Editorial 1
Editorial 2
Some export advice
Letters to the editor


Roaring again

With a jack-in-the-box vitality that would have fascinated the brothers Grimm, Mr Laloo Prasad Yadav is back as the head of what has come through as the single largest party in the Bihar assembly elections. As political opponents, onlookers, psephologists and perhaps Mr Yadav himself come to terms with their incredulity, the Rashtriya Janata Dal�s astonishing recuperation affords another opportunity to consider the complex set of factors that makes Bihar�s electoral character so bizarrely unpredictable. In the apparent absence of any irregularities, these results seem to indicate some enduring, yet baffling, truth about the entity that the RJD, the National Democratic Alliance and the Congress have severally confronted.

Bihar�s electorate is a fragmented electorate, each fragment protecting its own interests with an indomitable canniness that juggles together class, caste, land and region. When this is combined with the essential disunity within the NDA coalition, trying to accommodate under a single umbrella its many fragmented interests, the result can only be what Mr Yadav describes as a �fractured mandate�. Mr Yadav�s figure � physically, politically and rhetorically � has come to signify a unity of interests that the variety entertainment provided by the NDA failed to embody. What Mr Yadav continues to offer to the broad coalition of electorate comprised of backward classes, Dalits and Muslims is the possibility of articulate representation. This is a form of electoral empowerment that has very little to do with the keeping of promises in actual, material terms. Pervasive corruption, criminalization, imprisonment and every other feature of what has come to be known as his �jungle raj� � all made flamboyantly part of his rhetoric of rustic transparency � can be over-ridden by the sense of this identity of image, voice and interests. This fractured polity was also welded together � once again through sheer rhetorical energy more than anything else � by projecting the compelling image of a common enemy. In an electorate whose most deprived and illiterate sections are intensely politicized and remarkably well-networked, awareness of the NDA government�s saffron agenda unites a diverse range of peoples, influencing their particular electoral behaviour in spite of concerted campaigning. The Maithil Brahmins of Mithilanchal, the backward Kurmis and Koeris of central Bihar or the urban constituencies of the Koshi belt � all had different equations to forge with the NDA and the Congress. These equations, coming together in a caste and class arithmetic, brought about the RJD�s spectacular improvement in fortunes. After this display of political intransigence, often perceived reductively as �voter illiteracy�, it remains to be seen whether the governor makes this triumph the basis of his call to leadership.    



The little portion of the Kargil review committee report released to the public tells a sorry tale of India�s national security system. The picture the committee gives is of a set of organizations which barely communicate with each other, never introspect and are lackadaisical about cross checking information or following up leads. The report concentrates on how India�s many intelligence bodies failed to predict or notice the forcible entry of hundreds of Pakistani infiltrators. The report says Kargil was a �complete and total surprise� to the Indian government, military and intelligence bodies. The research and analysis wing, the apex intelligence body, is given the lion�s share of the blame. And there can be little question RAW was amateurish in its handling of information. But the committee is too easy on army intelligence. It excuses the military for failing to recognize the import of Pakistani preparations for Kargil, blithely saying this �mindset� arose from past Pakistani practice. This is a curious argument. If the Pakistani military is expected to act in the same way every year, there is no reason to have a director general military intelligence. The lack of coordination among the various bodies borders on the criminal. Intelligence bureau did not pass on information to RAW. If the army told RAW something, the latter did not bother to follow it up. The joint intelligence committee, supposed to serve as a clearing house, is portrayed as brain dead. It does not meet regularly. Its meetings are attended by junior officers. Every spy worth his salt knows collecting information is easy. The real test is the arduous process of sifting through all the reports, cross checking them and analyzing them. The final step is to implement policy based on the distillation of all this information. In India, it seems, the second stage of this process is almost nonexistent.

