Editorial 1
Editorial 2
Budget with a mild flavour
Letters to the editor


Guns �n potatoes

The carnival of triumphs at 1, Anne Marg, Patna, is rapidly becoming something altogether more fraught, brittle and grim. Ms Rabri Devi�s swearing in as Bihar�s chief minister on March 11 may be the culmination of a series of spectacular electoral performances for her husband, Mr Laloo Pasad Yadav, and their party, the Rashtriya Janata Dal. But the sordid underbelly of this victory has already begun to show. The Central Bureau of Investigation has sought the governor�s sanction to prosecute Mr Yadav and Ms Rabri Devi in a disproportionate assets case, for which the Bharatiya Janata Party chief in Bihar, Mr Sushil Modi, has already � unsuccessfully � tried to prevent Ms Rabri Devi�s swearing in. Moreover, the inevitable aftermath of the frenzied horsetrading is beginning to fray Mr Yadav�s nerves. Pestered with demands from his supporting legislators and haunted by the thinness of his majority, Mr Yadav is now having to grapple with the tyranny of electoral and coalition arithmetics.

The CBI charge has, from the start, got irreversibly politicized � and therefore lost its effectiveness � as the BJP�s last, desperate lunge at its adversary. Mr Yadav has already begun to turn this to his advantage, being a past master at projecting himself to his electorate as the victim of communal adversity. Witness his magnificent coopting of the enemy�s �jungle raj� image as a potent campaigning tool. Besides, trying to frustrate RJD rule by bringing corruption charges against Mr Yadav is like attempting to pull down the Third Reich by bringing violation of human rights charges against the f�hrer. A more disturbing sense of the precarious is, perhaps, afforded by the spectacle of instability, uncertainty and fragmentation that confronts Mr Yadav and Ms Rabri Devi in the possible configurations of the assembly. The drama remains one of wary suspensions and deferred decisions. The composition and character of the coalition government, apart from its certain unwieldiness, is still far from determined. The Congress, irresolute and internally divided, has deferred its final word for the time being, trying to pass off, as ever, befuddled cluelessness as high deliberation. The quixotically highminded tone of their common minimum programme seems singularly unsuited to the actualities of Bihar�s surrealpolitik. The left parties are also suspended between opposition and abstention, between the jungle and the mahajungle, as one party member vividly puts it. The oppositional structure of the assembly has broken down, with the coalition having to accommodate within itself ideologically opposed elements. The BJP-led opposition is itself fractured, with the Samata Party and the Janata Dal (United) opening themselves to Mr Yadav�s overtures. There is also disagreement over who is to lead the opposition, given Mr Nitish Kumar�s current ignominy. On both sides of the floor, too many conflicting conditions, bargains and allegiances have to be integrated.

Rising above the discourse of democracy, development and empowerment that seemed free for all in the elections, are two compelling images of the anarchy that continues to energize and devastate Bihar: one of Mr Yadav�s merry men, on a victorious high, dancing in his potato fields while repeatedly firing his gun into the air, and the following day, in the Garwah district, eight jawans blasted to bits by a Naxalite landmine. The new � or the old � government will have to reckon with this anarchy within and without.    


Lawful study

As lawyers in New Delhi are getting into position for their relay hunger strike in protest against the police lathicharge on them, two unremarkable developments seem to bode better things in the long run for the judicial system in the country. The bar council of India has ordered that all evening law colleges should close down from the forthcoming academic session of 2000-2001. That the evening colleges have the option of changing into day institutions is well within the logic of the bar council. It feels that with the recent updating of the syllabus, evening colleges with two or two and a half hours of classes, taught by part-time teachers who are practising lawyers, would be woefully inadequate. As a matter of fact, this is not merely an issue of failing in the pursuit of excellence that the council has mentioned. Evening law colleges, initially intended to offer an extra avenue for professional training for working people, have no academic function. They are centres for acquiring, as easily as possible, a bit of paper certifying to what can be best called a superficial skill. Lawyers are always in demand. The skill acquired � sometimes with the help of unfair means in examinations, unfortunately � can bring in a good bit of money in lean times. By demolishing this infrastructure, the bar council is doing the legal profession a deal of good. The less the country has of quick-fix lawyers, the better.

