Round The States

New Delhi, 10 January 2007

Panic Exodus Of Biharis

ULFA POGROM AGAINST NON-ASSAMESE

By Insaf

The ULFA pogrom in Assam last week-end against the non-Assamese workforce is causing grave concern to both the Centre and the State Government. The latest round of killings in the three days of violence left more than 75 dead and scores of persons injured in northern Assam. The militants fired repeatedly for three days on houses belonging to the Hindi-speaking people. This was preceded by an encounter between motorcycle-borne militants and the police in Dibrugarh. The attacks should not have come as a surprise because the militants had more than once stated their plans to strike at the hapless migrant labourers to press for their demand: “Asom for Assamese” and “freedom”.  The latest carnage has led the State Government and the Centre to take stern and effective steps against the militants. The Army has been re-deployed and 20 additional Companies of the Central security forces have been moved to the affected areas.

The eruption of the violence by ULFA against the non-Assamese workers from Bihar and eastern U.P., as also the exodus of a large number of Hindi-speaking people from the State, has exposed once again the pitfalls in the blow-hot-blow-cold policies of the Governments at the Centre and in the State. In fact, major political parties have justifiably attacked the internal security management of the Congress-led UPA Government at the Centre. The BJP has lashed out at the Union Government for its handling of the internal security, an important national issue, which surprisingly, does not find any mention in the UPA’s 57-page Common Minimum Programme. The Samajwadi Party has accused the Centre for being insensitive to the problems created by ULFA. Astonishingly, the Indira Goswami Committee has not been able to meet the underground and jailed rebel leaders.  The Committee, remember, was constituted to facilitate peace talks between the Centre and the ULFA.

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Red Alert In Bihar

The Bihar Government has appropriately issued a red alert across the State in the wake of the killings of the Bihari labourers in Assam, Chief Minister Nitish Kumar held an emergency meeting of his Cabinet to discuss the exodus of Biharis from Assam, most of whom have been living there for long. A five-member team has been sent to Assam to study the situation. The CM has also directed the State’s Police Chief to monitor the situation and keep the force in readiness to meet any retaliatory attacks in the State.  He has been directed to coordinate with the railway authorities to ensure security in the northeast-bound trains. Over a dozen long-distance Assam-bound trains either originate from Bihar or pass through the State. The CM has also written to his counterpart in Guwahati to provide protection to the Biharis in Assam, which Tarun Gogoi has assured.

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Violent Land Tussle In W. Bengal

The political backlash over farmland acquisition in West Bengal is set to flare up again, even as Singur’s aftershocks echo in distant Nandigram in Midnapore District. The land tussle in Nandiram, the site for the Special Economic Zone (SEZ) being developed by the Indonesian group, Salim, turned violent over the week-end.  Six people were killed and many more injured when the farmers, whose land is being acquired, and the CPM cadres were engaged in a pitched battle. The two sides lobbed crude bombs at each other and exchanged gunfire for nearly four hours. This constrained Chief Minister Buddhadeb Bhattacharjee to come out in sack cloth and ashes. He admitted having acted hastily and also that notices had been sent to farmers whose land was to be acquired and stated on Tuesday: “We will talk to all the political parties and elected Panchayats before acquiring land at Nandigram.”

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UP Towards Central Rule?

Five weeks ago, this column predicted: “Uttar Pradesh appears to be drifting towards Central rule before the State goes to the poll next year… the UPA Government’s mind seems made and according to some, it is only a matter of time…” Today, the Centre’s mind appears more firmly made on promulgation of the President’s rule in the State. But the question remains: when and how? A final decision will be taken before the upcoming Assembly polls in March-April, if not earlier. The three major parties in the fray, the BJP, BSP and the Congress have demanded Central rule on the ground of deteriorating law and order situation in the State, especially after the horrible and disgusting serial killings of children in Noida. But can this honestly justify the use of Article 356 to dismiss the Mulayam Singh Government?  It could set an unfortunate precedent, raising a basic issue: does a deterioration in the law and order situation amount to a  breakdown of the constitutional machinery?

