Prem Shankar Jha

India is split over Prime Minister Narendra Modis decision to abolish article 370 by a presidential order last week. The saffron fold is rejoicing: This government – their government—has had the guts to do what the Congress and its secularists could not. The Kashmir problem is  over. There will be a period of unrest, but when it is over, this canker, this anomaly from the past, will have been removed. The building of the modern Indian nation will be complete.

They could not be more wrong. Modi made a huge blunder in November 2016 when he demonetised nine-tenths of the country’s currency in circulation at one stroke, paralysing the Indian economy for months. This did lasting damage to farmers and the rural poor, from which they have not recovered. But he got away with it.

It may be the sense of absolute invulnerability that the recent election has given him that has led him into an even greater blunder now. But this time, he may not get away with it because his action is almost certain to set off repercussions, some of them outside the country, that he will not be able to control.

The first is the reaction of the already deeply alienated Kashmiri youth. Modi  correctly anticipated that abolishing article 370 would make them erupt in even greater paroxysms of anger, than did the death of Burhan Wani in 2016. To pre-empt this, he moved 75,000 additional troops of the Central armed police into the valley, abruptly cut off the Amarnath Yatra, closed all schools and colleges, shut down the internet, blocked mobile telephony and landlines, stopped the distribution of newspapers, and placed not only separatist leaders  under house arrest  but also, for the first time in Kashmir’s history, leaders of the mainstream parties who have never questioned Kashmir’s accession to India.

But what he and home minister Amit Shah seem not to care about is the monstrous sense of betrayal that has swept the rest of the Kashmiri people that 80 to 90 per cent of the population who have never wanted a complete separation from India, and to whom Azadi has always meant full political autonomy but without the severance of Kashmir’s connection  with the rest of India.

This is the vast majority that the government has betrayed. It has done so because of blind adherence to an ideology that, like all others that the world has had to endure, shows no respect for history, and steamrolls facts that do not serve its purpose into the ground. This is the ideology of ‘Hindutva’.

The key fact that the Sangh parivar chooses to ignore is that Kashmiri Islam is entirely different from the Deobandi and Barelvi Islam practised by Sunnis in the rest of the subcontinent. Called Reshi Islam (after Rishi), it was brought to Kashmir by Sufis from Persia and Central Asia and spread in the valley by Brahmin disciples, the most famous of whom was Lalded, aka Laleshwari Devi, after whom schools, colleges and hospitals all over the valley are named today.

As a result, Kashmiri Islam is suffused with Hindu practices, so much so that in 1946, when the chief of the Kashmir Muslim conference,  Chaudhury Ghulam Abbas, wrote to Mohammed Ali Jinnah asking that  his party be inducted into the Muslim League, Jinnah declined because his secretary, Khursheed Ahmad  reported from Srinagar that “… these people follow a strange form of Islam…. that drives a coach and four through all the tenets that we consider most holy … I fear that it will take a long period of re-education for them to become true Muslims”.

History will confirm that Kashmir was the only princely state in which it was the people, through the National Conference, and not solely the Maharaja, who decided to accede to India.

It will confirm that when armed infiltrators from Pakistan entered Kashmir dressed as peasants in August 1965 at the start of the 1965 war and asked a peasant to point out the way to Srinagar, he sent them on the wrong road and bicycled to Srinagar to warn the government of the presence of the infiltrators. It was this man that the ISI made one of the first targets of the insurgency, in 1990.

Finally, history will also confirm that since the insurgency started in 1989, every Kashmiri nationalist (separatist) leader who has been willing to discuss peace with New Delhi, or even lay out the steps Delhi would have to take if it wanted the insurgency to end, has been assassinated at the behest of the ISI, The list is long: it starts with Mirwaiz Maulvi Farouq, and ends with Abdul Ghani Lone, the father of Sajjad Lone who joined the alliance with the BJP in 2015, was a minister  till the other day, and has now been put under house arrest by the very government he backed. Had these leaders really wanted to break away completely from India, would Pakistan’s ISI have taken such great pains to have them killed?

Tragically, despite the opening of the bus road across the Line of Control, the insurgency in Kashmir dragged on because neither of Modi’s two predecessors knew quite how to end it. But despite this, Kashmiris did not give up hope that Delhi would one day understand what they really wanted and bring them peace. So strong was this hope that as recently as 2009, despite 20 years of insurgency, a survey commissioned by Britain’s Royal Institute of International Affairs had shown that only 2.5 to 7.5 percent of Kashmiris in the worst militancy affected districts of the valley said they wanted Kashmir to belong to Pakistan.

Had Modi been made aware of Kashmir’s history, he would have realised that Kashmir had already achieved a version of what V.D. Savarkar had dreamed of in 1923 when he propounded Hindutva – a civilisation in which the (Muslim) population fully recognised, and indeed prized, its (Hindu) cultural roots. Only the name they gave it differed: they called it Kashmiriyat.

As Yasin Malik, the leader of the JKLF, wrote in a short book, The Real Truth, while in jail in the early ‘nineties, it was the Congress’s decision to lift the ban on the Jamaat-iIslami that had been imposed by Maharaja Hari Singh that began the erosion of Kashmiriyat in the valley.

Had Modi really wanted to integrate Kashmir, therefore, he would have spared no effort to undo the damage done to Kashmiriyat in the previous 42 years. But he did the exact opposite:Instead of easing the armed forces’ iron grip on the valley, he tightened it; instead of offering an amnesty to a budding generation of Kashmiri militants driven to desperation by the incessant harassment of their families by the police, he demanded unconditional surrender and deployed the IB’s newly acquired cyber-espionage capabilities to root them out and kill them.