At a completely different level of the judicial system, the Delhi high court has ordered the release of 200 undertrial prisoners against personal bonds after waiving the surety condition. This is an important step towards the alleviation of the unspeakable conditions of undertrials throughout the country. The released prisoners are mainly petty offenders, with bail granted and no one willing to stand surety. They, like many others around them and before them, could have stayed in prison for most of their lives had the high court not taken this decision. Many problems in Indian courts would be solved with a little less of pen pushing and a little more of purposeful thinking. The abolition of evening colleges and the release of undertrial prisoners on personal bonds both show signs of the latter.    

Some like their coffee strong. But, all of us do not mean the same thing when we ask for strong coffee. Only my wife and I precisely know what I want when I ask for strong coffee.

This time, many people wanted a strong budget, a �tough� budget. Many are disappointed. But, what did the majority want in the clamour for a tough budget? The finance minister represents the largest party in Parliament. As the elected representative of the people, he can claim that he knows best. He can claim he has given us a budget with a flavour that will suit the average citizen�s taste. He can also claim that it is a budget that is tougher than what it could have been otherwise.

Management of a coalition is an arduous task. Had the budget been any stronger, there would have been too many demands for rollbacks � even from within his coalition � and the risk was not worth taking. If he is right, then the average Indian did not really want a tough budget, what he wanted was a budget with mild flavour.

There are already complaints about whatever �tough� measures the minister has proposed. Stalwarts of the National Democratic Alliance, notably N. Chandrababu Naidu and Om Prakash Chauthala, have disapproved of the proposed rationalization of fertilizer subsidy. The export lobby is complaining about the phased withdrawal of incentives under Sections 10A, 10B, 80HHB, 80HHBA, 80-O, 80HHC, 80HHF, 80HHE, 80HHD, 80-R, 80RR and 80RRA.

The corporate establishment is bitter about the enhanced dividend tax at the rate of 20 per cent, and has dubbed it �double taxation�. Given all these complaints, whether the average Indian wanted a tougher budget is a debatable point. Nevertheless, there are sound technical reasons why a budget with a stronger flavour would have been good for the growth prospects of the economy.

The 2000-2001 budget came in the backdrop of a favourable macroeconomic situation. Growth is buoyant, inflation is low, and the foreign exchange situation is comfortable. It is understandable that the minister did not want to disturb the momentum of growth that appears to be picking up. �Sentiments� could be hurt, bears could outnumber the bulls in Dalal Street and upset the party. However, deficit is a palpable problem. We have the distinction of being in the super league of nations in terms of the deficit. When we talk of the deficit, we are reminded of not falling in the trap of deficit fetishism.

No, indeed we should not. Deficit control is not the be all and end all of governance, but it is a necessary condition of good governance. Furthermore, there is a strong correlation between high deficits and balance of payments problems. We have had two such crises already at the beginning of the Eighties and the Nineties.

The news from past numbers is not encouraging. For 1998-99, the deficit, which had been budgeted to be Rs 91,025 crore in June 1998, and revised substantially upwards to Rs 103,737 crore in February 1999, turned out to be even higher at Rs 113,349 crore. That was a slippage of as much as 1.25 per cent of gross domestic product. The deficit numbers for 1999-2000 look smaller than the figures for the previous year because of the exclusion of about Rs 25,000 crore of the states and Union territories� share of small savings. But even in terms of these smaller numbers in 1999-2000 again, the deficit budgeted at Rs 79,955 crore in February 1999 has been revised upwards to Rs 108,898 crore in February 2000. As a proportion of GDP, the slippage in 1999-2000 is already a good 1.5 per cent.

While we keep worrying about the large fiscal deficit budgeted by the minister, the sanctity of the budget itself is being lost through these large slippages. The Reserve Bank of India has already commented on the �bad marksmanship� of the state governments.

The Centre should not be open to the same criticism. The deficit, when computed on an old basis including the states� share of small savings, is Rs 136,103 crore or seven per cent of GDP in 1999-2000, and is budgeted to be Rs 143,275 crore or 6.5 per cent of GDP in 2000-01. The deficit is getting close to where we were in the crisis year of 1990-91, let us hope that there will be no slippage beyond the budgeted figure in the coming year to make matters even worse.

The government needs to rapidly reduce the deficit to create conditions for continued macro-stability, to bring interest rates down and open up fiscal space for augmenting expenditure where it is needed the most, namely, basic education and health care, and infrastructure such as roads. Only enhancing revenues, and curtailing expenditure on various non-essential items can bring down the deficit. Revenues have to be enhanced mainly by improving tax administration, simplifying rules, and removing exemptions.