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EC Guidelines For Punjab Poll

Even as north-India freezes in cold, activity in Punjab and Uttarakhand is hotting up in the run-up to the Assembly elections on 13 February.  In a bid to ensure free and fair poll, the Election Commission has issued detailed guidelines for the transfer of officials of the rank of Sub-Inspector and above and for the use of the official machinery by the Ministers and officials. The Chief Minister has been allowed four cars for security cover and the Leader of the Opposition two. With the imposition of the model code of conduct, the State Government, on its part, has issued separate instructions to stop cheques already issued for grants and financial assistances from being encashed and limited use of official cars. An immediate stop has been put on recently-transferred teachers from joining at their new places of posting. A reshuffle in the Punjab Police is also on the cards in line with the Election Commission guidelines.

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Uttaranchal Or Uttarakhand?

An interesting and ticklish issue has come up in Uttaranchal prior to the Assembly poll on February 21.  At the time when the poll schedule was announced, the new hill State was called Uttaranchal. But on January 1, an extraordinary gazette notification of the Central Government changed the named of the State to Uttarakhand, as per the Uttaranchal (Alternation of Name) Act, passed by Parliament and assented to by the President of India. The BJP, which is hoping to wrest power from the Congress in the State has now written to the Election Commission to stop the name change, since this has been notified by the Centre after the model code of conduct came into force. It has charged the Congress, presently ruling the State, of indulging in avoidable politics by changing the name just before the Assembly poll.

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Happy Progress In Naga Peace Talks

Speculation is rife about the future of the ongoing talks for peace in Nagaland between the Centre and the NSCN(IM).  Following a surprise meeting between Sonia Gandhi and the NSCN(IM) General Secretary T. Muivah in New Delhi last week, many Nagaland watchers are wondering if the decks have been cleared for a settlement of the long-drawn Naga issue. At the end of the 30-minute meeting with Sonia Gandhi, Muivah requested Union Minister Oscar Fernandes, the Centre’s pointsman for the Naga talks, for a meeting with Prime Minister Manmohan Singh. This has yet to materialize. But the positive development between the Naga leaders’ meeting with Fernandes-led group of Union Ministers last year at Bangkok and last week’s meeting with Sonia Gandhi could have an impact on the Manipur Assembly poll next month. Naga tribes dominate four hill districts of the State and the NSCN(IM) continues to demand greater Nagaland, which includes large parts of Manipur.

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M.P. Follows Pak Model

The BJP Government in Madhya Pradesh, led by Shivraj Singh Chouhan has taken inspiration from Islamabad to devise a family planning programme for the Muslims of the State. It is based on the “Pakistan model” which advocates use of religious texts and clerics for awareness campaigns and of mosques to distribute contraceptives. The State Government is of the view, like the Pakistan administration, that “what comes in the way of family planning is ignorance and not religion and that the Muslim community should come out of darkness…”  The State’s Ministry of Health has thus decided to distribute as many as 10,000 copies of the book, “Census, Islam and Family Planning” free of cost, so that the message of family planning reaches the people.  The book has been written by the BJP’s National Executive member, Muzaffar Hussain.---INFA

 (Copyright, India News and Feature Alliance)

Round The States

New Delhi, 4 January 2007

Despite Apex Court’s Order….

STATES EVADE POLICE REFORMS

By Insaf

The State Governments seem determined to have their way on the crucial subject of police reforms. These have been recommended by various commissions and committees over the past two decades but have been successfully evaded. The States are, indeed, not willing even to implement the Supreme Court order of September last for overdue reforms. At a Chief Ministers meet, convened by Union Home Minister Shivraj Patil in New Delhi over the week-end to discuss the issue, they unanimously decided to individually inform the Court about their practical difficulties in implementing the order.  The Court had directed all the States to set up a State Security Commissions each, a police establishment board to decide all postings, transfers and promotions and a police complaint authority at the district and State levels.  It also stipulated that the DGPs at the State headquarters should be selected from a panel of three officers finalized by the UPSC and should have a fixed tenure of two years like the officers under him.

Most Chief Ministers voiced strong reservations about the fixed-tenure proposal. Bihar’s Chief Minister Nitish Kumar, for example, apprehended that fixed tenures could create “monsters” in each police station. He argued that it was simplistic to blame political interference and asked: “What about interference from the superiors as also corruption and bribery?”  The States are particularly opposed to the Security Commissions on the plea that these would encroach upon their jurisdiction as did the selection of the DGPs by a panel set up by the UPSC.  That, they insisted, was their prerogative. Even Shivraj Patil  conceded that the Centre was not in favour of the DGPs being selected from a UPSC panel. Opinion was, however, divided on the establishment of a Police Complaint Authority. Karnataka opposed it on the ground that such an authority at the State and district levels would cost nearly 40 crore, which it could ill-afford.