Finally, instead of opening a dialogue with the Hurriyat and JKLF leaders – as he had himself agreed to do by signing on to the Agenda for Alliance document with the PDP in 2015 – he kept them under almost continuous house arrest, and destroyed the last vestiges of their hold on the youth of the valley. As if that were not enough, by also putting all the leaders of themainstream parties under house arrest, he has made the Kashmiris leaderless and put them at the mercy of every wave of passion or anger in the valley.

Having closed every root to a peaceful end to the insurgency in Kashmir, Modi has decided to employ legal sleight of hand to make the problem disappear. Unfortunately, it will not disappear. Kashmiris will hold their breath till the Supreme Court passes its verdict on the appeal filed against the presidential order filed on August 5. The court is unlikely to uphold the presidential order, because doing so would fly in the face of its own decisions of 2017 and 2018 that Article 370 is not a temporary article of the constitution.

All serious observers of Kashmir and the Constitution knew that the word temporary had been introduced only to convey the fact that the scope of Article 370 would have to be redefined after the return of Pakistan Occupied Kashmir to the state.

By the same token, the abolition of the Kashmir assembly’s right to declare itself a constituent assembly in 1956 was a tacit admission that the legal provisions governing Kashmir’s relations with India could not be kept hostage to Pakistan’s non-compliance with the UN Security Council’s 1948 resolution forever. The Modi government’s attempt to use a General Clauses (India) Act incorporated into the constitution as Article 367 – but passed by the British parliament in 1897 to resolve disputes in the interpretation of words used in thedifferent statutes by which it governed India, at a time when  Kashmir was not a part of Indiais  unlikely to pass muster with the Supreme Court.

But even if this surmise proves right, the relief in the valley will be short -lived. For the jingoism that Modi and the RSS will stir up against Kashmiri Muslims, against Indian democrats and against the Supreme court itselfwill see it coast to victory in the state elections at the end of this year .

After that, the BJP will acquire a majority in the Rajya Sabha and the road to changing the constitution via parliament will be open. It is only then that all hell will break loose in Kashmir.

As the death toll rises, thousands of young Kashmiris who have so far stayed out of the insurgency will join it. Judging from what ISIS has already announced, and what has happened elsewhere after the destruction of its original stronghold in Syria, jihadis from the Middle East, and perhaps even Europe, may find their way into the Valley despite everything that the security forces will do. Islamabad will also come under increasing pressure from its own public to unleash its jihadi tanzeems, and will claim that it cannot hold them back.

A long and bloody war will then ensue and terrorism will spread to the rest of India where there is no dearth of soft targets to attack. The hunt for terrorists that will follow will turn India into a police state. Carefully staged fake encounters, which became normal in Gujarat after the 2002 riots, will become the order of the day throughout the country. Muslims will be the main victims. Kashmiriyat will become a distant memory. That will be the beginning of the end of the India we have known till today.

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Nine out of nine exit polls have predicted an outright  victory for the BJP with close to 300 seats. This prediction flies in the face of prepoll opinion surveys which had concluded that the BJP would do better than its opponents hoped, but would not come near an absolute majority in the Lok Sabha. It  also dismisses the profound discontent of the electorate  — of farmers over the deepening agricultural crisis, youth over the complete absence of jobs,  workers over the loss of existing jobs,  and small manufacturers and traders forced into bankruptcy  by a combination of industrial stagnation, demonetisation, and the GST.

Can Modi’s single plank election appeal to hyper- nationalism, attacking Pakistan,  killing Kashmiri militant youth  and terrorising Indian Muslims have been sufficient  to overcome  this extensively documented collapse of confidence? If the exit polls are even close to accurate, then this would have to be the only explanation.. But can we believe the  exit polls?  Have they been accurate in the past?  The answer is that some exit polls have been reasonably accurate; others have been  wrong but within acceptable limits, while still others have been wildly wrong.  A closer examination of  past exit polls is therefore necessary to determine which category he current predictions are likely to fall into.

Let us start with past Lok Sabha polls:  In the 2004  elections pollsters gave the Vajpayee-led NDA 230 to275 seats. But it  won only 187 seats and was pushed out of power. The 2009 exit polls they gave the UPA 199 seats and doubted whether it could stay in power. Instead it got 262 seats and did. In the 2014 elections, however, the exit poll preditions were  borne out..

Since these results give a very mixed picture  lets look at exit poll predictions for Vidhan Sabhaelections. In the 2015  Bihar elections the pollsters had predicted that the BJP would get between 93 and 155 seats with a median prediction of 108 seats, and comfortably form the government.  Instead they won a mere 53 seats. Similarly, in the UP 2017 vidhan sabha elections the exit polls gave the BJP 161 to 170 seats and 228 to 230 seats to the SP and BSP combined. In fact the BJP won a spectacular 312 seats.

By contrast,  in Karnataka 2018 the exit pollsters got it almost right, for the average of their estimates, the so-called ‘poll of polls’, gave the Congress 80 seats, the BJP 104, and the Janata Dal ( secular) of Deve Gowda  38 seats, In practice the Congress got 86, the BJP 103 and the JD(S)  37.

Similarly in the three other major state elections in 2018, the exit polls got it more or less right in two , but spectacularly wrong in the third: in Madhya Pradesh 6 exit polls gave widely varying estimates for the two main parties, but their average came close to the mark. This was 111 for the Congress and 108 for the BJP. In Rajasthan  they predicted 108 for the Congress which ended with 110. But in Chhattisgarh, exit polls predicted 40 for the BJP and 44 for the Congress, but the BJP won only 15 seats while the Congress won 68.

