Showing posts with label asian age. Show all posts
Showing posts with label asian age. Show all posts

Wednesday, May 28, 2008

An Extreme Case is not an Exception

Arun Shourie

That an area as large as Bihar should sink into quicksand is alarming enough by itself. But one of our problems is that collapse in Bihar no longer shakes us: "O, that is Bihar," we shrug.

Bihar is an extreme case, yes. But the point about an extreme case is that it is but one end of a continuum. Bihar is far from being an exception. Even the most prosperous states today exhibit the same symptoms. Not just Bihar, but Punjab too is having difficulty paying just the salaries of government staff. Not just Bihar, but state after state -- Rajasthan is the example of the month -- has defaulted on the repayments it has to make to the Centre. In Assam�s case, all financial transactions had to be halted, and the treasury had to be closed last week, as the state had no funds to meet even the day�s liabilities. It isn�t just that almost all of plan expenditure of Bihar is now financed through central funds, that is so in the case of most states: Rakesh Mohan, the director of the NCAER, draws attention to a telling figure -- as recently as the Sixth Plan, balances from current revenues financed 40 per cent of state plans, in the Eighth Plan their contribution was zero, today it is a substantial negative. It isn�t just that state enterprises in Bihar are in a woeful condition, they are in more or less that condition across the country: another figure that Rakesh Mohan mentions -- state enterprises were projected to contribute Rs 4,000 crore to the financing of the Eighth Plan, their actual contribution was minus Rs 2,723 crore.

All sorts of devices have been contrived by the Centre and states to camouflage defaults by state governments, all sorts of devices have been fabricated by states to divert central funds meant for capital expenditure to pay wages and salaries. A senior functionary was educating me the other day to the mystery behind plan projects remaining incomplete for years and years on end in state after state. There is more than lethargy, he explained. Under our system of accounting, so long as the project is a continuing one, salaries and wages of the staff working on it can be paid out of plan funds; once it is completed, these have to be paid out of the state�s own funds. Unable to pay even salary and wage bills of its employees, state after state keeps that last mile of the road incomplete...

And finances themselves are but a symptom. Entire systems have fallen apart. A former deputy comptroller and auditor general, C.B. Kumar, points out that of the 992 state government companies, the accounts of 783 companies are in arrears -- up to 10 years. In the case of many of them, accounts have not been finalised for even one year since their inception.

And the finances of states, the evaporation of control and supervision mechanisms in state owned companies -- these too are but symptoms. The malaise extends far beyond states, far beyond governments. "Non-performing assets" -- a euphemism to cover up moneys which have been given, handed out on collateral considerations -- now exceed Rs 43,000 crore: that feat has been accomplished not by state governments but by our "commercial" banks. The companies that have vanished with over Rs 20,000 crore belonging to small depositors are not government companies, they are companies floated by private entrepreneurs. Similarly, while the securities scam showed up the degree of morality and vigilance in our banks and financial institutions, could it have remained undetected if a profession wholly outside the state structure -- chartered accountants -- had been doing its job?

In a word, unless we wake up, Bihar is not just an extreme case, it is the future. And the condition to which Pakistan has sunk is a live warning of what happens when such problems are neglected.

Everything else points to the same urgency. Time does not stop just because we are preoccupied with our problems: we talk of the "21st century;" it is five weeks away. The world does not stop because we are busy battling the next caste: technologies continue to replace each other every two-three years; per capita income in China is already double that of India, but with China growing at 10-11 per cent, and us stuck at 6 per cent, the gap between us and them doubles every 14 years -- and the per capita income is just an indicator: military capability, and much else is subsumed in it.

