Editorial 1/ Thin end of wedge
Editorial 2/ Courting rebukes
The second chance
Fifth column/ trying to get the equations right
Whose state is this anyway?
Letters to the editor

The Trinamool Congress leader, Ms Mamata Banerjee, finally knows her price. It is about Rs 200 crore per annum. The figure is arrived at through simple arithmetic since this is what it will cost the exchequer as a result of rolling back the prices of liquid petroleum gas by Rs 10 a cylinder and kerosene sold through the public distribution system by a rupee a litre. The exchequer has to bear this because the National Democratic Alliance, in its wisdom, decided it was worth acceding to Ms Banerjee�s demand to roll back the prices. She had threatened to quit the NDA if her demand was not met. The NDA will not have to bear the cost of subsidizing the price of LPG and kerosene, the country�s economy will carry the burden, which means the taxpayers will have to pay for Ms Banerjee�s continued presence in the NDA. The latter has Ms Banerjee as the prize for being weak and spineless. There are no economic grounds for rolling back the prices. The global price of oil has climbed since the hike in prices was announced. Moreover, a move of this kind can only make a mockery of an earlier recommendation to deregulate the oil sector by the year 2002 with an LPG subsidy of 15 per cent of the import parity price and a kerosene subsidy of 20 per cent of the import parity price. The present prices are near 30 per cent and 60 per cent respectively.

Ms Banerjee�s motives are obvious. She knows of no other mode of political articulation save populism. She thinks that by demanding a reduction in the price of kerosene available via the PDS, and of LPG, she will appear to be pro-poor. She is oblivious that the real poor of the country have no access to LPG and kerosene through the PDS. In fact, the money spent on subsidizing the prices of these two commodities could be much better spent if it was given directly to families below the poverty line. Ms Banerjee, like most other Indian politicians, is not really concerned about helping the poor. Her concern is to strike a pose which will fetch her more votes. What better posture than being pro-poor? More complex are the motives that drove the prime minister, Mr Atal Behari Vajpayee, and the NDA to capitulate to the threat issued by Ms Banerjee. The latter�s exit would not have led to a loss of majority in the Lok Sabha. She does not wield that kind of numbers. In fact, allowing her to leave would have exposed her as a destabilizing element. Mr Vajpayee is evidently keen to preserve the unity of the NDA and also, as the leader of the Bharatiya Janata Party, unwilling to alienate Ms Banerjee in West Bengal. Mr Vajpayee may be setting a very bad precedent. Today�s rollback may lead to a compromise tomorrow on the decision to reduce government equity in nationalized banks.    

Firmness, more often than not, produces discomfiture in its object. The Delhi state administration and the chief opposition, the Bharatiya Janata Party, have been thrown into a tizzy by the Supreme Court�s insistence that polluting industrial units in and around the capital be relocated. The political leadership�s abdication of responsibility in the face of � and in connivance with � vested interests has been tellingly exemplified by the way the city has been held to ransom by factory owners. Roads have been blocked and schools closed. Instead of criticizing such disorderly behaviour, BJP legislators went rushing around trying to persuade the prime minister that he should intervene to stop the state government�s attempts to relocate industries. The plea is based on a quibble. According to the complaint, the Supreme Court has ordered polluting units to be relocated while the Congress state government is threatening to relocate whole industrial units. Pathos is infused into the plea by the statistics regarding how many small and middle scale units will suffer and exactly how many persons will lose their jobs. The government is no better. It put itself into high gear because it will soon have to answer a contempt notice by the Supreme Court for not having taken steps to relocate polluting units by December 1999 as originally ordered. It has then been unnerved by the protests which paralysed the city. And instead of cracking down on the lawbreakers, the government put in a plea in court for more time.

The Supreme Court has, quite rightly, remained unmoved. The content of the rebuke it has administered the state government is similar to the one given to the Karnataka and Tamil Nadu governments when they wanted to free incarcerated extremists to fulfil Veerappan�s demand. As a matter of fact, the court has cited the similarity, pointing out that disorder in the state is the administration�s business. To connive in lawbreaking in order to maintain a superficial peace, which is something the Delhi government would not mind doing, is the surest way to invite disorder. Not only would the government be seen to agree with lawbreaking businessmen, it would be seen to be agreeing on account of fear. Once the political leadership stands exposed in its weakness, irresponsibility and corruption, there is no way that order can be maintained. When the issue is one of public health, as is this anti-pollution move, the people will ultimately see the court�s point of view and recognize its leaders as irresponsible or callous. Action on this front in Delhi would be exemplary for all states. Not only should other states begin taking necessary steps for relocating polluting units, but new factories should be made to build in the required anti-pollution devices. Both the Delhi government and the opposition are displaying an amazing lack of foresight by asking for a longer rope for the offenders.    