What can we learn from these results that will help us to make sense of the exit poll results described above? It needs to be remembered that the essential premise of an exit poll is that the people tell the truth when they come out of the polling booth, because once they have  voted they have nothing to gain from hiding their choice. This, of course, is never entirely true, so opinion polls taken at leisure try to filter out a ‘lying factor’ by asking intersecting  questions. But there is no time for this in an exit poll. So the accuracy of answers hinges entirely upon the respondents’ sense of security.

This is highest when conditions are “ normal”, the rule of law more or less prevails, and the conventions of democracy are respected. These conditions usually exist  when the state or country enjoys a stable party system in which both or all parties have been in and out of power several times and do not fear being voted out. In the polls described above Rajasthan , Madhya Pradesh, and Karnataka meet these pre-conditions.

A second condition in which people are likely to speak the truth is when  there is an overwhelming popular consensus on issues. Respondents then draw their sense of security from being part of a large group.  This pre-condition was fulfilled before the Lok Sabha elections of 2014  by Modi’s promises of reviving growth and creating two core jobs a year. With ‘Vibrant Gujarat’ behind him, and  a benign party and prime minister who did not target political opponents, people had no hesitation in talking about how they have voted.

A third pre-condition  for exit poll accuracy is that no new factor of compelling importance should have come into play, that disturbs the equilibrium described above. The Bihar 2015 predictions went wrong because exit pollsters were unable to take fully into account the impact of the formation of the Mahagatbandhanin the state, when converting votes  into seats. This is the single biggest stumbling block in predicting the results of any election based upon the simple majority voting system.

The pollsters got UP wrong for the same reason – they were unable to take the impact of the division of the vote between the SP and BSP fully into account while converting votes into seats. That bitter fight,  and the way it divided the Muslim vote while consolidating the upper caste hindu vote turned the exit poll results into a farce.  The results showed that the BSP-SP vote division had given the BJP 228 out of its 312 seats.

The SP had won all the  18 bye-elections in the state before the 2017 vidhan sabha poll, because the BSP had not fielded a candidate. As a result five sixths of the BSP vote had gone to the Samajwadi party. In this election if the BSP and SP have retained their shares of the 2017 vote, their combination alone will cost the BJP 46 out of its present 73 seats.

The other new factor that the pollsters have not even remotely taken into account  is the way in which Modi’s policies have unintentionally, but rapidly,  sharpened the class division in Indian politics to the point where the politics of caste and creed is gradually being transformed ito the politics of class.  It is not just that  industry has stalled and  jobs have been lost by the million when Modi had promised the opposite.   It is that every law passed by his government, and every bit of rope he has given to the VHP and other outcroppings of the RSS to enforce enactments such as the ban on cow slaughter; the unleashing of Gau Rakshaksupon cattle traders;  the invasion by aged cattle of the already crisis-ridden farmers’ fields;  the collapse of the cattle market, which has destroyed the prime mode of saving of the landless poor, and the systemic oppression and lynching of Muslims has brought in class into Indian politics in a way that could barely have been imagined five years ago.

All the economically and politically oppressed  in the country are poor. All of them are, to varying degrees, living lives of fear. Therefore very few of them are willing to tell the truth about how will they vote to strangers. But the vast majority  of them are behind the various raggle-taggle gatbandhansthat have been formed across the country to fight the BJP. This is why the exit poll predictions this time need to be taken with more than a pinch of salt.




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An awful cancer has invaded the soul of India. This is the country where Gautam Buddha,  the greatest saint humanity has known, was born. This is the country where Bhakti and Sufi  poets and saints stripped Brahminical Hinduism and orthodox Islam of ritual, idol worship and clerical control,  and preached union with the almighty through  love and submission,

This is the country of Swami Vivekananda, who electrified the World Conference of Religions at Chicago in 1893, by telling the delegates that Hinduism did not merely tolerate other religions but accepted them,   because the great religions are  like rivers that have carved out  different paths but end in the same sea; like paths up a mountain that end at the same peak.

This is the country that produced  Mahatma Gandhi, who drove  the British out of India without  firing a shot at them. But today this same country is in the grip of a blood lust in which the only issue being discussed ad nauseamis ‘how many terrorists/ Pakistanis/ Muslims did “we” kill in Balakot?

Nowhere is the new bloodlust more visible than on Indian television,  which is being watched abroad with growing horror on Youtube. A report in the Washington Posthas summed up its irresponsibility with damning precision:

“More than two weeks after the (Pulwama) attack, our analysis finds that no news site had rectified the errors in their reporting, leaving these misleading facts as a matter of public record. Instead, the Indian media has ascribed to itself the role of an amplifier of the government propaganda that took two nuclear states to the brink of war. Many TV newsrooms were transformed into caricatures of military command centers, with anchors assessing military technology and strategy (sometimes incorrectly). Some even dressed for the occasion in combat gear. Speculation and conjecture were repeated ad infinitum, and several journalists even took to Twitter to encourage the Indian army”[1].

If blame can be ascribed to any single individual, it has to be Prime minister Narendra Modi, who is willing to stop at nothing  to win the next election. But why have the media , that pride themselves on being the Fourth Estate of democracy (“The Nation wants to know”)  joined in so enthusiastically? The short answer is that the audience to whom it panders is not the India that has existed for ages, but a  new India being created mainly in the urban areas today.

