Editorial 1
Editorial 2
Closing the gate
Letters to the editor


Price pressure

During the run up to the current year’s budget, the Union finance minister had promised to take bold steps on a number of important issues. However, Mr Yashwant Sinha received few compliments at the end of his budget speech because he seemed to have had second thoughts on most issues. At any rate, the budget was a damp squib. There were only two praiseworthy exceptions. The first was the decision to charge consumers above the poverty line the economic cost of foodgrains supplied through the public distribution system. The second was the announcement to step up the pace of disinvestment in public sector undertakings. These decisions were welcomed by pro-reform groups. In order to gain wider acceptance, Mr Sinha had carefully sugarcoated these controversial policy initiatives by simultaneously announcing a significant increase in the ration quota for those below the poverty line. He also indicated that the proceeds from disinvestment would be used at least partially to retire government debt.

However, both these measures have attracted a lot of criticism. Almost all the allies of the Bharatiya Janata Party as well as the opposition parties have vociferously demanded that the government announce a rollback in the increases in prices of PDS foodgrains as well as kerosene. There are also reports the Congress party will soon attempt to refurbish its public image by taking an explicit “pro-poor, anti-reform” stance. All this may kick off a phase of competitive populism. The final outcome is quite uncertain. The cabinet committee on disinvestment, which met last week, postponed any decision on the proposed sell-off of majority stakes in Air India, Pawan Hans and the Indian Oil Corporation. It has decided to meet again in May. Similarly, there are reports that the prime minister may announce a partial rollback of prices during the course of his reply on the budget discussion in Parliament.

It is to be hoped the BJP will realize that very little can be gained from reversing the reform process. The government enjoys a comfortable majority, and can certainly ride out the storm. It is unlikely that the BJP’s powerhungry allies will force the issue and take the ultimate step of withdrawing support. They will not risk another election. In any case, the disinvestment exercise does not affect the general voting public adversely. At worst, it may mean losing the votes of a small group of public sector employees. Moreover, if the government yields on any of these issues, then the situation will only go from bad to worse. The fiscal health of the government remains as precarious as ever. The current level of fiscal deficit is not sustainable. There will come a time when it can no longer refuse to bite the bullet — hard decisions on containing subsidies will have to be taken. The earlier these decisions are taken, the more time the BJP gives the public to forget the short term pains before the next round of elections. Moreover, the sooner the deficit is reduced and other reforms pushed through, the greater is the possibility the economy will reach a higher growth path. Once the benefits of higher growth spread widely, it can only improve the BJP’s electoral prospects. Thus, both economic logic as well as political imperatives dictate that the government withstand these populist pressures. The failure to do so will only bring short run benefits and long term liabilities.    


Other troubles

Ethnic cleansing and insurgency may be notionally distinct, but they are actually inextricable in tensely multi-ethnic Assam. About 29 people have been brutally massacred during the last month in Assam’s Karbi Anglong district. Most of them were labourers from Bihar and Nepal, and their killers are believed to be the militant fringe of one of Assam’s indigenous tribal peoples, the Karbis. The two Karbi militant outfits — the Karbi National Volunteers and the Karbi People’s Front — have recently merged to form the United People’s Democratic Solidarity, which had warned the local non-tribal population, on its rising day on March 22, against trying to “dominate” the Karbis. In spite of this alert, the UPDS’s systematic targeting of “immigrant” communities could not be prevented by the state. Although the governor wants to maintain the distinction between the insurgency problem and this spate of ethnic cleansing, a number of factors ties the latter to the ongoing conflicts in Assam and its neighbouring states.

First, the Autonomous State Development Committee claims that the UPDS is being backed by the National Socialist Council of Nagalim and the United Liberation Front of Asom. The army, which has been conducting operations in the area, has publicly given the NSCN a clean chit, although the Karbi militants have been known to take refuge regularly in Nagaland. Second, the web of hostility and violence arises out of the conflicts within the community in the district. These conflicts get deflected into social and economic relations between the tribals and the “outsiders”, involving such activities as farming and timber trading. It has also been alleged that the village elders are implicated in some of these killings. Hence, the tackling of this new problem will perhaps be more effective — and the ASDC certainly seems to think so — if the district administration empowered the village community with legal weapons and aided the organization of village defence forces, modelled on the ones formed in Jammu and Kashmir. The internalized tensions and the inaccessibility of this forested terrain make the situation unfamiliar to the military and paramilitary forces, routinely — and belatedly — called in to confront the aftermath of the massacres.    

