Year of the onion
IT has been a year like none before. Events hurtled across the political arena, but with no direction.

Policing Delhi
DELHI has been sliding fast into criminality over the past six years or so. There have been numerous cases of murder in areas inhabited by the rich and the resourceful.

THE PINOCHET CONUNDRUM
Disturbing tide of justice
by Sunanda K. Datta-Ray
AS Indian member of the Tokyo war crimes trial, Justice Radhabenode Pal warned that it was victor’s justice that was being dispensed, and that the legal position would have been reversed if the fortune of war had gone the other way.

For safeguarding secularism
by Satyapal Dang
IT is anybody’s guess as to how long the Vajpayee government would last and what would follow in case of its collapse — a Congress-led government or elections

Crisis may head to economic collapse
by Surinder Singla
ONE would like to compliment The Tribune on its role in initiating a public debate on the financial crisis in Punjab. The debate is led by two of its staff members, Mr Gobind Thukral and Mr P.P.S. Gill (Dec 23 and 24).

Plight of the rupee
by Sanjay Manchanda
THE value of money has declined steadily and constantly over the years.

75 Years Ago

Historical distortion
EUROPEAN writers are apt to assume on the basis of Indian medieval history that there was no representative system of Government known to the Orientals and that they have always been accustomed to personal rule or despotism.

Year of the onion

IT has been a year like none before. Events hurtled across the political arena, but with no direction. The winners and losers of February changed places by November. The BJP, buoyant and confident at the start of the year, looks and acts as a defeated phenomenon now. The Congress, facing relegation from the national league 11 months ago, has regained much of its elan but has a messy problem about future plans. The United Front has disintegrated and the proposed third front is still a distant dream. The Left is intact and that is its major worry; it wants to be growing and it is not. The regional parties are in various stages of health; the failure of the Big Two to steamroll their way through the nation has insulated them from an imminent threat of oblivion. Ms Sonia Gandhi has come out of her self-imposed confinement in 10 Janpath, and what a coming out it has been! She has revived the ageing Congress, applied a coat of youthful paint and injected a dose of hope and fighting spirit among the tired workers. If the party regains its lost pride, history may well judge that 1998 belongs to her. A reverse process is in operation in the BJP. It is a party at war with itself and with the sangh parivar. Its policies are so undeveloped that they cannot provide the spinal column of a ruling party. It is the deficiency in this department that has converted a trump card like the Pokhran blasts into a damp squib. And, in the process, created an awkward situation in foreign relations. The contagion of infighting has spread to alliance parties. The AIADMK-led front has crumbled; the Samata Party and the Biju Janata Dal have split and the Akali Dal is going through a patch of disunity.

A disturbing feature is the induction of a streak of intolerance and anger into politics. This and the steady fracturing and further fracturing of the parties threaten to weaken democracy. For all the reckless experiments with various combinations and alliances, Indian democracy has remained strong and in sound health. This should not be affected, and not many political parties inspire confidence that they are even aware of this need. The liberals outside mainstream politics too have a role to play; if they assert, the parties may be forced to clothe themselves with well-defined policies and programmes and that will arrest the tendency to use verbal violence to shout down rivals. When policies clash debate is born; when personalities clash it is mayhem in legislature.

As the year closes, the economy is slowly sinking into a crisis. That is the only message of the latest RBI report. It is a veritable litany of woes. There is no arena that offers cheer. The country’s finances have been badly mismanaged and it will take months of serious and sensible efforts to avert a 1991-like meltdown. But the present leadership is plainly unequal to the task. In this respect, onion is more than a pungent vegetable. It stands for rank political failure and a merchant class without moral compunction. It was political insensitivity to blame unseasonal rains for a development that was both man-made and greed-driven. Onion at best cost the BJP power in three states. But onion management, when applied to the entire economy, will push the country into a pit. Let 1998 be a loud and clear warning.