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Assembly Polls In Three States

Crucial Assembly elections are slated during the year in six States and, possibly, in seven.  The Election Commission has announced polls in Punjab, Uttaranchal and Manipur next month, leaving out Uttar Pradesh for March-April. Gujarat and Goa are scheduled to go for the Assembly polls in the second half of the year. Karnataka too may face an election, given its unending political developments. The first round of polls in February are crucial for the Congress. The party is ruling in all the three States and has completed full five-year tenures in Punjab and Uttaranchal. Confident of a peaceful poll in these two States, the Election Commission has announced one-day poll--on February 13 in the Punjab and February 21 in Uttaranchal.  In the insurgency-hit Manipur, it will be a three-day poll---on February 2, 15 and 23.

The stage is set in the Punjab for a fierce contest between the ruling Congress and the Shiromani Akali Dal (Badal)-BJP combine, as indicated by the tendency on both sides to hit each other below the belt.  Chief Minister Amarinder Singh, who is leading the Congress campaign, has claimed that his party will win around 70-75 seats in the 117-member Assembly.  The party has 66 MLAs in the present House. The Leader of the Opposition, and former Chief Minister Prakash Singh Badal has reacted sharply to Amarinder Singh’s claim and thinks that the Congress would struggle to get even 30 seats.  For his own party, he has predicted a three-fourth majority in the next Assembly.  The party had won 40 seats in the last Assembly poll. Badal has also dismissed as false propaganda Amarinder Government’s claim that it has brought a lot of positive changes in Punjab. A lot more is sure to follow.

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Ensuring Peaceful Poll In Manipur

The ruling Congress in Uttaranchal faces a challenging task, where the main Opposition, the BJP, is hoping to win a comfortable majority. The State Congress continues to be a divided house, causing anxiety to the Congress High Command. In Manipur, meanwhile, the law and order situation is receiving special attention of both the Election Commission and the Union Government. Election Commissioner Navin Chawla has already visited the State and worked out details with the State Government about the deployment of security forces for the three-phase poll.  A Central team, headed by Home Secretary V.K. Duggal, has visited Assam and Manipur to work out deployment of security forces, keeping in mind that the National Games at Guwahati from February 9 to 24 coincide with the Manipur poll. ULFA continues to oppose the Games and is even threatening to go physical.

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EC Plans For U.P.

The Election Commission is making all-out efforts to ensure a free and fair poll for the 403-member Assembly in U.P.  That is why the U.P. poll has been delinked from the three other States.  The crucial election is likely to get the attention of the kind received by Bihar in 2005 and West Bengal last year. A four-phase poll is expected to be announced. Even as the warning bells are beginning to worry Chief Minister Mulayam Singh and his party, following the increasing reports of the law and order problems in the State, the Election Commission has been quietly going about its job of cleansing the electoral rolls. So far, as many as 25 lakh names of “dead voters” have been struck off the voters’ list.  Incidentally, the already detected number relates to only dead persons. The Commission would also be striking off the names of duplicate voters, for which purpose booth level officers have also been appointed.

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Singur Troubles Chhatisgarh

West Bengal’s land deal with the Tatas for their Rs.1 lakh car project is beginning to create controversial waves elsewhere. What is considered by the BJP to be poison in Singur is, in fact, viewed as manna by the same party in Chhatisgarh..  Even as the BJP supports Trinamool Congress against the Tata deal in West Bengal, its own Government in Chhatisgarh is busy earmarking over 6000 acres of agricultural land for the Tatas, who want to invest Rs.10,000 crore in a steel plant with a capacity of 5 million tonnes per annum.  The State’s Raman Government claims that the villagers have passed a gram sabha resolution accepting the land acquisition. But the tribals in the Lohandiguda block of Bastar say they do not want to part with their land. In fact, they want the State Government to accept 13 demands in lieu of their land. Heading the list is their demand of “land for land”. This cannot be met easily.

