Editorial 1/ External Shine
Editorial 2/ Disassembled
A head for numbers
Strong winds in Tamil Nadu
Document/ For a better work environment
Fifth Column/The poor and the huddled masses
Letters to the editor

The external sector represents both the success and the failure of the reform attempt. It represents success in the sense that this is the sector where reforms have generally been introduced, unlike the domestic economy. The exchange rate is market-determined, the rupee has become convertible on the current account for most purposes and limited capital account convertibility exists. There is a more open policy on foreign direct investments, export subsidies have been unified and sometimes phased out, quantitative restrictions on imports have been eliminated and tariffs reduced. On tariffs, however, there have been no significant reductions in duties after 1995-96. The collection rate went up in 1996-97 and has declined only marginally since then.

Exports have increased by 15 per cent and more in dollar terms for five years in the Nineties, an achievement unparalleled since 1947. India’s share in world exports has inched up from around 0.5 per cent towards the beginning of the decade to around 0.9 per cent now. The export/import ratio has improved, the share of short-term in total debt has declined to less than 5 per cent and the debt-service ratio (as a share of current account receipts) has dropped to around 17 per cent. While these successes are known and are responsible for India being unable to argue that QRs are needed on balance of payments grounds, foreign exchange reserves of almost 45 billion dollars are also responsible for the reform process getting stuck. The 1990-91 reforms were triggered by a BoP crisis. With the crisis having disappeared, so have the reforms. Exports have slowed down in 2001-02. But there are no indications of a BoP crisis that can trigger fresh reforms. Even if exports are down, imports are under control. Petroleum imports will not increase. Non-oil imports have not been buoyant, reflecting industrial slowdown in import-intensive exports like gems and jewellery. The government has imposed non-tariff barriers on several imports, affecting imports across the board. The upshot is that the trade account deficit will not be large.

Historically, a net surplus on the invisibles account has offset the trade deficit and resulted in a lower current account deficit than the trade one. This may no longer happen this year, since software exports are under a cloud. But even then, the current account deficit is unlikely to exceed 1 per cent of the gross domestic product. The nominal exchange rate may have depreciated since 1991, but the real exchange rate is back to around 1991-92 levels. Since India’s exports are in the low value segments and are hence price sensitive, rupee depreciation would have helped. Depreciation would not only have stimulated exports, it would also have provided a more acceptable form of protection to domestic industry. While the government would be right in arguing that net capital account inflows have neutralized the depreciation that would otherwise have happened because of the current account deficit, it is also culpable on certain counts. Tariffs have not dropped since 1995-96, the government shored up reserves through the expensive route of the millennium bonds. The moral of the east Asian crisis having been misinterpreted, steps towards capital account convertibility have stopped. Thanks to protectionist pressures, the government has unfortunately passed this option of a kick-start.


It would be cynical to say that all politicians are unscrupulous self-seekers masquerading as people’s representatives. But many of Manipur’s politicians have earned exceptional notoriety as incorrigible turncoats. Given the uncertainty into which politicians themselves plunged the state two months back, the Union cabinet’s decision to petition the president to dissolve the Manipur assembly is a welcome step. The assembly was kept in suspended animation when president’s rule was imposed in the state following the Bharatiya Janata Party legislators’ withdrawal of support to the Samata Party-led government of Mr Radhabinod Koijam. The governor, Mr Ved Marwah, resorted to the only course open to him by recommending the dissolution of the house. These legislators had opposed the dissolution, hoping to get ministerial berths in a new coalition government. That the people were angry with their representatives was evident in the violence that erupted in Imphal over the Centre’s decision to extend the Naga ceasefire beyond Nagaland. Such was the public fury with the politicians that most of them had to flee their homes, although they had no role in the decision.

But a long political vacuum can only add to the people’s frustrations. Now that another election faces them, both the politicians and the people will do well to ponder their roles more seriously than they seem to have done before. The politicians must take their lesson from the violence and mend their ways to recover their lost credibility. This business of party-hopping for ministerial gains and toppling of governments has gone on for far too long in a state plagued by insurgency and economic backwardness. Party leaders will be playing with fire if they try to exploit for electoral gains the recent rift between the Meitis and the Nagas over the ceasefire question. The people, on the other hand, have to be more careful with their choices, sending out clear signals to discredited politicians that they have had enough of their antics. It is not enough to submit to the sceptic’s prognosis that the people get the government they deserve. To deserve better the people too have to do better in the choice of their representatives. It is their welfare, not the politicians’, which is at stake.


