Editorial 1
Editorial 2
Millenial dreams of growth


Great refuge

The Indian government put a cautious foot forward about the karmapa with the defence minister, Mr George Fernandes, announcing that the leader of Tibet’s third largest Buddhist sect could stay in India for the time being. Given that most Tibetan refugees in India live in a kind of immigrant limbo, and even the dalai lama does not have fullfledged political asylum, this temporary stay can be expected to eventually metamorphose into permanent residency. Indian officials have quietly indicated that the karmapa will not be returned to China against his will. Though it may seem be to a product of indecision, New Delhi’s mimimalism is merely a manifestation of caution.

India has reasons to move slowly. First, there remains some uncertainty over the karmapa’s motives in leaving China and coming to India. There are the additional problems of two rival claimants to the black hat crown and the sect’s influence in the border state of Sikkim. This is little helped by the arcane and opaque manner in which Tibetan spiritual leaders communicate with the temporal world. And unlike the older dalai lama who is experienced in the ways of the world, the karmapa is a 14 year old who has rarely been separated from his Chinese handlers. Second, India has been carefully repairing the diplomatic bridges it burnt in 1998 when it declared the Pokhran nuclear tests were aimed at China. New Delhi will undo this damage control if it shortsightedly tries to use the karmapa’s arrival to embarrass Beijing. If, as seems likely, the karmapa is a genuine refugee, China will suffer a great loss of face irrespective of what India does. After all, the Tibetan leader was handpicked by Beijing and showcased as the shining success of their minority policy. By letting the karmapa stay, but delaying his recognition as Tibetan Buddhism’s number three, New Delhi maximizes its policy options.

A low key response would be in line with India’s general policy on Tibet. Though New Delhi officially recognizes Chinese suzerainty over Tibet and has a ban on anti-Chinese actions by Tibetan refugees on its soil, it has been extraordinarily generous in providing sanctuary and assistance to Tibetan refugees. This has allowed it to have the best of both worlds. The Tibetan presence helps confirm India’s liberal credentials and its status as the world’s largest democracy. The refugees also provide India a potential public relations weapon in case relations with China ever sour. On the other hand, by ensuring Tibetan denunciations against China are made outside the subcontinent, Beijing is reassured that India is interested in constructive relations with its northern neighbour. It should always be remembered that while the Tibetans deserve moral sympathy, they are too weak to win back their homeland through their own efforts. If there is a “Tibet card” it is lost in the China deck. If Tibet is granted independence or autonomy, it will be because of major internal changes inside China. Such an upheaval is not impossible, but it is more crystal gazing than certainty. Such an assumption cannot be the basis of India’s Tibet policy. New Delhi’s overall goal should be to help Tibetans and Chinese to arrive at a mutual settlement that will stabilize India’s northern border and staunch the refugee flow. New Delhi can position itself as being the facilitator of such an agreement. Playing host to the karmapa only strengthens India’s ability to accomplish this goal.    


Power play

The employees of the Uttar Pradesh state electricity board are trying to hold the entire state to ransom. They have been on strike since Saturday and large parts of India’s largest province have been plunged into darkness and been rendered waterless. It is to the credit of the new UP government that it has refused to surrender to this blackmail. The strike has been declared illegal and the National Security Act has been invoked against its ringleaders. It needs to be recalled that the previous government led by Mr Kalyan Singh was threatened by a similar strike and it refused to give in. The strikers reckoned that a new government, still not quite steady on its feet, might be a softer target. The strike is a good example of irresponsibility masquerading as legitimate workers’ demands. The employees have nothing to gain from this action since they are protesting against an administrative decision which, they have been assured, will not affect their pay and their service conditions. As employees of public sector undertakings they have forgotten the meaning of the word accountability. They are suffering from the delusion that they can get away with anything at the cost of the consumer. By taking a firm stand, the UP government has shown the strikers that they may be living in a fool’s paradise. The government could derive greater kudos if it called in the army to run the plants and thus relieve the misery of the millions who have been affected by the strike.

