The Tribune, Chandigarh, India

EDITORIALS

People's “gold” for Milkha!

A power-drunk Sports Ministry badly and urgently needed a stinging slap to bring it back to senses. That shock therapy has finally been administered by legendary Milkha Singh, and how! Only a person of his calibre could have given such an outstanding performance, worthy of a gold medal from genuine sports lovers. He has not minced words while rejecting the Arjuna Award offered to him for lifetime achievements. It will give red faces to some politicians and sports administrators all right, but will, hopefully, straighten the misshapen face of Indian sport. He has put the spotlight on all that is rotten in the ministry and all the aberrations that have cropped in in the awards distribution system. The errors of omission as well as commission have been accumulating over the decades, partly because sportsmen are in general docile by nature and mainly because of the chalta hai attitude prevalent in all government undertakings. The result is that while the non-deserving climb the awards bandwagon courtesy the crony ladder provided by the self-serving sports administrators, the deserving ones are made to cool their heels. As Mr Milkha Singh has pointed out, there are three main problems. One, there is too much of politicisation, with even the PMO suggesting the names of those who should be given awards. Two, performance figures are cooked up by those in authority to give away awards to their favourites. Three, there is drug abuse in many competitions within the country, with the result that when many of the flash-in-the-pan sports heroes compete abroad, they have no feet to stand on. The system has become so rotten that performances are declining while the number of award winners is multiplying.

Ironically, this malaise is not confined to sports alone. There has been a marked devaluation of almost all the awards given by the government. In fact, keen observers of the game use a list of awardees to find out who has cosied up to whom. Regionalism, casteism and political expediency etc are some of the extraneous factors that determine who gets even the highest awards, including the coveted Bharat Ratna. The net result is that the awards have lost most of their sheen, so much so that those who genuinely deserve these do not enjoy any exhilaration on receiving them, considering the kind of people with whom they have to share the honour. Now that Mr Milkha Singh has pulled a skeleton out of the bulging cupboard, it is time to do a thorough cleanup. Either the lost glory of the awards should be restored or these should be done away with completely.

Yet another rollback

ALL over the world blue chip, or leading, companies with international operations are retrenching employees for two reasons. One is the economic slowdown and the other is redundancy created by the information technology revolution. What 10 men did in the past with their screwdrivers, typewriters and files can now be done by one man operating a robot or sitting in front of his computer. The loss of jobs in the production and administrative wings of both the governments and corporations is well over 20 per cent, and it is inching up. The affected workers join the service sector at a lower pay but without the fear of being on the street again. India, rather the central government, had a similar grand vision. It declared its determination to downsize the structure on several occasions but with no result. The Fifth Pay Commission asked the government not to fill the vacancies created by retirement, normally estimated at 3 per cent of the three million employees. This way over a period of 10 years, the staff strength would have trimmed by 10 per cent, saving considerable amount in terms of salary and allowances and also streamlining the entire set-up. But pressure from trade unions has frustrated attempts in this direction.

Now the Planning Commission has come to the rescue of the ruling BJP-led alliance. In what is obviously a command performance, it has suggested in its draft Plan proposals that downsizing should be reduced to 2 per cent, thereby permitting the various ministries to recruit employees to fill skilled and professional posts. This is laughable. The more logical course will be to promote juniors or, if they are found wanting, transfer workers from other departments. That, incidentally, was the advice of both the Pay Commission and the Expenditure Reforms Commission. The problem is obvious. Politicians in positions of power want to retain the power to dole out jobs to their supporters and constituents. This is what Mr Ram Vilas Sharma did when he was the Railway Minister, when he increased the strength of railway employees by nearly one lakh, mostly from Bihar. The government is under pressure to cut down fiscal deficit which threatens to balloon to 5.7 per cent of the GDP from the budget promise of 4.7 per cent. It is imperative to bring all sectors under the microscope. For one, the bad loans off nationalised banks stand at more than one lakh of rupees if the interest due is taken into account. The value of the unsaleable foodgrains with the FCI is nearly Rs 60,000 crore. The frozen revenue on accounts of uncollected excise and customs duty is about Rs 60,000 crore. All these warrant tough action and that requires tonnes of political will. That is precisely what is lacking.

