Editorial 1/Quiet Indian
Editorial 2/Death�s duel
Making the most of it
Letters to the Editor

No one is happier than the Sri Lanka government following the visit of the minister of external affairs, Mr Jaswant Singh, to Colombo. The stray utterances of the National Democratic Alliance�s various Tamil components on the pleasures of partition had led Sri Lanka to wonder how committed the ruling government in New Delhi was to the island nation�s unity. For Sri Lanka the most important line in the joint statement issued in Colombo was that India supported the �unity, sovereignty and territorial integrity� of Sri Lanka. In the past few weeks Colombo had been as worried about India�s cautious approach to the latest battle for Jaffna, especially its unwillingness to tangibly buttress the Sri Lankan war effort, as it had by Mr M.Vaiko�s statements.

Mr Singh�s challenge has been to walk a narrow path that exists between the numerous conflicting groups who have an interest in Jaffna. New Delhi�s position has been clear. It does not want a Tamil state carved out of Sri Lanka, especially one governed by a fanatical Liberation Tigers of Tamil Eelam. The government recognizes there is no domestic support for a direct Indian military role in the civil war. Finally, it would also prefer Sri Lanka not seek hostile third party help in pressing its war. Hemmed in by these three negatives, Mr Singh�s options were limited. India�s policy has been made much easier by the fact the Sri Lankan army seems to have weathered the LTTE offensive. A military stalemate now exists around Jaffna. By dropping calls for a ceasefire as a prerequisite for talks, India seems to believe such a military equilibrium will last for sometime. India�s role in this stalemate has been minimal, limited to cutting off the LTTE�s seaborne supply routes. But New Delhi has quietly prayed against a decisive Tamil military victory for fear it would lead inexorably to demands for total independence.

The stalemate around Jaffna makes it possible for Mr Singh to shift to the second phase of his Sri Lankan diplomatic effort. Namely, finding a long term political solution to the island�s forever war. The need to put together a credible devolution package for the Tamils is the key message Mr Singh took with him to Colombo. This was not too hard to sell. The Sri Lankan president, Ms Chandrika Kumaratunga, had been trying to stitch together such a package before the fall of Elephant Pass. Sensibly, Mr Singh has said the details of such a package should be left to the LTTE and Colombo. After its limited battlefield success, the LTTE can be expected to demand more autonomy than Colombo had originally considered. Though much has been left to circumstance, Mr Singh�s policy has been built around a recognition of the limits of Indian influence and power over a deep seated, ethnic conflict. He has preferred to let the Sri Lankans fight it out among themselves and limit Indian policy to pushing a few broad concerns. It is uncertain what India would have done if the LTTE had succeeded in capturing Jaffna � probably a policy of diplomatic and economic containment of the peninsula until the LTTE had been tamed. But for now, Mr Singh�s policy of caution, of nudges rather than the knocking of heads, has allowed India to maintain a low risk, high profile stance during the latest chapter of the Sri Lankan civil war.    

In Bihar, even trends in violence move backwards. As massacre answers massacre in the Nawada district of central Bihar, what emerges is a pattern that recalls the traditional caste wars of the Seventies and the early Eighties. On June 12, twelve members of a Bhumihar family were slaughtered by a gang widely believed to have been led by the Kurmi gangster, Mr Ashok Mahato. This massacre avenges its symmetrical opposite, the hacking to death of five Yadavs by a Bhumihar gang, led by Mr Akhilesh Singh, also in Nawada, on June 4. Until recently, Nawada used to be a Naxalite stronghold, where the violence was structured by the conflict between the Maoist Communist Centre and the private army of the upper-caste landlords, the Ranbir Sena. But with the Sena�s decline, owing to the arrest and subsequent confessions of some important leaders, the conflicts in the area � although just as bloody � are motivated by more traditional caste hostilities between the Bhumihars and Rajputs on the one hand and the backward castes (predominantly the Yadavs and also the Kurmis) on the other.