Policing Delhi

DELHI has been sliding fast into criminality over the past six years or so. There have been numerous cases of murder in areas inhabited by the rich and the resourceful. The poor, however, have not been spared and, therefore, it is futile to make a class distinction in the context of the victims. The atmosphere has become violent. The main cause of this is the politician-criminal-police nexus. The new government headed by Mrs Sheila Dikshit has tried to instil confidence among the public and a faint hope has arisen that the proactive policing policy promised by Mrs Sushma Swaraj will be vigorously worked out and a new era of fearless living will dawn on the national capital without further harm. However, if one looks at even one day's crime situation, one would get rather sceptical. Take Tuesday (December 29), for instance. Five dacoits descended on the Najafgarh branch of the Punjab and Sind Bank in the south-western part of the city and escaped with more than Rs 3 lakh. Police officials blame the incident on the failure of the bank's internal security system. "It is not possible to post policemen in every bank" is the straight reply of the guardians of the law. Such incidents can take place in an environment of maximum security in an area where the Union Home Minister is on the move! Six miscreants barge into a doctor's clinic in Mayur Vihar and rob him of his personal belongings; they drive away in the ENT specialist's personal vehicle. Dilshad Garden finds a businessman looking helplessly at his shot son and robbed wife. Two men snatch all the money a Super Bazar cashier has in Trilokpuri. Paschim Vihar and Rohini report confidence-shattering crimes.

Law and order is a subject dealt with by the Union Government in Delhi and the police personnel there receive orders from the Home Ministry or the Lieutenant-Governor. It will not be proper to blame only the rapidly rising population for criminal acts. Delhi, both new and old, has been attracting thousands of people belonging to various socio-economic strata and an increase in the population has also witnessed an expansion of the law and order network. The criminalisation of Delhi is closely linked with the degradation of the political milieu and a marked fall in the morale of the police force. Mr Advani is not quite correct in saying that Delhi is in the "limelight" and, therefore, crimes committed in the city get overly highlighted. The law and order situation has worsened and the law-keepers have to begin at the beginning by accepting their inability to strike fear into the hearts of criminals and anti-social elements. A few middle-level police officers are transferred when residents show panic. A little respite gives the police an opportunity to assert unrealistically that all is well. Then another spurt of robberies and killings materialises. The Home Minister goes out in search of some excuse or explanation once again. Mr Advani has done well not to replace Police Commissioner V. N. Singh. Mr Nikhil Kumar had done a commendable job but he was summarily shifted. Mr V. N. Singh fell back upon his experience and evolved a credible policing policy. The past BJP government did not give him the cooperation he needed. One would expect full support for him and his men from the new Chief Minister, who should assert her right to be involved in the decision-making process with regard to the security of life and limb in the Union Capital. Mumbai, with a strong police network, has become a scene of daily murders and robberies. Other major cities like Patna and Lucknow give a similar impression. So, crime management has to be done under expert advice by dedicated policemen. There should not be too much dependence on the Central Reserve Police Force (CRPF) and the Central Industrial Security Force (CISF). The Director-General of the CRPF, Mr M.N. Sabherwal, has rightly emphasised the need for adequate training time for his men who are being put on continuous duty. A couple of additional battalions should be raised under the supervision of Mr Sabherwal and other officers who have a strong will like him. It is not impossible to police Delhi well. The need of the hour is to break the politician-criminal-police nexus.

THE PINOCHET CONUNDRUM
Disturbing tide of justice
by Sunanda K. Datta-Ray

AS Indian member of the Tokyo war crimes trial, Justice Radhabenode Pal warned that it was victor’s justice that was being dispensed, and that the legal position would have been reversed if the fortune of war had gone the other way. That is something to be borne in mind at a time when many regard Augusto Pinochet, Suharto, Imelda Marcos, Slobodan Milosevic and Radovan Karadzic as enemies of the human race, their names writ in opprobrium and accusation. But for Indira Gandhi, Tikka Khan, Rao Farman Ali, A.K. Niazi and even Yahya Khan might have joined their inglorious ranks.

