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COVER STORY

27-04-2001

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Briefing

Warped policies

cover-story
ASHA KRISHNAKUMAR

IF the initial phase of liberalisation and market-centred policies marginalised the poor and the destitute, the acceleration of the policies has alienated the not-so-poor but vulnerable sections.

Proof that only a minuscule section gains from the liberalisation process at the expense of the vast majority of the people can be had from the experience of the weavers and farmers of Andhra Pradesh. In the case of textiles, the initial policy of encouraging powerlooms weakened the handloom sector, which provides livelihood for lakhs of weavers. The crisis in the handloom sector further deepened with the policy-driven increase in yarn prices, the non-availability of hank yarn, the withdrawal of the Janata cloth scheme and the scuttling of the Andhra Pradesh Handloom Cooperative Society, almost wiping out the sector.

The intensified implementation of the policies of liberalisation and globalisation also led to the dereservation of powerlooms from the small sector, throwing it open to bigger and powerful players; indiscriminate import of cheap fabrics; and a sharp increase in power tariffs as a result of reforms in that sector. The textiles crisis is drawing more sectors into its vortex. The issue, thus, is no longer of handlooms versus powerlooms as both are now equally affected.

IN the case of agriculture, in the initial phase of liberalisation the larger policy of providing state support was withdrawn lending to precipitous fall in public capital formation that undermined the sustainability of the farm system itself. The opening up of the agricultural sector to the world markets was accompanied by an increase in the prices of inputs such as fertilizer and power. Little wonder then that the farm crisis is no longer confined to the bottom rung of the socio-economic ladder but has also affected the not-so-poor. The problem has been compounded by financial sector liberalisation which has spelt the end of direct credit to poor farmers and households and small industries and the vulnerable sections.

Thus it is the systematic erosion of entitlements - a simple but extremely powerful concept developed by Nobel laureate Amartya Sen in his analysis of families (Hunger and Public Action by John Dreze and Amartya Sen; Clarendon Press, Oxford;1989) - that has pushed hundreds of weavers and farmers to commit suicide or die of starvation. According to Sen, given the socio-economic, political and legal arrangements in any system, every person can establish command over some alternative commodity bundles, which are his entitlements. And if some economic change makes it impossible for him to acquire any commodity bundle with enough food to survive, which he is entitled to, he can be reduced to starvation. Sen argues that this "entitlement failure" can happen either because of a fall in his endowment (such as alienation of land) or due to unfavourable shift in his exchange entitlement (such as loss of employment and fall in wages). It is the latter which seems to have happened in the case of Andhra Pradesh's weavers and farmers.

What can the government do now? In the short term, it can subsidise inputs and buy the agricultural produce and the weavers' products. But from the long-term perspective, it raises some basic questions about the socio-economic development the country has embarked upon.

WEAVERS IN DISTRESS

cover-story

With no policy support from the Government, no means to invest in technology and no market-savvy master weavers to help them adapt to changing consumer tastes, the traditional weavers of Andhra Pradesh are increasingly driven to desperation and death.

ASHA KRISHNAKUMAR in Sircilla and Dubakka

THE thread of life is running out for the weavers of Andhra Pradesh. Marginalised, ironically, by government policies, and pushed into the vortex of unemployment, debt and starvation, handloom and traditional powerloom weavers have been driven to death. Unofficial figures of cases of suicide and starvation deaths in the last two years total over 400 and several weavers' organisations endorse this estimate. Frontline's investigations have confirmed 43 cases of suicide in the powerloom town of Sircilla in Karimnagar district in the past one year, and 20 cases in the handloom centre of Dubakka in Medak district during the past four years.

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But the State government has not put out any figure. The administration's reaction would seem to be marked by callousness and indifference. If Karimnagar Collector Debabratha Kantha is dismissive when he says "suicides in Andhra Pradesh are routine among farmers, powerloom or handloom weavers," Minister for Handlooms and Textiles Padala Bhoomanna, also a member of the Cabinet sub-committee set up to formulate short- and long-term plans to solve the weavers' problems, has a simple solution: "The powerloom owners must be discouraged from committing suicide as they do it only after getting into a financial mess."

Meanwhile, weavers continue to end their lives, unable to provide a square meal for the members of their families. Reports of poverty, starvation and death come in not only from the drought-prone northern Telengana districts of Karimnagar, Nalgonda and Medak, but also from the supposedly prosperous coastal districts of Guntur, Prakasam and Krishna. The official response to this stark reality is quibbling: "Check if ration has not been lifted by the family", or "if they are really starvation deaths, then should the women and children not have died first?"

The real villains of the piece are the successive governments at the Centre, or, more specifically, their textile policies. The textile policies since 1985, which seek to liberalise, modernise and privatise the industry, have systematically marginalised over 40 lakh handloom weavers who used to produce over 400 crore metres of cloth every year.

Only those States that managed to put in place policies that helped modernise and integrate the production processes, as did powerlooms in Maharashtra and Gujarat, or which had an effective system to help the sector to adapt quickly to changing market demand (as has happened in Tamil Nadu), managed to survive the market-centred approach. Unfortunately, the traditional weavers of Andhra Pradesh had neither the means to invest in modern technology nor market-savvy master weavers to help them adapt to changing consumer tastes. With their products becoming uncompetitive in the market, stocks mounted, availability of work began to decline and the weavers faced joblessness, mounting debt, starvation and, consequently, death.

For the weavers, the bad times started in the mid-1980s and the situation deteriorated by the mid-1990s. The number of handlooms fell from 5.29 lakhs in 1985 to 2.12 lakhs in 1998, and of these hardly a third were occupied. In Dubakka, for instance, less than 10 per cent of the 1,500 looms work today.

There are about 60,000 traditional powerlooms in the State. Over 60 per cent of the 40,000 powerlooms in the major centres of Chittoor, Karimnagar and Nalgonda districts have been lying idle since 1999. In Sircilla, of the 10,000 powerlooms (the unofficial figure is 12,000), 2,000 have been abandoned and another 2,000 sold at scrap value. Only some 6,000 are working and that too at less than 20 per cent of their capacity.

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Sircilla and Dubakka are some 200 km from the hi-tech-driven State capital of Hyderabad. Equally ironic is the fact that Sircilla is the constituency of Union Minister of State for Home Affairs Ch. Vidya Sagar. Dubakka falls within the parliamentary constituency of BJP MP A. Narendra.

This correspondent visited Sircilla on March 13 and 14, and Dubakka on March 24. It was beyond doubt that the weavers were in the throes of a crisis and desperately needed help. Behind every related case of suicide there is a story of narrowing options, fewer coping mechanisms and growing despair.

The living conditions of the weavers' families, which are already below the poverty line, are deteriorating rapidly. (A study conducted by K. Rama Mohana Rao in Karimnagar district in 1983 showed that the average annual household income among the weavers was Rs.3,687, whereas the poverty line threshold was Rs.4,819.)

The major conclusions of this investigation are: First, the loss of market for powerloom products that began in 1997 continued unabated until there was practically no work for anyone in Sircilla. In Dubakka, the slide began in 1985 when powerlooms began to be encouraged by the government. The situation worsened in 1991 after the Centre began to push the liberalisation policies vigorously and launched a frenzied export drive, which covered cotton and yarn. The weavers' condition reached its nadir in 1996 when the Andhra Pradesh State Handloom Cooperative Society (APCO) stopped the Janata cloth scheme. The last straw was the virtual collapse of APCO in 1998.

Secondly, there has been a systematic deterioration of living conditions: the weavers of Sircilla and Dubakka subsist on painfully low levels of nutrition intake and with almost no access to healthcare facilities. Poor nutrition seems to have made them susceptible to opportunistic infections. Desperate to provide food and medical attention to the family, the weavers would take loans. As the debts and the pressure to repay them mount, they go into depression. Some of them resort to suicide.

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Thirdly, survival options are limited for them as farm work is scarce in these drought-prone areas. With the powerloom centres of Bhiwandi and Mumbai (in Maharashtra) as also Surat and Ahmedabad (in Gujarat) upgrading to jetlooms (one jetloom displaces 40 powerlooms), the weavers could no longer find jobs there during the lean periods in Andhra Pradesh. Thus the option of migration was also sealed.

Most important, recent government policies seem to have pushed the weavers over the edge. In Sircilla, the crisis was precipitated by a sharp increase in yarn prices, a steep rise in the power tariff, concessions provided for technology upgradation which bypassed the small and traditional powerlooms, and dumping by countries such as China and Thailand which led to a fall in the market for their textiles.

The Dubakka handlooms were affected additionally by competition from powerlooms, the government's failure to enforce the reservation of some varieties of cloth for production and the hank yarn obligation of mills, the stoppage of the Janata cloth scheme and the virtual collapse of APCO which owed large sums to the primary handloom cooperative societies.

The weavers are not new to crises. They overcame each one of them with remarkable resilience. But the latest crisis has gone on for far too long for them to reinvent themselves. The policies of the government in the 1990s, which essentially amounted to taxing the poor and pampering the rich, have spelt doom for an industry, once the hope for the drought-prone area.

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The plight of the Telengana weavers is worse than the situation that prevailed in the coastal Andhra region in 1991, when a number of starvation deaths were reported. Then, the doughty champion of handloom weavers, the late Pragada Kotiah (MP and general secretary of the Andhra Pradesh Handloom Weavers Congress), brought their plight to the public gaze and forced the government to take action (Frontline, December 6, 1991). (Subsequent Frontline studies had found that there were no starvation deaths among weavers of the region after 1991.) The Telengana weavers have nobody to take up cudgels on their behalf. The local press, which played an important role in exposing the deaths in 1991, has been virtually silent this time around.

On March 7, after the issue was raised in the Assembly, Chief Minister N. Chandrababu Naidu formed a Cabinet sub-committee consisting of Padala Bhoomanna, N. Kishtappa (Minister for Animal Husbandry), K. Vidyadhara (Minister for Major Industries) and B.V. Mohan Reddy (Minister for Transport) to inquire into the situation and suggest ways to solve the crisis. It is yet to visit Sircilla and Dubakka, although politicians of every hue have made a beeline for Sircilla. On March 27, the Chief Minister announced a package primarily aimed at revamping APCO. On April 6, he ordered the "immediate release of Rs.26 crores", a part of APCO's dues to the primary cooperative societies. The ex gratia payments of Rs.10,000 under the National Family Benefit Scheme, which were sanctioned by the district administration soon after the 38th suicide in Sircilla on March 13, have been stopped owing to "political interference". In the meantime, on April 2, a family of four committed suicide by consuming poison, and four days later a weaver set himself ablaze in Sircilla.

Government intervention, either by shoring up the demand for the weavers' output or by providing subsidies on inputs, would have provided a safety net for the 15,000 families in Sircilla and the over 10,000 families of Dubakka. On the contrary, even after the loss of several lives, the weavers of Andhra Pradesh have not received any substantive help.

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NAGULA RAVINDER (36) hanged himself from the ceiling of his house on January 23. For this skilled weaver of Sircilla town, after 17 years of hard, but reasonably comfortable living, things began to change rapidly in 1997. Work became scarce, and by mid-1999 there was none. His visits to Bhiwandi (Maharashtra) and Surat (Gujarat) in search of job were not successful. In order to feed the family of five (including their two children and her mother-in-law), Ravinder's wife began rolling beedis. She earned Rs.16 a day for rolling 600 beedis. But the job was only for four days a week. Ravinder started taking loans and even sold his wealth of one gram of gold to the local money lender. Without any regular income, he was unable to clear even a part of the mounting debt. When people stopped lending, the family first reduced the food intake and eventually starved on the days his wife did not have work. When debts reached Rs.50,000 and there was no hope of repaying, his wife along with the children went away to her parents' place. With her went the meagre income of Rs.16 a day. Ravinder was naturally depressed.

On January 23, after four days of starvation, Ravinder and his mother, Mallava, decided to end their lives. Then, in a last-ditch attempt, Mallava went in search of work to an adjoining village. After a gruelling 10-km walk and an hour's pleading with a farmer, she got a job, to pick cotton. After a hard day's work and with Rs.15 in hand, Mallava returned home happy at the prospect of feeding her son, only to find him dead.

KOMATTI BHOOMAYYA, a 30-year-old weaver of Sircilla, set himself ablaze on July 27, 2000. Until 1992, his wife, Padma (24) and their three children - Shravanti (7), Shravani (6) and Raju (4) - survived on the Rs.300 to Rs.400 a week Bhoomayya made from weaving grey cotton cloth in a powerloom. But owing to a steep rise in yarn price and the subsequent increase in production cost, the demand for the cloth fell, and, consequently, his work suffered. Bhoomayya struggled to earn Rs.150 to Rs.200 a week.

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The blow came in 1997: the powerlooms of Maharashtra, which was a major market for the 26x26 counts grey cotton material and 80x80 counts polyester material produced in Sircilla, introduced high-speed jet looms. Every jet loom replaced 40 powerlooms. The Sircilla products became costly and the market for them fell. Bhoomayya was rendered jobless.

He managed to do some odd jobs at construction sites and earned Rs.100 a week - 50 per cent below the minimum level of consumption. With no valuables to sell, the family essentially subsisted on borrowings. His debts mounted to over Rs.30,000 and there was severe pressure to repay.

It was around this time that Raju fell ill. Bhoomayya was unable to provide medical care. He became acutely depressed and when Padma and the children were away, he set himself ablaze. Padma approached the Mandal Revenue Office to claim the ex gratia of Rs.10,000, which the State government gives the family of a deceased weaver. But the amount was denied as "her husband did not die naturally".

The crisis in Sircilla

ASHA KRISHNAKUMAR cover-story

The traditional powerlooms of Sircilla fall silent as they lose out to the modern, faster looms in other States.

NOT very long ago, on a drive along the State highway from Hyderabad to the northern Telengana region you negotiated one bustling handloom centre after another, and an occasional powerloom complex. But all the hustle and bustle is now gone. There is hardly any activity. The looms have fallen silent. There is despair all around.

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It is particularly stark in some pockets such as Sircilla, a major powerloom weaving centre in Karimnagar district, 65 km from the district headquarters of Karimnagar, where death hangs in the air. Suicides by weavers and powerloom owners are not uncommon.

Handloom weaving developed in Sircilla town in the 1920s, after some enterprising local people went to Solapur (now in Maharashtra) in search of work, learnt the art of weaving, came back and set up their own looms. It was a godsend for the people of the area with no alternative employment, and weaving quickly spread to some 50 villages around Sircilla town. Numerous allied activities developed. Over time, the skilled weavers of Sircilla developed unique designs and a niche market, mainly in Maharashtra, for their products. The looms gave employment to thousands of people, directly or indirectly.

The first signs of trouble came in the mid-1970s, when a large number of powerlooms were set up in Maharashtra and these began duplicating the unique designs of the Sircilla saris. The Sircilla handloom weavers could match neither the productivity nor the low costs of the Maharashtra powerlooms.

But they took up the challenge, and soon some 450 weavers jointly took a loan of Rs.1 crore from Andhra Bank and set up 3,000 powerlooms. They produced 25x25 counts cotton cloth (dyed in 40 colours) and 80x80 polyester cloth. Every loom, working two shifts, produced on an average 70 metres of cloth every day. This revived the weaving industry, which soon flourished with a market extending across the country, particularly Orissa, Gujarat, Maharashtra, Madhya Pradesh and Andhra Pradesh.

Around this time there was another development. Unwilling to concede the demands of their workers for higher wages, beedi unit owners of Maharashtra relocated to Sircilla, taking advantage of the connections some of them had with the weavers who went there either for work or to sell their products. Thus, while the Sircilla men moved to powerlooms, the women took to rolling beedis.

By 1990, the area had 10,000-12,000 powerlooms (owned by 800 people), providing reasonable livelihood to over 15,000 families. Some families also owned looms (one loom costs Rs.20,000), and wove cloth themselves without outside help. For instance, G. Ambadas, who owned four looms, employed about five persons and produced grey cotton cloth for the Maharashtra market. Now he works on only one loom, by himself. Says Ambadas: "My family barely survives. The cost of production has risen many times over in the last five years. My power bill, for instance, has increased from Rs.400 a month to Rs.1,800. The New Economic Policy is systematically wiping out artisans."

Roja Powerloom Society, with 32 looms and 31 members, stopped work in June 2000. Says its president P. Kumarayya: "From producing 100 metres of grey cotton cloth a day working two shifts in 1997, we produced 25 metres a day in 1999, and stopped completely last June." While some of its members have migrated, many have become head-load workers in and around Sircilla. Says Kumarayya: "Government help in subsidising inputs and in marketing our cloth is very important and urgent. I do not understand why the government is turning a blind eye to all the problems we have been facing in the last four years."

Allied activities, such as sizing and processing of yarn, have been closed, rendering 10,000 people jobless. Swarna Sizing and Processing Company, which employed 40 people in two shifts till 1999, has remained closed for the last two years. Dyavanapalli Narasaiyya, its owner, is now a headload worker in Sircilla town. Gundapalli Ramanujam, owner of a sizing unit which till 1998 employed 40 to 50 people, has kept himself out of sight for the last two years, unable to repay the term loan taken from the Andhra Pradesh State Finance Corporation. Such stories abound in and around Sircilla.

Mainly to blame is the Centre's liberalisation policy, introduced vigorously in 1991. Yarn prices spurted as the Centre started exporting in a frenzy, including huge quantities of cotton and yarn. The Centre also levied 9.25 per cent excise duty on cone yarn, pushing up yarn prices further. According to State Powerloom Minimum Wage Board member Konda Sankariah, in the last two years the price of a five-kg bale of 25-count cone yarn went up from Rs.300 to Rs.480. Also, according to Sircilla Municipal Chairperson A. Ravinder, "the mills produced only 40-65 counts yarn and not the 25 counts yarn we need." This pushed up yarn prices further. Clearly, the free play of market forces led to the differentiation among the various sections of the industry, pushing to the wall the poor and the vulnerable - a common fallout of a market-centred approach.

More recently, globalisation, the opening up of the economy and the removal of quantitative restrictions on some categories of goods, have led to dumping by China and Thailand, "making it impossible for us to sell our goods in the market".

The State government, on its part, raised power tariffs four times since 1995, as part of the reforms process. This 'shocked' the powerlooms as it pushed up weaving costs tremendously. The cottage industry - the powerloom industry is so classified - bore the brunt of the increase. According to Konda Sankariah, powerlooms were charged commercial rates. Erratic power supply also added to the problems.

The last straw was the removal of powerlooms from the small-scale sector as part of the Centre's liberalisation policies. Anyone could now set up a powerloom. Big producers, such as the Reliance and Mafatlal groups, entered the arena with modern jet and auto looms. The government also gave concessions for the import of second-hand machinery. The productivity of these modern powerlooms was much higher.

To aid these big players further, the Centre reduced the Customs duty on modern powerlooms from 15 per cent to 5 per cent and also provided them a 50 per cent subsidy on machinery under the Technology Upgradation Fund Scheme (TUFS). Many big and modern powerlooms in Maharashtra have set up composite looms and adopted an integrated production system, incorporating all allied activities such as warping, spinning, weaving and dyeing,

The Sircilla powerlooms could not even dream of competing with these modern looms in terms of price, quantity or quality. Sales dropped and stocks mounted, as did the interest outstandings on bank loans. According to Sircilla Powerloom and the Handloom Cloth Merchants Association founder-president Rudra Sankariah, materials worth over Rs.2 crores have been lying in godowns for the last two years.

The problems of the weaving industry have often been seen as an issue of handlooms versus powerlooms. This is no longer valid. With liberalisation, globalisation and structural adjustment of the economy, the issue is now one of the small and vulnerable versus the big and strong. The market differentiation is sharp and clear.

According to P. Premchand, president of Krushi, a non-governmental organisation, the problem of increased cost of production was compounded by the simultaneous fall in product prices, and the sharp increase in consumption costs. Everything worked against the traditional powerloom sector.

Worse, the weavers could not benefit from any government scheme. For instance, the Debt Relief Fund of Rs.10,000 announced by the government in 1989 applies only to handloom weavers. The Sircilla weavers are also not eligible for assistance to modernise their looms under the TUFS as it does not cover cottage industries. The family of the weaver who commits suicide is not even eligible for an ex gratia payment. Says Karimnagar Collector Debabratha Kantha: "It should not be given as it would become an incentive for weavers to commit suicide."

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Most powerloom owners abandoned their looms, some sold them as scrap and the few who stuck on use less than 20 per cent of capacity executing job works given to them by agents in Hyderabad. These units no longer employ any weaver; the owners do the job themselves. The marginalisation of the powerloom weaver is, thus, complete.

The government has turned a blind eye to this tragedy in spite of numerous representations in the past year. For instance, the Sircilla Powerloom and Handloom Cloth Merchants Association organised a dharna in front of the Mandal Revenue Office and also petitioned the District Collector, the Union Textiles Minister and the Prime Minister. (Until the time this correspondent visited Sircilla in March, no government official had even visited the houses of weavers who had committed suicide.)

According to K. Santa Rao, general secretary, Andhra Pradesh Handloom Workers' Union, the government is playing a cruel joke on the poor weavers by announcing the introduction of 1,000 powerlooms in each of the 1,100 mandals in the State, and forcing most handloom weavers to shift to powerlooms in line with the 1998 Satyam Committee Report, which recommended a total restructuring of handlooms and powerlooms. In the case of handlooms, the committee divides the weavers into three categories - a small percentage of weavers producing unique, high-quality products such as Pochampalli, Gadwal and Dharmavaram saris; the majority of weavers, who are semi-skilled; and unskilled weavers. According to the committees recommendations, the unskilled weavers should be asked to change their vocation and the semi-skilled weavers, who constitute the majority of handloom weavers, should be trained and their skills upgraded in order to enable them to become powerloom weavers.

This move, according to the Rashtriya Cheyneta Karmika Samakhya (with 23,000 independent weavers in its fold) president Mohan Rao, would surely wipe out artisans and their centuries-old-skills. It shows the government's indifference to the tragedy facing the powerloom sector.

The recommendation for the powerloom industry seems to be the last nail in the coffin of the small and traditional powerlooms. It wants the composite mills split into spinning and weaving units, and the latter modernised and decentralised down to the cluster level, and the garment units dereserved from the small-scale sector. This would allow the multinationals as well as big and modern powerlooms to enter the grassroots level, to wipe out the traditional powerlooms.

PEDHI RAJESHAM, a 36-year-old weaver from Sircilla, hanged himself from the ceiling of his house on September 15, 2000. His wife, Anjavva (25), died on November 11, 2000 of tuberculosis. Their orphaned children - Rani (6) and Sai Kumar (2) - are now left in the care of Rajesham's parents.

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Rajesham used to weave close to 100 metres of cloth and earned Rs.50 a day (at the rate of 50 paise per metre) till 1997, after which the availability of work began to decline. By the end of 1998, he was hardly earning Rs.100 a week. Even this meagre income was not available by mid-1999. His loans meanwhile, touched Rs.40,000. Around this time Anjavva was found to have TB. His mother, Lakshmi, started to roll beedis and earned Rs.16 a day for four days a week. This provided the family of six some succour, but considerably below subsistence levels.

Jobless and unable to provide Anjavva any medical care, Rajesham hanged himself when his family was away. Subsequently, Anjavva's health deteriorated and she also died.

BACHU ANJAYYA (35) of Sircilla consumed poison in July 2000 after struggling for three years to make both ends meet. He lost his job in 1997 when his employer abandoned the loom as it had become economically unviable, and left Sircilla.

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After searching desperately for a job for over six months, Anjayya went to Solapur (he had migrated twice before in search of a job), only to return two weeks later, not having found a job. From then on life became a struggle for the family of three.

His wife Latha took to rolling beedis and earned Rs.16 a day for four days a week. Anjayya began borrowing, and his debt mounted to Rs.50,000. Meanwhile, Latha fell ill, but Anjayya had no money to provide medical attention. Depressed, he consumed poison and died.

Silence of the looms

ASHA KRISHNAKUMAR cover-story

Dubakka once had over 1,500 looms producing traditional cotton saris. Now the figure has fallen to 700, as its products have become uncompetitive in the market.

DUBAKKA, the once prosperous handloom centre in Andhra Pradesh's Medak district, is enveloped in an eerie silence. There is no rhythmic sounds of the shuttles, no tricycles trundling down the narrow and winding lanes loaded with grey and coloured yarn, no activity in the cooperative society. The mandal headquarters town is yet to recover from the suicide of 32-year-old A. Anjaneyalu, who consumed poison on March 13. Twenty suicide cases have been reported among the handloom weavers over the last four years. Many more have gone unreported. The situation for the weavers is desperate.

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Yet, Minister for Handlooms and Textiles Padala Bhoomanna maintains: "Suicides are normal in Andhra Pradesh. It should be discouraged and the weaver families should be told that life is a struggle."

The crisis in Dubakka started with the 1985 Textile Policy. Though the policy recommended protection of the handloom sector - by reserving 22 items for it (brought down to 11 in 1996 on the recommendation of the Mira Seth Committee) and by providing it with adequate hank yarn with mills having to make 50 per cent of the output in the hank form - it was biased towards the "commercially viable powerlooms". This led to a mushrooming of powerlooms - registered and unregistered - that posed stiff competition to the handlooms. It costs Rs.280 to weave a tie-and-dye Pochampalli sari on handlooms, but only Rs..60 on a powerloom. The market for Dubakka handlooms began to disappear.

Dubakka, which had over 1,500 looms producing traditional cotton saris - under the structure of the cooperative, master weaver and independent looms - saw the figure fall to 700 as its products became uncompetitive in the market. Unable to get work, many weavers went to Bhiwandi, Solapur and Surat in search of jobs.

Only weavers who under the cooperative fold (the Handloom Weavers Cooperative Society, set up in 1949 with 2,340 members, is the only society in Dubakka and one of the oldest in the region) produced the coarse Janata cloth (26x26 saris and dhotis) survived the 1985 Textile Policy. The work was simple - even older people could weave Janata cloth - and the weavers earned up to Rs.1,500 a month. But this happy situation did not last.

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In the massive export drive the Centre launched in 1991, cotton and yarn exports started increasing. This led to a sharp increase in yarn prices and pushed up the cost of production. Many master and independent weavers stopped, or reduced, work. The number of working looms in Dubakka dropped to 350.

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With a fall in the market for the coarse variety of saris, the Dubakka looms shifted to the superior 2x120 double count tie-and-dye Pochampalli variety, for which there was demand. Work became difficult as the designs were intricate. Older people could not cope and lost jobs. It also took more time now to weave a sari - three days against two earlier. Wages for weaving a sari also declined from Rs.120 to Rs.80. Men took to weaving the tie-and-dye variety, while women took to rolling beedis (on account of a workers' agitation in Maharashtra, many beedi unit owners, taking advantage of the situation in the northern Telengana region, had set up shop in this area).

If the weavers of Dubakka survived though their incomes had fallen, it was because the Andhra Pradesh State Handloom Cooperative Society (APCO) provided them work and alsalso lifted their products. However, those dependent on master weavers were not so lucky. For them, work and wages dropped. And even for those dependent on the primary cooperative society, things began to go wrong as APCO started defaulting on payment, until the society virtually collapsed in 1996 after the Janata cloth scheme was abolished. After that the Dubakka handloom industry never recovered. Of the 2,340 members of the cooperative society in Dubakka, only 41 get work. Even that has been possible because of the Rs.4-lakh loan taken by the society from the National Handloom Development Centre.

From 1996, it has been an uphill task for the handloom weavers and their families. G. Bhoomayya, a master weaver who owns 10 looms and has been weaving for the last 45 years, says he has never seen such a crisis. Six of his looms are idle for the last two years. With the four working looms, he is just breaking even. M. Parasuramulu, an independent weaver who used to earn Rs.1,800 a month until 1997, hardly earns Rs.640 now, the lowest in 30 years.

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As in Sircilla, several weavers from Dubakka migrated to places such as Solapur and Bhiwandi and even Surat in search of jobs. But in vain. Debts mounted and with it the pressure to repay the loans. With the breakdown of all coping mechanisms, and with no alternative employment, some men began committing suicide. Says Communist Party of India (Marxist) State general secretary B.V. Raghavulu: "This is a clear case of the systematic erosion of entitlements."

Silk weaving has been affected by the handloom crisis. According to former secretary of the Pochampalli Handloom Cooperative Society A. Bhikshapali, a third of the 10,000 looms in Pochampalli are not functioning. Pochampalli, which produces one of the finest varieties of silk saris in the country, has never witnessed such a downtrend before.

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Apart from the collapse of APCO, the organisational structure of the master weavers is responsible for the downfall of handlooms in the State. According to Rashtriya Cheyneta Karmika Samakhya president Mohan Rao, one of the major problems with the fall in demand is the inability of handlooms to adapt to changing consumer tastes. And this is primarily because, unlike in Tamil Nadu, the master weavers here are highly fragmented, mostly small and medium-scale operators with little reach or contact in the input and output markets. Thus, the handloom products soon became uncompetitive. Also, while the government's policies aimed at export markets, they did nothing to shore up the domestic market. Says B. Uzramma of the Independent Handloom Research Group: "There is an excellent market for handloom products, if only the government took some interest and invested a little in infrastructure and research, which would yield tremendous returns in terms of employment generation, increasing the value of output and exports."

After a report in the local press in February of suicides, a team from the Andhra Pradesh Handloom Workers Union - consisting of its general secretary K. Santa Rao, Medak district general secretary G. Jai Raju and Siddipet unit secretary of the Centre of Indian Trade Unions, Ch. Mallesh - visited the town. The union also organised a dharna in Hyderabad on March 3. According to Santa Rao, Chief Minister N. Chandrababu Naidu has promised, as part of the Weavers' Revival Package, to disburse part of APCO's dues to the primary cooperative societies. But, says senior CPI(M) leader and former Andhra Pradesh Handloom Workers' Union president K. Satyanarayana: "The government has made many such promises in the past."

Unless State government's intervention is immediate, decisive and extensive, more lives will be lost in Dubakka.

ALETI ANJANEYALU (32) of Dubakka consumed poison and died on March 13, 2001. He worked for a cooperative society and sometimes for master weavers producing tie-and-dye saris since the age of 15. In 1986-87, he earned Rs.1,000 to Rs.1,200 a month, a good income by his standards. He got married in 1987 and begot a girl child the next year. He incurred a huge expenditure on two functions - the naming and ear-piercing ceremonies - for the child, as is the custom in his community. He borrowed over Rs.4,000 and was soon caught in the debt trap. He also had a son the next year.

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The weaving work began declining since the mid-1990s and he even had to take a wage cut. His monthly income in 1997 fell to less than Rs.800. At this time he was paying an interest of Rs.450 on the loans he had taken and a house rent of Rs.200. Anjaneyalu was forced to borrow more. The family was not assured of even a frugal meal.

In 1998, his wife had some gynaecological problems and was advised hysterectomy. Anjaneyalu was forced to borrow Rs.10,000 for the surgery. Thereafter his debts mounted to over Rs.50,000 and there was pressure to repay.

On March 13 four lenders met Anjaneyalu at his house and demanded that he repay the amount. Ashamed and depressed, Anjaneyalu consumed poison that evening and died on way to the hospital.

V. KESHAVULU (45) of Dubakka consumed poison in November 1999. A member of the cooperative society, Keshavulu wove the tie-and-dye Pochampalli saris and earned over Rs.1,500 a month until mid-1997. With some savings and borrowings, he and his wife, Rangavva, managed to get their daughter married and also buy a handloom.

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But tragedy struck them in 1998 as work and wages started falling. APCO stopped procuring saris from the primary cooperative society, stocks mounted and the society was unable to give its members regular work. The family started borrowing and by mid-1999 had accumulated a debt of Rs.50,000. Pressured by the lenders to repay the loan and with no hope of getting regular work, Keshavulu, depressed, ended his life.

The lenders took away the loom. Now Rangavva has taken to rolling beedis and earns Rs.500 a month. But she is also exploited. For every 1,000 beedis, she has to purchase 600 gm of tobacco powder and 750 gm of tendu leaves, which together cost Rs.20. Invariably, she says, the owner cheats her on the actual weight, forcing her to buy more leaves and powder.

Says a stoic Rangavva: "Death is the only way out for us in Dubakka."

Of awards and rewards

Viewed in the context of a general atmosphere of cultural policing prevailing in the country, the developments relating to the 48th National Film Awards manifest a disturbing trend.

ON March 25, filmmaker Pradip Krishen and cinematographer Sashi Anand resigned from the jury of the 48th National Film Awards, accusing the body of not having followed the procedures and of having predetermined the results. Joined by Odissi dancer Madhumita Raut, they also accused some of the remaining members of the jury of having formed "a cartel of eight" and implemented a "Hindutva" agenda. Another jury member, noted film actor Dhritiman Chatterjee, put in a letter of protest supporting the dissenters.

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The jury members who were criticised, dismissed the allegations as "half-baked lies". Producers involved in the Mumbai film industry confused the issue further by insisting that the real tussle was between commercial cinema and parallel cinema and threw their weight behind the majority section of the jury.

The revelations that followed the resignations deserve careful scrutiny. The 16-member jury, it seems, had been divided into four sub-groups and each sub-group was to watch 32 films each. The films that were rejected by all four members were struck off the list while the remaining ones were shortlisted for being considered for the awards. All four members had rejected both Daman (for which Raveena Tandon got the Best Actress award) and Pukar (for which Anil Kapoor got the Best Actor award) The chairperson, the veteran actress and danseuse Vyjayantimala Bali, asked for the recall of the films. Two other films were similarly brought back into the reckoning.

According to Krishen, Pandavas, an animation film of questionable standard, was recommended for an award because the chairperson thought it would help in "spreading Hindu culture". Worse, jury member Macmohan, an actor best known for his cameo as Samba in Sholay, turned out to be the uncle of Raveena Tandon. According to the rules set down by the Directorate of Film Festivals (DFF), all jury members have to sign an affidavit declaring that they are not related to any of the nominees by blood or marriage.

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In protest, filmmaker Gautam Ghosh and Bengali actor Soumitra Chatterjee declined their awards - for the best Bengali film and the Special Jury Award for Acting respectively. Soumitra Chatterjee has worked with almost all the distinguished filmmakers of Bengal; he has acted in 14 Satyajit Ray films. Although felicitated internationally, Chatterjee had never won a national award. A Lifetime Achievement Award would have been a more fitting tribute for him this time.

It is no secret that the status of the DFF is largely determined by the Ministry of Information and Broadcasting. It is also common knowledge that many of the nominations to the Jury are made on political considerations and have little to do with the credentials of the nominees. Many people have sought to defuse the present controversy by stating that the national film awards have always been plagued by coterie politics. This argument misses the point. The jury constituted by the Bharatiya Janata Party-led National Democratic Alliance government is not only loaded in favour of the BJP but comprises many individuals whose credentials for the job are dubious. The controversy has to be seen in the context of the systematic cultural interventions being made by the Sangh Parivar.

Apparently the DFF had sent a list of about 100 names to the Ministry out of which some were chosen as jury members; and some names were added. If the DFF is indeed an autonomous body, why does the list have to be prepared by the Ministry in the first place? The final list betrays a tilt in favour of the interests represented by the BJP. Vyjayanthimala Bali, who is associated with the BJP after quitting the Congress(I), headed the jury. Tarun Vijay is the editor of the Rashtriya Swayamsevak Sangh mouthpiece Panchjanya. Shashi Ranjan, a product of the Film and Television Institute of India, was the producer of ''Shotgun Show'', a television programme by Shatrughan Sinha, a BJP supporter. Pawan Kumar, a BJP heavyweight, was formerly Shatrughan Sinha's secretary. And then there is Niveditha Pradhan, who was the campaign manager of Information and Broadcasting Minister Sushma Swaraj in the Bellary parliamentary constituency. Sushma Swaraj defended Niveditha's inclusion by stating that she was chosen to "represent housewives".

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Denying that the jury had a "saffron" agenda, Tarun Vijay, in an article in The Indian Express, described the dissenters as "intolerant, iconoclastic secular Talibanis" who, with "hate in their eyes and acid in their tongue", quit when their own agenda was not followed. In a particularly revelatory passage, he wrote: "They were advocating Split Wide Open for its bold theme and characterisation. Others rejected it for what they considered its perverted portrayal of human relations. If a film (that) shows sexual relations between son-in-law and his old mother-in-law, between father and daughter, a husband having homosexual relations with his servant and the wife joining in too, is considered the best film to be given the national award at the hands of the President, then why not invite better porno films from Playboy?" Whether the film deserves the highest award or not may be a matter of debate, but the reasons that Tarun Vijay has chosen to attribute for its rejection have nothing to do with its cinematic merits. His objections are that of the moral police and not a cinephile. This is like stating that Satyajit Ray's Charulata deserves no awards because it depicts a woman falling in love with her brother-in-law, or that Ghare-Baire promotes adultery and hence does not deserve praise.

The Sangh Parivar has been on a mission to redefine India's history and socio-cultural experience. To this end, it has deployed both legal and extra-legal measures; state and street censorship. The disruption of the shooting of Deepa Mehta's Water is a case in point. Arun Jaitley, the then Minister for Information and Broadcasting, gave Deepa Mehta permission to shoot the film in Banaras. But activists of the Parivar destroyed the sets, intimidated the film crew and stopped the shooting. The government did nothing to ensure that the permission granted by it was honoured. Nor did it seem to feel that it had any duty to safeguard the filmmaker's constitutional right to freedom of speech and expression. On the contrary, Jana Krishnamurthy, vice-president of the BJP (now its president), said: "Physical vandalism cannot be tolerated (but) if something goes against the moral fabric of the society, its long-established tradition and sentiment, it could be described as moral vandalism." If these words create a sense of deja vu, it is because BJP leaders have used similar language against M.F. Husain's paintings, Deepa Mehta's Fire, The Miss World Pageant, satellite television and just about anything that does not conform to the Hindutva forces' understanding of Indian culture.

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The policing of public morality finds its most strident advocate in Sushma Swaraj herself. In 1996, when she held the same portfolio during the BJP-led government's brief tenure, she banned a TV commercial showing a woman with a billowing skirt because it was "against Indian culture"; she upbraided Doordarshan newsreaders for wearing "semi-transparent" clothing. She also banned a programme called "Kaam ki Baatein" on FM radio because, according to her, sex education and awareness about the Acquired Immune Deficiency Syndrome amounted to promoting "adultery". Soon after taking over as the Minister for Information and Broadcasting Minister this time, she wanted to ban Fashion TV as it "promotes obscenity and vulgarity". Recently, at the Digital Talkies Festival in New Delhi (the first of its kind in India) two films which the Central Board of Film Certification had refused to clear - Pankaj Advani's Urf Professor and Siddhartha Srinivasan's Drivya Drishti - won top awards. Thankfully, the Ministry had nothing to do with the jury selection there. The sparklingly witty and stylish Urf Professor introduces an entirely new cinematic idiom to Indian cinema. It is unlikely that the moral police will ever certify this unique film for public viewing.

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MEDIA watchers and the public at large should feel concerned at the innumerable restrictions being imposed on the right to information and freedom of speech and expression. In this regard, the Information Technology Act, 2000 and the Cable TV (Regulation) Amendment Act, 2000 deserve close attention. Under the Information Technology Act, "publishing of information which is obscene in electronic form" is a punishable offence. It says that "whoever publishes or transmits or causes to be published in electronic form, any material which is lascivious or appeals to the prurient interest" in a manner that tends to "deprave or/and corrupt" people can be punished with imprisonment up to five years and a fine up to Rs.1 lakh. The question is: Who decides what is obscene or lascivious or what constitutes "prurient interest"? Also, under this Act, downloading material on HIV/AIDS, child sexual abuse or even the script of Split Wide Open could well attract punishment. Under the present climate of moral policing, very little is required to provoke an outcry about obscenity and vulgarity. The Act allows a "police officer and other officers" to enter and search "any public place and arrest without warrant any person found therein who is reasonably suspected of having committed or of committing or being about to commit any offence under this act."

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Similar restrictions have been brought in by the amendments to the Cable Act of 1995. The amendments not only impose a highly problematic Programme and Advertising Code but also bring television under the Cinematograph Act of 1952. This means that the rules applicable to feature films would apply to television as well. As is commonly known now, the Advertising Code prohibits the telecast of advertisements on cigarettes, liquor and other intoxicants as also infant milk substitutes, feeding bottles and infant food. In order to ensure that these censorship provisions are followed, the Information and Broadcasting Ministry requisitioned the services of the Central Monitoring Cell on Gurgaon-Mehrauli Road, in Delhi. Here, 120 members of the cell sit and watch TV all day, looking out for "anti-Indian propaganda" among other things. When the Cable TV Act was being enforced, this cell was used to monitor liquor and tobacco advertisements. Set up originally by the Army and the Intelligence apparatus, the cell now serves as a mammoth panoptican for the BJP-led government.

In this situation, it would be both naive and delusory to imagine that the controversy surrounding the 48th National Film Awards is a case of coterie politics as usual. Secular personalities like Mahesh Bhatt and Javed Akhtar have missed the point in their rush to defend commercial cinema. The paranoia is particularly misplaced in today's context where the dichotomy between commercial and parallel cinema has been blurred conclusively by films like Mrityudand, Takshak, Zubeidaa, and Astitva. There are now innumerable privately instituted awards - such as Filmfare, Lux-Zee and Videocon - that cater almost exclusively to popular cinema. Commercial cinema is no longer neglected.

Mumbai film industry producers and the saffron members of the jury have been asking how the BJP benefits from awards being given to Raveena Tandon and Anil Kapoor. Perhaps the benefits are mutual. The BJP gets to reward the faithful (Raveena Tandon had campaigned for a BJP MLA, and Anil Kapoor had added new scenes to Pukar with a view to cashing in on patriotic feelings generated during the Kargil war) and the Mumbai film industry gets (seemingly serious) recognition and tax-free status for its films!

A classic comeback

After tasting defeat in the first Test, India makes a remarkable recovery to win a series at home against world champions Australia.

JUST about everyone had given up. The Indians, crushed by the marauding Australian team in the first Test in Mumbai, were following on in the Kolkata Test... everything seemed lost.

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Then came the astonishing turnaround at the Eden Gardens, which concluded on the gripping fifth day of the final Test at the M.A. Chidambaram Stadium in Chennai with the hosts clinching the series 2-1.

For the Indians, despair had now given way to hope - hope for a better, brighter future for cricket, especially after the dark of the match-fixing scandal. For the Aussies however, the 'Final Frontier' remained unconquered.

Ultimately what won the series for India was the change in the batting order. Australia seemed set to deliver the knock-out punch at the Eden Gardens, when came an inspired piece of thinking from the Indian side.

V.V.S. Laxman, who had shown glimpses of form during his fighting 58 in the first innings in Kolkata, was sent in at No. 3.

The shift also enabled vice-captain Rahul Dravid, who had allowed the bowlers to dominate when he batted at No. 3 in the first innings, regain his confidence at No. 6. The rest is contemporary history.

Laxman produced a stroke-filled 281, the highest individual score for India, surpassing Sunil Gavaskar's 236. Dravid made a solid 180, and the two added 376 for the fifth wicket, while the Aussies endured a barren fourth day. India won the match by 171 runs.

Laxman's was an epic innings. The stylish batsman from Hyderabad was under considerable pressure after his twin failure in Mumbai, but displayed the resolve to fight his way back in a truly memorable manner.

In Laxman's success is a bigger message. That a gifted player will eventually find his way through the maze, and cannot be kept down, even if the 'wise men' do not always show wisdom. Making Laxman open the innings earlier was a mistake - thrusting the opening slot on middle-order batsmen is not going to pay in the long run.

This was also the 'Breakthrough Series' for off-spinner Harbhajan Singh, who bagged 32 wickets in the series, became the first Indian to achieve a hat-trick in Test cricket, and bowled his team to a fine series victory. India had discovered a match-winner.

The young Sardar bowled a lovely off-stump line - he had worked on this aspect during the conditioning camp prior to the series - extracted bounce and spin, flighted the ball tantalisingly and made the odd one drift away from the right-hander - the key delivery really. The fizz was definitely evident in Harbhajan's bowling, and he displayed the happy habit of running through sides once the breakthrough was made.

Harbhajan had been through a lot in his career - he was hauled up by the International Cricket Council (ICC) for a doubtful action, and then banished from the National Cricket Academy on disciplinary grounds. But now he has shown that he has the mettle to bounce back. Even during the testing moments in his career, Harbhajan never gave up. And when the opportunity presented itself, he slipped into the role of a strike-bowler effortlessly in the absence of the injured spearhead, Anil Kumble, making the mental transition with ease. Man of the Series he certainly deserved to be. Harbhajan received fine support from the field too, with Laxman, Dravid and Shiv Sundar Das bringing off superb catches close to the wicket - catches that eventually mattered.

Yet there was hardly any spin support for Harbhajan. As many as three left-arm spinners - Rahul Sanghvi, Venkatapathy Raju and Nilesh Kulkarni - were tried in the series with no great success. That Sachin Tendulkar, with three wickets on the sensational final session at the Eden Gardens, emerged Harbhajan's most successful 'spin partner' does not augur well for the future. The return of Kumble, as and when he recovers, should definitely help.

Pleasingly, India's series victory was not achieved on tailor-made pitches that could assist the spinners. The wickets at both Eden Gardens and Chepauk were essentially good strips with natural wear and tear on the final day. And on a stark turner in Mumbai, it was Australia that emerged triumphant. Perhaps there is a lesson to be learnt here.

The other valuable contribution came from maestro Sachin Tendulkar who got his 25th Test hundred in Chennai, an innings that was both crucial and delightful.

There was also the lovely 84 from opener Das in Chennai. Sadagopan Ramesh chipped in too. The openers were under fire in the early part of the series but showed the character to fight back.

However, the real test for the Indian batsmen will come when they take on the quicks on the bouncy tracks of Down Under, or in South Africa. The need of the hour is not to get carried away by the victory at home. With a busy 'away series' schedule ahead of India, there are battles that remain to be won. And maybe several reputations still to be earned.

CONQUERING India in India in a Test series was the 'ultimate dream' for Steve Waugh, the last frontier in a glittering run of away-Test series victories. In the end, he failed - by just two 'tail-end' wickets. It was a moment of crushing disappointment for the tough-as-nails Aussie captain when he lost the series in Chennai.

Did he err in enforcing the follow-on in the second Test? After all, his bowlers were tired after putting in a whole-hearted effort in the first innings, and then there was a possibility that his team could bat last on a deteriorating pitch.

In hindsight it might seem a mistake, but then Steve Waugh's decision had seemed logical - his team's confidence was sky-high with an unprecedented 16 successive victories in Test cricket, and nobody had expected Laxman and Dravid to put in such a brave front.