For much of the current year, almost every piece of news about the Indian economy has been pretty dismal. The rupee has been moving down steadily, the Bombay sensitive index refuses to move even remotely close to the dizzy heights it had reached last year, various industry associations keep bringing out surveys revealing loss of business confidence, and economists of all hues make gloomy forecasts about the short term growth prospects. Much of the gloom has a very real basis � even the finance minister has just confirmed that the economy is not going to grow at anything like the targeted figure of seven per cent. In fact, Yashwant Sinha has lowered the rate of growth quite significantly, to only 5.8 to six per cent.

Perhaps, the only bright spark has been the sudden resurgence of interest in economic reforms and new policy initiatives. After a long period in which the reform process seemed to have gone completely adrift, a new era of reforms may have been initiated with the formal sanction for the entry of three new companies into the insurance sector. This marks the dismantling of government monopoly in the insurance sector. The transformation of the insurance sector has been an important component of the package of second generation reforms. It has come after a long struggle since employees of the nationalized companies, supported by some of the left parties, were bitterly opposed to the entry of the private sector into the insurance industry.

This has been followed by a virtual avalanche of new policy announcements. The government is now going to allow media companies to start direct-to-home television services. This would probably have come much earlier, but for the fear that the formidable initial capital cost would perhaps deter the entry of everyone except for maybe a couple of the really big players, thus making the industry very uncompetitive. But why should the government really care? At least in the initial years, DTH is likely to be too costly except for the very affluent. Surely, the affluent are able to look after their own interests. Why should the government mollycoddle them? In the same week, the government announced a radically different textiles policy. The remarkable thing about the new textiles policy is the dereservation of the garment industry.

This means that the smallscale sector will no longer have its special privileges since it will simply not be able to compete with the larger companies which are much better equipped to withstand foreign competition. Hopefully, dereservation will soon allow Indian garment manufacturers to capture a significantly larger share of international markets. Since protection of the smallscale sector has been one of the �sacred cows� amongst Indian policymakers and many economists, this has been a particularly bold initiative.

But this has not been all. The government has also reversed its earlier stance and allowed bidders for Indian Airlines to have foreign partners. Readers will recall that the Tatas were denied permission to start a new domestic airline in partnership with Singapore Airlines. It was never very clear why successive governments were so scared of collaboration with foreign partners in the aviation industry when such collaboration is being actively encouraged in sectors such as infrastructure.

In any case, the green signal to have foreign partners will mean that potential bidders can now have deeper pockets. This will enable them to bid larger amounts. The government will surely be one of the winners. To the extent that the new management will have professional partners with experience of running other airline companies, the travelling public will also gain.

Newspapers report that the government is contemplating further changes in the economic scenario. For instance, it is reported to be debating a proposal to sell off its shares in Maruti Udyog Limited. Of course, this decision should have been taken several years ago, when Maruti had a stranglehold over the domestic automobile industry. And, in any case, why should the government manufacture cars? More importantly, it is no longer doing as well as it was a couple of years ago. The obvious implication is that the government will have lost a huge packet by delaying the decision to sell off its shares. Some estimates put the loss at as high as Rs 3,000 crore.

Perhaps, the most important area crying out for hard action is fiscal discipline. It is rather ironic that although everyone agrees with the need to drastically reduce the burgeoning fiscal deficit, there is virtually no agreement at all on how the deficit should be brought down to reasonable levels within the foreseeable future. Successive governments or the more responsible elements of ruling coalitions have tried to bring down the deficit by slashing the crippling outflow on account of various subsidies. Unfortunately, all these efforts have been shot down by irresponsible opposition. Now that the government seems to have mustered enough courage to take bold steps such as dereservation, it is hoped that it will also have the political will to slash subsidies.