In demanding that any of these personages be brought to the bar of international justice, however, one cannot but recall both Justice Pal’s sombre warning and the political factors that prompted Mrs Gandhi to let off scot-free some 92,000 Pakistani soldiers of whose bestiality in Bangladesh there was no doubt. That triumph of pragmatism could also explain the intriguing role of the USA in this entire business of crime and punishment, and especially its curious ambivalence over the former Chilean dictator. It is no secret that the Central Intelligence Agency helped (to put it mildly) General Pinochet and his forces to overthrow and murder the democratically elected socialist president, Salvador Allende, in 1973. Now, without either supporting or opposing the case for bringing General Pinochet to trial in Spain, Washington is quietly releasing classified documents to help the Spanish prosecutors.

This might seem more like vendetta than justice; it is almost as reprehensible as the American kidnapping and imprisonment of Panama’s Manuel Noriega. But in both instances, the judicial process really cloaks the exercise of power politics. Not that the Americans were always so cynical. They, too, had their moment of idealism before tumbling to the responsibilities of the reality of power.

Opening the Nuremberg trial, Robert Jackson, the young and idealistic American prosecutor, declared, “The ultimate step in avoiding periodic wars, which are inevitable in a system of international lawlessness, is to make statesmen responsible to the law”. He added that “while this law is first applied against German aggressors, the law includes — and if it is to serve a useful purpose, it must condemn — aggression by any other nations, including those which sit here now in judgement”. Yet the USA opposed tooth and nail the formation of the International Court of Justice, demanding that American troops, generals and policy-makers should be exempt from the court’s jurisdiction.

India, China, Iraq, Libya and Sudan also voted against, presumably because they know that when it comes to international affairs, there is no such thing as disinterested justice. It cannot be a comfortable thought for the self-righteous — and those who administer the law and dispense justice invariably are — that their high moral position is made possible only by the triumph of arms. The Serbian war crimes tribunal has not succeeded in bringing the real ringleaders to book; neither has the tribunal in Rwanda. As Pal had the courage to affirm, the Tokyo and Nuremberg trials, which set a global precedent, took place only because the Allied powers defeated Germany, Italy and Japan. Similarly, as victor in the Bangladesh war, India could have tried the Pakistanis. But political pragmatism ensured their release. Pragmatism must always prevail if law and order are to be maintained, and the world saved from anarchy in the name of human rights and universal jurisdiction.

If , on the other hand, the winner-takes-all principle’s primacy is recognised, then the fate that hangs over General Pinochet’s head might be visited on other leaders as well. Whether they are guilty is a matter of opinion. The Argentinians can accuse Mrs Margaret Thatcher of wilfully sinking the ship, Belgrano, and drowning all on board, during the Falklands war, knowing that it was about to surrender. Iraq can charge the former United States President, Mr George Bush, of deliberately killing and wounding scores of innocent people by bombing a baby food factory during the Gulf war. Indeed, it is possible that when Queen Elizabeth II pays a state visit to, say , Rome, militant Irish Catholics might apply for a warrant for her arrest for colonial oppression and exploitation of Ireland.

What must be resisted is the temptation to relive the past. It is understandable that those ageing British and Australians who were prisoners or war of the imperial Japanese, or those tragic females in the Philippines and South Korea who were forced to become what was euphemistically known as “comfort women”, should crave for some kind of acknowledgement of their sufferings. But the apology too prompt can be an empty gesture. President Bill Clinton’s willingness to say “sorry” for slavery will not guarantee education, health care, jobs and welfare to the descendants of those slaves. If the Australian Prime Minister, Mr John Howard, were to follow suit in relation to aborigines, would it make their burden of pain any easier to bear? Mr Tony Blair’s apology for the potato famine did not have a noticeable effect on Anglo-Irish relations. As Mr Inder Kumar Gujral wisely retorted when some shallow hotheads demanded an apology from the Queen, India has far more important matters on its plate.