Where did the Australians go wrong? The continuance of Ricky Ponting in the team was puzzling. The Australians have in the past been ruthless with the selections. Leg-spinner Stuart McGill's omission is a case in point. Yet, when things began to go horribly wrong in India, the visitors refused to make the required changes. The hopelessly out-of-form Ricky Ponting was persisted with for the deciding match in Chennai, and the results were disastrous. Steve Waugh defended the decision saying "I want to back my batsmen to get the runs" but the argument did seem unconvincing, especially since Damien Martyn had been dropped earlier in the season after two crucial efforts against the West Indies.

Retaining leg-spinner Shane Warne was another mistake the Aussie captain made. Although coach John Buchanan did not want Warne for the Chennai Test, Steve Waugh did. Buchanan's thinking had sound reasoning since the Aussies' game plan for the series was to field three pacemen and a spinner, and off-spinner Colin Miller was certain to play in the final Test. Australia had to pay a heavy price for its captain's hesitation to take a tough decision. In the close finish that the Chennai Test was, all the runs conceded by Warne proved decisive. Warne was dismissed ruthlessly by the Indian batsmen, while Glenn McGrath and Jason Gillespie - both of whom bowled their heart out in the series, generating speed and extracting movement - desperately missed pace support.

Omitting paceman Damien Fleming after the first Test was a blunder since he is a 'genuine mover of the ball', and can take 'big' wickets.

The Aussies lost seven wickets in a dramatic post-tea session on the final day at the Eden Gardens. In a situation where defending with a straight blade - Gillespie and McGrath showed the way later - might have done the trick, the Aussies resorted to horizontal strokes and the approach was hard to understand, especially from a side that had displayed tigerish resolve in the past. For instance, Adam Gilchrist, who produced an audacious, match-winning century in Mumbai, just refused to understand that his tactics - sweeping the ball from off-stump - would not pay off every time.

Most of the Australian players struggled against Harbhajan Singh's off-spin. With the ball turning and bouncing, and the close-in cordon firmly in place, it was a very different ball game for the Aussies. The Australians would do well to undertake an 'A' team tour of India that will enable some of the young players to get a feel of the Indian conditions. Tackling off-spinners has been a traditional failing for the Aussies. The team's middle-order caved in much too often.

Michael Slater's verbal outburst, after his catch off Dravid was disallowed in the Mumbai Test, earned him a fine and a suspended sentence, and he was never again the same player in the series. For a team that plays the 'mind game', Slater lost the mental battle. Slater is a crucial player for the Australian team and his loss of focus hurt its chances.

Another significant aspect is that although Australia still has a formidable team, it is an aging one. Steve and Mark Waugh are 35 plus now, and the Australians may have to find replacements for key middle-order slots. The depth of talent Down Under has not been in question, but then replacing giants is no easy task.

Matthew Hayden, who made runs, and made them in style, was Australia's unexpected hero. The key to the hefty and brave opener's success - he made 549 runs in all with a double hundred, a hundred, and a near hundred - was that he used his feet to the spinners and was never caught in two minds.

There were a couple of doubtful decisions that went against the Aussies in the second Test - umpire S.K. Bansal came under scrutiny here - but generally the quality of umpiring passed muster. Nevertheless, the ICC might do well to have two 'neutral umpires' for Test matches in order to remove any cloud of suspicion.

Finally, a word about the Indian captain. Sourav Ganguly was not in the best of form, especially with his personal life being under public scrutiny, but some credit can go his way for a famous series victory over a formidable rival. That he came up with the right moves on the field, cannot be forgotten. And full marks to coach John Wright and fitness trainer Andrew Leipus, who really made a difference in a quiet, non-obtrusive manner.

Tendulkar's crown

Sachin Tendulkar reaches a cricketing milestone by becoming the first player to reach the 10,000-run mark in one-day internationals.

HERE'S a simple question, with a simple answer.

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What would have been the most frightening thought for bowlers when India's Sachin Tendulkar became the first batsman to crack the 10,000-run barrier in one-day internationals?

That this could be the beginning of yet another journey - towards the next 10,000!

Here's a tougher question, with a tougher answer.

How many runs would Tendulkar have accumulated in both forms of the game when he eventually hangs up his boots?

25,000, 35,000, 45,000? Well... Tendulkar is only 28 now, and it is so hazardous to venture into a guess really, for the impossible is possible with the little great man.

He has already scored 6,720 runs from 82 Tests at an average of 56.95, and 10,105 in 266 limited overs internationals (LOIs) (average 42.64) to make a stunning grand total of 16,825; only Australia's Allan Border with 17,698 runs to his credit, has aggregated more. However, Tendulkar is way ahead when it comes to three-figure knocks - 25 in Tests and 28 in LOIs.

A lot more records are bound to come the way of this fabulous batsman, possessing that awesome combination of impeccable technique, a wonderful eye, quick-silver reflexes, and a heart larger than the breadth of his shoulders.

The significance of the landmark - which he achieved in the third ODI against Australia at Indore - lies not in the numbers alone. It is more about one man's infinite passion for the game, his quest for perfection, his date with glory.

And his pride in turning out for India. "A lot of people make money, earn crores, but how many of them get the chance to represent the country? It's an honour," he once said during an interview.

Tendulkar goes beyond the numbers. In fact, way beyond them. For him, it is a celebration of the spirit - the spirit of India.

Recently, a friend from Mumbai narrated an interesting story. About how he saw the ace cricketer having a knock at an obscure school nets at the Shivaji Park ground on a hot afternoon a couple of years ago. Tendulkar had then just returned from a tough overseas campaign, yet he could not resist taking off to a ground where it all began for him. It is this combination of hard work and astonishing talent that makes him such a dangerous proposition for his rivals.

Watching Tendulkar at the conditioning camps for the Indian team provides us an insight into his work ethics. In a session that might last five hours, he would seldom take a break.

The running and stretching routines would be followed by 'nets'. He would barely have taken the pads off after batting, when one could spot him with the ball in his hands and a glint in his eyes. And then he would take the lead in the fielding routines. It is non-stop action for him.

In fact, before this year's camp in Chennai, coach John Wright and fitness trainer Andrew Leipus made it clear that the players would not be able to take it easy during any phase of the camp. It did not matter to Tendulkar though - he was already doing just that.

And his total commitment on the field is also reflected off it. He is a man of word. A few years ago Tendulkar was in Chennai with the Sungrace Mafatlal team to compete in the Buchi Babu tournament. And when this writer approached him for an interview, he readily agreed.

However, the Mumbai team suffered a shock defeat at the hands of a local team, prompting a dramatic change in the tour itinerary. The team was flying out way ahead of the date the maestro had set aside for the interview.

Yet, Tendulkar honoured the commitment, and talked to The Sportstar, while his team-mates packed his bags (or else he would have missed the flight).

There was no compulsion whatsoever, and here lies his greatness. It is this spontaneous integrity that comes to the fore time and time on the cricket field too.

Perhaps the most significant aspect of Tendulkar's cricket is his enormous strength of mind that provides the cutting edge to his glittering talent. Carrying the expectations of millions of Indians can be mentally and physically an overwhelming challenge, yet the great man has seldom buckled under the responsibility. In fact, he has thrived on it.

Australia's captain Steve Waugh once marvelled at how Tendulkar invariably delivered in crunch situations despite the pressures on him as the premier batsman of a nation that breathed cricket. Steve Waugh should know, for Tendulkar had conjured two of his greatest one-day hundreds against the former's team in Sharjah, in 1998 - back-to-back knocks of 143 and 134, the first when India desperately needed the runs to qualify, and secondly when India chased a challenging target of 272. Shots flew in all directions, be it straight hits, rousing flicks, searing cover-drives, delicate cuts, or murderous pulls. For once, the resourceful Aussies ran out of ideas.

No wonder Tendulkar is such a natural one-day cricketer. And his body-balance, in defence and offence, against both pace and spin (he is at ease against both), and on bouncy and turning wickets, is the key to his winning ways.

What makes Tendulkar such a formidable batsman? Apart from the qualities mentioned above, it is his ability to win the 'battle of the mind' against the bowler. He almost seems to know what the next delivery would be, and is ready with a stroke. He picks the length so quickly that he has three strokes for every delivery - the hall-mark of a great batsman. No wonder he has so much time at his disposal.

Tendulkar's first impulse as he shapes to play a delivery is to attack; defence is only the second option. This is where his approach is vastly different from another Indian legend - Sunil Gavaskar - whose game stemmed from defence. While Gavaskar would wear the bowlers down, Tendulkar goes after them.

Gavaskar was the first batsman in Test history to achieve 10,000 runs in Test cricket and none can question the opener's success against the great speed merchants of that era. However, it must be conceded that in one-day cricket, Tendulkar surely scores over Gavaskar for his sheer shot-making skills. He can smack balls to which most batsmen would show their defensive blades.

Perhaps no other stroke conveys the joy of Tendulkar's batting than the short-arm pull that he unleashes even against deliveries just short of a good length, often picking the ball from off-stump - a stroke that has unsettled the best of bowlers. The back-foot thump through the covers too has rattled pacemen in the early overs.

On seaming wickets, the straightness of his bat, even as he wades into shots in the 'V', has often carried the day for him and India. Indeed, Tendulkar striking the quicks down the ground, his left elbow straight and high, is a glorious sight.

Tendulkar also relishes taking on the ace bowlers and hitting them off the firing line. One just has to look at his onslaught on the fiery Glenn McGrath of Australia in the recent one-day series to see the point. With his in-born sense of aggression, he can be destructive on the field.

The shift to the opening slot during the 1994 series in New Zealand - where he volunteered to don a new role when the team faced a crisis - has obviously been a huge turning point in Tendulkar's one-day career. Opening suited his temperament fine.

Until then, Tendulkar had walked in at No. 4 when the asking rate was already high, and he was like a caged tiger, with a hint of desperation in his methods. But as an opener, he could set his own pace, create, innovate, and make it easier for the rest.

It must be conceded that captaincy did take some of the gloss away from Tendulkar's batting - he did not seem to be enjoying his efforts anymore. And once the 'burden' was off his shoulders, the booming strokes were back in full play.

And until captain Sourav Ganguly's dramatic slump in form this season, Tendulkar formed a highly productive right-left opening partnership with the southpaw, that reached its pinnacle when the two, complementing each other, raised 252 against Sri Lanka in Colombo, during the 1998 tour of that country.

Add to it his 'baffling' bowling - his exotic repertoire of off-spin, leg-breaks, and seamers has now fetched him over 100 wickets in LOIs - his often brilliant fielding and his hectic running between the wickets, and we have a dynamo on the cricket field.

Yet greatness sits lightly on Tendulkar's shoulders. He is modest about his rather enormous achievements, often going out of his way to put the young players at ease, has a patient ear for the players of the past, sports a friendly smile for the fans even during moments of stress, betrays no sign of the arrogance that has eventually consumed so many cricketing superstars of the past. He is the man of the masses - both an entertainer and a winner for them.

A multi-dimensional malaise

cover-story
ASHA KRISHNAKUMAR

THAT suicides constitute a common phenomenon in Andhra Pradesh, whether it is among cotton and tobacco farmers or powerloom and handloom weavers is an oft-repeated statement by officials. But is there a "proclivity" among certain groups of people to commit suicide?

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No, says Dr. Lakshmi Vijayakumar, vice-president of the International Association for Suicide Prevention. "It is a multi-dimensional malaise, with social, economic, cultural, medical, philosophical and psychological roots," says the Chennai-based doctor.

In Andhra Pradesh, it is more of a social malaise, with no single underlying reason, but the consequence of a multitude of distress factors.

The central issue of all research on suicides is whether they are the result of problems with the individual or society. Many argue that depressed people commit suicide and, hence, society cannot be blamed. But studies show that less than a third of those depressed commit suicide. So, this argument is untenable. A combination of factors, including depression, is responsible for suicides.

Suicides in Andhra Pradesh which, in recent years, have become more widespread and general, need to be assessed from a sociological perspective. French sociologist Emile Durkheim, a proponent of the "society is responsible" theory, classifies suicides into four categories depending on how well the people have integrated into society.

First, egotistic suicides of, say, people in transitional societies, where their aspirations are high but it is accompanied by the breakdown of the traditional support systems. Second, anomic, owing to sudden changes in, for instance, market conditions leading to the breakdown of entitlements. Third, altruistic, owing to the total integration with society, such as self-sacrifice for the country. Fourth, fatalistic suicides by people with no hope of survival, such as prisoners of war.

The suicides by weavers and farmers of Andhra Pradesh fall into the anomic category. But even in this case only the most vulnerable, who are confronted with several miseries - of health, income, psychological and social - tend to end their lives. They look at it as solving the problem.

But why are suicides among Andhra Pradesh weavers occurring in certain pockets? There is the phenomenon of "exposure to suicides", which is important in cases of "imitative" suicides. Cluster, or contagious, suicides are common among vulnerable groups or communities.

Thus, in the case of Andhra Pradesh weavers, the suicides are clearly because of sudden changes in their economic situation and, as a consequence, their living conditions becoming extremely precarious. That many suicides happen among the vulnerable in certain pockets leads to the "imitation syndrome". But, even in such cases, only the most vulnerable commit suicide.

Perilous policies

ASHA KRISHNAKUMAR cover-story

Government policies that focussed on the liberalisation, modernisation and globalisation of the industry but ignored the livelihood issues pertaining to the lakhs of traditional handloom and powerloom weavers are behind the tragedy that has overcome them.

THE new National Textile Policy of November 2000, which seeks to modernise, privatise and globalise the industry in order to integrate it into the world market, has become the noose for weavers and their families in Andhra Pradesh, for whom the loom is not only a means of livelihood but a way of life.

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The current crisis in the handloom sector, unprecedented in the post-Independence period in terms of its scale, has been precipitated ironically by successive textile policies and the recommendations of various committees, pushing the weavers into a debt trap, starvation and death. But at the root of the crisis - which in some senses also hastened the decline of the handlooms sector - is the liberalisation process set off by the 1985 Textile Policy and compounded by the structural adjustment programme pursued by the government since 1991.

The thrust of the Textile Policy of 2000, based on the Satyam Committee Report, is to make India a global player in textile production and exports, particularly of garments. It seeks to re-orient the handloom sector to the globalisation process - this, according to the policy, is the principal strategy to ensure its survival. The policy has set a target of increasing textile exports in value terms by around five times in the next decade - from $11 billion worth to $50 billion, and half of it in the form of garments. It also aims at increasing cotton production by 50 per cent, while explicitly encouraging the use of man-made fibres such as polyester.

To achieve these rather ambitious targets, the policy seeks to de-reserve garment-making from the labour-intensive small-scale sector and throw it open to the capital- and technology-intensive national and global investors. To aid this process further, the government is to assist the private sector in specialised financial arrangements and to set up a venture capital fund. The policy permits 100 per cent foreign direct investment (FDI) in the textiles sector against the earlier limit of 24 per cent. It encourages the private sector to set up world-class, environment-friendly integrated textile complexes - from yarn production to garment-making - all under one roof. And, in order to strengthen handlooms it would assist the industry forge joint ventures to secure global markets. It also seeks to liberalise and encourage export of cotton yarn.

The Union Budget 2001 gives a further impetus to this trend by allocating Rs.10 crores to set up "Integrated Apparel Parks" to enable the dereserved garment units to modernise. Also, to set up 50,000 shuttleless looms and to convert 2.5 lakh traditional looms to automatic ones, the provision under the technology upgradation fund scheme (TUFS) is raised from Rs.50 crores to Rs.200 crores.

Clearly, the odd ones out in all this are the traditional handloom and powerloom weavers, with their simple pit and horizontal looms. Neither the plight of the weavers nor the means to strengthen institutions such as the Andhra Pradesh State Handloom Cooperative Society (APCO) that protect the weavers, finds a mention in the policy.

But, then, handloom bashing is nothing new. It was on even in 1952 when the Kanungo Committee was set up to suggest ways to modernise the textile industry, which once constituted India's dominant export sector. The committee report said: "For the ordinary cloth, the pure and simple handloom is and must be a relatively inefficient tool of production. With the exception of those items which require an intricate body pattern, there seemed to be no variety of fabric which the handloom industry could produce in a better quality or at a lower price. A progressive conversion of handloom into powerlooms through organised effort over a period of 15 to 20 years is, therefore, recommended."

The main objective of the Textile Policy is to ready the industry to cope with competition in the international market. The handloom weavers have accordingly been advised to "stand up on their own" and compete in the global market. While suggesting that the government support the weavers in this by devising special schemes, the Satyam Committee recommends the scrapping of the Reservation Act (of 11 items) and the hank yarn obligation which, despite their ineffective implementation, have provided the only means of support to handlooms.

According to Dr. K. Srinivasulu, Reader, Department of Political Science, Osmania University, the main problem with the Satyam Committee Report, which the government is to implement in phases, is its way of looking at the handloom industry. Deviating from the well-accepted method of categorising weavers on the basis of the organisation of production into cooperatives, master weavers and independent weavers, the report seeks to divide them into three groups on the basis of the "quality of cloth" they produce. In the first tier are weavers who produce "unique, exclusive, high- value-added items" (highly skilled weavers). In the second are producers of "medium-priced fabrics from not-so-fine counts of yarn" (semi-skilled). And in the third tier are those who produce ''plain and low-cost textile items'' (unskilled).

It is recommended that while the first tier weavers be encouraged to remain in handlooms, those in the third be made to shift their vocation. The committee, which assumes that the bulk of the weavers are in the second tier, suggests that they be trained, provided with semi-automatic looms and then encouraged to switch to powerlooms.

According to the estimates of the 1974 high-power committee of the Planning Commission on the textile industry, headed by Sivaraman, each powerloom can displace six handlooms (and 12 weavers). Recent estimates indicate that every jet loom displaces 40 traditional powerlooms. However, the Satyam Committee recommended that the bulk of the handloom weavers be accommodated by powerlooms.

The anti-handloom bias of the report is clear from the following statement: "Generally handloom weavers remain tradition-bound and are averse to change... For more than five decades, the poor handloom weavers remained spoonfed through government schemes and they continue to look up to the government for anything and everything." Nothing can be farther from the truth, for if the handloom industry has survived it is largely because of its own strength and resilience and the capacity of the weavers to adapt to market changes.

The latest Textile Policy has its roots in the 1985 exercise which was a clear departure from the policy followed since Independence, which recognised the employment potential of handlooms and provided it adequate safeguards from the mill and powerloom sectors. The 1985 policy made a significant departure from this by according high priority to "productivity" rather than to "employment", thereby viewing the industry in terms of processes - spinning, weaving and product processing - rather than in terms of sectors.

Productivity was sought to be increased in the various processes irrespective of the relative strengths of the different sectors to compete. Powerlooms proliferated and, in the 1980s, their overall growth was estimated at 11.7 per cent per annum (the figure for cotton powerlooms was 14.94 per cent per annum). Over five lakh unauthorised powerlooms were regularised in 1985. By the early 1990s, going by official figures, there were over eight lakh powerlooms which, given their cost and productivity advantages, hastened the virtual demise of the handloom sector.

Despite its emphasis on liberalisation in the industry, the 1985 policy provided two major measures to protect handlooms - the Handloom (Reservation of Articles for Production) Act (which reserved 22 varieties for handlooms), and the hank yarn obligation of the spinning mills (that 50 per cent of production should be in the form of hanks). This move met with stiff opposition from mills and powerlooms; writ petitions were filed by the mills and the Reservation Act was stayed.

In spite of the recommendation of the Abid Hussain Committee (1988) - set up to monitor the implementation of the 1985 policy - to place "handlooms in the Ninth Schedule of the Constitution in order to avoid the legal challenge to this legislation", the government did not move decisively to implement the Reservation Act. And, even as the ground was cleared for the implementation of the Act when the Supreme Court upheld it in 1993, nothing changed on the ground. In fact, on the recommendation of the Mira Seth Committee (set up in 1995 to review the performance of the handloom industry following the implementation of the 1985 policy), which suggested the reorientation of handlooms as the main strategy for its survival, the government in 1996 reduced the number of items reserved for handlooms from 22 to 11. But as the government has not been serious about implementing the Reservation Act, even these 11 items continue to be produced by powerlooms. Says Andhra Pradesh Handloom Workers' Union leader K. Santa Rao: "Even if the government reserves two items - saris and dhotis - for handlooms, it will survive."

Similarly, the 50 per cent hank yarn obligation of the mills has never been enforced. The percentage of hank to total yarn production has never crossed 26 per cent. According to Rashtriya Cheyneta Karmika Samakhya (the largest organisation of independent handloom weavers in the State with 2,340 members) president Mohan Rao, the actual supply of hank yarn has barely touched a third of the requirement.

Thus, not only was there a diversion of hank yarn to the powerlooms - 170 million kg in 1990-91 alone - it was also exported in large quantities - 64 per cent of total yarn exports or 30 million kg of hank yarn (20s and 40s count) to China and Thailand in 1990-91. There was also a mismatch between the quality of yarn the handlooms needed and that supplied by the mills. Thus, the number of working handlooms declined since 1985 (from 48 lakhs to 43 lakhs in 1986 to 38 lakhs in 1995), affecting over 30 lakh families and rendering over one crore people jobless.

Then came the body blow in 1991 in the form of the new Economic Policy and the process of liberalisation. In order to tide over the problems of balance of payments and low foreign exchange reserves, the government went for an export drive, including of yarn and cotton, ignoring domestic production requirements.

Yarn exports increased from 94.68 million kg in 1990-91 to 110.99 million kg in 1991-92 - 86.8 per cent of it was low count hank yarn - when domestic yarn production had in fact declined dramatically. (Ironically, while low-count yarn of 6s, 10s, 17s and 20s was exported, higher count yarn of 80s, 100s and 120s were imported to feed the "foreign" machines.) As a result, hank yarn prices increased by 18 to 20 per cent; while the price of 40s count rose by Rs.10 a kg, that of 60s and 80s went up by Rs.21 and Rs.25 a kg. As part of the privatisation and liberalisation process, sick and inefficient mills were also closed (400 units were wound up between 1991 and 1994). Ninety-five of the 129 independent mills and cooperative mills have been declared sick and are exempt from hank yarn obligation. This accentuated the problem of yarn availability and escalating prices. Thus, handlooms suffered not only due to the non-availability of hank yarn, but also owing to steep increases in yarn prices. This trend continued and the situation worsened through the 1990s. And, as the increase in yarn prices could not be totally passed on to the consumer, every crisis situation caused by a price increase was managed by cutting the weavers' wages.

The yarn price hike, coupled with the Centre's globalisation and modernisation policies (reducing duty on the import of textile machinery and opening up the economy to clothes from countries such as China and Thailand), also pushed the traditional powerlooms to the wall. Unable to face competition from jet and auto looms, and cheaper fabric dumped from abroad, thousands of powerloom weavers lost their jobs.

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It is in this background that the Satyam Committee was set up.

The Andhra Pradesh government's schemes did not review the problems of the weavers. Its 'Bicycle to the weaver' and 'Loom to the loomless weaver' schemes, when yarn prices were escalating to unsustainable levels, only reveal the callousness of the policymakers. The latest package announced on March 27, which includes modernisation, and training of weavers to produce for the export market and face international competition, is no different.

The crisis set off by a sharp rise in yarn prices was compounded by a number of problems on the demand side and in the export market. For example, two major export items from Andhra Pradesh to African countries - the 'real Madras handkerchiefs' and 'Madras checks' - have been hit by the steep tariffs and quota barriers imposed by importing countries.

Over the last 15 to 20 years, government policies that focussed on the liberalisation, modernisation and globalisation of the textile industry have steadily marginalised the weavers - both handloom and traditional powerloom.

This is no peripheral industry involving a small section of the population. After agriculture, weaving is India's single biggest employment provider; there are an estimated 36 lakh handlooms in the country, supporting roughly two crore people. Yet, weavers have been let down by successive policies.

The collapse of APCO

cover-story
ASHA KRISHNAKUMAR

THE handloom weavers' cooperative societies in Andhra Pradesh are in a precarious condition, thanks to institutions, mainly the Andhra Pradesh State Handloom Cooperative Society (APCO), set up to support them. And this has directly impacted some 1.7 lakh weaver families, dependent entirely on the primary cooperatives. APCO, set up in 1974 on the recommendations of the Sivaraman Committee (to protect handlooms from the onslaught of powerlooms) to help the handloom weavers with finance and marketing facilities, has become virtually defunct.

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Its turnover in 2000-01 (up to January) at Rs.20.38 crores was less than 20 per cent of the 1992-93 figure of Rs.128.41 crores, and its procurement worth Rs.6.36 crores was down from Rs.112.45 crores. It has accumulated losses totalling Rs.58.82 crores.

According to a note submitted on February 7 by Handloom and Textiles Minister Padala Bhoomanna to Chief Minister N. Chandrababu Naidu, since January 1999 APCO owes the primary cooperative societies Rs.36.26 crores for the purchase of cloth and Rs.10.32 crores for procuring yarn. As a result of these dues, and the interest of 8.5 per cent on the loans taken from the district cooperative banks, most primary societies have collapsed.

APCO has been consistently defaulting since 1998 on its payments for the stocks procured. In some cases it has even refused to lift the stocks, resulting in a massive accumulation with the primary societies. The cash credit or the working capital for the society is determined by adding 20 per cent to the annual production value and then halving it. When APCO does not pay up, the societies are caught in a severe bind - their working capital would drop, production levels would fall and the cash credit limit for the subsequent year would decrease.

It is in this vicious cycle that the primary cooperative societies have found themselves since 1992, when APCO started to fall back on payments, till it stopped them completely in 1998. According to B. Balaraj, manager the Handloom Weavers Cooperative Society established in 1949 at Dubakka, the crisis worsened after 1996, when APCO stopped the Janata cloth scheme, on which most primary societies depended.

The story is no different for most of the 598 primary cooperative societies - huge outstandings from APCO, no working capital, growing interest burden on the working capital loans taken from the district cooperative banks, drastic cut in production and large-scale unemployment. Not surprisingly, 85 per cent of the societies are defunct. The rest are in poor shape.

For instance, the Saibaba Society in Pondur in Srikakulam district, a pioneer establishment of the early 1930s, has just about managed to keep itself afloat. Its membership has dropped from 2,000 in the 1950s to a mere 200 now. And not all the members get regular work; the society is able to employ only about 20 members. APCO owes it Rs.14 lakhs (without taking into account the interest on outstandings); stocks worth Rs.7 lakhs are lying in its godown and the society has drastically cut production levels. And even to run at such low output levels it has borrowed Rs.3 lakhs at 24 per cent interest.

The plight of the Maramanda Society in East Godavari is no better. Its working capital of Rs.42 lakhs has been wiped out as APCO owes it Rs.50 lakhs. Government bodies owe the society another Rs.7 lakhs by way of payment on discounts and exhibition expenses. The society borrowed in 1999 Rs.6 lakhs for outstanding interest payments. Now it has stopped working.

What set off the collapse of APCO? Dubakka Handloom Cooperative Society president A. Chandramouli says it is largely because of mismanagement and the government's apathy towards weavers, an attitude that has been reflected in the non-clearance of dues to APCO. In his February note Padala Bhoomanna stated that the State and Central governments owed APCO Rs.1.39 crores and Rs.1.29 crores respectively. However, according to independent figures, various government departments owe APCO nearly Rs.11 crores. The defaulters include the Social Welfare and the Tribal Welfare departments and the Directorate of Health.

According to Mohan Rao, president of the Rashtriya Cheyneta Karmika Samakhya, APCO's collapse is primarily due to political interference at every stage of its working.

The intent of the State government to close down APCO is evident from its recent move to retrench 925 employees, sell some of its assets and shut down six divisional offices, three marketing offices and 148 units.

According to the Handloom Workers Union general secretary, K. Santa Rao, representations to the Textiles and Handlooms Minister and the Chief Minister to revive and sustain APCO as also to clear the dues have fallen on deaf ears. Promises are made freely, but never followed up. Even the latest package of Rs.15 crores announced by the Chief Minister to clear part of APCO's dues to the societies will meet with the same fate, he fears.

APCO's revival would certainly pull the weavers from the brink. Ironically, the Textile Policy released in November 2000 is silent on the fate of the apex institution.

Little evidence of relief

cover-story
PARVATHI MENON

"THE number of suicide cases came down because we did not announce an ex-gratia payment to the families of those who died of monocrotophoshate poisoning," said Anantapur District Collector Somesh Kumar. "We have assisted the families of victims in other ways." The convoluted and unsympathetic logic underlying the official analysis of a serious social crisis apart, Frontline found very little evidence of assistance in kind to the families of those who died.

In the case of one family, that of Ramjaneyulu's at Jakkalcheruvu village, his wife Mangamma and children were given financial assistance in instalments to construct a small house. The residents of the village staged a demonstration demanding immediate assistance for the family. In an Action Taken Report prepared by the administration and submitted to the State government, the steps taken to provide relief to the families of 41 persons who committed suicide are listed. All the relief measures are in the "to be done" category. Children are "to be" given admission into Social Welfare Residential Schools, a house is "to be" given to the next of kin, old age pensions are "to be" provided to the aged members of the family; bank loans are "to be" rescheduled, and so on.

Survivors, carrying the burden of loans, wait for relief "to be" disbursed. In Marthadu village, the aged parents of Devarla Rajanna, the bread-winner who committed suicide, have received no help from the administration, not even the Rs.10,000 that was supposed to have been immediately disbursed from the National Family Benefit Scheme. "Some government officials said they would give us old age pension and assistance to build a house, but nothing has come by so far," said Devarla Balanna. Neither has help in cash or kind been extended to Rami Reddy, the husband of Padmamma of Penakacherla village. He is a sick man who cannot work. "Please try to get some help for the family. They have nothing," was the last request that Nagamma, a family friend, made to the Frontline team before it left the village.

A farm crisis and suicides

cover-story

Forty-one cases of suicide were reported in Anantapur district of Andhra Pradesh between September and November 2000. A Frontline investigation shows that crop failure, indebtedness and related problems caused a majority of these deaths

PARVATHI MENON in Anantapur district

PADMAMMA, a farmer from Penakacherla village in Anantapur district of Andhra Pradesh, was the head of a family consisting of an ailing husband, two daughters and three sons. She not only worked hard raising groundnut on the 3 acres (1.2 hectare) of rain-fed land that the family owned, but also worked as an agricultural labourer for Rs.20 a day. Fifty-year old Padmamma was a political organiser of the Vyavasaya Coolie Sangham (agricultural workers' union) and had mobilised women and men in her village in agitations for higher wages. Nagamma, her friend and co-worker in the Sangham, remembers Padmamma for her selflessness and vitality. "She was our leader. She would listen to all our problems but would hardly speak of hers. And she was always forthcoming with help. If anyone had difficulties, she would even collect money and give it to them."

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But of course Padmamma was weighed down by her own share of worries. Like most other small farmers, she was deeply in debt. She was worried about her husband who needed treatment. Her daughters were married in simple ceremonies and had moved out, but her wage was hardly enough to keep the family going. She planted groundnut on her land in July last year and hoped that her harvest would help pay back a part of her debt of Rs.30,000 to the local agricultural bank and to private moneylenders. Midway through the season, the groundnut crop was hit by bud necrosis, a disease that wiped out a large part of the kharif crop in Anantapur last year. She sprayed her crops with monocrotophosphate, the pesticide that the government had distributed free of cost to groundnut farmers, but it made little difference. One evening Padmamma came home from work, and as usual went into her fields. As she surveyed her lifeless crops, something snapped in this once strong and resilient person. She drank the pesticide meant for her crops and died in hospital a few hours later.

For G. Ramanjineyulu, a small farmer owning 5.5 acres of land from Jakkalcheruvu village, the breaking point came when his motor pump burned out under low voltage conditions. Its repair would have cost him another Rs.3,000, so when it happened, Ramanjineyulu, who had a shared loan of Rs.1,00,000 with his brothers from the agricultural bank, plus an individual loan of Rs.60,000 from the village moneylender, decided he could take it no more. He returned home and drank pesticide. A day later Anita, his 12-year-old daughter, distraught with grief at her father's death, also consumed the pesticide and died. "His motor died, his bullocks died, the bank people and moneylenders were pressuring him to repay, and there was no expectation of a crop," said Irojamma, a resident of the village.

Rami Reddy, Padmamma's husband, does not work. The debt burden now falls on him and his sons. He got just two bags of groundnut valued at Rs.2,000 from his harvest, after investing between Rs.5,000 and Rs.6,000 on the crop. After Padmamma's death, the family got nothing from the government in terms of either ex-gratia payment or help in kind. Mangamma, Ramanjineyulu's wife, was sanctioned Rs.10,000 from the family benefit scheme, although she has received only half that amount. The government is also financing the construction of a small house for her in the village.

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These two were among a rash of 41 suicides, 18 of them by women, in Anantapur district over the months of September, October and November of 2000, by the consumption of monocrotophophate, according to figures released by the Anantapur district administration. This particular pesticide was distributed by the district administration as an antidote for bud necrosis, a virulent disease that spreads through insects and kills the crops. In addition, there were nine attempted suicides by monocrotophosphate poisoning. Of these two were by women. The administration's report does not ascribe all the deaths to problems of crop failure and indebtedness, although an independent investigation of such cases by Frontline in the villages of Jakkalcheruvu (Gooty mandal), Marthadu and Penakacherla (Garladinne mandal), Ammavarupetta (Bukkarayasamudram mandal), and Maruru (Rapthadu mandal) showed that it was indeed for these and related reasons that a majority of these deaths seemed to have occurred.

The official report, such as it is, does provide some insights into what happened. To begin with, all 50 suicides and attempted suicides were by monocrotophosphate poisoning. Of the 41 suicides, 34 were by farmers (including 15 women) who owned land, mostly unirrigated and between 1.5 and 10 acres in extent. The pesticide was distributed by the district administration to families who either held or leased land (leasing land is a common practice in these parts). A majority of the farmers were in debt to agricultural banks and moneylenders. A majority of the women (16) who died were in the 15-30 age group, whereas a majority of the men (17) were between 21 and 50 years.

The other feature of what appears to have been an epidemic of suicides is that but for one village where three members of a family committed suicide the same day, there is not more than one suicide in a village, and the villages are in mandals that are in many cases far removed from one another.

It was pressure from an alert and conscientious local press in Anantapur, that highlighted each case of suicide soon after it occurred, that forced a discussion of the issue in the Andhra Pradesh Assembly. The district administration's report on the deaths was a sequel to that. What therefore is now information in the public realm is that 50 persons, a majority of them groundnut farmers with small holdings of unirrigated land, and all of them in debt of varying magnitude, felt that death was preferable to the life of acute hardship that they were living.

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While the spate of suicides peaked in October-November last year, they have not ceased. Cases of suicides continue to be reported in the media from different parts of the district. In March, two cases of suicides were reported - one by 33-year-old Krishna Naik, a peasant from Mariampally Tanda in Gumagatha mandal and the other by 40-year-old Lakshmidevi from Siddiramapuram village in Bukkaraya-samudram mandal. Both committed suicide owing to a burden of debt they could not repay. In April three cases of suicides were reported: 35-year-old Lakshmamma of Konduru village in Lepakshi mandal; 20-year-old Dadvali, a weaver from Singanmala mandal headquarters, and 18-year-old Rama Devi of Bandameedapalli village in Rapthadu mandal. Rama Devi reportedly killed herself when she lost her gold ear-rings and was scolded by her parents for her "carelessness". Parents had reportedly told her that they could not get her married because they were so deeply in debt.

Drought is the catch-all phrase that is used by the officialdom to explain away agricultural distress. In fact, most farmers themselves readily accept this explanation. There is no question that Anantapur is a rainfall-deficient district, with an average annual rainfall of 520.4 mm. It is the second lowest rainfall district in the country (after Barmer in Rajasthan). In 2000, the average rainfall was 540 mm, well above the average. The previous year was one of acute rainfall scarcity with Anantapur receiving only 360 mm. Yet the severe drought in 1999 did not drive cultivators to suicide. In fact, groundnut production in the kharif 2000 season (April 1 to September 30), despite the ravages of bud necrosis, was 9 lakh tonnes, according to the district administration. (The Oilseeds Growers Federation estimated the production at 7.25 lakh tonnes.) Compare this with the production of the 1999 kharif season which was just 3 lakh tonnes, and it becomes clear that drought and falling production alone do not explain the phenomenon of suicides. Further, in Andhra Pradesh last year there were suicides among cotton farmers in Mahboobnagar district, and among tobacco growers in Guntur district. Never in the past has there been such a situation.

The immediate reason for the suicides was a mounting burden of debt that the families concerned could simply not hope to repay, added to a widespread sense of despair when the bud necrosis attack broke out. Underlying this was a web of factors, some specific to the groundnut economy, and others related to the impact of liberalisation policies on the larger agricultural environment.

Anantapur district has the largest acreage under groundnut in the country. Last year the kharif crop, which is entirely rainfed, was sown on 7,35,000 ha. "Bud necrosis was seen in August, a month after sowing," said T. Yellamanda Reddy, principal scientist at the Agricultural Research Station in Anantapur. "The disease is present in sunflower and in roadside weeds, and spreads through insects." According to him, the disease caused damage ranging from 1 per cent to 80 per cent of the standing crops in a particular field. "In Anantapur, the average yield of groundnut is 1,100 kg a hectare, although yields here can go up to 2,000 kg a hectare. This year, however, the average yield was only 850 kg a hectare," said Yellamanda Reddy. The disease also coincided with the first of two dry spells in August and September. Monocrotopho-sphate turned out to be totally ineffective, partly because it was used too late as the crop had already been hit by the second dry spell which lasted between 12 and 23 days in different parts of the district. The rabi crop (October 1 to March 31) is an irrigated one and has been sown on 20,000 ha. According to Yellamanda Reddy this crop too has been affected, but to varying degrees in different areas.

The inherent risks of rainfed agriculture have increased with the rather dramatic rise in the costs of cultivation. In Andhra Pradesh, power rates were hiked in 2000 pushing up costs for the agricultural sector by 25 to 70 per cent, while the duration of power supply for agricultural operations was cut to nine hours a day. This is usually during night. In actual fact, cultivators find that their borewell pumps work for just six hours at night.

Electricity, or the lack of it, both for agriculture and domestic use, was a major issue of concern among the farming families this correspondent met. In Jakkalchiravu village, a group of small farmers said that yields have fallen substantially in the last two years because of power cuts. "From six to eight bags of groundnut per acre, we got just three bags this year. If our pump fails because of voltage fluctuations, then it costs another Rs.4,000," said J. Narayanaswamy, who owns five acres of land. (A bag takes 40 kg.) Viramma, a farmer from Jakkalchiravu village, owns 3 acres of irrigated land. She spent Rs.10,000 on the land, which included the cost of seeds, fertilizer, pesticides, power and labour. "I have a 5 hp pump for my borewell," she said. "I pay Rs.260 a month for electricity. Just before the increase in power costs, it was Rs.60 to 70, and nine years ago it was only Rs.7."

Power is only one component of the cost of cultivation, which has seen a sharp rise in the last two years. Fertilizer prices soared after their decontrol in the mid-1990s. "A 50 kg a bag of DAP fertilizer in 1994 cost Rs.180. In 1999 it cost between Rs.480 and Rs.520," said Vishwesh-wara Rao, a large farmer. Pesticide costs have also risen. When bud necrosis broke out last year, the district administration distributed monocrotophosphate to the value of Rs.6 crores in the district. The dealers make a killing by selling Rs.36 crores worth of pesticides. "The cost of cultivation is in the region of Rs.3,500 an acre (Rs.8750 a hectare)," said Vishweshwara Rao. "Because of the use of pesticides last year, it went up to Rs.4,000 and even up to Rs.4,500 an acre."

Seeds cost more too. With the breakdown of the government seed distribution centre, farmers are dependent on private seed dealers, and this has affected both the price and quality of seeds. There has also been a breakdown of institutional safety nets, such as the public distribution system, procurement support, crop compensation schemes and so on, which in the past may have softened the blow of agrarian crises.

By the middle of the kharif season, there were fears among farmers of the entire crop getting wiped out. But this did not happen, as the overall production figures cited above show. However, each farmer was carrying the debts of the previous drought year and had borrowed yet again to invest in the kharif crop. But the worst was yet to come. When it came to the sale of their crop, they found that groundnut prices had crashed. "From Rs.1,400 a quintal in October 1996, groundnut prices peaked in September 1998 at Rs.1,700 a quintal." said Vishweshwara Reddy, district general secretary of the Andhra Pradesh Raitha Sangham. "This year prices fell from Rs.1,300 a quintal in September 2000 to Rs.1,250 in October, and it is now Rs.1,150," he said. "The government declared a minimum support price of Rs.1,220 a quintal, but procurement has been inadequate. Of the total kharif production of 7.25 lakh tonnes, procurement has only been one lakh tonnes." The fall in the cultivated area and prices of oilseeds in India is the direct consequence of cheap edible oil imports (Frontline, February 2, 2001). As long as cheap imports continue, there is unlikely to be any price stabilisation for groundnut.

MEANWHILE, debts among farming families are on the rise. A family's debt is typically divided between the bank and the moneylender. There is not a day when the Anantapur edition of Eenadu, a Telugu daily, does not carry notices of gold auctions. These notices list the names of farmers, the quantity of gold they have pledged, and the outstanding sums. A cause for consternation among the farming families this correspondent spoke to was the repeated notices that banks send defaulters, asking for repayment of interest, and threatening the attachment of land and other forms of property.

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Take the case of Bandi Naganna, a small farmer owning 5 acres in Ammavarupetta village, who survived a suicide attempt thanks to timely hospitalisation. He took a long-term loan of Rs.1.5 lakhs from the agricultural bank four years ago, which has now become Rs.2 lakhs. He has also taken Rs.10,000 from the moneylender at an interest of Rs.2 a month for every Rs.100 (which works out to 24 per cent per annum). When his crop was affected by disease, he decided to kill himself.

There is Venkatarama Reddy, whose 18-year-old sister Thulasamma committed suicide. He has 4 acres of orchard land, and made 10 attempts in vain to dig bores. Each attempt cost him Rs.8,000. He also leased 10 acres of land to grow groundnut and lost Rs. 20,000 in that venture. He owes Rs.40,000 to the Marur primary agricultural society and has received several notices from it. In addition, he owes a moneylender Rs.20,000 at the standard private interest rate of 2 per cent a month. "We had fixed a marriage for my sister but would have needed Rs.50,000 and at least 10 tolas (one tola equals 10 grams) of gold to get her married," he said. Thulasamma committed suicide soon after the crop failed.

On April 3, Narendra Reddy, a 26-year-old farmer from Kallapuram village in Pamadi mandal, was brought to the Praja Vaidyashala hospital in Anantapur in a critical state as he had consumed monocrotophosphate. Reddy had seven acres of land and had loans amounting to Rs.1.27 lakhs. His life was saved by Dr. M. Geyanand. It is ironic that the timely medical attention he received, which saved his life, may actually increase his debt burden, as it will be a few months before he can get back to work.

The Anantapur District Cooperative Central Bank Ltd is the major agricultural bank in the district. According to its president S. Suryanarayana, the bank gave short-term kharif loans amounting to Rs.56 crores in 2000, up from Rs.51.81 crores in 1999. Under its long-term lending scheme it has advanced Rs.17.28 crores in 1999-2000. "Our recovery rate for both short-term and long-term loans was just 30 per cent in 1999-2000," said Suryanarayana. "We have recovered 18.45 per cent this year and we are running at a loss of Rs.19.9 crores."

The mood is one of despair and frustration among the groundnut farmers. Good agricultural practices and favourable climatic conditions are no longer enough to ensure the farmer an adequate livelihood. With an import regime that now exposes agriculture to the uncertainties of global trade, groundnut cultivation and the lives of four and a half lakh farmers dependent on it are precariously poised in rural Anantapur.

Stocks of scandal

In the wake of the Tehelka tapes, the scandal that has enveloped the revenue apparatus and the supervisory authorities for the stock markets, add to the government's worries.

THERE is no surer antidote for public apathy than the recurring shock of revelation. Within the space of just over a fortnight, the country seemed to have overcome the initial outrage caused by the Tehelka tapes and to begin looking at the sordid revelations of high-level malfeasance in defence procurement with something approaching absent-minded tolerance.

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Two events, though, interrupted this descent into indifference. First, the stock markets crumbled under the accumulated weight of multiple transactions underwritten by fictitious money, jolting the investing public alive to the realities of supervisory laxity and connivance (see separate feature). Second, the arrest of B.P. Verma, Chairman of the Central Board of Excise and Customs (CBEC) - an agency that provides the Central government with half the revenue to keep itself running - showed how the system has for years been rewarding the corrupt with promotion and career advancement.

Any adventurer with a sufficiently fat purse can enter the portals of the country's most highly secured establishment, work his or her way right to the top and gain sufficient purchase for merchandise of a dubious - not to mention completely fictitious - character. That was the singular message to emerge from the sensational Tehelka tapes, aired to riveted audiences in March. The month following has brought revelations of more specific and equally shocking import. The value of assets owned by Verma, it is now revealed, is in the range of Rs. 40 crores. He was on a vigilance watch-list for some years but did not miss his opportunities to rise in the hierarchy of the Indian Revenue Service. More than the corruption of the individual, the key question raised by his arrest and indictment is: who put him in a position where he is able to control a workforce of 80,000 that manages the vital check-points of the Central government's revenue streams?

Verma was appointed CBEC Chairman in June last year after having served for over three years as a Member of the Board. Even in the latter position, he held successive charge of the two vital portfolios of Excise and Budget. In a tight race with another incumbent member for the top job, Verma obtained the endorsement of the Prime Minister's Office (PMO). Finance Minister Yashwant Sinha, for reasons that may not be quite unconnected to community and regional affiliation, seemingly preferred Verma's rival for the job. But when told where the PMO's preferences lay, he quickly acquiesced in Verma's appointment. The community factor supposedly worked partially in Verma's favour too, as did the backing of a top bureaucrat. His elevation was finally cleared by the Appointments Committee of Cabinet, which includes the Home Minister in addition to the Prime Minister.

All the individuals who helped Verma climb the ladder to the top of his service are today keen to dissociate themselves from his record of corruption. But in the days to come, certain hard questions will have to be faced and answered.

CHIEF Vigilance Commissioner Nagarajan Vittal made bold, after Verma's arrest, to go public with the claim that he had indeed opposed his appointment and recommended vigilance inquiries against him at various junctures. But this manner of retrospective wisdom does little to allay public misgivings about the CVC's curious reluctance to exercise the powers of superintendence that are granted him. Vittal did make another kind of public intervention though of a somewhat less valuable kind. Citing figures of the vigilance inquiries he had launched, he pointed out that Customs personnel featured most often on his watch-list, and so on. His rather broad generalisation invited upon Vittal the ire of the Indian Revenue Services Officers' Association, which threatened legal action.

The CVC also found himself in the focus of public attention for another reason. A fortnight after the disclosures of the Tehelka tapes, he submitted his final report in exercise of a mandate entrusted him in February last year. The brief he was given was rather limited - to examine whether the proscription of middlemen in defence purchases was, knowingly or otherwise, being flouted. When this question was referred to the CVC by the government during George Fernandes' tenure in the Defence Ministry, it was not clear what the basic intent was. Was Fernandes really in need of education on the extent to which defence purchases were influenced by brokers and middlemen? Was he interested in a fair and impartial inquiry in the interests of the public's right to know? Or was he merely seeking to initiate an open-ended political controversy that would rage indefinitely and threaten several political reputations?