Two items of expenditure that must be controlled are the salary and wage bill, and subsidies on non-merit goods. Proper expenditure management will not only reduce the deficit, but also help improve the effectiveness of government expenditure. The government has to transform itself to an efficient deliverer of essential public goods and services.

On the basis of the new definition of the deficit excluding the states� share of small savings, the minister has budgeted for a fiscal deficit of 5.1 per cent of GDP in 2000-01, compared to 5.6 per cent in the revised estimates of 1999-2000. As much as 0.3 percentage points of the 0.5 percentage points reduction in the deficit is from a projected increase in revenues from disinvestment. As a proportion of GDP, much of the benefits from a 0.1 percentage point increase in revenue receipts and 0.15 percentage points reduction in revenue expenditure has been utilized for augmenting capital outlays by 0.1 percentage point.

Augmenting revenues from taxes is absolutely essential for reducing the deficit. But, much of this revenue enhancement has to come from simplification of rules and procedures, removal of exemptions and widening the net, improving administration, and plugging loopholes. All this is urgent, and needs to be done in a timebound manner.

In the budget for 2000-01, there are several important steps that have been taken for revenue enhancement. The proposed intensification of the drive for permanent account number allotment, extension of the one in six scheme to an additional 79 cities, use of PAN by the Central bureau of excise and customs and directorate general of foreign trade as business identification numbers will improve administration.

The introduction of Central value added tax, the extension of maximum retail price for about an additional 24 items, dispensation of statutory records, and system of fortnightly payments will lead to better compliance. Similarly, the phased withdrawal of export incentives will simplify direct tax administration. The argument that exports need to be encouraged is well taken, but that can be done through an exchange rate policy. Let us avoid complicating the tax system for this purpose. The minister, however, has not dispensed with the scores of exemptions that continue to prevail under excise.

On the expenditure side, little has been done to cut down the size of the government establishment. The size of the establishment has been budgeted to go up by more than a lakh to 38,55,548 in 2000-01 from 37,45,661 budgeted for 1999-2000. However, some steps have been taken to cut down on untargeted subsidies. The subsidy bill, which in 1999-2000 has been revised upwards to Rs 25,692 crore from the budgeted amount of Rs 23,798 crore, is projected at Rs 22,800 crore for 2000-01.

Between 1999-2000 and 2000-01, subsidy on food is budgeted to come down by Rs 900 crore to Rs 8,100 crore, on sugar by Rs 125 crore to Rs 110 crore, and on fertilizer by Rs 599 crore to Rs 12,651 crore. There are already demands for rolling back some of the price adjustments needed for curtailing subsidies. Given that the minister has given us a budget with a mild flavour calculated to minimize the risks of rollbacks, let us hope that he implements all that he has proposed and there is no further dilution of the brew.

The author is director, National Institute of Public Finance and Policy, New Delhi    


Cut from the same cloth

Sir � Shekhar Kapur�s submission to the release of his film, Elizabeth, with the two cuts insisted upon by the film certification appellate tribunal seems sheepish, especially in view of his earlier threat not to distribute his film in India if the censors snipped off three scenes (�Frustrated Shekhar ushers in Elizabeth�, March 4). But this should not surprise anyone. Kapur�s initial hullabaloo was merely a ploy to bargain with the authorities. Moviemaking is a business and no filmmaker can afford to ignore India�s vast market. Kapur, for one, has never run short of marketing gimmicks like organizing an �exclusively for women� show for Bandit Queen. Filmmakers make a lot of noise about artistic freedom but an essential part of their trade is to keep the powers that be in good humour. Anti-establishment moviemaking is a myth in India. Look at Deepa Mehta. Filmmakers, like politicians, should realize that the masses are not so gullible that they won�t cotton on to their game plan.

Yours faithfully,
Tapan Pal,

No women, no cry

Sir � Subhro Saha�s article, �Fuel for female power�, March 8, was indeed apposite on International Women�s Day. For the writer could not have better exhibited a more typically �masculine� vision of what gender issues mean to the society today � nothing. Under the circumstances, Saha�s attempt to be sympathetic to the women�s cause deserves applause.