That India and its proponent, the RSS, are products of modernity and the rupture it creates with the past. For this India  religion begins and ends with the robotic performance of ritual,  poojato idols, pilgrimages to Vaishno Devi and Amar Nath, and ‘purifying’ baths during the  Kumbh Mela at the confluence of  the  stinking Ganges and Yamuna rivers that they have not the slightest intention of either reviving or cleaning up.

This new India is still very small. Even in 2014, barely 31 percent of the electorate voted for Modi. So why are there no defenders of the old India out there? While many factors are responsible, in the political sphere the answer seems to lie in the cultural vacuum at the core of the Congress, the largest party in the opposition. The leader  of the Congress is a lady born in Italy and raised a Catholic. The President of the party is only one quarter Hindu by blood, and not Hindu at all by nurture or education. Neither of them has a gut  understanding of the core values of Hindu society; its syncretic, accepting, pluralism; its willingness to adapt, live and let live. So neither of them is able to  feel the anger that the  degradation of Hinduism, and  perversion of  its core values by the RSS has created in caste hindus of the old India, and the fear it has inspired in the Dalits, some of the backward classes and the Muslims.

This emotional vacuum at the top has led the Congress into the trap of trying to compete with the BJP by peddling ‘soft Hinduism’, instead of opposing  the ‘hard Hindutwa’ of the RSS, tooth and nail. Before the Gujarat elections Rahul Gandhi visited temple after temple, came out of them with a teekaon his forehead and proclaimed that “I am a Hindu” in much the same way as a convert to Islam or Christianity would proclaim that he or she is now a Muslim or Christian.

This “soft”  Hindutwa explains why he was so quick to accept Pakistan’s culpability  in the attack, why he   described it almost sentimentally as  “an attack on India’s soul” and,  without prior discussion, committed not only the Congress but the entire opposition to “fully supporting  the government and the security forces” in their actions. By doing this he legalized in advance every action that Modi has taken against Pakistan.

“Soft Hindutwa” also explains many of his subsequent silences and omissions, such as why he did not point out that Pakistan was only indirectly to blame because the suicide bomber was a Kashmiri youth; why he did not immediately condemn Modi’s dangerous brinkmanship in launching a pre-emptive attack on a Jaish-e-Mohammad madrassa and training camp  at Balakot, and why he did not immediately condemn Modi’s calculated silence  over the expulsion of thousands of Kashmiris from apartments, rooms and hostels by frenzied mobs across north India. To the minorities, as well as to the Hindus of the ‘old’ India , it conveyed the disheartening news that for the Congress too political expediency trumped the rule of law. So why bother to vote for it?

This lack of courage  has allowed Modi to turn the tables on the opposition. Whereas it is he who is playing a dangerous game of brinkmanship in a desperate effort to win an election he was almost  certain to lose,  with the help of the ever-subservient media he has been able to  portray  the opposition as unprincipled, opportunistic politicians who care two hoots about India’s security and standing in south Asia and the world, and are only intent upon ousting the BJP from power at any cost.

As a result, Modi has been able to make a significant part of the population of the country forget, at least for the moment, the collapse of the economy, the crisis in agriculture, the stagnation of industry, the  11 million jobs lost by it over the past five years, and the hollowness of  the grandiose promises he made to them when he came to power. Whether Modi  will be able to make their amnesia last till the general elections remains to be seen. But Rahul Gandhi’s silence on this front too is not going to shorten it.

Unfortunately this is not the end of India’s misfortune for, having made one major mistake, Rahul Gandhi seems intent on making another, even bigger one. This is not to understand the imperative need to avoid fracturing the anti-BJP vote at any cost. Instead through his lack of experience and his want of leadership qualities, he is doing the exact opposite: in state after state he is  allowing the shortsightedness and greed of his  party rank and file to make him demand far more seats in than the Congress’ share of the vote merits, and thereby  disrupt the building of a common front against the BJP.

In Delhi the Congress has flatly refused  to make any  seat-sharing agreement with the Aam Admi Party, and has decided to fight all the seven seats by itself, despite the fact that it does not stand a snowball in Hell’s  chance of winning even a single seat,  and can only divide the vote in favour of the BJP. This has been made abundantly clear by an opinion poll based on  a mammoth 18,750 person sample has  shown that while the AAP still holds 52 percent of the vote, the Congress share is a paltry 5.5 percent.

In the crucial state of UP the Congress has already published the names of 11 candidates and intends to fight many more seats in spite of  having won only 2 seats out of 80 in 2014 and commanding barely 11 percent of the vote. In UP  too whatever little chance the Congress had of cutting into the BJP vote to win some seats has been destroyed by its tame acceptance of Modi’s leadership in dealing with the aftermath of Pulwama. Today, all that the Congress can do is to increase the number of seats that the BJP will win.

As if these setbacks are not enough, if reports in some newspapers are accurate, relations between  the Congress and Tejaswi Yadav’s JDU are also becoming strained in Bihar.

How costly Rahul Gandhi’s immaturity , and lack of leadership qualities,  can prove was  shown by the results of the Gujarat state assembly elections in December 2017. Long before  he turned on Mani Shankar Aiyar, the most eloquent speaker in  his  own party, when Aiyar defended  the Gandhi family against an unprovoked slur by Modi  by calling him  a neech kism ka admi, (which Gandhi misunderstood as a neech jaat ka admi) ,  he had already  ensured a BJP victory by spurning the  Aam admi party as well.