Nor do our problems abate because we are busy sorting out our politics. In the last three-and-a-half years when our politicians were busy bringing down and installing governments, our population increased by over five crore. Even in the six months between the ouster of the Vajpayee government and the installation of the present Vajpayee government, our numbers would have increased by over 70 lakh. We must, therefore, act, as the Buddha would say, "with the urgency of a man whose hair is on fire". The allied point is just as obvious: there is no discord on these issues. Indeed, I believe there is consensus on almost all the issues which are at all within the realm of the possible. When liberalisation was launched, how the critics lampooned it. But where they were in power, those very persons and their parties were taking pride in proceeding on that route even faster than the central government. Similarly, when the critics acquired office at the Centre, they continued those very policies.

That is a large part of the problem today: on almost every practicable matter there is consensus on what should be done, everyone also sees that those steps should be taken forthwith, but when one party takes them, the other shouts and screams, and puts obstacles. So that nothing is allowed to proceed -- except by fits and starts. The same danger lurks today. The economic decisions which will be taken now are ones that carry forward the same process which successive governments have been furthering for a decade. But because this government will be announcing those policies, others will stall them.

There is a conviction -- which all parties need to outgrow -- that because one is in Opposition, one�s job is to oppose, to choke whatever whoever is in government is trying to do. Precisely because it does not have a better idea on the matter, the party out of office feels compelled to contrive differences. Often, a completely unrelated issue is made the occasion for blocking everything. Notice the minatory statements which Congress leaders have been making about Rajiv�s name in the Bofors� chargesheet.

Assume for a moment that there is ground for a genuine difference of opinion on the matter -- I do not see any ground either in law or fact, but assume that there is. How does that difference on this particular matter justify throttling legislation on, say, economic reforms? Even countries deal with each other on some issues in spite of there being sharp differences on other issues. Indeed, many who will today be arguing -- within the Congress, say -- against cooperating with the government on any issue are ones who, when it comes to Pakistan, are most energetic in arguing that we must keep identifying areas on which we can engage it in joint action in spite of what it is doing in Kashmir, and the rest. But when it comes to cooperating with the government of their own country, even when it seeks to further policies they had themselves initiated, Congressmen will think it perfectly in order that they hold back till it interferes in the judicial process and has a document which is before the courts altered in the way they specify. As all parties are in office somewhere or the other in the country, and as all of them are therefore disabled by such conceptions of what the proper role for an Opposition is, all have cause to revise their conduct. The cure liable to be more effective is for people to be alert, notice who is stalling essential legislation or policies, and for what reason, and punish him accordingly.

Governments too would do well to change their ways. At least in five respects. All too often, they lose interest in a remedy the moment it has been enacted. Mr N. Vittal, the chief vigilance commissioner, gives a telling example. In 1988, Parliament passed the Benami Transactions (Prohibition) Act. It was acclaimed to be a decisive step in tackling corruption -- indeed, so urgent and vital were its provisions acclaimed to be that they were first introduced by way of an Ordinance. Clause 5 of the Act specified that a procedure would be prescribed for acquiring property under the Act. Eleven years have gone by, no procedure has been prescribed. Governments have forgotten all about the Act. And not just governments: the other day when I referred to the Act and its fate in the Rajya Sabha, it was evident that MPs too had not bothered to check up on what they had passed. The first point therefore is: follow through on what you get through Parliament, follow through on the schemes you launch.

The second lesson, equally elementary, is about existing institutions. Every government feels impelled to launch new schemes, to set up new institutions. But the need today is to energise existing institutions. It is good that the government will be introducing legislation to set up the Lok Pal: the bill has been in the works for 30 years, and this will be the seventh version of the bill. So, it is good that at last the law will be passed, and the institution will be set up. But just as important is to activate the Lok Ayuktas: in state after state, they have been rendered moribund. Why not call a conference of existing and past Lok Ayuktas, garner their proposals to make the institution functional, and create public opinion for those changes to be enacted? Similarly, I was astonished to learn the other day that the comptroller and auditor general has a staff of 20,000 persons. They produce over a hundred audit reports every year. These run into 15,000 to 20,000 pages. They are packed with details -- often, as we have seen in the case of Bihar, with details of the most alarming kind. But can any one recall a single consequence which has followed as a result of these prodigious labours? The cure would not be to set up yet another institution, but to get together with present and past CAGs and take steps which would make the work of this institution fruitful. The third lesson is about the new institutions we set up. Unable to improve existing institutions, we set up some new one. Unable to get existing courts to speed up, we set up special courts, unable to get states to act reasonably on sharing river waters we enact the inter-state river water disputes law. But the manner we provide for the new institution to function is exactly the manner which has paralysed the old institution. The procedural regulations that special courts must adhere by are exactly the same as the regulations which clog existing courts. The personnel who man the inter-state river dispute tribunals are just the same as the ones that man existing courts: they bring to their new task the same approach, the same fixation on legalisms, on the date of this notification as against that one which hobble our courts. For the new institution to be different, its personnel, the procedural rules that are to govern its functioning, its entire ethos have to be radically different.

