The Tribune, Chandigarh, India

RBI’s timely move
Growth must be the primary concern

The Reserve Bank of India has intervened in time by announcing a set of measures to ensure that the economy remains on the growth path. This will infuse the required liquidity into the cash-starved financial system. Banks will now have more money to lend to the needy and at lower rates of interest. The reduction in the repo rate (the rate at which banks can borrow from the RBI), the CRR (the proportion of deposits the banks have to maintain in cash with the central bank) and the SLR (the amount banks have to keep with the RBI in cash or in the form of gold or approved securities) is on the lines of what the apex banks have gone about in the US, China and some other countries to counter the pressures of the global financial crisis on their economy. The RBI felt more encouraged to take to this path after a decline in the inflation rate to 10.68 per cent. There is the likelihood of inflation coming down further.

However, banks appear to be maintaining caution. Very few of them have so far reduced their interest rates for advancing loans for various purposes like buying houses and cars though the RBI made its announcement on Saturday. But most probably they will move in the direction shown by the RBI after their scheduled meeting with Union Finance Minister R. Chidambaram today (Tuesday). Easy availability of funds is expected to increase the demand for houses and various consumer goods which has remained sluggish for some time. Ensuring that banks have no problem of money for lending is what the government can do immediately. No government can afford sluggish economic activity, as this may lead to large-scale job cuts, which is already happening in some sectors.

While the ultimate results of the RBI’s measures are yet to be seen, liberal lending of funds has a flip side too. There are chances of many of the beneficiaries turning into defaulters if the wheels of the economy fail to move on the expected lines because of some unexpected development. Then there is another problem: depositors like pensioners are hit hard as a result of a soft interest rate regime. Something must be done to protect their interests also. But the cause of economic growth has to be the primary concern under all circumstances.

End of Kumble era
10-out-of-10 genial skipper

This must have been one of the most understated retirements by any Indian cricket captain. But then it was true to form. Anil Kumble has always thrived in underplayed elegance, both on and off the field. He bid adieu to cricket in a matter-of-fact way, much before anyone could carp about his badly battered body — which had done service to the country for full 18 years without tiring. It is customary to say only flowery things about a departing person but all those would be perfectly true also for this gentleman cricketer who was also a dogged fighter at the same time. His being the highest wicket taker in Test matches is an abiding proof of that spirit.

He gave his fans much to cheer. But some images of him are indelible in the public memory. One is of his wiping off all the 10 Pakistani wickets in an innings in 1999- in the same Ferozeshah Kotla grounds where he played his last innings on Sunday. He thus became the second man after Jime Laker to achieve the feat. The other was of his bowling with a broken jaw against the West Indies in 2002. He took pride in the fact that he placed the team way above his own performance.

Above all, he steered clear of all controversies. When he was made the captain last year, it was obvious that he was holding fort till M.S. Dhoni was ready to claim the throne. But he left his own stamp on the proceedings all this while. The one-ness that he brought to the team through personal example is priceless. He was a role model for team members. The way Dhoni shouldered him during his last lap of the ground said a lot about the cohesiveness of the team. His loss will be irreparable for the team and the country.

Thought for the Day

They called me mad, and I called them mad, and damn them, they outvoted me. — Nathaniel Lee

ARTICLE

Identity politics
Signals from Maharashtra, Bihar
by S. Nihal Singh

A unique aspect of the present political turmoil in the country is that although India cannot entirely insulate itself from the world’s economic woes, it is refining a new form of politics that is distinctly its own. Approaching elections are always accompanied by heightened political activity, and although caste politics is no stranger to the country’s practice of parliamentary democracy, identity politics has never held such sway.

We are familiar with the evolution of linguistic nationalism, which led to the redrawing of states largely based on language. In more recent years, we have experienced Mr Narendra Modi’s form of acute regional nationalism giving the state of Gujarat characteristics that are in confrontation with New Delhi. This trait was best known in times past in West Bengal, which had never forgiven New Delhi for moving the capital of British India from Calcutta, as it then was.