The government of India (including Union territories without legislatures) has an estimated staff strength in the current financial year of 3.45 million people. This is 8,113 less than the previous year and almost 30,000 below that in 1999-00.

The numbers employed in state governments and local authorities is not known, nor the total in all state-owned or state-run enterprises. We also do not know how many of these posts are filled and how many vacant, nor the expected actuarial pattern of attrition due to retirements, resignations and deaths. The expenditure on pay and allowances to this staff at the Centre was Rs 18,784 crore in 1995-96 and will be Rs 31,945 crore this year.

This is 8.5 per cent of all Central government budgeted expenditure for this year. Yet the average cost is only about Rs 9,000 per month, which would mean a possible range of Rs 5,000 to about Rs 40,000 a month. States and local authorities would present similar pictures. The numbers employed are excessive, and the remuneration is low and uncompetitive in relation to comparable employment in the corporate sector. While some effort has been made for the first time to reduce numbers, it has not been adequate.

Our political system demands that success in politics is rewarded with jobs as ministers. Each ministry has its entourage of central service officers, and lower level support staff. With increasingly large ministries at the Centre and the states, there is little scope for reducing staff numbers. We must have a limit on numbers of elected representatives who are given office in governments.

Our problem is that these large numbers of staff are very poor at service delivery. For example, the public distribution system is corrupt, wasteful and reaches only a fraction of the poor for whom it is meant. Our health services are so poor especially in rural areas, that the poor prefer to pay for private healthcare, even when it is by a quack, to losing time and therefore wages while waiting for a “free” public health service. Children and boys in particular, are sent to expensive “private” schools because the public schools are considered to give a poor quality education.

The list of poor service delivery by overstaffed government departments is endless. Overstaffing adds to costs, results in poor remuneration, and in work being created through endless procedures and paperwork. The Annual Human Development Report of the United Nations development programme documents the results. India is far behind on almost every indicator of human development as compared to China, Thailand, Malaysia and even Indonesia. We were much better off in comparisons in the Sixties.

This overstaffing is at all levels. Many state governments have more than one director general of police. Some have four. There are six or more chief secretary level posts, and many additional chief secretaries. Uttar Pradesh is said to have four finance secretaries and one principal finance secretary. This is not conducive to efficient and effective work, as we can see from the quality of governance in most states. The Centre is not much better, with a legion of joint secretaries, additional secretaries and special secretaries, apart from most ministries having more than one secretary level position.

What can be done? At the officer level, we must cut down sharply on recruitment to the central services. In any case we must reduce “permanent” appointments and increasingly employ people for specific tasks, on limited period contracts. Such appointments may require higher levels of remuneration, and we should not grudge that. It also enables political appointments, a better alternative to the politicization of the permanent civil service.

Beyond the joint secretary level, an independent selection committee like the Union public service commission must advertise all positions, even if that is only within the government, and appointments must be after selection. In the early P.V. Narasimha Rao years, a proposal was made that government officials could take a few years off to serve in the private sector. It was not implemented. It was a good idea and must be revived. It will bring new ideas and experiences into government when such officials return.

It is in performance evaluation, training and promotions that the government is very weak. Except for a few years when P. Chidambaram was minister for personnel and training and later, Margaret Alva to a lesser extent, there has been no minister in charge of this important part of government with any idea of the ways in which these techniques can help to improve the quality of our governance. Chidambaram introduced the short-lived programme of compulsory annual training for central service officers. At one of these in 1996, he said that the one-week refresher course was a sabbatical to stretch their minds.

By including officers at different levels, it enabled vertical interaction, which rarely happens in the hierarchy of normal government work. Being from different states, they can share experiences, again lacking in government. The intention was to give officers a choice from a cafeteria of courses. The overall design was for the officer to spend 11 years in the district in no more than three postings, specializing for five years thereafter, and after year 17 in a posting for which the specialization would be taken into account. The object, he said, was to change the work culture so that it is driven by results and not by procedures.