A day of accidents

THE explosion in a factory in Tamil Nadu which claimed at least 25 lives occurred because the prescribed safety norms were ignored by the management. On the same day about 15 persons were run over by the Howrah-Mumbai Gitanjali Express near Jalgaon in Maharashtra. However, for a change the railway authorities were not responsible for the accident. The passengers, travelling by another train had pulled the emergency chain, got down and were run over by the Gitanjali Express on the parallel track. In the case of the Tamil Nadu explosion, which destroyed a whole block of the factory, the next of kin of the victims have been offered a token amount of Rs 50,000 each as compensation. Technically, the families of those killed in the rail mishap are not entitled to receive even a token amount of money as compensation from the railways because the passengers themselves were at fault. As far as the Tamil Nadu tragedy is concerned the fact that it was a state-owned factory, manufacturing industrial explosives, aluminium bullets and copper and electric detonators, may have contributed to the laxity in the safety norms. However, it would not be difficult to punch holes in this line of argument by pointing out to the appalling and unsafe working conditions in most private industrial units. Tamil Nadu Chief Minister Jayalalitha has directed the authorities concerned to improve the safety standards at the explosives factory. She has given the directive because as Chief Minister that is what she is expected to do. Once the dust has settled no one would even bother to check out whether the fault which resulted in the explosion has been removed.

A fortnight ago a large number of inmates at a privately-run asylum for the mentally challenged in Tamil Nadu perished in a fire because they were chained to wooden posts. The tragedy should have resulted in a nationwide movement for getting the mentally challenged better treatment facilities and humane living conditions. It did not. Why? Because we as a people wake up and create a din, blame the authorities concerned, immediately after a major accident. No lessons are learnt for improving safety standards at home or at the place of work. Most people may have already forgotten the Dabwali fire in Haryana which claimed the life of over 400 school children, trapped inside the shamiana made of highly inflammable material. A surprise check of permises of most "tent house" owners would show that they continue to use inflammable material in spite of official ban on its use. The fact of the matter is that unless we as a people first imbibe and then teach our children the importance of adopting "safety" as a way life it is pointless to express concern every time a major accident takes place.

OPINION

The case of “vanishing companies”
Enforcement agencies sleeping on the job
G. K. Pandey

BY now, you’ve probably read all there is to read about the “sins” of ex-UTI chief P.S. Subramanyam, the “dud” stocks like Cyberspace Infosys that he invested in, the media firms like ex-Illustrated Weekly editor Pritish Nandy’s and journalist-turned-MP Rajiv Shukla’s that he patronised, and so on. But a facet that no one has really paid attention to, is the role of analysts, not just in the UTI but those in the private sector as well, including the foreign ones. Over the past few weeks, much of the foreign Press has been dominated by news of how analysts have been the target of an onslaught of lawsuits filed by the investors who’ve been burned by recommendations made by these analysts.

Mary Mecker, at one time hailed as the “Queen of the Internet” thanks to her bullish outlook on dotcom stocks, is one of the prime targets of these class action suits. On August 3, investors in Amazon.com and e-Bay filed federal suits against Mecker and her employer Morgan Stanley. The crux of the argument made by these lawsuits is that Morgan Stanley was carving huge investment banking fees from these firms, and Mecker’s optimistic recommendations on their stock were directly linked to this. The latest lawsuit, in fact, contends that Mecker’s compensation was directly linked to her ability to attract such clients — in 1999, her reported pay package was $15 million. To quote from the suit, Morgan earned millions of dollars in fees due to Mecker’s “behind the scenes dealmaking and business generating activities.”

Morgan Stanley, for the record, has dismissed all such charges as absurd, but what sort of complicates things is the fact that a former client of the firm had filed a similar suit, and Morgan had settled out of court. A former client, Debases Kanjilal, claimed that he’d been misled by a bullish “buy” analysis by Henry Blodget, and when the $10.8 million case went for arbitration, Morgan paid $400,000.

