The government’s short-run policy options are limited, since there is a crisis of confidence among both consumers and producers. Despite wholesale and retail prices declining and close-to-zero real interest rates, consumer expenditure has not increased. The unemployment rate may be around five per cent, but there are fears of greater unemployment and job insecurity as restructuring, promised by the government, takes hold. Nor are investments taking off. Manufacturing has faced the threat of cheap imports and companies have cut down on production and hiring of new workers.

In April, the last month for which figures are available, the number of bankruptcies has also gone up. There are very few monetary policy options and interest rates cannot be cut further. In fact, Japan is the best example one has of a Keynesian liquidity trap. This identifies a fiscal policy option, which has been favoured by the earlier government, but is ruled out because the government (including local governments) is heavily in debt. Perhaps the only sensible course of action is to accept that Japan is in for a period of deflation in the next two to three years. With Japan’s strengths in finance, technology and skilled labour, this should not dampen consumer and producer confidence, provided a credible reform programme is introduced. Mr Koizumi needs to realize that the present popularity will not last and he cannot afford to muddle through, as several earlier governments have attempted to do. Japan’s recovery is also the key to recovery in east Asia and, coupled with what happens in the US and the European Union, the trigger for world economic expansion. Although the scale is different, rather strangely, the Japanese problem is no different from the Indian one of slackening growth. Or the American one. Monetary policy instruments (interest rate cuts) are necessary, but not sufficient. Fiscal policy instruments are untenable. Other than accepting cyclical fluctuations as inevitable and riding them out, the only course for governments is to proceed with reform packages. In large measure, the problem in both Japan and India is one of negative sentiments and perverse expectations. If this problem can be addressed, macro fundamentals will take care of themselves.

It is humiliating for a city, when its supposed “cultural sensitivity” is used to justify an act of censorship that defies every notion of intelligent, mature and, indeed, cultured behaviour. The Calcutta Municipal Corporation, set on by some benighted members of the mayor-in-council, has directed 65 advertising agencies to remove billboards all over the city, deemed “obscene” by this civic body. Pieces of cloth have already been used to cover some of these images. The debate that has so far taken place around what constitutes “obscenity” is too banal for any serious critical engagement. Perhaps Calcutta should be grateful that there is at all a debate, that the mayor-in-council seems to be divided on this issue and that the mayor himself is now beginning to sing a different, more sensible, tune from what he had started out with. But the mayor’s opinions are known to be fluid (Operation Sunshine) and his civic conscience flexible (illegal pandal in front of his home). The entire matter could have been dismissed as monumentally silly if the CMC had less authority to actually implement such a grotesque insult to citizens’ rights. One hopes that Calcutta’s intellectuals, if summoned to form this select moral police, would have nothing to do with this absurd and obscene flexing of municipal muscles.

There is general agreement that the crown prince, Dipendra, assassinated the king and other members of the family in a state of high emotional stress, though some doubts have been expressed about this because the suicidal wound which he inflicted upon himself had its entry point on the left side of his temple while he was a right-handed man. In any case, the killings were committed by one of the persons present during the royal family’s evening gathering where no outsider could have been there.

That Dipendra was the perpetrator of the violence has been confirmed by surviving members of the royal family. That King Birendra and Queen Aishwarya did not have a harmonious relationship with the crown prince because of his lifestyle was generally known. King Birendra and Queen Aishwarya, despite all their royal privileges, were a reserved, sober and generally conservative couple. Prince Dipendra, on the other hand, was a person in more modern and feisty mode. His coming home reportedly in a state of inebriation and the resulting admonitions from his parents might have triggered off the ghastly violent reaction. One, of course, is curious as to why he spared Prince Paras, son of the present king, Gyanendra, while he practically massacred or wounded everybody else present at the family gathering.

The end result is the complete elimination of the main branch of the ruling family founded by King Prithvi Narain Shah more than two centuries ago. In a long term perspective, the killing of King Birendra is the second most significant political event in Nepal in the last 51 years. The previous one being King Tribhuwan’s seeking refuge in the Indian embassy from the Ranas and the restoration of monarchy in Nepal with Indian help.

The manner in which the Nepalese authorities dealt with the crisis was both bizarre and confused. First of all, they refused to accept or acknowledge the unvarnished direct reports about the assassination which emanated from the palace immediately after the killings, specially about Prince Dipendra’s role. Then there was the explanation that an automatic weapon was accidentally triggered off, because of which the members of the royal family, including the king, were killed.