Well before the election,  Arvind Kejriwal had made three attempts to contact Rahul Gandhi in order to forge an alliance with the Congress in Gujarat. Kejriwal had understood that  while the AAP could not win any seats on its own, it did command a sizeable  share of the vote in Gujarat. He was therefore willing to put up AAP candidates in seats selected by the Congress, where the AAP had the greatest capacity to cut into the BJP’s vote.  Rahul Gandhi did not even bother to reply to his a phone calls. So  BJP came back to power by the skin of its teeth, winning 18 seats with a margin of 5,000 or fewer votes and nine with a margin of less than 2,000 !

Today the Indian nation is facing a crisis whose seriousness almost no one in the Congress party understands ( and the few who do dare not to speak). Thanks to Rahul Gandhi’s inexperience and indecisiveness  there is now a distinct possibility that the BJP will emerge as the largest single party after the next elections and be able to  form a government with disillusioned elements of the Mahagatbandhan.Should that happen, the dwindling but still substantial number of Kashmiris who   want azadiwithout losing their links with India  will lose all hope and  start backing those who  want to secede from India. India will  have lost  Kashmir forever. Worse still, a future BJP government’s  attempt to hold on to it by force alone, as Modi has done for the last five years,  will almost certainly precipitate a war with Pakistan.

In the Indian heartland democrats and dissidents will be silenced through a wholesale use of the sedition laws.  First the High courts and then  the Supreme Court will collapse under the burden of the cases that the victims will file. Vigilante rule targeting Muslims and Dalits will  gather momentum. As faith in the police and the judiciary dwindles first a few, and then more  Muslim youth will  conclude that it is better to die fighting than live in fear forever, and swing to terrorism  as hundreds , if not thousands,  of Kashmiri youth have done in the past five years. The police repression that will inevitably follow will destroy the last vestiges of democracy and the rule of law.

State governments not under BJP rule will not take this lying down. Their attempts to protect their democratic systems will lead to the splintering, and then disintegration, of India. The portents of disintegration are already visible: Modi has not held a single meeting of the National Development Council since he came to power, and questioned the very need for its existence in January 2015.

And the first signs of rebellion by state governments against arbitrary rule by the Centre have already appeared. Between November 2018 and January 2019 three states – Seemandhra, West Bengal, and Chhattisgarh, have withdrawn their ‘general consent’ to Central enforcement agencies, to operate in their territory  without prior, specific permission, under the Delhi Special Police Establishment Act.

The portents are unambiguous: if the BJP of the Modi era (not to be confused with the BJP of the Vajpayee era)  is returned to power  it is not only its democracy but its unity, and its syncretic culture that will be in mortal danger.



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While such electoral promises may garner votes, taxpayer money meant to safeguard India’s future is instead spent on an ever-expanding web of social welfare programmes that don’t really enable the poor.

As BJP, Congress Race to Promise the Earth to the Poor, Who Will Foot the Bill?Credit: Reuters

The approach of the next general election has reminded political leaders of the existence of the poor in India. This has set off a rash of competing promises to the electorate.

On January 28, three days before the budget, Congress president Rahul Gandhi announced that his party would guarantee a minimum income to every poor family in the country.

As of now neither Rahul, nor anyone else in Congress, has clarified precisely who will benefit from this scheme, but the cost will be prohibitive: At the prevailing minimum wage of Rs 321 a day (Rs 9,630 a month), covering 25% of the families of the country will cost the exchequer a whopping Rs 700,000 crore a year.

How the beneficiaries will be chosen is still unclear. The actual number could be much smaller – perhaps no more than 18% – if we count only those whom the National Sample Survey has placed in its residual category of ‘casual’ workers. But even casual workers make up 18% of the work force. So guaranteeing at least a minimum income will add Rs 500,000 crore to the central government’s expenditures.

The situation in Wazirpur is indicative of the plight of unorganised workers across Delhi. Credit: Amit Kumar

Not to be outdone, three days later, Piyush Goel – Prime Minister Narendra Modi’s acting finance minister – announced in his budget speech that the BJP-led government would introduce an immediate income subsidy of Rs 6,000 a year to all farm families with less than two hectares of land. The government has estimated that 12 crore farmers operate on less than two hectares of land. This will therefore add Rs 72,000 crore to the Centre’s annual expenditure.

Goyal also unveiled an insurance scheme for unorganised workers in which the government will match the contributions of Rs 55 to Rs 100 a month of contributors starting from the age of 18, and guarantee them a pension of Rs 3,000 a month after they reach the age of superannuation. On the surface, this looks like a ‘pay as you go’ insurance scheme of the kind that continental European countries have adopted (but the UK and India have not). But it too bears the marks of haste and lack of study.

In ‘pay as you go’ schemes, the annual payout by the insurance company is met by the interest earned on accumulated pension contributions, supplemented by current premium inflows.

If such a scheme is open to anyone who is prepared to pay the required premium, a lock-in period of five to six years before contributors become eligible for its benefits is usually sufficient to make it solvent, without the need for any annual subvention from the exchequer.

But the imposition of a Rs 15,000 ceiling on eligibility for benefits will almost certainly pervert its purpose. For it will provide the employers with a big stick with which to dissuade workers who want a pay hike beyond Rs 15,000: “Stay below it or face the loss of half your pension when you retire”. 

Unwittingly, therefore, Goyal has made a similar mistake to what the Speenhamland Act made in England in 1795, when it promised to supplement private wages with a ‘filler’ to raise workers’ living standards to the minimum acceptable level. All that the Act succeeded in doing was to allow employers to lower their wage rates as far as the Speenhamland commissioners would tolerate .