Fourth, the solutions must be on an altogether different scale, they must be of an altogether different kind than the ones to which we naturally gravitate. The backlog in courts? As a great concession we agree to the setting up of a dozen courts. But the Chief Justice was mentioning the other day that the requests which are pending for additional courts already total over 4,500. Setting up a dozen more courts -- and that too after years and years of the files going up and down -- is as good as doing nothing. Similarly, to get the inter-state water disputes machinery out of the current rut, we need to man the tribunals with persons whose entire approach will be different: who will craft design solutions rather than pronounce awards that hinge on legalisms.

And when we do alight on a solution, as Montek Ahluwalia with his vast experience points out, we must not look upon it as set in stone. That is the fifth lesson. As new technology beckoned, a new telecom policy was announced in 1994. But technology changed so fast that a newer policy was required by 1998. The steps which have been taken under it have already had to be altered twice. But technology is continuing to evolve at a dizzying pace: the technology to transmit voice over Internet with distortion is almost at hand; you will soon be able, therefore, to talk to persons overseas at the cost of a local call; that will devastate the finances of existing long distance operators. And so we can be certain that an entirely new telecom policy will be required three-four years from now. If we hold up that new policy on the old supposition that the existing policy had been announced just a short while ago, or if allegation-mongering inhibits governments from attempting new formulations, we will be enlarging the gap between us and the rest of the world.

Hence: when you pass a law, when you set up an institution, look back and see how it is working; instead of setting up new institutions, where possible energize existing ones; when you set up new institutions, ensure that their personnel, their operating procedures, their entire thinking is new; think anew repeatedly, and each time at a speed which will, at the least, match the progress of technology.

The Asian Age
November 12 1999

Sunday, May 25, 2008

Not Just an Islamic, But a Psychological State

Arun Shourie

India's size has become "an unmanageable liability," writes an analyst in Pakistan's Frontier Post of June 9. "As a result, nearly one-third of its 25 states are at war, where military troops are routinely called out to keep peace." The cause for this is largely "India's exclusionary political, religious and social order that is heavily biased against non-Hindu minorities," he says. This from an analyst whose own country is being torn apart by killings of Shias by Sunnis, of Sindhis and Mohajirs by Punjabis, by tensions between Baluchis, Pakhtuns and Punjabis. Second, except for a brief period, he observes, India's economy has been stagnating around "the Hindu pace of growth." This from an analyst whose country is living from month to month on what is the seventeenth bail-out package from the IMF since 1958, this from an analyst the currency of whose country has been devalued over forty five times in the last decade, this from the analyst in whose country even the management of the Water and Power Development Authority, even of the Karachi Electricity Board has had to be handed over to the Army! Third, its military power has remained "less than decisive in its conflicts with Pakistan except for its military action in East Pakistan." The Pakistan Army has lost every single war it has fought with India, yet India's military power has been "less than decisive"! And as for that one exception which even he acknowledges, the case of 1971, it seems that in the author's view, it is "the backing of the overwhelming majority of native Bengalis" which enabled Indian forces to prevail.

