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Centre-state
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race: Putin On Record
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Revive democracy Bangladesh
has been a cesspool of corruption and what was once a bazaar gossip has turned out to be true. Both Sheikh Hasina and Khalida Zia, former prime ministers, were known for rewarding their kith and kin and suspected of receiving benefits indirectly. As of today, it looks as if both have not been above board. Yet, I was shocked to read about the concocted story on the torturing of Tarique Rahman run on a TV network in Bangladesh. Corruption cannot be hidden by a false picture of torture. People are not taken in by such crude attempts to suppress the truth. That the caretaker government has been able to make some of the deals public with evidence so as to pursue them in the court of law is a plus point. But, it is hoped there is no witch-hunting or vendetta of any type. There is always a suspicion against the rulers that they try the opponents on flimsy grounds to wreak political vendetta. However, the charge against former Law Minister Moudud Ahmed allowing loans on forged documents is shocking. I have known him for a fairly long time and considered him an uncertain commodity in Bangladesh politics, but not in matters of money. Never did I imagine that he would be mixed up with bogus transactions. I recall his halcyon days of legal practice which brought Moudud fame and money. He was so defiant of the establishment that he would never mince words against any government in power. He was detained by General Ershad who subsequently appointed him the Prime Minister. I came to know Moudud during his detention when his wife wrote to me that he was picked from home at midnight. Moudud was released after the protest voiced by the Germans. The charge against him is serious. He is alleged to have bent rules to benefit a businessman to get a loan of 15 crore takka (roughly Rs 10 crore) from a local bank which too forged documents to lend money without any collateral. The name of Sam Pitroda, chairman of World Ten Holdings Limited, has also figured in the case because his signature was reportedly forged to withdraw 35 crore takka (nearly Rs 25 crore) from the National Bank of Pakistan. What was the connection between the Bangladesh bank and that of the one in Pakistan is beyond me. This Pitroda is different from the one we have heading the National Knowledge Commission. Yet it is worth probing. Moudud’s case only underlines something common among most ministers of the three countries in the subcontinent. They can circumvent any rule or norm to benefit themselves, their relations or friends. It is not a one-sided political favour. There is invariably quid pro quo. Money too changes hands, either visibly or under the table. One act of corruption, as has been seen, requires the assembly of a whole stable of politicians, bureaucrats and criminals. The cleansing process in Bangladesh gives hope that the same type of broom may one day sweep the dirt in India and Pakistan. But we do not want the military to do it. Democracy has enough levers to operate against the corrupt. However, commendable are such efforts in Bangladesh, they come to naught when the caretaker government’s basic job of holding elections early is still in doubts. After all, as Dr Akbar Ali Khan, a respected expert, has reminded that elections had to be held within 90 days of the caretaker government taking over. His advice that they should be held at least 90 days after the finalisation of the voters’ list needs to be followed now. It is, however, good to hear from the military-backed government that it will hold the polls this year. But this has been said earlier too. Since no date has yet been fixed, there are always misgivings about the polls. The example of Pakistan is before us. General Zia-ul Haq assured at the time of military takeover that he would hold elections within 90 days. But he stayed on for nearly nine years until he died in a plane crash. That the caretaker government has initiated talks with the political parties on the polls is a commendable step. But why doesn’t it announce the date first and then work backwards, talking to political parties and providing facilities for holding free and fair elections? The caretaker government was not convincing when it tried to draw a distinction between the Emergency in Bangladesh and the one declared by President Pervez Musharraf in Pakistan. Dhaka’s plea was that the imposition of the Emergency in Bangladesh was “within the country’s constitution.” The Emergency in Pakistan is not dissimilar. Musharraf clamped it as the Army Chief. It was not martial law but similar to the one the caretaker government in Bangladesh has done. The European Union, the main donor to Bangladesh, says that Dhaka has managed the Emergency “in a pragmatic way.” I do not know how far it is correct. True, Article 141A of the constitution of Bangladesh says that whenever a grave emergency exists in which the security or economic life of Bangladesh or any part thereof is threatened by war or external aggression or internal disturbance, the President may proclaim a state of Emergency.” But it is also stated that the Emergency “shall cease to operate at the expiration of one hundred twenty days, unless before the expiration of that period it had been approved by a resolution of parliament.” Bangladesh’s state of Emergency should, by this reckoning, have ended in April, 2007. There is no explanation given for the blatant breach of the
constitution. The ongoing routine of secret detention, extra-judicial executions and deaths by “cross-fire” has in no way lessened. Odhikar, a Dhaka-based organisation, has said that there were 153 extra-judicial executions in the 10 months of the Emergency. It observed that the actions of the current government were being “dictated less and less by the law” and called on the government to follow the due process of law. Still the most important thing is to have elections in the next few months, preferably before the monsoon. When the electoral rolls are complete, what is the hitch? The armed forces owe it to the nation to revive the democratic system, which it took over on the promise to make the people of Bangladesh
sovereign.