Legally, too, this sudden tide of justice is somewhat disturbing. Britain’s highest court of appeal, the judicial committee of the House of Lords or Law Lords, did not deny the High Court’s ruling that General Pinochet is entitled to sovereign immunity, as bestowed on him by the Chilean government. But it held by a narrow majority that this immunity could not cover murder, torture and kidnapping, the crimes of which he had been accused by the Spanish judge. Here is a nice conundrum: Not only can a foreign court decide on the extent of a former head of state’s immunity, but also he can be prejudged on the basis of arguments submitted by a third party in another land. On the basis of this precedent, an Indian judge can take similar action against any former Pakistani President or Prime Minister when the latter is visiting abroad, claiming that Indian citizens have been ill-treated in Pakistan.

True, magistrates in a lower British court will now have to decide on the Spanish judge’s actual extradition appeal. But being only human, they cannot be expected to be indifferent to the views of such august personages as the Law Lords and upheld by the Home Secretary, Mr Jack Straw. Another angle is equally worrying. Recently, when human rights activists tried similarly to charge President Laurent Kabila of Zaire, the French government held that being still in office, unlike General Pinochet, he continues to enjoy immunity. That means General Pinochet would not have found himself in this predicament if he had not held free and fair elections and handed over power to a democratic government. It is something for other tyrants to think about. Dictators are safe so long as they continue to dictate.

Formerly Editor of the Statesman, the author is editorial consultant to the Straits Times in Singapore.

Plight of the rupee
by Sanjay Manchanda

THE value of money has declined steadily and constantly over the years. But this year it has been an absolutely phenomenal development. The purchasing power of a hundred-rupee note tumbled down to such depths that one moment you took it out of your wallet and the next it vanished without a trace.

In the beginning of the year 1998, the supposedly “big” note was still fetching a reasonable amount of “ration-pani” for the salarised classes, but a little while ago it barely got you the day’s quota of onions, tomatoes, and potatoes.

Well, if that is the fate of a hundred-rupee note, it would not need a streak of ingenuity to imagine the plight of small change. In the first place, it is such a rarity that the jingling sound of coins nowadays has become the most pleasing music to ears.

The cashier at the bank gives you a cold stare when you ask for small change, and curtly tells you, “don’t you know that small change is not available?”, making the client feel that a very grave mistake has been committed by asking for the impossible!

In any case, small change no longer carries any value whatsoever, which is evident from the fact that you seldom get the balance back that is due to you as a customer. Instead, the super markets, post-offices and shopkeepers now give you all sorts of things — toffees, sweets, matchboxes, revenue stamps, ordinary postal stamps or post-cards — in lieu of the balance.

Worse still, with the fast declining value of money, the value of life have also taken somersaults, which, of course, is more painful. The other day, after about a couple of years, I went to buy “prasad” for the traditional Rs 1.25 (with complete change, though) at the sweetshop gracing the entrance to a popular local temple.

As I said: “Sawaa rupaye ka parsad (Rs 1.25 parsad, please)”, the sweet-seller looked at me up and down disdainfully before turning to his other costomers. About 20 minutes of anxious wait later, he condescended back to me, since all his customers had been served and the next one was not yet in sight.

“Bhai saheb, aage raasta naapo. Aap jaise do aur bhagat yahan aaye to, yeh mandir aur meri dukan dono band ho jayenge (Please move ahead, brother. If two more devotees like you come here, both the temple and my shop will close down)” he pleaded with folded hands.

After listening to that derogatory statement with open-mouthed incredulity, I came back home pondering that if 1998 has brought us to this pass, what will 1999 hold in store!

For safeguarding secularism
by Satyapal Dang

IT is anybody’s guess as to how long the Vajpayee government would last and what would follow in case of its collapse — a Congress-led government or elections. Some segments of the Left have been keen that the Congress should take the initiative to bring about its fall and form a government led by it. I think it needs to be realised that this is a wrong approach for more than one reason.

In the first place, to be keen for a Congress-led government after prolonged and blind anti-Congressism is a complete swing of the pendulum which could not but harm the credibility of the Left.

Secondly, while it may be correct that the longer the RSS-controlled BJP is in power, greater the harm it can do by placing RSS men in key positions, by lowering the quality of education, by introducing concepts of Hindutva and Hindu Rashtra, by increasing communal tensions, by subverting paramilitary forces, even the Army, etc. All such measures needed to be opposed strongly. But it was necessary to allow the people to have the experience of the BJP-led government. Many had voted for the BJP and its allies to give the BJP an opportunity to rule. Abrupt overthrow of the BJP-led government with the help of defection of some of its allies would prove counter-productive.