The ineptitude of these explanations and their being half-baked and confused reactions were obvious. First, what was the logic of an automatic weapon being available at an evening gathering of the royal family? Second, such weapons have safety latches. How did they get into firing position? Third, how is it that an accidental triggering off of such a gun could precisely target the king who was in a different room, other members of the royal family who were in an adjoining hall and the queen and one of the princes, who were killed in a garden outside the room? Was the gun accidentally fired self-mobile?

Nobody believed the first official explanation. There is fairly reliable information that the guns used were either Israeli Uzi or an AK-47, and an M-16 automatic rifle. A pistol was used by Prince Dipendra to kill himself. Regardless of the constitutional or political justification of Prince Dipendra being designated the king of Nepal while he was still in a coma was even more bizarre. It was perhaps an attempted exercise to exonerate him from the violence which he reportedly perpetrated. This became an abortive attempt with Dipendra also passing away. King Birendra’s younger brother, Gyanendra Bir Bikram Shah, has been enthroned as the king of Nepal.

Initial reports indicate that he is not an entirely popular choice, but he is the unavoidable choice given the laws of monarchical succession in Nepal. General reports are that he is a more gregarious and well-read person compared to King Birendra. He also has a reputation of having a more assertive personality and a decisive approach to issues compared to the late king. Though interested and knowledgeable about the politics of Nepal and the world, he kept aloof from the political management of the kingdom during his brother’s reign. He is known to be a man having clear views and convictions. Becoming the monarch is not likely to change his personality.

The question — the answer to which only time will tell — is how he will adjust to becoming a constitutional monarch, the role bequeathed to him by his late brother. The prime ministers of Nepal would certainly have to deal with a more assertive personality in Gyanendra compared to his predecessor, who consciously transformed himself from an absolute to a constitutional monarch.

There are two questions which need answers. What is the kind of Nepal that Gyanendra will have to manage? And what is the kind of Nepal India would have to deal with in the aftermath of this violent tragedy? The obvious and foremost challenge that King Gyanendra faces is to continue the tradition of being a constitutional monarch which King Birendra created and assiduously nurtured over the last decade and more. He will have to cope with pressures advocating his assuming greater authority in the face of internal political uncertainties. Resisting these advocacies in the interest of nurturing democracy would be the most significant responsibility of King Gyanendra.

Though democracy stood restored from 1990 in Nepal, Nepalese politics has been highly volatile. Political parties are faction-ridden with bewilderingly numerous ideological orientations and political motives. There have been 10 governments in Nepal during the last 11 years, alternating between the Congress Party, the Communist Party and coalitions of that country. Nepal remains one of the least developed countries in the world with problems of unemployment, illiteracy, low productivity and lack of infrastructure, all reflected in the low per capita income of roughly $ 214 per annum.

Nepal has been subject to political violence, especially over the last three to four years with the Maoist wing of the Communist Party advocating the overthrow of the monarchy and the creation of a republic. Nepal also has to cope with the problem of Nepalese refugees who have migrated to Nepal from Bhutan under political pressure. Disparities between the standards of living in the Kathmandu valley on the one hand, and the rest of Nepal on the other, is a destabilizing factor. In fact, when compared to the manner in which Nepal’s political parties are functioning, the two factors stabilizing Nepalese politics are the monarchy and the armed forces, stability being dependent on the relationship between the monarchy and the armed forces high command and their jointly being supportive of the processes of evolving democracy in Nepal.

To respond to the second question about Indian concerns, we should do whatever we can to disprove the absurd charges levelled by the Communist Party (Maoist) that the assassination of King Birendra was the result of an Indian conspiracy. By no stretch of the imagination would anybody in India have desired the elimination of the late king. He was highly respected by the Indian establishment and by Indian political circles.

He was greatly admired for the role he played in nurturing democracy in Nepal. He was the major positive influence in improving Indo-Nepalese relations after the difficulties which our relations went through in the late Eighties till 1991. Theories about Indian conspiracies and collaboration between the Central Intelligence Agency of the United States and Indian intelligence agencies are fanciful hallucinations of motivated and mendacious political circles in Nepal. There has been criticism both in Nepal and in India about India recognizing King Gyanendra and offering whatever assistance the prime minister, G.P. Koirala, needed.

The criticism is not justified. King Gyanendra ascended the throne with the consent and endorsement of the cabinet and all the political parties of Nepal, except the Maoists. India’s not recognizing the king would have created a major crisis in Indo-Nepalese relations. The Indian decision was both necessary and logical. India has rightly not commented on the investigative commission and so on appointed by the Nepalese government to report on the assassination. The Communist Party of Nepal withdrawing from the inquiry commission nominated by King Gyanendra is a purely political and partisan decision, confirming the party’s political agenda and its perceptions regarding Nepal’s public opinion on the issue. In any case, this is an internal affair of Nepal. One, however, is convinced that full facts regarding the assassination should be ascertained and made public to avoid political controversy and from India’s point of view, to prevent any misunderstanding between India and Nepal, given the Nepalese Maoists’ allegations regarding India.