We have been told that Parliament will soon enact legislation which imposes statutory ceilings on the size of the fiscal deficit. Any government faced with such an obligation will be forced to find really effective means of reducing expenditure. What pass as �economy drives� today are really a mockery of the system. A fiscal responsibility act will also ensure that the government exploits all possible avenues for increasing government revenues.

This will inevitably involve substantial increases in user charges for a range of economic services provided by the government. A higher level of user charges will obviously improve government revenues. But it is generally not recognized that remunerative prices for a wide range of services will also stimulate private investment into these sectors. After all, why should private entrepreneurs invest in, say, new highways unless they are assured that they can levy toll charges which will provide them with a reasonable return on their investment?

It is also critically important to reduce the size of the government. The downsizing of government activities will have a large beneficial effect on government deficits since it would reduce the wage and salary bill. Indeed, very little attention is paid to the fact that the much-maligned pay commission had suggested that the hefty increase in salaries be accompanied by a 30 per cent reduction in personnel.

There would also be an equally important, although somewhat indirect, effect on the overall economy. An important problem facing the country nowadays is political instability and the deleterious effect that it has on the economy through uncertainty about government policies.

However, the greater the �distance� of the government from the economy in terms of its degree of involvement in routine economic operations, the smaller will be the impact of political uncertainty on economic activities. That is one lesson to be learnt from the experience of post-war Italy, where frequent changes of government seem to have virtually no effect on the economy.

The author is an economist at the Indian Statistical Institute, New Delhi    

The crisis in the National Democratic Alliance government, caused by the near resignations of Mamata Banerjee and Ajit Panja, seems to have blown over. With the prime minister, Atal Behari Vajpayee, agreeing to partially roll back the prices of kerosene and liquid petroleum gas, it now seems certain that both Banerjee and Panja will no longer remain vexed on this issue. But a question remains. Why did the NDA capitulate?

The political drama that unfolded in New Delhi and Calcutta after the two Trinamool Congress leaders faxed their resignations to the prime minister on September 30 amply demonstrated how desperately Vajpayee wants the Trinamool Congress to remain within the NDA fold. Many feel that it was bad economics, but a good political move on Banerjee�s part to link her resignation threat with the rise in prices of essential commodities. Even Banerjee�s critics concede that by making the government partially retreat on the petroleum products issue, Banerjee has emerged as a champion of the people. However, Vajpayee�s credibility has suffered in the process.

Events following September 30 suggest that the prime minister initially tried hard to persuade Banerjee to withdraw her resignation. The defence minister, George Fernandes, as well as Vajpayee�s special emissary, Sudhindra Kulkarni, were despatched.

Climb down

Eventually, the prime minister, after informal consultations with senior cabinet colleagues, had to assure Banerjee that some concessions will be made for her sake.

Banerjee�s relations with the Centre have an important bearing on West Bengal. When Banerjee put in her resignation, West Bengal Congress leaders like Pranab Mukherjee and Priya Ranjan Das Munshi told the media that Banerjee was welcome to lead a Trinamool Congress-Congress alliance in the state against the ruling Left Front once she broke off relations with the NDA. The rapproachment between Vajpayee and Banerjee has for now belied the state Congress�s hopes of roping in Banerjee to lead the anti-left and anti-BJP front in next year�s assembly elections.

Banerjee was piqued by the extent of the hike in petroleum products and the timing of the announcement. At a time when almost two crore people in West Bengal were reeling under the impact of one of the worst ever floods, the steep rise in the prices of kerosene and diesel came as a shock. Moreover, the announcement came just prior to the most popular Bengali festival, the Durga Puja, says one of Banerjee�s lieutenants.

But what was Vajpayee�s compulsions in giving in to Banerjee�s demands, especially given that the NDA government was not going to lose its majority in the Lok Sabha, even if the Trinamool Congress were to break away?

Guardian angel

One answer lies in the BJP�s abject political dependence on Banerjee in West Bengal. Borne aloft on the Trinamool Congress, the BJP, which did not win a single seat in the last state assembly elections, now has two members of parliament from West Bengal. On the strength of its alliance with the Trinamool Congress, it has also won a byelection for the state assembly last year. Besides, since the BJP�s prospects in the Uttar Pradesh assembly elections do not seem very bright, Vajpayee is evidently hoping that a good show by the Trinamool Congress-BJP alliance in West Bengal may help offset possible losses in Uttar Pradesh.