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Profile The reason: the versatile scientist had been honoured with Padma Bhushan. Decorating Dr. Gowrikar with the prestigious civilian award of the land may be apt but his achievements have been greater. He is among the rare breed of multi-faceted scientists whose path-breaking works range from space technology, astronomy, polymer to fertiliser. With his significant contribution, India is today recognised as a key leader in critical solid fuel technology. Popularly known as the “father of Indian monsoon forecasting”, Dr, Gowrikar has developed a new technology to predict monsoon. In recognition of his outstanding contribution in the sphere of space research, the Astronautical Society of India bestowed on him the prestigious Aryabhatta Award . He has greatly contributed to the promotion of astronautics in India. The other recipients of the award are Prof Satish Dhavan and Dr APJ Abdul Kalam. Dr. Gowrikar interacted with Dr Kalam between 1986 and 1993. As far back as 1969 the first space propellant rocket was fired. The dynamic testing of the propellant was made by Dr Gowrikar’s team and the rocket was developed by the former President. Dr Gowrikar joined the space centre at Thumba (Kerala) as early as 1967 as head of the propellant engineering division. He later became the Director of the Chemicals and Material Group and finally rose to head Vikaram Sarabhai Space Centre, the Indian Space Research Organisation’s (ISRO) largest establishment, entrusted with the responsibility of advanced rockets and launch vehicles for the space programme. The SLV-3 project, which was India’s first Rocket to orbit a scientific satellite, was successfully completed during Dr Gowrikar’s tenure. Weeks before Dr Gowrikar was given Padma Bhushan, the Science Congress decided to honour him with Vikram Sarabhai Memorial Award. At the Science Congress session held in Vishakha-patnam on January 3, Prime Minister Manmohan Singh presented him the prestigious award, saying that Dr Gowrikar has not only been an institution builder but also effectively shaped how this area of science and technology should develop. An outstanding work of Dr. Gowrikar has been the publication of a comprehensive Fertiliser Encyclo-paedia with a preface by Dr M.S. Swaminathan. The then President, Dr Kalam, when presented with a copy of the encyclopaedia, was highly impressed by the work. After closely going through the pages, he suggested that the compilation be made available through all kisan call centres, spread in different parts of the country, to cultivators to enable them put in practice the specialised data. In the last two years of their operation, the centres have provided consultancy, information, assistance and guidance to over 5 lakh callers from villages of eight states. Anywhere in India, people can call 1551 as a toll-free number to get the services. The top uses of the scheme are Maharashtra and Tamil Nadu followed by U.P. and Rajasthan. Drawing from the encyclopaedia, Dr Kalam revealed that from now on to 2020, India will have to gradually increase the production of foodgrains to around 400 million tonnes. The increase in the production will have to be done under the reduced availability of land from 170 million hectares to 100 million hectares with reduced water availability and reduced manpower. Technology and fertilisers will be the only means through which we can achieve this goal. The father of the Green Revolution and Nobel laureate, Dr Norman Borlaug, too rated the book as “unique and
invaluable”.