Whatever these motivations, Vittal's plodding effort to arrive at the factual position through a minute scrutiny of the Defence Ministry files was rapidly overtaken by the drama and sheer audacity of the Tehelka revelations. Although a preliminary report by the CVC has been with the government for the last six months, there has been little indication of when the contents would be made available to the public. Nor has there been any sense of urgency on the part of the CVC to bring the results of his inquiry into the public realm.

The Tehelka revelations compelled the CVC to delay the submission of his final report by just over a fortnight. Although he had hoped to obtain first-hand testimony from the two reporters who had carried out the Tehelka sting operation, Vittal had ultimately to rely on a secondary study of the transcript of the tape that was broadcast over satellite TV late in March. Shortly after submitting his final report, Vittal made another of his rare public disclosures. The Tehelka tapes, he said, had "vindicated" all the points that he had made in his interim report submitted last year. But if all that the CVC has done is to document the presence of middlemen in defence purchases, then his accomplishments must be deemed to be rather modest. It is not clear that he has really estimated how much the cost of sustaining these brokers has been to the public exchequer. Nor is it clear whether he has suggested any remedial or punitive measures.

For its part, the government continued on its path of responding to the Tehelka tapes with a furious search of motives and sponsors. Thomas Mathew, a Director in the Ministry of Home Affairs, was placed under suspension for allegedly leaking sensitive information to the Tehelka investigators. Mathew, for his part, responded with petitions directed to the National Human Rights Commission and the President, pleading that he was being targeted merely because he had certain sympathies - though expressed in a manner fully consistent with his official position - with the cause of Dalits and the oppressed communities.

Mathew was suspended even before he could reply to the show-cause notice that had been issued him. The basis for the notice was visibly rather thin. A newspaper published from New Delhi, with scarcely concealed sympathies for the ruling Bharatiya Janata Party, had featured a front-page story shortly after the Tehelka revelations, based entirely on an unnamed source's recollections of Mathew's supposedly unseemly political links.

In using this rather dubious report as the basis for disciplinary action and then preempting the right of reply of the official, the Home Ministry under L.K. Advani can undoubtedly claim a degree of novelty in administrative procedure. But this does not by any means exhaust the litany of curious goings-on in the government in the turbulent aftermath of the Tehelka tapes.

Former Defence Minister George Fernandes has been wondering out aloud about the efficacy of the country's intelligence services. If the Intelligence Bureau (I.B.) failed to detect the operations of the two Tehelka reporters for all the four months or so that they had a free run of Defence Ministry officials, then in Fernandes' opinion it points to an intelligence failure even greater than in the case of Kargil. Cut to the quick by this rather transparent effort to call into question the credentials of his Ministry, Advani politely demurred.

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If the stories that began emerging on the Tehelka team's operation in the second week of April are any indication, then the I.B. has indeed been working rather strenuously to debunk the message by discrediting the messenger. Three possibilities have been broached in terms of the origins of the Tehelka sting. Curiously, one of them points to the powerful London-based family of financiers, the Hindujas, who ostensibly planned the entire operation to take the heat off themselves in the Bofors prosecution.

The damage control team in government is also putting out the possibility that the estranged wife of a prominent arms agent had engaged a detective agency in London to uncover certain details of his commercial dealings. Tehelka, in turn, was contracted by the London agency to assist in the investigations, according to this version. But as the investigation progressed and its journalistic potential became apparent, Tehelka's operations acquired an autonomy of their own, it was stated.

A third possibility is the involvement of a defence contractor that had lost out in certain crucial deals and was keen on increasing its leverage in the Indian arms procurement apparatus.

THE Tehelka team has of course reacted to each of these stories with prompt and vigorous denials. The factual basis of the Hinduja story is Tehelka chief executive Tarun Tejpal's recent visit to London, in the course of which he went, by his own admission, to the Hinduja headquarters. But the purpose of this visit, he says, was only to explore if there was any possibility that Tehelka could supply editorial content to a website owned by the Hinduja family. But he was extremely torn at the prospect of meeting a close relative of the three brothers who have been indicted in the Bofors payoffs scandal. On this account, he backed out at the last minute, literally when he and a colleague were waiting for the lift to take them up to the office of Dheeraj Hinduja. For the duration of his colleague's meeting, Tejpal claims, he paced the pavement outside the Hinduja headquarters.

Aniruddha Behal, one of the duo of reporters that actually conducted the sting operation, has meanwhile alleged that government agencies have been tapping his phone and using the information thus gained to interrogate and pressure his colleague Mathew Samuel.

Yet with all this energy expended, the government has not quite managed to free itself of the taint of the Tehelka tapes. And with the travails now besetting the revenue apparatus and the supervisory authorities for the stock markets, the government's stocks of scandal seemingly have a long way to go before they are anywhere near depletion.

In consolidation mode

A significant shift in the Congress(I)'s strategy in the post-Tehelka political situation relates to its attitude to electoral alliances and coalitions.

LONG bereft as it was of any effective political weapon to beat the Bharatiya Janata Party with, the Congress(I) considers the Tehelka expose a godsend and has started viewing itself as a party waiting in the wings to slide effortlessly into the corridors of power at the Centre. It hopes that a disgraced National Democratic Alliance (NDA) government will stagger out, unable to cope with the burden of its own contradictions and having been displaced from the moral high ground that it has often attempted to take.

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This confidence of the Congress(I) is reflected in the way it has smugly gone about striking alliances in the four States and one Union Territory where Assembly elections are to be held in May, regardless of the bickerings in the respective local units of the party. It is also reflected in the way the party is planning its post-Tehelka expose strategy. Aware that at the moment the numbers are still with the NDA, despite the quivers and undercurrents of resentment, since a majority of its constituents have no option but to stay with it, the Congress(I) is going about its task in an unhurried manner. As senior leaders have put it, the party's game plan is to discredit the government further and make it appear so hollow morally that it will collapse under its own weight.

Outlining the strategy, Congress(I) spokesperson S. Jaipal Reddy said: "Our aim is to expose and oppose." This, he said, would lead to the NDA government being deprived of its "USP" (Unique Selling Proposition), which is its claim to the moral high ground. "Once we achieve that, our task of replacing it becomes easier, though we are in no hurry to do that," Jaipal Reddy said, trying to dispel the impression that his party was interested in a quick toppling game. But inherent in this strategy is also the realisation that however much it desired to do so, the party was in no position at present to topple the government on its own, because except for the Trinamul Congress, none of the NDA constituents has left it. Even in the case of Trinamul Congress leader Mamata Banerjee, clearly her exit had more to do with electoral compulsions in West Bengal than any concern for ethics or morality. She might have felt it embarrassing to remain in an alliance when leaders of some of its major constituents have been caught videotaped accepting money from fictitious arms dealers. Remember, her main election plank against the Left Front government in West Bengal is alleged corruption.

The post-Tehelka strategy of the Congress(I), both inside and outside Parliament, is to "keep the issue smouldering and continue discrediting the ruling alliance". A discredited NDA government, the party hopes, would become weaker after the May elections to five Assemblies. Confident of making substantial gains in these elections, it prefers to "wait and watch" rather than take the "NDA bull by its horns". Senior party leaders said that it would be "a long haul", and the strategy should therefore be "multi-phased".

The first phase of the strategy - "stalling Parliament" - is already over and the next would be "taking the issue to the streets". District-level rallies, dharnas and demonstrations have been planned all over the country. Party president Sonia Gandhi will launch this phase on April 12 by addressing a rally in Lucknow, part of the parliamentary constituency of Prime Minister Atal Behari Vajpayee. She will also address a rally in Jaipur.

The second phase will conclude on April 19, when Parliament resumes its budget session after the recess. Although the Congress(I) plans to make Parliament the venue of its next phase of agitation, it appears to be in no mood to stall the proceedings this time. "We will resort to other forms of protest," said the party's chief spokesperson, Ambika Soni, though she did not throw any hint as to what these "other forms" would be. The political affairs committee of the party would decide the "form" on April 19.

A SIGNIFICANT shift in the Congress(I)'s strategy in the post-Tehelka political situation relates to its attitude to electoral alliances and coalitions. At its plenary session in Bangalore in March, the party, in a bid to remove any confusion over its stand on alliances, declared that it was ready to form coalitions with those among the secular parties that had nothing to do with the BJP. The party followed up this declaration with setting in motion the process of firming up an alliance with the Trinamul Congress in West Bengal for the Assembly elections, notwithstanding the unease over it in the party's State unit.

Sonia Gandhi deputed party general secretary Kamal Nath to initiate talks with Mamata Banerjee, sensing that senior State leaders such as Pranab Kumar Mukherjee and Priya Ranjan Dasmunshi might have reservations, given their past prejudices, in going all out to woo the Trinamul Congress leader. Although the two parties had decided on principle to contest the elections together, talks on seat sharing were still on. Mamata Banerjee agreed to give the Congress(I) 57 seats, and the offer might go up to 60. There are serious differences over the 18 seats held by the Congress(I). Since the talks began rather late, the Trinamul Congress had already announced its candidates for these seats. Kamal Nath said: "Had the talks begun two months ago this problem would not have arisen. Her candidates have already started campaigning. How can we expect them to withdraw now?" He, however, hoped that such "minor irritants" would not come in the way of a larger understanding between the two parties.

Although the Congress(I) has only been given about 60 seats out of the total of 294, Kamal Nath thinks it is a "good enough" deal. In a State where Congress(I) candidates had been losing their security deposits in 235 to 240 seats for many years now, it is not a bad bargain, he feels. "We should not forget that Trinamul Congress members are all ex-Congress people. The most important factor at present is the consolidation of the Congress vote in order to defeat the Left Front. The larger objective is important enough to ignore petty considerations," he says. In the long run, he hopes, grudges will be forgotten and the party will emerge stronger.

It is, however, easier said than done. For all they know, the party's travails may have only just begun. With most of the senior leaders in West Bengal, including the veteran Ghani Khan Chaudhary, Pranab Mukherjee and Priya Ranjan Dasmunshi sulking, the electoral outcome could just turn out to be a repeat of the 1996 Uttar Pradesh elections. In U.P., which once was a Congress(I) stronghold, it entered into an electoral alliance with the Bahujan Samaj Party and contested as a junior partner only 125 seats out of a total of 425. As a result, demoralisation set in in the party, senior leaders refused to step out to campaign and the result was a near-total rout. The party could win only 35 seats. In West Bengal, however, only time can tell the outcome.

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Anyway, Kamal Nath is confident that in alliance with the Trinamul Congress his party would defeat the Left Front. In their euphoria of a pre-conceived electoral victory, the Congress(I) leaders, however, forget that their anti-corruption plank tends to lose its sting, given the contradictions in their strategies for West Bengal and at the Centre respectively. Even as they batter the NDA government for corruption in collaboration with the Left parties in Parliament and elsewhere, they fight the Left parties in the West Bengal elections on the same ground of corruption in alliance with a party which had been a constituent of the NDA until recently and which, by keeping a large "grey area", has still been creating the impression that it might rejoin the NDA in case it either loses the elections in West Bengal or the judicial probe gives a clean chit to those tainted by the Tehelka tapes. "Yes, this is a grey area but we have to take the risk," says a senior Congress(I) leader.

Congress(I) leaders do not think that their anti-corruption plank in West Bengal would weaken if they joined hands with the Left inside Parliament to attack the NDA government. "It is only floor coordination inside Parliament and there is nothing wrong in it. Coordination at the Centre on specific issues was never a problem," says Ambika Soni. Congress(I) leaders also say that their party has all along been fighting the Left parties both in Kerala and in West Bengal. Explaining away the contradictions in its stand, Jaipal Reddy says that when it comes to fighting the BJP communalism takes precedence over everything else and "minor contradictions get dissolved in the crucible of communalism".

The party, though treading cautiously as far as Assembly elections in other States go, seems to be in the throes of a minor crisis in Kerala too, where the octogenarian K. Karunakaran, peeved at his daughter Padmaja Venugopal being denied the ticket, is threatening to adopt an aggressive posture. On April 4, Karunakaran told mediapersons in New Delhi that the list of candidates approved by the central election committee was "biased and totally loaded against" him and that he was "very unhappy with the list". Karunakaran accused the Leader of Opposition in Kerala, A.K. Antony, his major rival at the State level, of being biased against him and of having worked to ensure that his supporters were denied the ticket. He said that the central leadership of the party was favouring his opponents, especially Antony.

Notwithstanding the confusion over the Congress(I)'s stand on corruption, the onset of a certain degree of demoralisation in its West Bengal unit, where the party will have to be content with the status of a junior partner, and the undercurrents of resentment among senior leaders in the State, the Congress (I), post-Tehelka, has come forth as a party in action mode, seeking to shake off its hitherto inactive style. Probably believing in the dictum of not biting more than it can chew, the party seems to be taking small but non-hesitant steps towards the culmination of its larger goal of regaining power through a consolidation of pro-Congress forces in the country.

"A beginning has been made. Mamata Banerjee is back with us, so is Jayalalitha. A consolidation of our support base would help us in the long run," says Jaipal Reddy. He is confident that it would "change the dynamics of politics rather than its mechanics". And the acid test would come with the Uttar Pradesh Assembly elections, due either late this year or early next year.

Moving up front

The People's Front, with an ambitious political agenda ahead of it, constitutes a five-member committee to evolve a common minimum programme for the formation.

THE People's Front (P.F.), which takes in the spirit of the erstwhile United Front, has got around to doing business in right earnest. With the power equations changing in national politics, the Front has formed a five-member committee to have its battle gear ready. At a meeting held at the New Delhi residence of Communist Party of India (Marxist) general secretary Harkishan Singh Surjeet on April 3, the Front constituted the committee which comprises, besides Surjeet, former Prime Ministers V.P. Singh and H.D. Deve Gowda, Communist Party of India (CPI) general secretary A.B. Bardhan and Samajwadi Party president and P.F. convener Mulayam Singh Yadav. The committee will formulate the P.F.'s strategy for the days ahead as also a common minimum programme. The programme will be released at a rally in Azamgarh in Uttar Pradesh on April 17.

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Surjeet said the committee's brief was to "formulate a common minimum agenda that will ensure that the parties included in the Front have a degree of uniformity in their policies and approach so that the Front does not end up as yet another short-term political arrangement". Since the Front, like the Congress(I), has decided to take the fight over corruption in high places to the streets, the committee will chalk out an agitational programme to force the Vajpayee government's ouster over the issue of corruption as exposed in the Tehelka tapes. There will be rallies, dharnas and public meetings all over the country.

Although some scepticism prevails in certain political circles about the Front's viability, given the level of sustained cohesion that has been seen in the past, and also because its reach is rather limited at the moment, the Front leaders are taking their job with extreme seriousness. For the present, the major constituents of the Front are the four Left parties, the CPI, the CPI(M), the Forward Bloc and the Revolutionary Socialist Party (RSP), besides the Samajwadi Party and the Janata Dal (S). However, the Front hopes to expand its base in the days to come: to be precise, when disappointed National Democratic Alliance (NDA) allies part ways with the BJP.

The Front leaders described Laloo Prasad Yadav's Rashtriya Janata Dal too as one of their allies, although neither Laloo nor any of his nominees were present at the Front meetings.

"No matter how sceptical people are of the Front, call it the Third Front, or the United Front or the People's Front, the fact remains that this formation of parties that are aligned neither to the Congress(I) nor to the BJP, is all the more relevant in today's context," says V.P. Singh, the Front's ideologue. According to him, the constituency of those "not satisfied with either the Congress(I) or the BJP" is still very large and it is this constituency that the Front will seek to capture when the time comes.

Discounting scepticism with regard to a loose conglomeration of non-Congress(I), non-BJP parties, V.P. Singh says these very parties are now at the centre of power today. "Who is running the government today? Is it not the Telugu Desam Party, or the Dravida Munnetra Kazhagam (DMK) of Karunanidhi, which are the balancing factors of the power equation today, though their alignments might be slightly different," he says. According to V.P. Singh, even if the previous Third Front experiment lasted only for a relatively short period of time, it made the bigger parties such as the Congress(I) and the BJP realise the importance of regional parties, facilitating the dawn of "coalition politics" at the national level.

"Since coalition politics is here to stay, the Third Front, call it by any name, has become more important than ever before," says V.P. Singh. And the factors that would now help the P.F. steer closer to capturing power, he says, are two: the people's chemistry and the inherent contradictions of the National Democratic Alliance. The P.F. will assume due significance and unleash a people's process. Fed up with the present set of economic policies, people will force a change and elect a set of rulers who would promise them pro-people policies," the former Prime Minister says. According to him, this "chemistry of the people" will be the most significant factor determining its success or otherwise. In his assessment, the chances of success are considerable.

The second process, he says, will be that of the inherent contradictions of the NDA coming to the fore during the next general elections. "In order to have a government of its own," V.P. Singh argues, "the BJP needs to win at least 100 seats more. This can only be at the cost of its southern allies since its potential in north India has been exhausted. It remains to be seen how far these regional allies would permit the BJP to eat them up." In his assessment, this inherent contradiction within the NDA would start manifesting itself after the BJP's defeat in the Uttar Pradesh Assembly elections later this year, and then it would be time for the P.F. to step in.

Confident of the P.F. coming to power in New Delhi on its own, "with people's support", the consummate politician that he is, V.P. Singh steers clear of discussing the topic of an alliance with the Congress(I). "The Congress is not being considered at the moment," he says, leaving enough room for interpretation that it could be considered in a post-election scenario if the Front fell short of a majority. For the time being, though, he, along with the other four leaders, is busy seeking to rewrite the rules of the political game yet again.

Opening the floodgates

It is in the midst of growing evidence of an imminent global slowdown that India has crossed a crucial threshold in its engagement with the global economy in the form of the Exim Policy for 2001-2002 that promises a sea change in the fortunes of several crucial sectors of the nation's economy.

ON March 31, India crossed a crucial threshold in its decade-long journey of integration into the global economy. On that day the Export and Import Policy for the year 2001-02 was notified, or more accurately, a series of amendments were introduced to the five-year Export and Import policy announced in 1997. As Union Commerce Minister, Murasoli Maran had the privilege of making the announcement at a crowded press conference in Delhi's Vigyan Bhavan. The expectant gathering knew that the occasion itself was of decisive importance not for the content of the announcements that the Minister would make, but for all that would follow.

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The main features of the Exim Policy were known to the public well in advance of the actual announcement. Under conditions that India acceded to in 1994, at the moment that it signed the agreement creating the World Trade Organisation (WTO), quantitative restrictions (QRs) on imports of any commodity were strictly disallowed. Nations, or "contracting parties" to the WTO that maintained these forms of import controls, were obliged to switch over to the more "market friendly" device of adjusting tariffs within a reasonable period of time.

With its immense dependence on agriculture and small industries to sustain mass employment, India was among the nations that had been seeking the maximum recourse to protection through QRs. Together with the thorny issue of amending its patent laws, the dismantling of QRs became the focus of public concern and decisive proof in many observers' estimation that the WTO regime was hopelessly skewed in its application against the interests of the developing countries.

All the misgivings aside, there was no escape, though, from the commitments made in 1994, as a gesture of faith that a rule-based multilateral trading system was better than none at all. However, every turn in the debate proved contentious. The Bharatiya Janata Party suffered a virtual revolt within its own ranks over the issue of amending the Indian Patents Act in order to ensure conformity with the WTO regime. On QRs, there proved to be a long and tortuous process of bargaining in WTO forums before an acceptable modus vivendi between India and its trading partners could be reached.

Six separate complaints against India were lodged with the WTO Dispute Settlement Body (DSB) in 1997, all pertaining to the continued application of QRs on imports. Following a direction from the DSB, India simultaneously negotiated a six-year time-table for the removal of QRs with five of the complainants - the European Union, Canada, Australia, New Zealand and Switzerland. There remained only one recalcitrant, the United States, which unfortunately had sufficient leverage to ordain a new schedule that was more to its convenience.

The negotiations that ensued with the U.S. were conducted between an Additional Secretary in the Ministry of Commerce and his counterpart in the U.S. In December 1999, the U.S. negotiator proposed a certain schedule for the removal of QRs and suggested that the Indian acknowledgment of this official communication be treated as a conclusive agreement. The following January, a schedule to remove all QRs by April 1, 2001 was formally notified to the WTO by India and the U.S.

Half the commodities (or tariff lines) on which QRs were applicable till March 2000 were decontrolled over the course of 2000-01. The remaining commodities, numbering 715, that the highly disaggregated classification scheme adopted in international trade statistics, were unfettered from all restraints on April 1.

Even prior to that critical date, many of the commodities that were being decontrolled had started trickling into grocery shops in the more affluent metropolitan neighbourhoods in the country. Marine and dairy products, confectionery and fruits from hitherto exotic locations were conspicuous. This has been certified by some of the more avid champions of the global economy as an unequivocal triumph for the Indian consumer. Those with a more realistic understanding have pointed out that the consumer would have little to spend if production processes were to be disrupted, since without a viable level of domestic output, incomes would collapse and so too would consumption.

The official response to these apprehensions has been to promise a constant monitoring mechanism to assess when imports could threaten the viability of domestic production. This so-called "war room", in the Commerce Minister's picturesque phrase, would keep a resolute vigil over import transactions in close to 300 tariff lines. Included in the watch-list are the major foodgrains, most domestically produced fruits, dairy and marine products, and meat and all its derivative items of consumption. Articles of special significance for the small-scale sector, such as toys, pencils, pens and other stationery items, also feature on the priority list. And in an effort at even-handedness, even imports of automobile assemblies, parts and components - which are of concern to Indian big business - also will be monitored for any possible surge. Statistics pertaining to all these products would be collated on a monthly basis and at the least suggestion of distress among domestic producers, appropriate safeguards would be instituted.

The challenge for the Indian government here would be to work out the kind of safeguards that could successfully negotiate the welter of rules and guidelines embodied in the WTO. QRs, for instance, may be introduced in certain specified circumstances by WTO member-states. But if one were to cut through the multiple provisions of the WTO agreement, then the grounds for doing so amount substantively to only one - a significant balance of payments crisis that threatens to drain a country's foreign exchange reserves. And even in this situation, QRs may be applied for only so long as it takes to rebuild exchange reserves.

The alternative would be for India to utilise the tariff option to restore the price advantage for domestic producers. For the bulk of the commodities that have been freed for import over the last two Exim policies, tariffs have been set at levels of up to 70 per cent. These are well within the binding commitments (or "bound tariffs") that have been given by India to the WTO - which represent the customs duty rates beyond which recourse is not permitted. As a general principle, India has set bound tariffs at 100 per cent for primary agricultural commodities, at 150 per cent on processed items and at 300 per cent for edible oils.

On the face of things, India enjoys a high degree of flexibility in invoking tariff protection for sectors that suffer serious injury from unrestricted imports. But here again, the adjudicatory authority of the WTO could be invoked, since "trade distortion" is a widely defined term that could be applied even to escalating tariffs. The tough-minded trade negotiators at the WTO headquarters in Geneva have recently indicated that they will vigorously challenge any country that seeks to replace QRs with high tariff walls as an equivalent method of protection.

Another safeguard that has been built into the Exim policy is the reservation of certain tariff lines for import through "state trading enterprises". This list is limited to the most sensitive commodities, such as rice, wheat, maize, coconut and coconut oil, urea and petroleum products. The Commerce Ministry is convinced that this mode of conferring an import monopoly on certain enterprises is well within WTO rules. But a closer reading of the protocols appended to the 1994 agreement would indicate that even here there is a substantial power of review available to the trade body.

THERE is, clearly, another phase of contention foretold in the WTO councils by the multiple safeguards that India has sought to impose against a destabilising import surge. The import of used cars is another area where friction could be encountered. Citing safety and environmental considerations, the Exim policy restricts the import of used cars to those that are not more than three years old and also stipulates a single point of entry through Mumbai. This is clearly an effort to neutralise the freight advantage that the Japanese auto industry - the biggest player in the trade in reconditioned cars - may enjoy. Another concern perhaps is the need to prevent any possibility of misuse of India's special trading arrangements with Nepal. But in unsettled times for the world economy, it is not beyond the realms of possibility that Japan, for one, could sense a deliberate "trade distorting" intent in these stipulations and take the matter to the DSB.

The agriculture sector, however, remains the core of the problem. Coincidentally, India's Exim policy announcement comes just when the WTO seems to have moved into a decisive phase in negotiations over further liberalisation of agricultural trade. Between January and March, a number of proposals were received from interested member-states on the measures that would be appropriate to further reforms in agricultural trade. And quite in contrast to the confident tone of official pronouncements in the domestic forum, India's submission points to certain serious threats faced by the developing countries in general.

Quoting a study by the Food and Agriculture Organisation, India's submission to the WTO notes, for instance, that the six-year record of liberalisation in agriculture has been asymmetric in its impact: "While trade liberalisation had led to an almost instantaneous surge in food imports, (developing) countries were not able to raise their exports." This, in turn, has led to "small producers" being "marginalised" and "added to unemployment and poverty".

As a remedy, India has proposed that developed countries should adopt "tariff bindings (that effect a) substantial reduction in all tariffs". Concurrently, developing countries should be allowed to "maintain appropriate levels of tariff bindings, keeping in mind their developmental needs and the high distortions prevalent in the international markets". And in addition, a special safeguards mechanism is urged that would allow for the "imposition of quantitative restrictions under specified circumstances".

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Considering that the Commerce Ministry is claiming that all these powers are already available to it under WTO rules, it should seem rather curious that it is making a case for precisely the same rights in the WTO forum. The implication is clear: in the thicket of rules that the global trade watchdog has been overseeing, there are several areas of ambiguity. But these are still subject to adjudication and failing a further comprehensive agreement that specifically enshrines them, the outlook could be for further disputation and acrimony.

ANOTHER proposal that India has placed before the WTO goes right to the core of the developed countries' policies on agriculture. Under the 1994 agreement, income support programmes for the farm sector are exempted from any reduction commitments, since they are deemed to have minimal distorting effects on trade. The argument is devoid of any convincing rationale other than that of the developed countries' convenience. Since the late-1980s, both the U.S. and the E.U. have favoured the mechanism of directly funding farm incomes rather than propping up prices through assured purchase commitments. Under the system of deficiency payments that the U.S. and the E.U. practise, farmers are compensated directly by governments if the prices of their produce fall below a certain level. Since this means effectively that the farmer is able to sustain situations of glut in the agricultural market, there seems little basis to the argument that income support is less trade distorting than price support.

India has now proposed that these programmes also be recognised as subsidies that distort trade patterns to the disadvantage of developing countries. There is a case, then, for their inclusion in the discipline of subsidies reduction that WTO member-states are enjoined to accept.

Apart from these exemptions, the developed countries also benefit from relatively less stringent requirements on the reduction of export subsidies. While countries that had no export subsidies in operation at the conclusion of the WTO agreement are prohibited from introducing them, heavily subsidising exporters like the E.U. and the U.S. were obliged to reduce export subsidies by the relatively modest order of 36 per cent over six years. India's submission now claims that even within this less demanding regime, the developed countries have been reallocating subsidies between different commodities, rolling them over from one year to another, and resorting to a variety of devices to neutralise the competitive advantage of the developing countries in agriculture.

According to recent estimates, the total support rendered to the agriculture sector by the countries comprising the Organisation of Economic Co-operation and Development (OECD) increased from $308 billion in the reference period (1986-88) to $347 billion in the most recent three-year period for which data are available (1997-99). This means effectively that the global market continues to be awash in highly subsidised agricultural products, which could penetrate developing country markets - with potentially destabilising consequences.

DESPITE the formidable odds he faces in the international market, Murasoli Maran struck an upbeat tone in presenting his Exim policy. His emphasis was not so much on the defensive measures needed to adopt to cope with the new situation, but on the many opportunities that India could capitalise on. There are proposals, for instance, to formulate a comprehensive policy for agricultural exports and to strengthen the scheme of "special economic zones" that was introduced last year in the interests of boosting exports. The intention is to overcome decades of "export pessimism" and reach a target of 1 per cent of world trade by 2004. In absolute terms, this means hitting an export level of $75 billion in three years, at an annual growth rate of 18 per cent. This, says Maran, is an eminently achievable goal.

Global multilateral bodies, seeking to put a brave face on the increasing evidence of recessionary trends, have been forecasting a dramatic upturn this year. This refrain, however, sounds increasingly at odds with reality as each week brings a reversal of the patchy evidence of an economic rebound registered the previous week. India's own exports for the last year could register a growth rate of 20 per cent. But for the last month that provisional data is available for, that is, February 2001, the growth rate was just over 10 per cent. Whether this is on account of the global slowdown or other contingent factors, remains to be analysed. But just when India seeks to cross a critical threshold in its engagement with the global economy, it seems that the environment may just be turning rather too inclement for its comfort.

Of concerns and safeguards

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Interview with Murasoli Maran.

The day after presenting the government's Export-Import policy for the financial year, the Union Minister for Commerce Murasoli Maran spoke to Sukumar Muralidharan about its likely implications and the underlying principles. Excerpts:

The Exim Policy has been announced and much of the public attention has been focussed on the removal of quantitative restrictions (QRs). Though this was the most predictable aspect of the policy, it has caused widespread concern and misgivings. How have you addressed these?

We appointed a committee with the Commerce Secretary as chairman and the Secretaries of Agriculture and Small-Scale Industries also involved. They went into each and every subject - how each area would be affected and the kind of safeguards that are necessary. So they gave their report and we have taken all decisions only after that. We have forewarned all the administrative Ministries dealing with this issue and they have in turn consulted the associations and trade bodies concerned. A lot of thinking has gone into these actions.

Basically you have set up this safeguard of constant monitoring of imports and you have also provided for the reimposition of QRs at some stage.

Only if necessary. We have brought in legislation which has already been circulated. We couldn't introduce it because of all the other problems. In the Rajya Sabha it was slated for a particular day but we could not do so because the House was adjourned.

This would allow for a reimposition of QRs only on balance of payments grounds.

We have got seven kinds of protection available. We can raise our tariffs. Second, if dumping takes place - that is, if an exporter sells his product below its value - then we can impose anti-dumping duties. Third, if he subsidises and causes material injury, then we can impose countervailing duty. Both these powers are with the Commerce Ministry. Fourth, if there is a surge causing or threatening to cause serious injury to domestic industry, then there is safeguard action. This power is with the Finance Ministry - it can temporarily impose QRs also. Fifth, according to an Article of the WTO agreement, we can take action to protect human, animal or plant life or health and to preserve morals and to conserve exhaustible resources. Then, under Article XXI of the WTO agreement, we can take action from security concerns. And finally under Article XVIIIB, QRs can be reimposed if the balance of payments position worsens.

The monitoring body that you have proposed will keep a close watch on all these sectors in order to determine when action would be warranted under any of these provisions.

We will have an inter-ministerial monitoring body consisting of the Secretaries for Commerce, Revenue, Agriculture, Small Scale Industries, Animal Husbandry, and the Director-General of Foreign Trade. I am calling it a "war room" because they would have to be watchful and we may have to declare war against surges in imports and dumping. We have taken about 300 sensitive items as suggested by the inter-ministerial group. We will monitor these items - we should not be taken aback by any development and there should not be any disinformation among the public. Just as in the case of inflation figures and industrial production figures, we are going to release these figures every month.

In terms of small-scale industry, what is the thinking now, since the removal of QRs means that the reservation policy becomes irrelevant?

It was irrelevant even earlier, since about 800 items were reserved for SSI, but only about 600 were actually produced. But in spite of this nobody could prevent imports. So it was an anomalous situation. Now recently in his Budget speech, the Finance Minister has announced the removal of 14 items from the reservation list. There was a Group of Ministers with (Home Minister) Mr. Advani as chairman. I was also a member and we decided to remove these items from the reserved list because they are very good export earners. Scale of operation is very essential in these. Most important, a comprehensive package on the SSI and tiny sectors was announced by the Prime Minister on August 31. For example, the excise duty limit has been raised from Rs.50 lakhs to Rs.1 crore, to improve the competitiveness of the SSI sector. Then we have provided credit-linked capital subsidy of 12 per cent on loans for technology upgradation. And so on.

Over the last few years there have been a lot of reports of acute distress in certain SSI sectors, such as pencils, stationery, toys, and so on.

You see, if one unit is closed it is one thing - it could be due to inefficiency. But if the entire sector is affected, that is a different matter. For example, regarding certain Chinese goods - toys and sports shoes - there has been immediate action and anti-dumping duty has been imposed.

Would you say that there has been no evidence of large-scale distress in the SSI sector?

Whenever we hear reports we look into them and take all the necessary action.

What about agriculture and plantation and orchard crops?

In the recent Budget, tariffs were raised in the case of tea, coffee and other crops. There is a psychological element here. They say increase it still more. I said: for what purpose? Where are the imports? The figures should speak for themselves. Then they say it is for psychological satisfaction.

But in a plantation-crop dependent State like Kerala, there are widespread apprehensions about this Exim policy.

Over what crops? Coconut and coconut oil, for instance...

These have been reserved for state trading enterprises. They will not be allowed through private trade - along with rice, wheat, maize, petroleum products and urea.

Is this procedure of canalisation allowed under WTO rules?

You may consider it as canalisation, but this kind of trade through state trading enterprises which is done on commercial principles, is permitted under WTO rules - under article XVII of the agreement. We have taken competent legal opinion on this matter.

What is the progress with regard to the special economic zones (SEZs) that you launched last year?

I have inaugurated one at Nangunery in Tamil Nadu and one at Positra in Gujarat is about to be inaugurated. Then we have granted permissions for SEZs in Maharashtra, West Bengal, Uttar Pradesh, Madhya Pradesh, Andhra Pradesh - and two in Orissa.

Have all the special tariff measures that you had recommended been conceded by the Finance Ministry?

Many have been granted. As far as SEZs are concerned, there is no problem at all.

Since last year's Budget, export incomes are beginning to be taxed and all exemptions will be removed over a period of five years.

We want it back-loaded - remove less of the exemptions in the first three years and more in the last two years. We have had discussions but because the Finance Bill is yet to be passed, we cannot say anymore.

On the WTO, you have submitted certain proposals for the agriculture negotiations.

We have proposed a "food security" box for exempting certain kinds of activities from WTO rules. We have asked the OECD (Organisation for Economic Cooperation and Development) countries to reduce their subsidies so that we can also participate. Since 1995 the WTO rules have been in operation and what has happened since then? In fact, the WTO has been beneficial, since we had bound our tariffs for agricultural products at zero. We were at that time food importers, getting aid from the U.S. and leading a "ship-to-mouth" existence. What has happened now is that we have enhanced our bound duty rates to 100, 200 and 300 per cent. In all of these years, nothing has happened.

There is a perception in the farm sector that the WTO rules are doing damage.

That is why we have come up with these kind of explanations. We did not sign this yesterday, but government is a continuum. We have to continue, but we will take into confidence all the parties and State governments.

An alliance of convenience

The Asom Gana Parishad breaks ranks with its coalition partners in the State government to forge an alliance with the Bharatiya Janata Party.

WITH the ruling Asom Gana Parishad (AGP) severing its ties with the Left parties and finalising a seat-sharing deal with the Bharatiya Janata Party, the political scene in Assam on the eve of the May 10 Assembly elections presents an altogether different picture. The AGP, which won 63 of the total of 126 seats in the May 1996 Assembly elections, was running the government with the support of the Left parties. While the United People's Party of Assam (now the Samajwadi Party), with one MLA, and the Communist Party of India, with three MLAs, had their representatives in the Ministry, two other alliance partners, the Communist Party of India (Marxist) and the Autonomous State Demand Commi-ttee (ASDC), supported the government from the outside. The CPI(M) has two seats and the ASDC five in the Assembly. The position of the AGP government led by Prafulla Kumar Mahanta was strengthened when a Bodo formation, the People's Democratic Front (PDF), with five legislators decided to support it. The Congress(I), the principal Opposition party, won 34 seats.

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Political observers felt that the sudden change in AGP strategy could be attributed to its fear of the rising strength of the Congress(I) in the State. While the Congress(I) won nine of the 14 Lok Sabha seats in the October 1999 Lok Sabha elections, the AGP failed to win even a single seat. The Congress(I) has ruled the State for the longest period since 1952. It lost to the AGP in the 1985 Assembly elections held immediately after the Assam Accord was signed in the wake of a violent anti-foreigner agitation which lasted from 1979 to 1985. However, the Congress(I) returned to power in 1991 and ruled the State until 1996.

Earlier, the AGP's efforts to have a truck with the BJP had failed owing to stiff opposition from the BJP's State unit. The BJP State unit was of the view that the "growing popularity of the BJP in Assam" would be affected if it aligned with the AGP, which had the anti-incumbency factor going against it. Following this, the AGP, in a resolution adopted at its Naogaon conclave in February, had said that the party would continue its anti-BJP stance because the BJP was a communal party. The BJP, on the other hand, had declared that it would fight the AGP on the corruption issue. That the BJP initially declined the AGP's offer of an alliance was evident from the statement made by Prafulla Kumar Mahanta after a meeting with West Bengal Chief Minister Buddhadeb Bhattacharya in Calcutta on March 28. Mahanta said that the AGP did not want to have any arrangement with the BJP and that it wanted to be part of the Lok Morcha (People's Front) at the national level.

However, after having turned down an offer of alliance from the AGP, the BJP suddenly changed its stance and agreed to talk to the AGP. The BJP is reported to have done this after Mahanta met Home Minister L.K. Advani in Delhi on March 31 and told him that the Congress(I) was better placed to form the next government in Assam. Advani immediately called the State BJP leaders and talks between the two parties were resumed.

Uday Hazarika, State secretary of the BJP, told Frontline that after considering various political factors the party finally decided to join hands with the AGP only to prevent the Congress(I) from coming to power. Moreover, the Bodo groups led by the All Bodo Students Union had suggested that the AGP and the BJP come together in order to prevent a division in the anti-Congress(I) votes. In that event, other groups of tribal people would also back the two parties and all of them together could pose a challenge to the Congress(I). The Bodo groups would like to see friendly governments both at the Centre and in the State so that they could pursue their goals, Hazarika said.

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With the formal decision to go for an alliance with the BJP, the AGP has claimed a share of 80 out of the 126 seats. According to the AGP's formula, the BJP will field candidates in 28 to 30 constituencies (the BJP won four seats in the 1996 Assembly elections and two seats in the 1999 Lok Sabha elections) and the rest of the seats will be distributed among the All Bodo Students' Union-supported independent candidates and the Holiram Terang faction of Autonomous State Demand Committee. After the alliance was finalised, AGP president Prafulla Kumar Mahanta sent the party's vice-president Biraj Sarma and general secretary Pradip Hazarika to New Delhi to initiate talks with BJP general secretaries Narendra Modi and Sunil Shastry to work out a seat-sharing formula. Apart from its 63 sitting seats, the AGP will field candidates in the six constituencies which were won by its former allies, the CPI, the CPI(M) and the Samajwadi Party. The AGP would also contest in 11 other constituencies where it had won when it first contested the elections in 1985.

Interestingly, even after the alliance with the BJP was formalised, the AGP seemed to fight shy of naming the BJP as its electoral ally. It preferred to refer to the BJP as the National Democratic Alliance (NDA). Chief Minister Mahanta said that although his party was confident of forming the next government, he was willing to ally with the NDA in order to wipe out the Congress(I) from the State. He said the AGP would continue to promote secularism no matter which party it forged an alliance with.

WITH the resignation of Flood Control Minister Promode Gogoi of the CPI and the Irrigation Minister Abdul Muhib Majumdar of the Samajwadi Party from the State Cabinet, the ruling four-party alliance has broken down. On being asked whether their parties were considering an alliance with the Congress(I), Gogoi and Majumdar said that such a possibility could not be ruled out. While Gogoi said that the Congress(I) was a secular party, Majumdar said his party was supporting the Congress(I)-Nationalist Congress Party government in Maharashtra to keep the BJP out of power. They said that a similar formula could be worked out in Assam.

Meanwhile, the Congress(I) is ready for an electoral alliance with the Left, other regional parties and groups opposed to the AGP-BJP alliance. "Whoever goes with the BJP either directly or indirectly, will not get the votes of the minorities. And Assam is a State where the minorities, both religious and linguistic, play a decisive role in the elections," said Assam Pradesh Congress Committee president Tarun Gogoi. He claimed that the Congress would make a clean sweep in the elections. The Congress(I) was sure about getting the direct support of the United Minority Front (UMF), Gogoi said.

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With only weeks left for the elections, political parties are busy wooing the crucial minority vote bank. According to the 1991 Census, Muslims account for 28 per cent of Assam's population and cannot be ignored by any party. In the last elections, the AGP-led four-party alliance had managed to get 10 candidates belonging to the Muslim community elected. This time, however, the figure might come down, owing to the AGP's alliance with the BJP. The Jamait-e-Ulema-e-Hind, a major Muslim organisation, has pledged support to the Congress(I).

The reported sharp fall in the rate of growth of population of Assam has gladdened minority organisations. The All Assam Students Union (ASSU), which has been spearheading a movement against illegal infiltration into Assam from Bangladesh, described the Provisional Census Report, 2001, as a positive gain. The report puts the rate of growth of population in Assam at 18.85 per cent. The 1991 Census had revealed a growth rate of 24.24 per cent over the previous decade and it was attributed mainly to a large-scale influx from Bangladesh.

UMF president H.R.A. Chowdhury said that the report had proved wrong the contention that infiltration into Assam continued unabated. "We have been saying that the rate of infiltration was not as alarming as was being made out to be by some quarters including the Assam Governor. Now, we have been proved right," he said.

Unravelling of an alliance

With the exit of constituents that could make a difference at the hustings in a highly polarised political situation, the alliance led by the ruling Dravida Munnetra Kazhagam seems to have lost its position of advantage in Tamil Nadu.

MISFORTUNES seldom come singly. This seems to be true of the National Democratic Alliance (NDA) and the ruling Dravida Munnetra Kazhagam (DMK) in Tamil Nadu. The alliance was in disarray when the date for the Assembly elections (May 10) was announced by Chief Election Commissioner M.S. Gill in New Delhi on March 31. The DMK had virtually shown the door to an important constituent of the NDA, the Marumalarchi Dravida Munnetra Kazhagam (MDMK). Party president and Chief Minister M. Karunanidhi was blunt: "If they want to go it alone, they can do so. We are not standing in their way." Vaiko, general secretary of the MDMK, was quick to take the cue and alleged that his party had been "expelled from the alliance in a planned manner".

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In February, another important constituent of the NDA, the Pattali Makkal Katchi (PMK), had walked out to join hands with the rival front headed by the All India Anna Dravida Munnetra Kazhagam (AIADMK). The Tamizhaga Rajiv Congress (TRC) has also pulled out of the NDA, accusing the DMK of hobnobbing with caste-based parties and corrupt politicians to try and ride back to power. Ironically, TRC president Vazhappadi K. Ramamurthi signed a resolution passed by the Vanniyar Sangham, a caste outfit, on March 24 which accused the DMK of "behaving like an enemy of Vanniyars". (Vanniyars form a sizable population in the State. Ramamurthi belongs to the community. The PMK led by Dr. S. Ramadoss is also essentially an outfit of Vanniyars.)

The DMK received another jolt on April 1 when Minister for Tamil Culture M. Thamizhkudimagan joined the AIADMK. He was upset that he was not allotted the Ilayankudi constituency from where he was elected in 1996. He alleged that all decisions in the DMK were being taken with a view "to projecting Stalin". Chennai Mayor M.K. Stalin is the son of Karunanidhi.

It is thus a weakened NDA that will take on a formidable "secular" front headed by the AIADMK.

Ostensibly, the parting of ways between the DMK and the MDMK occurred because of a row over three specific constituencies the latter wanted. (The three seats that the MDMK wanted held a special significance for it. Vaiko's village, Kalingapatti, comes within the Sankarankovil constituency and he was keen that the MDMK should field a candidate there. L. Ganesan, chairman of the MDMK presidium, was keen to contest from Thanjavur. The MDMK wanted to field another top leader, Malar Mannan, from Tiruchi-1.) But what lay at the core of the crisis was the impending ascension of Stalin to power. Both parties, however, fight shy of acknowledging this. Political sources said that the DMK feared that Vaiko would be a threat to Stalin's claims if the DMK did not get an absolute majority. The MDMK, in turn, was willing to get out because it did not want to contribute to the DMK's success and thereby help Karunanidhi anoint Stalin as his successor at the appropriate time. For both the parties it is a bold gamble, and their parting may cost both dearly.

MDMK sources alleged that the DMK leaders did not at any point treat their party as a constituent of the alliance but looked upon it as an enemy. A section in the MDMK was, however, anguished over the parting of ways.

A section in the DMK was also upset over the development. The party is weak in the southern districts and the sizable Mukkulathor community there backs the AIADMK, they say adding that the MDMK's exit would further hurt the DMK's chances. The MDMK had hard-working cadres and Vaiko was a big draw in election meetings.

The line-up is clear now. The NDA includes the DMK, the Bharatiya Janata Party, the Puthiya Tamizhagam, the Dalit Panthers, the MGR-ADMK, the MGR Kazhagam and caste-based parties such as the Makkal Tamil Desam, the Kongu Nadu Vellalar Katchi, the Tamil Nadu Mutharayar Sangham, and so on.

Facing them is the AIADMK-led secular front that includes the Tamil Maanila Congress (TMC), the Congress, the PMK, the Communist Party of India (Marxist), the Communist Party of India (CPI), a faction of the Indian National League, the Indian Union Muslim League and so on.

The MDMK, according to Vaiko, would be an "alternative" to these two formations. It would contest 213 out of 234 seats in the Assembly but would not field candidates in the 21 constituencies where the BJP is contesting. Vaiko said that the MDMK would continue to be a constituent of the BJP-led NDA government at the Centre. However, Jana Krishnamurthy, BJP president, said that his party would not share a platform with the MDMK during the campaign. According to Vaiko, there is not "even one per cent chance" of the MDMK joining the AIADMK-led front.

In the DMK's reckoning, the MDMK going it alone would amount to the formation of a third front, which factor would be advantageous to the DMK-led front. But the MDMK leaders said their party commanded 5 per cent of the votes in many constituencies and could ruin the DMK's chances in about 25 constituencies. However, informed observers note that the MDMK by itself may not win too many seats.

IT is not as if everything is hunky-dory with the AIADMK front. Problems erupted between the AIADMK and the TMC over the identification of constituencies that the TMC and the Congress(I) would contest. The TMC suffered a jolt when its top leader and former Union Finance Minister P. Chidambaram revolted against its decision to align with the AIADMK and set up the Tamil Maanila Congress Democratic Forum to do "propaganda during the next 60 days that a single party government under Jayalalitha cannot provide good governance." Chidam-baram has been asked by the TMC to show cause why he should not be expelled from the party.