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Rewriting Rajathan’s History

Vasundhara Raje’s Rajasthan Government has launched on a bizarre project. She wants the State’s history written afresh to make it more authentic. About 175 years ago, Col. James Todd had written a book entitled: Annals and Antiquities of Rajasthan. This was considered the most authentic work on the State’s 41,000 villages and 186 cities and towns. But the State Government and its Education Minister, Ghanshyam Tiwari does not think so and regard it as highly controversial. It has, therefore, decided to seek the assistance of 50,000 teachers to write their own version of Rajasthan’s history under a one-year project entitled: Aapno Dharti, Aapno Log.  (Our Land, Our People).  Will the end product be authentic history or will it be folk lore laced with highly subjective romanticism?  The State’s historians have their doubts, grave doubts. They would prefer to have well-known historians to do the job.---INFA

(Copyright, India News and Feature Alliance)

ECONOMIC HIGHLIGHTS

New Delhi, 26 December 2007

Sustaining High Growth Rate…

BUT WHERE IS THE INFRASTRUCTURE?

By Dr. Vinod Mehta

(Former Director, Research, ICSSR)

If anything that might hold back India from sustaining a high growth rate of around 9 to 10 per cent is the slow development of its infrastructure. In spite of the fact that the problem has been well identified. 

Development of infrastructure like roads, rail network, waterways, seaports, airports, communications, electricity etc., is the basic pre-condition for any economy to achieve and sustain a high rate of economic growth. Thus, if the country has to maintain and sustain an over nine per cent growth rate it is essential to speed up the development of infrastructure.

Almost all the developed countries have a well developed infrastructure which enables them to maintain a relatively high growth rate. Take for instance, the Netherlands. The size of the Netherlands is almost equal to that of Haryana.  It has one port at Rotterdam compared to four major ports in India, but that one port in Rotterdam handles more shipments than all the four major ports in India taken together.

Similarly, Schipol Airport in Amsterdam handles more aircrafts than the four major airports in India taken together. Even in the City State of Singapore its port and airport handle more ships and airplanes than handled by all the major Indian ports and airports.           

Compared to these countries, even after 15 years of economic reforms, India’s infrastructure is still not in a good shape. This has been recognized by all the Governments in power.

Besides, the importance of infrastructure has been underlined in the India Infrastructure Report and various Governments have also made some moves like the development of the highways and the privatization of the Delhi and Bombay airports, but these do not add too much. Given that the availability of electricity in abundance, modern transport and communication systems, good roads, trained manpower etc. would form the backbone for the success of any economic reforms. 

After the Revolution in Russia in 1917, Lenin emphasized the importance of electricity without which, he observed, new Russia could never think of becoming an industrial power. This observation is as valid today for India as it was valid for Russia then.

Even after six decades of planned development we are not producing enough of electricity to meet our growing domestic demand. Every day there are power-cuts coupled with voltage fluctuations which are not only resulting in production losses and damaged equipments but also blocking potential fresh investments. It has become a ritual every year to divert electricity from the industry to agriculture during the summer months. 

Bringing things to such a pass today that the demand for electricity exceeds the supply of electricity. Moreover, the electricity transmission losses are high because of obsolete technology, the State electricity boards are perpetually in losses and foreign investments are limited to promises only. 

True, nuclear power may go a long way in relieving the power shortage in the country but that depends on the successful conclusion of the Indo-American nuclear deal which is being opposed both by the Left and the BJP.

Whether the deal finally sees the light of day or not, the Government's first task should be to pay attention to attracting foreign and domestic investment, on a very big scale, in electricity generation; it must encourage introduction of new technology and to the extent possible revamping and privatization of the State electricity boards so as to make them earn reasonable profit. 

Learning from the Enron experience, the foreign investment and contracts in this sector must be made not only transparent but also with a rider that once approved the project would be completed within the agreed time framework.

The second important infrastructure problem relates to the development of roads. There are very few fast roads for the high speed movement of goods. The roads all over the country are in a bad shape. 

Shockingly, only 20 per cent of the paved roads are said to be in good condition (roads substantially free of defects and requiring only routine maintenance) as against 30 per cent in Indonesia, 31 per cent in Philippines, 50 per cent in Thailand and 70 per cent in South Korea. Such roads not only slow down the movement of traffic but result in the excessive wear and tear of vehicles and excess consumption of petrol and diesel. 