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I remember her as two people really. The first is the young Benazir who was so brave and fought so strongly against dictatorship and the second is the Benazir after power, a completely different person. I’d like to remember her as the first, the one who suffered but who had not yet caused suffering of her own. — Fatima Bhutto,
niece of Benazir Bhutto and daughter of slain Mir Murtaza Bhutto Some day they will say Microsoft will be replaced, and in 10 years or 20 years from now, they will be right. So just keep going because it will be one out of 20 times. That is good enough for some people. — Bill Gates — Prof T. N. Srinivasan
of the Yale University Economic Growth Centre We believe that modern and contemporary art has long been undervalued as compared to other areas of the art market, and with the boom of the financial markets, real estate and all other asset classes in India, many new art collectors are establishing themselves and purchasing work for artists of similar heritage. — Philip Hoffman, founder of the UK-based Fine Art Fund When someone goes to India Gate he finds one India, but at government offices he finds another India. Any time, these buildings can catch fire. These should be fully demolished and modernised and the CPWD should not be involved. — Chemicals and Fertilisers Minister
Ram Vilas Paswan — Tamil writer Rokkiah
Malik, alias Salma Having just 1.5 per cent of the country’s area, Punjab is contributing more than 22 per cent of wheat and 12 per cent of rice to the national stock. — Dr Manjit Singh Kang,
Vice-Chancellor, PAU
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Centre-state relations At
the recently held 4th International Conference on Federalism in New Delhi various challenges being faced by the federal countries in the world were discussed. In the Indian context two seemingly divergent views appeared to have been expressed – one led by Prime Minister Manmohan Singh and the other by an equally renowned economist, Lord Meghnad Desai. Dr Monmohan Singh pointed out that sometimes “narrow political considerations, based on regional or sectional loyalties and ideologies, can distort the national vision and sense of collective purpose and urged the participants to reflect on whether the single party state have advantages in managing the Centre-state relations better as opposed to a multi-party system.” On the other hand, Lord Meghnad Desai asserted that “a multi-party federal political system, which is accommodative to regional and sectional identities, helps in ensuring inclusiveness”. No doubt, the growth of regional parties has put some stresses and strains on the working of Centre-state relations in India and often the goings get tough. Yet our experience shows that a single party rule, if it happens to be both at the Centre and state levels, could distort the federal fiscal relations because then most of the vital economic decisions may be taken at the party level and the established institutions like the National Development Council, the Inter-State Council, etc. may become defunct. For example, before the Janata Party came to power in 1977, many fiscal decisions were taken at the party meetings and the necessary constitutional formalities completed thereafter. First of all, sales tax (which is a state subject) on important items like sugar and textiles was abolished in 1957 and replaced by additional excise duty. In 1959 a tax on railway passenger fare and freights (whose entire proceeds were assigned to the states) was abolished and merged with the railway fare. With effect from 1961 the nomenclature of tax on a company’s income was changed to corporation tax and thereby depriving the states of their legitimate share because the Centre could constitutionally retain the entire proceeds from the corporation tax. This move of the Centre was much criticised by the Administrative Reforms Commission and the Sarkaria Commission. It may be pointed out that in 1985 Mr V.P. Singh, the then Union Finance Minister, tried to replace state sales tax on some more items by additional excise duties but he could not succeed, because by that time many regional parties had come to power in many states which started vehemently opposing any encroachment into their constitutional rights. Therefore, in the changed scenario it is only a mutual dialogue between the Centre and the states, which can ensure everlasting solutions to Centre-state conflicts. It is a happy augury that the regional parties have developed a national outlook and the national parties too have some regional stakes. For example, take the implementation of the VAT. Although it was delayed by four-five years, yet sustained efforts by the Empowered Committee of State Finance Ministers and financial accommodation by the Union Government ensured its smooth transition in 2005. Thus Lord Desai is proven right that in a multi-party model decisions may take long but are more inclusive. In fact, the federal polity in India has become mature and it has withstood many stresses and strains. It may be relevant to mention here that the Union Government, taking advantage of the constitutional clause that it has the sole right over the tax which has not been mentioned in the Constitution, has started levying service tax. From a modest beginning of about Rs 800 crore in 1994-95, service tax is expected to yield more than Rs 50,000 crore to the Centre in the current fiscal. This has naturally become a bone of contention between the Centre and the states. Although our fiscal federal relations have a brief history of little more than five decades, many political and economic developments have taken place since then. On the economic front, almost one and a half decade of reforms has passed and now we are talking about the second and third generation economic reforms. On the political front, single party rule has given way to multi-party rule. Regional parties have developed a nationalist outlook and national parties have started exhibiting regional interest. Therefore, it must be kept in mind that no permanent solutions to all problems, particularly relating to federal finance, are possible. After 30 years of experience, it was the Sarkaria Commission. Then came the National Commission in the closing year of the last century. Now is the much wider commission on Centre-state relations headed by Justice M.M. Punchi. The commission must see whether the Centre has, advertently or inadvertently, ever encroached upon the constitutional jurisdiction of the states. In the modern days globalisation and privatisation, whose finances have been adversely affected and responsibilities increased? Why, in spite of nearly 60 years of planned economic development, have inter-state disparities not come down? What institutional mechanism should be adopted to meet the emerging challenges and how the working of existing institutions like the Inter-State Council could be ensured. It must be remembered that in a developing federation like India only an accommodating and mutual good faith approach among different layers of the government can ensure a sustainable and more inclusive economic growth. In fact, countries like India with large variations in culture, customs traditions, languages etc must adopt a federal set-up to maintain a balance between preserving regional variations and national unity – what is commonly known as “unity in
diversity”.