The up and coming generation has reasons to feel flabbergasted. Bill Gates has been to them the next thing to god. Now an archaic piece of American legislation, the so called anti-trust law, is being applied to cut up his Microsoft empire.

This is bizarre, for it sends across the message that free market transactions are not the summum bonum of human civilization; limits exist to what a private industrial or commercial entity might aspire for; these limits are set and enforced by the government of the country. Which is another way of stating that restrictions operate on the supposedly free functioning of market forces. Even Gates, his divine circumstances notwithstanding, has to come under the social discipline enforced by the government. The government acts as agent of the state.

The up and coming generation is bound to be befuddled. This is outrageous they will argue among themselves, and keep shooting questions at society’s decisionmakers. One cannot blame them too much. They have been reared in an environment where the untrammelled functioning of the free market has been taken to be sacrosanct. No exceptions to the competitive roles have till now been communicated to them.

The information technology has had an uninterrupted run in the United States and the rest of the Western world for almost a quarter of a century. Discovery of fresh arenas of deployment of capital was taken for granted, and the demand for investment funds in an industry by nature acutely capital intensive was seemingly without end.

The entire community was exposed to the spectre of monopolization of the market by the market leader. Bill Gateses proliferated all over in activity after activity. That was assumed to be quintessential capitalism. But now both the executive and the judicial wings of the government have stepped in, in the US itself. The likes of Bill Gates, they have decided, are infringing on the grammar of free market operations.

Part of the problem has arisen because the standard literature describing the emergence of a monopolized market has long been thrown out of the window — or allowed to go into disuse. Monopoly equilibrium is a concept from another era. The world was then marked by lack of demand, for goods and services, leading to large scale unemployment in one capitalist country after another.

Textbooks on market imperfection, such as the volumes written by Joan Robinson in the United Kingdom and Edwin Chamberlain in the US, came into circulation. Terms like monopoly, duopoly, polypoly, et cetera, entered common usage. Clever geometrical diagrams were drawn, supplementing derivations from differential calculus, to convey the harsh fact of life in a way that monopoly equilibrium was always to the left of competitive equilibrium. Which was another way of stating that, other things remaining the same, monopoly output lags behind output under conditions of free competition. Unemployment, it followed, would be less in a monopoly situation compared to what perfect competition would yield.

This phase of economics the up and coming generation has not generally been acquainted with. Nurtured in a milieu of relative naiveté, the market forces, they have summed up, are a magnificent phenomenon, if only the wretched state could be stopped from interfering. Once such interference stopped, that would lay the foundation of all round economic efficiency with optimum utilization of the factors of production involved.

The economic depression of the late Twenties and the Thirties gave the lie to assumptions of this nature. A grim chapter of history ensued. The free market was a non-starter. It was considered essential that the state intervene massively so that public works could come up here, there, everywhere in the economy raising national output and the quantum of national employment. Textbooks get written to explain how the process of state intervention worked like magic, with supply creating its own demand.

Those textbooks are now by and large extinct. They have been withdrawn from the market since they contain arcane, often dangerous, thoughts. The hangover of that genre of economics has stretched for a long while.

Thank goodness, once the Cold War ended in the manner that it did, it was victory time for the free market. The new economics that has accompanied globalization is replete with commonplace, straightforward notions stressing the suzerainty of the market and knocking off the pedestal the role of the state as the saviour of the economic system.

Several developments have followed. The US has been an active patron of the free market philosophy. It has its clout as the world’s only superpower. A pattern of a new international culture is in the pipeline. The vassal states, for dear life, have rushed to sing the praise of the free market philosophy. Whatever his majesty the king might think, the subjects too must think in the same way and with alacrity. The onrush of legislation choking the Indian Parliament, slashing subsidies and closing down public undertakings of all descriptions, are illustrative of the sycophancy that is at work.