He writes about those women who have made a place for themselves in a male dominated society by finding employment in so called �masculine� jobs. Is that the reason why they should be extolled? The writer obviously thinks that jobs which are tougher are better handled by men. So women capable of doing the same should receive plaudits.

Have not thousands of young men had similar, if not worse, ordeals in the job market? Why can�t these women be treated as �human beings� who are having a tough time in the job market like anyone else? And why ignore working class women who are far worse off because of less pay than their male counterparts?

The reason these women received special attention on Women�s Day from the writer is possibly because they appear to conform to the stereotypical �modern woman�, who has successfully maintained her looks and is still doing hard work outside � no matter what the job. After all, without the tinge of glamour, is any issue involving women worth a second look? Or else their �pink shirts and black jeans� would not have been mentioned at all.

One can easily see that these girls will not remain employed at the petrol pump till �retirement�. The irony is that none of these girls appear to be aware of the new trend in the job market. Women are now being offered jobs that were so long denied to them. But this is done chiefly by cashing in on their �feminine� charm. They are employed as representatives of their sex, and not as desexualized individuals. Their feminine charm is meant to attract customers.

Sadly, feminism and the women�s movement have acquired innumerable warped connotations, and thus the writer�s attempt to bring out the irony in the story of the lives of these women seems �natural�.

But the purpose of feminist movement(s), more than anything else, is to make the point that women should be treated as individuals, rather than as representatives of their sex. The special treatment received by these women, which is meant to underline the irony in their success, defies this notion.

Yours faithfully,
Anita Lal,

Sir � International Women�s Day appears to have brought the Calcutta traffic to a standstill, from the picture on Metro, March 9. And it turned out that a city which is �tolerant� to traffic snarls and several processions every day found it irritating.

The caption states that the woman carrying a banner, �Darkness to Light� is �at least an expression of hope, if not conviction�, as members of voluntary organizations �marched through the city, bringing traffic to a standstill�. Are we confused about what Women�s Day means to us? It is unreasonable of voluntary organizations to bring city traffic to a standstill, but people also lose restraint because they feel they have nothing to do with women�s issues. It would be wiser for these organizations to work on �gender issues�, rather than �women�s issues�.

Yours faithfully,
Saheli Das Gupta,

Communication gap

Sir � The headline, �Tug of war over Calcutta, Chennai telecom circles� (March 4) and the first few paragraphs of the report give an impression that I am at loggerheads with the Union minister for communications, Ram Vilas Paswan, on the issue of the transfer of Calcutta and Chennai telecommunications circles to the Mahanagar Telephone Nigam Limited. I would like to clarify. For quite some time, the proposal to transfer the circles to MTNL has been supported by the government of Tamil Nadu and members of parliament of West Bengal.

On its part, MTNL was willing to take over these charges if the government decided to do so. However, in my discussions with senior officers of the department of telecommunications, it transpired that given the overall picture of corporatization of DoT, the government thought it may not be desirable to transfer the charge of these two cities to MTNL.

As one can understand, it is not possible for MTNL to get into Chennai and Calcutta if the government of India, which is operating the services at these two places, decides in its interest not to give the additional responsibility to my company.

In view of this clear definition of roles of the MTNL and the government of India, there is no question of me, the Union minister of communications and the secretary, department of telecom services, being at loggerheads. I have excellent relationships with those above mentioned.

Yours faithfully,
S. Rajagopalan, chairman and managing director, Mahanagar
Telephone Nigam Limited, New Delhi

Sir � While trying to renew my internet account recently, I realized that I did not remember the password and called up the telephone numbers on the receipt for help. I was told to call up two other numbers, which I did about 15 times. After talking to several uninterested people all of whom wanted to transfer me to other uninterested people, and listening to myriad recorded messages like �This is the voice recording system but you cannot record your message now� and �Sorry, the operator is busy, please call some other line�, I reached an officer who was of some help.

This officer asked me to file a written application along with a fee of Rs 100 at the Videsh Sanchar Nigam Limited office. I asked him whether there was any way this could be done online, to which the reply was an emphatic no.

I reminded him that I had, in the past, received such help from the VSNL�s help-desk after providing my identity. I was told that it was a mistake and that if I told the officer who had rendered such help, suitable action would be taken against him.

Disgusted, I gave up, asked my banker to stop clearance of the VSNL cheque and bought the service from a private entrepreneur.

Yours faithfully,
Ujjal Sinha,

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