A bit of a change in that last bit, I must say in fairness! For in their history textbooks, children are taught that the "native Bengalis" very much wanted united-Pakistan to continue and it was only the cunning of Hindu-Bharat which waylaid them.

The next point will truly be news to us. Recalling some hare-brained proposals for "solving the Kashmir problem," he says "Even if I were Indian, I couldn't help but support Pakistan's so very obviously rational approach to the conflict on Kashmir." Not just that, this analyst knows something we don't, for he continues, "This rationality in Pakistan's position has the majority of Indians re-looking at the Kashmir conflict in terms of 'justice' although their immediate motive is economics. In survey after survey, the majority of Indians have come to believe that the cost of keeping Kashmir is higher than leaving it alone..." The only way out for India is to resolve the Kashmir issue "in accordance with the wishes of the people of Kashmir, and in accordance with UN resolutions," writes a former Army colonel in the June 11 issue of the same paper. Till it does so, not only will it keep bleeding, such analysts write, it will be exposing the region to "power-play by the West under CIA machinations." "But India," the colonel continues, "with typical narrow-minded bania mentality, refuses to see the realities on the ground and the resultant fall-outs of a continuing impasse over the Kashmir issue..."

"The latest Indian Army operations in Kashmir are due to the adamance of the mujahidin who are waging war to achieve their aim of self-determination," observes the Jang in its editorial on June 4 - two lies in those few words: that the invaders are mujahideen, and that the goal of their invasion is self-determination! "History tells us that when people of any region start sacrificing themselves for their rights then no power on earth can restrain them from their goal. This time mujahideen have given a new life to the movement and the Kashmir issue has become prominent. The Indian government has tried to crush the mujahideen but all in vain..." The invasion has given a new life to the secessionist movement in Kashmir? That will certainly be news to the tourists in the Valley!

"No doubt India is losing on the war front," the Jang announces, "but at the same time the Indian propaganda machinery has become very active with western media support..." In a word: only mujahidin from within Kashmir are involved, militarily they are prevailing, if at all India is scoring a point it is only in propaganda, and that too only with western help! Still the latter is a matter of concern to the paper. "We fail to understand," the paper says, "why our 'grand official intellectuals' have failed in convincing the foreign media that the Kargil war is not based on fundamentalism. Why most of the foreign media reports on Kashmir are anti-Pakistan and anti-mujahideen and why our diplomats and embassies are unable to present the mujahideen's case in its right perspective. And finally why western rulers are endorsing the views of Vajpayee in the context of Indo-Pakistan relations and the Lahore Declaration."

A week, and that lacuna too seems to have been made up! "Its (India's) casualties are mounting," writes an analyst in the Nation of June 13, "and there is a grudging acceptance that it is also losing the media war to Pakistan. These twin pressures are beginning to take their toll on a wary populace which has seen political instability followed by military failure. Elections are less than three months away and no one seems to know which way the country is headed." "In such a situation," he concludes, "Pakistan should stand its ground with grit and determination and appreciate its brave men in uniform who are manning our territory with courage and ensuring that India's aggressiveness is countered swiftly and severely."

Soon, however, that Pakistan is completely isolated diplomatically cannot be denied. But that only proves that it is a martyr in the cause of Islam! Taking note of the US reluctance to swallow the Pakistani version, the Army colonel observes that the US has always been bending backwards to "placate India." And for reason, he writes, "We may be aware of the US role the world over against the interests of Muslims. And its desire to somehow contain China, its only possible rival after the disintegration of the USSR. It will like the dispute over Kashmir to be so resolved that as a result of it the present land linkage between Pakistan and China is severed. In this context, its best bet is India as a countervailing power... In fact the US is / has been actively helping India in its technological attainments through Israel." In a word, if the US is not swallowing the Pakistani version that is because it is congenitally anti-Muslim, and if India has achieved something technologically that is because the US has been helping it via Israel!