The chairman of the committee, Mr K. Subrahmanyam, has correctly said he was not empowered to blame individuals. However, the lack of accountability is probably the root cause of the decrepitude of India�s national security structure. If mistakes are never noticed, work is never overseen and wrong acts are never punished � what is the incentive for the people involved to ever do anything but the bare minimum? The report notes the lack of any mechanism for �testing the agencies, monitoring their performance and reviewing their records to evaluate their quality�. It concludes that various groups � politicians, bureaucrats, soldiers and spies � have a vested interest in the status quo. The shroud of secrecy surrounding the remaining 2,000 plus pages of the report does not bode well for any future corrective activity. The Henderson-Brooks report which dissected the 1962 border war has yet to be revealed to the Indian public, its recommendations collecting dust in the timeless shelves of New Delhi�s ministries.    

India�s growth strategy and the budget for 2000-01 should focus heavily on exports. Export-led growth in services is one of the most interesting developments of the Indian economy. But export led growth in manufactures, the more traditional textiles and apparel, in electronics and other labour intensive operations remain areas where India could do a lot more than in the past.

India�s export environment suffers from several institutional weaknesses. India�s labour laws, noted unfavourably in the 1999 Global Competitiveness Report, make it very costly to sack workers in enterprises of more than 100 workers. The result is that formal sector firms � those that are registered and pay taxes � are loath to take on new employment. The vast majority of India�s employment is informal in small, tax evading, inefficient enterprises.

Equally remarkably, India�s legislation continues to restrict the entry of medium or large firms, or the growth of small firms into medium or large firms, in several areas of potential comparative advantage. Thus garments, toys, shoes and leather products continue to be reserved, to a varying extent, for small scale producers.

Such restrictions virtually assure China�s dominance in these sectors compared with India. India�s tax and tariff structures similarly remain anti-export biased. India�s high overall tariff rates, especially tariffs on intermediate products that are used by exporters, impose a heavy indirect tax on export competitiveness.

Furthermore, the Union budget for 1998-99 imposed an additional levy of eight per cent on imports, which was later reduced to four per cent. There are duty drawback systems to reduce this anti-export bias, but such programs are administratively burdensome and often too costly to use effectively.

Finally, the regulatory attitude to foreign direct investors, who could be the fuel for India�s export drive, continues to be ambivalent. The government promotes FDI on the one hand, but then maintains regulations against full foreign ownership or insists on lengthy approval processes, on the other.

The development of industrial parks for exports should be greatly intensified and enhanced. Private developers need the freedom to acquire urban and semi-urban land to develop privately financed infrastructure in support of exports.

The government must take urgent measures to reduce export costs, including private sector provision of port services, zero tariff ratings on capital and intermediate goods imports used for export (based on an effective duty exemption scheme), enhanced export oriented infrastructure � especially roads to the airports, reliable power supply and telecommunications facilities to support export zones.

As suggested by the Abid Hussain committee, the reservation of labour intensive sectors to small scale enterprises should be scrapped. This will give India a chance to provide stiff international competition in labour intensive exports to countries such as China.

The government should actively encourage inward investment in export oriented sectors, allowing 100 per cent foreign ownership without administrative interference, and with the provision of generous tax holidays as necessary to attract internationally mobile capital from other locations.

China has achieved a lot more in manufactured export production than India and for no particular reason. India has the resource base, the entrepreneurship, a coastline, a vast labour force. It has everything coastal China has had except the interest of government which neglected this for a long time and which even today under-emphasizes the role of industrial facilities, under-emphasizes the role of infrastructure, of land area, of the effective port facilities that one needs to compete with China.

But it is a place where one could find tens of millions of jobs over the next few years in real, significant, foreign exchange earning private sector activity.

It is important to mention, in addition to labour intensive manufacturing exports, India�s clear and growing capacity in service sector exports based on information technology. Here, as in labour intensive exports, Indian government policy could do much more to spur export growth.

On the plus side has been the government�s long term commitment to the Indian Institutes of Technology. More recently has been the government�s support for software technology parks in Chennai, Bangalore, Pune and other cities. These are the information technology industry equivalent of the export processing zones for manufacturing industries. There are serious negatives however. The continuing state monopoly of Videsh Sanchar Nigam Limited in international telephony seriously raises the costs of telephone and information technology services in India.