The structure of this caste-based violence is, however, more complex. First, the caste conflict is played out as gang warfare, as the exchange between the Kurmi Mr Mahato and the Bhumihar Mr Singh illustrates. The Lakhisarai massacre in May was founded on the caste conflict between another pair of mafia leaders, Mr Janardhan Singh (Bhumihar) and Mr Hareram Yadav. Second, this caste-cum-gang conflict is usually politically aligned. Mr Akhilesh Singh�s wife, Ms Aruna Devi, was elected to the assembly as an independent candidate and most of the massacred were his kin. On the Yadav side, Mr Hareram Yadav is the cousin of the Rashtriya Janata Dal legislator, Mr Pralhad Yadav. It is interesting to note that the Yadav massacre immediately pulled Mr Laloo Prasad Yadav and Ms Rabri Devi to the scene, whereas the Bhumihar massacre got the governor and the Union home minister, and quite conspicuously, not the first couple. Finally, and most alarmingly, this caste-gangster-politician nexus is mediated by the police. The complicity of the Yadav deputy superintendent of police in the Bhumihar massacre has been widely alleged. In any case, the police are either complicit or helpless against the ascendancy of the politicized mafia. With caste, politics and the mafia operating in such perfect unison, �social justice� still remains Bihar�s unique forte.    

Indian trade and investment reforms since 1991 should not make the country complacent despite significant achievements. Let me first summarize the achievements. The 6.8 per cent growth in gross domestic product during the eighth plan period (1992-1996) exceeded the 6.5 per cent target. Our foreign exchange reserves will ensure that a foreign exchange crisis will not recur in the near future.

Service charges as proportion of our national debt are much less today compared with 1991. Thanks to improved access to imports, the wholesale price inflation and the consumer price inflation were at record low levels last year. Foreign institutional investors and multinationals have been flushing the information technology, communications and entertainment sectors with foreign capital.

The most challenging problem facing the Indian economy is the fiscal deficit, which is total government expenditure minus government revenue plus capital grants. The combined Union and state fiscal deficit for 1999-2000 is likely to be 10.5 per cent of the GDP, a figure that shows no improvement since 1991. This implies that the government has been living way beyond its means by subsidizing unproductive activities. Political favouritism, such as free water and electricity to farmers, financial help to sick industrial units, excessive administrative costs, and poor revenue collection, must be blamed the most. The government is financing this deficit from market borrowing, thus putting a short term pressure on interest rates.

One of the ways of reducing the fiscal burden of the government is to allow the entry of private domestic and foreign capital in areas where the taxpayer�s money is being wasted unproductively. The government, however, needs to get wiser about how to get a strategic investor to take an interest in making the sick industrial unit profitable. The 155 million Gas Authority of India Limited�s shares sold at $ 9.67 per global depository receipt, which was less than the prevailing domestic price.

The government would earn a higher price if a larger proportion of the shares were sold to the private investor. The government received bids from 10 companies after it decided to sell 74 per cent of Modern Foods Limited. This is an instructive lesson for all those who are working out the privatization of the insurance sector, Air India, Indian Tourism Development Corporation hotels, and a host of public enterprises that the government needs to pull out off.

The finances generated by disinvestment should be used to improve education and health in India. The east Asian and Chinese trade-led economic successes could not have been achieved without a level of health and education. Even in India, it is English education coupled with middle class schooling that has propelled India to the status of software giant. The benefits from improved education and health will be much greater if India can increase the spread of basic education and health.

The need of the hour is not government control over production but government regulation. Regulation ensures that competition and not monopoly practices rules the day. Regulators must understand the common good and promote it for the benefit of all.

For example, regulated competition in long distance telephony has drastically reduced the price of calls in the United States. Can the Indian regulator promote greater telecommunications access through cheaper rates in India, so that the vast majority of the Indian people can access information, education and health services through the internet? The quarrel between the Telecom Regulatory Authority of India and the department of telecommunications is not a healthy sign. We need to understand the effective institutionalization of regulation much better.

Regulation has an international aspect. Industrial country interests drive much regulatory norm making. For example, before the digital revolution the international telecommunications regime driven by the International Telecommunications Union, emphasized government control over telecom services rather than privatization.

Subsequently, the digital revolution and the consequent rise of new equipment providers and large service sector users of telecommunications in the US pressured their government to lobby for privatization in this sector. The US supported by the United Kingdom and Japan successfully shifted the arena of international bargaining from the ITU to the World Trade Organization where privatization was made into a norm.