Life is not worth living unless we do the bidding of the world’s only superpower. Come hell or high water, we, the subalterns, will obey the wishes of the master. The blind adherence to the goal of maximizing the takings of the boss’s interests even if in the process our own interests suffer irreparable danger, is one issue the country’s formal leaders are most reluctant to discuss in public forums.

The Microsoft story is a bit of a setback for those who have strongly invested in the new horizon. For reasons of state, the likes of Gates, it is being understood, will not be allowed to exploit the possibilities of the free market to the hilt. The US administration, than whom there can be no greater admirer of the practice of globalization, has inserted a spoke in its standing legislation. Untrammelled human endeavour in any particular direction, howsoever brilliant and innovative, is out, the freedom of one cannot impede the freedom of the multitude.

The nonresident Indians, with universal admiration for all things American, will have reasons to experience disappointment. They were, they thought, in the early, blooming stages of capitalism in India, why frighten them with the Microsoft story?

And yet it is not that simple, accepting the reality of the US itself agreeing to the imposition of restriction on the functioning of the free market mechanism. The mind wavers. Should not the concept of clamping restrictions on the activities of a monopoly power be extended in other spheres as well? Should there not be at least some informal legislation to prohibit the global superpower from monopolizing the wealth and resources of the earth?

Once upon a time the United Nations was thought to be the ideal agency to keep in check superpower overbearingness. That organization has, however, been comprehensively destroyed by the US and its agents. The felt need is nonetheless there for a keeper of morality in this world, often the victim of vulgar emotions and whimsical programmes taking precedence over decency and a humane order.

Much more than the superpower itself, its sycophants will be scandalized by proposals to impose restrictions on the exercise of power by the big boss. It is difficult to believe, on current data, that this country had wrested its freedom from foreigners hardly half a century ago.    


Hallowed abodes

Sir — When will our leftist rulers learn where to draw the line? By now both Amartya Sen and Sourav Ganguly must be reeling under the weight of the accolades heaped on them by the West Bengal government. Since Ganguly has been given an apartment, it was only in the fitness of things to confer heritage status on the Calcutta house frequented by Sen in the Sixties (“CMC honour for Amartya’s house”, April 24). At this rate Amita Sen’s house in Santiniketan is waiting, perhaps, to be converted into a museum. For all you know, the owner of the house in New Alipore might even have a steady stream of visitors on Sunday afternoons, gawping at his home. Bengalis have never missed the opportunity to iconize fellow Bengalis who have managed to show some distinction and bask in borrowed glory. By the way, has the thought of conferring heritage status on Satyajit Ray’s Bishop Lefroy Road residence crossed the government’s mind?

Yours faithfully,
Tarak Sen,

Self pursuit

Sir — It goes without saying that the Congress’s initial barring of Jairam Ramesh from accepting N. Chandrababu Naidu’s offer of an advisory position on the Telugu Desam Party panel could have turned out to be a regrettable triumph of “partisanship over pragmatic governance” (“Politics in the way”, April 16). Naidu had sought the assistance of Ramesh, distinguished economist and head of the Congress’s economic cell, not for himself, but for the development of his state. In Ramesh’s initial acceptance as well, the thought of politics had not risen. He wanted to use the opportunity to put his talents in the service of the country.

In Sonia Gandhi’s calculations, however, such idealism did not figure very prominently. Ramesh was not going to be allowed to form part of the panel because the Congress could not be seen helping a party it wanted to finish politically in Andhra Pradesh. Clearly, Sonia Gandhi could easily be overtaken by the new politics ruling the day. Even Mamata Banerjee has seen the judiciousness of placing the matter of development over party politics in her call for a mahajot.

Sonia Gandhi’s obscurantist view of politics is also evident from her criticism of the Bharatiya Janata Party’s move on constitutional review. She has even gone to the extent of accusing the BJP of insulting B.R. Ambedkar by trying to destroy the Constitution (“Sonia swivels statute gun on ‘puppet’ PM”, April 15). She would do well to recall that Jawaharlal Nehru had said in the constituent assembly that the Constitution that was framed was “not final” and could not “bind down” succeeding generations. Even the Congress had earlier formed a committee under Swaran Singh to study and amend the Constitution. Innumerable amendments have been made under the aegis of the Congress. Indira Gandhi too did not accept the dogma of an irrevocable Constitution.