VSNL is doing considerable damage to India�s international competitiveness in the infotech sector. India�s telephone density is abysmally low � 1.3 per hundred in 1995 compared with around 62.6 per hundred in the United States. Charges for domestic long distance and international telephone calls in India are among the highest in the world, largely due to lack of competition. Physical infrastructure for data transmission within India, like fibre optic cables, remains underdeveloped despite some recent progress.

India is becoming one of the most important players of the world in the infotech sector and it is the fastest growing foreign exchange earner for India. The government could do more for this industry, not through direct subsidies necessarily, but through liberalization of telecommunications. The latter would mean lower priced telecom services by allowing new entry of major international players in telecom who would lay down a tremendous fibre optic network in India, increase bandwidth and put India more closely in line with the international scene.

The government should find resources to support basic science and research and development in this sector to some extent. India has world class engineers and scientists who have already brought India up in an important way in this sector and could keep India in the forefront of this new technology.

Exports are part of what the budget must address to further reform, attain and sustain higher rates of gross domestic product growth. Others include a general greater openness of the economy, taking off items from the small scale sector reservation list, deregulating India�s private sector � including liberalizing labour laws and exit policies, demonopolizing infrastructure and decentralizing economic policymaking.

The fiscal deficit remains high. Ominously, the ratio of internal public debt to GDP has continued to rise and the debt service burden has risen even faster because of rising interest rates. The expenditure-GDP ratio needs to be brought down considerably. The composition of government spending is skewed towards unproductive, current expenditures and away from basic infrastructure and vitally needed spending on human resource development, including primary health and education.

Jeffrey D. Sachs is director and Nirupam Bajpai is research fellow at the Centre for International Development, Harvard University, US    


Friends all from left to right

Sir � I had thought West Bengal�s left leaders were the only ones to maintain contact with Fidel Castro. And then too not all of them had implicit faith in what is perhaps the last old style communist regime. Buddhadev Bhattacharya might go all the way to Cuba to get his eyes checked, but his boss, Jyoti Basu, will rely only on London physicians. So what is the Bharatiya Janata Party doing flirting with Cuba�s communist dictator (�Date with Castro after Clinton call�, Feb 25)? Or is it a ploy to muffle domestic criticism of the government�s going gaga over Bill Clinton and show that India still has the independence to decide who are its friends and who its enemies? The United States, for one, will only be amused at such childish tactics. The hordes of refugees who routinely escape Castro�s paradise for the proletariat, braving everything from storms in the Gulf of Mexico to US patrol planes, to begin life in the consumer�s paradise, US, is all the evidence needed of its victory. But evidently the Indian leadership is not convinced.

Yours faithfully,
B. Bhattacharya,
New Delhi

Captain�s burden

Sir �It is a matter of great pride and joy that Sourav Ganguly has been selected as the captain of the Indian cricket team. The Calcutta boy has had a great struggle to make it to the top. Pankaj Roy once led the Indian team but this is the first time a Bengali has been officially appointed captain. Ganguly has braved a great many storms � being severely criticized for being �lazy� both on and off the field. Indeed, he has changed from a cricketer whom the team could do without, to an indispensable part of it. Ganguly has become a person the team now relies upon heavily. Ignoring cricketers from West Bengal had become a part of the �tradition� of the selection committee till Ganguly proved his mettle through his consistent performances in one day internationals and test cricket. After the debacle in the recent series against Australia, Indian cricket possibly faced the greatest crisis in recent times, that of choosing a captain who can lead the team with confidence. Now that Ganguly has been unanimously chosen captain, the challenge to prove his abilities has been renewed all over again.

Yours faithfully,
Aishik Sen,

Sir � The inclusion of Mohammed Azharuddin and Nayan Mongia in the Indian cricket team for the current series against South Africa does not come as a surprise. However, the resignation of Sachin Tendulkar from the position of captain is shocking. He was appointed to the job till March 31, 2000. This is all the more surprising since he resigned immediately after the two players made a comeback. It would seem Tendulkar was not happy about their inclusion. Tendulkar, of course, went on record saying he was taking �moral responsibility� for the team�s failure in Australia. Noticeably, the coach, Kapil Dev, did not attend the meeting of the selection committee.