Even more important is the point that an alternative Congress-led government would not have been any better in some important aspects.

Take for instance the issue of corruption, certainly a very important issue. It greatly harms, slows down and even prevents development. Crores spent in the name of schemes meant for poverty-alleviation only enrich the corrupt. At the ground level, it makes the life of the common man more difficult and more miserable.

The BJP has no hesitation in relying for support on what they have described as the “queen of corruption”. Possibly the Congress would be quite willing to rely on the support of more than one “king of corruption”. After all, the thesis that corruption is a lesser evil than communalism was put forward by Congress President Sitaram Kesri. Mr Kesri’s thesis should not be adopted by the Left.

The eagerness to see a Congress-led government in power with “corruption kings” in it or supporting it from outside has created the impression that for the sake of power, the Left too may adopt the thesis and compromise with corruption. This has greatly harmed the fight against corruption.

True, people do not want another general election now. That, however, would justify only outside Left support to a Congress-led government with freedom to criticise and expose wrong policies and actions, including corruption, in case of collapse of the BJP-led government.

In my opinion, Mrs Sonia Gandhi’s policy of not doing anything to bring about the fall of the BJP-led government could not be faulted. Uncharitable critics say since both Mrs Sonia Gandhi and the BJP leadership do not want the skeletons of the Bofors scandal to tumble into the open, there is some mutual understanding. There are others who say that she was keen to see the results of the Assembly elections in four states. Still others opine that Mrs Sonia Gandhi hopes that elections after some more time may give the Congress an absolute majority. However, it is not necessary, at present, to try to analyse the factors that weighed with the Congress high command.

The Congress stance led to the revival of the slogan of a “Third Front” a la the “United Front”, formed after the earlier Lok Sabha elections. The necessary lessons do not seem to have been drawn by the Left. No doubt, it was correct to form that Front and take outside Congress support to install a government to prevent the BJP from seizing power. However, it was wrong to create an unwarranted illusion about it or to regard it as a very progressive front which would prove enduring. Its rapid collapse after the fall of the government has lessons which need to be learnt.

There is no denying the fact that, given the present class composition of the country’s population, the Left cannot come to power on its own. The need of the hour is a Left Democratic Front consisting of the Left and Centrist forces and based on a programme that will meet the requirements of the situation and take India forward. Such a front cannot come into existence without the Left itself becoming a stronger force than it is today. That can happen only through mass mobilisations and struggles — economic, political, social and ideological — as well as service to the people through constructive work. And it is going to be a prolonged struggle before such a front comes up. — IPA

State of Punjab's finances: public debate
Crisis may head to economic collapse
by Surinder Singla

ONE would like to compliment The Tribune on its role in initiating a public debate on the financial crisis in Punjab. The debate is led by two of its staff members, Mr Gobind Thukral and Mr P.P.S. Gill (Dec 23 and 24). Both have covered extensively the economy of Punjab. Thus, the exercise will lead to a fruitful discussion on the subject.

Mr Gobind Thukral has expressed the opinion that the financial crisis was in the making for a long time as every government contributed in its own way by adding non-Plan expenditure as well as offering subsidy to various segments of the population. One would agree with him to a large extent that this is a historical trend, and enlarge the role and functions of the government, thus raising the level of public expenditure which is inevitable.

Similarly, every government stayed away from the political fallout of the unpopular decision of raising and mobilising resources from its people to fund new schemes to facilitate economic growth in the state. Resource mobilisation is the most neglected aspect though there is enough autonomy to raise resources of its own.

But every government resorted to crying for more Central funds. This approach from any state in India has its limitations. The Central Budget belongs to all, and the states have equal rights on the Budget. That is why the subsidised foodgrains schemes run by various states, particularly Andhra Pradesh, do not have any Central support. The point is simple: no state in India can abdicate its responsibility of political populism and squandering the resources of a state to secure the electoral mandate. And this kind of financial mess and mismanagement backfired in both Andhra Pradesh and Haryana. The Andhra government abandoned its promise of providing two-rupee-a-kilo of rice to the people and Haryana scrapped prohibition which caused immense damage to its economy.