And some time prior to this, another lawsuit was filed — this time against Credit Suisse First Boston, Goldman Sachs, Merrill Lynch, Morgan Stanley Dean Witter, BancBoston Robertson Stephens and Citigroup’s Salomon Smith Barney — for precisely the same kind of thing, misleading the investors. The suit, filed by the lawfirm Beatie & Osborn LLP, alleged that these investment banks had violated the law by systematically issuing “buy” recommendations for shares of technology companies they knew (or should have known) had dubious financial histories, negative cash flows, and deteriorating financial ratios.

What is especially interesting is that the spate of lawsuits comes virtually on the heels of a statement by the acting chief of the US Securities and Exchange Commission (SEC) to the US Congress on the matter. The US SEC told Congress that it had found a large number of cases of conflict of interest among analysts of the country’s largest brokerage firms. The SEC chief told the Congress that they had found that 25 per cent of the analysts at nine unnamed firms invested in companies before they went public — and the analysts subsequently covered these firms. SEC also told Congress that analysts routinely got involved in corporate-finance deals and participated in road shows. The stock market watchdog also said that it had found evidence that analysts’ pay in some firms was linked with the performance of the investment-banking arm.

The US case will, needless to say, go on as it will — you’ll have a rash of more lawsuits but, more important, the US Congress, which is conducting a parallel hearing, will pursue it with great vigour. And it may just be possible that (though still a bit far-fetched), as in the case of the great tobacco lawsuits, investment firms like Morgan Stanley may even offer some kind of bulk settlement to protect themselves from further lawsuits!

The question which should bother all of us in India, of course, is what our legislators are doing in this matter. Forget legislators, I don’t think our own stock market regulator SEBI has bothered to even look into the matter.

And while it is true that analysts’ views don’t move the stock markets in India as much as they do in countries like the USA, the point is important, though in a slightly different context. What happened in the case of the vanishing companies — companies that raised thousands of crore from the stock market and then disappeared? The official view, of SEBI and some of the investigating/enforcement agencies was: what can we do? They were, in a sense, right, but what about the role of the merchant bankers to the issue, the bankers who lent money to these firms, the bankers who lead-managed the issues and hyped their virtues to the gullible public? Surely they had some role, beyond just collecting their percentage commission on the funds raised from the stock market?

Did anyone of the agencies entrusted to examine the case of the “vanishing companies” — the agencies are SEBI and the Department of Company Affairs — ever bother to ask these merchant bankers whether they had ever bothered to track these firms? If you look into the record of these firms, chances are that you will find that these firms didn’t loot just the ordinary public — they are sure to have taken huge loans from public sector banks and financial institutions. So, did these banks and government-owned financial institutions ever bother to track these firms to find out where their money had disappeared?

Even before I ask it, I know the answer. It is a resounding “no”. And why should it be anything else? This is not the first time these banks and financial institutions have been caught napping. Part of the reason for the huge non-performing assets of India’s financial sector is the fact that none of the big lenders has ever bothered to keep even a watchful eye on their funds — sorry, that should be our funds, since it is taxpayers who end up bailing the banks and financial institutions when they go belly-up. Just the other day, one newspaper cited the case of the JCT which got a loan of Rs 240 crore from financial institutions, and then promptly lent this out to some subsidiary companies owned by it! Lending money to subsidiaries, who in turn lend it to another chain of subsidiaries, to those not familiar with the subject, is the classic modus operandi for siphoning off funds.

It is precisely this sleeping on the job that we also witnessed in the case of UTI. Not only was the Finance Minister sleeping, the heads of IDBI, LIC and SBI who were on the board of the UTI, also didn’t seem to know what was happening under their very noses.

Now I know that lawsuits are not something that come very naturally to us Indians. I think the only way we’re likely to see some serious action on taking care of the interests of small investors is to begin acting along US lines. It is only when investor groups start suing merchant bankers who have recommended dud scrips, or government-owned financial institutions for sleeping while promoters raped their firms which then resulted in their stock prices collapsing. Because if there is one thing that is certain, it is that JPC or no JPC, the government won’t do too much to look after the interests of investors. To be fair, since it has not looked after the interests of honest taxpayers all these years, why should it bother to do the same for investors?