Nepal’s importance to India remains undiminished. It is an important buffer state between India and China. A cooperative relationship with Nepal is essential to prevent Indian separatist movements and Pakistan’s Inter-Services Intelligence from using Nepal as a base for fomenting centrifugal impulses in India. Nepal’s stability and Nepal’s friendship is therefore of great importance to India. The prospects of cooperation in the sharing of hydro-electric power and for trade are potentially enormous.

India should also be willing to extend cooperation to Nepal (subject, of course, to Nepal’s wishes in the matter) to build up Nepal’s economic infrastructure and technological capacities. We should be willing to provide Nepal with trade and transit facilities to overcome Nepal’s landlocked status to the maximum extent possible. The minor territorial disputes that exist with Nepal should be resolved in a spirit of mutual accommodation. Signals to this effect should be conveyed to the new king and to the government of Nepal.

A moment of crisis is also a moment of change. India should utilize the opportunity to signal its willingness to be innovative and constructive in structuring a new relationship with Nepal given the new monarch who has come to power.

The author is former foreign secretary of India

According to the latest census data, India’s population has now become 1,027 million, an addition of 181 million people more during 1991-2001; this addition is the highest ever decadal increase in population figures. The population growth rate has declined from 2.14 per cent per year during 1981-91 to 1.93 per cent per year during 1991-2001, a decline of only 0.21 percentage points in 10 years. At this rate of decline, the Indian population will take about 90 to 100 years more to get stabilized, and that too at a level much higher than the sustainable level. So even at this rate of decline, which is being hailed as spectacular, India would almost certainly suffer Malthusian calamities.

The provisional census report rightly states that “the analysis of growth rates of the states starting from the decade, 1951-61, tells the real story of population growth in India. It took four decades even for Kerala to reach a decadal growth of less than 10 per cent from a high growth rate of 26.29 per cent in 1961-71. Tamil Nadu also took the same time to reduce its decadal growth rate from a high of 22.30 per cent during 1961-71 to 11.19 per cent during 1991-2001.

The growth rate in Bihar has shown an upward swing during 1991-2001 and the growth rates in Rajasthan, Uttar Pradesh and Madhya Pradesh are now at a level where Kerala and Tamil Nadu were 40 years ago. Even if it takes four decades for these four states to reach the present levels achieved by Kerala and Tamil Nadu, it seems it would be difficult for India to achieve a stable population by 2045. Therefore, it is imperative that some bold and pathbreaking initiatives are taken in reversing the trends of growth in these states, which at this stage do not show perceptible signs of abatement.”

Bihar (including Jharkhand) is not the only state to have registered an increase in its annual PGR from 2.11 per cent per year in 1981-91 to 2.40 per cent per year in 1991-2001, but Gujarat and Haryana too have registered increase in their yearly PGR from 1.92 to 2.03 per cent and 2.42 to 2.47 per cent per year respectively during the same period. Moreover, the PGRs of Rajasthan and Uttar Pradesh (including Uttaranchal) have remained almost unchanged at 2.50 per cent and 2.27 per cent per year respectively during the last two decades.

Only last year, in February, the government of India announced the national population policy. But the Census 2001 report makes it clear that the NPP 2000 has already become invalid: “It has been assumed in the policy document that the medium term objective of bringing down the total fertility rate to replacement level of 2.1 by 2010 will be achieved. It is envisaged that if the NPP is fully implemented, the population of India should be 1,013 million by 2002 and 1,107 million by 2010. However, in 2001 itself, India has already exceeded the estimated population for the year 2002 by about 14 million. It will take a herculean effort on the part of the government and the people to achieve the much-cherished goal of a stable population.”

One fails to understand the logic behind finalizing the NPP in February 2000 when it was known that only about a year later, in March 2001, the Census 2001 data would become available with more updated information, essential for preparing a realistic and effective population policy. Since the government did not care to come up with a population policy for almost five decades after independence, it could have easily waited for one more year to get the latest demographic data to formulate a proper population policy.

It has now become imperative that NPP 2000 is reviewed and reformulated keeping in mind the latest demographic scenario.

NPP 2000 has several flaws, but the most serious lacuna is in the long-term objective of the policy. According to NPP 2000, “The long term objective is to achieve a stable population by 2045, at a level consistent with requirements of sustainable economic growth, social development and environmental protection.” But what is that sustainable population size at which the NPP 2000 wants to stabilize India’s population? The document provides no answer.