The ‘Speenhamland Effect’ will also ensure that the total number of beneficiaries will far exceed the 10 crore that to the Modi government expects. There are more than 36 crore non-agricultural employees in the unorganised sector. Is there any good reason not to expect 30 crore among them to take out old age pension policies? 

If, or rather when, that happens, the government’s outgo on the scheme will rise to Rs 36,000 crore. If one adds to these two schemes the tax, and interest rebates that the interim finance minister has promised, this budget will increase budget spending by Rs 100-125,000 crore in a full year.

A woman tests LED bulbs after installing them onto a grid to make indicator lights inside an electrical manufacturing unit in Mumbai, March 22, 2018. Credit: Reuters/Francis Mascarenhas

A broke government

Where will this money come from? Neither the Congress nor the BJP has said a word about how it will raise it, so one must conclude that they expect the annual increase in the government’s tax and non-tax revenues to cover the extra spending. 

But even a cursory look at the government’s finances will show that while this can happen when the economy is growing at 8-10% a year and industry at 9-12%, as it did between 2003 and 2011, it cannot when industrial growth is stuck at 3-4% a year. 

The harsh truth is that the government is broke. To balance its budget in 2017-18, it had to borrow money to meet close to 29% of its expenditure by borrowing money from the public through the sale of bonds by the Reserve Bank of India. The preliminary estimate for 2018-19 is only marginally lower. 

Had the borrowed money been going into the creation of infrastructure, as it did in from the ’50s to the ‘70s, it would have given no cause for concern because the additional assets it created would have generated more money and more jobs. 

But in 2017-18, very little of the borrowing is being done for investment. Of Rs 5,91,000 crore in 2017-18, Rs 529,000 crore was used to pay the interest on past loans. This is thus a self-contained circle that comes into being in which fresh debt is incurred to meet the cost of servicing past debt.

In short, the government is running the largest Ponzi scheme of all time.

The budget does contain a small allocation Rs 263,000 crore for its capital account. But this money does not create new fixed assets. Most of it goes into the maintenance of the fixed assets – roads, bridges, power stations and the like that were built in the past. 

In sum, very little of the money that the government now raises from taxpayers is intended to safeguard the future of the country by creating more and better infrastructure. Nearly all of it is being spent upon salaries and pensions of a bloated bureaucracy whose income is adjusted every five years for inflation, come rain or shine.

What little remains is being spent on an ever-expanding web of social welfare programmes that create immediate relief and garner votes in the next election, but do nothing that will enable the poor to stand on their own feet.

That security comes only with the acquisition of stable, permanent jobs. Neither Rahul Gandhi’s minimum income programme, nor Mr Modi’s Rs 6,000 a year to the superannuated farmer will assure his or her son, daughter or grandchildren a job. To revert to economists’ jargon, every rupee that the government spends on boosting consumption instead of investment, denies someone a job on some date in the not too distant future.

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The tragedy of the crisis in West Bengal is that it pits the political freedom of regional parties against the mandate of the state to punish corruption and political pillage.

We Are Witnessing the Death of the CBI. Will Indian Democracy Follow?Mamata Banerjee at her dharna site in Kolkata. Credit: PTI

Seventy years after India gained its freedom, the Ashoka Chakra has become a symbol of national unity – one that every child in the country is familiar with. But there is a darker side to the unity that Ashoka created, which few care to remember.

Beginning in the 14th year of his reign, Ashoka attempted to make his subjects change their traditional customs to bring them in line with dhamma – the Buddhist ‘right path’. To oversee this, he appointed a socio-religious police, the dhamma mahamattas. Initially the dhamma mahamattas used persuasion, but as Ashoka grew more introverted later in life, they began to abuse their power and use coercion.

As the historian Romila Thapar has noted, their high-handedness created a wave of discontent. After Ashoka’s death, first the outlying and then the inner principalities began to ignore central edicts. In less than half a century, the Mauryan empire passed into history.

What happened then has been repeated many times since. It happened when Aurangzeb tried to re-establish Muslim pre-eminence in the Mughal empire and alienated the Rajput princes who supplied his army with most of its soldiers.

It happened when Achyuta Raya, the weak and self-centred son of Krishnadeva Raya, the greatest of the Vijayanagar kings, tried to hold together his father’s far-flung empire through the use of threats and force.

It almost happened to the British Raj, when Lord Dalhousie imposed the doctrine of lapse upon the princes who had entered into subsidiary alliance with the East India Company.

India is on another such fateful cusp today. Since the 1994 Bommai judgment of the Supreme Court, which practically ruled out the use of president’s rule to keep state governments in line, executive power has been shifting steadily from the Centre to the states.

Most of this shift has taken place in a spirit of cooperation, to the end of improving governance and strengthening democracy. But on February 3, that cooperation gave way to open conflict between the Central government and the state of West Bengal.

The CBI’s record in West Bengal

A fortnight earlier, the Central Bureau of Investigation (CBI) had accused the Kolkata police commissioner, Rajeev Kumar, of ‘deliberately delaying and diluting an SIT [investigation] of two notorious chit fund Ponzi schemes,’ the Sarada and Rose Valley scams. It said he was ‘absconding’, a clear warning that his arrest was imminent.

The CBI’s accusation was strongly refuted the very next morning. Javed Shamim, the additional commissioner of Kolkata police, pointed out that Kumar had been in office every day, including on weekends. Chief minister Mamata Banerjee accused the Modi government of resuming its campaign to bring the Trinamool Congress to its knees before the general election.