MIDDLE

Welcome to Delhi!
S. Raghunath

DELHI is all set to roll out the red carpet to the Very Important Tourist (VIT) — of the dollar vintage that is and not the domestic yokels bally-hoo.

Shall we give him a big hand and take him on a conducted tour of the capital city?

Welcome to Delhi, Mr Joe Hardback. I see that you’re seized by a frightful paroxysm of sneezing, wheezing and snuffling which is caused by breathing the city’s cool, tangy air or carbon monoxide and vehicle exhaust gases.

The luxury, pre-paid radio taxi is out of order having fetched up right to rally in a 4-foot deep pothole on Parliament Street and so kindly hoop aboard this swanky autorickshaw and away we go.

Our first port of call, so to say , is Daryaganj. Delhi is justifiably proud of its mushrooming, capitation fee engineering colleges and polytechnics and we turn out a record number of graduate engineers who are all set to awe the world by constructing 200-storey skyscrapers. These are the collapsed ruins of a new two-storey residential building. Shall we move on?

This is the old secretariat building in Civil Lines whose architecture is 18th century Tudor and whose dilapidation is post World War II. Oh, that noisome smell? That’s emanating from the western entrance to the secretariat building — the mouldering corpse of a hideous hyaena shot on the city outskirts. We plan to make it a stellar tourist attraction. New York has its Statue of Liberty and Paris the Eiffel Tower, remember.

I am now taking you to Trilokpuri in the Trans-Yamuna colony where archaeological digs are in progress. Professor Ig, a UNESCO deputed archaeologist, has been conducting excavations in what appears to be an abandoned human settlement established by the Delhi Development Authority and the New Delhi Municipal Corporation. The UNESCO team has unearthed half-built houses constructed out of ordinary mud adulterated cement and re-rolled steel and the whole area is encrusted with picturesque weeds. The learned professor has also retrieved perfectly preserved pieces of parchment paper which he believes are DDA demand notes for enhanced house tax and amenities cess and he believes the inhabitants hastily abandoned the settlement when the authorities slapped on them these demand notes.

The city of Rome has its Via Appaia — the road constructed more than 3, 000 years ago and still intact. Delhi, too, has its Via Appaia and as a native son, I am proud of it. This is Barakhamba Road and I want you to take a close look at this vital, arterial road. It was relaid,chipcarpetedand macadamised just yesterday and already, it looks like the road to perdition. It has withstood the ravages of time and nature for 24 long hours, just take a measure of that!

No doubt you are tired after your long flight from the States and I’ll now drop you at a lodge in Chandni Chowk in the walled city and I’ll pick you up after lunch. In the afternoon, I’ll conduct you round the old city with its enchanting sights like people actually living in graveyard mounds and raising families.

ON THE SPOT

Ye voh Vajpayee to nahin
Tavleen Singh

BY my bed always lies a book of poems by Faiz Ahmed Faiz. I had it bound in black leather after he signed it for me in March 1980 when he was in Delhi and I met him for an interview. I count it as among the most memorable interviews I have ever done because as I listened to him talk about poetry, India, Pakistan, love and life I realised that I was privileged to have met one of the last surving thinkers of the generation that witnessed the historical changes that gave us freedom and partition. Not to mention the honour of meeting one of the two or three great poets that we have produced this century. Because poetry is so absent in our “great culture”. I turn to the book from time to time to find answers among the beauty of the words and so I did on Independence Day last week. A particularly appropriate day since one of the most famous poems Faiz wrote was for that first Independence Day in 1947. He called it Subah-e-Azadi and said it was a false dawn. “Yeh voh seher to nahin”. This is not that dawn for which we waited.

How ironic that 55 years on it is still not the dawn for which the freedom struggle was fought. It is not that dawn because we have been let down by those who have ruled us. So badly that not one of our Prime Ministers bothered to change the colonial system of government the British left behind. We are still ruled by a bureaucracy and a state structure that remains indifferent to the aspirations of the people of India. So indifferent has it been that our rulers have not even attempted to change methods of policing or a system of education that was evolved by Lord Macaulay to teach the Indians English so that our colonial masters could create “a nation of clerks”. Many of the laws that govern us are British-made. So hopeless has been our quest for turning India into a prosperous, developed country that when you add up the number of railway tracks and roads laid since the British left you find that the addition since 1947 has been relatively insignificant.