That apart, the BJP thinktank in New Delhi holds that in case the Trinamool Congress left with its nine members, the Vajpayee government would have a slim majority in the house and would be subjected to intense pressure by the smaller allies.

Opinions differ on whether Banerjee will continue with the NDA till the assembly elections next year. Some political analysts feel that if polls are held in February, before the presentation of the Union budget, Banerjee may remain in the Vajpayee cabinet. But if the polls are held after the budget, chances are she will resign on one pretext or the other to escape the responsibility of a harsh budget. With a growing fiscal deficit, the next budget in all probability will be an unpopular one. With stakes as high as those in West Bengal, Banerjee cannot afford to drive a hard budget without losing face.    

The serpentine queue at the gates of Ranchi�s Raj Bhavan snaked its way into the main road beyond. At least 10,000 invitees jostled for a space in history. But Jharkhand proved to be a great leveller.

Ministers, commoners, mediamen and security forces fought pitched battles for access through a hairbreadth aperture at gate number two. But by the time the �smalltime� legislators and the city�s elite trooped into the enclosure after bouts of wrestling, the ceremony was already under way. The chief justice and the governor had been sworn in and preparations were afoot for Babulal Marandi�s coronation.

Over a thousand �guests� were still sweating it out at the entrance, showering the carbine-wielding Bihar military police jawans with the choicest of expletives in all possible tongues. And if the chaos is a pointer to the things to come, Jharkhand is on the brink of troubled waters.

The ultra-left Maoist Communist Centre, which called off a protest rally by one of its overground fronts, the Jharkhand Mukti Manch, ostensibly to �atone� for the accidental killing of the Hazaribagh deputy commissioner�s wife, has renewed its war cry. On November 17, the outfit blew up railway tracks on the Muri-Barkakhana section disrupting train services between Gaya and Hazaribagh.

It has also threatened to freeze the flow of minerals from the mines to the factories. If implemented, the economic blockade could cost the fledgling government dear as industry is the lifeline of Jharkhand.

Although the Marandi-led National Democratic Alliance government in Ranchi is confident of proving its majority on the floor of the house, the opposition is gearing up for a battle royale. The NDA, with 45 legislators in the 81 member house, had proposed the Janata Dal (United) veteran, Inder Singh Namdhari, as speaker. An old warhorse with a fairly clean image, Namdhari is liked by all. So, the opposition, which had initially planned to field a consensus candidate following an understanding between the Jharkhand Mukti Morcha and the Congress, decided to support Namdhari.

Though Namdhari�s unanimous election was a marginal victory for the NDA in its first trial of strength, the �united colours� of the opposition will not let the crown rest easy on Marandi�s head. The NDA, with 32 Bharatiya Janata Party legislators, five Samata Party members of the legislative assembly, three Janata Dal (United) legislators, three independents and one nominated member from the Anglo-Indian community, has a fragile edge over the opposition JMM-Rashtriya Janata Dal-Congress combine, which has 36 members. The JMM hogs the lions�s share with 12 MLAs, the Congress has 11 legislators, RJD nine, the Communist Party of India two and the Marxist Coordination Council and the Communist Party of India (Marxist-Leninist) one each.

Even if the week-old government survives the trial of strength, tussles within the NDA over ministerial berths will deny it stability. The Jharkhand assembly, which convened its four-day maiden session on November 21, has no BJP ministers. Of the 10 ministers, five are from the Samata Party, two from the Janata Dal (United) and there are three independents.

Local BJP leaders are already crying foul. The party, which is the dominant constituent of the ruling alliance, has been excluded from the ministry. Though the high command expects partymen to �understand and work in the larger interest of the state� the local rank and file is more worried about portfolios and �poor representation in the government�. Their contention is justified. �The NDA formed the government on the strength of the BJP but now we have been given short shrift,� rued a senior party leader in Ranchi.

The opposition is waiting for this resentment to snowball into a rebellion, so that the dissidents can be lured into its fold. A senior opposition leader gives the present government only six months time. One reason the opposition adopted a soft line on Namdhari is that the former Bihar minister holds the key to the Janata Dal (United) support base in Jharkhand. If the Marandi government totters, a split can be engineered in the NDA to wean away the five Janata Dal (United) legislators.