But even as West Bengal has been moving away from its obsession with an unjust past towards a future of industrialisation, the Modi brand of regional chauvinism, equating any perceived unfriendly act at the federal level with hurting the pride of Gujaratis, took the theme several notches higher. This helped Mr Modi to try to cover up the anti-Muslim pogrom in his state by decrying criticism as an anti-Gujarati act.

Mr Raj Thackeray of the Maharashtra Navnirman Sena (MNS) has taken regional chauvinism several notches higher by linking the employment of local youth in certain categories of jobs to regional chauvinism and using strong-arm tactics to enforce it. Actually, the Shiv Sena was the first to harvest the idea of emphasising the primacy of locals over others from elsewhere in the country. People from southern India were the first focus of the Sena’s ire.

Perhaps it is the phenomenon of 24-hour television news channels that has helped dramatise the beating up of North Indians — many of them from Bihar — taking lower level railway recruitment examinations in Mumbai. And the nature of the anti-North movement received fillip from the unfortunate death of a gun-toting Bihari boy hijacking a Bombay bus and falling to police bullets. Bihari politicians of all stripes expressed their shock and horror.

Before Mr Raj Thackeray, Ms Mayawati of the Bahujan Samaj Party had exploited the importance of her low caste base by using its disadvantaged nature to form a solid block and later to parlay that strength into enticing Brahmins and other castes in her fold. Whether she can repeat her Uttar Pradesh success, based on unique characteristics, on a broader
northern Indian scale remains
to be determined.

The salience of identity politics was traditionally clothed in caste affiliations and while caste was an important touchstone for fielding candidates of almost all parties, it was especially prevalent in the Hindi-speaking states, the caste affiliations of a constituency being thoroughly examined before selection. Given its background, the caste factor in southern India often boiled down to the anti-Brahmin configurations although the caste split in a state like Karnataka became a major political factor.

The trend in Indian politics after the departure of the Independence stalwarts has been that only a major cataclysm like Indira Gandhi’s assassination or the exploitation of the symbols of Hindutva like the Ram Janmabhoomi temple by the Bharatiya Janata Party have trumped caste and regional identity factors. But the BJP’s Shining India plank proved to be a false dawn in the 2004 general election, and the party is still in search of a new magic wand even while exploiting identity politics.

Essentially, the BJP had earmarked two issues for its election campaigns: Hindutva with stress on taking on Christians for their conversions and the anti-terrorist plank with its tinge of anti-Muslim propaganda. But the party has received setbacks in view of the anti-Christian depredations getting out of hand, with Orissa state’s Chief Minister, beholden to the BJP for staying in power, refusing to act with a firm hand.

The BJP’s anti-terrorism propaganda against the allegedly soft attitude of the Congress met with a reversal by the investigation and arrests of Hindus, in particular sadhvi Pragya Singh Thakur, allegedly associated with the Malegaon blasts. Their guilt has still to be proved, but the reported association of BJP or RSS workers with terrorism, normally linked to Muslim jihadis, was a body blow to the party, which has reacted with defensiveness, now converted into brazenness.

The Congress has its own dilemmas. The party shares power with the Nationalist Congress Party in Maharashtra and its Chief Minister, Mr Vilasrao Deshmukh, has proved to be particularly wanting in dealing with the Raj Thackeray outfit, giving him a free run in response to his provocative defiance. Obviously, the Congress party in the state was fearful of the backlash severe punishment of the MNS leader would invite at the altar of identity politics.

Given its present form, the Congress is unable to come up with a transformational issue that could surmount the new intensity of identity politics and is scouting around for ideas. Whatever propaganda the BJP is seeking to make of the run of terrorist acts, the Assam massacres being among the most tragic and gruesome, the establishment’s inability to get a handle on terrorist activity goes against the ruling party. These terror acts often represent a systemic failure and the inability of the state’s security and intelligence agencies to refine their technical expertise and equipment.

What next? Identity politics is here is to stay like caste politics has in the past. The nation’s hope will be that the salience of identity politics will recede with time. But the Maharashtra events and their backlash in Bihar and Uttar Pradesh are a warning that if the ruling establishment and the major opposition parties do not act with firmness and restraint, the consequences could be dire. The Congress has the responsibility to govern firmly and fairly, but the BJP, as the principal opposition party, owes it to itself and the country to curb the goons of affiliated parties and organisations from indulging in murder and destruction. It is no coincidence that the bulk of murders of Christians and destruction of their churches is in BJP-ruled states. Who would have imagined that the cosmopolitan Karnataka state would witness a frenzy of anti-Christian church burning?