But it is possible that the growing economy of any state can evolve a fairly useful system of subsidy for its poor, deprived and desolate people, to make them productive citizens of the country. I would like to mention here a scheme which was initiated in Punjab - of issuing yellow cards to its poor people, to entitle them to interest-free loans for various small economic activities like dairying. Also, this scheme will entitle them to subsidised food as well as the state paying the interest on the educational loans given to the children of these poor families. The entire focus was to subsidise the capital formation for poor families so that they could come up to become productive agents rather than to subsidise their consumption needs to perpetuate their poverty, paralysing them permanently.

I wish Mr Gobind Thukral could identify the various subsidy schemes of state governments and their intended impact. The present government exactly chose the course of spending the hard-earned revenue in a manner that will not help the economy to grow at a faster rate to generate more tax revenue.

The other point which the correspondents have emphasised is that revenue expenditure has increased but revenue itself is not going up — particularly tax revenue has been declining. It is true that revenue expenditure has increased tremendously over a period of time, but it has risen more phenomenally during the past two years. To prove my point, the expenditure on debt-servicing, which was only Rs 1,042.7 crore in 1992-93, grew phenomenally to Rs 1828.95 crore in 1997-98. And this interest payment on public debt is still causing the biggest drain on the budget of Punjab after it dishonestly claimed that the entire Central government loan has been waived off.

Going by the Economic Survey of Punjab (a state government publication), partial debt has been waived off and the remaining debt of Rs 6,000 crore would be evaluated by the forthcoming Finance Commission after 2000. I would quote from the Punjab government’s “Punjab Budget at a Glance, 1998-99”. It raised the public debt to Rs 3631.13 crore in 1997-98 from Rs 2259.82 crore which it retired. Thus, an additional public debt was added to the tune of Rs 1371.31 crore! This public debt was not spent on the capital expenditure which was merely Rs 686.09 crore. This is adding every year to the interest burden on the state finances.

So, it is clear that all along the government has mismanaged the finances of the state. In fact, it is mortgaging the future of Punjabis by raising public debt for non-productive purposes. The Reserve Bank of India is closely scrutinising sovereign state guarantees offered to public sector banks without the backup of “inflow of income for these loans”. The RBI may evolve some system by which this hollow sovereign guarantee of a state cannot be acceptable to banks as it only endangers the future generation of Punjabis who have to live in debt for their whole life. This is what state Congress president Amarinder Singh is hinting at to combat the present financial crisis, which may lead to the economic collapse of the state.

The Tribune reporters have argued that tax revenue, particularly sales tax, has declined sharply. They have expressed the opinion that there is need for stringent measures to be adopted so that taxes are not stolen by the trading community in collusion with the tax officials. I do not subscribe to this view. Even if there is some possibility of a few dishonest traders being aligned with the tax administration in this game of denying the state its tax collection, it is an absolute untruth to say that the sales tax collection vis-a-vis other states like Haryana, Jammu and Kashmir and Himachal Pradesh has come down. I am quoting from the RBI statements.

The per capita tax revenue has increased in Punjab by 8.9 per cent, in Haryana by 8.7 per cent, in Himachal by 10 per cent and in Jammu and Kashmir by nearly 10 per cent, in the past two years (1995-96 and 1996-97). To quote particularly Punjab, if you take 1993-94, the per capita tax earning was Rs 1177.92 which rose to Rs 1516.70 in 1996-97, which is a phenomenal increase. And the per capita tax collection which was Rs 1490.34 is really Rs 1438.88 in the same year in Haryana which shows a decline.

So, it would not be true to say that there is a tax leakage in Punjab. But one would share the view that the per capita tax collection can be increased in Punjab as it has been prevalent from 1992 to 1996. It has been in the range of 16 per cent because of the economic growth that took place during this particular period of time. The point I am making is that the growth rate has declined both in agriculture and the allied sectors as well as in the manufacturing sector. That is the real cause for the decline of the growth rate in tax collection.