The privatization of telecommunications with effective regulation is likely to be good for India. However, the telecom case points to the importance of actively pursuing one�s interest effectively in the multilateral arena where trade rules are made. T.N. Srinivasan, professor in Yale University, has argued that India would have negotiated a better deal on intellectual property if it had not decided to stay out of the negotiations leading to the trade related intellectual property rights agreement. Similarly, the regime on electronic commerce is still in evolution. The government needs to make up its mind about where its interest lies on a large number of issues. Only then can it pursue its interest by making appropriate alliances.

Last but not the least, India needs to fight aggressively for greater market access if it has to reap the benefits of trade. First, the textile sector has witnessed rising US protectionism. The level of US protection declined between 1993 and 1996, but was higher than the 1993 figure in 1999. The European Union�s level of protection, while less than the US�s, showed a similar trend. Given the importance of textiles for India�s exports, India could threaten the world with lax intellectual property protection if it did not get better access into industrial country markets.

Second, labour conditions are being attached to trade to keep the industrial country trade unions happy. This is despite the wellknown proposition that trade leads to a rise in wages. This proposition has been validated by the east Asian experience, despite very weak trade unions in these countries. If trade leads to rising wages, is it fair for the developed countries to expect high Indian wages before allowing for market access?

Then again, India has objected that ecological standards may become another non-tariff barrier to trade. The benefits from trade liberalization may not be realized if special interests in the US try to hide behind turtle excluder devices in order to check shrimp exports from India. If environmental concerns have to play their legitimate role, they must be delinked from the WTO. A purely scientific Global Environmental Organization could pursue the objective of enlightening the world about the real environmental problems.

In the not so distant past, the world woke up to the threat of ozone depletion as a result of the work of two British scientists published in the British journal, Nature. It was scientific assessment and negotiations handled by the United Nations environment programme and not trade sanctions, which paved the way for an agreement on curbing ozone depletion.

India has gained from the trade and investment liberalization initiated in 1991. However, the fiscal deficit has not been reduced since 1991. The government must sell off unproductive assets and concentrate on education and health. Second, investment liberalization brings with it the need for effective institutionalization of market regulation � an area where India has much to learn. India also needs to aggressively pursue its interests at the WTO so that it can use foreign investment and market access to improve the economic well being of its people.

The author is assistant professor, Centre for Policy Research, New Delhi    


Separated at birth

Sir � It is a good public relations gesture on the part of the Israelis to �scourge the length and breadth of their country� for L.K. Advani�s long lost classmate from Karachi (�Search for Advani�s Solomon�, June 12). I remember a similar fuss made over Rashid Latif�s reunion with his half-brother when the Pakistan team arrived in Calcutta for the World Cup inauguration in 1996. The costs of Partition in terms of human suffering and economic disruption were enormous and enduring. Yet, politicians in the two neighbouring countries of the subcontinent continue to inflame religious passions. Strangely, many of the more hawkish politicians are themselves victims of Partition. It was Advani�s party that allowed Bal Thackeray to get away with his injunctions against the Pakistani team. Again, the students who beat up a Pakistani shayar recently have affiliations with the Bharatiya Janata Party. Advani�s lost childhood friend makes a good story. Unfortunately, the sting in the tale has been all but ignored.

Yours faithfully,
Shalini Khanna, Calcutta

Massacre routine

Sir � The killing of 15 backward caste labourers in Hasanpur-Balurghat village of Lakhisarai district on May 11 makes Bihar the most hideous place in the country when it comes to lawlessness (�Massacre shatters Bihar shroud of calm�, May13). People have not forgotten the Bathani Tola, Shankarbigha, Laxmanpur Bathe, Senari and Lotogaon massacres. The government this time too, has announced an ex-gratia payment of rupees one lakh, a job, and a pucca house to the families of the dead. It is difficult to believe that the police was incapable of stopping these merciless killings.

Poor law and order situation in the state discourages new investors. Investment in the state in the last 10 years has been abysmal compared to states like Gujarat, Andhra Pradesh, Maharashtra and Tamil Nadu. Bihar provides 40 per cent of the total produce in minerals, but its industry and trade are among the most backward in the country. Old and established industrialists and businessmen are leaving the state principally because of the menace of kidnappers and extortionists.