None of this has taken root. Out of 5,000 or so in the Indian administrative service alone, the number attending “compulsory” courses has come down from 3,170 in Chidambaram’s first year to 825 in 2000-01. Even allowing for the change to once in two-year attendance since 1993, there is sharp decline. Indeed, there is no longer a compulsory development programme for each officer, though officers may pick the course they should go to. There is no reporting on whether they actually attended, and there is no evaluation about the quality of their participation and its effect on their work. This is so even when officers are sent overseas to attend training courses. They can goof off and nothing is done about it. In this situation, the question of linking training to career progression does not arise.

This is in marked contrast to countries in southeast Asia and Australia. Training is not only budgeted for, but there is a detailed strategy and plan. It arises from performance evaluation, which identifies training needs, and attendance is compulsory. The next evaluation will comment on the benefit of that training for the officer. His training record will be an important input in his career progression.

There is need for a similar training philosophy, strategy and plan not only for the IAS but also for the other services and for the remaining staff. At present there is no attempt to develop a coordinated training philosophy for government as a whole, for departments that are part of it, or for different levels. Unless we can identify, develop and nurture talent in government, and use it where it can be most productive, we can have little hope that service delivery by government will ever improve in India. We cannot continue with automatic promotions especially at senior levels. Nor can we go on with the generalist approach even at the highest levels. This is where objective performance evaluations, training and specialization at the midpoint in a career can make a difference.

The author is former director general, National Council for Applied Economic Research [email protected]


In the battle to cleanse Indian politics of corruption, few cases have been as sensational as that of J Jayalalitha. The Supreme Court has now closed a chapter by making it almost certain that she will be unable to secure for herself a verdict of “not guilty” in time to contest election and become a member of the legislative assembly by the middle of November. Sooner if not later, she will have to bow to the inevitable and make way for another party member as chief minister.

Her career is by no means over. Bal Thackeray ran the government of Maharashtra, India’s most industrialized state for five years without ever bothering to stand for any elected office. His “remote control” as he called it was operated via his party machine. For over four years now, a unique husband-wife team has run Bihar, with Laloo Prasad Yadav retaining all the prerogatives of office except the label.

Neither Bal Thackeray nor Yadav were convicted. In Jayalalitha’s case, she has been pronounced guilty with her case going on appeal to a higher court. The decision of the governor, Fathima Beevi, to swear her in as chief minister was the subject of controversy from day one. Having had her nomination papers rejected, the chief minister has been under immense pressure.

It has been a race against time in more ways than one. Unless the cases are settled and in her favour by mid-October, the notification for a byelection cannot be issued. If this does not happen, and it is almost certain that it cannot, she will not be chief minister after November 15. Her party has some hard thinking to do. Used to playing follow the leader since the days of its founder, M.G. Ramachandran, it has to rally behind a proxy.

All this points to a disturbing pattern cutting across party lines. In 1975, when her election was set aside on grounds of malpractice in the campaign, the then prime minister, Indira Gandhi, hesitated to make way for a cabinet colleague. In general she set a precedent. Politicians no longer quit when they ought to. They wait until they have no legal means of staying in office. As in so much else, the institutional price has been a heavy one.

Indira Gandhi imposed a state of Emergency. Even though her expert legal counsel was confident of eventual victory in the courts, she hesitated to renounce power. Public opinion, especially that of the middle classes, was seen as deeply inimical to such a move. It would have made a mockery of democracy. She opted for a harder, tougher route, abrogating the democratic process itself, a move that marked a Rubicon in her decades-long career.

The Tamil Nadu chief minister has no such option. An opposition party, the Dravida Munnetra Kazhagam, that is a key constituent of the ruling alliance in New Delhi, besieges her in the state. The Bharatiya Janata Party has been an adversary ever since she pulled down the second Vajpayee ministry in 1999. Even a close ally, the Congress, has kept all options open and is in no mood to bail her out.