Yet, every Independence Day our Prime Minister stands up on the ramparts of the Red Fort and makes promises, promises and more promises. Mr Atal Behari Vajpayee made his fourth Independence Day speech last week and as the Aaj Tak television channel pointed out said pretty much the same things he said in his first speech.

We will not tolerate terrorism, we want peace, we will fight corruption, we will take steps to boost the economy, we will empower women, help our farmers, we will, we will, we will. Meaningless, empty promises that remain so blatantly unfulfilled that even the schemes that get announced from the Red Fort usually languish in dusty government files. The empty words are particularly offensive when they come from Mr Vajpayee because his reputation as a politician was built on the brilliance of his oratory so we should at least be able to get an inspiring, beautiful speech. It was what he did best and as, recently, as when he went to Lahore on that unfortunate bus he mesmerised the large audience of Pakistanis gathered to hear him in the lawns of the Governor’s house. A retired judge came up to me afterwards and said with tears in his eyes that he had never heard such a wonderful speech.

It was wonderful only because he spoke extempore. I remember an official from the Ministry of External Affairs breathing a sigh of relief when he put aside his written speech and spoke from the heart. “Thank God that he put away the speech his officials wrote” he said feelingly. Since then, though, the Prime Minister has relied only on what his officials write for him so what we get is the usual, dreary drivel that is generally all that officials are capable of producing. An omnibus collection of empty promises and worthless words. Why does Mr Vajpayee allow this? Is it because the poems and the oratory have died? Or is it because he has become just another politician?

I tried finding out and learned, from those who claimed to know, that there had been some discussion before Independence Day about the need to inject a feel-good factor into a government and economy besieged by shame and scandal. Someone suggested that one way was to allow the Prime Minister to make an unwritten speech. He chose not to, so we got more of the usual drivel.

Result? The government looks as bad as it has done since Tehelka ended its time of innocence and the UTI scam brought even the Prime Minister’s Office into disrepute. Perhaps, Mr Vajpayee is not fully aware of how bad his government has begun to look.

In the week before August 15 I travelled between Mumbai and Delhi. In Mumbai I went to The Economic Times awards function where every major Indian businessman was in attendance. I talked to merchant bankers, automobile manufacturers, oil-wallahs and consumer goods kings and the biggest names and came away with darkest gloom. I met nobody who had anything good to say about either the government or the economy. Things were worse, they said, than they had been in a long time because people were afraid to invest. Part of the problem is that because the Finance Minister has been weakened, his hound dogs in the form of income tax inspectors and enforcement officials are breathing down the necks of prospective investors. Generally, they can be shooed off after they have made a few lakhs to lay off but the atmosphere they create is one of economic dictatorship rather than that of a market economy. Then there is the problem of the Finance Minister not doing anything by way of reform.

If big business is shrouded in gloom big politics is even less cheerful. In Delhi I met people in the government who admitted that nothing was moving forwards and that nobody at the top seemed to care. The “two old men” as Mr Vajpayee and Mr Advani are called, in the view of their own party men, appear to have been gripped by a collective paralysis.

Had they seen how the government’s ratings have dropped? “Yes, yes”, said a young minister irritably “they read India Today but they either don’t care or seem not to know what to do”. Similar dismal views were expressed by other people I talked to and they claimed that they had expressed them “at the top” as well but nothing seemed to change.

On the night of Delhi’s downpour I went to see Shatrughan Sinha’s play. There were senior ministers in the audience and Congress leaders like Manmohan Singh and Madhavrao Scindia and it was interesting that the loudest laughs came when Sinha poked fun at politicians and the atrophy that grips government offices. The Prime Minister was not there or he may have understood that he needed to make a really inspiring speech from the Red Fort instead of doling out the usual, meaningless promises. Meanwhile, as a poet himself, perhaps he should mull over why “yeh voh seher to nahin”.