MIDDLE

Way back in 1950
by Lt-Gen Baljit Singh (retd)

RECENTLY, a friend gifted me the school fixtures booklet for the year 1950. It was traditionally an 8 x 10 cm pale green cover, generally enclosing about 20 neatly printed white pages.

What struck me forcefully on turning the pages, besides the quality of teachers and the diversity of academic, extracurricular and sports fixtures, was the fact that there were just 251 students in all. Admittedly, the English medium public schools at the time were a rarity but perhaps there was this limiting factor in the hills of creating adequate buildable space for residential dormitories, class rooms, staff quarters, sports infrastructure etc.

The last few pages of the booklet listed the students by the alphabetical order of their last name. Now Shikabpa Gyaltsen had the bed adjoining mine. He was the scion of Lhasa’s aristocracy. His father was the head of the Tibetan “Kashag”, that is, the Dalai Lama’s supreme governing Council for Tibet. Shikabpa’s family had traditionally always been represented on the Kashag.

Unlike the rest of us who had the winter break from December to mid February, Shikabpa was permitted a five-month-long vacation every two years to be able to go to Lhasa and back.

He won the best technical boxer’s trophy each year and also the soccer blazer. He did not return to the 1951 term. As we now know, the PLA had over-run Tibet in 1950 and Shikabpa was probably sent to school in the USA. For, in the 1980s “History of Tibet” by a Gyaltsen Shikabpa figured among the significant new publications in the USA!

Unlike Shikabpa, Simha SJBR was an extrovert. He along with three of the Rana and Pashupati clan cousins commuted to and fro each year from Kathmandu. Almost all of us arrived at the term start by train in an organised group, entraining enroute at the focal towns. But Simha and his siblings would invariably arrive a day later and always as we would be rushing out of the dormitories for sports. Simha probably trained at the Royal Military Academy, Sandhurst (UK), and rose to be the C-in-C of the Royal Napalese Army.

Singh Dalip figured below my name. He was an NRI from Malaysia. He had the perfect body of a Grecian athlete and was a born sportsman. And of the most likeable and friendly disposition too. He was the anchor of the school cricket team (opening bowler and a prolific batsman) and a hockey player with dazzling stick work. He went on to earn cricket and hockey blazers at the Royal Military Academy, Sandhurst, and captained the Malaysian hockey team in the Olympics. Sadly, Dalip died young.

OPED

Who was to blame for the credit crisis?
by Sean O’grady

It took about 40 years for a reasonably consensual explanation of the Great Depression that could be rattled off in three minutes to emerge. Even with continues to generate some debate. (There are people out there who believe that Franklin Roosevelt caused the Great Depression, in case you were wondering). It may well take a similarly long period of academic research and political argument to get to the bottom of what has gone wrong over the past 12 months, or longer.

What is emerging is three schools of thought, or culprits if you like. These can be termed the “macroeconomic school”; the “regulatory school”; and the “banking school”. The first, in effect, blames no one and abstracts away minor consideration of institutional arrangements and political personalities to focus on the big picture. The scenario is quite simple, really. It starts from the well observed premise that much of the money that flowed into the western economies over the past decade came from China. (“China” here being shorthand for all the fast-growing, export-driven economies of the world, especially east Asia, and thus encompassing Malaysia, Korea, Indonesia and the like). That, in turn, originated in their large trade surpluses with us. In effect, we consumed more than we earned, and the Chinese lent us the money to carry on doing so.