The number of people living below the poverty line in the state has risen from 46 per cent to 56 per cent during the reigns of Laloo Prasad Yadav and Rabri Devi. The government�s failure to implement the Land Ceiling Act in the state has increased the difference in economic status between landless peasants and the land-owning higher castes. Naxalites are taking advantage of the situation, especially in central Bihar, and violence is on a steady rise. With such dismal conditions, there is little hope of any positive development in the state in the years to come.

Yours faithfully,
Manoranjan Das, Jamshedpur

Sir � Bihar is becoming a dangerous place for the poor. The massacre in Lakhisarai in central Bihar where 15 labourers were killed recently must be an eye opener for all of us in Bihar. Do we really value human lives as we value the life of a cow? The government must wake up and do something to prevent such incidents in future.

Merely �rushing to the spot� and declaring ex-gratia payments to the families of the deceased will not do any good to the people. Rather, the government must show sincerity and some amount of political will to punish the officials who are in connivance with the killers. Recurrent killings in central Bihar make it evident that some officials are hand in glove with these criminals. Unless there is a massive upheaval against the injustice meted out to the poor and landless people of Bihar, the credibility of democracy, one of the basic tenets of our Constitution, will be at stake.

Yours faithfully,
Sunny Jacob, Jamshedpur

Sir � A major part of the problems of Bihar can be attributed to the fact that the state has made little progress towards local self-government. Vested political interests have prevented elections from being held to gram panchayats and other village and district bodies for almost two decades. Instead, nominated henchmen of politicians hold meetings with officials of the state government and decide on development projects and divide the allocations made for the purpose among themselves.

Even the judiciary has come to be a convenient tool in their hands. The Supreme Court should hurry up with its ruling on the litigation regarding the panchayat elections which has been pending for quite some time now. Yours faithfully Desh Deepak, Patna

Sir � The Rashtriya Janata Dal chief, Laloo Prasad Yadav, has announced that he and his wife, the chief minister of Bihar, will take sanyas if proven guilty of the charges of disproportionate assets possessed by them (�Probe Pande�s plot:Laloo�, June 11). But the truth is, in the last 10 years, the former chief minister and his wife have drained the coffers of the state to an unimaginable degree, apart from making Bihar the most feeble state in economic terms.When the country adopted policies of economic liberalization in 1991, most states used the situation to their favour by inviting foreign direct investment, thereby improving their industrial infrastructure.

But Bihar is lagging behind in every aspect of welfare and development. The level of corruption has increased to such an extent that it will take years for any new government to clean things up. When other states are taking up technological revolution as the new mantra of development, basic infrastructural facilities such as roads, power, telecommunications and water are not available.

The vision and panache of the chief minister of Andhra Pradesh, N. Chandrababu Naidu should be lauded. He has changed the face of the state completely. It is unfortunate that a state like Bihar, which is so rich in natural resources is not able to make the fullest use of them simply because of callous governance.

The entire nation is waking up to second generation reforms and Bihar still has to grapple with caste related violence that seems to arrest all the attention of its political and administrative apparatus. Shouldn�t Bihar conscientiously go for a change in its leadership?

Yours faithfully,
Siddharth Rungta, Chaibasa

Erring tribute

Sir � Khushwant Singh�s tribute to Nazrul Islam was excellent and timely (�He sang from the love of rebellion�, May 22). It was interesting to know that Nazrul was the first Indian poet to be jailed for demanding complete independence. However, the great poet died on August 29, 1976 and not August 22 as mentioned by Singh.

Yours faithfully,
Nirmalendu Chakraborty, Cooch Behar

Sir � Singh�s never-ending thirst for knowledge has made him what he is today. But surely that is no reason to provide incorrect information from the little known Vidrohi Kavi: Nazrul Islam by Gitesh Sharma. Contrary to what Singh writes, the two sons of the poet, Kazi Nazrul, did not die in infancy. They grew up to be talented young men. From an author of Singh�s calibre is it too much to expect a little more attention to facts?

Yours faithfully,
Indira Mullick, via email

Sir � The two sons of Nazrul Islam were Aniruddha and Sabyasachi. Aniruddha went on to become an acclaimed guitarist while Sabyasachi, former announcer with the All India Radio, has left an indelible mark in the field of Bengali recitation. Khushwant Singh�s knowledge on Nazrul is worse than mediocre.

Yours faithfully,
P.K. Das, Santiniketan

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