The writer is a former Professor of
Economics, Punjabi University, Patiala
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New phase in arms race: Putin Vladimir Putin
has used one of the last major speeches of his presidency to deliver a defiant message to the West, accusing it of unleashing a new arms race that left Moscow no choice but to retaliate in kind. Less than a month before presidential elections that his hand-picked successor is almost certain to win, the speech removed any lingering doubts that Russian foreign policy might become less aggressive after Mr Putin steps down. "It's clear that a new arms race is unfolding in the world," said Mr Putin, one that Russia did not start. And he vowed that Russia would respond to the threats by developing newer and more modern weapons that were as good as if not better than those possessed by Western countries. "We are being forced into retaliating ... Russia has and always will have the answers to these challenges," he said. The speech in which he also condemned Nato expansion came as defence chiefs of the 26-nation alliance, increasingly alarmed by Russia's flexing of its military muscles, met in Vilnius, the Lithuanian capital, and urged Moscow to tone down its rhetoric. Russian bomber patrols have recently been made over the Atlantic, Pacific and Arctic oceans and approached close to the borders of Nato airspace. Two Russian Tupolev-95 aircraft strayed south from their routine patrol pattern off the Norwegian coast and headed towards Scotland last September. In the most recent incident, two long-range "Blackjack" bombers flew to the Bay of Biscay off France and Spain to test-launch missiles. The Russians have also hinted they want to re-establish a naval presence in the Mediterranean, probably using Syrian ports. The strategy is designed to heighten the visibility of Russia's military might but the sabre-rattling has alarmed Western countries and fuelled talk of a new Cold War. Mr Putin went into overdrive yesterday, painting Russia as the victim of Western aggression and expansion, and promised a Russian response. He said Western countries spent far more on defence than Russia, and also returned to a theme he has raised many times before - that of Nato enlargement towards Russian borders. "We pulled out of bases in Cuba and Vietnam," he said. "And what did we get? New American bases in Bulgaria and Romania." He also complained about US plans to build elements of a missile defence system in Poland and the Czech Republic. "They try to persuade us that all these actions are not aimed against Russia," he said, "but they have no constructive answers to our well-founded concerns." Russia has previously threatened to deploy nuclear missiles in its Baltic exclave of Kaliningrad if the US goes ahead with its plans. Russia's annual defence spending has quadrupled since Mr Putin came to power and the Kremlin has announced a £100bn programme to modernise ageing military hardware. Symbolically ominous changes are under way too: Russia recently announced that vast parades in Red Square to showcase the nation's military strength are to be revived this year for the first time since the collapse of the Soviet Union. Mr Putin also accused unnamed foreign countries of cynically trying to gain unfair access to Russia's natural resources. "Many conflicts, foreign policy acts and diplomatic démarches smell of oil and gas," he said. "This is the context in which we understand the growing interest towards Russia." He said the sovereignty of certain countries had been completely destroyed under slogans of freedom and democracy. The speech was broadcast live on Russian television. Mr Putin was addressing the State Council, an influential gathering of the country's elite, including Dmitry Medvedev, the man virtually guaranteed to be Russia's next president. Also present was the Chelsea owner, Roman Abramovich, Russia's richest man, attending in his capacity as governor of Russia's Chukotka region. Mr Putin has consistently portrayed Western attempts to foster democracy in Russia as nefarious intentions. Last month, he told the security services to beware of foreign meddling in the upcoming presidential elections, and earlier this week the Organisation for Security and Co-operation in Europe announced it would not monitor the election because of an unco-operative attitude from Russian officials. Yesterday's bellicose remarks came at the end of a speech devoted to outlining achievements during his eight years in office and setting out a blueprint of Russia's development to 2020. He rattled off economic and social achievements over the past eight years, boasting that Russians were now immeasurably better off than eight years ago, and laid out a development strategy to improve incomes, life expectancy, and quality of life for Russians by 2020. Bizarrely, Mr Putin made no reference in his speech to the fact that the presidency will soon be changing hands, and spoke repeatedly of what "we" need to do.n By arrangement with
The Independent
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On Record