And what did we do with the money? We created an asset bubble, an inflation in one particular type of investment. It happened, in the US and the UK, to be housing, but it need not have been. The money could have gone into any kind of asset, as it has before. Before the Great Crash of 1929, it was shares, as it was before the dotcom crash of 2000. The belief that the value of shares would only ever go up, that there was a “new paradigm” because of fantastic new technologies, fuelled these booms. In 18th century Europe, it was the South Sea Company’s untold — and unreal — riches on the other side of the globe, the original speculative bubble. In the 2000s, it was dream homes in Florida and semis in the English home counties that were the subject of a frenzy. It could have been classic cars, or antiques, or fine wines. It doesn’t matter, except in the important sense that housing has a social aspect. Capitalism usually creates bubbles where there is a lot of cash swilling around, and no politician has ever, ahem, been able to abolish boom and bust. We will always have crashes, and it is foolish to suppose that we can prevent this sort of thing happening again.

So, on this view, it is really no one’s fault, except, perhaps, our own, because of our unquenchable desire for cheap DVD players, lovely homes and lack of fear about debt. However, people never look to blame themselves first. What is happening now is a reflection of that; we have to pay back our debts and cope with a transfer of wealth and income to China. The financial sector has to shrink and rationalise. We basically don’t fancy making that historic adjustment. Hence our second school of thought.

This is the one that holds most attraction for the politicians and public.

As we see with the conspiracy theories over the death of Princess Diana, the public are unwilling to accept simple explanations. They usually want to blame someone. Up to a point, they are right, though. You can have more or less effective people working as regulators; more or less satisfactory structures; and more or less satisfactory attitudes. It is difficult to argue that the UK’s arrangements were perfect on any count. The example of Spain is a powerful one. There, the Government discouraged the banks from joining in the American sub-prime party, and the central bank required the banks to have a “counter-cyclical” attitude to their business. The Bank of England has now taken up the cause of what is called “macroprudential” rules. In a way, these are just a fancy answer to Ogden Nash’s old complaint about the banks; that they only lend to people who don’t need the money. Now, as the economy enters recession, we do need the money, and yet they won’t lend. Even so, it is also fair to point out that Spain’s real estate boom and crash has been almost as dramatic as ours.

Third is the banking school of thought. On this view, the blame lies with the banks. This is not because they were too greedy but because they were too stupid: they failed to maximise their profits. There is something in this, too. The banks are not some sort of force of nature that has to be tamed by governments and regulators. They are responsible for their own actions. They did not have to offer “Ninja” loans-to folks with no income, no job and no assets. They did not have to create derivatives that their senior managements didn’t understand. They did not have to adopt the “originate and distribute” model of lending that converted bankers into dodgy salesmen and distributed risk arbitrarily. They did not have to have bonus systems that rewarded taking on too much risk and short-termism. And they don’t have to rely on quite so much funding from the money markets-and often from abroad-as opposed to customer deposits. As the charts here show, the growth of the banks’ balance sheets over the past few years was impressive; but it was driven by a dangerous increase in leverage (they borrowed too much as well) and by making less and less prudent lending decisions. Should the FSA or the Bank of England or the Government have stopped them? They could have tried harder but the regulators can’t make the bankers’ commercial decisions for them, and it was those that were flawed.

Of course, these schools of thought are not completely mutually exclusive.

In reality, it is more a question of where the balance of blame attaches.

— By arrangement with The Independent

Before the Rains is Sivan’s best
by Shakuntala Rao

Fatal culture clash, imperialist entitlement, forbidden passion between master and servant: the ingredients of director Santosh Sivan’s period piece Before the Rains may be the best film about India this year — but unlikely to be seen in India.

Of late it has been tiring to watch an incessant hodgepodge of borrowings and half-cooked ideas from Bollywood — shiny black S.U.V.’s screeching through teeming streets, scantily clad women in item number after item number, men with biceps and six packs spouting inane dialgoues — all feverishly edited jet-setting exercise in purposeless intensity.

So, Sivan’s new film is a respite from the usual lifeless and contrived thrillers and love-stories that end up at the movie theatres. Recently released in Europe, USA, and Canada and produced by Merchant-Ivory Productions, Before the Rains is adapted from Red Roofs, the longest of three unrelated stories in the Israeli director Dany Verete’s 2002 film, Yellow Asphalt, which explored the collision of modern customs and tribal traditions in contemporary Israel. In Before the Rains the setting is 1937 colonial India.