Both Kapil Dev and Tendulkar should have been more sporting about the selection committee�s decision to include Azharuddin and Mongia in the team once again. The episode exposes how the game of cricket has been tainted by dirty politics, especially in the last few years. Tendulkar may be a great batsman, but he has hurt his own reputation by the recent move.

Yours faithfully,
S. Banerjee,

Sir � The news report, �Sachin to step down as Azhar returns� (Feb 21), by Lokendra Pratap Sahi is biased. It reflects the correspondent�s bias against Mohammed Azharuddin, and an unreasonable support for Kapil Dev and Sachin Tendulkar. While Azharuddin�s minor flaws are inflated to appear as grave �crimes�, major blunders by Tendulkar and Kapil Dev are brushed aside.

The news report concludes, �When 37-year-olds make a comeback, a captain is made to feel terribly uncomfortable and a living legend gets humiliated, anything is possible.� This is a warped analysis of the situation. Since Hrishikesh Kanitkar and Jacob Martin, Azharuddin�s replacements, failed miserably in the recently concluded series, it was sensible of the selection committee to call the veteran player back. Tendulkar suggested that captaincy was thrust upon him, and that he was not ready for it. It is only likely that his batting will improve now that he has been released from the burden.

As for Kapil Dev, he has indulged in politics by pushing his personal likes and dislikes above the team�s interests. He was intent on keeping Azharuddin out of the team to settle �old� scores. The Board of Control for Cricket in India made a mistake in handing over the entire series in Australia to Kapil Dev before he had the chance to prove his abilities as coach.

Tendulkar�s resignation and the inclusion of Azharuddin and Mongia in the team are not as grim as they appear to be in the news report.

Yours faithfully,
L.D. Madappat,

Sir � Sachin Tendulkar�s decision to step down from the position of captain at a crucial juncture � when the team was to take on tough opposition in the form of the South African side � is shameful. It defies team spirit and nationalism, both of which cricketers should stand for. He has pressurized the management in the face of a crisis, in order to win public sympathy.

Instead of swallowing Tendulkar�s �logic� regarding the quitting of captaincy, the BCCI should take stern measures against him. If other cricketers can be censured for their follies, why should Tendulkar be allowed to be an exception?

Yours faithfully,
Syed Aftab Aslam,

Sir � The selectors of the Indian cricket team have destroyed cricket lovers� restraint by their repeated blunders. The question of captaincy is now uppermost in the minds of those who love the sport. Ajay Jadeja was ignored in a manner that was insulting to the cricketer. Not only was he deprived of the position of captain � that should have been his before the tour to Australia � but he was also excluded from the team. The question of his being �unfit� merely saved the selectors� face.

It was then a great surprise for the people to find that Sachin Tendulkar, in spite of his disastrous stint as a captain earlier, had again been given the captaincy. It was difficult not to accuse the selectors of bias. His stepping down, therefore, is no big surprise.

Yours faithfully,
Amit Doley,

Green is in

Sir � The decision taken by the Bharatiya Janata Party government to direct manufacturers to classify all food products into vegetarian and non-vegetarian is welcome. Food manufacturers have, so far, kept the consumers in the dark about the ingredients of products, so much so that vegetarian food products are often made with non-vegetarian items. This is unfair to all those who are strictly vegetarian. It is the right of every individual to know the ingredients of the products they are consuming from the market. Indeed, everyone should switch to vegetarian food habits as the love shown to animals by this move would far outweigh the utility of nutrients obtained from non-vegetarian food.

Yours faithfully,
Rajeev Bagra,

Sir � The news report, �Centre cooking up great food divide� (Jan 29), was consoling for vegetarians. Manufacturers selling food products in the market often evade their �duty� of specifying the ingredients. As a result, non-vegetarian products are often passed off as vegetarian. It would be a grave mistake to consider the demand as a question of seeking �purity� or �impurity� in food items. It is simply a matter of individual choice. In a country like India, where food habits are often determined by religion, consumers have the right to know the kind of food they are consuming.

Yours faithfully,
Abhilash Tibrewal,
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