Further, there is no genuine second line leadership in her party. V. Nedunchezian, the veteran minister is no more. S. Thirunavakarassu, the only member of legislative assembly from her party to win every single election he has fought, something even the “Revolutionary Leader” cannot claim, left many years ago. Sasikala Natarajan, the Thevar associate of the chief minister, occupies a key party post but is unlikely to retain the kind of support a head of government nee ds from the party rank and file. Half a dozen former ministers also face serious corruption charges.

Even during the campaign, there were many informed guesses on who could be a chief minister designate of the supremo. The key criterion was and is widely thought to be twofold. One is a clean image: the former fisheries minister, D Jayakumar, or the law minister, C. Ponnaiyan, would qualify on such a count. Neither would be a major threat, but the latter did desert the party chief in her time of trouble in the aftermath of M.G. Ramachandran’s demise in 1987.

The other test is that of unswerving loyalty. The puratchi thalaivi’s will be the last call. It is not often noticed that about 80 of the 130 MLAs are in their thirties and forties. Many are first time legislators who owe their quick rise to their record of personal fidelity. The culture of follow the leader to the bitter end is etched into their psyche.

It is ironical that a movement that included at the start a strong streak of rationalism and atheism should have reached a pass where the choice is between a deified individual and a family run party. The Dravidian current occupies both the ruling space and the opposition one, but it has somewhere lost the capacity for critical introspection.

There is a lively debate on when the change began. Already in the Fifties, M.G. Ramachandran’s arrival at the ye- arly DMK party conclave was a festive affair. On one memorable occasion, he rose into the conference in a chariot. By the end of the Sixties, there was intense perso nal rivalry between the cine star who rode high in the eyes of the masses and M. Karunanidhi, who ran the party organization.

What is remarkable three decades on is how the DMK, once a broadbased movement and then a ruling party, is captive to the Karunanidhi family. During his tenure from 1972 to 1976, he had no opposition worth the name and the party prospered accordingly. The first Sarkaria commission was constituted on the complaints of the Communist Party of India and the fledgling Anna Dravida Munnetra Kazhagam. The former chief minister got off the hook when he and Indira Gandhi struck an alliance. All cases were withdrawn in 1980. No one who challenged his family managed to last in the party.

The All India Anna Dravida Munnetra Kazhagam had a free run of the state in the early Nineties. Power went to the head of its leadership. Jayalalitha’s two most troublesome cases concern real estate. Neither owes much to the main opposing Dravidian party. The oppositional space was filled by other entities, and one was not a professional political outfit but a citizen’s group.

One, the Tansi case was initiated after much spadework by the maverick S. Swamy. The Palni Hills Conservation Council filed the other, the Pleasant Stay hotel case. The PHCC, which has a sterling record of grassroots environmental education, and runs a dozen fine nurseries of forest saplings, decided to go to court against the builders who are destroying the hill town of Kodaikanal. Whatever happens in the case, it has shown that a midget of a group can take on a mighty political leader. The tragedy of the Dravidian parties is that they have no time for such vital issues. Having unleashed huge changes in polity and society, they have now run aground.

What lies ahead is still unclear. The brutal crackdown on the DMK has left its cadre in a daze. Should Jayalalitha ensure a smooth transition, she may yet make capital out of the fact that she gave up power. Her fear may well be that even a proxy will grow fresh feathers and create problems should she be able to return to office in future. As so often, Tamil Nadu moves from one drama to another.


In view of the increase of cases reported on sexual harassment of women, the Supreme Court of India, on a writ filed by women’s NGOs, has laid down guidelines to obviate such harassment at places of work, and at other institutions including universities, hospitals and other professional bodies. In the absence of any legislation, the court has held that these guidelines shall be legally binding and enforceable. With respect to employment, the guidelines are applicable to the government, public, and private sector, and cover women drawing a salary or an honorarium or working as volunteers.

The court has directed all employers and other responsible persons in workplaces and other institutions to ensure the prevention of sexual harassment of women and to provide procedures for resolution, settlement and prosecution of acts of sexual harassment. Most significant, the Supreme Court has brought sexual harassment within the purview of human rights violations.

Definition: Sexual harassment is unwelcome sexually determined behavior, direct or by implication, and includes: physical contact and advances, a demand or request for sexual favours, sexually coloured remarks, showing pornography, any other unwelcome phys- ical, verbal or non-verbal conduct of a sexual nature.