WINDOW ON PAKISTAN

‘The state is tied up in knots’
Gobind Thukral

PAKISTAN'S most influential weekly, The Friday Times, has taken Gen Pervez Musharraf to task. Its editor, Najm Sethi (remember the one who faced the wrath of Mian Nawaz Sharif) feels sad that the new military ruler is unable to end terrorism now devouring the country. In an editorial, Sethi said,“Terrorists enrage Gen Parvez Musharraf. He says he wants to don his SSG uniform and blast them all to smithereens. We share his sentiment. But we are not terribly enthused by the government’s state law and order approach to the problem. Many of these terrorists are motivated by religious passions. Others are clearly agents of foreign powers seeking to destabilize state and government. Together, they have laid our country low. Foreign tourists and businessmen are afraid to visit Pakistan or invest in it. Enforced work stoppages in the wake of terrorist violence greatly hurt the economy. The targeting of Shia professionals. especially doctors in Karachi, has scared them into seeking refuge abroad. In short, an environment of violence, fear and loathing has confirmed the awful perception of Pakistan abroad.”

Mr Sethi is right. But he forgets a simple fact. Is this not Pakistan, which exported terrorism to Afghanistan in order to fight the Soviets and nearly destroyed that country and is this not Pakistan, which is responsible for the cross-border terrorism in Kashmir? Now it has to taste the poisonous pudding it has made for others.

Nevertheless, Mr Sethi has made a bold assessment. He said “The worst offenders are religious fanatics. Last year, over 300 Pakistanis died at their hands. This year the score already exceeds 150. Karachi is the current hot spot and Shias are the main target. For weeks TFT has reported on what is brewing in the city, why the police is unable to handle the problem, why the issue defies purely administrative measures. Yet the government’s fixation on dusting curative prescriptions off the shelf rather than attempting preventive solutions, despite the continuing failure of this approach, suggests that the state is tied up in knots.

Similarly, other newspapers like Dawn, Nation and Jung have taken the government to task.

Pakistani news media have given an equal importance to another burning issue: the local bodies elections. Interestingly, while the people participated in large numbers in this military controlled exercise to elect Naib Nazims, that is deputy district heads and heads, the newspapers have been generally skeptical. The general refrain is that the elected members would always be pawns in the hands of the men in olive. How could the army allow such elected representatives to take their roots and act on their own? In an article titled, “Democracy of a blind date,” a well-known politician A B S Jafri commented in the Dawn that with these captains at the helm, where does the boat go? “It could be anywhere, more likely to nowhere in particular. Not one of those elected to positions of state power has any declared programme with the voter’s endorsement. Few, it any, have any experience in public administration. At their respective level, the nazims land in the seats of power without any recognisable political credentials. The votes that brought them to power were cast in culture where candidates were not required to talk, nor the voters enabled to listen. If there can be a blind date in the political life of a people, this electoral extravaganza has been just it.”

“In a democracy, the public representative is the bird of passage, the public servant is a permanent presence. Yet the beauty is that the transient incumbent issues orders, the ageless dinosaur obeys. What sustains the unquestionable authority of the elected element is the strength of his political party out in the field. In the case of the nazims, there is no political base or support. The sovereign factor is conspicuous by its total absence.” Mr Jafrai also said:

“Our established tradition is that when it comes to the nitty-gritty of public administration, the bureaucrat tends to give the slip to the elected superior. It is a part of our national experience that more often than not, the bureaucrat has pulled a fast one on his elected boss. Take a look at the NAB record. The largest single element in this parade of the tainted has its origins traceable to the class of bureaucrats. The winner at this particular post in the race is the bureaucrat. Such prognostication may be morbid but it is rooted in long experience.

“Do not fail to note a crucial deficiency in the devolution philosophy. You are taking the government to the people, not the government servant. He remains aloof, a federally controlled (or pampered) automaton. The government is to belong to the village, but the government servant must remain an Islamabadi imposition. What about devolution here?

“Local self-governance without local public administration is a case of putting the pony right on top of the cart. This is profound inconsistency. Give it a thought. It is never too late to correct your errors, even if pointed out by others. If the civil and police functionaries are not local, government a self-induced illusion. Think it over. Take a look at local governance in better politically governed communities.

“As elsewhere, in Pakistan too, there should be life beyond the DC and the SP.”