At the root of the strike is the workers’ objection to the decision to split the state electricity board into three autonomous corporate bodies — the UP Power Corporation Limited, the UP Thermal Power Generation Corporation Limited and the UP Hydroelectric Power Corporation. This decision of the UP government is not without precedence. The breaking up of a huge and monolithic electricity board into more than one corporation has been followed successfully in Orissa and Andhra Pradesh. There is no available evidence that electricity workers in Orissa and Andhra Pradesh have been adversely affected by such a division. Separating the generation and the distribution of electricity makes eminent sense. Workers have nothing to lose from such a move save their socialist hangovers.    

As I write this, 1999 has come to a close. It is but natural that at the turn of the century, people think big, and discussions are not confined to changes recorded over a couple of years, but related to vastly longer time spans. That is why newspapers and magazines are full of articles discussing how the economy has fared over the last millennium as well as what we can expect in the next one. The paucity of reliable long term data on historical rates of growth casts some doubts on comparisons which go too far behind into the past.

Similarly, the possibility of radical structural changes in the world economy means that everyone’s crystal ball is just as foggy as the winter mornings in Delhi. Nevertheless, much of this discussion is extremely interesting and is certainly worth a brief description.

Despite the absence of reliable data, there is little doubt that the first 50 years of the 20th century witnessed very little change in the values of crucial economic and social parameters in India. There are several different estimates of national income for this period. Even the most favourable estimate indicates that per capita income at constant prices crawled upwards at much less than 0.5 per cent per annum, while the most pessimistic one indicates virtually no change during this period.

The rate of growth of population exhibited considerable fluctuation before 1921, mainly because of the devastation caused by famines and epidemics. Falling death rates meant an increasing population, although the rate of increase was moderate at an average annual rate of around one per cent or less. The image of a virtually stagnant society was also evident in social indicators such as the level of literacy and life expectancy at birth.

For example, life expectancy at birth was just about 20 years in 1901. This was to rise to less than 35 years during the course of the next 50 years. Similarly, the overall literacy rate was roughly six per cent in 1901, and climbed to barely 18 per cent in 1951.

Against this backdrop of virtual stagnation in the first 50 years, there was a radical transformation of the country in the latter half of the century. After all, even the much maligned “Hindu rate of growth” seemed quite respectable in comparison to the almost constant level of per capita incomes in colonial India.

Moreover, the aggregate growth figures are rather misleading since they hide the structural transformation in the economy. Although the Jawaharlal Nehru-P.C. Mahalonobis strategy of reliance on a capital-intensive and modern industrial sector has been criticized subsequently, it cannot be denied that this strategy was successful in building the foundation for a successful transition to the 21st century.

Indeed, even today, India is the fifth largest economy in the world once adjustments to countries’ national incomes are made in order to accommodate price differences across countries. Rapid strides have also been made in improving the quality of life of the average Indian. There has been a marked improvement in the overall literacy rate, which has improved from the dismal 18 per cent in 1951 to 53.5 per cent in 1997.

Life expectancy at birth has also registered a sharp jump from 35 years in 1951 to 62.6 years in 1997. Despite these impressive achievements, many Indians must surely feel that we have missed the boat at some point in the last 50 years. Roughly one in three Indians in the rural sector is counted amongst the poor, even when the poor are defined by including only those whose level of consumption is below an extremely low “poverty line”.

We also perform dismally from an international perspective — our rank is 132 out of 174 countries according to the United Nations development programme’s human development index.

It turns out that the average Indian’s life expectancy or the Indian infant mortality rate today is comparable to that of South Korea and Thailand in 1960. As far as adult literacy is concerned, the Indian achievement in 1997 is significantly lower than that of these countries in 1970. In other words, India today lags more than 30 years behind many Asian countries.

In recent years, the Indian economy seems to have moved quite far away from its trend rate of growth. During the last decade, the average rate of growth has been around six per cent. This is an extremely impressive performance, especially when one takes into account the fact that countries all over the world have been passing through difficult times during the last couple of years. Indeed, the Indian economy has been one of the six or seven best performers in the Nineties in so far as the rate of growth is concerned.