It is a tricky year for the Finance Minister to prepare the budget this year. There are two issues that he has to contend with – the upcoming Lok Sabha elections in 2009 and a likely US recession. Member of the Prime Minister's Economic Advisory Council Saumitra Chaudhri spoke about issues confronting the Finance Minister in the budget-making process and what to expect in the budget proposals for 2008-09. Excerpts: Q: What are the key issues that the Finance Minister is
faced with while making the budget this year? A: Macro management will be the key in the coming year which will include managing inflation, capital flows and
monetary prices, as also keeping the growth story intact. The trick will be to survive the mild recession that the world's largest economy will slip into...it definitely is a concern for everybody. In 2008, the inflation rate will be somewhere around 4.5 per cent and the growth target will be somewhere around 8.5 per cent. The US recession will lead to the cooling down of oil and wheat and food prices that will lead to lower inflation levels. Here the challenge is to see that the growth story does not slip and the momentum is continued. Q: How will the Finance Minister tackle the situation of fertiliser subsidy and the growing irrigation needs? A:
The fertiliser subsidy will remain unfixed for a while and
get sorted out in the course of the year and not in the budget. As regards irrigation, there is not enough water to announce or take up any large irrigation project in the country. It is likely that there will be more effective irrigation methods like using sprinkler's to water the fields. New technology in irrigation is the need of the hour. At present free power and water are leading to flooding the field resulting in the loss of good soil and fertiliser. There remains a great opportunity in rainwater harvesting and there is also going to be a gradual change in crops that farmers plant for high yield. It is likely that there could be some incentives to new irrigation technology like drip irrigation, seed programmes etc. Q: As the US slips into recession, will the profuse capital flows that we have seen in the 2007-08 continue? A:
It may not be necessary that the US recession may see the money flow into India. Instead US assets may be
lucrative for European comp nies to acquire. What could also happen is that investors and US companies may take less risk in the coming year due to the rece sion. What has to be done to moderate the profuse flows has already been done – external commercial borrowings have been pinched. There will be proper channeling of private equity fund flows so that there is a defined rule under which PEs come in the country. Q: What will be the issues in providing cheap housing for the urban poor and the rural poor? A:
Well, this area does remain a challenge for any government as there is no way in the world to make cheap and efficient housing structures as an answer to the slums or rural houses. Any housing structure that is made is likely to face a high cost of building as the raw material cost is high. Cheap structures are likely to be in danger of collapsing and creating other problems instead of
solving them. Besides, cheap low budget structures will not enthuse the private players to enter the fray as it is not lucrative and if it is given to public departments they are ridden with corruption leading to the spiraling of cost. So either ways there is no way to make cheap houses. Q: Is there a possibility of tax slabs being changed for
personal taxes at a time of tax buoyancy? A: There may not be a change in tax rates but there could be a change in tax slabs by raising them at a time of revenue buoyancy. However, there will be expenditure buoyancy in the year to come and so the Finance Minister will have to think before letting forgo any revenue. There is a lot of tax abuse in areas such as Uttranchal and J&K that are excise free. Q: How will the industrial growth continue in the coming year? What will the policy be to foster growth? A:
The durable goods segment has seen a decline due to a negative growth of the two-wheeler and heavy truck segments. The textile sector growth has been hit by the rupee appreciation. The growth is certainly not slowing down even as these are minor blips in the economy.
Attention needs to be paid to whether there is a decline in the investment boom which at the moment is not an area of concern. The policy should not affect the consumer confidence and the
boom.
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The telephone would not stop ringing at Dr Vasant Gowrikar’s Pune residence on the eve of Republic day. Messages of congratulations were pouring in from his friends and admirers. 
We should have a similar strategy as China and quietly advance our interests instead of mouthing collegially on behalf of people who may or may not want us to represent them.
I lived in a joint family where writing was forbidden Things were no different at my in-laws place. So I continued to hide my writings from my husband, children (two boys) and in-laws by writing when no one was around. Other times I would hide in the toilet and write or use a blanket for cover. I hid my writings in my sari or under the mattress. This continued for 13 years.