The film centers around three characters: Moores (Linus Roache), a British trader, with a keen acumen for business and a grand scheme to build a road into the jungles of the Malabar Coast to transport spices. Moores is carrying on a passionate affair with his housekeeper, Sajani (Nandita Das), a beautiful but naïve woman who commutes from the nearby village to work at his bungalow.

One afternoon they are accidentally spied making love at a waterfall by two young boys from the village, who report seeing Sajani with an unidentified man. When her husband interrogates her, Sajani’s evasive replies drive him into a fury and he savagely beats her. Since Moores’s wife has recently arrived from England, Sajani has already become someone to be kept hidden. But when she shows up wounded at Moores’ door in the middle of the night, he insists she leave as soon as possible.

The next day he hands her money and entrusts her to the care of T. K. (played brilliantly by Rahul Bose), his trusted assistant, who is ordered to make sure that Sajani leaves. The story culminates in death and humiliation and unfolds on the tapestry of India’s burgeoning independence movement.

As in Sivan’s earlier film, The Terrorist, Before the Rains doesn’t dawdle in usual sentimentality. As much as you sympathise with Sajani’s hopeless plight — she is a pariah with nowhere to go — the film is a dispassionate study of how power, when threatened, ruthlessly exercises its prerogatives. The movie’s most compelling figure is the unfailingly loyal T. K., who is instructed to violate local customs in a desperate cover-up. A stoic, taciturn man who loves his boss too much, he is a lost soul who has foolishly imagined he could keep one foot in the traditional world and the other in the modern.

Before the Rains is a classic Merchant-Ivory costume drama from which we expect exotic scene-settings and just as exotic love affairs, only to tread much deeper waters. Merchant-Ivory and Sivan productions have no release date set for India. Alas, another classic from a fine Indian director cannot find an audience in India.

Delhi Durbar
Ban Ki-moon springs a surprise

“Namasteji! Kya haal chaal hai? Mera naam Ban Ki-moon hai”. This came straight from the UN Secretary General as he greeted journalists, much to their pleasant surprise, at his press conference.

Few of them knew of his strong India connection. New Delhi was the first diplomatic assignment of Ban as a junior South Korean diplomat 36 years ago. His daughter is married to an Indian and his eldest son was born in India.

During his stint in New Delhi, he picked up a number of key Hindi words.

Ban, who keenly follows developments in India even while performing his duties as the UN chief, acknowledged that he continues to feel a close bond with India, not just as a matter of state, but personally.

“Dhanyawad (Thank You),” he said at the end of the press conference with a broad smile on his face.

V K Malhotra new Vikas Purush

As you drive down Delhi roads, particularly South Delhi, you often come across these days the smiling face of Vijay Kumar Malhotra fondly staring at you from the hoardings hanging from any number of electric poles with the caption: Vikas Purush (Development Man).

That is naturally part of the BJP campaign for its chief ministerial candidate in Delhi. Except that the latest Vikas Purush reminds you of the circumstances in which the then BJP president M Venkiah Naidu had coined the term and proclaimed former Prime Minister Atal Bihari Vajpayee as the Vikas Purush a few months before the 2004 general elections.

It also reminds one how poor Vajpayee was consigned by the BJP to the forgotten pages of history soon after.

Since Malhotra is no spring chicken either, is this title of ‘Vikas Purush’ a subtle message to tell him and other oldies that once the BJP declares you a ‘Vikas Purush’ you should consider this your last fight and be ready to hang in your gloves?

Sorry for stripping

No one, not even the most daring of parliamentarians, wants to face “conduct” proceedings. So when Lok Sabha Speaker Somnath Chatterjee referred the matter of “stripping act” by Assam’s independent Bodo MP S.K. Bwismuthiary to the committee looking into improper conduct by members, the latter was totally on the defensive.

Contrary to the “no-holds-barred” image he displayed in the Lok Sabha while protesting the Assam violence, Bwismuthiary quickly changed tack.

Reports are that the MP, who first pulled off his cap and then threatened to strip in the house, later tendered an unconditional apology to the Speaker. Conduct proceedings against the MP were finally dropped. So much for image building!

Contributed by Ashok Tuteja, Faraz Ahmad and Aditi Tandon