This has given rise to great expectations about the future. Indeed, I have seen estimates suggesting that we could double per capita incomes in the short time of 15 years, and double that again in the next 10 years. If we can grow at the rate implied by these calculations, the the Indian economy would have only China as its rival in terms of sheer size.

Can the economy satisfy these expectations? Much will depend on the speed with which the government is allowed to complete the reform process. At a conservative estimate, only a quarter of the package of reforms has been completed. It is also the case that only the easier reforms have been implemented. The ones which are remaining are amongst the more contentious. Hence it is unlikely that the government will be able to proceed full steam ahead to complete the reform process.

But, assuming that we do not falter along the way, it is interesting to speculate on the path that we need to follow in order to exploit our potential. Despite the substantial transformations in the economy, the agricultural sector is still going to be the largest in terms of employment in the foreseeable future. This clearly suggests that rapid and sustained growth at rates approaching 10 per cent per year are simply not possible unless this sector too grows at rates close to this figure.

This will be possible only if the agricultural sector itself is transformed. This requires much more than the introduction of new techniques to grow the current set of crops. It is imperative that farmers are encouraged to shift to high-value products.

For instance, an editorial in a business daily points out that Thailand probably earns more from its orchid exports than we do from tea, coffee and jute. And yet, India’s orchid potential is just as large as Thailand’s.

Within the non-agricultural sector, the “sunrise” areas must be those which use knowledge intensively. Technological development is transforming the way in which people do business, and soon “knowledge” rather than capital and machinery will be the key input. The size of India’s population can be turned into an asset if we can produce well educated and trained citizens. India can then become one of the centres of international manufacturing, banking and commerce. This is no pipe dream.

After all, our software engineers have already made us one of the world’s leading countries in software development. There is no reason at all why the software story cannot be replicated in other areas.

The author is economist at the Indian Statistical Institute, New Delhi    


Out of tune, out of mind

Sir — At last, the true story about Indipop is out (“Pop goes this bubble”, Jan 15). It is in a sorry state, never mind the hype and the cash accompanying it. The artistes are not the only ones to blame. The music companies, in a mad rush for short term publicity, rope in as many aspirants as possible and the result is endless hours of identical music videos — the accent on video rather than on music. And if the aspirants have already tried their hand at modelling or acting, all the better, for that experience comes in more handy than true musical talent. Only artists like Shubha Mudgal, Shankar Mahadevan or groups like Colonial Cousins are producing music which may last sometime by virtue of their innovation or because they are rooted in classical music. The forces of the market have been trying to dictate terms to music lovers. But the downward route the Indian pop market has taken shows that only quality is long term. Only a few like Hariharan can fall back on their classical repertoire. Whatever will happen to the rest?

Yours faithfully,
Sunethra Menon, Calcutta

Myth of stability

Sir — As a senior citizen, I foresee that the BJP led coalition government will lead India to doom even before the completion of its five year tenure. In less than a week after the Atal Behari Vajpayee government assumed office, the National Democratic Alliance government started taking whimsical and hurried decisions. It seems that Vajpayee and his followers are in a mad hurry to push their names into history books.

It is worthwhile looking into some of the decisions taken by the Centre in the recent past. Prices of consumer goods have shot up, especially after the price hike in diesel. The government has been able to do little in the wake of natural calamities, particularly the supercyclone in Orissa — and damage to crops has been phenomenal.

Next, under the guise of “financial sector reforms”, unemployment is beginning to grow. These reforms, at the behest of the International Monetary Fund, are being formulated by a coterie of foreign educated economists who seem to have only a theoretical knowledge of India’s chronic problems, such as unemployment, lack of infrastructure development and corruption. And this is why most reformists have been harping on financial sector reforms, closure of sick public sector units, insurance regulatory bills, deregulation and decontrol and so on.

But these economists have ignored the Centre’s huge spendings in defence and the Pokhran tests. And what about the various scandals that have wiped off so much of the public’s resources? What about the large scale squandering of money through banks by way of bad loans and faulty overseas transactions?

Does the government or these economists have any solutions for a corrupt and lethargic tax collection machinery that operates with no external bindings? These faulty mechanisms have left the Central government coffers in a mess and it is the people who have to bear the ills brought on by an inefficient government.