There is bad blood between the PMK on the one side and the TMC and the Congress(I) on the other because the PMK supports the Liberation Tigers of Tamil Eelam (LTTE), whose members assassinated Congress president and former Prime Minister Rajiv Gandhi. Worse, in the neighbouring Union Territory of Pondicherry, the PMK and the AIADMK will contest together against the TMC-Congress(I) combine. This strange situation arose after the AIADMK agreed to the PMK's claim to the chief ministership for the first two and a half years and the AIADMK holding it for the remaining term. This arrangement infuriated the Congress(I) and the TMC, which now run a coalition government in Pondicherry. They argue that they should have been given a major share of the 30 seats to contest (plus three nominated seats) and allowed to form the government.

Peace was bought by delinking the matter of Pondicherry from that of Tamil Nadu. It was agreed that the Congress(I) and the TMC would contest as allies against an AIADMK-PMK alliance. Congress(I) spokesman S. Jaipal Reddy said on April 3: "Our political reservations about the PMK continue. We will not be part of any power-sharing arrangement with them in Pondicherry."

What outweighs all these political developments is a vital legal question whether Jayalalitha will be able to contest in the elections. Her being convicted and sentenced to three years' rigorous imprisonment in the "Jaya Publications case" and the "Sasi Enterprises case" in October 2000 virtually disqualifies her from contesting the elections. Jayalalitha has moved the Madras High Court, seeking a direction to suspend the convictions. In her petitions she said that in a democracy "we should take pride in allowing the public to choose their leader freely, rather than crippling the will or in maiming the voice of the public by focussing on trial court judgments only." The petitions came up for hearing on April 9.

Terror and worse

The Andhra Pradesh Control of Organised Crime Act, recently passed by the State Assembly, draws flak from Opposition parties and other concerned groups.

ON the lines of similar laws in force in Maharashtra and Karnataka, the Telugu Desam Party (TDP) government led by N. Chandrababu Naidu last month enacted the Andhra Pradesh Control of Organised Crime Act (APCOCA), with the professed objective of dealing with mafia gangs. However, it has been condemned by Opposition groups as a draconian law.

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The passage of the law in the Assembly has stoked fears among Opposition parties that it would be used as an instrument to harass political parties inimical to the TDP. Asaduddin Owaisi of the Majlis Ittehadul Muslimeen (MIM) said the bill was aimed at youth belonging to the minority communities, while Gummidi Narasiah of the Communist Party of India (Marxist-Leninist) New Democracy expressed the fear that it may be used to curtail mass movements. However, Home Minister T. Devender Goud said that the Act, similar to one that was passed in the Karnataka Assembly, was aimed only at mafia gangs operating from outside the country. "The Telugu Desam is a political party with a record of democratic traditions, which fought a battle for the restoration of democracy when NTR (N.T. Rama Rao) was replaced in a political coup in August 1984. We can as well wind up and go home rather than use such a bill against our political opponents," Goud said.

The 'black bill', as the Opposition called it, was passed 12 minutes past midnight on the night of March 29 after the Congress(I) MLAs, four MLAs of the MIM, two members of the CPI(M) and the lone CPI(ML) member walked out of the Assembly. The Opposition is convinced that the APCOCA is only a re-packaged version of the now-lapsed Terrorist and Disruptive Activities (Prevention) Act (TADA).

The State government justified the legislation on the ground that organised mafia groups similar to the ones in Mumbai were rearing their head in Hyderabad. Criminal gangs were posing a threat to society by making the normal legal process ineffective through the subversion of the enforcement machinery and causing violence against witnesses.

But a close examination of the Minister's claim shows that although the level of concern here is exaggerated, it is not entirely without basis. There have been no instances as yet of large-scale extortion, kidnapping by ganglords or mafia-type activity in the State. However, there are land-grabbers with strong political connections at work, well-entrenched gangs making hooch in the Old City of Hyderabad and the spilling of factional violence from Rayalaseema to Hyderabad. Of late, hired assassins undertaking 'supari' or contract killings are also surfacing but not on a scale comparable to Mumbai.

K. Balagopal of the Human Rights Forum said that the APCOCA had all the essential elements of TADA and even the provisions for telephone tapping and the imposition of heavy fines ranging from Rs.1 lakh to Rs.5 lakhs. Balagopal said that it was ironical that the TDP, which had in 1995 demanded that TADA be allowed to lapse because it was an undemocratic and draconian law, should have come forward with the APCOCA.

Balagopal added: "Organised crime in Andhra Pradesh is limited to land grabbing and factionalism. But the major perpetrators of such offences are TDP and Congress leaders. Half the MLAs and MPs from Kurnool and Cuddapah districts in Rayalaseema have links with factions. But the government is not invoking even the existing laws against them. The APCOCA will be used against politically less powerful organisations such as Deendar-e-Anjuman, held responsible for blasts in churches in Andhra Pradesh and Karnataka, and against naxalites."

The Act empowers the State government to constitute Special Courts to try cases of organised crime. The Judges concerned will be appointed by the State government with the concurrence of the High Court. The Act gives the Police wide powers. It authorises police officers not below the rank of an SP to intercept wire, electronic or oral communication for a period of 60 days with the Home Secretary's clearance. Such evidence shall be admissible in the Court during the trial.

Section 20 of the Act states that if a person is convicted of any offence punishable under the Act, the Special Court may declare any property belonging to the accused to be forfeited to the State government. On an application made by a witness, the Special Court can keep the person's identity and address secret and even hold proceedings in camera. Thus, the Act overrides various provisions of the Indian Penal Code and the Indian Evidence Act.

However, Devender Goud said that there were safeguards against the misuse of the Act. For instance, a review committee comprising the Chief Secretary, the Home Secretary and the Law Secretary will review every order passed for tapping telephones.

Asaduddin Owaisi, floor leader of the MIM in the Assembly and one of the staunchest critics of the Act, compared it to the notorious Prevention of Terrorist Activities (POTA) Bill which the Centre abandoned after considering it for some time. "The Indian Penal Code deals extensively with the provisions contained in the APCOCA against criminals, including the conspiracy angle through Sections 120-B, 147 and 148. FERA (Foreign Exchange Regulation Act) and FEMA (Foreign Exchange Management Act) deal extensively with economic offences. The Act is only meant to be used against Muslims; nearly 3,500 Muslims of whom were booked under TADA earlier," Owaisi said.

Owaisi asked how a man being tried under the new law could fight his case if the trial was held in camera and he was denied knowledge of the names of witnesses whose deposition might end in his conviction. "Even the Nuremberg trials against Nazi leaders were held in public," Owaisi said.

The Leader of the Opposition, Dr. Y.S. Rajasekhara Reddy, said that the Congress(I) staged a walk-out from the Assembly since it did not want to be a party to the adoption of a black law. He deplored the provision for admission as evidence confessional statements made before police officers because coercion was invariably used to extract statements in such situations. "This law is worse than TADA. People who will implement this Act have even withdrawn cases of murder against TDP functionaries and filed false cases against Congressmen to settle political scores. Even before the law came into existence, they have tried to falsely implicate my son in a case of conspiracy based on the wild allegations of an accused," Rajasekhara Reddy said.

Nomula Narasimhaiah, a CPI(M) MLA, said that the provisions of the Act were inconsistent with the claims of the Home Department that the crime rate had come down. CPI(ML) legislator Gummidi Narasaiah said that the law will be used to suppress naxalites who were fighting for the poor.

However, the Home Minister denied all these charges. "We are a free society. How can we use this Bill against our political opponents?," he asked. It was meant to prevent Hyderabad from turning into another Mumbai where the mafia has penetrated into several fields including the film industry. The police cited the abduction of Sumedha, a 16-year-old girl, from Jubilee Hills in Hyderabad on March 27, the day the House passed the Bill, as the latest instance of organised crime. The abductors demanded a ransom of Rs.5 crores through hawala channels from the young woman's father, Gopalakrishna, a distributor of tobacco products.

On March 28 the police rescued her from Zaheerabad, about 100 km from Hyderabad, and arrested three abductors. Four more persons were arrested later. The abductors had used a cellphone to contact Gopalakrishna's residence where a caller identification facility was installed. The police traced the origin of the call and alerted Zaheerabad police. Investigations revealed that the abductors had connections with organised crime.

Of late, crime involving the use of hi-tech gadgetry has spread in Hyderabad. For instance, 23 persons were killed in November 1997 when the henchmen of the leader of a group in Ananthpur district triggered a blast in a car using a remote controlled device. The gang had used mobile phones to track the movements of the targeted vehicles. Recently, suitcase bombs aimed at the main accused in the murder of Y.S. Rajasekhara Reddy's father, and another at Congress(I) MLA from Dharmavaram, K. Surya Pratap Reddy, were recovered by the police.

Hyderabad, a communally sensitive city which also has a large number of defence installations, is also a natural choice of the Inter-Services Intelligence (ISI) for its activities. Activists of the Indian Muslim Mujahideen Movement (IMMM) and the Students Islamic Movement of India (SIMI) are among those on whom police keep a watchful eye. A few years ago, an Additional SP, Krishna Prasad, was killed when trying to nab Kashmiri militants holed up in a house at Langer Houz.

However, land grabbing is the main criminal activity in Hyderabad and even small-time criminals are shifting to this field which has traditionally enjoyed political patronage. Illicit distillation is another field which has spawned mafia dons. One of them, Sudesh Singh, was shot dead in what was alleged to be a fake encounter.

The police claim that they are sometimes unable to secure convictions even if they nab the accused stands to reason. Srisailam Yadav, the main accused in the killing of seven persons at Erragadda some years ago, was acquitted and he even joined the TDP, although he was virtually disowned by the party later.

The courts too are handicapped because the witnesses are intimidated by henchmen of the criminals being tried. Hence, the police sometimes end up producing false witnesses, leaving judges no option but to dismiss the cases. If the identity of the witnesses is protected and the proceedings are held in camera, this problem can be surmounted, the police say.

All these arguments notwithstanding, concerns regarding the draconian nature of the provisions and the possibility of their misuse at various stages and levels remain.

A multi-dimensional malaise

cover-story
ASHA KRISHNAKUMAR

THAT suicides constitute a common phenomenon in Andhra Pradesh, whether it is among cotton and tobacco farmers or powerloom and handloom weavers is an oft-repeated statement by officials. But is there a "proclivity" among certain groups of people to commit suicide?

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No, says Dr. Lakshmi Vijayakumar, vice-president of the International Association for Suicide Prevention. "It is a multi-dimensional malaise, with social, economic, cultural, medical, philosophical and psychological roots," says the Chennai-based doctor.

In Andhra Pradesh, it is more of a social malaise, with no single underlying reason, but the consequence of a multitude of distress factors.

The central issue of all research on suicides is whether they are the result of problems with the individual or society. Many argue that depressed people commit suicide and, hence, society cannot be blamed. But studies show that less than a third of those depressed commit suicide. So, this argument is untenable. A combination of factors, including depression, is responsible for suicides.

Suicides in Andhra Pradesh which, in recent years, have become more widespread and general, need to be assessed from a sociological perspective. French sociologist Emile Durkheim, a proponent of the "society is responsible" theory, classifies suicides into four categories depending on how well the people have integrated into society.

First, egotistic suicides of, say, people in transitional societies, where their aspirations are high but it is accompanied by the breakdown of the traditional support systems. Second, anomic, owing to sudden changes in, for instance, market conditions leading to the breakdown of entitlements. Third, altruistic, owing to the total integration with society, such as self-sacrifice for the country. Fourth, fatalistic suicides by people with no hope of survival, such as prisoners of war.

The suicides by weavers and farmers of Andhra Pradesh fall into the anomic category. But even in this case only the most vulnerable, who are confronted with several miseries - of health, income, psychological and social - tend to end their lives. They look at it as solving the problem.

But why are suicides among Andhra Pradesh weavers occurring in certain pockets? There is the phenomenon of "exposure to suicides", which is important in cases of "imitative" suicides. Cluster, or contagious, suicides are common among vulnerable groups or communities.

Thus, in the case of Andhra Pradesh weavers, the suicides are clearly because of sudden changes in their economic situation and, as a consequence, their living conditions becoming extremely precarious. That many suicides happen among the vulnerable in certain pockets leads to the "imitation syndrome". But, even in such cases, only the most vulnerable commit suicide.

Perilous policies

ASHA KRISHNAKUMAR cover-story

Government policies that focussed on the liberalisation, modernisation and globalisation of the industry but ignored the livelihood issues pertaining to the lakhs of traditional handloom and powerloom weavers are behind the tragedy that has overcome them.

THE new National Textile Policy of November 2000, which seeks to modernise, privatise and globalise the industry in order to integrate it into the world market, has become the noose for weavers and their families in Andhra Pradesh, for whom the loom is not only a means of livelihood but a way of life.

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The current crisis in the handloom sector, unprecedented in the post-Independence period in terms of its scale, has been precipitated ironically by successive textile policies and the recommendations of various committees, pushing the weavers into a debt trap, starvation and death. But at the root of the crisis - which in some senses also hastened the decline of the handlooms sector - is the liberalisation process set off by the 1985 Textile Policy and compounded by the structural adjustment programme pursued by the government since 1991.

The thrust of the Textile Policy of 2000, based on the Satyam Committee Report, is to make India a global player in textile production and exports, particularly of garments. It seeks to re-orient the handloom sector to the globalisation process - this, according to the policy, is the principal strategy to ensure its survival. The policy has set a target of increasing textile exports in value terms by around five times in the next decade - from $11 billion worth to $50 billion, and half of it in the form of garments. It also aims at increasing cotton production by 50 per cent, while explicitly encouraging the use of man-made fibres such as polyester.

To achieve these rather ambitious targets, the policy seeks to de-reserve garment-making from the labour-intensive small-scale sector and throw it open to the capital- and technology-intensive national and global investors. To aid this process further, the government is to assist the private sector in specialised financial arrangements and to set up a venture capital fund. The policy permits 100 per cent foreign direct investment (FDI) in the textiles sector against the earlier limit of 24 per cent. It encourages the private sector to set up world-class, environment-friendly integrated textile complexes - from yarn production to garment-making - all under one roof. And, in order to strengthen handlooms it would assist the industry forge joint ventures to secure global markets. It also seeks to liberalise and encourage export of cotton yarn.

The Union Budget 2001 gives a further impetus to this trend by allocating Rs.10 crores to set up "Integrated Apparel Parks" to enable the dereserved garment units to modernise. Also, to set up 50,000 shuttleless looms and to convert 2.5 lakh traditional looms to automatic ones, the provision under the technology upgradation fund scheme (TUFS) is raised from Rs.50 crores to Rs.200 crores.

Clearly, the odd ones out in all this are the traditional handloom and powerloom weavers, with their simple pit and horizontal looms. Neither the plight of the weavers nor the means to strengthen institutions such as the Andhra Pradesh State Handloom Cooperative Society (APCO) that protect the weavers, finds a mention in the policy.

But, then, handloom bashing is nothing new. It was on even in 1952 when the Kanungo Committee was set up to suggest ways to modernise the textile industry, which once constituted India's dominant export sector. The committee report said: "For the ordinary cloth, the pure and simple handloom is and must be a relatively inefficient tool of production. With the exception of those items which require an intricate body pattern, there seemed to be no variety of fabric which the handloom industry could produce in a better quality or at a lower price. A progressive conversion of handloom into powerlooms through organised effort over a period of 15 to 20 years is, therefore, recommended."

The main objective of the Textile Policy is to ready the industry to cope with competition in the international market. The handloom weavers have accordingly been advised to "stand up on their own" and compete in the global market. While suggesting that the government support the weavers in this by devising special schemes, the Satyam Committee recommends the scrapping of the Reservation Act (of 11 items) and the hank yarn obligation which, despite their ineffective implementation, have provided the only means of support to handlooms.

According to Dr. K. Srinivasulu, Reader, Department of Political Science, Osmania University, the main problem with the Satyam Committee Report, which the government is to implement in phases, is its way of looking at the handloom industry. Deviating from the well-accepted method of categorising weavers on the basis of the organisation of production into cooperatives, master weavers and independent weavers, the report seeks to divide them into three groups on the basis of the "quality of cloth" they produce. In the first tier are weavers who produce "unique, exclusive, high- value-added items" (highly skilled weavers). In the second are producers of "medium-priced fabrics from not-so-fine counts of yarn" (semi-skilled). And in the third tier are those who produce ''plain and low-cost textile items'' (unskilled).

It is recommended that while the first tier weavers be encouraged to remain in handlooms, those in the third be made to shift their vocation. The committee, which assumes that the bulk of the weavers are in the second tier, suggests that they be trained, provided with semi-automatic looms and then encouraged to switch to powerlooms.

According to the estimates of the 1974 high-power committee of the Planning Commission on the textile industry, headed by Sivaraman, each powerloom can displace six handlooms (and 12 weavers). Recent estimates indicate that every jet loom displaces 40 traditional powerlooms. However, the Satyam Committee recommended that the bulk of the handloom weavers be accommodated by powerlooms.

The anti-handloom bias of the report is clear from the following statement: "Generally handloom weavers remain tradition-bound and are averse to change... For more than five decades, the poor handloom weavers remained spoonfed through government schemes and they continue to look up to the government for anything and everything." Nothing can be farther from the truth, for if the handloom industry has survived it is largely because of its own strength and resilience and the capacity of the weavers to adapt to market changes.

The latest Textile Policy has its roots in the 1985 exercise which was a clear departure from the policy followed since Independence, which recognised the employment potential of handlooms and provided it adequate safeguards from the mill and powerloom sectors. The 1985 policy made a significant departure from this by according high priority to "productivity" rather than to "employment", thereby viewing the industry in terms of processes - spinning, weaving and product processing - rather than in terms of sectors.

Productivity was sought to be increased in the various processes irrespective of the relative strengths of the different sectors to compete. Powerlooms proliferated and, in the 1980s, their overall growth was estimated at 11.7 per cent per annum (the figure for cotton powerlooms was 14.94 per cent per annum). Over five lakh unauthorised powerlooms were regularised in 1985. By the early 1990s, going by official figures, there were over eight lakh powerlooms which, given their cost and productivity advantages, hastened the virtual demise of the handloom sector.

Despite its emphasis on liberalisation in the industry, the 1985 policy provided two major measures to protect handlooms - the Handloom (Reservation of Articles for Production) Act (which reserved 22 varieties for handlooms), and the hank yarn obligation of the spinning mills (that 50 per cent of production should be in the form of hanks). This move met with stiff opposition from mills and powerlooms; writ petitions were filed by the mills and the Reservation Act was stayed.

In spite of the recommendation of the Abid Hussain Committee (1988) - set up to monitor the implementation of the 1985 policy - to place "handlooms in the Ninth Schedule of the Constitution in order to avoid the legal challenge to this legislation", the government did not move decisively to implement the Reservation Act. And, even as the ground was cleared for the implementation of the Act when the Supreme Court upheld it in 1993, nothing changed on the ground. In fact, on the recommendation of the Mira Seth Committee (set up in 1995 to review the performance of the handloom industry following the implementation of the 1985 policy), which suggested the reorientation of handlooms as the main strategy for its survival, the government in 1996 reduced the number of items reserved for handlooms from 22 to 11. But as the government has not been serious about implementing the Reservation Act, even these 11 items continue to be produced by powerlooms. Says Andhra Pradesh Handloom Workers' Union leader K. Santa Rao: "Even if the government reserves two items - saris and dhotis - for handlooms, it will survive."

Similarly, the 50 per cent hank yarn obligation of the mills has never been enforced. The percentage of hank to total yarn production has never crossed 26 per cent. According to Rashtriya Cheyneta Karmika Samakhya (the largest organisation of independent handloom weavers in the State with 2,340 members) president Mohan Rao, the actual supply of hank yarn has barely touched a third of the requirement.

Thus, not only was there a diversion of hank yarn to the powerlooms - 170 million kg in 1990-91 alone - it was also exported in large quantities - 64 per cent of total yarn exports or 30 million kg of hank yarn (20s and 40s count) to China and Thailand in 1990-91. There was also a mismatch between the quality of yarn the handlooms needed and that supplied by the mills. Thus, the number of working handlooms declined since 1985 (from 48 lakhs to 43 lakhs in 1986 to 38 lakhs in 1995), affecting over 30 lakh families and rendering over one crore people jobless.

Then came the body blow in 1991 in the form of the new Economic Policy and the process of liberalisation. In order to tide over the problems of balance of payments and low foreign exchange reserves, the government went for an export drive, including of yarn and cotton, ignoring domestic production requirements.

Yarn exports increased from 94.68 million kg in 1990-91 to 110.99 million kg in 1991-92 - 86.8 per cent of it was low count hank yarn - when domestic yarn production had in fact declined dramatically. (Ironically, while low-count yarn of 6s, 10s, 17s and 20s was exported, higher count yarn of 80s, 100s and 120s were imported to feed the "foreign" machines.) As a result, hank yarn prices increased by 18 to 20 per cent; while the price of 40s count rose by Rs.10 a kg, that of 60s and 80s went up by Rs.21 and Rs.25 a kg. As part of the privatisation and liberalisation process, sick and inefficient mills were also closed (400 units were wound up between 1991 and 1994). Ninety-five of the 129 independent mills and cooperative mills have been declared sick and are exempt from hank yarn obligation. This accentuated the problem of yarn availability and escalating prices. Thus, handlooms suffered not only due to the non-availability of hank yarn, but also owing to steep increases in yarn prices. This trend continued and the situation worsened through the 1990s. And, as the increase in yarn prices could not be totally passed on to the consumer, every crisis situation caused by a price increase was managed by cutting the weavers' wages.

The yarn price hike, coupled with the Centre's globalisation and modernisation policies (reducing duty on the import of textile machinery and opening up the economy to clothes from countries such as China and Thailand), also pushed the traditional powerlooms to the wall. Unable to face competition from jet and auto looms, and cheaper fabric dumped from abroad, thousands of powerloom weavers lost their jobs.

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It is in this background that the Satyam Committee was set up.

The Andhra Pradesh government's schemes did not review the problems of the weavers. Its 'Bicycle to the weaver' and 'Loom to the loomless weaver' schemes, when yarn prices were escalating to unsustainable levels, only reveal the callousness of the policymakers. The latest package announced on March 27, which includes modernisation, and training of weavers to produce for the export market and face international competition, is no different.

The crisis set off by a sharp rise in yarn prices was compounded by a number of problems on the demand side and in the export market. For example, two major export items from Andhra Pradesh to African countries - the 'real Madras handkerchiefs' and 'Madras checks' - have been hit by the steep tariffs and quota barriers imposed by importing countries.

Over the last 15 to 20 years, government policies that focussed on the liberalisation, modernisation and globalisation of the textile industry have steadily marginalised the weavers - both handloom and traditional powerloom.

This is no peripheral industry involving a small section of the population. After agriculture, weaving is India's single biggest employment provider; there are an estimated 36 lakh handlooms in the country, supporting roughly two crore people. Yet, weavers have been let down by successive policies.

The collapse of APCO

cover-story
ASHA KRISHNAKUMAR

THE handloom weavers' cooperative societies in Andhra Pradesh are in a precarious condition, thanks to institutions, mainly the Andhra Pradesh State Handloom Cooperative Society (APCO), set up to support them. And this has directly impacted some 1.7 lakh weaver families, dependent entirely on the primary cooperatives. APCO, set up in 1974 on the recommendations of the Sivaraman Committee (to protect handlooms from the onslaught of powerlooms) to help the handloom weavers with finance and marketing facilities, has become virtually defunct.

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Its turnover in 2000-01 (up to January) at Rs.20.38 crores was less than 20 per cent of the 1992-93 figure of Rs.128.41 crores, and its procurement worth Rs.6.36 crores was down from Rs.112.45 crores. It has accumulated losses totalling Rs.58.82 crores.

According to a note submitted on February 7 by Handloom and Textiles Minister Padala Bhoomanna to Chief Minister N. Chandrababu Naidu, since January 1999 APCO owes the primary cooperative societies Rs.36.26 crores for the purchase of cloth and Rs.10.32 crores for procuring yarn. As a result of these dues, and the interest of 8.5 per cent on the loans taken from the district cooperative banks, most primary societies have collapsed.

APCO has been consistently defaulting since 1998 on its payments for the stocks procured. In some cases it has even refused to lift the stocks, resulting in a massive accumulation with the primary societies. The cash credit or the working capital for the society is determined by adding 20 per cent to the annual production value and then halving it. When APCO does not pay up, the societies are caught in a severe bind - their working capital would drop, production levels would fall and the cash credit limit for the subsequent year would decrease.

It is in this vicious cycle that the primary cooperative societies have found themselves since 1992, when APCO started to fall back on payments, till it stopped them completely in 1998. According to B. Balaraj, manager the Handloom Weavers Cooperative Society established in 1949 at Dubakka, the crisis worsened after 1996, when APCO stopped the Janata cloth scheme, on which most primary societies depended.

The story is no different for most of the 598 primary cooperative societies - huge outstandings from APCO, no working capital, growing interest burden on the working capital loans taken from the district cooperative banks, drastic cut in production and large-scale unemployment. Not surprisingly, 85 per cent of the societies are defunct. The rest are in poor shape.

For instance, the Saibaba Society in Pondur in Srikakulam district, a pioneer establishment of the early 1930s, has just about managed to keep itself afloat. Its membership has dropped from 2,000 in the 1950s to a mere 200 now. And not all the members get regular work; the society is able to employ only about 20 members. APCO owes it Rs.14 lakhs (without taking into account the interest on outstandings); stocks worth Rs.7 lakhs are lying in its godown and the society has drastically cut production levels. And even to run at such low output levels it has borrowed Rs.3 lakhs at 24 per cent interest.

The plight of the Maramanda Society in East Godavari is no better. Its working capital of Rs.42 lakhs has been wiped out as APCO owes it Rs.50 lakhs. Government bodies owe the society another Rs.7 lakhs by way of payment on discounts and exhibition expenses. The society borrowed in 1999 Rs.6 lakhs for outstanding interest payments. Now it has stopped working.

What set off the collapse of APCO? Dubakka Handloom Cooperative Society president A. Chandramouli says it is largely because of mismanagement and the government's apathy towards weavers, an attitude that has been reflected in the non-clearance of dues to APCO. In his February note Padala Bhoomanna stated that the State and Central governments owed APCO Rs.1.39 crores and Rs.1.29 crores respectively. However, according to independent figures, various government departments owe APCO nearly Rs.11 crores. The defaulters include the Social Welfare and the Tribal Welfare departments and the Directorate of Health.

According to Mohan Rao, president of the Rashtriya Cheyneta Karmika Samakhya, APCO's collapse is primarily due to political interference at every stage of its working.

The intent of the State government to close down APCO is evident from its recent move to retrench 925 employees, sell some of its assets and shut down six divisional offices, three marketing offices and 148 units.

According to the Handloom Workers Union general secretary, K. Santa Rao, representations to the Textiles and Handlooms Minister and the Chief Minister to revive and sustain APCO as also to clear the dues have fallen on deaf ears. Promises are made freely, but never followed up. Even the latest package of Rs.15 crores announced by the Chief Minister to clear part of APCO's dues to the societies will meet with the same fate, he fears.

APCO's revival would certainly pull the weavers from the brink. Ironically, the Textile Policy released in November 2000 is silent on the fate of the apex institution.

Little evidence of relief

cover-story
PARVATHI MENON

"THE number of suicide cases came down because we did not announce an ex-gratia payment to the families of those who died of monocrotophoshate poisoning," said Anantapur District Collector Somesh Kumar. "We have assisted the families of victims in other ways." The convoluted and unsympathetic logic underlying the official analysis of a serious social crisis apart, Frontline found very little evidence of assistance in kind to the families of those who died.

In the case of one family, that of Ramjaneyulu's at Jakkalcheruvu village, his wife Mangamma and children were given financial assistance in instalments to construct a small house. The residents of the village staged a demonstration demanding immediate assistance for the family. In an Action Taken Report prepared by the administration and submitted to the State government, the steps taken to provide relief to the families of 41 persons who committed suicide are listed. All the relief measures are in the "to be done" category. Children are "to be" given admission into Social Welfare Residential Schools, a house is "to be" given to the next of kin, old age pensions are "to be" provided to the aged members of the family; bank loans are "to be" rescheduled, and so on.

Survivors, carrying the burden of loans, wait for relief "to be" disbursed. In Marthadu village, the aged parents of Devarla Rajanna, the bread-winner who committed suicide, have received no help from the administration, not even the Rs.10,000 that was supposed to have been immediately disbursed from the National Family Benefit Scheme. "Some government officials said they would give us old age pension and assistance to build a house, but nothing has come by so far," said Devarla Balanna. Neither has help in cash or kind been extended to Rami Reddy, the husband of Padmamma of Penakacherla village. He is a sick man who cannot work. "Please try to get some help for the family. They have nothing," was the last request that Nagamma, a family friend, made to the Frontline team before it left the village.

A farm crisis and suicides

cover-story

Forty-one cases of suicide were reported in Anantapur district of Andhra Pradesh between September and November 2000. A Frontline investigation shows that crop failure, indebtedness and related problems caused a majority of these deaths

PARVATHI MENON in Anantapur district

PADMAMMA, a farmer from Penakacherla village in Anantapur district of Andhra Pradesh, was the head of a family consisting of an ailing husband, two daughters and three sons. She not only worked hard raising groundnut on the 3 acres (1.2 hectare) of rain-fed land that the family owned, but also worked as an agricultural labourer for Rs.20 a day. Fifty-year old Padmamma was a political organiser of the Vyavasaya Coolie Sangham (agricultural workers' union) and had mobilised women and men in her village in agitations for higher wages. Nagamma, her friend and co-worker in the Sangham, remembers Padmamma for her selflessness and vitality. "She was our leader. She would listen to all our problems but would hardly speak of hers. And she was always forthcoming with help. If anyone had difficulties, she would even collect money and give it to them."

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But of course Padmamma was weighed down by her own share of worries. Like most other small farmers, she was deeply in debt. She was worried about her husband who needed treatment. Her daughters were married in simple ceremonies and had moved out, but her wage was hardly enough to keep the family going. She planted groundnut on her land in July last year and hoped that her harvest would help pay back a part of her debt of Rs.30,000 to the local agricultural bank and to private moneylenders. Midway through the season, the groundnut crop was hit by bud necrosis, a disease that wiped out a large part of the kharif crop in Anantapur last year. She sprayed her crops with monocrotophosphate, the pesticide that the government had distributed free of cost to groundnut farmers, but it made little difference. One evening Padmamma came home from work, and as usual went into her fields. As she surveyed her lifeless crops, something snapped in this once strong and resilient person. She drank the pesticide meant for her crops and died in hospital a few hours later.

For G. Ramanjineyulu, a small farmer owning 5.5 acres of land from Jakkalcheruvu village, the breaking point came when his motor pump burned out under low voltage conditions. Its repair would have cost him another Rs.3,000, so when it happened, Ramanjineyulu, who had a shared loan of Rs.1,00,000 with his brothers from the agricultural bank, plus an individual loan of Rs.60,000 from the village moneylender, decided he could take it no more. He returned home and drank pesticide. A day later Anita, his 12-year-old daughter, distraught with grief at her father's death, also consumed the pesticide and died. "His motor died, his bullocks died, the bank people and moneylenders were pressuring him to repay, and there was no expectation of a crop," said Irojamma, a resident of the village.

Rami Reddy, Padmamma's husband, does not work. The debt burden now falls on him and his sons. He got just two bags of groundnut valued at Rs.2,000 from his harvest, after investing between Rs.5,000 and Rs.6,000 on the crop. After Padmamma's death, the family got nothing from the government in terms of either ex-gratia payment or help in kind. Mangamma, Ramanjineyulu's wife, was sanctioned Rs.10,000 from the family benefit scheme, although she has received only half that amount. The government is also financing the construction of a small house for her in the village.

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These two were among a rash of 41 suicides, 18 of them by women, in Anantapur district over the months of September, October and November of 2000, by the consumption of monocrotophophate, according to figures released by the Anantapur district administration. This particular pesticide was distributed by the district administration as an antidote for bud necrosis, a virulent disease that spreads through insects and kills the crops. In addition, there were nine attempted suicides by monocrotophosphate poisoning. Of these two were by women. The administration's report does not ascribe all the deaths to problems of crop failure and indebtedness, although an independent investigation of such cases by Frontline in the villages of Jakkalcheruvu (Gooty mandal), Marthadu and Penakacherla (Garladinne mandal), Ammavarupetta (Bukkarayasamudram mandal), and Maruru (Rapthadu mandal) showed that it was indeed for these and related reasons that a majority of these deaths seemed to have occurred.

The official report, such as it is, does provide some insights into what happened. To begin with, all 50 suicides and attempted suicides were by monocrotophosphate poisoning. Of the 41 suicides, 34 were by farmers (including 15 women) who owned land, mostly unirrigated and between 1.5 and 10 acres in extent. The pesticide was distributed by the district administration to families who either held or leased land (leasing land is a common practice in these parts). A majority of the farmers were in debt to agricultural banks and moneylenders. A majority of the women (16) who died were in the 15-30 age group, whereas a majority of the men (17) were between 21 and 50 years.

The other feature of what appears to have been an epidemic of suicides is that but for one village where three members of a family committed suicide the same day, there is not more than one suicide in a village, and the villages are in mandals that are in many cases far removed from one another.

It was pressure from an alert and conscientious local press in Anantapur, that highlighted each case of suicide soon after it occurred, that forced a discussion of the issue in the Andhra Pradesh Assembly. The district administration's report on the deaths was a sequel to that. What therefore is now information in the public realm is that 50 persons, a majority of them groundnut farmers with small holdings of unirrigated land, and all of them in debt of varying magnitude, felt that death was preferable to the life of acute hardship that they were living.

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While the spate of suicides peaked in October-November last year, they have not ceased. Cases of suicides continue to be reported in the media from different parts of the district. In March, two cases of suicides were reported - one by 33-year-old Krishna Naik, a peasant from Mariampally Tanda in Gumagatha mandal and the other by 40-year-old Lakshmidevi from Siddiramapuram village in Bukkaraya-samudram mandal. Both committed suicide owing to a burden of debt they could not repay. In April three cases of suicides were reported: 35-year-old Lakshmamma of Konduru village in Lepakshi mandal; 20-year-old Dadvali, a weaver from Singanmala mandal headquarters, and 18-year-old Rama Devi of Bandameedapalli village in Rapthadu mandal. Rama Devi reportedly killed herself when she lost her gold ear-rings and was scolded by her parents for her "carelessness". Parents had reportedly told her that they could not get her married because they were so deeply in debt.

Drought is the catch-all phrase that is used by the officialdom to explain away agricultural distress. In fact, most farmers themselves readily accept this explanation. There is no question that Anantapur is a rainfall-deficient district, with an average annual rainfall of 520.4 mm. It is the second lowest rainfall district in the country (after Barmer in Rajasthan). In 2000, the average rainfall was 540 mm, well above the average. The previous year was one of acute rainfall scarcity with Anantapur receiving only 360 mm. Yet the severe drought in 1999 did not drive cultivators to suicide. In fact, groundnut production in the kharif 2000 season (April 1 to September 30), despite the ravages of bud necrosis, was 9 lakh tonnes, according to the district administration. (The Oilseeds Growers Federation estimated the production at 7.25 lakh tonnes.) Compare this with the production of the 1999 kharif season which was just 3 lakh tonnes, and it becomes clear that drought and falling production alone do not explain the phenomenon of suicides. Further, in Andhra Pradesh last year there were suicides among cotton farmers in Mahboobnagar district, and among tobacco growers in Guntur district. Never in the past has there been such a situation.

The immediate reason for the suicides was a mounting burden of debt that the families concerned could simply not hope to repay, added to a widespread sense of despair when the bud necrosis attack broke out. Underlying this was a web of factors, some specific to the groundnut economy, and others related to the impact of liberalisation policies on the larger agricultural environment.

Anantapur district has the largest acreage under groundnut in the country. Last year the kharif crop, which is entirely rainfed, was sown on 7,35,000 ha. "Bud necrosis was seen in August, a month after sowing," said T. Yellamanda Reddy, principal scientist at the Agricultural Research Station in Anantapur. "The disease is present in sunflower and in roadside weeds, and spreads through insects." According to him, the disease caused damage ranging from 1 per cent to 80 per cent of the standing crops in a particular field. "In Anantapur, the average yield of groundnut is 1,100 kg a hectare, although yields here can go up to 2,000 kg a hectare. This year, however, the average yield was only 850 kg a hectare," said Yellamanda Reddy. The disease also coincided with the first of two dry spells in August and September. Monocrotopho-sphate turned out to be totally ineffective, partly because it was used too late as the crop had already been hit by the second dry spell which lasted between 12 and 23 days in different parts of the district. The rabi crop (October 1 to March 31) is an irrigated one and has been sown on 20,000 ha. According to Yellamanda Reddy this crop too has been affected, but to varying degrees in different areas.

The inherent risks of rainfed agriculture have increased with the rather dramatic rise in the costs of cultivation. In Andhra Pradesh, power rates were hiked in 2000 pushing up costs for the agricultural sector by 25 to 70 per cent, while the duration of power supply for agricultural operations was cut to nine hours a day. This is usually during night. In actual fact, cultivators find that their borewell pumps work for just six hours at night.

Electricity, or the lack of it, both for agriculture and domestic use, was a major issue of concern among the farming families this correspondent met. In Jakkalchiravu village, a group of small farmers said that yields have fallen substantially in the last two years because of power cuts. "From six to eight bags of groundnut per acre, we got just three bags this year. If our pump fails because of voltage fluctuations, then it costs another Rs.4,000," said J. Narayanaswamy, who owns five acres of land. (A bag takes 40 kg.) Viramma, a farmer from Jakkalchiravu village, owns 3 acres of irrigated land. She spent Rs.10,000 on the land, which included the cost of seeds, fertilizer, pesticides, power and labour. "I have a 5 hp pump for my borewell," she said. "I pay Rs.260 a month for electricity. Just before the increase in power costs, it was Rs.60 to 70, and nine years ago it was only Rs.7."

Power is only one component of the cost of cultivation, which has seen a sharp rise in the last two years. Fertilizer prices soared after their decontrol in the mid-1990s. "A 50 kg a bag of DAP fertilizer in 1994 cost Rs.180. In 1999 it cost between Rs.480 and Rs.520," said Vishwesh-wara Rao, a large farmer. Pesticide costs have also risen. When bud necrosis broke out last year, the district administration distributed monocrotophosphate to the value of Rs.6 crores in the district. The dealers make a killing by selling Rs.36 crores worth of pesticides. "The cost of cultivation is in the region of Rs.3,500 an acre (Rs.8750 a hectare)," said Vishweshwara Rao. "Because of the use of pesticides last year, it went up to Rs.4,000 and even up to Rs.4,500 an acre."

Seeds cost more too. With the breakdown of the government seed distribution centre, farmers are dependent on private seed dealers, and this has affected both the price and quality of seeds. There has also been a breakdown of institutional safety nets, such as the public distribution system, procurement support, crop compensation schemes and so on, which in the past may have softened the blow of agrarian crises.

By the middle of the kharif season, there were fears among farmers of the entire crop getting wiped out. But this did not happen, as the overall production figures cited above show. However, each farmer was carrying the debts of the previous drought year and had borrowed yet again to invest in the kharif crop. But the worst was yet to come. When it came to the sale of their crop, they found that groundnut prices had crashed. "From Rs.1,400 a quintal in October 1996, groundnut prices peaked in September 1998 at Rs.1,700 a quintal." said Vishweshwara Reddy, district general secretary of the Andhra Pradesh Raitha Sangham. "This year prices fell from Rs.1,300 a quintal in September 2000 to Rs.1,250 in October, and it is now Rs.1,150," he said. "The government declared a minimum support price of Rs.1,220 a quintal, but procurement has been inadequate. Of the total kharif production of 7.25 lakh tonnes, procurement has only been one lakh tonnes." The fall in the cultivated area and prices of oilseeds in India is the direct consequence of cheap edible oil imports (Frontline, February 2, 2001). As long as cheap imports continue, there is unlikely to be any price stabilisation for groundnut.

MEANWHILE, debts among farming families are on the rise. A family's debt is typically divided between the bank and the moneylender. There is not a day when the Anantapur edition of Eenadu, a Telugu daily, does not carry notices of gold auctions. These notices list the names of farmers, the quantity of gold they have pledged, and the outstanding sums. A cause for consternation among the farming families this correspondent spoke to was the repeated notices that banks send defaulters, asking for repayment of interest, and threatening the attachment of land and other forms of property.

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Take the case of Bandi Naganna, a small farmer owning 5 acres in Ammavarupetta village, who survived a suicide attempt thanks to timely hospitalisation. He took a long-term loan of Rs.1.5 lakhs from the agricultural bank four years ago, which has now become Rs.2 lakhs. He has also taken Rs.10,000 from the moneylender at an interest of Rs.2 a month for every Rs.100 (which works out to 24 per cent per annum). When his crop was affected by disease, he decided to kill himself.

There is Venkatarama Reddy, whose 18-year-old sister Thulasamma committed suicide. He has 4 acres of orchard land, and made 10 attempts in vain to dig bores. Each attempt cost him Rs.8,000. He also leased 10 acres of land to grow groundnut and lost Rs. 20,000 in that venture. He owes Rs.40,000 to the Marur primary agricultural society and has received several notices from it. In addition, he owes a moneylender Rs.20,000 at the standard private interest rate of 2 per cent a month. "We had fixed a marriage for my sister but would have needed Rs.50,000 and at least 10 tolas (one tola equals 10 grams) of gold to get her married," he said. Thulasamma committed suicide soon after the crop failed.

On April 3, Narendra Reddy, a 26-year-old farmer from Kallapuram village in Pamadi mandal, was brought to the Praja Vaidyashala hospital in Anantapur in a critical state as he had consumed monocrotophosphate. Reddy had seven acres of land and had loans amounting to Rs.1.27 lakhs. His life was saved by Dr. M. Geyanand. It is ironic that the timely medical attention he received, which saved his life, may actually increase his debt burden, as it will be a few months before he can get back to work.

The Anantapur District Cooperative Central Bank Ltd is the major agricultural bank in the district. According to its president S. Suryanarayana, the bank gave short-term kharif loans amounting to Rs.56 crores in 2000, up from Rs.51.81 crores in 1999. Under its long-term lending scheme it has advanced Rs.17.28 crores in 1999-2000. "Our recovery rate for both short-term and long-term loans was just 30 per cent in 1999-2000," said Suryanarayana. "We have recovered 18.45 per cent this year and we are running at a loss of Rs.19.9 crores."

The mood is one of despair and frustration among the groundnut farmers. Good agricultural practices and favourable climatic conditions are no longer enough to ensure the farmer an adequate livelihood. With an import regime that now exposes agriculture to the uncertainties of global trade, groundnut cultivation and the lives of four and a half lakh farmers dependent on it are precariously poised in rural Anantapur.

Commuters' crisis

the-nation

As the Delhi State government takes the rap for having failed to meet a Supreme Court-mandated deadline to ensure that the entire diesel-run bus fleet of the capital is switched to compressed natural gas mode, the public is caught in the crossfire.

T.K. RAJALAKSHMI V. VENKATESAN in New Delhi

THE public transport system in the national capital has never been anything to boast about, but its utter collapse in the wake of a Supreme Court order regarding vehicular pollution left Delhi in a state of disarray in the first week of April. The last occasion when the city got similarly paralysed was in the wake of the closure of polluting industries and consequent labour unrest (Frontline, December 22, 2000). The latest confusion was the outcome of the non-implementation of a Supreme Court order of July 1998 directing the conversion of the entire diesel-run bus fleet of the capital into the Compressed Natural Gas mode by March 31, 2001. This order covered all commercial vehicles including autorickshaws and taxis.

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The Delhi government led by the Congress(I), the Union government led by the Bharatiya Janata Party and, most important, the commuters, were unprepared for this eventuality. While the Delhi government blamed the Central government and the Petroleum Ministry for an inadequate number of filling stations and gas supply, the Petroleum Minister averred that there was no shortage and that the Delhi government had been lax in implementing the apex court order. At another level, the mess got transformed into a farce as environmental groups battled over the efficacy of CNG as a fuel. The "CNG lobby" led by the Green activists was ranged against a "diesel lobby" led by the private transporters.

As the deadline approached it was evident that very few public transport vehicles had been converted or were in the process of being converted into CNG mode. The first few days of April proved to be a nightmare for the commuters who had to make do with the limited fleet of some 800 Delhi Transport Corporation (DTC) buses and a few three-wheelers which had CNG fittings. Out of a total fleet of 12,000 to 14,000 buses, the DTC has some 2,000 while the rest are managed by private operators, who had not complied with the court order.

Chaos led to confusion and there was violence on the streets. Six buses, most of them belonging to the DTC, were torched in Badarpur on the outskirts of the capital. Commuters travelled atop buses, many hung out precariously from the exit points and working women, as always, bore the brunt. The three-wheelers that plied charged exorbitant rates. School and college goers suffered.

THE general comment was that the Supreme Court, in its zeal, had not shown enough sensitivity to the plight of the commuters. On March 26, the court declined to entertain an application from the Delhi government and the parties concerned seeking an extension of the deadline.

The Bench, comprising Chief Justice A.S. Anand, Justice B.N. Kirpal and Justice V.N. Khare, said granting a "blanket extension" of deadline "would amount to putting a premium on the lapses and inaction of the administration and the private transport operators".

The Bench, however, allowed certain relaxations and exemptions to mitigate the sufferings of commuters in general and school-going children in particular, by granting a limited extension of the deadline till September 30, 2001 in certain specified cases. Commercial vehicles shall be permitted to ply from April 1 to September 30 if they carry and display on the windscreen a permit or authorisation signed by the Principal Secretary for Transport in the Delhi administration. To be eligible for this permit, the vehicle owner should have placed a firm order for conversion to CNG or other clean fuel mode, and furnish an affidavit in the Supreme Court on or before March 31, 2001 on the basis of which the official was expected to issue permits and authorisations.

While the Supreme Court staff sat extra hours on March 30 and 31 to complete the filing of affidavits by vehicle owners, the Delhi government wanted a limited extension of time to enable it to complete the issue of permits. On March 30, it also requested the Bench, through Additional Solicitor-General Kirit Raval, to hold a special sitting to consider a short extension of time.

Even though the Delhi government is partly to blame for its inaction in complying with the court's July 1998 order, the court gave its order on relaxations only on March 26, leaving little time to complete the formalities. Raval underlined a genuine problem faced by the Delhi administration: it was not possible for one individual - the Transport Commissioner - to issue all the permits, and requested that two other officers be permitted to issue such permits. Chief Justice Anand said a request had to be made by the official himself for the purpose, and refused to heed Raval's request.