Hence the colonel's ringing exhortation: "Let there be no misconception about the US and Indian collusion where interests of Muslims and the western nations clash. For the loss of Muslims also becomes the gain of India. It is time we realised this and the OIC, the Arab League and Mutamar-e-Islami worked together towards unity and greater cohesion in their ranks to thwart the designs of these enemies of Islam."

A complete rupture from reality. That one-third of India's states are at war, that our economy is collapsing, that India is losing on the war front, that Pakistan has overcome the initial Indian advantage and is now winning the diplomatic battle too, that to the extent that the US etc. are not endorsing Pakistan's position that is because they are anti-Muslim, that India's technological advances are due to American help via Israel, that Pakistan's rational position on Kashmir has led every Indian to re-think his country's stance... A psychological condition, schizophrenia. To the onlooker the figments are so absurd that he tends to disregard them. But the person concerned actually believes the hallucinations. He acts on them.

That is one lesson: we must at all times be alert to what Pakistani society and rulers are reading into developments in India, for those inferences will tempt them to instigate, and to invade. The manifest instability of our governments during the last few years, their being pushed and pulled from every side would have been an important factor in the Pakistani calculation. So myopic, so self-centred are those who have been pulling down governments, those who have fractured the electorate that it is useless asking them to see the consequence of what they are doing. At least the rest of us should heed this consequence -- of tempting a neighbour who is so apt to misread the situation in any case -- and quarterise these politicians and groups.

But that is just the preliminary lesson, almost an incidental one.

First, we must bear in mind that the one -- Pakistan in this case -- who conceives of himself as an enemy has an inherent advantage. He can prepare for one type of operation -- it was sponsoring insurgency last time, it is high-altitude warfare this time -- at a place and a time of his choosing. We have to prepare ourselves to counter that entire gamut of possible operations.

That will take resources. Therefore, we must not cavil at sparing them. There is no other way to survive. Things which have come to light during the past few months also show that we must rethink management of defence at several levels.

The management of production and procurement of defence equipment, for instance. The sorry tale of snowmobiles is well known by now. But it is just one of many. From the fate of the plan to produce ammunition for the Bofors guns within the country to the way proposals to produce bullet-proof vests have been knocking around - all speak to the same state of affairs.

The relationship that should prevail between the defence forces and the defence ministry, for another. To refuse to re-examine this on the clich�, "The forces must be subordinate to civilian authority," is to ensure that many operational requirements will not be attended to in time. It is also to ensure that resentments which have erupted in the past few months will continue to fester.

The composition of the National Security Council, the staffing of its secretariat, its function and role, for a third. The council really has to be more than a version of the India International Centre's Saturday Lunch Club.

But the basic lesson that Pakistan's Kargil invasion holds out is the old one, an unfortunate one but an inescapable one: Pakistan remains an implacable enemy. It sees only one role for itself: to break India. It is doubly convinced of this purpose because it sees itself as a state dedicated to Islam, and India as a dar-ul-harb, the land of war to vanquish which is an Allah-ordained duty. It stokes insurgency in Punjab, that leaves 21,000 dead. But it fails to wrest Punjab from India. Therefore, it inflames insurgency in Kashmir.

That leaves 15,000 dead. But that too fails to break India. So, it begins planning Kargil... Pakistan will just not abandon these operations. It sees no other role for itself. It sees that mission - of breaking India - as a divine mandate. At each turn it is convinced that while the particular operation which has just concluded has failed, the next one will break India.

Therefore, a united, prosperous Pakistan is not in India's interest. It will only be that much more zealous, and more effective in carrying out its mission.

And, therefore, we must engage Pakistan in the arms race which it cannot afford, we must lift restrictions we have put on our agencies and ask them to widen the fault-lines which have developed in Pakistani society and polity.

That is the basic lesson. Do not shy away from it. Listen to what the enemy is saying. Look at what he is doing. Look at his nature - full-face. Look at what he conceives his nature to be. As a first step, learn not to drown voices which try to awaken you to that enemy, and his nature.

Asian Age
July 2, 1999