The JMM has now trained its guns on the governor, Prabhat Kumar, whose controversial �political background� has given the opposition ammunition to launch a fresh attack.

The party has decided to boycott Kumar�s address in the house on the day the new government proves it strength. The JMM feels that the �secular ethos of the new state cannot be upheld if Kumar, chargesheeted in the Babri Masjid case, is allowed to function as the constitutional head�. The opposition has threatened to mobilize public opinion against his appointment on the ground that the �interest of the minorities cannot be safeguarded under his gubernatorial tenure�.

Kumar�s appointment seems to have put the BJP in a spot. The party was under pressure from the Rashtriya Swayamsevak Sangh to install a hardliner as governor. But the move has given the JMM an unwitting edge in the �credibility war�. �If Prabhat Kumar can be made the governor, why not Shibu Soren the chief minister? ... he did not affront religious sentiments, he was only framed in a payoff deal,� argued Stephen Marandi, leader of the opposition in Jharkhand assembly.

The mudslinging serves to highlight the futility of statehood. For 10 years, the BJP has worked overtime to breach the �greater tribal unity� by polarizing the people along caste lines.

In 1995, it surged into the heartland by winning the bulk of the urban assembly seats. It cashed in on the floundering JMM leadership, racked by charges of corruption. Subsequently, it fanned out into the rural interior and consolidated base among the animistic Sarnas and pro-Hindu Mahatos by providing them with free education and healthcare through its Vanavasi Kalyan Ashrams.

These school-cum-day care centres, set up to counter the activities of the church, yielded rich political dividends. Many tribals came under the Hindu religious fold, switching allegiance from the JMM to the BJP. These neo-Hindus stood the party in good stead during government formation. Splinter groups like the All-Jharkhand Students� Union, the United Gondwana Democratic Parishad and the Jharkhand People�s Party hitched their wagons to the NDA juggernaut.

The tribal leadership, though militant in nature, has never been consistent. Since the formation of the Adivasi Mahasabha by Jaipal Singh in 1938, the movement has failed to carve out a niche for itself. An identity crisis prompted Singh to dissolve the mahasabha and form the Jharkhand Party in 1949, so that the statehood movement could acquire secular overtones. But Singh�s �liberal vision� received a jolt in 1956 when the state reorganization committee rejected the demand for a separate Jharkhand state.

�Insecure�, Singh merged his party with the Congress in 1963 to attain legitimacy as a politician. This probably was the beginning of the �politicization� of the Jharkhand cause by extraneous forces. According to political commentators, the movement was hijacked by national parties in the Seventies. Parties like the BJP, Jana Sangh and the Congress, initially opposed to statehood, suddenly changed tack.

The 27 per cent tribal population was eventually edged out of the region�s realpolitik and subsequent attempts to compartmentalize politics on ethnic lines ended in fiascos. Even the JMM failed to thrive on its own and eroded its credibility in the process.    


Age no bar

Sir � It is surprising how scientific breakthroughs often come to the rescue of those who subscribe to unconventional views. This is precisely why I am thrilled at finding scientific support for my longstanding belief that women have a longer experience of the world, which is perhaps what makes them wiser than men (�Adam ages behind Eve�, Nov 16). In a traditional society like India�s, where the the overage and overweight god, Shiva, is the epitome of the ideal husband, men with older wives are very often frowned on. The society has no problems with a wife 15 years younger than her husband, but if the husband happens to be even four years younger than his partner, there is no stopping the criticism. Even after the recent genetic revelation, there is little hope that women will be accorded better treatment on the ground that they are older than men, and hence, to be respected. But with scientists throwing their weight behind the theory, men with older wives may just start getting treated with a little more reverence than usual.
Yours faithfully,
Tapan Pal, Howrah

New learning

Sir � The framework developed by the National Council of Educational Research and Training in doing away with terminal examinations in schools from class I to X is a welcome move and a much-needed step towards achieving universalization of education (�Free ride from class I to X�, Nov 15). Of every 100 children who enrol in primary schools, only 12 graduate and about six complete their post-graduate courses. The other 88 are marginalized and forced to drop out in the name of merit, standardized through the privileged class�s perception of education. All this is to secure the job prospects of the privileged, to create a distinction between the intelligentsia and the common people. The system created by our colonial masters has been perfected by the native educated class to serve their interests.