Even though Delhi Chief Minister Sheila Dixit was initially hopeful of meeting the September 30 deadline, she joined the chorus of public protest against the court order, and declared that her government was ready to face punishment for contempt of court, but that it would not allow the citizens of Delhi to suffer. On April 3, the government decided to allow all buses possessing booking receipts for CNG conversion and photocopies of affidavits filed in the court to ply without the mandatory special permits until April 15. Clearly overwhelmed by the massive exercise involved, she made it clear in the Delhi Assembly that the government would not be in a position to meet the September 30 deadline.

Sheila Dixit said that the court was not aware of the ground realities prevailing in the capital, and that it was time it took a lenient view of the situation in view of the serious law and order problem that had arisen. She also said the court was being irrational and was taking an indifferent view, by refusing to listen to the government's problems.

On the morning of April 3, when Raval moved the Bench to extend the deadline by three or four days, the court commented: "If the Apex Court Registry had worked till midnight for the last three days to receive 27,442 applications from bus and three-wheeler operators, and 15,000 applications had been sorted out, why could not the Delhi government complete its work expeditiously?"

For the Delhi government, however, it was a new experience to examine the papers, and issue permits within the stipulated time. The sheer volume of work necessitated more time. It was only on April 5 that the court allowed the government to issue provisional permits until April 14 to bus and three-wheeler operators who had filed affidavits.

THE court meanwhile directed the Delhi Chief Secretary to file an affidavit on the reported statements of the Chief Minister and the Transport Minister on the issue. Expressing his anguish over Dixit's remarks, Chief Justice Anand said, "I feel so hurt by the statements. They are opening a war on the judiciary. The Delhi administration is not above the law." The Bench observed that "sympathy for the commuters is being used by the Delhi Government to cover up its administrative lapses and lack of governance." Asked by the Bench whether the government's defiant stand amounted to a breakdown of constitutional machinery, Solicitor-General Harish Salve warned that if this attitude persisted, then the Centre had no option but to displace the government.

Had the court been quick to respond to the Delhi government's request for extension of deadline in granting valid permits to transporters, the unfortunate incidents in the capital from April 2 to April 4 could have been avoided. While the Delhi government is responsible to an extent for not having speeded up the process of conversion, the Central government was equally responsible, if not more, for the mess. The provision of CNG, laying of gas pipelines as well as setting up of "mother" and "daughter" stations for buses and other vehicles have been grossly inadequate. ("Mother" feeders are those that cater to buses and "daughter" feeders are those that cater to smaller vehicles.)

In an attempt to redeem itself in the eyes of an angry public, the government issued an advertisement clarifying that it had assumed office only in December 1998 and that the previous BJP government had placed orders for some 1,300 urban diesel buses and 350 ordinary diesel buses, subsequent to the court orders of July 28, 1998. The government had cancelled this order. The DTC had placed orders for 2,000 new CNG chassis or buses in June and November 2000 and separate orders had been placed for the conversion of diesel-run buses.

The Dixit government charged a Central government undertaking, Indraprastha Gas Ltd, with not being able to provide an assured supply of CNG and not laying gas supply pipelines which as of now exist only in south Delhi. Moreover, the CNG mother and online stations for buses and outlets for autos and taxis were grossly inadequate, alleged the Delhi government.

Ram Naik, Union Minister for Petroleum and Natural Gas, blamed the Delhi government for the mess. He held that neither Sheila Dixit nor Parvez Hashmi, the Transport Minister, had interacted with the Union Ministry or informed the Ministry about the demand requirements. Hashmi rebutted the charge by showing a copy of the minutes of a meeting held between the State Transport Ministry and the Petroleum Minister on August 18, 2000 when a requisition was made for adequate supply of CNG to the DTC and for LPG being made available as an alternative fuel. But, it is evident that no time-frame or commitments were made or extracted from either side and that follow-up was negligible. The private transporters, perceived as the main culprits in the matter, are a perplexed lot. The owners have had to spend huge amounts of money to book CNG vehicle chassis or even to get CNG kits. One company, Nugas Technolo-gies, has the monopoly of body fabrication and supply of CNG kits and chassis. The cost of a bus with a new CNG system, excluding 12 per cent local taxes, is Rs.13.10 lakhs. (A diesel bus costs Rs.7.5 lakhs.) The cost of conversion from a diesel to CNG system is Rs.4.5 lakhs, excluding 8 per cent local tax.

According to Jaswant Singh Arora, president of the Federation of the Delhi Transport Unions Congress, both the governments were to blame for the crisis. The Central government was not able to provide gas even for those vehicles in the CNG. Each taxi or autorickshaw driver had to spend two to three hours to get his tank filled. The Federation had estimated that some 250 filling stations would be needed as against 68 now. He felt that a real crisis would arise when, after six months, all vehicles will be CNG-run.

The president of the Private Operators Bus Welfare Association, Himmat Singh, said the actual comparison should be made between CNG and ultra low sulphur diesel (ULSD). A study by a Tata Energy Research Institute had pointed out the relative advantages of ULSD over CNG. Worldwide, CNG buses accounted for only an insignificant share of city fleets. Himmat Singh said that ULSD was a hundred times cleaner than "dirty diesel". Himmat Singh said that the increased costs for the transporters would eventually be passed on to the commuters. He said the previous BJP government had told the court that CNG was a better option than ordinary diesel and the court was not told about other options.

RAJEEV DHAVAN, advocate and counsel for the Centre for Science and Environment (CSE), holds the Supreme Court responsible for the chaos in Delhi. Criticising the court for converting its registry into a Regional Transport Office, he said certifying the applications for conversion was basically an administrative job which could have been better handled by senior officers of the Delhi government. The court, it appears, stepped in to ensure authenticity in the process, but it also exposed its lack of trust in an elected government. With the Supreme Court registry receiving affidavits until the night of March 31, how could the government have issued the permits at the same time, he said.

Those critical of the Delhi government's role say it had not offered any reasons for going back on the recommendations of the Bhure Lal Committee, which were accepted by all parties and was the basis for the Supreme Court's 1998 judgment. For the government to question now the wisdom of conversion to CNG or the deadline of March 2001, it is suggested, is certainly an afterthought. The Bhure Lal Committee was a statutory committee appointed under Section 3(5) of the Environment Protection Act, 1986.

However, the debate on the effectiveness of CNG is far from over. The Supreme Court Bench's March 26, 2001 order is proof enough. The Bench said: "It was contended before us that low sulphur diesel should be regarded as a clean fuel and buses be permitted to run on that. It was submitted that in some other countries ULSD, which has sulphur content of not more than 0.001 per cent, is now available. We direct the Bhure Lal Committee to examine this question and permit the parties to submit their written representations to the committee in that behalf." The committee was asked to submit a report within a month as to which fuel can be regarded as clean.

Transporters are also not clear about the reference to the Bhure Lal Committee. Himmat Singh said the Committee must include a technical person and a member from the public so that the transporters' point of view could be understood.

A CSE spokesperson suggested that the Supreme Court's directive to the Bhure Lal Committee to examine the ULSD issue is only in the context of inter-State buses and transit vehicles for which switch-over to CNG would be a problem in view of its non-availability outside Delhi. But the non-mention of inter-State buses in the court's order makes one wonder whether the Bench was moved by the demand for a complete rethink on the issue and examine the available options.

'We are just being cautious'

the-nation

Interview with Delhi Chief Minister Sheila Dixit.

Delhi Chief Minister Sheila Dixit explains her government's dilemma over the CNG issue, in this interview she gave T. K. Rajalakshmi.

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Is the perception that your government woke up only at the last minute with regard to the conversion of diesel vehicles to CNG mode correct?

There wasn't sufficient time to implement the court order as CNG buses are not manufactured here. Secondly, the gas itself is not available in adequate pressure or in an adequate number of places in Delhi. Delhi is the first city to be asked to go in entirely for CNG. Two years was too short a time even to get the technology, tried or untried. After all, it is an expensive bus. It costs about five or six lakh rupees more than the normal diesel bus. So the ordinary bus operator and the government have had to think twice, especially when you put large quantities of money and also when there are many question marks. When you buy 30,000 buses, there has to be the infrastructure - mechanics, service stations - but there is none for CNG. These services take years to build.

The Delhi government has been made a scapegoat as neither do we have the manufacturers in our hands nor do we have the gas. Yes, we had the money and we put in more since last year but even now till October we will be able to get only about 1,500 buses because that is the capacity. CNG buses are manufactured in Alwar and have to be sent to Pune, Jamshedpur or Mumbai for the chassis to be made and they have to be sent by railway wagons as there is no CNG available on the way. The whole process takes too long. There are questions about whether it is a safe technology, or whether it can withstand the 45oC heat of summer in Delhi, whether it can pick up speed as today it stops even at flyovers or slows down so miserably that one has to restart it, recharge it. The technology is uncertain, the gas is not available and the infrastructure is not ready. The economy of it all is uncertain. What is it that we are going in for, nobody has any idea.

Today they blame the Delhi government for not doing this, tomorrow they will blame us for throwing public funds and private operators' money without being sure (of the facts). Suppose two years later we have to dump them? We will have to be answerable. Then there are conflicting opinions between environmentalists and technologists. CNG may not result in the same kind of pollution like diesel, but it will bring another kind of pollution, whether it be a greenhouse gas effect or some carcinogenic emissions. Nowhere in the world in any city has CNG been tried fully. There are other clean fuels, so do that, we say. I am opening my viewpoint for the first time because we have been giving out these points and views to the Honourable Supreme Court and at that time I thought it would be wrong on my part to say it to the public. But I think the time has come now to say it.

The government had two years to look into these issues. Why weren't these points raised earlier?

We asked for one more year. The technology has to settle down. How can you force a private operator to pay five or six lakh of rupees more? There are some 50,000 trucks and other vehicles that ply through Delhi. They don't run on CNG, what will they do for fuel within the city? These buses that we get or convert will not be able to go out of town as there is no CNG outside Delhi. Many private operators hire out their vehicles out of the city for marriage parties or for trips or tours, now they will just be confined within the city. Before the BJP demitted office in 1999, its government placed an order for 1,800 diesel buses knowing that CNG would have to be used. There has to be some explanation for this.

Your government is now talking about Ultra Low Sulphur Diesel (ULSD). Why did you not raise this point earlier?

There is a sharp divide among environmentalists themselves, one of them recommending CNG and the other going in for ULSD. A year ago, the sulphur content had come down to .005 while the ideal sulphur content should be .001 per cent. That is currently not available.

We are being accused that we did not tell the Central government about our CNG requirements. It is not true. Our first meeting was held when Suresh Prabhu was the Environment Minister. The Bhure Lal Committee was involved, and so were other Ministries. Our Transport Minister had more meetings with (Union Minister for Petroleum and Natural Gas) Ram Naik. I had written two or three letters to the Petroleum Ministry requesting that gas supply be ensured. We had meetings with Indraprastha Gas Limited, and people from various Ministries. We can't afford not to have gas. You have seen these huge queues of scooters and cars standing for hours. Then the stations are not equitably distributed all over Delhi. They are concentrated in South Delhi. How do you expect the three-wheeler driver or the bus driver to travel huge distances for gas? There are teething problems over technology. Its safety is not assured, its economic viability is not assured and above all its environmental suitability is questionable.

To what extent is the Central government to blame for this crisis?

The Central government, the Union Ministry, kept on telling us things that were not true. At no point did they say they won't give us gas. In September 1999, they started their stations and at the first meeting I had with Prabhu in January he said we have got it all on line, it will be ready. Came September 2000, things were still not ready. Today it is still not ready. What do we do? Even at the existing stations, the pressure is not good: it takes 30 to 40 minutes to fill a bus.

But overall, there is a perception that your government mismanaged things.

How do you comply with orders that are impossible to comply with? The ground realities are different. Eventually we are grateful to the court for giving us the 14 days we asked for to issue the permits. But the crisis is not over. I am not sure how many buses will be available on September 30 or whether gas will be available. Today I am not confident that the September 30 deadline will be met. The conversion is also not a success: it is a hit-and-run story so far. Some people asked why we couldn't get the technology from abroad. We placed advertisements, and groups came from Italy, Australia, the United States, and none of them (could handle) the kind of temperatures that we have -45oC for about two months. Yesterday there was an incident involving a three-wheeler whose cylinder burst and six people were injured. Now they say the nozzle and the receptacle are not matching. Because it is a new technology, there is not enough research on this. Many will blame me for selling sub-standard stuff. Spurious material is bound to come up as there is not enough of the genuine stuff. I do not intend to defy anybody, but it is time to bring these realities to the fore.

Neither have the end emission norms for CNG been specified. Suppose these buses don't run, what happens then? These are questions that need answers. We are going to set up an Environmental Protection Board to look into these issues.

Please don't blame my government for being slack or inefficient. We are just being cautious.

Your apparently defiant statements in the Legislative Assembly put you almost at the risk of contempt of court.

There was no intention to defy the court. I said in the legislature that the Cabinet has taken a decision keeping the public's difficulties in view and we are ready to face any punishment for that. The court then gave us 14 days for permits. There was this accusation that we were not working. We were working right through the holidays. There were women employees who have not had a single holiday but were working through and through to issue these special permits. We were being neither defiant nor reluctant at any stage.

Concerns in India

world-affairs
R. RAMACHANDRAN

THE outbreak of the foot-and-mouth disease (FMD) in the United Kingdom and in some other parts of Europe has trigerred unwarranted concern and even scare in this regard in India. One of the reasons for this was an incorrect report in the media that the virus strain isolated from the current outbreak in the U.K. came from India. The concern is unwarranted because FMD is endemic in India and is generally prevalent over the country. The furore in the U.K. and Europe is chiefly because these countries have been declared to be FMD free by the Office International des Epizooties (OIE), the international body for monitoring the spread of animal diseases.

Of course, there are instances of outbreaks every year in various parts of India - an outbreak being when the number of affected animals in some village, or groups of villages, exceed the normal number. A recent outbreak in Punjab and Haryana, around the same time as the outbreak in the U.K., heightened the focus on FMD, particularly in the media.

The total number of FMD cases in the U.K. in the current outbreak is reported to be 322 (as of March 18). India has an animal population of about 450 million (200 million cows, 85 million buffaloes, 115 million goats, 20 million sheep and about 30 million pigs). In 1999, the total number of reported cases in India was 38,233. Of this bovine cases, which are the most numerous, were 35,574. In all, there were 940 (bovine) outbreaks during that year. According to the Department of Animal Husbandry and Dairying of the Ministry of Agriculture, the recent outbreak occurred in Gokulgarh vilage of Rewari district between February 12 and February 23. According to the Ministry, buffaloes and cattle numbering about 50 were affected in a total population of around 1,000. Subsequently, there were reports of an outbreak near Meerut, according to V.K. Taneja, Animal Husbandry Commissioner. A team has gone to study the situation. Initial reports said that the numbers in Meerut may be higher.

The outbreak is often seasonal, occurring mainly during October-November and February-April, because of increased agricultural activity, such as harvesting and sowing. Statistically, according to P.N. Khanna, a former scientist of the Indian Veterinary Research Institute (IVRI), Izzatnagar, in a given region an outbreak of the FMD can be expected to occur once in every four years. This is essentially because the natural immunity conferred by infection at a time lasts about three years.

CAUSED by a small virus, the disease is highly contagious and is transmitted even by wind across an area of over 20 to 30 km. Although humans are not susceptible, a person handling infected cattle can be a carrier of the virus. Unlike in the West, where it is easy to control the spread through strict quarantine measures, slaughtering and even burning, the Indian context is entirely different. Movement and mixing of animals (even in urban areas) and cattle bazaars are common here and can lead to widespread transmission. During outbreaks, however, such trade fairs are forbidden. Moreover, the dairy and meat industry being extremely important in the West, it is the concern over enormous economic losses owing to the disease that warranted burning. In India such measures would be unthinkable especially when it is known that the virus is not transmitted to man, that the disease is self limiting and that milk and meat are easily rid of the virus by simple measures such as treatment with caustic soda or citric acid.

The virus comes in seven distinct strains of A, C, O, Asia 1, SAT1, SAT2 and SAT3, of which the last three are confined to the African region. However, Khanna said that there were as many as 60 variants with minor "shift" and "drift" mutations. All the four non-African strains were found in India, of which the most virulent was the O type. This type was first isolated in India by the IVRI in 1990. This strain is referred to as the pan-Asian strain and this has since been isolated in several other countries. Disease caused by the O type is also the most widespread, accounting for about 80 per cent of the cases in India. However, for the last two years, no case of infection owing to the C strain has been found.

It was this pan-Asian O strain that was recently isolated in the U.K. by the European Referral Laboratory for FMD at Pirbright. According to the centre, the virus was isolated on February 19 from pigs in an abattoir in Essex. What has been stated is that the virus characterisation is similar to the Indian strain. However, there is no way of concluding that it went from India. In any case, since no milk or meat products from India are allowed to be exported to FMD free countries, the possibility of the virus having travelled from India seems remote. India does, however, exports meat to West Asia and South-East Asian countries. It is possible that the meat re-exported from there could have carried the virus. However, even that is unlikely because, according to Taneja, exported meat is deboned, deglanded and chilled. Under these conditions the virus does not survive. Moreover, ante-mortem and post-mortem of slaughtered animals is a must for meat export houses.

The death reports in the recent outbreak in the Punjab-Haryana region (about a dozen) were not owing to FMD. The deaths were the result of secondary infections caused by the general loss of immunity and most of these were found to be owing to the bacterial infection of haemorrhagic sceptecemia (HS), or Pasteurellosis.

Hard times

As the foot-and-mouth disease situation worsens in Britain, Prime Minister Tony Blair's plans to seek a re-election in May suffer a setback.

IT is one of the worst disaster stories to come out of Britain in recent years and its effect on the British psyche is proving to be as debilitating as its economic and political cost. The image of "Cool Britannia", blessed with a picturesque countryside, and as the preferred destination of well-heeled international tourists, has taken a beating as the country is ravaged by the foot-and-mouth epidemic, now in its sixth week. Shunned by tourists, blamed by its European neighbours for exporting the disease to them and widely seen overseas as being closed to business, the national mood is one of all-pervasive gloom and shame. Britons travelling abroad say they feel humiliated when directed at American and European airports to walk over the "disinfectant" mats. A newspaper survey showed that even people of the Third World were beginning to turn up their noses.

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When the first case of foot-and-mouth disease was reported in February, it was widely seen as an aberration and even the gloomiest of forecasts did not anticipate that it would spread so rapidly and on such a scale. In the event, it is turning out to be as serious as the 1967 epidemic, until now regarded as the worst. Vast stretches of the British countryside is out of bounds, more than a million head of cattle have been slaughtered and the mass cull is likely to continue until the disease is brought fully under control. According to experts, bringing the disease under control could take several months. Farmers who had barely recovered from the effects of the mad cow disease when the epidemic struck say that they face ruin, many of them having lost their entire livestock. Rural tourism, which should have been in full bloom at this time of the year, is down to its knees as hotels, pubs and tourist attractions are closed and sports events cancelled. A rough estimate puts the total loss to the farming and tourism industry at over 9 billion.

However, what is worrying the Tony Blair government most is the political cost of the situation. The crisis has already overshadowed Blair's carefully worked out plans for an early return to a second term in office, and for the first time since he came to power four years ago, he finds himself struggling to prove his mettle as a crisis manager. The foot-and-mouth epidemic is his government's first major crisis and it is widely seen to have mishandled the matter inviting the charge of "complacency", "insensitivity" and "arrogance". According to a British Broadcasting Corporation (BBC) Newsnight poll, nearly 70 per cent of the people are dissatisfied with the government's handling of the epidemic. Although Labour continues to lead in the opinion polls in the build-up to the elections, the longer the crisis lasts the more the party is likely to become vulnerable to the mood swings of the voters. Hence Blair's keenness to be done with the elections as soon as possible. According to a Times-MORI poll published on March 29, the Labour lead over the Conservatives was still intact with 50 per cent of the people saying that they would vote for Labour if elections were to be held "tomorrow". "The striking feature of the poll is that Labour has maintained its ratings despite widespread public criticism of its handling of the foot-and-mouth outbreak... The public is also dissatisfied rather than satisfied with the way the government is running the country... But even with these negative attitudes people still have a low opinion of the Tories as an alternative," The Times said. (By the first week of April, Blair had more or less decided to have the elections delayed until June.)

On the foot-and-mouth epidemic, the main criticism was that the government woke up to the crisis late, and even as the disease was raging, Ministers were glibly saying that it was under control. In the first few weeks of the crisis, Agriculture Minister Nick Brown handled the matter all by himself when it was clear to everyone that the situation warranted a bigger and more coordinated effort. Unlike other European countries which moved swiftly and succeeded in nipping the disease in the bud, the British government's initial response was slow and bureaucratic. For instance, the decision to cordon off much of the countryside and advise people to stay off had the effect of scaring away tourists, a decision which the government is ruing today. Although the government is now trying hard to dispel the impression that Britain is closed to tourists (British diplomats have been advised to spread the message that their country is still very much in business), the damage has been done. Hotels have reported mass cancellation of bookings, and the forecast is that this is going to be one of the leanest tourist seasons in recent memory.

The alarm bells started ringing in Downing Street only when the disease began to spread to Ireland and Scotland, and Britain's European partners, apart from slapping a ban on all food imports from the country, started to blame their own troubles on London. Added to this was the pressure from the multi-billion pound tourist industry and Blair's fear of its impact on his election timetable. However, by then the crisis was in its fourth week and nearly out of control. Blair got a taste of the public mood when on his first visit to a foot-and-mouth affected area, he was booed and greeted with abuse. A visibly shaken Blair then ordered an all-out war against the disease. However, in doing so he nearly touched off a farmers' revolt. The decision to slaughter hundreds of healthy animals simply because they happened to be within three miles (4.8 km) of the infected "exclusion zones" provoked widespread fury with farmers threatening to stop the killings physically. There was talk of "riots" if farmers were forced to hand over their healthy cattle for slaughter. Blair was accused of trying to speed up things in order to be able to hold elections on his most favoured date of May 3. It took some delicate backroom tactics to persuade the farmers to fall in line. In an attempt to underline the government's sense of urgency, Blair cut short his stay at the European Union summit in Stockholm and returned home to take control of the situation.

Critics say that the crisis would not have assumed the current proportions had Blair displayed the same sense of urgency two weeks earlier. For once the Opposition caught the public mood right. The Tories echoed the widespread view that measures such as calling in the troops to help with the disposal of slaughtered animals (the Tories claimed that they had made this suggestion right in the beginning) and vaccinating the cattle should have been taken up much earlier. The Tory leader Willam Hague and his shadow Agriculture Secretary Tim Yeo accused the government of doing too little too late. The Ministry of Agriculture, Fisheries and Food (MAFF) has been attacked by the Opposition and experts for not learning any lessons from the 1967 foot-and-mouth disease outbreak. Tim Yeo even charged it with "extraordinary incompetence". A former MAFF official described the Ministry as the "Siberia of Whitehall", alleging that it was full of bumbling bureaucrats who did not see beyond red tape. A campaign has started to demand the abolition of the Ministry and its replacement by a Ministry of Rural Affairs.

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The media have highlighted the fact that the Ministry ignored the warnings of its own experts. Way back in 1997, an experts committee called for a total ban on pigswill, a mixture of leftovers and waste food fed to pigs, but the government did not act. Now it has emerged that pigswill used in a farm in Northumberland was most probably the source of infection. The government is now contemplating a ban on pigswill. The government has also been alleged of having been lax in ensuring that meat from foot-and-mouth disease prone regions of the world does not get into the country. A report in The Guardian said: "Thousands of consignments of illegal meat arrive in Britain travelling in either containers or hand luggage mainly from Africa and Asia - continents with recent outbreaks of foot and mouth disease." The pigswill which set the foot-and-mouth chain reaction was alleged to have come from contaminated meat smuggled into Britain from the Far East and served at a Chinese restaurant in northeast England. The Association of Port Health Authorities has called for more stringent measures to prevent the illegal entry of meat, especially from countries where the foot-and-mouth disease is endemic. The key issue, according to a member of the Pig Producers' Association, is "how the hell did this get into Britain in the first place?"

Meanwhile, a counterview that the crisis was exaggerated thanks to a strong and pampered farmers' lobby has emerged. It is said that the footage of burning pyres and farmers sobbing as their cattle were taken away for slaughter turned a provincial crisis - less than one per cent of the country's livestock was believed to be affected - into a national emergency. However, the plight of 60,000 steel workers who lost their jobs recently went nearly unnoticed because, as one critic said, there were no cameras to record their grief. Livestock farming is said to be the most subsidised industry and yet it is forever pretending to carry the cross for everyone else. In an article in The Times, one of Britain's most respected commentators, Simon Jenkins, accused farmers of "blackmailing" the nation. "The Labour government is being held to ransom by livestock farmers much as Tory governments were held to ransom by coalminers. Farming communities cry in aid of the same 'national interest'. They evince the same emotivesupport from the media. Ministers have no friends and no clue which way to turn," Jenkins wrote. The view was echoed by several others including another leading columnist Polly Toynbee in The Guardian. The point they make is that a harmless disease which - unlike the bovine spongiform encephalopathy (BSE) - does not kill, does not affect human beings and in fact grants a degree of immunity to the affected cattle has been projected as a monster devouring thousands of cattle. If farmers vaccinated their animal there would have been no foot-and-mouth disease, but they do not because, under international trading rules, they would lose their disease-free status and it would affect their export potential. "This debacle is not about human health, nor about animal welfare. It is about money," Jenkins said.

The crisis has also raised questions about the way farming is done in Britain - under pressure from supermarkets to produce cheap food. Critics are demanding a new look at farming techniques and there is a view that instead of tailoring production to the needs of the supermarket chains and the export markets, farmers should be encouraged to produce safe food. A debate has begun, but whether it would reach its logical conclusion is doubtful because, as one commentator put it, once the crisis is over and television cameras move on, it would be back to business as usual - until another crisis erupts.

Pakistan's nuclear dilemma

The military government in Pakistan is moving to downplay its nuclear image and join the CTBT regime in order to tide over its economic downturn.

AFTER the May 28, 1998 nuclear tests at Chagai, which came in response to India's Pokhran nuclear explosions on May 11, Pakistan came to pride itself as a member of the elite club of nuclear capable nations. It also sought to see itself as the leader of the ulema - the Muslim world.

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But condemnation from all over the world, and more important, economic sanctions imposed by a number of countries, soon tempered Pakistan's nuclear pride. Three years down the line, there is a growing realisation in Pakistan of the need to address the concerns of the international community on various nuclear issues, though the overwhelming opinion in Pakistan continues to favour a minimum credible nuclear deterrence. This is a need it felt particularly in the absence of balance in the matter of conventional weapons vis-a-vis its main enemy - India.

No regime in Pakistan can be faulted for harping on the theme of minimum credible deterrence. The country has serious domestic and security compulsions. But the after-effects of the nuclear tests particularly on the economy have been so severe that the military government was compelled to initiate concrete steps to allay the apprehensions of the world community regarding Pakistan's status as a nuclear state.

In recent months, there has been frantic activity in the corridors of the military headquarters on nuclear-related issues. In the second week of March the military government announced the retirement of Dr. Abdul Qadeer Khan, considered to be the father of Pakistan's nuclear bomb, from active service along with the Chairman of Pakistan's Atomic Energy Commission, Dr. Ishfaq Ahmed. Qadeer Khan, who headed the Khan Research Laboratories, has been associated with the country's nuclear programme for the last 27 years and has been credited with all the major achievements of Pakistan in the nuclear field. The 64-year-old scientist had been given many an extension of tenure and yet no government in the past had dared to tell him that it was time to pack up his bags.

Political and religious parties reacted angrily to the retirement order. And as the furore over the issue reached a crescendo, Chief Executive Gen. Pervez Musharraf had to assert repeatedly at every available forum that his government would not compromise on the security of the country and that Pakistan's nuclear programme was irreversible. There were few takers for the explanation from the government that Qadeer Khan was actually being moved up as adviser to the Chief Executive with Cabinet member status. The general feeling was that it was a move aimed to please the West which is bent on committing Pakistan to sign the Comprehensive Test Ban Treaty (CTBT) and thereby halt its ambitious nuclear weaponisation programme.

Indeed there is some merit in the arguments of the critics of the military government on Qadeer Khan's removal from the helm of Pakistan's nuclear affairs. The Musharraf government faces a serious dilemma on the CTBT issue. Economic rather than political considerations have forced it to give serious thought to the potentially explosive issue. For instance, Japan has dangled the carrot of annual aid amounting to over $500 million if Pakistan joined the CTBT bandwagon. The just-concluded Pakistan Development Forum (PDF), a consortium of Western lending and aid agencies, also sent out clear signals to the military regime that it better become part of the CTBT regime if it is keen on their help; otherwise it should be prepared to be counted out.

The military government is more than inclined to append its signature to the Treaty, though under the new dispensation in Washington Pakistan no longer faces any pressure from the United States on CTBT. But what holds it back is the stiff resistance of the religious lobby, particularly the Jamaat-e-Islami (JI).

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The Musharraf government's dilemma stems essentially from India's reluctance to sign the CTBT. The stated position of the Pakistani establishment is that it has no objection in principle to the CTBT and that it is keeping its options open only in order to ensure that India does not take advantage of the situation.

The Finance and Foreign Ministers in the Musharraf government tried unsuccessfully towards the end of 2000 to push Musharraf to agree to the Treaty. After a sustained campaign in favour of the CTBT, the Ministers beat a hasty retreat and took cover under the excuse of 'lack of national consensus'.

The issue is in the spotlight once again with the unambiguous message from the PDF and the recent visit of Foreign Minister Abdul Sattar to Tokyo. While in Japan Sattar gave the impression that Pakistan might sign the Treaty before India does so, but soon corrected himself with the statement that it may not be possible for Islamabad to join the CTBT club before the general elections in Pakistan scheduled for October 2002.

A letter from Gen. Musharraf that the Foreign Minister handed over to Japanese Prime Minister Yoshiro Mori reportedly makes the plea for an appreciation of the domestic compulsions of the military regime on the issue of the Treaty. In response, Mori told Sattar that he hoped Pakistan would soon make progress on limiting its nuclear capability and that such progress would allow Japan to give 'comprehensive aid' to the country.

Speaking to presspersons after his meeting with Mori, Sattar said that "there is a strong opinion in Pakistan that we should wait to make the decision until after the general election".

The decision to shift Khan and his colleague in the Atomic Energy Commission was preceded by an ordinance in January this year for the establishment of a Pakistan Nuclear Regulatory Authority (NRA). Prior to this a National Command Authority (NCA), which is vested with the command and control of nuclear weapons, was set up.

These actions were seen as a response to the concerns of the international community on nuclear safety management. From time to time apprehensions have surfaced about these nuclear weapons passing into the hands of 'extremist' elements. Hence perhaps it was no coincidence that the first publicised meeting of the NCA in the fourth week of March took place at General Headquarters (GHQ), Pakistan's military headquarters. A brief official statement on the meeting made it a point to mention that the NCA, presided by Gen. Musharraf, undertook a comprehensive review of important security matters relevant to Pakistan's nuclear policy. "The regional and international security issues both in the context of the short- and long-term objectives were also addressed".

Obviously issues such as Pakistan's nuclear capability vis-a-vis India, and the CTBT would have dominated the agenda of the meeting. And though there was no indication as to how exactly the military regime intends to sell the merits of joining the CTBT regime, particularly to the domestic audience, it is clear that the CTBT issue is on top of its agenda given the economic benefits to be reaped.

NOTWITHSTANDING the economic squeeze it experienced in the aftermath of the nuclear explosions, there is little doubt that Pakistan has done the maximum possible to consolidate its nuclear programme in the last three years. This is evident from the extensive research paper that has appeared in the London-based Jane's Intelligence Review on the relative strengths and weaknesses of the nuclear programmes of India and Pakistan.

The journal said that Pakistan had edged past India in the nuclear arms race. It said that unlike India whose nuclear programme got bogged down due to internal politics, international pressures and its own unique security concerns, Pakistan's programme flourished unfettered under the direct control and command of the military.

The review noted that in contrast to India's nuclear programme, Pakistan's programme is controlled by the Army and has therefore been fully incorporated into the country's overall military strategy.

"Pakistan's officials believe that Islamabad's nuclear capability gives it the option of strongly supporting insurgents across the border in Kashmir. This view is based on the belief that Delhi would not dare hit back with a strong conventional strike for fear of escalation to nuclear exchange," the review said. It also has reported that "for their part, Indian leaders privately explain that they do not believe Pakistan would resort to using nuclear weapons, even if India were to strike Pakistan. It is this dichotomy of thinking about the potential use of nuclear weapons in South Asia that U.S. officials say poses the greatest danger".

The assessment in Jane's Intelligence Review would have pleased the military establishment. While Pakistan is compelled to address the concerns of the international community arising out of its position as a nuclear state, it cannot be expected to do anything that would deprive it of the 'parity' with India it has achieved after a gap of over five decades.

A haven lost

ROHAN GUNARATNA world-affairs

Will the British ban seriously affect the Liberation Tigers of Tamil Eelam's support operations from Europe?

THE recommendation by Home Secretary Jack Straw to proscribe 21 international "terrorist" groups was approved by the British Parliament recently. The Asian groups proscribed under the new Terrorism Act 2000 were the Al-Qa'ida (Usama Bin Laden network, or UBL network), the International Sikh Youth Federation (ISYF), the Babbar Khalsa International (BKI), the Harkatul Mujahideen (HM), the Jaish-e-Mohammed (JM), the Lashkar-e-Toiba (LeT) and the Liberation Tigers of Tamil Eelam (LTTE).

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All these groups have built rudimentary to extensive terrorist support infrastructure in the United Kingdom, primarily to advance their political aims and to raise funds for political and military activities. Among these groups, the LTTE has established a network in the U.K. for carrying out state-of-the-art propaganda, raising funds, training cadre and procuring and shipping weapons.

The list of groups was developed by the Home Office after consultations with the internal and external intelligence and security agencies - the MI5 and the MI6 - and the Special Branch of the police. It considered six factors: the nature and scale of the group, its activities, the specific threat it poses to the U.K., the specific threat it poses to British nationals overseas, the extent of the organisation's presence in the U.K., and the need to support other members of the international community in the global fight against terrorism.

All the 21 groups participated in terrorist activity. They attacked civilians and civilian infrastructure in order to achieve political change. The bulk of the groups attacked foreign nationals or foreign interests, including British human and physical targets. For instance, 17 November assassinated the British Defence Attache in Greece, and the Harkatul Mujahideen murdered British tourists in Kashmir. Most of the groups operated in the U.K. through front, cover and sympathetic organisations, carried out propaganda and raised funds. For instance, the LTTE operated through 40 affiliates, such as the United Tamil Organisation, the Tamil Rehabilitation Organisation, the Tamil Centre for Human Rights and the Tamil Information Centre.

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Some of these groups, notably the Asian groups, generated funds voluntarily or by intimidating their diaspora and migrant communities. Others are engaged in credit card fraud, trafficking in narcotics and kidnapping. According to the U.K. police, some groups operating through front, cover or sympathetic organisations applied for and received funds from several charities and foundations purportedly for welfare and humanitarian projects. The LTTE, for instance, received grants from borough councils and the national lotteries charities board. Some of the funds generated by the LTTE were monitored and found to have been feeding procurement accounts. The more sophisticated groups, including the LTTE, engaged in legitimate trade, businesses and investments. The LTTE has invested in the gold trade, the film industry, export-import business and in the sale of phone cards.

The LTTE raised up to 2 million to 3 million a year in the U.K. The bulk of it came from segments of the Sri Lankan Tamil community whose strength in the U.K. is estimated at 120,000; they were subjected to sustained LTTE propaganda primarily disseminated by its offices and cells in the U.K. The LTTE fund collectors visited the homes and workplaces of Sri Lankan Tamils, especially the new arrivals, and demanded a mandatory payment of 200-300 each. While part of the funds were laundered in the U.K., the other part was transferred out for military and dual technology procurement.

THE Terrorism Act aims to suppress the support to and encouragement and promotion of domestic and international terrorism. The Act replaces the Prevention of Terrorism Act of 1974, which was developed mainly to control the Irish terrorist groups. The need for a new law arose because the methods of operation of the terrorist groups dramatically changed in the 1980s and the 1990s. Sathasivam Krishnakumar alias Kittu established the international secretariat of the LTTE in London in 1990. After the Rajiv Gandhi assassination, the U.K. authorities served Kittu a quit notice on the grounds that he engaged in extortion of funds from Tamils living in the country. Kittu moved to France, and then to Switzerland, where he lived for a year before boarding the LTTE arms ship m.v. Ahat (also known as Yahata), which was interdicted by the Indian Navy in January 1993. (He died in a mid-sea confrontation on January 14; Frontline, February 12, 1993.)

The misuse of U.K. soil by terrorist leaders is best illustrated by Kittu's activities. He played a critical role in the assassination of Rajiv Gandhi - he coordinated some of the logistics for Sivarajan, the operations commander of the assassination team. Over the phone, Kittu (who was in Chennai during the International Peace-Keeping Force episode) made arrangements for Sivarajan's stay in Chennai and got some Indian nationals to assist in the assassination plan. Furthermore, Kittu indirectly helped draw up the modus operandi of the assassination. Operating from the U.K., he dispatched the famous video "Death Wish II" through the LTTE's clandestine office in Chennai and thereafter by boat to Jaffna. It showed a beautiful woman presenting a bouquet to a world leader and then assassinating him by activating the explosives strapped to her body.

After Kittu's expulsion from the U.K., the LTTE continued to maintain its secretariat in London but ensured that its head resided outside the country. Kittu was succeeded by John Christian Chrysosthom alias Lawrence Tilagar, also a military-trained LTTE cadre who was based in Paris. In late 1996, Tilagar was succeeded by V. Manoharan, an LTTE activist based in Paris, who was fined 120,000 francs and convicted by the French authorities for possession of heroin. Manoharan remains the head of the international secretariat.

The U.K., along with other affluent countries, emerged as a major centre for disseminating terrorist propaganda, raising funds, recruiting and training cadre and procuring and shipping weapons and dual technology in the 1990s.

LTTE leaders such as Tharmalingam Shanmugam Kumaran alias Kumaran Pathmanthan, the chief procurement officer of the LTTE, visited the U.K.

As a response to such transnational developments that threatened international security and stability, the United Nations formulated a convention on the suppression of the financing of terrorism. The U.K. is a signatory to the convention. With terrorist groups harnessing the advantages of globalisation and becoming increasingly mobile, the U.K. decision is likely to set a trend for countries of the Commonwealth and the European Union to suppress foreign terrorist presence on their soil. Many governments affected by the activities of transnational terrorist groups from their countries have saluted the U.K. for having developed a list of terrorist organisations.

The ruthlessness of the LTTE and its formidable presence in the U.K. are the factors that influenced the U.K. government to include the LTTE in the list of proscribed organisations. But some elements in the Sri Lankan government tried to take credit for the proposed proscription. In reality, there has been grave failure on the part of the Sri Lankan intelligence agencies to provide the U.K. authorities with the kind of high-grade intelligence required for linking U.K.-raised funds to terrorism in Sri Lanka, which is essential to prosecute LTTE activists in the U.K. The failure stems from the current Sri Lankan government's politicisation of the intelligence apparatus in 1995 by replacing its professionals with novices. The internal and external intelligence directorates of Sri Lanka are currently headed by retired officers. The Sri Lankan intelligence apparatus is plagued by inefficiency, inter-agency rivalry, bureaucratic control by the Ministry of Defence, the pressure to gather political intelligence and the lack of coordination with the security forces and the foreign service.

The capacity of the Sri Lankan state to counter the LTTE's international propaganda suffered when Ravinatha Ariyasinghe, the head of the Foreign Ministry's publicity division, was transferred on political grounds. It is not unusual for Sri Lankan politicians to compromise national and strategic interests for short-term gains, political and personal. The self-destruction of the anti-LTTE propaganda cell at a time when the U.K. decided to proscribe the LTTE prevented the Sri Lankan government from effectively lobbying other countries to follow the U.K. example.

In the backdrop of these problems, the West has been slow in taking substantive action against the LTTE. The toleration of terrorist groups by Western governments has led to the growth and expansion of their influence as in the case of the LTTE. For years, the U.K. government informed Sri Lanka that its agencies were monitoring the LTTE's activities on its soil. Like Sri Lanka several countries suffered because of terrorists abusing the U.K.'s hospitality to plan, prepare and conduct their operations from London. For instance, when the LTTE's operational cells in Colombo were hard pressed for cash, the U.K. unit transferred funds to its operatives in the Sri Lankan capital.

The intelligence and security community of the U.K. favoured the idea of permitting these groups to conduct their operations openly, stating that British human and technical mechanisms were monitoring them. With reports of terrorists buying armaments and technologies from the U.K. as well as using it as a base for procurement operations, the authorities realised the difficulty of effectively monitoring foreign terrorist groups based in London. The British government did not give priority to monitoring the LTTE and Indian terrorist groups. As most Asian groups used the U.K. only to conduct support operations, the West Asian groups were considered the most important by the security and intelligence agencies.

The LTTE procured 60 tonnes of high explosives from the Rubezone chemical plant in Ukraine using funds raised in the U.K., Germany, Switzerland and Canada. Sothilingam Shantha-kumar, a Sri Lankan Tamil with a British passport, visited Ukraine and initiated the purchase after paying 40,000. The LTTE used the explosives to destroy or damage the Central Bank in 1996, the World Trade Centre in 1997, and the Temple of the Tooth in 1998. The explosives from the consignment continue to kill thousands of civilians and soldiers while Sothilingam Shanthakumar continues to sit in Eelam House, the LTTE's office in London, not far away from the Guys Hospital.

Using their freedom to operate openly in the U.K., the terrorist groups set up fronts to disseminate information to politicise, radicalise and mobilise the diaspora and migrants who had left the conflict zones. They also built lobbying capability in the host countries and mobilised public support for political and violent terrorist activities. The LTTE established the International Broadcast-ing Corporation (IBC) in Vauxhall, London, which continues to transmit LTTE information worldwide.

These LTTE fronts were so bold and deceptive that they even approached the government of Sri Lanka and its organs for funds. The IBC's directors nearly duped a former Sri Lankan High Commissioner, S.K. Wickramasinghe, in London into authorising the grant of government funds. Fortunately, the High Commission's information councillor Aruna Kulatunge presented sufficient evidence to block the transfer of funds.

THE Terrorism Act has been criticised by a few U.K.-based terrorist-infiltrated human rights organisations and a few British politicians. British politicians dependent on the migrant vote are susceptible to pressure from some migrant constituencies to speak against the Act. Terrorist groups with influence over these migrant communities are known to have approached politicians and promised them several thousand votes in return for their support in Parliament.

The proscription of terrorist groups is compatible with the criminal justice system of the U.K. and both the European and international human rights conventions. There is a provision for any proscribed terrorist group or any person affected by the proscription to make an application to the Home Secretary against the step. If the application is rejected, the organisation or individual can appeal to a newly created independent tribunal - the Proscribed Organisations Appeal Commission.

Throughout the 1990s, many foreign governments, including India, protested against or expressed concern over London turning into a safe haven for terrorist groups. Except a few, the terrorist groups did not stage attacks on U.K. soil but used it as a base for their operations. International pressure on the U.K. to produce a list of terrorist groups increased after the United States State Department released a list of 28 (adding two later) in October 1997.

The governments of Canada and Europe are likely to follow suit. Australia, Canada, France and Switzerland remain major centres for terrorist support activity. These countries, signatories to the U.N. Convention on the Suppression of the Financing of Terrorism of 2000, are developing similar legislation.

IN the 21st century, organised crime and globalised terrorism have become major threats to national and international security. In the post-Cold War period, many ragtag groups have become sophisticated by using communication and travel facilities which have become less expensive, and small arms which are readily available. Using porous borders, they challenge the security of many nation states. Furthermore, with the creation of transnational offices and cells, these groups have begun to threaten not only their target states but also their neighbours. Today, the LTTE poses considerable threat to Sri Lankan and South Indian security. Despite being proscribed in India, Malaysia and the U.S., the group continues to operate in these countries, often with the support of corrupt political leaders and bureaucrats.

By examining how terrorist groups operate in countries where they are banned, terrorist behaviour after proscription can be predicted. They are likely to go underground and conduct their support activities. By infiltrating human rights, humanitarian, cultural and political organisations or setting up new ones, they are likely to continue with their support operations. As such, the U.K. authorities will have to see whether the groups have infiltrated any existing organisations or set up new front organisations. The proscribed groups are likely to hire lawyers and challenge the proscription. The LTTE has informed the U.K. authorities that its proscription will hamper future peace negotiations with the Sri Lankan government. The British authorities have reminded the LTTE that the U.K. and Spanish governments have negotiated with terrorist organisations even after their proscription, the Irish Republican Army and Euzkadi Ta Askatasuna respectively. Intelligence assessments by several governments reveal that the LTTE is not serious about peace negotiations and only wishes to have a period of peace so that it can regroup, rearm and retrain its cadre.

The U.K. proscription has made the LTTE and others criminal groups and restricted their activity and mobility in the country. Although the proscription will increase the immediate and mid- term threat to British security, it will reduce the long-term threat. As foreign terrorist groups often learn from one another and occasionally pass on technologies and concepts to domestic terrorist groups, outlawing and disrupting their presence in London will enhance international security in the long term. As terrorist groups are revengeful, the British government is likely to witness terrorist attacks and possible cooperation between the Irish terrorist groups and foreign groups in the immediate and medium term.

Proscription of these groups will legally empower the U.K. authorities to disrupt foreign terrorist infrastructure and prosecute terrorists and their supporters. However, they are unlikely to attack, erode and destroy foreign terrorist support networks on British soil immediately. Unless a foreign terrorist group directly attacks a host government and a host society, that government is unlikely to mount a sustained course of action against the group for fear of earning its wrath.

The U.K. proscription will affect the LTTE's image rather than hamper its support operations. By exploiting the freedoms enshrined in the constitutions of Western countries, the LTTE has built a significant support infrastructure in the rest of Europe. It has begun to shift much of its infrastructure in the U.K. to France and Switzerland. The LTTE is a textbook example of how contemporary terrorist groups behave. To compensate for the loss of one safe haven, it is likely to find another in the neighbouring environment.

Dr. Rohan Gunaratna is the author of Sri Lanka's Ethnic Crisis and National Security.

Business not as usual

RITA MANCHANDA world-affairs

India-Nepal trade relations force another round of turbulence.

IT has been open season on Nepal, first with Indian intelligence agencies raising an alarm about the Himalayan kingdom becoming the new base for subversive activities by Pakistan's Inter-Services Intelligence across the open Nepal-India border, and more recently, with Indian business crying foul about a 'surge' in imports caused by the re-export of third country goods to India by Nepal, taking advantage of the loopholes in the Indo-Nepal trade treaty of December 1996 and worse, accusing Nepal of being a conduit for smuggled Chinese goods. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) denied any 'surge' or 'loopholes' in the treaty or for that matter any smuggling of Chinese goods via the open border. The Nepalese media, though defensive on the issue, allege that India, which was reluctant to confront China on the trade issue, is bullying and making a scapegoat of Nepal, as it did in the case of the hijacking of the Indian Airlines flight in 1999.