Acts of sexual harassment can be humiliating, can create a hostile work environment and may constitute a health and safety problem for women. Employers and responsible persons need to ensure that a woman objecting to harassment is not disadvantaged in respect to her employment and promotion.

Prevention: In order to prevent the occurrence of sexual harassment, the Court has directed employers and persons in charge of the workplace to take the following steps —

(a) Express prohibition of sexual harassment as defined above at the work place should be notified, published and circulated in appropriate ways.

(b) The rules/regulations of government and public sector bodies relating to conduct and discipline should include rules/regulations prohibiting sexual harassment and provide for appropriate penalties in such rules against the offender.

(c) As regards private employers steps should be taken to include the aforesaid prohibitions in the standing orders under the Industrial Employment (Standing Orders) Act, 1946.

(d) Appropriate work conditions should be provided in respect of work, leisure, health and hygiene to further ensure that there is no hostile environment towards women at work places and no employee women should have reasonable grounds to believe that she is disadvantaged in connection with her employment.


Employers are expected to set up within their organization an appropriate complaints mechanism. The Court has recommended provision for a complaints committee, a special counsellor and other support services for handling complaints. With respect to the committee, the following guidelines have been laid down:

The committee is to be headed by a woman. At least half of the committee members should be women. To prevent undue pressure from within the organization, the committee should include a third party representative from an NGO or any other body conversant with the issue of sexual harassment. The complaint should be handled confidentially and within a timebound framework. The committee is required to submit an annual report to the concerned government department. Employers and persons in charge are required to report to the appropriate government department regarding compliance with the aforesaid guidelines.

Disciplinary Action:

Where such conduct amounts to misconduct in employment as defined by the relevant service rules, appropriate disciplinary action should be initiated by the employer in accordance with those rules.

Other Provisions:

In addition to preventive and remedial measures, the Court has also stressed the need for awareness-raising in the workplace:

Employers should be allo-wed to raise issues of sexual harassment at workers’ meetings and in other appropriate forums. Sexual harassment should be affirmatively discussed in employer-employee meetings. The guidelines stressing the rights of women workers must be prominently notified.

Criminal Law: In addition to the above the court has also addressed sexual harassment and criminal law remedies.

a) Where such conduct amounts to a specific offence under the Indian Penal Code or under any other law, the employer shall initiate appropriate action in accordance with law by making a complaint with the appropriate authority.

In particular, the employer should ensure that victims, or witnesses are not victimized or discriminated against while dealing with complaints of sexual harassment. The victims of sexual harassment should have the option to seek transfer of the perpetrator or their own transfer.

Where sexual harassment occurs as a result of an act of omission by any third party or outsider, the employer and person in charge will take all steps necessary and reasonable to assist the affected person in terms of support and preventive action.

These guidelines are binding and enforceable in law until such time as the government passes appropriate legislation.


The difference between “the poor, the huddled masses” of refugees and economic migrants who filled up the United States and eventually had the Statue of Liberty erected in their honour in New York harbour, and the huddled masses of Afghan refugees and economic migrants, trapped in the hold of the container ship, Tampa, off Christmas Island for eight days, is merely a matter of dates. The Afghans were about a hundred years late.

It’s almost too easy to vilify the Australian authorities, whose clumsy attempts to pass the Afghan parcel to other, poorer states in the region provided the world’s media with such an easy target over the past week, though they richly deserve vilification. So does the great Australian public, whose panic at the prospect of being inundated by yet more seaborne asylum-seekers from exotic places (over 4,000 in the past year) reminded the rest of the planet that the country long had an explicitly racist “White Australia” immigration policy.

From the initial decision to send special air service troops aboard the Tampa and stop the 430 people aboard from going ashore on Australian territory, through the bullying attempts to make poorer neighbours (even East Timor!) take the refugees instead, down to the final solution of sending most of them to the island of Nauru for “assessment”, every action of the government of John Howard was driven by its terror that racist voters would turn against it and cost it the next election (due in a few months) if it let the Afghans set foot on Australian soil.