Ironically, while financial sector reforms and defence schemes are at par with the first world, the ordinary citizen has no basic infrastructure or civic amenities to fall back on. If the Centre continues to operate amid this financial chaos, a civil commotion is bound to arise in the future. Perhaps India needs president’s rule or some sort of military regime to make some amends urgently.

Yours faithfully,
Sanjit B. Mallick, Calcutta

Sir — The Bharatiya Janata Party, the Jan Sangh reincarnated, is being able to maintain its popularity primarily because of two things — Pakistan bashing and hostility towards Muslims. The Jan Sangh had always shed tears over the part of Kashmir that was under Pakistani occupation.

The BJP now appears as the “only patriotic party”, even in its recent hesitation regarding the release of militants in connection with the hijacking of the Indian Airlines flight IC 814. The Rashtriya Swayamsevak Sangh chief, M.S. Golwalkar, had made threatening noises vis a vis Pakistan. L.K. Advani has also warned Pakistan that India would have a proactive Kashmir policy.

All these instances have made the public believe that the BJP stalwarts will be successful in preserving a stable government at the Centre. But today the real state of affairs is far from what the BJP has tried to project. The Kashmir border appears to be free for terrorists to cross over. While the Atal Behari Vajpayee government was trying to convince people that it was the best government in the past 50 years, the most sensitive border between India and Pakistan remained unprotected and unpatrolled. This allowed militants and Afghan mercenaries to enter and occupy large parts of the Drass sector and Kargil.

As a result of Kargil and the unceasing tension between Islamabad and New Delhi, India has lost many lives and continues to do so. One wonders whether India needs pseudo-Hindus to govern the land. Such people feel no guilt when saying that aggression on the Indian soil will not be tolerated, even after all the problems Pakistan has caused for India. Surely the Union defence minister, George Fernandes, should have resigned after Kargil as did V.K. Krishna Menon in the aftermath of the 1962 Chinese aggression.

Yours faithfully,
K. N. Bhagavan, Bangalore

Sir — With regard to the release of the hijack hostages, the world has breathed a sigh of relief. Had not the Atal Behari Vajpayee government been wary and diplomatic, the scaling down of the hijackers’ demands or the release of the hostages would have been impossible. The Centre’s tackling of the hijack should not be seen as a compromise on the nation’s security. The government acted only with the nation’s interest in mind. And this is the first time that the hijackers’ demands were ultimately futile. The release of three hardcore militants is nothing compared to the hundreds present in India. What New Delhi needs to do is toughen up security and anti-terrorist measures.

Yours faithfully,
Dhaneswar Banerjee, Bolpur

Sir — Why have we been pleading with the United States and other nations to declare Pakistan a terrorist state? New Delhi must pull its socks up and snap all diplomatic and commercial ties with Islamabad.

Yours faithfully,
H. P. Hande, Bangalore

Russian cold

Sir — The letters published on December 19 (“Russia house”) make interesting reading. Almost all the letters were laced with anti-United States sentiments. But it is important for us not to allow our prejudices hinder us from viewing things objectively, especially in the case of Chechnya. The crisis in the Caucasian republic should be looked at with a deeper insight. The Chechens were suffering even before the disintegration of the Soviet Union. The Russian military operations there on the pretext of anti-terrorist action are the result of a Russian army exacting revenge for its defeat in the 1994-96 war.

Unfortunately, it is the innocent civilians who are being victimized. As for the Chechen fighters, they have been retreating in fear of the Russians overrunning them. But Washington’s concern in this regard is understandable since it does not want another conflict snowballing into a bigger war, involving neighbouring countries as well.

Yours faithfully,
Ajzal F. Hafiz, Calcutta

Sir— The former Russian president had a moment of lucidity when he stepped down after leaving the Russian economy in turmoil and causing long term damage in Chechnya. But Yeltsin has been granted immunity from prosecution by Vladimir Putin. Yeltsin and his aides should be taken to task not only for corruption but also for having tried to destroy a whole people.

Yours faithfully,
K.L. Munshi, Bhagalpur

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