Another point Mr Thukral has argued is that the state taxes — sales tax, excise tax, passenger tax etc — are of an inelastic nature whereas he finds customs duty, excise duty and income tax to be most elastic. Before I mention how state taxes have grown vis-a-vis the Central taxes, I would like to explain to the readers what elasticity means. It means that if income grows, taxes grow, and if income declines, the tax collections decline. In both cases, I find the taxes have behaved in a very elastic way. The revenue from state excise duty rose from Rs 479.64 crore in 1991-92 to Rs 1200 crore in 1997-98. Sales tax rose from Rs 752.71 crore to Rs 1303.10 crore. Taxes on vehicles grew from Rs 40.50 crore to Rs 227.15 crore. Similarly, the state share of income tax has grown from Rs 17.29 crore in 1990-91 to Rs 229.24 crore in 1997-98. The Central excise duty has grown from Rs 177.95 crore in 1990-91 to Rs 374.52 crore in 1997-98.

So, from these figures, one can conclude that state taxes as well as taxes from the Central government are elastic; both respond to the increases in the income generated in the state. If there is an increase in the income, it will get reflected in the rising taxes at the state level as well as the state’s share in the taxes from the Central government. Both are fairly elastic.

The inadequate increase in tax revenue cannot be attributed either to a collusion of traders with tax officials to loot taxes or to taxes being inelastic, and the share in the Central taxes not really coming as it should have been because of a low growth rate of the Punjab economy. Basically, it is the lack of economic activity or a general decline of the economy, particularly agriculture and the allied sectors and the manufacturing sector.

I would not like to burden the reader with more statistics to focus the point that the state deficit has been increasing except in 1993-94 when it declined to Rs 48.27 crore. State governments had been most negligent and did not pay any attention to the growing budget deficit every year. It is only under the Congress government that a serious attempt was made when the deficit was brought down from Rs 220.5 crore in 1994-95 to Rs 48.27 crore in 1996-97 as Budget estimates. Under the present government, the deficit in the Budget is increasing with the problems of rising revenue expenditure on account of the wages and salaries of the establishment, liability of interest payments on loans obtained from the government of India and market borrowings and the unproductive expenditure policy with regard to socio-economic services. I do not find a single instance that by the present policies of revenue and expenditure of the government, the financial crisis would be solved. In fact, I have every reason to believe that the financial crisis will take the Punjab economy towards a total collapse.

This conclusion is based on the fact that Akali politicians still deal with the misplaced economic perception “they have hung on to the past they know”. They have not learnt any lessons from the new economic reform policies which allow a state government to invite private investment including foreign direct investment, into every major sector of the economy like infrastructure.

Basically, it is a cycle — once you have a reasonable rate of agricultural and industrial growth coupled with good policies, you raise the tax collection of the state which you could plough back for developing infrastructure that will again push up industrial and agricultural production, thus setting an unending cycle of economic prosperity.

The writer is a former member of Parliament.

75 YEARS AGO

Historical distortion

EUROPEAN writers are apt to assume on the basis of Indian medieval history that there was no representative system of Government known to the Orientals and that they have always been accustomed to personal rule or despotism.

Such a belief would falsify the very existence of a higher type of civilisation, culture, learning and arts among the ancestors of the Indian people.

It is hardly possible to suppose that if the people knew nothing but personal despotism, they could have evolved a type of civilisation and arts which at one time surpassed every thing else in the world and which to this day is admired for its excellence through the literature of that period.

Nor do we find in the European history, ancient, medieval or modern, any evidence of personal rule or despotism, however benevolent, having produced anything great and abiding as the product of national genius.

India, however, has passed through a long period of arrested civilisation owing partly to its conquest by inferior peoples and partly to the degeneracy brought on by internal causes. If now there is a powerful impetus given to progress in all directions, it is because of the strength of her ancient culture and civilisation and subsequent period of stagnation being relieved by free development.