The apprehension that the elimination of examinations would cause a fall in standards is again a misconception. First, an educational standard is a relative term and does not have an absolute value. It is often employment needs that decide such standards. Such concepts also merely glorify established educational institutions. In practice, however, it is the individual capacity of the student or the coaching by private tutors that does the trick. The proposed change will bring the student, and not the examinations, into focus. The idea of continuous and comprehensive assessment will make schools and teachers more responsible.

Yours faithfully,
Bratin Chattopadhyay, Santiniketan

Sir � The consequences of disbanding examinations might not be immediately foreseen in a highly competitive and far from utopic state like India. Merely banking on periodic assessments to maintain an academic record would in a way lead to confusion. For one, schools might just become places of relaxation.

As for the imposition of value education at the grassroots level, it should be seen at first if the system is any better than the present one. Examinations bring a number of emotions into play � fear, determination and discipline, all of which are essential in the training of children. A sudden departure from the norm would leave parents wondering about the proper way to guide their wards since it would be hard to find the necessary parameters by which one could accommodate oneself into the �continuous and comprehensive� evaluation system.

If indeed the government sees the NCERT�s move as a pathbreaking step, it should seek its implementation at a lower level and for a shorter duration, say from class I to III.

Yours faithfully,
Kalyanjit Ghosh, Kharagpur

Sir � The quest for knowledge in insatiable and, with advancement, the need for its dissemination would also increase. The worst implication of this is the increasing burden on students who, under the present system of education, have to cope with tough competition. It would be a fresh and welcome change if the current method of evaluation by written examinations is done away with. The proposed system of grading would give students a fair chance to be judged on the basis of the entire year�s performance. Moreover, it will broaden the students� perspective as they will not be pressurized to study under the constant fear of an examination. This would give students more room to concentrate on other activities as their evaluation process would be more flexible, ensuring an all-round development.

The proposal to introduce value education must be applauded and should be clubbed with more emphasis on �national� education. As is the practice in a few countries, a more integral approach would be to make two years of military training compulsory at the middle school level. This would enable an overall disciplined grooming of the individual, thereby making him or her a better citizen.

The move should be adopted by all the states. The baseless fear of saffronization would only serve as a deterrent to change a stagnant situation. One must remember that nothing is permanent except change and to survive in this rapidly changing and growing world, the change must begin at the primary level.

Yours faithfully,
Sarita Kejriwal, Calcutta

Never all the way

Sir � I fail to understand the benefits that would accrue for the nation by the government�s decision to allow foreign institutional investors to invest in Indian stock markets, but not in the Indian capital goods industry. Generally, FIIs sell on United States�s interests and act on advice and decisions taken abroad. When Intel shares fell some time back, they pulled down the Indian stock market, thereby ruining thousands of investors. Hundreds of crores of rupees were lost and they all certainly went into pockets of the FII. It is a wellknown fact that FIIs, by their sheer money power, can bring down the value of a share to any level of their choice and rebuy the same, making a net profit at the expense of the local population. They earn both ways, whether prices rise or fall. When the Indian government has not earned even a single dollar in the Singapore stock exchange, why is it permitting the Singapore government to earn hundreds of crores from the Indian stock markets?

The finance ministry is supposed to bring in money for the nation, not facilitate other nations to make easy money here and repatriate even more easily. The finance department of the government, the opposition members of Parliament , bureaucrats in the government, the prime minister and the sangh parivar must assess first what India would gain before setting FIIs loose in the stock markets of the country.

Yours faithfully,
Mahesh K. Rathi, via email

Sir � It sounded incoherent when the Union information and broadcasting minister, Sushma Swaraj, ruled out any possibility of foreign direct investment in the print media despite the saffron government�s objective of promoting globalization. Our first prime minister, Jawaharlal Nehru, had also decided not to allow foreign investment in the print media.

Facts and figures gathered from developed and developing countries do not paint a rosy picture of globalization and privatization, contrary to what their proponents are trying desperately to promote. The exceptions to the disaster are only those who have wilfully protected their interests. The decision, �No FDI in print media�, makes us to believe that the print media has been intentionally left untouched. Is it because it is propagating the worth of globalization and privatization in its own way and requires no interference?

Yours faithfully,
Shib Sankar Mukherjee, Shyamnagar

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