make amen ds."

Union Law Minister Ram Jethmalani has expressed the opinion that the code of conduct lacks sanction in the absence of any provision to impose penalties on those who violate the code. He described the code as "inadequate".

A draft bill prepared by the Committee on Judicial Accountability (CJA) provides for a five-member National Judicial Commission (NJC) consisting of retired judges or senior advocates who would be independent of the government and the higher judiciary. Th e chairman would be appointed by the full collegium of the Supreme Court, and the government. The Leader of the Opposition in the Lok Sabha, the collegium of the Chief Justices of the High Courts and the Bar Council of India each will nominate one member . The NJC would have investigative powers as well, and its powers would be binding on the government, according to the draft. However, it remains to be seen whether such an NJC will ensure accountability, impeccable conduct and transparency in the higher judiciary.

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