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At risk is the 1996 treaty, which wrote up a new preferential script for Nepal, foregrounding "non-reciprocity", the hallmark of the Gujral doctrine towards neighbours. (I.K. Gujral was then the Foreign Minister). The treaty saw a seven-fold jump in Nepal's exports to India and a three-fold increase in India's exports to Nepal. As a consequence, Dabur Nepal's fruit juices, Nepal Lever's Close Up, Colgate-Palmolive's Nepal-made toothpaste and soaps and sundry items like vanaspati ghee, acrylic yarn and copper twine entered the Indian market at highly competitive rates.

Indian producers raised a hue and cry that Indian industry was being threatened by the re-export of third country goods by Nepal. They lobbied with the government to intervene against a surge in imports from Nepal, especially of vanaspati ghee, acrylic yarn and copper wire.

The 'politically motivated' zero duty clause in the 1996 treaty for export of Nepalese manufactures to India, was designed to encourage the industrialisation of Nepal. Instead, has it encouraged third country re-export to India via Nepal? A group of Nepalese businessmen who visited India to discuss matters with the Confederation of Indian Industry (CII) and the Federation of Indian Chamber of Commerce and Industry (FICCI) in February were told in no uncertain terms that Nepal must do something about value addition, or else.

"They were very tough," says Prabhakar Rana, co-chair of the Indo-Nepal Joint Eco Committee. The 1996 treaty is producing bad blood between India and Nepal and the uncertainty over the treaty has put a freeze on bilateral and third country investment, which was eyeing an integrated Nepal-Indian market.

The treaty comes up for (automatic) renewal this year, and all indications are that the Vajpayee government is taking a hard line on complaints about allegations of Nepal's conduit economy for authorised re-export and unauthorised smuggling of Chinese goods. Moreover, with Indian industry's complaints getting intertwined with the security allegations of intelligence agencies, India-Nepal trade relations have a rocky ride ahead. In the case of Nepal, security concerns and threats to domestic industry are mutually reinforcing each other in an overlapping threat scenario. Intelligence agency-inspired news reports project it as a nexus between Nepal-based traders and the ISI, funnelling funds for subversion through systematic under-invoicing of "authorised" trade. And in the case of unauthorised trade, the nexus with the underworld makes for smuggling, not only of goods but arms, explosives and subversives. The signal is that the government is getting tough.

In 2000, lobbying by Indian industry saw Commerce Minister Omar Abdullah respond with an outcrop of non-tariff barriers, including the mandatory Bureau of Indian Standards (BIS) and maximum retail price markings. In this year's budget, Finance Minister Yashwant Sinha levied counter-vailing duty (CVD) on the MRP as opposed to the earlier practice of charging it on the transaction price, for personal care items. As the Minister explained, the logic is to have a level playing field as the excise rate for domestic producers is on the basis of MRP. The measure is not specific to Nepal but its impact on Nepal goes against the grain of the preferential boost to the development of industry and employment in Nepal, which the architects of the 1996 treaty had intended. Nepal-based Indian joint ventures (JVs) have made a representation that the government should keep in mind Nepal's special needs.

According to the Indian Embassy's press spokesperson, Manoj Bharti, Indian investment in Nepal has grown to about 35 per cent of Nepal's gross domestic product (GDP) and accounts for 40 per cent of employment. But the new CVD provisions threaten to squeeze drastically their economics of production.

Says Sandip Ghosh of Nepal Lever, a subsidiary of Hindustan Lever: "The CVD provision will wipe out whatever competitive advantage Indian joint ventures like ours have." In Nepal's export basket, toothpaste and soap are the second and third biggest items. For Nepal Lever, which sources most of its raw materials and packaging from India, it will mean a hike in the cost of Nepal-made Pepsodent or Close Up to the tune of two Nepali rupees a tube. "We don't get MODVAT back, and if you add up the back freight costs, our operations will become unviable," says Ghosh. Even harder hit are Dabur Nepal and Colgate with its 90 per cent to 100 per cent export-oriented production. In the wake of the 1996 treaty, these Indian and third country JVs, such as Kodak Nepal, were set up to serve an integrated Nepal-India market, largely to take advantage of the difference in the tariff structure between Nepal and India.

THE rationale was that the treaty, with its zero duty clause for the export of Nepalese manufactured goods, would give a fillip to the industrialisation of Nepal, otherwise it would continue to remain a conduit economy for the smuggling of third country goods to India. But traders were quick to seize upon a loophole in the treaty as no level of material or labour content is specified, only HMG of Nepal and FNCCI are to certify Nepalese manufacture. Said one embassy source: "What we're getting is not the development of a manufacturing base but traders taking advantage of the difference in tariff structure to re-export through Nepal." The Kodak case is cited as an example of the misuse of the treaty provision. The duty on imported bulk film is 30 per cent in India and less than 10 per cent in Nepal. Where is the value addition in cutting the film and converting it into smaller rolls, they ask.

Consequently, India has refused Kodak Nepal access to its market, and the company has gone to the Nepal Supreme Court charging India with violating the treaty. A multinational company, Kodak could wipe out domestic industry in India, whereas the sundry small producers of vanaspati ghee or acrylic yarn in Nepal do not have the capacity to do so. But that has not stopped the Indian industry lobby from clamouring for protection, alleging a 'surge' in Nepalese export of these items. For over six months the Indian government was trying to fix a meeting under the surge clause in the treaty. Finally, in March, Nepal agreed to discuss the 'surge' in imports alleged to be the result of re-export of third country goods via Nepal. The No.1 item is vanaspati ghee, which tops Nepal's exports to India.

FNCCI secretary-general Badri Ojha maintains that vanaspati exports from Nepal account for less than 1 per cent of the Indian market for the product, while Indian producers claim that Nepal has mopped up 10 per cent of the market. The charge is that Nepal is re-exporting edible oil imported from Indonesia taking advantage of deep duty differential. Duty on edible oils in India is above 35 per cent and in Nepal 10 per cent and refunded on export. The flow chart of the hydrogenation process, say Indian embassy sources, reveals very little value added. And like copper twine and acrylic yarn, it is accused of being a mere re-export. India pays in rupees. It is Nepal which expends foreign exchange. In Budget 2001, duty rates on edible oil have been further increased to protect domestic producers but vanaspati ghee exports from Nepal are out of the loop. A 15 kg tin of Nepal-produced vanaspati, which was cheaper by (Indian) Rs.75, will now become even more competitively priced. Indian domestic industry argues that the hydrogenated process used in Nepal is inferior, and that the product is less healthy. When FNCCI representatives visited India in February, both the CII and the FICCI were adamant about value addition. Subsequently, FNCCI has taken up the matter with Nepal-based producers but with the uncertainty over vanaspati exports, there are no takers for the required investment for an improved product.

On top of this are the security linked charges of massive under-invoicing. Take the case of acrylic yarn. The international price of acrylic fibre is ($1.5) Rs.65 a kg. Nepalese companies export it at (Indian) Rs.68. The spinning cost is only Rs.3 when it should be Rs.30. The difference is collected through hawala channels and the money used to fund subversive activities, sources in the intelligence agencies are quoted in the Indian media as having said.

Badri Ojha denies that Nepal is misusing the zero duty clause to re-export third country goods. And FNCCI prides itself in the norms for certification. But its counterparts in India are not impressed. As for routing Chinese goods through Nepal, FNCCI points out that Nepal has introduced compulsory letter of credit with China and it has minimised diversion. Sino-Nepalese trade has actually declined. As for unauthorised trade, that is, smuggling of Chinese goods, Ojha says Nepal is helpless. But the Nepal government has taken some action. Forces of the Royal Nepal Army have been deployed to strengthen customs posts along the border. There are only three negative items on the trade list - alcohol, tobacco and perfumes.

Pressure is mounting, at the minimum to introduce a 30 per cent material and labour content clause and to expand the negative list. However, the clamour by domestic industry and the intelligence agencies could impel a situation which risks, as an embassy source pointed out, throwing the baby with the bath water. India has important political and economic stakes in the industrial development of Nepal, the raison d'etre of the preferential clause in the 1996 treaty. But clearly, a treaty which is seen as a scam on one side is not tenable. But opinion in Nepal is not impressed. Rajat Sharma, writing in The Kathmandu Post (December 2, 2000) summed it up thus: "Isn't this large-scale duty-free re-export marginal? Isn't the noise being made about imports threatening industry and security disproportionate to size?"

TO make matters worse for the future of Indian-Nepal relations is the groundswell of growing anti-Indian feelings which manifested themselves in the violence in December over the alleged remarks made by Indian actor Hrithik Roshan. Earlier in 2000, the factory premises of some Indian JVs were attacked. The growing Maoist insurgency in Nepal has further undermined Indian and third country investment plans. In particular, anti-Indian sentiments are likely to get worse with the temptation being faced by political parties to project negative nationalism as a unifying plank in Nepal. Already, the transition from autocracy to representational politics in Nepal is splintering the 1950 India-Nepal treaty and the psychological and material structure of friendly bilateral relations. Rocking the 1996 treaty will have further consequences for producing a mindset in which on the one side every Indian is seen as an exploiter and on the other, every Nepali as an India-baiter.

Working out a mutually beneficial economic relationship involves being sensitive to Nepal's defensiveness about trying to maintain economic sovereignty and its right to determine its own tariff structure. Nepal has not forgotten the humiliation of India's 1989 squeeze on the transit of goods to Nepal and the persisting difficulties over transit even now. Politics, not economics, should mediate the present crisis in trade relations, argue political commentators in Kathmandu. For, taking the so-called special relationship with Nepal for granted will only threaten India's security.

Of vaccines of promise

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Interview with Dr. Hans Wigzell.

"The global trend is towards application-oriented research. This... would kill curiosity-driven research, the basis of several crucial discoveries," says Prof. Hans Wigzell, Rector and Professor of Immunology, Karolinska Institute, Sweden.

A specialist on vaccines, Prof. Wigzell chairs various international AIDS vaccine initiatives such as the World Health Organisation's HIV vaccine committee and the International AIDS vaccine initiative, as also the European vaccine committee.

In Chennai recently to participate in an international congress on immunology, the chairman of the Nobel Assembly and the Committee for the Nobel Prize for Medicine and Physiology spoke to Asha Krishnakumar on various vaccine trials that are on, the cost of vaccines and the role of governments in reaching vaccines to all. Excerpts from the interview:

Has there been a blurring of distinction between basic and applied sciences in immunology and vaccine development?

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The global trend now is towards application-oriented medical experiments. This is primarily because many of those who finance medical research are concerned about its application - more than ever before. This could be dangerous from the point of view of curiosity-driven medical research. But this is the reality today.

The National Institutes of Health, which is the major funding agency in the United States, is politically under the Department of Health. Thus, all medical research is health-driven. Europe also has a clear bias towards application. In Sweden, the large institutions, including the Strategic Research Foundation, which has invested $ 3 billion, are heavily tilted towards application.

Thus, molecular biology research is moving towards developing new products, proteins, antibodies and the like. Also, an analysis of the basic genome structure of the micro-organism provides for the development of products for various bacterial diseases. A lot of research is also on for the production of antibiotics and vaccines. There is a movement towards applied science. Never before has there been so many clinical trials in vaccines.

On the other hand, there is also a movement in the universities to defend curiosity-driven research which, I think, should have its space. For many of the inventions which do not have immediate commercial consequences but are good for human beings in the long-run would not have been possible had research been confined to application. As a majority of the patents come from university research, these establishments are spearheading the movement towards curiosity-driven research.

Some of the big pharmaceutical companies, such as SmithKline Beecham, American Home Products, Wellcome, Glaxo and so on, which abandoned vaccine research 10 years ago, are getting into it once again because they see it as becoming profitable. They are involved in various trials - for making better vaccines against classical diseases such as tuberculosis and malaria, new vaccines against old diseases such as meningitis and also against new viruses like HIV, the human immunodeficiency virus.

Trials and molecular biology research going on simultaneously all over the world have given new insights into many diseases. For example, diseases such as cancer are now found to be 'approachable' by vaccines. With developments in molecular research and diagnostic techniques, it is now possible to understand why a particular tumour in a particular individual has a particular molecule. This can be targeted during treatment.

Thus, trials on various vaccine approaches are on around the world, with some positive reports here and there. It would be naive, however, to believe that a major breakthrough is round the corner. It will only be a gradual development.

What are the promising vaccine trials? And how far away are scientists from the development of vaccines for slow onset diseases?

Development of vaccines against many infectious diseases shows a lot of promise. Developing a vaccine against HIV, in which I am also involved as chairman of the WHO HIV Vaccine Committee, is a tough job. But you may probably have a vaccine against HIV in a few years. You can make human antibodies against HIV. There is a biological feasibility, though right now the frequency of success in inducing that kind of an antibody is way too low.

Work on auto-immune diseases is going on, but it is very tricky because we do not yet know whether the self-destructive mechanism is a cause or the consequence.

Thus, a number of promising vaccine approaches are being tried. But it is hard to predict how many, and if at all, would have a clinical consequence.

Some areas in which trials are going on vigorously include antibodies against hormones, and vaccines against contraception and arteriosclerosis. The most exciting research is on for a vaccine against Alzheimer's disease. The mice-model shows positive results. It shows that some kind of protein gets precipitated in the brain and if you vaccinate against cell protein, antibodies block the precipitation and even if the damage has started it clears. The clinical trials of this protocol are now in the second phase. This is predicted to be a fantastic discovery. If it functions for Alzheimer's then there is a lot of hope for other brain diseases.

What are the vaccine trials going on against major slow-onset diseases such as HIV and diabetes?

In the case of HIV, the WHO selected four countries - Uganda, Rwanda, Thailand and Brazil - for vaccine trials. In Thailand, the GP 120 (based on glycoprotein) trial against HIV is on. My guess from the trial data is that it would be a weak vaccine - it could give, maybe, 10 to 15 per cent protection.

Some interesting trials are on in Africa. For instance, in Kenya, there is a trial using "vaccinia virus" (small pox). Some genes of HIV are introduced in this virus and used for vaccination. Some intelligent vaccines are developed using this method. Pieces of HIV genome are taken and certain protein parts which are known to provoke aggressive cell-mediated immunes are expressed in it. Subsequently they are given a booster with the protein. The booster is usually GP 120, 140 or 160.

In South Africa, a virus vector is used with an HIV gene-construct. This is also a trial that raises much hope.

Thus, at least four different Phase I trials for HIV are going on in Africa. Some early trials are on in the U.S. But one in the U.S. and another in Thailand have reached Phase III and some results can be expected in a year or two. But these are the weak vaccines. Others - stronger ones - may take longer. Thus it is naive to believe that we can get any striking positive data on HIV vaccines in a couple of years.

A large number of trials are done for malaria, mostly using DNA vaccines. The U.S. Navy has taken up a major effort in this.

What I would like to see is a vaccine against nicotine. Very interesting research is going on in this area by attaching the nicotine molecules to a carrier protein and making antibodies. This has proved to be very good in animal trials. When vaccinated with this, the animals wean themselves from nicotine. There would be clinical trials for this soon.

Will the results from the human genome project help in vaccine development?

In medicine, an understanding of the complex human metabolism is very helpful. So, the human genome project should provide us with some rich information. For example, it would provide us with a lot of insights into the side-effects of drugs and the administering of correct dosages of medicine. It would help greatly in vaccine development against auto-immune diseases as we would now be able to understand the immune systems better.

There is a controversy in the U.S. and also in Europe about the Hepatitis B vaccine causing autism in children. Is there any scientific basis for this fear?

The allegation is crazy. Public concerns are largely because the media are projecting, falsely, that some vaccines are causing complications. Some reports say that mental disturbances are caused by the vaccine against whooping cough, autism by the Hepatitis B vaccine, allergies by some others, and so on. But if you look at all the data from the commonly accepted vaccines, none other than oral polio has any negative effect. The oral polio vaccine can rapidly mutate to become aggressive. This may happen in one in 100,000 cases or so. This is proved scientifically now. But none of the other allegations are true.

The triple vaccine MMR - against measles, mumps and rubella - was said to cause meningitis. But when we did a survey we found that in over one million children only 34 got meningitis. And that was also not because of the vaccine. In fact, it was found that the vaccine protected children from meningitis. So, the allegation was absolutely baseless.

These vaccines when developed and marketed are very expensive, particularly in developing countries where it is needed most. What institutional or structural changes are needed to make them cheaper?

It is a shame if the vaccines are not used among a large section of the population. But the prices of many of the older vaccines have come down drastically. To address the problem of costs, governments must play a proactive role. They should spend on vaccine research. I am disturbed by the military expenditure of some of the countries. A major responsibility rests with the political leadership. Poorer countries should devise a sound drug pricing policy, one that ensures basic medicines and vaccines for all. Cost of the vaccine is not a problem, but the attitude of our leaders is.

In pursuit of trifurcation

The Sangh Parivar is back at the old game on Kashmir: its calculated moves here could spell disaster for the State and the nation.

THE Sangh Parivar is slave to its atavistic urges. Power will not mellow it, as some fondly believed. It will only ease expression of the hideous urges. Never before the Bharatiya Janata Party came to power in 1998 were Christians attacked so systematically. Rashtriya Swayamsevak Sangh (RSS) supremo M. S. Golwalkar had listed them as one of the three "Internal Threats" in Chapter 12 of his Bunch of Thoughts in 1966. The other two were Muslims and Communists.

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Likewise, never before 1998 was the "trifurcation" of Kashmir into three parts on communal lines - Muslim, Hindu, Buddhist - aired openly by a Union Minister and his mentors. The Times of India reported on September 4, 2000 that according to the RSS spokesmen, M. G. Vaidya, "the RSS was in favour of trifurcation of Jammu and Kashmir." Why? The reason he gave is revealing - "as it would help contain violence in the Valley." Presumably, the Muslim-majority areas can then become one huge concentration camp with licence to the security forces to kill. He said: "Most of the problems will be solved by creating a new state of Jammu and giving Union Territory status to Ladakh. The development of Jammu and Ladakh will be accelerated and these two regions do not require special status by Article 370 of the Constitution." Only the Valley demanded special status, he added. The general body of the RSS adopted a resolution on March 18 formally supporting the demand.

This is a revival of a demand the RSS' political arm, the Jan Sangh - ancestor of the BJP - made at its very birth in 1951. The revival is best understood in the context of the origins. The ball was set rolling calculatedly by L. K. Advani on June 7, 2000 at Leh. He knew he was on charged territory. The Ladakh Buddhist Association (LBA) has for years threatened to use violence. A social boycott of Muslims was on for months. In 1999 even refugees from Kargil were cold-shouldered in Leh. Despite the enactment of the Ladakh Autonomous Hill Development Councils Act, 1997, the LBA revived its demand for Union Territory status.

Earlier, on May 13, 1992, the Governor of Jammu and Kashmir, G. C. Saxena, ruled out categorically any move for trifurcation. In glaring contrast, Advani encouraged it. The ritual qualification "within the four corners of the Constitution" is less relevant than the fact that the Home Minister countenanced ("can discuss") trifurcation and did so in the context of the memo the LBA gave the Prime Minister that day containing this demand.

Constitutionally, the Centre has no right or power in this matter at all. Article 3 empowers Parliament "by law" to "diminish the area of any State". In relation to Kashmir, however, no such Bill can even "be introduced in Parliament without the consent of the Legislature of that State." The Centre has no business to offer to "consider" a demand whose acceptance is the sole prerogative of Kashmir.

Advani could not have been unmindful of the chain reaction his remarks would set off. Jammu's separation from the State will lead to a partition of the State on communal lines with incalculable consequences, at home and internationally. The LBA's memo said: "We believe a lasting solution lies in trifurcation of the State." The Times of India's correspondent summed up the reaction in a report from Jammu published on June 14: "Trifurcation of Jammu and Kashmir, an idea forwarded by organisations and individuals - either as a demand or suggestion in the public debate set in motion by the Centre - has been given new respectability by Union Home Minister Advani's remarks. His remarks came in Leh, in the context of the memorandum by the LBA to Prime Minister Vajpayee during the Sindhu Darshan festival demanding trifurcation of the State or Union Territory status for Leh." Not surprisingly, Syed Ali Shah Geelani gave a guarded approval to trifurcation but retracted it. Pro-Pakistan sentiment in the Valley will receive a boost by trifurcation.

Alarmed, Chief Minister Farooq Abdullah warned in Srinagar on October 2 that in that event the districts of Doda, Poonch and Rajouri will not live with Jammu and that will trigger something worse than the Jammu massacres in 1947 (Kashmir Times, October 3, 2000).

Jammu will split evenly. Three of its six districts have a Muslim majority - Doda (63.59 per cent); Poonch (88.87 per cent); and Rajouri (60.97 per cent). The latter two abut the Line of Control (LoC). The other three are Udhampur, Jammu and Kathua. A tehsil in Udhampur, Gool Gulab Garh and three in Rajouri will go to the Valley. Ladakh was split in 1979 into two districts - Muslim majority Kargil and Buddhist majority Leh. Having set the ball rolling himself and watched the RSS take it up on September 4, Advani mollified his ally Farooq Abdullah when he said in Srinagar on October 22, "we do not favour trifurcation". Unlike Advani, the Chief Minister was alive to the implications: "India will be left with two and a half districts while the so-called Greater Kashmir would go on a platter to Pakistan eventually". (Greater Kashmir; December 11, 2000). The Press Trust of India reported from Leh on December 17 that in the recently concluded polls to the Ladakh Autonomous Hill Development Council "votes were cast along communal lines." In the 1996 elections to the State Assembly, Gool Gulab Garh and Gool Arnas, another Muslim majority constituency in Udhampur, returned Muslim MLAs; so did Darhal and Rajouri in Rajouri district. Bar the BJP almost all put up Muslim candidates. Advani could not have been ignorant of this tragic communal polarisation.

Advani's disavowal could not arrest the play of the game he had calculatedly begun. On February 26, 2001, the Panun Kashmir, an organisation of Kashmiri Pandits, the LBA, and the Jammu and Kashmir Nationalist Front, to whom Vaidya has pledged the RSS' support, presented to the Prime Minister a memo demanding trifurcation as well as partition of the Valley to allot land for resettlement to Kashmiri Pandit refugees. Article 370 of the Constitution (on the State's special status) would not extend to this area, they explained. The next day, Pramod Mahajan, Minister for Parliamentary Affairs, told the Lok Sabha: "There is no proposal under our consideration for the trifurcation of the State".

Kashmiris were not reassured. Quoting the memo at length, Ghulam Nabi Hagroo, a senior advocate and respected public figure, asked: "If the demands of the Hindu leaders of Jammu and Kashmir are conceded, why should the Muslim belt (a portion of Leh, Kargil, Kashmir, Kishtwar, Doda, Bhaderwah, Gool Gulab Garh, Rajouri and Poonch) be asked to have an independent Jammu and Kashmir or to continue with the present set up?" He spelt out the consequence - "joining their co-religionists on the other side" of the LoC. (Greater Kashmir; March 16, 1961).

THIS is precisely what Prime Minister Jawaharlal Nehru had warned Home Minister Vallabhbhai Patel half a century ago in a letter dated April 17, 1949. The Home Secretary, H.V.R. Iyengar, had sent him a copy of a report of one of the intelligence officers who had been sent to Kashmir. "In this report, among other things, a reference was made to a growing Hindu agitation in Jammu province for what is called a zonal plebiscite. This idea is based on the belief that a plebiscite for the whole of Kashmir is bound to be lost and, therefore, let us save Jammu at least. You will perhaps remember that some proposal of this kind was put forward by the Maharaja some months back. It seems to me that this kind of propaganda is very harmful, indeed, for us. Whatever may happen in the future, I do not think Jammu province is running away from us. If we want Jammu province by itself and are prepared to make a present of the rest of the State to Pakistan, I have no doubt we could clinch the issue in a few days. The prize we are fighting for is the valley of Kashmir.

"This propaganda for a zonal plebiscite is going on in Jammu, in Delhi and elsewhere. It is carried on by what is known as the Jammu Praja Parishad. Our intelligence Officer reported that this Praja Parishad is financed by the Maharaja. Further, that the large sums collected for the Dharmarth Fund, which are controlled by the Maharaja, are being spent in propaganda for him. All this is resulting in producing a most peculiar and unfortunate situation." (emphasis added, throughout. Sardar Patel's Correspondence 1945-50, Navajivan Publishing House, Ahmedabad; Vol. 1, p. 262)

Doubtless, it had not the slightest effect on Patel who had ranged himself for Maharaja Hari Singh and against Sheikh Abdullah, the State's Prime Minister from the outset. Only three months after Kashmir's accession to India, Hari Singh threatened its secession in a letter to Patel dated January 31, 1948; "Sometimes I feel that I should withdraw the accession that I have made to the Indian Union. The Union only provisionally accepted the accession ..." (ibid., p. 162).

The views of Karan Singh, Hari Singh's son, are no less revealing. Shortly before he was sworn in Governor of Jammu and Kashmir on February 26, 1981, B. K. Nehru met various people. "The only real briefing that I got was from Tiger (Karan Singh) who put the State of Jammu and Kashmir in correct perspective for me. He explained that the State was a wholly artificial creation, its five separate regions being joined together by the historical accident that Raja Gulab Singh had conquered all the territories over which his father Maharaja Hari Singh was ruling at the time of Independence and partition. Those five different entities had nothing in common with each other. The hill areas of Gilgit, Baltistan and Skardu and the Punjabi-speaking areas of Muzaffarabad etc. were already in the hands of Pakistan. In our part of the State, there were three clear divisions - Jammu, which was Hindu, Kashmir, which was Sunni Muslim and Ladakh, one part of which was Buddhist and the other Shia Muslim. Because of the lack of commonality between these three divisions, the sooner they were separated the better it would be for the future. My own knowledge of Kashmir was next to nil except for what I had been forced to learn about it during my ambassadorship in Washington." (Nice Guys Finish Second; Viking, 1997; p.589). Nehru's approval of the idea is evident. It is unlikely that he altered his high opinion of his interlocutor because of his actions, only seven months later. In September 1981, Karan Singh founded the Virat Hindu Samaj with himself as its President and colleagues no less illustrious - Hans Raj Gupta (RSS and VHP) and the BJP's O.P. Tyagi as vice-presidents; V. H. Dalmia (RSS and VHP) as treasurer; and Ashok Singhal of the VHP as general secretary.

AS a proposal, trifurcation of the State of Jammu and Kashmir only reflects a certain intellectual outlook and emotional attachment to "one's own" as well as alienation from "the others" - the familiar divide between "them and us". It was expressed as a "fear" in the Sangh Parivar's utterances in the 1950s when plebiscite in Kashmir was official policy; at least for the record. The idea of plebiscite was formally buried in 1954. Trifurcation reared its head in 2000. But the outlook and emotion were never concealed, as Karan Singh's fervent plea ("the sooner the better") to an approving B.K. Nehru reveals. Neither of them could be oblivious to the impact of Jammu's separation on the minds of the people in the Valley, on the morale of Pakistan, or on international opinion.

When the veteran Hindu Mahasabha leader, Shyama Prasad Mookerjee, resigned from the Nehru Cabinet, ostensibly in protest at the Nehru-Liaquat Pact of April 8, 1950, it was not to retire but to renew political activity in the new clime. He was privy to the Constituent Assembly's resolution of April 3, 1948 calling for a ban on communal parties. The Hindu Mahasabha refused to admit non-Hindus, even for the record. He set up on October 21, 1951 the Bharatiya Jan Sangh under a pact with Golwalkar. The RSS would provide the cadres and officials. Its grip, never loose, tightened over the years. At its very birth, Mookerjee searched for issues on which he could arouse people's passions. Kashmir came in handy for more than one reason. "The economic power of the Dogra landlords had been seriously undermined in 1951 by the Big Landed Estates Abolition Act, which had provided for the confiscation of large holdings without compensation and for the transfer of land to the tillers... the Jan Sangh did not have its own party units in Jammu and Kashmir but it was in sympathy with the Praja Parishad and its vigorous leader, Prem Nath Dogra, a Brahman, formerly a civil servant in the princely state, who had at one stage headed the RSS groups in Jammu city." (Bruce Graham, Hindu Nationalism and Indian Politics; Cambridge University Press; 1990; p. 36). Sheikh Abdullah's government had a pronounced leftist approach.

NEHRU treated the Jan Sangh and the Parishad with withering scorn. Addressing a public meeting in Kolkata on New Year's Day 1952, he said: "There can be no greater vindication than this of our secular policies, our Constitution, that we have drawn the people of Kashmir towards us. But just imagine what would have happened in Kashmir if the Jan Sangh or any other communal party had been at the helm of affairs. The people of Kashmir say that they are fed up with this communalism. Why should they live in a country where the Jan Sangh and the Rashtriya Swayamsevak Sangh are constantly beleaguering them? They will go elsewhere and they will not stay with us" (Selected Works of Jawaharlal Nehru; Second Series, Volume 17; p. 78).

In July 1952, Nehru and Sheikh Abdullah concluded the Delhi Agreement, in pursuance of which monarchy was replaced by an elected head of state. By then Mookerjee had nailed his colours on the trifurcation mast in the Lok Sabha on June 26, 1952. If Kashmir did not "come within India except in respect of three subjects (Defence, Foreign Affairs and Communications), then at any rate let us devise a scheme by which the people of Jammu may have the full liberty to decide whether they will integrate fully with India." On November 14, 1952, Kashmir's Assembly elected Karan Singh as Sadar-e-Riyasat (head of state). Prem Nath Dogra immediately launched an agitation and was arrested along with his colleagues on November 26.

On December 6, 1952, Nehru wrote a revealing note to the Home Ministry:

"It has become more and more obvious that the Jammu Praja Parishad movement is not only closely allied with the Jan Sangh, the RSS, the Hindu Mahasabha, etc., but to some extent directed from Delhi and Punjab. It has as its objective something much more than some petty change in Jammu.

"I have received some information about this, which is significant. The leaders of this movement are thinking of spreading out from Jammu into the Punjab first of all and then Delhi. They refer to it as a major movement against our Government to establish Hindu Rashtra all over India. The three allied topics are said to be Kashmir, of course, and the refugees of East Bengal especially and cow protection. My information is that Prem Nath Dogra has been in contact with Dr. Syama Prasad Mookerjee... It is stated that a considerable quantity of arms and ammunitions have been stocked by the Praja Parishad... At present it is reported that the Praja Parishad delegation is in Delhi to see Dr. Syama Prasad Mookerjee and the Jan Sangh Guru Golwalkar to discuss further plans... I have also received a report that Maharaja Hari Singh has contributed some money to the Praja Parishad. (SWJN, Vol. 20, pp. 367-8).

IN December 1952 the Jan Sangh held its first annual session at Kanpur. Walter K. Anderson and Shridhar D. Damle record what transpired there in their excellent work The Brotherhood in Saffron (Vistaar; 1987; p. 159) as follows:

"Mookerjee directed the delegates' attention to two issues: the special relationship of Kashmir with the Indian Union, and the condition of the Hindu minority in East Bengal. On the Kashmir question the delegates decided to involve the Jan Sangh directly in an agitation whose objective was the total integration of the Muslim majority Kashmir into India. This agitation, launched by the Praja Parishad, a Hindu political party in Kashmir supported by the RSS, also had the enthusiastic backing of the RSS.

"Mookerjee organised a committee to mobilise national support for the Kashmir agitation. As part of his effort to focus national attention on Kashmir, he entered Kashmir on May 11, 1953."

He was arrested and detained. His death from a heart attack on June 23 exacerbated feelings. A tragic chapter ended, only to reopen another as tragic but vastly more consequential.

The Kanpur session issued an ultimatum for Kashmir's integration before launching a satyagraha in March 1953. Mookerjee initiated correspondence with Nehru and the Sheikh in January-February 1953, pursuant to the Kanpur decision. It reveals a lot, though it was purely for record, not conciliation. (Integrate Kashmir: Mookerjee-Nehru & Abdullah, correspondence; BJS; Delhi, 1953. General Secretary Deendayal Upadhyaya's note records that the correspondence was begun "in pursuance of the resolution on the Kashmir situation and Jammu Satyagraha passed at the Kanpur session."

Mookerjee's first letter to Nehru on January 9, 1953 gave the game away. He wanted the State's Assembly to pass a resolution ratifying its accession to India, knowing well that it would, in the clime that prevailed in 1953, antagonise the U.N. Security Council and that the Assembly itself had come into being through a rigged poll in October 1951. All the 75 seats had been won by the National Conference led by Sheikh Abdullah, as many as 73 of its candidates were returned unopposed when nominations closed on August 30. In two others, the N. C. defeated Independents. The Praja Parishad alleged that nomination papers of its candidates were rejected "on the flimsiest grounds and under pressure from the government." Fifteen months later Mookerjee wanted this body to ratify the accession, adding with charming delicacy: "even though doubts have been expressed regarding the validity of some of the elections, especially from Jammu."

Mookerjee posed a revealing question to Nehru: "If the ultimate accession of the State to India continues to be undecided and if the decision will have to be based on a general plebiscite of the people, what will be the fate of Jammu in case the majority of the people, consisting of Moslems, vote against India? Pray do not brush aside this point as fantastic."

Mookerjee was a member of the Nehru Cabinet from August 15, 1947 to April 1, 1950. While in office, he was privy to the ceasefire in Kashmir on New Year's Day 1949; the Karachi agreement defining the ceasefire line on July 27, 1949; the adoption of Article 370 in the Constitution and to the U.N. Commission for India and Pakistan's resolutions on a plebiscite in Kashmir dated August 13, 1949 and January 5, 1949. Evidently none of these offended him as did the 1950 pact on refugee influx from East Pakistan into West Bengal, his constituency.

That he was out only to embarrass Nehru in the worst demagogic manner becomes clear from his demand for "the recovery of one-third territory of J & K which is now in occupation of Pakistan". Since Mookerjee knew that that spelt war, he was being simply unscrupulous and irresponsible.

He argued that Article 370 was "a temporary provision" and Gopalaswamy Ayyangar, who had sponsored it in the Constituent Assembly on October 17, 1949, had said as much. The record belies this now familiar BJP plea. Article 370, in fact, represented an accord between Nehru and Abdullah as a result of parleys since May 1949 to which Vallabhbhai Patel was also party. Ayyangar recalled the history and said: "We are entangled with the United Nations in regard to Jammu and Kashmir and it is not possible to say when we shall be free from this entanglement. That can take place only when the Kashmir problem is satisfactorily settled" (Constituent Assembly Debates, Vol. X, p. 424. vide the author's article ''Article 370: Law and Politics'', Frontline; September 29, 2000).

Mookerjee proceeded to argue that "the people of Jammu" had "the inherent right to demand that they should be governed by the same Constitution as has been made applicable to the rest of India. If the people of Kashmir Valley think otherwise, must Jammu also suffer because of such unwillingness to merge completely with India?" To leave no room for doubt as to what lay at the back of his mind, Mookerjee added on explicitly: "None knows better than you the peculiar characteristics of different parts of the State of Jammu and Kashmir. Kashmir Valley, Jammu and Ladakh represent different types of people; their languages, their outlook, their environments, their habits and modes of life, their occupation differ from one another in many vital respects. Historically and politically they came to be united into one homogeneous unit which we naturally should not like to disrupt or destroy."

The ritual reference to "natural bonds of unity" that followed could not conceal his design to partition Kashmir on communal lines.

Nehru's reply (January 10, 1953) warned that "the Jammu agitation, if it succeeded, would ruin our entire case relating to the State... What effect do you think has the Praja Parishad agitation on such (pro-Pakistan) persons in the Valley or elsewhere?"

Mookerjee's demands were politically as well as constitutionally impossible - the break-up of Jammu and Kashmir; the deletion of Article 370 of the Constitution; and "action" for the recovery of Pakistan-Occupied Kashmir. Nehru's replies, written in pain, were less pointed than Abdullah's. Mookerjee had sent him a copy of his letter to Nehru.

On February 4, the Sheikh replied in a documented and sharp letter which bore the impress of his colleague, the brilliant lawyer, Mirza Mohammed Afzal Beg: "There is conclusive evidence to show that the Praja Parishad is determined to force a solution of the entire Kashmir issue on communal lines. Its leaders have expressed their views publicly to this effect and I give below a few extracts from their speeches: 'Our way is not with Kashmir. Sheikh is not acceptable to us. We cannot tolerate Jammu and Ladakh going to the winds. We want the people to have blind faith in Praja Parishad and get ready by putting (on) shrouds to attain our goal." (Madan Lal, Secy., City Praja Parishad, at Samba on 20-10-52)... 'We would put an end to Sh. Abdullah and other workers of the National Conference. We will suck their blood. We will root out this Government and send them to Kashmir. We do not like this Raj'. (Reshi Kumar Kaushal, Member, Praja Parishad Working Committee, at Reasi on 23-11-52)."

Nor was their leader Mookerjee neglected: "At a press conference recently you are reported to have said 'If the people of the Kashmir Valley think otherwise there can be specific provision for this zone for the time being. We would readily agree to treat the Valley with Sheikh Abdullah as its head in any special manner and for such time as he would like but Jammu and Ladakh must be fully integrated with India according to the wishes of the people. Let me repeat that I do not want Jammu and Kashmir to be partitioned. But if Sheikh Abdullah is adamant, Jammu and Ladakh must not be sacrificed but the Valley may be a separate State within the Indian Union, receiving all necessary subventions and being treated constitutionally in a manner as Sheikh Abdullah and his advisers desire'."

BUT Sheikh Abdullah asserted that if a fair plebiscite was held "the decision is bound to be in our favour. You are not perhaps unaware of the attempts that are being made by Pakistan and other interested quarters to force a decision by disrupting the unity of the State... You cannot be unaware of the possible repercussions in Kashmir as a result of this agitation which is led by a militant Hindu leadership and which in the past has made its attitude towards the Muslims amply clear. If the agitation grows, unforeseen forces may be released which would seriously threaten the foundations of the State... This arrangement (Article 370) has not been arrived at now but as early as 1949 when you happened to be a part of the Government."

Sheikh Abdullah pointed out that Jammu was but part of the Jan Sangh's wider national agenda: "Many of the parties who are at present supporting the Praja Parishad are not satisfied with the present pattern of the Indian Constitution. Some of them have demanded openly that it should conform to Hindu ideals. Others have been equally enthusiastic about their respective party flags. One such spokesman has recently said that his party would strive for replacement of the present national flag by a Bhagwa flag... We voluntarily offered to associate ourselves with India and without compromise of basic principles we like this association to be abiding. But unfortunately, the Praja Parishad wants a decision for the Hindus of Jammu in mid-stream... I do not know if the charge of separatism is deserved by us at the hands of those who would themselves like to partition the State on communal basis. The Praja Parishad leaders have made it clear that they will not rest till they have rid Jammu Hindus of what they call the haunting fear of Muslim domination of Kashmiris. To such an attitude, what answer can I offer?...

"To entertain the doubts that the Muslims of Kashmir would now give up their secular ideals would be uncharitable, although the statements and the pronouncements made by the leaders of communal parties in India from time to time and inspiration and guidance they are providing at the moment to the Praja Parishad leadership in Jammu, is no doubt giving them a rude shock. But let me assure you and the people of India that the Muslims in Kashmir will not falter from their ideals even if they are left alone in this great battle for secularism and human brotherhood."

Six months later, on August 8, 1953, the man who wrote thus was put in prison, on Nehru's orders, and branded a secessionist. Mookerjee's agitation and his death fouled the atmosphere in New Delhi and Nehru's colleagues sensed a threat to his survival in office.

Mookerjee was on the warpath. "You have concluded your letter with many abuses," he complained to Nehru, incredibly enough. To the Sheikh he wrote: "I have been unable to understand your abhorrence of the Bhagwa flag. The Bhagwa colour has no communal meaning. It stands for purity, sacrifice and service. For so many thousands of years this was the colour of the flag in free India. There is no possibility of this colour being accepted in India immediately. But it is amazing that you should think that it represents aggressive Hinduism. Does secularism mean that India must cut herself off from her past history and traditions? The colour of your flag is wholly red, with special design on it. If any of your uncharitable critics says that it is a camouflage for using the communist flag, surely it will be unfair and you will resent it."

The charade of the correspondence ended in February 1953. But Mookerjee inscribed on the record for all to read the motivations and objectives of the Sangh Parivar's Kashmir policy. In a statement in the Lok Sabha on March 25 on the situation in Jammu, Nehru said: "It has been proposed. 'Well, if not Kashmir, let Jammu become completely inter-related with India.' That obviously means that the Jammu and Kashmir state is disrupted. And we support this famous process of integration by disruption and by throwing away inevitably the rest of the State into somebody's lap." (SWJM, Vol. 21; p. 222).

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THE effect which Mookerjee's singularly unscrupulous politics had on the Valley were accurately described by Nehru in a letter to his confidant, B.C. Roy, the Chief Minister of West Bengal, dated June 29, 1953. It bears quotation in extenso for two reasons. First, for the record; and, next, for its contemporary relevance. The Sangh Parivar did not gain by its criminal folly. It won only 5 of the 30 seats from Jammu in the 1957 Assembly elections and 3 in 1962. But it had alienated the Valley.

Nehru wrote: "It is difficult to speak openly about the injurious results of this movement. It has made the Kashmir problem far more difficult than it ever was. Before this movement was started, I had little doubt in my mind that the final decision about Kashmir would be in our favour, however long it might take. But this movement has upset all my calculations and weakened our position in Kashmir terribly. I am for the moment talking about the Kashmir Valley only. As you know, the people in the Valley are over ninety per cent Muslim. The reaction of the Jammu Praja Parishad movement on them has been very great. They have become frightened of the communal elements in Jammu and in India and their previous wish to be attached to India has weakened. Indeed, at the moment, all the hostile forces against us are dominant in Kashmir... The whole difficulty has been about the Valley of Kashmir and we are on the point of losing it because of the Praja Parishad movement.

"Psychologically we have lost it and it would be difficult to get back to the older position. You will appreciate how it has distressed me to see the hard work of several years washed away by this movement. In the ultimate analysis, we gain Kashmir if we gain the goodwill of the people there... It is true that if the Kashmir Government had implemented the rest of the provisions of our agreement with them, this would have helped considerably. But they were not given much of a chance, immediately followed by this agitation in Jammu and later outside... All this because of this continuing Praja Parishad agitation, which had a cumulative effect on the people of the Kashmir Valley and which helped Pakistan greatly in its general propaganda... it was no easy matter to get a grip of the psychological changes that it was reducing. During the past few months, I have had no greater trouble or burden than this feeling of our losing grip in Kashmir" (SWJN; Volume 22; pp. 203-205).

Sheikh Abdullah, himself driven into a corner, bared his predicament in a historic but little noticed letter to Maulana Azad on July 16, 1953, shortly before his dismissal from office and arrest on August 8: "I am very happy to hear from you that the Government of India is willing to declare that the special position given to Kashmir will be made permanent and that the Government of India will be bound by it without any conditions. If such a declaration had been made at an appropriate time, it would undoubtedly have strengthened our hands and unified various organisations and public opinion in the State and even if the masses had been asked about accession, a majority of them would have come out in favour of India... Although such a declaration would be welcome, it remains to be seen if it would draw the support of different sections of people in India and parties in Kashmir. You would appreciate that without such support, this declaration would not suffice to dispel the fears that have arisen in the minds of the people of Kashmir."

THIS offer to Sheikh Abdullah, incidentally, confirms his charge that attempts had been made by New Delhi to renege on promises on the retention of Article 370.

If Article 370, by itself, had ceased to serve a solution in 1953, it cannot now, either; something more is required - without affecting the State's membership of the Union. Even if Prime Minister Atal Behari Vajpayee shows resolve and skill for such diplomatic creativity, one doubts whether Advani and the RSS will let him make the concessions that alone can bring about a Kashmir settlement. Meanwhile the situation deteriorates by the day in the State. The ceasefire cannot endure unless it is backed by political initiative.

From Srinagar The Indian Express correspondent wrote (March 27, 2001) that it was "for the first time in the city that pro-Lashkar slogans were made when militants of this group launched an attack... This shift hasn't happened overnight." It is an outcome of "the Centre's failure to translate the ceasefire initiative into a proper peace process." The consequences of failure are too terrible to contemplate.

Inflated support

The latest increase in the minimum support price for wheat point to an approach that will hardly help correct the distortions in the food economy.

ON March 23, the Central government made its long-delayed announcement of the minimum support price (MSP) for wheat for the rabi procurement season. The decision was delayed till the last hour: the harvest had already begun in Madhya Pradesh and was only days away in Punjab and Haryana.

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Once again, it was Punjab and Haryana that exercised a decisive influence on the government. Contrary to the expert consensus that the MSP for wheat was running at inflated levels and needed to be trimmed or at least restrained, the government decreed an increase of Rs.30 a quintal for the rabi harvest. This brings the MSP for wheat to Rs.610 a quintal, when both the Ministries of Agriculture and Food had concurred on the need to maintain it at the existing level of Rs.580. The outcome of this decision, which is with great credibility attributed to the Prime Minister's Office, could be a greater embarrassment of riches for the Food Corporation of India (FCI). With the political costs involved being what they are, the government is in no position yet to begin correcting the rampant distortions that have crept into the food economy over a decade of structural adjustment.

The basic parameters on which a decision could be based had been spelt out by the Commission on Agricultural Costs and Prices (CACP) as far back as August last year. Ideally, said the CACP, the MSP for wheat should be Rs.520. This would just about bring procurement and offtake from the public distribution system (PDS) into balance, putting the brakes on the spiral in wheat stocks. Once an equilibrium was established, the government could begin a process of stock depletion through open market sales that did not seriously destabilise the fundamentals of supply and demand.

With the political context factored in, a reduction of Rs.60 in the procurement price was perhaps considered infeasible. Recognising this, the CACP recommended that the MSP be maintained at its existing level. With procurement by official agencies still likely to increase substantially at this level, the CACP then suggested a number of non-price measures including a crash programme to augment the storage capacity available with the official agencies and a reduction in the central issue price for the PDS.

In the assessment of the CACP, the decision to peg issue prices for families above the poverty line (APL) at the economic cost incurred by the FCI had led to a steep drop in offtake through the PDS. This led to a further accumulation of stocks and a quite perverse burgeoning of the food deficit. This situation could be corrected, said the CACP, if the issue price for APL families were to be cut to between 80 and 85 per cent of the economic cost incurred by the FCI. In the aggregate, there would not be an increase in the subsidy burden on this account. Rather, it would only call for the reallocation of subsidies that would otherwise have been disbursed in the open market sales scheme (OMSS).