Mamata had good reason to believe this. In 2014, the CBI had come to Kolkata in a similar manner and arrested two Trinamool MPs, as well as the state’s minister for transport and sports, and the state director-general of police. They were subjected to intense cross-examination on charges of collusion in the chit-fund scams.

Thirty months later, on April 17, 2017, the CBI registered a first information report (FIR) against 13 persons – including 12 top Trinamool leaders – who were allegedly caught accepting cash on camera in a sting operation carried out by the news portal Narada News. The sting was carried out just before the 2014 Lok Sabha elections and was made public in 2016, just days ahead of the Bengal assembly elections.

When the investigators are suspect

The West Bengal police had therefore been seething at the high-handedness of the CBI and the Enforcement Directorate for some time. So on Sunday evening, when a team of CBI officers arrived unannounced at the commissioner’s house, and asked to be let in for “official work”, the police at the bungalow asked them to wait.

Word spread through Kolkata police stations that the CBI was about to arrest their chief. In no time, the CBI officers were besieged by hundreds of state police. They had to call in the CRPF to be rescued.

Mamata went straight to the police commissioner’s bungalow, accused the CBI of being Modi’s political tools and began a dharna, claiming that this had become necessary “to save democracy, the Constitution and the country.”

Commenting on the confrontation, a senior official of the Kolkata police said, “The CBI and ED have always acted as agencies above law. There are certain rules which all agencies need to follow while investigating. If they look for cooperation from us, they too need to cooperate with us.”

Protection for new partymen

Narendra Modi’s misuse of the CBI and other agencies had also been exposed when the CBI dropped its investigations against the former Trinamool railway minister Mukul Roy, and Assam minister Himanta Biswa Sarma, after they joined the BJP in November 2017.

While the evidence then was inferential, fresh evidence seems to have emerged that both Roy and Biswas struck explicit deals with the BJP to get the West Bengal and Assam police off their backs.

In a taped conversation apparently with the BJP’s general secretary for West Bengal, Kailash Vijayvargiya, Roy is heard asking him to ‘fix’ four West Bengal police officers who were creating trouble for him. Vijayvargiya denounced the recording as a forgery, but Roy has so far only accused the police of illegally taping his conversations – stopping short of challenging their veracity.

The TMC also claims that Sudipto Sen, the promoter of the Sarada chit fund, actually wrote to the CBI office in-charge in Kolkata to complain that Himanta Biswa Sarma took Rs 3 crore from him to facilitate the spread of his chit fund in Assam, and did not keep his promise.

Assam finance minister Himanta Biswa Sarma. Credit: TwitterAssam finance minister Himanta Biswa Sarma. Credit: Twitter

Crushing the CBI’s autonomy

The conflict between Delhi and Kolkata widened into a more general conflict between the Centre and states only after the Modi government broke with all precedent and summarily removed Alok Verma from the post of CBI director in October 2018.

Verma was removed because he had locked horns with Rakesh Asthana, a “special director” chosen from the Gujarat police cadre. Asthana is known to be close to Modi, who almost certainly brought him in to be his eyes and ears in the CBI.

The sordid accusations that Verma and Asthana levelled against each other led to both being sent on leave. Verma’s place was taken by M. Nageswara Rao, whose first act as interim CBI director was to transfer 13 officials – many of whom were investigating a 2011 bribery allegation against Asthana.

A week later, the CBI cleared the former Madhya Pradesh education minister, Lakshmi Kant Sharma, of complicity in the Vyapam scandal, in which 42 persons mentioned in the police records had met accidental, or inexplicable, deaths. The CBI had also declared that there had been no conspiracy behind those deaths.

In the 77 days that followed Nageswara Rao’s appointment, and the 23 days for which he was brought back after Modi sacked Verma for good (on January 10, 2019), his decisions made it clear that the CBI would not stand in the way of Modi’s vendetta against political rivals.

Modi’s cynical vendetta Raj

Modi had already shown the lengths he would go in his sustained assault on Arvind Kejriwal and the Aam Aadmi Party in Delhi, as on Mamata and the TMC in Bengal. (And earlier, too, by threatening to expose Nitish Kumar’s sources of funds, and forcing him back into the BJP’s fold.)

In November, sensing that he might be next on the list, M. Chandrababu Naidu took the fateful step of withdrawing Andhra Pradesh’s ‘general consent’ to Central enforcement agencies, to operate in Andhra without prior, specific permission, under the Delhi Special Police Establishment Act.

Days later, the West Bengal government did the same. On January 11, a day after Modi sacked Verma for the second time, the newly-elected Chhattisgarh government also followed suit.

This withdrawal of permission was not unprecedented: Deve Gowda had done it in Karnataka. But this is the first time that the Central government has faced three states doing so at the same time, with others ready to follow. In this moment, the Indian state confronts the rebellion that Ashoka, Aurangzeb and the British faced in the past.

The tragic cost of banishing the CBI

The tragedy of Indian democracy today is that the opposition’s battle to protect political freedom will simultaneously destroy the little capacity the state has left to prevent and punish crime.

This is demonstrated by the timing of Andhra’s withdrawal, only days before the CBI was to spring a trap to capture a ring of central government employees who were accepting bribes for permissions and favours.

When the CBI asked for specific permission to lay the trap, and asked the state to keep its plans secret, the state home ministry instead informed its own Anti-Corruption Bureau. What followed is not clear – but rather than capturing the entire ring, the CBI could make only one arrest. Its bitterness at the failure made it go public with a detailed statement about the cause.