Sadly, even in this sector, the country has not been able to attract private domestic and foreign investment. Needless to say the Government will have to provide clear-cut guidelines including tax incentives if any to attract investors in this field also.

Related to the development of roads is the question of changing the technological base of our big vehicles especially the buses, bulk carriers, specialized bulk carriers, as for frozen foods and so on. There has been large scale foreign investment in the car manufacturing sector but no significant foreign investment in the production of heavy vehicles to take care of the mass transportation needs.

The buses are rickety and uncomfortable, their designs old and outdated and they consume more energy per kilometre than required.  So is true of our bulk carriers. This is very important from the point of view of integrating all the domestic markets as well as exploiting the export market.

Similarly, the development of railways, aviation and river transport is very important for the success of economic reforms. The railways technology likewise is relatively outdated which accounts for a high rate of railway accidents in the country. Again, compared to other countries we have very few high speed trains. Since our ports are quite far away from the hinterland, it would difficult for the interior of the country to integrate with the world markets in the absence of a high speed railway network.

The demand for international air travel has gone up manifold. But Air India (after merging Indian Airlines with it) is unable to meet the demand because of the limited number of aircrafts. As a result foreign airlines have come in to India in a big way and Air India is left with only code-sharing by giving away her right to fly to these countries.

The third important area of infrastructure is communication. It is common knowledge that our basic telephones services are in a bad shape even though the availability of the telephone service is perhaps the lowest in India. Data shows there are only two telephones per 100 residents as against 7 in Brazil, 9 in Mexico and 16 in Russia. 

As for other services like voice and non-voice mail, data transfer, e-mail etc. the less said the better. The powers-that-be seem to forget that the growth of modern business depends upon the efficient communication system which is definitely lacking in India.

The introduction of cellular phones does not amount to modernization of the communication system. What the country needs is a very large expansion of basic telephone services followed by value-added services. The demand for the mobile phone services has been going up by leaps and bounds but the quality of service provided by the private players and others is still very poor. The question of the distribution of frequencies among the mobile players is yet to be satisfactorily settled.

In short, the country cannot now afford to ignore the development of all kinds of infrastructure. As the India Infrastructure Report states, the country would be needing between $150 to $200 billion in the next five years for infrastructure development in order to achieve an annual growth rate of 7 per cent.  We shall have to find the resources of this magnitude. ---- INFA

(Copyright India News & Feature Alliance)

ECONOMIC HIGHLIGHTS

Public Sector Companies

LOOK BEYOND DISINVESTMENTS

By Dr. Vinod Mehta

Former Director (Research) ICSSR

In spite of the assertions of the Finance Minister that disinvestment in the Public Sector Units (PSUs) is on track, the fact is that it has virtually come to a standstill.  In the last three years, the Government has not been able to convince its Left partners to agree to a part of disinvestment in some of the PSUs.

Significantly, it has been more than a decade since the Disinvestment Commission was set up (and later wound up). Recall, it had made a number of recommendations, but still not much headway has been made in this direction. Moreover, emphasis on disinvestment only is likely to attract opposition. Perhaps the opposition would not be so vocal if it were to be accompanied by reforms in the management of public sector units.

The factors behind our ailing public sector units are common knowledge. This is bound to happen as the public sector organizations are run more like Government departments rather than commercial undertakings. Decisions are never taken in time, seniority prevails over merit, good work cannot be rewarded while bad or indifferent work goes unpunished. The hierarchical system is very rigid and there is no accountability ---- this is our public sector!

Not that these things were not known earlier, but in the liberal economic atmosphere and at a time when we are facing a resource crunch, the continuation of this kind of situation does not make any sense.

It will be recalled that after taking over the Chairmanship of Air India and Indian Airlines, Russi Mody expressed his unhappiness over the working of these two airlines and his inability to do anything about it. Since he came from the private sector background, Mody, could openly express his frustration. But there are a hundred of other Russi Modys in various public sector units who are unable to express their anguish so openly.

Weak Industrial Base

The public sector units were set up at a time when the industrial base of the country was very weak and the domestic industrialists were neither in a position nor had the resources to make huge investments.  All those who advocated the setting up of public sector units also said that over a period of time the public sector units would be contributing in a big way to the exchequer.