Very few of the 430 may finally end up in Australia, if their claims to be refugees are eventually accepted as valid, but Canberra is promising that most of the “legitimate” ones will go to other countries while the rest are, presumably, sent back where they came from. In the meanwhile, about 150 lucky ones (women, children and complete families) will go to tolerant New Zealand — and all the single men will go to a tent city on the mid-Pacific Ocean island of Nauru, the world’s smallest and most desolate republic.

But though Australia has not come well out of this episode, the pressure of people trying to get into the rich countries is such that nobody trying to cope with it walks away with clean hands. If everybody who wanted to come actually came, those countries would no longer be rich, nor indeed even culturally recognizable. There are probably several times as many people who would move from the poor to the rich countries if all the barriers came down as the entire present population of those countries.

So there must be barriers and controls of some sort, and that’s where it gets tricky. Morally tricky, because so-called “economic migrants” will suffer mainly from poverty if they are sent home, whereas genuine refugees may suffer imprisonment, torture or death, so naturally, most illegal migrants claim to be refugees. And tricky in practical terms because barriers will always be breached by the more resourceful and desperate migrants.

Losing face

The people aboard Tampa had already paid a lot of money and come a long way before their chartered Indonesian vessel foundered and Tampa rescued them. When they found that she was heading for Singapore, they forced the captain to head for Australian territory instead. They had no guns, but the small crew dared not say no to so many people with so much at stake and so little to lose, so the Afghans effectively hijacked the ship. Nobody has clean hands.

There is no tidy or consistent policy available. Barriers must be maintained to prevent a free-for-all, but millions of people have to be allowed through them both on humanitarian grounds and because the ageing societies of the industrial world need the immigrants. The process of choosing who gets in will never be fair, and it will not always even be humane.

So maybe we should view the Tampa incident not so much as a human rights disaster (for none of the would-be migrants has been killed or hurt, and they truly were illegal), but as the year’s most spectacular public relations disaster. This sort of thing goes on all the time, but more adroit governments manage to keep it from becoming a media drama.



Cup of woes

Sir — The defeat of the giants of soccer, Brazil, in the hands of their arch-rivals, Argentina, shows the bad stream of luck that the former have been facing of late (“Brazil lose to Argentina, back in doldrums”, Sept 7). This adds fuel to our worst nightmare that for the first time in the history of the world cup, the Brazilians may fail to qualify the prestigious tournament. After the dramatic defeat suffered in the last world cup final, the Brazilians seem to have lost confidence as a perpetual champion in the game of soccer. They have been plagued by problems ranging from injuries of key players to crises within the Brazilian federation itself. In the recent qualifiers, the team has been lacking a number of vital players, such as, Ronaldo and Romario. Also the constant changes made with regard to coaches proved to be fatal for the most popular soccer team. The Brazilian federation should act now to ensure the qualification of their country before a nightmare is to come true.
Yours faithfully,
Kankana Mukhopadhay, New Delhi

Change of chairs

Sir — The recent shuffle in the council of ministers of Atal Bihari Vajpayee will give much needed encouragement to some of the beleaguered departments which have not done much to push reforms speedily and ensure that the budget proposals were implemented (“PM shake-up pleases and punishes”, Sept 2). Although the expansion has tried to give the impression that a dynamic team is being created, it appears to have been done with an eye to the assembly elections in Uttar Pradesh. Caste considerations also seem to have influenced it.

However, a cabinet reshuffle will not solve problems of governance till the number of ministries is reduced, more to improve efficiency than to cut costs. It is urgent that the present set of ministers try their best to put the economy on the high growth path.

Yours faithfully,
Harmeet Singh Chawla, Haldia

Sir — The recent Union cabinet reshuffle shows clearly that those who are efficient and appreciated by the public are not the greatest of favourites with the people in power. Why else would Jagmohan, the former urban development minister, who was working against encroachment in Delhi, be shifted to another ministry? Can Ananth Kumar, the new urban development minister, finish the task he started?

Yours faithfully,
M. Kumar, via email

Sir — Inducting new faces and promoting or demoting ministers are indeed the prerogative of the prime minister and therefore should not cause raised eyebrows. But Atal Bihari Vajpayee has got himself dragged into a controversy by saying that the criteria for the reshuffle were “past performances, preferences (of individual ministers) and the need to induct the young generation”.