Sonia Gandhi is going against the Congress’s illustrious past. She is not only alienating herself from Congressmen, but also debarring the Congress from playing the role of a constructive opposition.

Yours faithfully,
B.C. Dutta,

Sir — When Yashwant Sinha read his budget proposals in Parliament, the entire opposition decided to keep mum. It was too preoccupied with its decrying of the Rashtriya Swayamsevak Sangh, if one remembers the ongoing hullabaloo over the Gujarat government’s ban on civil servants joining the organization. The Congress gets worried about scruples only if it is with respect to other parties. As for itself, such high principles do not work. Look at the aplomb with which it has joined hands with the Rashtriya Janata Dal, despite trying to browbeat it earlier. It is self-interest at work here.

Yours faithfully
Pradip Ashopa,

Sir — The Congress has no principles. Pachmari should serve as a pointer. According to the declaration undertaken there, the party had resolved never to be part of a coalition government. But it now shares power in Maharashtra, Bihar and Pondicherry. The Congress in fact is incapable of forming a government on its own.

The party, moreover, has proved to be a chameleon. It has made promises and broken them with impunity. Congress support was withdrawn most unceremoniously from the H.D. Deve Gowda government and then the I.K. Gujral government.

The Congress had played the same mischief under Indira Gandhi when support was withdrawn from the Charan Singh government soon after Morarji Desai fell. For now, West Bengal exemplifies its unprincipled politics. Once sworn enemies, Somen Mitra has turned a political ally of Mamata Banerjee. Does Sonia Gandhi realize the Congress is drowning in quicksand?

Yours faithfully,
N. Bose,

Sir — Sonia Gandhi has not been short on criticizing the Bharatiya Janata Party-led government for its failure to give protection to Sikhs, 36 of whom were gunned down in a recent massacre at Chatisinghpora. Does she think Indians have a short memory so as not to remember hundreds of Sikhs were massacred on the very first days of Rajiv Gandhi’s tenure, and the massacre in most cases were led by Congressmen?

To this day, no one from the Nehru-Gandhi family has apologized for the carnage. Sonia Gandhi stands out to be a cynical politician.

Yours faithfully,
P. Parijatha,

Club culture

Sir — The rowing clubs of Calcutta, which were once the crowning glory of the city, are in a pitiful state at present. The lack of proper sponsorship and exposure of the sport has led it to the verge of extinction, and the state government isn’t helping things by imposing strictures on the rent of club premises. The clubs are slowly running out of funds and soon rowing will become history. The Bengal Rowing Club, one of the three main clubs of the Rabindra Sarobar, has been closed for almost a year now, owing to lack of funds.

The other two clubs, the Calcutta Rowing Club and the Lake Club, are still surviving but even their decay is evident. Each year there is a steady fall of new oarspersons in these clubs and the situation does not seem to be turning for the better.

It was only last month that a state-level regatta championship was held in and won by the CRC,but in no newspaper did it find a mention. In stark contrast, a state-level cricket championship never fails to attract attention. I appeal to all Calcuttans and especially to the youth of Calcutta to save this sport from extinction, for, once extinct, it will be difficult to revive. This is rowing’s last chance.

Yours faithfully,
Arun Das,

Sir — Cycling is on the upswing in West Bengal, attracting more and more talent. Unfortunately, in terms of infrastructure and training facilities, the state lags behind other states. A firm commitment was made some time back to set up a state of the art velodrome near the Sports Authority of India complex in Salt Lake but the site has been hijacked to build a hotel.

If the state authorities are unable to provide a proper velodrome, then the least it can do is arrange for a cycling circuit of at least 5 kilometres. The existing circuit around the Salt Lake stadium is only 1.3 kms long and that too taken over by walkers and joggers in the morning, and amorous couples in the evenings.

Renowned cyclists like Abhijit Seth, Premjit Singh, Sonia Singh, Barnali Ghosh as well as upcoming juniors like Anirban Mukherjee need support from the authorities to further their sporting talents. Since Calcutta roads are terribly accident prone, the cyclists deserve both civic and financial help.

Yours faithfully
Sush Kocher,
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