Further, the profits of the public sector units would supplement the resources raised through taxes. None ever conceived that these loss-making units would be perpetually bailed out by the Government. 

What we are witnessing today is that the PSUs are being treated as sacred cows. There are PSUs which have been perpetually losing money. Questionably, if this was not the intention of the originators of the idea of the public sector undertakings then on what basis are we defending these loss-making units?

Take for instance, the Indian Drugs and Pharmaceutical Ltd. The IDPL is the largest Central Pharma Public Sector Undertaking in India with plants at Rishikesh, Gurgaon, Chennai, Hyderabad and Muzaffarpur. Set up in the 60’s, the IDPL was formally declared sick by the Board for Industrial & Financial Reconstruction (BIFR) on August 12 1992.

A revival package for the Company was formulated and approved by the BIFR on February 10 1994.  It is almost 13 years and this PSU has not been rehabilitated. While drug companies the world over earn huge profits, the IDPL has been ailing almost since its birth and stands closed. The responsibility for its losses rests on following the same administrative approach of a Government department rather than modern management method.

Another public sector unit, Hindustan Photo and Films too perpetually ran into losses and stands shut. Again, while photo companies across the world are netting huge profits, here is a public sector company running into losses! With digital photography taking roots the demand for photo films is shrinking and many photo film making companies are switching to the new medium for storing photo images. In such a situation can this PSU ever be revived?

Write Off Loans?

The unprofessional management of the nationalized banks is too well known. Some of these banks had totally eroded their capital base in the past but were bailed out by the Government. Sadly, these banks are being run more or less like Government departments, no matter that banking is a commercial activity. Can a commercial bank write off the loans of borrowers (or provide loan on political considerations) as Indian banks do?

If the private sector banks were to do this, they would be out of business the next day.  Since the nationalized banks belong to the Government, the politicians can announce waiving of loans to farmers and then make up the losses of the banks through budgetary support. Again, since most of the bank Chairmen are political appointees, they hardly care for the RBI warnings.

Bluntly, public sector units function more like Government departments rather than commercial units run by professionals who have the necessary skills to manage them.  And so long as the PSUs continue to be run as such, there is very little hope that they will ever show profits. And where they have shown profits, it is largely due to the increase in the administered prices of their products rather than an improvement in their functioning.

The time has come to take a clear cut stand on the role of the public sector units in the country. It must be understood that loss-making PSUs are a drain on our resources --- resources which could have been used for social spending like healthcare, education, housing, safety net etc are being used to cover the losses of these units.

There appears to be no justification for making good the losses of these units year after year. Making up the losses of Indian Airlines and Air India means that the taxpayers’ money is being used to pay for the travel of Government officers, businessmen and others.

Travellers Being Subsidized

Similarly, budgetary support to shore up the losses of Air India means that the international traveller is being subsidized by the Indian taxpayer.  Ditto is the case of the losses of other public sector units like the IDPL, HPF, banks etc. The question is: How long will the taxpayer be asked to bear the burden of these loss-making units?

The country must take a cue from Russi Mody’s frustration, expressed over a decade ago, and do something to allow the public sector units to run as professional commercial organizations. Presently, what is more important than disinvestment is to totally delink the PSUs from the Ministries and issue clear guidelines as to what these units are expected to do.

The way out can be to set up an apex independent statutory body like the RBI or SEBI, whose job would be to monitor the functioning of all the public sector units, recruit professional staff without any interference from the Ministries and politicians, fill up the top positions, overlook mergers and possible disinvestment as well as have the powers to close down or sell off the units which are perpetually running into losses. 

The inefficiency of these PSUs and the budgetary support to the loss-making units is perhaps the biggest scandal which needs to be dealt with at all cost. There is no point in treating the PSUs as sacred cows. They must run efficiently and show profits as any other commercial organization. This was also the original idea of setting up these units.

As for as disinvestment of a part of a PSU is concerned, there need not be any hue and cry over it. What is needed is to specify the upper limit on disinvestment in a PSU.  Whether it is to be 5 per cent, 10, 20 or 49 per cent is a political decision. It would be better if political parties come to an understanding on this, sooner than later. ---- INFA

(Copyright India News & Feature Alliance)