While Ram Vilas Paswan was ostensibly shifted from telecommunication to labour for granting concessions to the telecom employees, Sharad Yadav got the axe as he was perceived to be against the disinvestment of Air India. In both these instances, the prime minister seems to have been guided by past performances of the ministers concerned. However, going by this criterion, the finance minister, Yashwant Sinha, should have been the first to be sacked, having proved unequal to the task of rescuing the moribund capital market, and also beset with scandals. The retail investors have left in droves and there has not been a single major public issue in the primary capital market for a long time now. Surprisingly, Sinha abdicated responsibility by attributing the recession to the general slump in the world markets.

Shahnawaz Hussain’s appointment as cabinet minister is no doubt a move designed to woo the minority vote bank in the forthcoming Uttar Pradesh assembly polls. Vajpayee does not seem to have been very just while reshuffling his cabinet.

Yours faithfully,
Sankar Lal Singh, Calcutta

Reserved for the year end

Sir — The latest annual report of the Reserve Bank of India has exposed the sorry state of the Indian economy. Significantly, when the RBI announced its credit policy in April 2001, it painted an optimistic picture by projecting a gross domestic product of 6 to 6.5 per cent for the current fiscal year. Within four months of this, the RBI feels that it is better to be discreet than bold, as the economic deceleration is continuing for the second year.

The RBI has raised doubts over the planning commission’s optimism about higher growth in the medium term. It is not possible to achieve 8 per cent growth rate in the tenth plan unless the industrial sector grows at a pace of 10 per cent. That seems impossible in this lacklustre economic situation. In the last financial year, this sector grew at a rate of 5.6 per cent, that continues in the current fiscal year too. In the first quarter, it fell below 2 per cent. The RBI admitted that its own previous projection assumed that the industrial slowdown would be reversed with the expected favourable monsoon.

The annual report has noted that the major cause for concern is the prolonged recession in the sector. But the government has done nothing to create adequate domestic demands. Moreover, the huge foreign exchange reserves of $ 44 billion were not channelled for investment in the infrastructural sector.

Yours faithfully,
Abhijit Roy, Jamshedpur

Sir — The RBI’s annual report, mentioning an estimated GDP of 5.2 per cent in the year 2000-01, is an indicator of the performance of the government in general and the finance ministry in particular. There is no hope of the 8 per cent annual growth rate envisaged in the tenth plan. This is not due to world recession, as Yashwant Sinha would have us believe, but owing to scandals involving politicians, officials, businessmen, stock and share brokers, financial institutions and so on. The Unit Trust of India scandal, like the Ketan Parekh scandal before it, took place because the recommendations of the securities and exchange board of India were not followed.

It is difficult to believe that the gross domestic savings situation has improved, as is being claimed. Savings interest on deposits of banks and other lending institutions have been reduced. If, in spite of this, savings have improved then it can only be concluded that black money is being deposited. All this indicates a huge fiscal deficit and a heavy tax burden on citizens in the next budget. In this context, is it not selfish on the part of the members of parliament to increase their salaries threefold?

Yours faithfully,
B.S. Ganesh, Bangalore

Parting shot

Sir — It was good to read Amit Chaudhuri’s “Secrets and treasures” (Sept 2), about the forgotten painter, Sudhir Khastgir, whose 94th anniversary falls on September 24. Apart from being a painter, Khastgir was a sculptor too, and got a fellowship of the Royal Society of Arts, London. People of my generation were familiar with his paintings, as they were often printed in journals like Prabashi, Bharatbarsha, and Modern Review. A disciple of Nandalal Bose, Khastgir’s forte was line drawings, though one could detect the influence of his teacher in them.

Chaudhuri has left out, perhaps intentionally, one important aspect of Khastgir’s talent. He was a delightful writer of poems and stories for children. These were mostly published in Mouchak, the most popular children’s magazine of our time. I remember his highly entertaining doggerel, “Boxing”, which began, Lal Singh, Nil Singh/ Khelechhilo boxing (Lal and Nil Singh/ Were playing boxing). Khastgir’s short story, “Bhikhu Majhi”, exploring the theme of adult literacy, was a favourite of mine, more so because of the beautiful illustrations by the author himself.

Yours faithfully,
Ashoke Sen, Calcutta

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