These prescriptions were derived from the concrete experience of the government's rather clumsy efforts to manage food stocks through a year of apparent plenty. In rabi 2000, wheat procurement went beyond all previous achievements. On July 1, wheat stocks in the central pool touched 27.8 million tonnes, against the normative level of 14.3 million. This was partly because the rabi procurement had opened on April 1 with a stockholding of 13.1 million tonnes against the stipulated norm of 4 million. But a more significant factor was the generous increase in procurement price to Rs.580 a quintal against the CACP's recommendation that it be kept at the earlier year's level of Rs.550.

Concurrently, the government notified an increase in the issue price for APL consumers and the sale price for the OMSS, to Rs.900 a quintal. This was expected to hold the balance even between official procurement agencies and private trade. There was an increase in wheat output in both Punjab and Haryana by the order of 12 and 16 per cent relative to initial estimates.

Faced with a huge buildup in its warehouses, the government reacted with something approaching panic. A decision was made to conduct a wheat auction where a reserve price below the FCI's economic cost was set. When this failed to cause a serious dent in the problem of burgeoning stocks, the OMSS price was slashed to Rs.700 a quintal and then to Rs.650.

None of this succeeded in bringing down stocks. Rather, the drop in OMSS prices impelled private traders to offload own stocks rather than risk a further erosion. Ironically, the softening of open market prices proved a further disincentive to private traders. Experience has shown that the volume of procurement in any year is directly proportional to the ratio of MSP to the open market prices prevalent just prior to the harvest. By pushing down open market prices, the government's inventory management operations might end up contributing to a further increase in its stocks.

Market sales at a price below the FCI's economic cost is not the only element of irrationality that the government has introduced in a desperate effort to contain its food stocks. Public sector corporations, which enjoy a monopoly on wheat exports from official stocks, were till recently given the grain at a knock-down price of Rs.415 a quintal. The rate has been raised to Rs.430 since April 1 and an intent has been announced to enable private trade to participate in exports. The procedure now conceived is to invite competitive tenders from the trade and allocate wheat to the highest bidder.

Union Minister for Food Shanta Kumar has fixed a total export target of 5 million tonnes for wheat from the FCI's stocks in the current financial year. In subsidising foreign consumers through the exchequer, this scheme compounds the misgivings highlighted by the CACP. If the subsidy earmarked for exports and open market sales were to be reallocated for the domestic market, the entitlement of both BPL and APL families to essential grain would be greatly enhanced. The stockholding would simultaneously be reduced, contributing to an overall easing of the fiscal burden.

The CACP's recommendations were premised upon this analytical reading of the dynamics of the market. Contrary to the propagandist view that an MSP of Rs.580 would be unfair to the farmer, the data collated by the commission shows that even an MSP of Rs.520 would cover a large part of the cultivation costs. A fairly sound estimate puts "C2 costs", which cover all actual cash expenses, the interest on value of owned assets, rental value of land and implicit value of family labour, at Rs.480 a quintal of wheat. The only major cost component that is not covered here is the remuneration that a farmer might expect for his management inputs.

However, since a cutback in the MSP was considered politically infeasible, the CACP urged at the minimum the maintenance of the status quo. That too proved inadequate for the pressure groups that have established their own zones of influence within the National Democratic Alliance government. A week before the final decision on the MSP was announced, Haryana Chief Minister Om Prakash Chautala told a farmers' rally in Hissar that he had baulked the proposal to peg the price at Rs.520. Two days after the decision was announced, Chautala and Punjab Chief Minister Parkash Singh Badal participated in the "unity rally" staged by the beleaguered ruling coalition in Delhi. Observers were quick to note that there was surely more than mere coincidence in the sequence. But for the larger public, the costs of these unsubtle political manoeuvres could well be greater distortions and irrationalities in a vital sector of the economy.

End of another bull run

Will the investigative and legal process that has been set in motion with regard to the second big manoeuvre of its kind in less than a decade, lead to a clean-up of the markets?

IF someone at Ketan Parekh's New Year's-eve party had dared to suggest that the greatest bull run in the history of the Bombay Stock Exchange (BSE) was about to end, it would have been put down to too much alcohol. Late in the evening of December 31, his 500 guests had been picked up from near Mumbai's Gateway of India and sped across the moonlit Indian Ocean to the beachside village of Mandwa. There they were escorted to an opulent farmhouse done up in jungle motifs, with animal skins laid across the floors and creepers winding their way up the walls. Six dancers had been flown in from the West Indies to entertain the guests, and even the waiters had been dressed up as faux tribesmen, their faces painted in glowpaint.

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Even by the sweet-life standards of Mumbai's super rich, Parekh's Africa night was a remarkably naked celebration of wealth. As it turned out, entire banks, and hundreds of thousands of ordinary shareholders, paid for that evening of revelry.

Now, a fortnight after Parekh's March 30 arrest, it is clear just how the high-profile broker was making his money. Parekh rode the bull run that began at the end of 1998 - a seemingly endless process premised on the belief that a new information age economy was coming into being. By the time of his Mandwa party, that myth was unravelling. ICE companies (short for information, communication and entertainment) were in serious trouble, and their stocks in decline around the world. The broker now made his last, desperate move. He used the Madhavpura Mercantile Cooperative Bank to issue him a Rs.200-crore credit line against his over-priced shares. The public sector Bank of India (BoI) then provided him with cash against pay orders issued by Madhavpura, which Parekh recycled to prop up his ICE stocks.

Inevitably, the chain broke. On March 8 and 9, BoI discounted six Madhavpura pay orders worth a total of Rs.137 crores. On the night of March 12, the Reserve Bank of India (RBI) discovered that the small Ahmedabad-based bank just did not have the cash to meet its obligations. The Rs.300 crores worth of shares that Parekh had pledged the bank were now worth nowhere near that amount. Incredibly, it took the RBI another week to realise the enormity of Madhavpura's default. BoI then ordered an investigation, which found that some Rs.660 crores worth of Madhavpura pay orders had been credited through it to Parekh. The money had moved through his brokerage companies, Classic, Panther Investment Traders and Panther Fincap and Management Services, to three shell companies - Chitrakoot Computers, Goldfish Computers and Nakshatra Software.

When confronted by BoI, Parekh coughed up Rs.7 crores. On March 30 he was driven to the Central Bureau of Investigation (CBI) office in south Mumbai's Walkeshwar area. Inside the office, popularly known as the White House, Parekh promptly confessed his guilt. But sources in the CBI told Frontline that several matters remained to be explored. For one, it still is not clear just why Madhavpura chairman Ramesh L. Parekh made funds available to the Mumbai broker so easily. Nor is it clear that Madhavpura was the only bank that Ketan Parekh had used to aid the bull run. Ramesh Parekh, who started off as a small time spice trader in the mid-1960s, could have acted in the expectation of either quick profits for his bank or personal gain. His interrogation, which started after his arrest on the night of April 5, could answer these issues. Spending time with the CBI, it has passed largely unnoticed, would not be a new experience for Ketan Parekh, who figures as accused number 10 in the organisations case number 3 of 1996 involving the defrauding of Canbank by Harshad Mehta.

The great bull run began to climax last year. The BSE Sensitive Index, or sensex, started that year at just above 5,000 points, but rose to 6,150 points by February 15. That meant that investors had become richer by Rs.200,000 inside of six weeks. The feeding frenzy was powered by the easy money regime brought in by the RBI to help an economic recovery. Cheap interest rates powered an expansion of money supply, inflows from Foreign Institutional Investors (FIIs) shot up, and middle class investors began to hop on the bandwagon in the hope of getting that extra rupee on their investments. Most of the investment was in ICE stocks. Of the Rs.200,000 crores added to market capitalisation in the first six weeks of 2000, half was accounted for by the computer companies Wipro and Infosys. Every other sector fared badly on the BSE through the year.

For those with their feet on the ground, signs that all was not well were evident even then. On February 14, 2000, Infosys hit the upper circuit breaker, which meant that no one on the BSE was willing to sell its shares. The next day the same share hit the lower circuit breaker, which meant no one was willing to buy it. That was not normal market behaviour.

Then there were growing signs that brokers were borrowing funds from banks against their shares, to push the boom along. Businessworld correspondents Niranjan Rajadhyaksha and T. Surendar noted in a February article that the volume of loans against shares had "gone up dramatically in recent months". Others suggested that FII funds were being parked in India only temporarily. In one interview, Parekh himself noted with misplaced glee that "there seemed to be a new one every day". FII funds would exit with equal speed.

But for the time being the going was good. Parekh played the boom for all it was worth. His influence on market events was considerable. The brokers favoured stocks, notably Zee Telefilms, Global Telesystems, Himachal Futuristic Communications Limited (HFCL), Global Tele Systems, Satyam, Aftek Infosys, SSI and Silverline Technologies, which began to be called the K-10, and became something of an index in themselves. When Zee Telefilms received a hammering from bear operators in June 2000, as a part the result of offloading by FIIs Jardine Fleming and Morgan Stanley, Parekh succeeded in pushing up the share prices of its holding company, Essel Packaging. The company's share price shot up from Rs.314 on June 20, 2000 to Rs.402 on July 10, 2000. Rumour has it that a bear operator who approached FIIs with a war chest of Rs.3,000 crores to knock down the K-20 stocks was sent packing, forcing him to sell short.

Consider the case of Aftek, a technology firm whose shares were selling at Rs.15 in October 1998. By March 1999, the shares were nearly unaffordable, despite the fact that the company's performance was unimpressive. One development had been that the company had added the term "Infosys" to its name, cashing in on the New Economy mania. Asahi Leasing and Finance, Arihant Housing Finance, and Paro Steel Industries had similarly prospered after metamorphosing into Sunstar Software Systems, LCC Infotech and Sanvan Software. Dozens of other companies used similar tactics with success, though they had nothing to do with computers or communications. But the real driving force behind its share price rise was Parekh's brokerage of the sale of 15 lakh shares with Triumph International Finance at a premium of Rs.26.50 apiece. Market rumour spread well before the deal was formally announced, allowing Parekh to turn a tidy profit for himself.

WHAT were the regulators doing all this while? Both the Securities and Exchange Board of India (SEBI) and the RBI have faced richly deserved criticism for their decision to bury their head in the sand through last year, despite the existence of price rigging and worse (see separate story). Less attention has, however, been paid to why these bodies might have chosen to act the way they did. One reason could have been that both were influenced by prevailing ideological doctrines which mandate that as far as possible the markets must be left alone. But it is also true that Parekh had influential friends. In January he was seen at Samajwadi Party leader Amar Singh's birthday party, forking out Rs.21 lakhs for an earthquake relief fund. Such contacts might explain why no follow-up investigation took place after income tax officials surveyed Parekh's offices last January.

Many of Parekh's business contacts had influence that cut across parties, and they have faced the heat in the past for sharp practices. In 1996, HFCL faced investigation by the CBI in the wake of allegations that its Director, Mahendra Nahata, had brokered a controversial telecommunications deal with then Union Minister Sukh Ram. HFCL emerged unscathed from that furore, only to face more trouble early this year. Film financier and diamond merchant Bharat Shah's arrest this January on charges of laundering funds for Karachi-based mafioso Dawood Ibrahim Kaksar, led to a sharp drop in HFCL stock. The friendship between the company's chairman, Vinay Maloo, and Shah was well known, and rumours spread that Maloo's arrest was imminent. The rumours were unfounded, but they did illustrate the ways of the incestuous world that Parekh operated in.

Indeed, Shah's arrest proved an ill omen for Parekh. CBI and Mumbai Police officials working on the money laundering case believe that mafia funds were channelled through Parekh into entertainment stocks. "We haven't found any hard evidence yet," says one Mumbai Crime Branch official involved in the Shah investigation, "but Parekh's arrest could open up new avenues for us". What is known is that Shah played an important role in Parekh's entry into Mumbai's entertainment industry. In April last, Parekh, Maloo and Australian media magnate Kerry Packer were seen along with Shah at a party at Mumbai's Oberoi Hotel, along with film celebrities like Amitabh Bachchan, Boney Kapoor, Sridevi and Jackie Shroff. That party was to signal Parekh's entry into the industry, and proved a precursor to plans by almost 30 film-related organisations to go public.

E, for entertainment, came to join Parekh's information and communication portfolio from September. That month, he funnelled funds into Bachchan's moribund production company ABCL. The bankrupt company was soon able to clear its enormous dues and start on a clean slate. Parekh also played a role in actor Jeetendra Kapoor's Balaji Telefilms' plans for a Rs.50-crore public issue. The stockbroker sounded the clap for Kapoor's daughter's first film. Ekta Kapoor is best known for producing a series of bestselling television soaps, notably ''Kabhi Saas Bhi Bahu Thi'' (Mother-in-Law Was Once a Daughter-in-Law). The Parekh-Maloo-Packer trio is also believed to have pumped in close to Rs.17 crores into the Internet portal Cricketnext.com.

What goes up must of course come down. Parekh's fall was, if anything, even more spectacular than his rise. By February 2001, with ICE stocks in decline and FIIs pulling out, the pressure was on Parekh. Banks like Madhavpura, however, helped the broker along. But it did not last long. The bears believed their time had come, and began hammering stocks down. Calcutta-based Ajay Kayan and his firm C. Mackertich, Bombay-based brokers R.S. Damani, Nirmal Bang, and First Global, as well as two of the biggest FIIs, Credit Suisse First Boston and JM Morgan Stanley, led the bear hunt. The stock market panic in March provoked by the Tehelka expose helped their cause. Indeed, First Global's interest in Tehelka has provoked rumours that the expose was timed to help its shareholders' cause, an allegation that both organisations deny. Whatever the truth, Parekh's stocks, and the market in general, took a severe hammering.

SEBI at last moved in the first week of March, promising to punish the bear cartel and ordering an end to what are called naked short sales, or the disposal of shares below value. Events, however, had outpaced the organisation. The payments crisis at the Calcutta Stock Exchange had nation-wide repercussions (see separate story), and the climate of fear on the markets was compounded when news broke that BSE president Anand Rathi had passed on confidential information on bull activity to bear cartel brokers. Rathi's taped conversations led SEBI to mount pressure on the BSE. Rathi's resignation too proved to be a case of too little, too late: on March 30 the Sensex was down to 3,604.38, from the level of 4,330.32 in mid-February.

It is going to be a while before the pieces are picked up. Among the principal casualties so far is the proposed merger between Global Trust Bank, one of the main financiers of Parekh's market operations, and UTI Bank. Critics of the deal, announced in January, charged that Parekh had ramped up Global Trust shares before the deal. UTI, they said, had agreed to the merger on terms that would have had adverse consequences for its shareholders. A confidential report by SEBI to the RBI says that Parekh and two associates had acquired over 20 per cent of GTB in the run-up to the merger, in violation of its take-over code. Part of these shares are alleged to have been parked with three finance companies owned by Gujarat based detergent tycoon Karsanbhai Patel, who owns Nirma. Both UTI and Global Trust have pulled out of the merger; both were defending it in the face of evidence of price rigging until days before Parekh's arrest.

Those who believe that the investigative and legal process which has started could lead to a clean-up of the markets, however, might do well to consider history. As his CBI record shows, Parekh is known to have worked in close association with Harshad Mehta during both the securities scandal and the six-month-long 1998 bull run. Although he escaped investigative scrutiny on both occasions, he will doubtless have the time while in CBI custody to consider Mehta's experience. The architect of the 1992 scandal has been convicted of several offences, but continues to be free, while his appeals are pending in the Supreme Court. A final judgment could take years, perhaps decades. Meanwhile, he remains the largest single defaulter of public sector bank loans, with a total liability of Rs.812.08 crores. Mehta continues to travel from his luxury flat in Mumbai in an imported car.

Crime, it would seem, pays. Someone, of course, has to pay for it.

Hundreds of people line up each morning outside the Friends Cooperative Bank in Mumbai's Kurla area, each hoping to get back his or her deposits. Rumours of a stock crash having sparked bankruptcies have provoked a run on small banks, and many of them just cannot meet the higher demands for cash. Some people will get their deposits back. Others, quite possibly, will not. Still others, drawn to the stock markets by low interest rates, have seen their savings disappear. Despite all the furore provoked in 1992, little seems to have actually changed.

A 'parallel' crisis in CSE

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Uncertainty prevails among the broking community as the Calcutta Stock Exchange tries to pull itself out of the payment shortfall crisis.

SUHRID SANKAR CHATTOPADHYAY in Kolkata

THE Calcutta Stock Exchange (CSE) at 7 Lyons Range was engulfed in one of the country's worst-ever payment shortfall crises when 10 defaulting brokers or broking firms belonging to three major players failed to pay up a total of Rs.106.93 crores to the bourse against their obligations in three consecutive weekly settlements (numbers 148, 149 and 150).

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The crisis made the CSE's Settlement Guarantee Fund (SGF) poorer by Rs.48 crores and depleted the general reserves to the extent of about Rs.20 crores. The overblown unofficial badla or carry forward market brought the exchange to its knees. The CSE, which until February-end enjoyed an average daily turnover of Rs.1,500 crores, saw the volume shrink to less than Rs.100 crores in the second half of March as the operators became nervous and cautious. According to Ajit Day, former president of the CSE, the loss for all the parties put together would be around Rs.800 crores. More than 70 per cent of the broking community, especially small and medium brokers, were devastated. Many lost their lifetime's savings. Abhisekh Banka, 22, a sub-broker, is reported to have committed suicide by drowning. His wife killed herself by jumping off a multi-storied building. The crisis precipitated the resignation of all three elected broker members - Dinesh Kumar Singhania, a director on the CSE board, Harish Biyani and Ashok Kumar Poddar - from the governing committee, paving the way for demutualisation.

The crisis has its roots in the operations of Mumbai-based bull trader Ketan Parekh, who used some CSE brokers as his conduits for official and "unofficial" deals in the ICE (information, communication and entertainment) shares. According to market observers, the elaborate price rigging operations in the technology counters conducted by Ketan Parekh's associates in Kolkata had begun more than a year ago. But Ketan Parekh and Co. suddenly got trapped after a gang of bears hammered down the ICE stocks across the board on March 2. With the drastic fall in the market, Ketan Parekh found himself unable to keep his commitment to his fronts - Singhania, Biyani and Poddar - in the CSE.

"When the local bulls could not off-load their stocks in the official market, they succeeded in transferring it to the unofficial badla system," said S.K. Kaushik, a broker. The Rs.3,000-crore unofficial badla market in the CSE is the largest in India. The system prevalent at the CSE is popularly known as the "1-2-3 system", by which brokers transfer stocks among themselves. Although the transfer takes place through the official market, the system ensures that the stocks go to the transferer's choice. Two brokers place buy and sale orders at the same time and at the same price. Then they contact each other over the phone and at the count of three, hit the enter button of the trading terminals simultaneously, thus ensuring that the orders hit the market at the same time. The price of the shares is "fixed" slightly above the market price by the operators concerned.

"With the unofficial market destroyed by the recent developments, the brokers who borrowed heavily from there and routed it through the official market, and the financiers have been badly affected," an expert told Frontline. According to him, the returns in the unofficial badla market is on an average 25 to 30 per cent, as against 18 to 20 per cent in the official market when the going is good.

According to Tapas Dutta, CSE executive director, on March 8, at settlement No.148, there was a shortfall of Rs.32.6 crores. It was for the first time that a default of such a huge proportion had taken place in any major bourse in the country. Defaults were mainly in the HCFL counter and in the DSQ software scrip.

CSE officials claim that the pay-in shortfall was a rare phenomenon since the introduction of on-line trading and Securities and Exchange Board of India-approved modified carry forward systems. Even if there was any shortfall, it was never more than a few lakhs. "The shortfall was then quickly adjusted against the defaulter's margin deposits," a top CSE official said.

The CSE authorities attempted to bridge the pay-in shortfall by encashing bank guarantees and fixed deposits of defaulters placed before the exchange as margin (sort of an advance payment or collateral against outstanding positions) worth around Rs.70 crores. It also sold shares, which were brought in by some of the defaulting brokers. However, the gap could not be filled.

Dutta said that after utilising these funds and drawing from the SGF, on March 15, there was a shortfall of Rs.13.08 crores for settlement No.149. On March 22, another 40 brokers failed to keep their commitments for settlement No.150, as they were hit by the chain reaction of the earlier defaults of Singhania, Biyani, Poddar and their respective companies. However, the shortfall was again bridged by adopting the same method used in the matter of the two earlier settlements and by recovering Rs.28 crores by cancelling "dubious" trade deals.

On March 26, the CSE formally declared 10 brokerages owned by Singhania, Biyani and Poddar as defaulters. It also initiated criminal proceedings against some of them under Section 138 of the Negotiable Instruments Act for presenting cheques worth around Rs.55 crores which were dishonoured by the drawee banks. The 10 arraigned persons are: Dinesh Kumar Singhania and Co, Doe Jones Investments and Consultants Private Ltd, Arihant Exim Scrip Pvt Ltd, Tripoli Consultancy Services Pvt Ltd, Harish Biyani, Biyani Securities Pvt Ltd., Ashok Kumar Poddar, Prema Poddar, Raj Kumar Poddar and Ratan Lal Poddar.

The CSE authorities came under attack for not being able to prevent the crisis and "allowing it to blow out of proportion". One broker blamed the ineffective surveillance mechanism. Ajit Day said: "It is obvious that the CSE authorities did not apprehend that things will take such a turn." The CSE management, however, avoided fixing responsibilities for the crisis.

The majority of the brokers demanded the resignation of the elected directors of the CSE governing committee. On March 30, the eight elected members - president Kamal Parekh, vice-president K.K. Daga and six directors - resigned. Dinesh Singhania had resigned earlier following the payment crisis . On April 2, a new management sub-committee comprising six public representatives, three SEBI nominees and the executive director was formed by the governing committee. The subcommittee is headed by Dipankar Basu, former chairman of State Bank of India, and includes Roopen Roy of Pricewaterhouse Coopers, Brij Gopal Daga of the Unit Trust of India (UTI) and Professor Gopal Reddy of the Indian Institute of Management, Kolkata.

The new board decided that the CSE would primarily seek to replenish the depleted SGF, the erosion of which has been more than 25 per cent of the last audited corpus. If not replenished, according to SEBI guidelines MCFS would be disallowed, and that would mean the end of the CSE and all those who depend on it. Currently the main concern of the management is restoring the CSE's financial position. Pratip Kar, SEBI executive director in charge of the secondary market, is reported to have said that CSE would eventually emerge as a demutualised entity, with a clear division between ownership and management.

However, Ajit Day sees a dark future for the CSE as the payment crisis has created confusion in the market and a drop in business.

The regulatory blinkers

The current turmoil in the bourses could have been avoided had the regulatory bodies not ignored the early warning signals.

FOR the ongoing turmoil in the stock exchanges, the regulatory authorities deserve a sharp rap, both for their unwillingness to learn from the past, even more important, for not paying heed to the early warning signals. Evidence that things were not what they seemed to be was available as early as January 2000. However, nothing was done and now, after 15 months, the situation has developed into a crisis of confidence for investors.

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The blame has to rest with the Securities and Exchange Board of India (SEBI) and, to a lesser extent, the Reserve Bank of India (RBI), for not ensuring better disclosures of bank lending against shares, especially to stock brokers.

What shows up as a gaping hole in the administration of capital market regulation is the fact that the Ketan Parekh-centered operations and problems seem pretty much analogous to the ones witnessed in 1992 during the Harshad Mehta crisis.

In the intervening nine years, SEBI had put in place numerous regulations touching almost every aspect of capital market operations. The markets have also changed in terms of trading systems, enhanced institutional investor presence and a depository system that has removed the scope for much mischief. However, still if there have been flash-points every two years, then a lot of it has to do with the following factors:

* The quality of implementation of regulations by SEBI has left a lot to be desired. Even if one ignores the ongoing secondary market turmoil, in other areas too SEBI has adopted a benign approach. In the last five years, virtually every major corporate action, be it merger or divestiture, was preceded by significant price changes pointing to informed/insider trading (trading on the basis of privileged and unpublished information). All that SEBI has to show for is one solitary case against Hindustan Lever. However, even this case hinges on rather technical grounds. A benign regulator has emboldened market players to trade on the basis of inside information, which is the most serious aspect of the capital market as far as investors are concerned.

* The regulatory mindset has also been geared to adopting a posture of benign neglect or indifference when stock prices go up. But no sooner do they show signs of distress, the system goes into a hyperactive mode. The regulatorial overdrive is all the more evident when there is some pressure from the government. Little do they seem to realise that it is invariably a speculative bubble that leads to a price crash. So it is really a case of SEBI not looking at the root cause in time. In the latest case, the extraordinary bull run in information technology, telecom and media stocks of companies with a dubious reputation was ignored right through 1999 and 2000. In contrast, SEBI is making too much noise when prices have hit rock bottom.

* Passing up warning signals and reacting belatedly have almost become a favourite pastime for SEBI. In the present turmoil, the published figures of leveraged trading - 'badla' on the Bombay Stock Exchange (BSE) and Automatic Lending & Borrowing Mechanism (ALBM) which has taken off on the National Stock Exchange (NSE) in the last six months - had pointed to pressures building up in the case of select stocks. The outstanding positions (that is, the sum total of transactions whose settlement is postponed to a future date) in the set of core 'Ketan Parekh stocks' such as Zee Telefilms, DSQ Software, PentaMedia Graphics, SSI, Satyam Computers, Himachal Futuristic, Global Tele-Systems, Silverline Industries, Aftek Infosys and Padmini Polymers just kept on rising despite a fall in the prices of these shares. Prices of these stocks had declined by 70 to 90 per cent. In such a situation, huge 'long' positions (purchases) being carried forward should have attracted a close look from the regulators and led to the issue of warnings to investors about possible price manipulation that could be costly.

* There was also the spurt in trading levels in the stock exchanges in general, with most of these stocks moving to the list of top ten traded stocks almost every day. Given the low delivery levels, circular trading could have been the only reason. But SEBI chose to satisfy itself with technicalities such as compliance with margin requirements and exposure. For the NSE and the BSE to be satisfied at this level may have been understandable, but not for the apex regulator. If it had dug deeper and learnt lessons from the past, things may not have come to such a pass. There may also have been some clues to have about the source of liquidity.

* Technically, much of what Ketan Parekh has done is within the bounds of the law. But price ramping, insider trading, highly leveraged positions spread across a series of associate brokers, collusive behaviour between promoters and market operators and circular trading (where big trades are put through among a few players) have been rampant. Things unethical must be brought into the 'illegal' category where pecuniary interest and public services are involved. Unfortunately under the present system, such practices carry penalties that are not of a deterrent nature and are small in relation to the potential for private gains. Proving such cases is also difficult. But a look at the operations of the Securities and Exchange Commission (SEC) in the U.S. shows that a strong regulator can put fear into the market players by making the price for excesses a genuinely stringent one.

* There is only a negligible level of transparency in the operations of SEBI. The most prominent example is the fact that the investigation report in the BPL, Videocon and Sterlite stocks transactions in 1998 (which led to a big crisis on the BSE) has not yet been made public. Legal constraints may have now come in the way, but in the first place there was nothing to prevent SEBI from publishing its investigation report.

Moreover, very little is known of the deliberations of key committee meetings such as the one of market surveillance and mutual funds. This lack of transparency has reached a point where even decisions on some takeovers have been made known to a couple of mediapersons without being put on record in writing or on SEBI's website (www.sebi.gov.in).

* The procedure for regulation making is ad hoc and so many changes are made from time to time with little rationale. The regulatory framework governing takeover, private placement, preferential offers and threshold for public offering of equity have been announced without due process. In contrast, the SEC has discussion papers, articulation of views by its top officials (who, incidentally, unlike the SEBI top brass do not comment on market price levels), empirical back-up for proposed changes, draft papers, a public comment period, the final regulations and then an ongoing study of the impact of the regulatory change. In the case of SEBI, one would find no signs of such process and it leaves ample room for regulation at the behest of vested corporate interests and the government. For instance, the hike in the threshold limit of acquisitions for 'open offer' under the takeover code from 10 per cent to 15 per cent of the equity of an acquired company was done just before a couple of big business groups put through major acquisitions.

* SEBI turned a blind eye to the rampant speculation on the Calcutta Stock Exchange (CSE). This, in turn, was also responsible for the current crisis. Despite vast improvement in trading systems in terms of regulation and technology, the CSE had an unofficial badla system that was allowed to continue at great risk to the market. Although the CSE has had heavy trading volumes (way behind the NSE and the BSE), the delivery percentage was extremely low. This coupled with the unofficial badla and the official badla meant a market that was virtually outside the system. That difficult to-be-deferred open positions were shifted there is well known. But SEBI allowed the exchange to start a modified carry forward system when it had a good chance to clean the stables.

By allowing the practice of external bail-outs - where some companies and institutions throw a life line to market players in trouble - brokers were encouraged to believe that if there is a difficulty somebody would step in. In the recent crisis, Unit Trust of India (UTI) and a prominent business group known for its widespread tentacles and lobbying purchased shares of DSQ and Himachal Futuristic at discounted prices. Such bail-outs always have a quid pro quo and are not good for the market as a system. This has happened on the BSE and the CSE at various points of time. In contrast, the NSE handled such cases through its National Securities Clearing Corporation and then proceeded against the brokers. This is a cleaner approach which remains within the market system.

* One key area where there was a failure was with regard to disclosures, especially of leveraged positions. More so, since the RBI and the government have been encouraging banks to be more active in equity related activities. It is another matter that banks continue to exhibit a high degree of caution. A few banks, especially the private sectors ones, have been aggressive but have handled their exposures well without taking a knock or being taken for a ride by brokers. It is once again the public sector banks and cooperative banks that have taken a knock with Bank of India and Dena Bank identified as victims so far. Despite the caution exercised by the banks, the level of their advances from a stock market perspective was fairly high. Even when it constitutes less than 2 per cent of all advances, the amount of about Rs.10,000 crores was three times the volumes that pass through the ALBM and BLESS (as 'badla' is called in the BSE). Since the amounts involved are high, a disclosure of the top 20 stocks against which lending has been done by the banks would have helped all investors assess the effect of leveraged positions. Unfortunately, now it is privy to a few. Mandating this should be easy to do and implement since the beneficial ownership in favour of banks is recorded in National Securities Depository Ltd (NSDL). Seen in conjunction with ALBM and BLESS positions, the disclosures may have ensured better market response to building pressure points due to excessive leverage.

However, the 2001 crisis is not a complete disaster story. The crisis was not so severe that stock exchanges had to be closed down, something that was witnessed in the past. The fact that exchanges were open meant that investors could trade albeit at lower volumes overall. This is a good sign as any closure of a market usually disrupts the system. The fact that the professionally managed NSE has managed to come through the turmoil in a smooth manner is a source of encouragement. It has also been proved that a clearing corporation type of arrangement and the absence of hands-on role for brokers in the running of a stock exchange as prevalent at the NSE, are superior.

A classic comeback

After tasting defeat in the first Test, India makes a remarkable recovery to win a series at home against world champions Australia.

JUST about everyone had given up. The Indians, crushed by the marauding Australian team in the first Test in Mumbai, were following on in the Kolkata Test... everything seemed lost.

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Then came the astonishing turnaround at the Eden Gardens, which concluded on the gripping fifth day of the final Test at the M.A. Chidambaram Stadium in Chennai with the hosts clinching the series 2-1.

For the Indians, despair had now given way to hope - hope for a better, brighter future for cricket, especially after the dark of the match-fixing scandal. For the Aussies however, the 'Final Frontier' remained unconquered.

Ultimately what won the series for India was the change in the batting order. Australia seemed set to deliver the knock-out punch at the Eden Gardens, when came an inspired piece of thinking from the Indian side.

V.V.S. Laxman, who had shown glimpses of form during his fighting 58 in the first innings in Kolkata, was sent in at No. 3.

The shift also enabled vice-captain Rahul Dravid, who had allowed the bowlers to dominate when he batted at No. 3 in the first innings, regain his confidence at No. 6. The rest is contemporary history.

Laxman produced a stroke-filled 281, the highest individual score for India, surpassing Sunil Gavaskar's 236. Dravid made a solid 180, and the two added 376 for the fifth wicket, while the Aussies endured a barren fourth day. India won the match by 171 runs.

Laxman's was an epic innings. The stylish batsman from Hyderabad was under considerable pressure after his twin failure in Mumbai, but displayed the resolve to fight his way back in a truly memorable manner.

In Laxman's success is a bigger message. That a gifted player will eventually find his way through the maze, and cannot be kept down, even if the 'wise men' do not always show wisdom. Making Laxman open the innings earlier was a mistake - thrusting the opening slot on middle-order batsmen is not going to pay in the long run.

This was also the 'Breakthrough Series' for off-spinner Harbhajan Singh, who bagged 32 wickets in the series, became the first Indian to achieve a hat-trick in Test cricket, and bowled his team to a fine series victory. India had discovered a match-winner.

The young Sardar bowled a lovely off-stump line - he had worked on this aspect during the conditioning camp prior to the series - extracted bounce and spin, flighted the ball tantalisingly and made the odd one drift away from the right-hander - the key delivery really. The fizz was definitely evident in Harbhajan's bowling, and he displayed the happy habit of running through sides once the breakthrough was made.

Harbhajan had been through a lot in his career - he was hauled up by the International Cricket Council (ICC) for a doubtful action, and then banished from the National Cricket Academy on disciplinary grounds. But now he has shown that he has the mettle to bounce back. Even during the testing moments in his career, Harbhajan never gave up. And when the opportunity presented itself, he slipped into the role of a strike-bowler effortlessly in the absence of the injured spearhead, Anil Kumble, making the mental transition with ease. Man of the Series he certainly deserved to be. Harbhajan received fine support from the field too, with Laxman, Dravid and Shiv Sundar Das bringing off superb catches close to the wicket - catches that eventually mattered.

Yet there was hardly any spin support for Harbhajan. As many as three left-arm spinners - Rahul Sanghvi, Venkatapathy Raju and Nilesh Kulkarni - were tried in the series with no great success. That Sachin Tendulkar, with three wickets on the sensational final session at the Eden Gardens, emerged Harbhajan's most successful 'spin partner' does not augur well for the future. The return of Kumble, as and when he recovers, should definitely help.

Pleasingly, India's series victory was not achieved on tailor-made pitches that could assist the spinners. The wickets at both Eden Gardens and Chepauk were essentially good strips with natural wear and tear on the final day. And on a stark turner in Mumbai, it was Australia that emerged triumphant. Perhaps there is a lesson to be learnt here.

The other valuable contribution came from maestro Sachin Tendulkar who got his 25th Test hundred in Chennai, an innings that was both crucial and delightful.

There was also the lovely 84 from opener Das in Chennai. Sadagopan Ramesh chipped in too. The openers were under fire in the early part of the series but showed the character to fight back.

However, the real test for the Indian batsmen will come when they take on the quicks on the bouncy tracks of Down Under, or in South Africa. The need of the hour is not to get carried away by the victory at home. With a busy 'away series' schedule ahead of India, there are battles that remain to be won. And maybe several reputations still to be earned.

CONQUERING India in India in a Test series was the 'ultimate dream' for Steve Waugh, the last frontier in a glittering run of away-Test series victories. In the end, he failed - by just two 'tail-end' wickets. It was a moment of crushing disappointment for the tough-as-nails Aussie captain when he lost the series in Chennai.

Did he err in enforcing the follow-on in the second Test? After all, his bowlers were tired after putting in a whole-hearted effort in the first innings, and then there was a possibility that his team could bat last on a deteriorating pitch.

In hindsight it might seem a mistake, but then Steve Waugh's decision had seemed logical - his team's confidence was sky-high with an unprecedented 16 successive victories in Test cricket, and nobody had expected Laxman and Dravid to put in such a brave front.

Where did the Australians go wrong? The continuance of Ricky Ponting in the team was puzzling. The Australians have in the past been ruthless with the selections. Leg-spinner Stuart McGill's omission is a case in point. Yet, when things began to go horribly wrong in India, the visitors refused to make the required changes. The hopelessly out-of-form Ricky Ponting was persisted with for the deciding match in Chennai, and the results were disastrous. Steve Waugh defended the decision saying "I want to back my batsmen to get the runs" but the argument did seem unconvincing, especially since Damien Martyn had been dropped earlier in the season after two crucial efforts against the West Indies.

Retaining leg-spinner Shane Warne was another mistake the Aussie captain made. Although coach John Buchanan did not want Warne for the Chennai Test, Steve Waugh did. Buchanan's thinking had sound reasoning since the Aussies' game plan for the series was to field three pacemen and a spinner, and off-spinner Colin Miller was certain to play in the final Test. Australia had to pay a heavy price for its captain's hesitation to take a tough decision. In the close finish that the Chennai Test was, all the runs conceded by Warne proved decisive. Warne was dismissed ruthlessly by the Indian batsmen, while Glenn McGrath and Jason Gillespie - both of whom bowled their heart out in the series, generating speed and extracting movement - desperately missed pace support.

Omitting paceman Damien Fleming after the first Test was a blunder since he is a 'genuine mover of the ball', and can take 'big' wickets.

The Aussies lost seven wickets in a dramatic post-tea session on the final day at the Eden Gardens. In a situation where defending with a straight blade - Gillespie and McGrath showed the way later - might have done the trick, the Aussies resorted to horizontal strokes and the approach was hard to understand, especially from a side that had displayed tigerish resolve in the past. For instance, Adam Gilchrist, who produced an audacious, match-winning century in Mumbai, just refused to understand that his tactics - sweeping the ball from off-stump - would not pay off every time.

Most of the Australian players struggled against Harbhajan Singh's off-spin. With the ball turning and bouncing, and the close-in cordon firmly in place, it was a very different ball game for the Aussies. The Australians would do well to undertake an 'A' team tour of India that will enable some of the young players to get a feel of the Indian conditions. Tackling off-spinners has been a traditional failing for the Aussies. The team's middle-order caved in much too often.

Michael Slater's verbal outburst, after his catch off Dravid was disallowed in the Mumbai Test, earned him a fine and a suspended sentence, and he was never again the same player in the series. For a team that plays the 'mind game', Slater lost the mental battle. Slater is a crucial player for the Australian team and his loss of focus hurt its chances.

Another significant aspect is that although Australia still has a formidable team, it is an aging one. Steve and Mark Waugh are 35 plus now, and the Australians may have to find replacements for key middle-order slots. The depth of talent Down Under has not been in question, but then replacing giants is no easy task.

Matthew Hayden, who made runs, and made them in style, was Australia's unexpected hero. The key to the hefty and brave opener's success - he made 549 runs in all with a double hundred, a hundred, and a near hundred - was that he used his feet to the spinners and was never caught in two minds.

There were a couple of doubtful decisions that went against the Aussies in the second Test - umpire S.K. Bansal came under scrutiny here - but generally the quality of umpiring passed muster. Nevertheless, the ICC might do well to have two 'neutral umpires' for Test matches in order to remove any cloud of suspicion.

Finally, a word about the Indian captain. Sourav Ganguly was not in the best of form, especially with his personal life being under public scrutiny, but some credit can go his way for a famous series victory over a formidable rival. That he came up with the right moves on the field, cannot be forgotten. And full marks to coach John Wright and fitness trainer Andrew Leipus, who really made a difference in a quiet, non-obtrusive manner.

Tendulkar's crown

Sachin Tendulkar reaches a cricketing milestone by becoming the first player to reach the 10,000-run mark in one-day internationals.

HERE'S a simple question, with a simple answer.

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What would have been the most frightening thought for bowlers when India's Sachin Tendulkar became the first batsman to crack the 10,000-run barrier in one-day internationals?

That this could be the beginning of yet another journey - towards the next 10,000!

Here's a tougher question, with a tougher answer.

How many runs would Tendulkar have accumulated in both forms of the game when he eventually hangs up his boots?

25,000, 35,000, 45,000? Well... Tendulkar is only 28 now, and it is so hazardous to venture into a guess really, for the impossible is possible with the little great man.

He has already scored 6,720 runs from 82 Tests at an average of 56.95, and 10,105 in 266 limited overs internationals (LOIs) (average 42.64) to make a stunning grand total of 16,825; only Australia's Allan Border with 17,698 runs to his credit, has aggregated more. However, Tendulkar is way ahead when it comes to three-figure knocks - 25 in Tests and 28 in LOIs.

A lot more records are bound to come the way of this fabulous batsman, possessing that awesome combination of impeccable technique, a wonderful eye, quick-silver reflexes, and a heart larger than the breadth of his shoulders.

The significance of the landmark - which he achieved in the third ODI against Australia at Indore - lies not in the numbers alone. It is more about one man's infinite passion for the game, his quest for perfection, his date with glory.

And his pride in turning out for India. "A lot of people make money, earn crores, but how many of them get the chance to represent the country? It's an honour," he once said during an interview.

Tendulkar goes beyond the numbers. In fact, way beyond them. For him, it is a celebration of the spirit - the spirit of India.

Recently, a friend from Mumbai narrated an interesting story. About how he saw the ace cricketer having a knock at an obscure school nets at the Shivaji Park ground on a hot afternoon a couple of years ago. Tendulkar had then just returned from a tough overseas campaign, yet he could not resist taking off to a ground where it all began for him. It is this combination of hard work and astonishing talent that makes him such a dangerous proposition for his rivals.

Watching Tendulkar at the conditioning camps for the Indian team provides us an insight into his work ethics. In a session that might last five hours, he would seldom take a break.

The running and stretching routines would be followed by 'nets'. He would barely have taken the pads off after batting, when one could spot him with the ball in his hands and a glint in his eyes. And then he would take the lead in the fielding routines. It is non-stop action for him.

In fact, before this year's camp in Chennai, coach John Wright and fitness trainer Andrew Leipus made it clear that the players would not be able to take it easy during any phase of the camp. It did not matter to Tendulkar though - he was already doing just that.

And his total commitment on the field is also reflected off it. He is a man of word. A few years ago Tendulkar was in Chennai with the Sungrace Mafatlal team to compete in the Buchi Babu tournament. And when this writer approached him for an interview, he readily agreed.

However, the Mumbai team suffered a shock defeat at the hands of a local team, prompting a dramatic change in the tour itinerary. The team was flying out way ahead of the date the maestro had set aside for the interview.

Yet, Tendulkar honoured the commitment, and talked to The Sportstar, while his team-mates packed his bags (or else he would have missed the flight).

There was no compulsion whatsoever, and here lies his greatness. It is this spontaneous integrity that comes to the fore time and time on the cricket field too.

Perhaps the most significant aspect of Tendulkar's cricket is his enormous strength of mind that provides the cutting edge to his glittering talent. Carrying the expectations of millions of Indians can be mentally and physically an overwhelming challenge, yet the great man has seldom buckled under the responsibility. In fact, he has thrived on it.

Australia's captain Steve Waugh once marvelled at how Tendulkar invariably delivered in crunch situations despite the pressures on him as the premier batsman of a nation that breathed cricket. Steve Waugh should know, for Tendulkar had conjured two of his greatest one-day hundreds against the former's team in Sharjah, in 1998 - back-to-back knocks of 143 and 134, the first when India desperately needed the runs to qualify, and secondly when India chased a challenging target of 272. Shots flew in all directions, be it straight hits, rousing flicks, searing cover-drives, delicate cuts, or murderous pulls. For once, the resourceful Aussies ran out of ideas.

No wonder Tendulkar is such a natural one-day cricketer. And his body-balance, in defence and offence, against both pace and spin (he is at ease against both), and on bouncy and turning wickets, is the key to his winning ways.

What makes Tendulkar such a formidable batsman? Apart from the qualities mentioned above, it is his ability to win the 'battle of the mind' against the bowler. He almost seems to know what the next delivery would be, and is ready with a stroke. He picks the length so quickly that he has three strokes for every delivery - the hall-mark of a great batsman. No wonder he has so much time at his disposal.

Tendulkar's first impulse as he shapes to play a delivery is to attack; defence is only the second option. This is where his approach is vastly different from another Indian legend - Sunil Gavaskar - whose game stemmed from defence. While Gavaskar would wear the bowlers down, Tendulkar goes after them.

Gavaskar was the first batsman in Test history to achieve 10,000 runs in Test cricket and none can question the opener's success against the great speed merchants of that era. However, it must be conceded that in one-day cricket, Tendulkar surely scores over Gavaskar for his sheer shot-making skills. He can smack balls to which most batsmen would show their defensive blades.

Perhaps no other stroke conveys the joy of Tendulkar's batting than the short-arm pull that he unleashes even against deliveries just short of a good length, often picking the ball from off-stump - a stroke that has unsettled the best of bowlers. The back-foot thump through the covers too has rattled pacemen in the early overs.

On seaming wickets, the straightness of his bat, even as he wades into shots in the 'V', has often carried the day for him and India. Indeed, Tendulkar striking the quicks down the ground, his left elbow straight and high, is a glorious sight.

Tendulkar also relishes taking on the ace bowlers and hitting them off the firing line. One just has to look at his onslaught on the fiery Glenn McGrath of Australia in the recent one-day series to see the point. With his in-born sense of aggression, he can be destructive on the field.

The shift to the opening slot during the 1994 series in New Zealand - where he volunteered to don a new role when the team faced a crisis - has obviously been a huge turning point in Tendulkar's one-day career. Opening suited his temperament fine.

Until then, Tendulkar had walked in at No. 4 when the asking rate was already high, and he was like a caged tiger, with a hint of desperation in his methods. But as an opener, he could set his own pace, create, innovate, and make it easier for the rest.

It must be conceded that captaincy did take some of the gloss away from Tendulkar's batting - he did not seem to be enjoying his efforts anymore. And once the 'burden' was off his shoulders, the booming strokes were back in full play.

And until captain Sourav Ganguly's dramatic slump in form this season, Tendulkar formed a highly productive right-left opening partnership with the southpaw, that reached its pinnacle when the two, complementing each other, raised 252 against Sri Lanka in Colombo, during the 1998 tour of that country.

Add to it his 'baffling' bowling - his exotic repertoire of off-spin, leg-breaks, and seamers has now fetched him over 100 wickets in LOIs - his often brilliant fielding and his hectic running between the wickets, and we have a dynamo on the cricket field.

Yet greatness sits lightly on Tendulkar's shoulders. He is modest about his rather enormous achievements, often going out of his way to put the young players at ease, has a patient ear for the players of the past, sports a friendly smile for the fans even during moments of stress, betrays no sign of the arrogance that has eventually consumed so many cricketing superstars of the past. He is the man of the masses - both an entertainer and a winner for them.

Stocks of scandal

In the wake of the Tehelka tapes, the scandal that has enveloped the revenue apparatus and the supervisory authorities for the stock markets, add to the government's worries.

THERE is no surer antidote for public apathy than the recurring shock of revelation. Within the space of just over a fortnight, the country seemed to have overcome the initial outrage caused by the Tehelka tapes and to begin looking at the sordid revelations of high-level malfeasance in defence procurement with something approaching absent-minded tolerance.