In fact, defining and estimating the country’s sustainable population size ought to have been top priority for the policy-makers. Because it is this sustainable size of our population that must in turn determine the medium and short term objectives of the population policy and not the other way round.

The medium term objective of NPP 2000 has already gone haywire. To contain India’s population at 1,107 million in 2010, the medium term objective of NPP 2000, the PGR will have to be brought down to 0.83 per cent per year during 2001-2010 from 1.93 per cent per year during 1991-2001. Given the present state of India’s family planning programmes, this is just not possible.

The silence of NPP 2000 about India’s sustainable population size makes the document just a hollow and non-serious statement of the kind which the nation has now become accustomed to.

There is yet another drawback in the NPP 2000. It is well known that the southern states, Kerala, Tamil Nadu, Andhra Pradesh and Karnataka, owing to certain factors, have done quite well in bringing down their population growth rates while many northern states like Bihar, Uttar Pradesh and a few others have not been able to control their PGR as required. So these defaulting states, in view of their worrisome demographic situation, need some bold and pathbreaking measures in addition to the usual development measures like literacy, better primary healthcare, higher age of marriage and so on as the Census 2001 report rightly suggests.

Unfortunately, the NPP 2000 does not have any scope for such state-specific measures already taken by few states. For instance, Madhya Pradesh, Rajasthan and Himachal Pradesh have debarred candidates with more than two children from standing for local body and panchayat elections through legislative enactments. But such kind of disincentives do not find favour in the NPP 2000. Had the NPP 2000 provided even a tacit approval for such disincentives, the needy states might have gone for even more effective and broad based disincentives without fear of incurring too much of political disadvantage.

Finally, what if the NPP 2000 is not revised and the population control programmes in India are left to continue, based only on the same faulty developmental measures laid down in the NPP 2000 as its operational strategies? Then India is sure to collapse under its own demographic weight. For instance, presume that the decline in PGR continues to be at the same high rate of 0.21 percentage points per decade, that is, from 1.93 per cent during 1991-2001 to 1.73 per cent during 2001-2011 and then to 1.53 per cent in 2011-2021 and so on just as it came down from 2.14 per cent in 1981-91 to 1.93 per cent in 1991-2001, which is hailed for being the ever highest decadal decline in India’s PGR. Even under this optimistic assumption, India’s population would rise to about 1,858 million in 2045 and would still be going up by about 16 million per year.

There are only two choices left for the government: adopt a truly effective population policy that could be effectual even in states like Bihar and Uttar Pradesh or face the consequences predicted by Thomas Malthus. This is the message that comes out loud and clear from Census 2001. The important question is: will the authorities heed the warning?

Anti-poverty schemes of various types have been in operation for the last three decades. But gross irregularities in implementing them continue to persist. The approach paper has underlined these deficiencies, such as unviable projects, lack of technical and institutional capabilities in designing and executing projects utilizing local resources and expertise, illiterate and unskilled beneficiaries with no expertise in managing an enterprise, indifferent delivery of credit by banks, complex procedures, poor recovery and so on.

Serious weaknesses have also been revealed in the execution of programmes for wage employment: thin spread of resources and flouting of Central government norms for earmarking 40 per cent of funds for watershed development and 20 per cent for minor irrigation.

Sector wise

Referring to the programme for rural housing, the approach paper says that the scheme has become popular because of the 100 per cent subsidy of Rs 20,000 per beneficiary. But instances of corruption to the tune of Rs 5,000 to Rs 8,000 out of the approved amount of Rs 20,000 have come to light.

The approach paper says that the “first generation of reforms has neglected the agricultural sector”. This statement may give the impression that the other sectors have received adequate attention.

But the fact is that the reforms have totally failed to give prompt and proper attention to other vital sectors like infrastructure, finance and the public sector.

Agriculture has always been of crucial importance to the country’s economy. It provides direct and indirect employment to several million people; and the export of agricul- tural commodities has been a great source of foreign exchange. It therefore seems odd indeed that the approach paper has bluntly stated that the reforms have neglected agriculture.

The sameness of life

Regarding the prospect for the tenth plan, the paper says that its goal of achieving eight per cent growth of the gross domestic product will be possible only “if sufficient political will is mobilized and a minimum consensus is achieved”. But does not a minimum consensus among political parties on planning already exist? All parties are agreed on the need to remove poverty and unemployment, develop agriculture, industry and exports, regulate imports and attract foreign capital and technology on a selective basis.

The approach paper gives the impression that even after implementing the tenth plan, the living conditions of the vast majority of the people will continue to be practically the same as at present.

Blairing a second triumph