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Two events, though, interrupted this descent into indifference. First, the stock markets crumbled under the accumulated weight of multiple transactions underwritten by fictitious money, jolting the investing public alive to the realities of supervisory laxity and connivance (see separate feature). Second, the arrest of B.P. Verma, Chairman of the Central Board of Excise and Customs (CBEC) - an agency that provides the Central government with half the revenue to keep itself running - showed how the system has for years been rewarding the corrupt with promotion and career advancement.

Any adventurer with a sufficiently fat purse can enter the portals of the country's most highly secured establishment, work his or her way right to the top and gain sufficient purchase for merchandise of a dubious - not to mention completely fictitious - character. That was the singular message to emerge from the sensational Tehelka tapes, aired to riveted audiences in March. The month following has brought revelations of more specific and equally shocking import. The value of assets owned by Verma, it is now revealed, is in the range of Rs. 40 crores. He was on a vigilance watch-list for some years but did not miss his opportunities to rise in the hierarchy of the Indian Revenue Service. More than the corruption of the individual, the key question raised by his arrest and indictment is: who put him in a position where he is able to control a workforce of 80,000 that manages the vital check-points of the Central government's revenue streams?

Verma was appointed CBEC Chairman in June last year after having served for over three years as a Member of the Board. Even in the latter position, he held successive charge of the two vital portfolios of Excise and Budget. In a tight race with another incumbent member for the top job, Verma obtained the endorsement of the Prime Minister's Office (PMO). Finance Minister Yashwant Sinha, for reasons that may not be quite unconnected to community and regional affiliation, seemingly preferred Verma's rival for the job. But when told where the PMO's preferences lay, he quickly acquiesced in Verma's appointment. The community factor supposedly worked partially in Verma's favour too, as did the backing of a top bureaucrat. His elevation was finally cleared by the Appointments Committee of Cabinet, which includes the Home Minister in addition to the Prime Minister.

All the individuals who helped Verma climb the ladder to the top of his service are today keen to dissociate themselves from his record of corruption. But in the days to come, certain hard questions will have to be faced and answered.

CHIEF Vigilance Commissioner Nagarajan Vittal made bold, after Verma's arrest, to go public with the claim that he had indeed opposed his appointment and recommended vigilance inquiries against him at various junctures. But this manner of retrospective wisdom does little to allay public misgivings about the CVC's curious reluctance to exercise the powers of superintendence that are granted him. Vittal did make another kind of public intervention though of a somewhat less valuable kind. Citing figures of the vigilance inquiries he had launched, he pointed out that Customs personnel featured most often on his watch-list, and so on. His rather broad generalisation invited upon Vittal the ire of the Indian Revenue Services Officers' Association, which threatened legal action.

The CVC also found himself in the focus of public attention for another reason. A fortnight after the disclosures of the Tehelka tapes, he submitted his final report in exercise of a mandate entrusted him in February last year. The brief he was given was rather limited - to examine whether the proscription of middlemen in defence purchases was, knowingly or otherwise, being flouted. When this question was referred to the CVC by the government during George Fernandes' tenure in the Defence Ministry, it was not clear what the basic intent was. Was Fernandes really in need of education on the extent to which defence purchases were influenced by brokers and middlemen? Was he interested in a fair and impartial inquiry in the interests of the public's right to know? Or was he merely seeking to initiate an open-ended political controversy that would rage indefinitely and threaten several political reputations?

Whatever these motivations, Vittal's plodding effort to arrive at the factual position through a minute scrutiny of the Defence Ministry files was rapidly overtaken by the drama and sheer audacity of the Tehelka revelations. Although a preliminary report by the CVC has been with the government for the last six months, there has been little indication of when the contents would be made available to the public. Nor has there been any sense of urgency on the part of the CVC to bring the results of his inquiry into the public realm.

The Tehelka revelations compelled the CVC to delay the submission of his final report by just over a fortnight. Although he had hoped to obtain first-hand testimony from the two reporters who had carried out the Tehelka sting operation, Vittal had ultimately to rely on a secondary study of the transcript of the tape that was broadcast over satellite TV late in March. Shortly after submitting his final report, Vittal made another of his rare public disclosures. The Tehelka tapes, he said, had "vindicated" all the points that he had made in his interim report submitted last year. But if all that the CVC has done is to document the presence of middlemen in defence purchases, then his accomplishments must be deemed to be rather modest. It is not clear that he has really estimated how much the cost of sustaining these brokers has been to the public exchequer. Nor is it clear whether he has suggested any remedial or punitive measures.

For its part, the government continued on its path of responding to the Tehelka tapes with a furious search of motives and sponsors. Thomas Mathew, a Director in the Ministry of Home Affairs, was placed under suspension for allegedly leaking sensitive information to the Tehelka investigators. Mathew, for his part, responded with petitions directed to the National Human Rights Commission and the President, pleading that he was being targeted merely because he had certain sympathies - though expressed in a manner fully consistent with his official position - with the cause of Dalits and the oppressed communities.

Mathew was suspended even before he could reply to the show-cause notice that had been issued him. The basis for the notice was visibly rather thin. A newspaper published from New Delhi, with scarcely concealed sympathies for the ruling Bharatiya Janata Party, had featured a front-page story shortly after the Tehelka revelations, based entirely on an unnamed source's recollections of Mathew's supposedly unseemly political links.

In using this rather dubious report as the basis for disciplinary action and then preempting the right of reply of the official, the Home Ministry under L.K. Advani can undoubtedly claim a degree of novelty in administrative procedure. But this does not by any means exhaust the litany of curious goings-on in the government in the turbulent aftermath of the Tehelka tapes.

Former Defence Minister George Fernandes has been wondering out aloud about the efficacy of the country's intelligence services. If the Intelligence Bureau (I.B.) failed to detect the operations of the two Tehelka reporters for all the four months or so that they had a free run of Defence Ministry officials, then in Fernandes' opinion it points to an intelligence failure even greater than in the case of Kargil. Cut to the quick by this rather transparent effort to call into question the credentials of his Ministry, Advani politely demurred.

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If the stories that began emerging on the Tehelka team's operation in the second week of April are any indication, then the I.B. has indeed been working rather strenuously to debunk the message by discrediting the messenger. Three possibilities have been broached in terms of the origins of the Tehelka sting. Curiously, one of them points to the powerful London-based family of financiers, the Hindujas, who ostensibly planned the entire operation to take the heat off themselves in the Bofors prosecution.

The damage control team in government is also putting out the possibility that the estranged wife of a prominent arms agent had engaged a detective agency in London to uncover certain details of his commercial dealings. Tehelka, in turn, was contracted by the London agency to assist in the investigations, according to this version. But as the investigation progressed and its journalistic potential became apparent, Tehelka's operations acquired an autonomy of their own, it was stated.

A third possibility is the involvement of a defence contractor that had lost out in certain crucial deals and was keen on increasing its leverage in the Indian arms procurement apparatus.

THE Tehelka team has of course reacted to each of these stories with prompt and vigorous denials. The factual basis of the Hinduja story is Tehelka chief executive Tarun Tejpal's recent visit to London, in the course of which he went, by his own admission, to the Hinduja headquarters. But the purpose of this visit, he says, was only to explore if there was any possibility that Tehelka could supply editorial content to a website owned by the Hinduja family. But he was extremely torn at the prospect of meeting a close relative of the three brothers who have been indicted in the Bofors payoffs scandal. On this account, he backed out at the last minute, literally when he and a colleague were waiting for the lift to take them up to the office of Dheeraj Hinduja. For the duration of his colleague's meeting, Tejpal claims, he paced the pavement outside the Hinduja headquarters.

Aniruddha Behal, one of the duo of reporters that actually conducted the sting operation, has meanwhile alleged that government agencies have been tapping his phone and using the information thus gained to interrogate and pressure his colleague Mathew Samuel.

Yet with all this energy expended, the government has not quite managed to free itself of the taint of the Tehelka tapes. And with the travails now besetting the revenue apparatus and the supervisory authorities for the stock markets, the government's stocks of scandal seemingly have a long way to go before they are anywhere near depletion.

Opening the floodgates

It is in the midst of growing evidence of an imminent global slowdown that India has crossed a crucial threshold in its engagement with the global economy in the form of the Exim Policy for 2001-2002 that promises a sea change in the fortunes of several crucial sectors of the nation's economy.

ON March 31, India crossed a crucial threshold in its decade-long journey of integration into the global economy. On that day the Export and Import Policy for the year 2001-02 was notified, or more accurately, a series of amendments were introduced to the five-year Export and Import policy announced in 1997. As Union Commerce Minister, Murasoli Maran had the privilege of making the announcement at a crowded press conference in Delhi's Vigyan Bhavan. The expectant gathering knew that the occasion itself was of decisive importance not for the content of the announcements that the Minister would make, but for all that would follow.

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The main features of the Exim Policy were known to the public well in advance of the actual announcement. Under conditions that India acceded to in 1994, at the moment that it signed the agreement creating the World Trade Organisation (WTO), quantitative restrictions (QRs) on imports of any commodity were strictly disallowed. Nations, or "contracting parties" to the WTO that maintained these forms of import controls, were obliged to switch over to the more "market friendly" device of adjusting tariffs within a reasonable period of time.

With its immense dependence on agriculture and small industries to sustain mass employment, India was among the nations that had been seeking the maximum recourse to protection through QRs. Together with the thorny issue of amending its patent laws, the dismantling of QRs became the focus of public concern and decisive proof in many observers' estimation that the WTO regime was hopelessly skewed in its application against the interests of the developing countries.

All the misgivings aside, there was no escape, though, from the commitments made in 1994, as a gesture of faith that a rule-based multilateral trading system was better than none at all. However, every turn in the debate proved contentious. The Bharatiya Janata Party suffered a virtual revolt within its own ranks over the issue of amending the Indian Patents Act in order to ensure conformity with the WTO regime. On QRs, there proved to be a long and tortuous process of bargaining in WTO forums before an acceptable modus vivendi between India and its trading partners could be reached.

Six separate complaints against India were lodged with the WTO Dispute Settlement Body (DSB) in 1997, all pertaining to the continued application of QRs on imports. Following a direction from the DSB, India simultaneously negotiated a six-year time-table for the removal of QRs with five of the complainants - the European Union, Canada, Australia, New Zealand and Switzerland. There remained only one recalcitrant, the United States, which unfortunately had sufficient leverage to ordain a new schedule that was more to its convenience.

The negotiations that ensued with the U.S. were conducted between an Additional Secretary in the Ministry of Commerce and his counterpart in the U.S. In December 1999, the U.S. negotiator proposed a certain schedule for the removal of QRs and suggested that the Indian acknowledgment of this official communication be treated as a conclusive agreement. The following January, a schedule to remove all QRs by April 1, 2001 was formally notified to the WTO by India and the U.S.

Half the commodities (or tariff lines) on which QRs were applicable till March 2000 were decontrolled over the course of 2000-01. The remaining commodities, numbering 715, that the highly disaggregated classification scheme adopted in international trade statistics, were unfettered from all restraints on April 1.

Even prior to that critical date, many of the commodities that were being decontrolled had started trickling into grocery shops in the more affluent metropolitan neighbourhoods in the country. Marine and dairy products, confectionery and fruits from hitherto exotic locations were conspicuous. This has been certified by some of the more avid champions of the global economy as an unequivocal triumph for the Indian consumer. Those with a more realistic understanding have pointed out that the consumer would have little to spend if production processes were to be disrupted, since without a viable level of domestic output, incomes would collapse and so too would consumption.

The official response to these apprehensions has been to promise a constant monitoring mechanism to assess when imports could threaten the viability of domestic production. This so-called "war room", in the Commerce Minister's picturesque phrase, would keep a resolute vigil over import transactions in close to 300 tariff lines. Included in the watch-list are the major foodgrains, most domestically produced fruits, dairy and marine products, and meat and all its derivative items of consumption. Articles of special significance for the small-scale sector, such as toys, pencils, pens and other stationery items, also feature on the priority list. And in an effort at even-handedness, even imports of automobile assemblies, parts and components - which are of concern to Indian big business - also will be monitored for any possible surge. Statistics pertaining to all these products would be collated on a monthly basis and at the least suggestion of distress among domestic producers, appropriate safeguards would be instituted.

The challenge for the Indian government here would be to work out the kind of safeguards that could successfully negotiate the welter of rules and guidelines embodied in the WTO. QRs, for instance, may be introduced in certain specified circumstances by WTO member-states. But if one were to cut through the multiple provisions of the WTO agreement, then the grounds for doing so amount substantively to only one - a significant balance of payments crisis that threatens to drain a country's foreign exchange reserves. And even in this situation, QRs may be applied for only so long as it takes to rebuild exchange reserves.

The alternative would be for India to utilise the tariff option to restore the price advantage for domestic producers. For the bulk of the commodities that have been freed for import over the last two Exim policies, tariffs have been set at levels of up to 70 per cent. These are well within the binding commitments (or "bound tariffs") that have been given by India to the WTO - which represent the customs duty rates beyond which recourse is not permitted. As a general principle, India has set bound tariffs at 100 per cent for primary agricultural commodities, at 150 per cent on processed items and at 300 per cent for edible oils.

On the face of things, India enjoys a high degree of flexibility in invoking tariff protection for sectors that suffer serious injury from unrestricted imports. But here again, the adjudicatory authority of the WTO could be invoked, since "trade distortion" is a widely defined term that could be applied even to escalating tariffs. The tough-minded trade negotiators at the WTO headquarters in Geneva have recently indicated that they will vigorously challenge any country that seeks to replace QRs with high tariff walls as an equivalent method of protection.

Another safeguard that has been built into the Exim policy is the reservation of certain tariff lines for import through "state trading enterprises". This list is limited to the most sensitive commodities, such as rice, wheat, maize, coconut and coconut oil, urea and petroleum products. The Commerce Ministry is convinced that this mode of conferring an import monopoly on certain enterprises is well within WTO rules. But a closer reading of the protocols appended to the 1994 agreement would indicate that even here there is a substantial power of review available to the trade body.

THERE is, clearly, another phase of contention foretold in the WTO councils by the multiple safeguards that India has sought to impose against a destabilising import surge. The import of used cars is another area where friction could be encountered. Citing safety and environmental considerations, the Exim policy restricts the import of used cars to those that are not more than three years old and also stipulates a single point of entry through Mumbai. This is clearly an effort to neutralise the freight advantage that the Japanese auto industry - the biggest player in the trade in reconditioned cars - may enjoy. Another concern perhaps is the need to prevent any possibility of misuse of India's special trading arrangements with Nepal. But in unsettled times for the world economy, it is not beyond the realms of possibility that Japan, for one, could sense a deliberate "trade distorting" intent in these stipulations and take the matter to the DSB.

The agriculture sector, however, remains the core of the problem. Coincidentally, India's Exim policy announcement comes just when the WTO seems to have moved into a decisive phase in negotiations over further liberalisation of agricultural trade. Between January and March, a number of proposals were received from interested member-states on the measures that would be appropriate to further reforms in agricultural trade. And quite in contrast to the confident tone of official pronouncements in the domestic forum, India's submission points to certain serious threats faced by the developing countries in general.

Quoting a study by the Food and Agriculture Organisation, India's submission to the WTO notes, for instance, that the six-year record of liberalisation in agriculture has been asymmetric in its impact: "While trade liberalisation had led to an almost instantaneous surge in food imports, (developing) countries were not able to raise their exports." This, in turn, has led to "small producers" being "marginalised" and "added to unemployment and poverty".

As a remedy, India has proposed that developed countries should adopt "tariff bindings (that effect a) substantial reduction in all tariffs". Concurrently, developing countries should be allowed to "maintain appropriate levels of tariff bindings, keeping in mind their developmental needs and the high distortions prevalent in the international markets". And in addition, a special safeguards mechanism is urged that would allow for the "imposition of quantitative restrictions under specified circumstances".

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Considering that the Commerce Ministry is claiming that all these powers are already available to it under WTO rules, it should seem rather curious that it is making a case for precisely the same rights in the WTO forum. The implication is clear: in the thicket of rules that the global trade watchdog has been overseeing, there are several areas of ambiguity. But these are still subject to adjudication and failing a further comprehensive agreement that specifically enshrines them, the outlook could be for further disputation and acrimony.

ANOTHER proposal that India has placed before the WTO goes right to the core of the developed countries' policies on agriculture. Under the 1994 agreement, income support programmes for the farm sector are exempted from any reduction commitments, since they are deemed to have minimal distorting effects on trade. The argument is devoid of any convincing rationale other than that of the developed countries' convenience. Since the late-1980s, both the U.S. and the E.U. have favoured the mechanism of directly funding farm incomes rather than propping up prices through assured purchase commitments. Under the system of deficiency payments that the U.S. and the E.U. practise, farmers are compensated directly by governments if the prices of their produce fall below a certain level. Since this means effectively that the farmer is able to sustain situations of glut in the agricultural market, there seems little basis to the argument that income support is less trade distorting than price support.

India has now proposed that these programmes also be recognised as subsidies that distort trade patterns to the disadvantage of developing countries. There is a case, then, for their inclusion in the discipline of subsidies reduction that WTO member-states are enjoined to accept.

Apart from these exemptions, the developed countries also benefit from relatively less stringent requirements on the reduction of export subsidies. While countries that had no export subsidies in operation at the conclusion of the WTO agreement are prohibited from introducing them, heavily subsidising exporters like the E.U. and the U.S. were obliged to reduce export subsidies by the relatively modest order of 36 per cent over six years. India's submission now claims that even within this less demanding regime, the developed countries have been reallocating subsidies between different commodities, rolling them over from one year to another, and resorting to a variety of devices to neutralise the competitive advantage of the developing countries in agriculture.

According to recent estimates, the total support rendered to the agriculture sector by the countries comprising the Organisation of Economic Co-operation and Development (OECD) increased from $308 billion in the reference period (1986-88) to $347 billion in the most recent three-year period for which data are available (1997-99). This means effectively that the global market continues to be awash in highly subsidised agricultural products, which could penetrate developing country markets - with potentially destabilising consequences.

DESPITE the formidable odds he faces in the international market, Murasoli Maran struck an upbeat tone in presenting his Exim policy. His emphasis was not so much on the defensive measures needed to adopt to cope with the new situation, but on the many opportunities that India could capitalise on. There are proposals, for instance, to formulate a comprehensive policy for agricultural exports and to strengthen the scheme of "special economic zones" that was introduced last year in the interests of boosting exports. The intention is to overcome decades of "export pessimism" and reach a target of 1 per cent of world trade by 2004. In absolute terms, this means hitting an export level of $75 billion in three years, at an annual growth rate of 18 per cent. This, says Maran, is an eminently achievable goal.

Global multilateral bodies, seeking to put a brave face on the increasing evidence of recessionary trends, have been forecasting a dramatic upturn this year. This refrain, however, sounds increasingly at odds with reality as each week brings a reversal of the patchy evidence of an economic rebound registered the previous week. India's own exports for the last year could register a growth rate of 20 per cent. But for the last month that provisional data is available for, that is, February 2001, the growth rate was just over 10 per cent. Whether this is on account of the global slowdown or other contingent factors, remains to be analysed. But just when India seeks to cross a critical threshold in its engagement with the global economy, it seems that the environment may just be turning rather too inclement for its comfort.

Of concerns and safeguards

other
Interview with Murasoli Maran.

The day after presenting the government's Export-Import policy for the financial year, the Union Minister for Commerce Murasoli Maran spoke to Sukumar Muralidharan about its likely implications and the underlying principles. Excerpts:

The Exim Policy has been announced and much of the public attention has been focussed on the removal of quantitative restrictions (QRs). Though this was the most predictable aspect of the policy, it has caused widespread concern and misgivings. How have you addressed these?

We appointed a committee with the Commerce Secretary as chairman and the Secretaries of Agriculture and Small-Scale Industries also involved. They went into each and every subject - how each area would be affected and the kind of safeguards that are necessary. So they gave their report and we have taken all decisions only after that. We have forewarned all the administrative Ministries dealing with this issue and they have in turn consulted the associations and trade bodies concerned. A lot of thinking has gone into these actions.

Basically you have set up this safeguard of constant monitoring of imports and you have also provided for the reimposition of QRs at some stage.

Only if necessary. We have brought in legislation which has already been circulated. We couldn't introduce it because of all the other problems. In the Rajya Sabha it was slated for a particular day but we could not do so because the House was adjourned.

This would allow for a reimposition of QRs only on balance of payments grounds.

We have got seven kinds of protection available. We can raise our tariffs. Second, if dumping takes place - that is, if an exporter sells his product below its value - then we can impose anti-dumping duties. Third, if he subsidises and causes material injury, then we can impose countervailing duty. Both these powers are with the Commerce Ministry. Fourth, if there is a surge causing or threatening to cause serious injury to domestic industry, then there is safeguard action. This power is with the Finance Ministry - it can temporarily impose QRs also. Fifth, according to an Article of the WTO agreement, we can take action to protect human, animal or plant life or health and to preserve morals and to conserve exhaustible resources. Then, under Article XXI of the WTO agreement, we can take action from security concerns. And finally under Article XVIIIB, QRs can be reimposed if the balance of payments position worsens.

The monitoring body that you have proposed will keep a close watch on all these sectors in order to determine when action would be warranted under any of these provisions.

We will have an inter-ministerial monitoring body consisting of the Secretaries for Commerce, Revenue, Agriculture, Small Scale Industries, Animal Husbandry, and the Director-General of Foreign Trade. I am calling it a "war room" because they would have to be watchful and we may have to declare war against surges in imports and dumping. We have taken about 300 sensitive items as suggested by the inter-ministerial group. We will monitor these items - we should not be taken aback by any development and there should not be any disinformation among the public. Just as in the case of inflation figures and industrial production figures, we are going to release these figures every month.

In terms of small-scale industry, what is the thinking now, since the removal of QRs means that the reservation policy becomes irrelevant?

It was irrelevant even earlier, since about 800 items were reserved for SSI, but only about 600 were actually produced. But in spite of this nobody could prevent imports. So it was an anomalous situation. Now recently in his Budget speech, the Finance Minister has announced the removal of 14 items from the reservation list. There was a Group of Ministers with (Home Minister) Mr. Advani as chairman. I was also a member and we decided to remove these items from the reserved list because they are very good export earners. Scale of operation is very essential in these. Most important, a comprehensive package on the SSI and tiny sectors was announced by the Prime Minister on August 31. For example, the excise duty limit has been raised from Rs.50 lakhs to Rs.1 crore, to improve the competitiveness of the SSI sector. Then we have provided credit-linked capital subsidy of 12 per cent on loans for technology upgradation. And so on.

Over the last few years there have been a lot of reports of acute distress in certain SSI sectors, such as pencils, stationery, toys, and so on.

You see, if one unit is closed it is one thing - it could be due to inefficiency. But if the entire sector is affected, that is a different matter. For example, regarding certain Chinese goods - toys and sports shoes - there has been immediate action and anti-dumping duty has been imposed.

Would you say that there has been no evidence of large-scale distress in the SSI sector?

Whenever we hear reports we look into them and take all the necessary action.

What about agriculture and plantation and orchard crops?

In the recent Budget, tariffs were raised in the case of tea, coffee and other crops. There is a psychological element here. They say increase it still more. I said: for what purpose? Where are the imports? The figures should speak for themselves. Then they say it is for psychological satisfaction.

But in a plantation-crop dependent State like Kerala, there are widespread apprehensions about this Exim policy.

Over what crops? Coconut and coconut oil, for instance...

These have been reserved for state trading enterprises. They will not be allowed through private trade - along with rice, wheat, maize, petroleum products and urea.

Is this procedure of canalisation allowed under WTO rules?

You may consider it as canalisation, but this kind of trade through state trading enterprises which is done on commercial principles, is permitted under WTO rules - under article XVII of the agreement. We have taken competent legal opinion on this matter.

What is the progress with regard to the special economic zones (SEZs) that you launched last year?

I have inaugurated one at Nangunery in Tamil Nadu and one at Positra in Gujarat is about to be inaugurated. Then we have granted permissions for SEZs in Maharashtra, West Bengal, Uttar Pradesh, Madhya Pradesh, Andhra Pradesh - and two in Orissa.

Have all the special tariff measures that you had recommended been conceded by the Finance Ministry?

Many have been granted. As far as SEZs are concerned, there is no problem at all.

Since last year's Budget, export incomes are beginning to be taxed and all exemptions will be removed over a period of five years.

We want it back-loaded - remove less of the exemptions in the first three years and more in the last two years. We have had discussions but because the Finance Bill is yet to be passed, we cannot say anymore.

On the WTO, you have submitted certain proposals for the agriculture negotiations.

We have proposed a "food security" box for exempting certain kinds of activities from WTO rules. We have asked the OECD (Organisation for Economic Cooperation and Development) countries to reduce their subsidies so that we can also participate. Since 1995 the WTO rules have been in operation and what has happened since then? In fact, the WTO has been beneficial, since we had bound our tariffs for agricultural products at zero. We were at that time food importers, getting aid from the U.S. and leading a "ship-to-mouth" existence. What has happened now is that we have enhanced our bound duty rates to 100, 200 and 300 per cent. In all of these years, nothing has happened.

There is a perception in the farm sector that the WTO rules are doing damage.

That is why we have come up with these kind of explanations. We did not sign this yesterday, but government is a continuum. We have to continue, but we will take into confidence all the parties and State governments.

An alliance of convenience

The Asom Gana Parishad breaks ranks with its coalition partners in the State government to forge an alliance with the Bharatiya Janata Party.

WITH the ruling Asom Gana Parishad (AGP) severing its ties with the Left parties and finalising a seat-sharing deal with the Bharatiya Janata Party, the political scene in Assam on the eve of the May 10 Assembly elections presents an altogether different picture. The AGP, which won 63 of the total of 126 seats in the May 1996 Assembly elections, was running the government with the support of the Left parties. While the United People's Party of Assam (now the Samajwadi Party), with one MLA, and the Communist Party of India, with three MLAs, had their representatives in the Ministry, two other alliance partners, the Communist Party of India (Marxist) and the Autonomous State Demand Commi-ttee (ASDC), supported the government from the outside. The CPI(M) has two seats and the ASDC five in the Assembly. The position of the AGP government led by Prafulla Kumar Mahanta was strengthened when a Bodo formation, the People's Democratic Front (PDF), with five legislators decided to support it. The Congress(I), the principal Opposition party, won 34 seats.

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Political observers felt that the sudden change in AGP strategy could be attributed to its fear of the rising strength of the Congress(I) in the State. While the Congress(I) won nine of the 14 Lok Sabha seats in the October 1999 Lok Sabha elections, the AGP failed to win even a single seat. The Congress(I) has ruled the State for the longest period since 1952. It lost to the AGP in the 1985 Assembly elections held immediately after the Assam Accord was signed in the wake of a violent anti-foreigner agitation which lasted from 1979 to 1985. However, the Congress(I) returned to power in 1991 and ruled the State until 1996.

Earlier, the AGP's efforts to have a truck with the BJP had failed owing to stiff opposition from the BJP's State unit. The BJP State unit was of the view that the "growing popularity of the BJP in Assam" would be affected if it aligned with the AGP, which had the anti-incumbency factor going against it. Following this, the AGP, in a resolution adopted at its Naogaon conclave in February, had said that the party would continue its anti-BJP stance because the BJP was a communal party. The BJP, on the other hand, had declared that it would fight the AGP on the corruption issue. That the BJP initially declined the AGP's offer of an alliance was evident from the statement made by Prafulla Kumar Mahanta after a meeting with West Bengal Chief Minister Buddhadeb Bhattacharya in Calcutta on March 28. Mahanta said that the AGP did not want to have any arrangement with the BJP and that it wanted to be part of the Lok Morcha (People's Front) at the national level.

However, after having turned down an offer of alliance from the AGP, the BJP suddenly changed its stance and agreed to talk to the AGP. The BJP is reported to have done this after Mahanta met Home Minister L.K. Advani in Delhi on March 31 and told him that the Congress(I) was better placed to form the next government in Assam. Advani immediately called the State BJP leaders and talks between the two parties were resumed.

Uday Hazarika, State secretary of the BJP, told Frontline that after considering various political factors the party finally decided to join hands with the AGP only to prevent the Congress(I) from coming to power. Moreover, the Bodo groups led by the All Bodo Students Union had suggested that the AGP and the BJP come together in order to prevent a division in the anti-Congress(I) votes. In that event, other groups of tribal people would also back the two parties and all of them together could pose a challenge to the Congress(I). The Bodo groups would like to see friendly governments both at the Centre and in the State so that they could pursue their goals, Hazarika said.

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With the formal decision to go for an alliance with the BJP, the AGP has claimed a share of 80 out of the 126 seats. According to the AGP's formula, the BJP will field candidates in 28 to 30 constituencies (the BJP won four seats in the 1996 Assembly elections and two seats in the 1999 Lok Sabha elections) and the rest of the seats will be distributed among the All Bodo Students' Union-supported independent candidates and the Holiram Terang faction of Autonomous State Demand Committee. After the alliance was finalised, AGP president Prafulla Kumar Mahanta sent the party's vice-president Biraj Sarma and general secretary Pradip Hazarika to New Delhi to initiate talks with BJP general secretaries Narendra Modi and Sunil Shastry to work out a seat-sharing formula. Apart from its 63 sitting seats, the AGP will field candidates in the six constituencies which were won by its former allies, the CPI, the CPI(M) and the Samajwadi Party. The AGP would also contest in 11 other constituencies where it had won when it first contested the elections in 1985.

Interestingly, even after the alliance with the BJP was formalised, the AGP seemed to fight shy of naming the BJP as its electoral ally. It preferred to refer to the BJP as the National Democratic Alliance (NDA). Chief Minister Mahanta said that although his party was confident of forming the next government, he was willing to ally with the NDA in order to wipe out the Congress(I) from the State. He said the AGP would continue to promote secularism no matter which party it forged an alliance with.

WITH the resignation of Flood Control Minister Promode Gogoi of the CPI and the Irrigation Minister Abdul Muhib Majumdar of the Samajwadi Party from the State Cabinet, the ruling four-party alliance has broken down. On being asked whether their parties were considering an alliance with the Congress(I), Gogoi and Majumdar said that such a possibility could not be ruled out. While Gogoi said that the Congress(I) was a secular party, Majumdar said his party was supporting the Congress(I)-Nationalist Congress Party government in Maharashtra to keep the BJP out of power. They said that a similar formula could be worked out in Assam.

Meanwhile, the Congress(I) is ready for an electoral alliance with the Left, other regional parties and groups opposed to the AGP-BJP alliance. "Whoever goes with the BJP either directly or indirectly, will not get the votes of the minorities. And Assam is a State where the minorities, both religious and linguistic, play a decisive role in the elections," said Assam Pradesh Congress Committee president Tarun Gogoi. He claimed that the Congress would make a clean sweep in the elections. The Congress(I) was sure about getting the direct support of the United Minority Front (UMF), Gogoi said.

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With only weeks left for the elections, political parties are busy wooing the crucial minority vote bank. According to the 1991 Census, Muslims account for 28 per cent of Assam's population and cannot be ignored by any party. In the last elections, the AGP-led four-party alliance had managed to get 10 candidates belonging to the Muslim community elected. This time, however, the figure might come down, owing to the AGP's alliance with the BJP. The Jamait-e-Ulema-e-Hind, a major Muslim organisation, has pledged support to the Congress(I).

The reported sharp fall in the rate of growth of population of Assam has gladdened minority organisations. The All Assam Students Union (ASSU), which has been spearheading a movement against illegal infiltration into Assam from Bangladesh, described the Provisional Census Report, 2001, as a positive gain. The report puts the rate of growth of population in Assam at 18.85 per cent. The 1991 Census had revealed a growth rate of 24.24 per cent over the previous decade and it was attributed mainly to a large-scale influx from Bangladesh.

UMF president H.R.A. Chowdhury said that the report had proved wrong the contention that infiltration into Assam continued unabated. "We have been saying that the rate of infiltration was not as alarming as was being made out to be by some quarters including the Assam Governor. Now, we have been proved right," he said.

Unravelling of an alliance

With the exit of constituents that could make a difference at the hustings in a highly polarised political situation, the alliance led by the ruling Dravida Munnetra Kazhagam seems to have lost its position of advantage in Tamil Nadu.

MISFORTUNES seldom come singly. This seems to be true of the National Democratic Alliance (NDA) and the ruling Dravida Munnetra Kazhagam (DMK) in Tamil Nadu. The alliance was in disarray when the date for the Assembly elections (May 10) was announced by Chief Election Commissioner M.S. Gill in New Delhi on March 31. The DMK had virtually shown the door to an important constituent of the NDA, the Marumalarchi Dravida Munnetra Kazhagam (MDMK). Party president and Chief Minister M. Karunanidhi was blunt: "If they want to go it alone, they can do so. We are not standing in their way." Vaiko, general secretary of the MDMK, was quick to take the cue and alleged that his party had been "expelled from the alliance in a planned manner".

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In February, another important constituent of the NDA, the Pattali Makkal Katchi (PMK), had walked out to join hands with the rival front headed by the All India Anna Dravida Munnetra Kazhagam (AIADMK). The Tamizhaga Rajiv Congress (TRC) has also pulled out of the NDA, accusing the DMK of hobnobbing with caste-based parties and corrupt politicians to try and ride back to power. Ironically, TRC president Vazhappadi K. Ramamurthi signed a resolution passed by the Vanniyar Sangham, a caste outfit, on March 24 which accused the DMK of "behaving like an enemy of Vanniyars". (Vanniyars form a sizable population in the State. Ramamurthi belongs to the community. The PMK led by Dr. S. Ramadoss is also essentially an outfit of Vanniyars.)

The DMK received another jolt on April 1 when Minister for Tamil Culture M. Thamizhkudimagan joined the AIADMK. He was upset that he was not allotted the Ilayankudi constituency from where he was elected in 1996. He alleged that all decisions in the DMK were being taken with a view "to projecting Stalin". Chennai Mayor M.K. Stalin is the son of Karunanidhi.

It is thus a weakened NDA that will take on a formidable "secular" front headed by the AIADMK.

Ostensibly, the parting of ways between the DMK and the MDMK occurred because of a row over three specific constituencies the latter wanted. (The three seats that the MDMK wanted held a special significance for it. Vaiko's village, Kalingapatti, comes within the Sankarankovil constituency and he was keen that the MDMK should field a candidate there. L. Ganesan, chairman of the MDMK presidium, was keen to contest from Thanjavur. The MDMK wanted to field another top leader, Malar Mannan, from Tiruchi-1.) But what lay at the core of the crisis was the impending ascension of Stalin to power. Both parties, however, fight shy of acknowledging this. Political sources said that the DMK feared that Vaiko would be a threat to Stalin's claims if the DMK did not get an absolute majority. The MDMK, in turn, was willing to get out because it did not want to contribute to the DMK's success and thereby help Karunanidhi anoint Stalin as his successor at the appropriate time. For both the parties it is a bold gamble, and their parting may cost both dearly.

MDMK sources alleged that the DMK leaders did not at any point treat their party as a constituent of the alliance but looked upon it as an enemy. A section in the MDMK was, however, anguished over the parting of ways.

A section in the DMK was also upset over the development. The party is weak in the southern districts and the sizable Mukkulathor community there backs the AIADMK, they say adding that the MDMK's exit would further hurt the DMK's chances. The MDMK had hard-working cadres and Vaiko was a big draw in election meetings.

The line-up is clear now. The NDA includes the DMK, the Bharatiya Janata Party, the Puthiya Tamizhagam, the Dalit Panthers, the MGR-ADMK, the MGR Kazhagam and caste-based parties such as the Makkal Tamil Desam, the Kongu Nadu Vellalar Katchi, the Tamil Nadu Mutharayar Sangham, and so on.

Facing them is the AIADMK-led secular front that includes the Tamil Maanila Congress (TMC), the Congress, the PMK, the Communist Party of India (Marxist), the Communist Party of India (CPI), a faction of the Indian National League, the Indian Union Muslim League and so on.

The MDMK, according to Vaiko, would be an "alternative" to these two formations. It would contest 213 out of 234 seats in the Assembly but would not field candidates in the 21 constituencies where the BJP is contesting. Vaiko said that the MDMK would continue to be a constituent of the BJP-led NDA government at the Centre. However, Jana Krishnamurthy, BJP president, said that his party would not share a platform with the MDMK during the campaign. According to Vaiko, there is not "even one per cent chance" of the MDMK joining the AIADMK-led front.

In the DMK's reckoning, the MDMK going it alone would amount to the formation of a third front, which factor would be advantageous to the DMK-led front. But the MDMK leaders said their party commanded 5 per cent of the votes in many constituencies and could ruin the DMK's chances in about 25 constituencies. However, informed observers note that the MDMK by itself may not win too many seats.

IT is not as if everything is hunky-dory with the AIADMK front. Problems erupted between the AIADMK and the TMC over the identification of constituencies that the TMC and the Congress(I) would contest. The TMC suffered a jolt when its top leader and former Union Finance Minister P. Chidambaram revolted against its decision to align with the AIADMK and set up the Tamil Maanila Congress Democratic Forum to do "propaganda during the next 60 days that a single party government under Jayalalitha cannot provide good governance." Chidam-baram has been asked by the TMC to show cause why he should not be expelled from the party.

There is bad blood between the PMK on the one side and the TMC and the Congress(I) on the other because the PMK supports the Liberation Tigers of Tamil Eelam (LTTE), whose members assassinated Congress president and former Prime Minister Rajiv Gandhi. Worse, in the neighbouring Union Territory of Pondicherry, the PMK and the AIADMK will contest together against the TMC-Congress(I) combine. This strange situation arose after the AIADMK agreed to the PMK's claim to the chief ministership for the first two and a half years and the AIADMK holding it for the remaining term. This arrangement infuriated the Congress(I) and the TMC, which now run a coalition government in Pondicherry. They argue that they should have been given a major share of the 30 seats to contest (plus three nominated seats) and allowed to form the government.

Peace was bought by delinking the matter of Pondicherry from that of Tamil Nadu. It was agreed that the Congress(I) and the TMC would contest as allies against an AIADMK-PMK alliance. Congress(I) spokesman S. Jaipal Reddy said on April 3: "Our political reservations about the PMK continue. We will not be part of any power-sharing arrangement with them in Pondicherry."

What outweighs all these political developments is a vital legal question whether Jayalalitha will be able to contest in the elections. Her being convicted and sentenced to three years' rigorous imprisonment in the "Jaya Publications case" and the "Sasi Enterprises case" in October 2000 virtually disqualifies her from contesting the elections. Jayalalitha has moved the Madras High Court, seeking a direction to suspend the convictions. In her petitions she said that in a democracy "we should take pride in allowing the public to choose their leader freely, rather than crippling the will or in maiming the voice of the public by focussing on trial court judgments only." The petitions came up for hearing on April 9.

Terror and worse

The Andhra Pradesh Control of Organised Crime Act, recently passed by the State Assembly, draws flak from Opposition parties and other concerned groups.

ON the lines of similar laws in force in Maharashtra and Karnataka, the Telugu Desam Party (TDP) government led by N. Chandrababu Naidu last month enacted the Andhra Pradesh Control of Organised Crime Act (APCOCA), with the professed objective of dealing with mafia gangs. However, it has been condemned by Opposition groups as a draconian law.

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The passage of the law in the Assembly has stoked fears among Opposition parties that it would be used as an instrument to harass political parties inimical to the TDP. Asaduddin Owaisi of the Majlis Ittehadul Muslimeen (MIM) said the bill was aimed at youth belonging to the minority communities, while Gummidi Narasiah of the Communist Party of India (Marxist-Leninist) New Democracy expressed the fear that it may be used to curtail mass movements. However, Home Minister T. Devender Goud said that the Act, similar to one that was passed in the Karnataka Assembly, was aimed only at mafia gangs operating from outside the country. "The Telugu Desam is a political party with a record of democratic traditions, which fought a battle for the restoration of democracy when NTR (N.T. Rama Rao) was replaced in a political coup in August 1984. We can as well wind up and go home rather than use such a bill against our political opponents," Goud said.

The 'black bill', as the Opposition called it, was passed 12 minutes past midnight on the night of March 29 after the Congress(I) MLAs, four MLAs of the MIM, two members of the CPI(M) and the lone CPI(ML) member walked out of the Assembly. The Opposition is convinced that the APCOCA is only a re-packaged version of the now-lapsed Terrorist and Disruptive Activities (Prevention) Act (TADA).

The State government justified the legislation on the ground that organised mafia groups similar to the ones in Mumbai were rearing their head in Hyderabad. Criminal gangs were posing a threat to society by making the normal legal process ineffective through the subversion of the enforcement machinery and causing violence against witnesses.

But a close examination of the Minister's claim shows that although the level of concern here is exaggerated, it is not entirely without basis. There have been no instances as yet of large-scale extortion, kidnapping by ganglords or mafia-type activity in the State. However, there are land-grabbers with strong political connections at work, well-entrenched gangs making hooch in the Old City of Hyderabad and the spilling of factional violence from Rayalaseema to Hyderabad. Of late, hired assassins undertaking 'supari' or contract killings are also surfacing but not on a scale comparable to Mumbai.

K. Balagopal of the Human Rights Forum said that the APCOCA had all the essential elements of TADA and even the provisions for telephone tapping and the imposition of heavy fines ranging from Rs.1 lakh to Rs.5 lakhs. Balagopal said that it was ironical that the TDP, which had in 1995 demanded that TADA be allowed to lapse because it was an undemocratic and draconian law, should have come forward with the APCOCA.

Balagopal added: "Organised crime in Andhra Pradesh is limited to land grabbing and factionalism. But the major perpetrators of such offences are TDP and Congress leaders. Half the MLAs and MPs from Kurnool and Cuddapah districts in Rayalaseema have links with factions. But the government is not invoking even the existing laws against them. The APCOCA will be used against politically less powerful organisations such as Deendar-e-Anjuman, held responsible for blasts in churches in Andhra Pradesh and Karnataka, and against naxalites."

The Act empowers the State government to constitute Special Courts to try cases of organised crime. The Judges concerned will be appointed by the State government with the concurrence of the High Court. The Act gives the Police wide powers. It authorises police officers not below the rank of an SP to intercept wire, electronic or oral communication for a period of 60 days with the Home Secretary's clearance. Such evidence shall be admissible in the Court during the trial.

Section 20 of the Act states that if a person is convicted of any offence punishable under the Act, the Special Court may declare any property belonging to the accused to be forfeited to the State government. On an application made by a witness, the Special Court can keep the person's identity and address secret and even hold proceedings in camera. Thus, the Act overrides various provisions of the Indian Penal Code and the Indian Evidence Act.

However, Devender Goud said that there were safeguards against the misuse of the Act. For instance, a review committee comprising the Chief Secretary, the Home Secretary and the Law Secretary will review every order passed for tapping telephones.

Asaduddin Owaisi, floor leader of the MIM in the Assembly and one of the staunchest critics of the Act, compared it to the notorious Prevention of Terrorist Activities (POTA) Bill which the Centre abandoned after considering it for some time. "The Indian Penal Code deals extensively with the provisions contained in the APCOCA against criminals, including the conspiracy angle through Sections 120-B, 147 and 148. FERA (Foreign Exchange Regulation Act) and FEMA (Foreign Exchange Management Act) deal extensively with economic offences. The Act is only meant to be used against Muslims; nearly 3,500 Muslims of whom were booked under TADA earlier," Owaisi said.

Owaisi asked how a man being tried under the new law could fight his case if the trial was held in camera and he was denied knowledge of the names of witnesses whose deposition might end in his conviction. "Even the Nuremberg trials against Nazi leaders were held in public," Owaisi said.

The Leader of the Opposition, Dr. Y.S. Rajasekhara Reddy, said that the Congress(I) staged a walk-out from the Assembly since it did not want to be a party to the adoption of a black law. He deplored the provision for admission as evidence confessional statements made before police officers because coercion was invariably used to extract statements in such situations. "This law is worse than TADA. People who will implement this Act have even withdrawn cases of murder against TDP functionaries and filed false cases against Congressmen to settle political scores. Even before the law came into existence, they have tried to falsely implicate my son in a case of conspiracy based on the wild allegations of an accused," Rajasekhara Reddy said.

Nomula Narasimhaiah, a CPI(M) MLA, said that the provisions of the Act were inconsistent with the claims of the Home Department that the crime rate had come down. CPI(ML) legislator Gummidi Narasaiah said that the law will be used to suppress naxalites who were fighting for the poor.

However, the Home Minister denied all these charges. "We are a free society. How can we use this Bill against our political opponents?," he asked. It was meant to prevent Hyderabad from turning into another Mumbai where the mafia has penetrated into several fields including the film industry. The police cited the abduction of Sumedha, a 16-year-old girl, from Jubilee Hills in Hyderabad on March 27, the day the House passed the Bill, as the latest instance of organised crime. The abductors demanded a ransom of Rs.5 crores through hawala channels from the young woman's father, Gopalakrishna, a distributor of tobacco products.

On March 28 the police rescued her from Zaheerabad, about 100 km from Hyderabad, and arrested three abductors. Four more persons were arrested later. The abductors had used a cellphone to contact Gopalakrishna's residence where a caller identification facility was installed. The police traced the origin of the call and alerted Zaheerabad police. Investigations revealed that the abductors had connections with organised crime.

Of late, crime involving the use of hi-tech gadgetry has spread in Hyderabad. For instance, 23 persons were killed in November 1997 when the henchmen of the leader of a group in Ananthpur district triggered a blast in a car using a remote controlled device. The gang had used mobile phones to track the movements of the targeted vehicles. Recently, suitcase bombs aimed at the main accused in the murder of Y.S. Rajasekhara Reddy's father, and another at Congress(I) MLA from Dharmavaram, K. Surya Pratap Reddy, were recovered by the police.

Hyderabad, a communally sensitive city which also has a large number of defence installations, is also a natural choice of the Inter-Services Intelligence (ISI) for its activities. Activists of the Indian Muslim Mujahideen Movement (IMMM) and the Students Islamic Movement of India (SIMI) are among those on whom police keep a watchful eye. A few years ago, an Additional SP, Krishna Prasad, was killed when trying to nab Kashmiri militants holed up in a house at Langer Houz.

However, land grabbing is the main criminal activity in Hyderabad and even small-time criminals are shifting to this field which has traditionally enjoyed political patronage. Illicit distillation is another field which has spawned mafia dons. One of them, Sudesh Singh, was shot dead in what was alleged to be a fake encounter.

The police claim that they are sometimes unable to secure convictions even if they nab the accused stands to reason. Srisailam Yadav, the main accused in the killing of seven persons at Erragadda some years ago, was acquitted and he even joined the TDP, although he was virtually disowned by the party later.

The courts too are handicapped because the witnesses are intimidated by henchmen of the criminals being tried. Hence, the police sometimes end up producing false witnesses, leaving judges no option but to dismiss the cases. If the identity of the witnesses is protected and the proceedings are held in camera, this problem can be surmounted, the police say.

All these arguments notwithstanding, concerns regarding the draconian nature of the provisions and the possibility of their misuse at various stages and levels remain.

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Oct 9,2020