The banner of resistance that Mamata has raised in Bengal will shelter an entire system for siphoning money from the poorest into the pockets of politicians and their henchmen – for there are at least 60 other ponzi schemes in Bengal alone, which have collected an estimated Rs 30,000 crore from around 1.7 million investors.

As the Cobrapost exposé of the Dewan Housing and Financial Scheme has shown, non-banking financial corporations are lending tens of thousands of crores to shell companies that finance political parties, among their other “investments”, but have directors with few, if any, assets. This means nothing can be recovered from them when these companies go broke.

Nearly all the major political parties joined Mamata’s protest against Modi, and reaffirmed their determination to put up a united front against the BJP in the coming elections. If they stay united, they will push the BJP out of power.

But if they do not follow up their victory by creating an election financing system that frees parties from the need to plunder money – as happened through the Sarada scam – then they will give the BJP a powerful platform fight from in 2024. And if the BJP resumes its attempt to create a monolithic Hindu rashtra, then India’s descent into the age of the later Mughals will be swift.

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By Going Solo in UP, Congress Demonstrates Its Penchant for Suicide

Rahul Gandhi. Credit: Twitter/@INCIndia

Apart from the two Nehru family bastions of Amethi and Rae Bareli, the Congress is unlikely to win any seats in the Lok Sabha polls.


Until a month ago, I had firmly believed that the BJP’s days in power were numbered. The threat it posed to the future of not only the nation but to rival political parties whose leaders it has been hounding since the day it came to power, had been recognised.

I believed therefore that gradually but unmistakably, the outlines of a ‘grand coalition’ to save democracy had begun to emerge from the mists of the future. Other than pushing the BJP out, the coalition had no clear programme of action. It also had no leader whom it could pit against Modi on the billboards as the election approached. Most importantly, the distribution of constituencies between them still lay in the future. But one thing was beyond doubt: if it survived, the sheer weight of its numbers would push the BJP to an epic defeat.

That defeat has begun to look distinctly less likely today. The reason is not second thoughts among the smaller parties, but the revival of overweening ambition within the Congress. The obvious sign is its January 13 decision to fight both the BJP and the SP-BSP coalition in UP.

The Congress has presented this as a reaction to being shut out of UP altogether by the BSP-SP combine, which did not offer it a single seat. In reality, the BSP and SP’s action the previous day emerged from a failure to bridge the wide gap between the ten seats in UP that the Congress had initially demanded and the seven it was willing to settle for, and the two that the SP-BSP were prepared to give it – the traditional Nehru dynasty seats of Rae Bareilly and Amethi.

Bringing new dynamism

To breathe new life into the state party unit, Rahul Gandhi promised to bring new dynamism – what he described as a “440-volt jolt” – to the party’s organisation in UP. His secret weapon has turned out to be his sister, Priyanka Gandhi, whom he has appointed the general secretary for eastern UP. She will have the final say in the choice of candidates for eastern UP and will campaign vigorously for the party in that part of the state at the very least.

Rahul will be relying upon her palpable honesty and commitment to the nation, her physical resemblance to her grandmother Indira-amma and her appeal to women voters, to turn the tide in the Congress’ favour.

All these factors will undoubtedly play some role in the choices of the voters. But will they suffice to restore the grand old party’s pre-eminence in UP? To have a chance of taking a majority of the seats away from the BJP and SP-BSP combine, the Congress needs not only to raise its share of the vote from 7.53% in 2014 to at least 35%, but to take it equally from the BJP and the SP-BSP combine. One look at the voting pattern in eight statewide elections over the last twenty years, four for the Lok Sabha and four for the vidhan sabha, shows that the task is not well-nigh, but absolutely impossible.

Let us take the BJP first. Its vote jumped from 17.5% in the 2009 Lok Sabha elections to 42.6% in 2014, and from 15% in the 2012 vidhan Sabha elections to 39.7% in the 2017 elections. These colossal increases were a product of the ‘Modi wave’, which was made up in equal parts of disappointment with the Congress during the last three years of UPA rule and belief in the grandiose promises that Modi was making. This wave has now visibly declined.

Since almost 11 points of the 25% increase in its share of the vote in 2014 came from the Congress, Rahul and his advisors obviously believe that this can be brought back to the party. But one look at the BJP’s share of the vote in the 2017 vidhan sabha elections shows that this would be wishful thinking. For despite losing every single bye-election to the vidhan Sabha to the Samajwadi party between 2014 and 2017, and despite the shock of demonetisation, the BJP still held on to 39.7% of the vote in 2017, less than 3% fewer than in 2014, capturing 312 out of UP’s 404 vidhan sabha seats.

The reason for the anomalous result was that since Mayawati did not contest any of the bye-elections to the vidhan sabha in this period, nearly all the BSP vote went to the SP. But Mayawati came back into the fray in 2017 determined to defeat not only the BJP but also the SP, all on her own, and fought the SP for every seat.

To make matters worse she specifically tried to woo away the Muslim vote, by putting up 100 Muslim candidates. Akhilesh Yadav was forced to follow suit with a somewhat fewer number. This played into Amit Shah’s hands: all he had to repeat tirelessly throughout the campaign was that if the caste Hindus did not stand solidly behind the BJP, the Muslims (backed by Dalits or OBCs), would come to power.

The coming together of the SP and BSP will harden this sentiment in UP. So it would be folly to expect any further decline in the BJP’s vote. But if the BJP’s vote is unshakeable, what about the SP and the BSP? The answer is that shaking this bastion of caste sentiment is even more difficult than shaking that of the BJP. The combined share of the two parties has ranged from 44-56% in the vidhan sabha and 42-51.5% in the Lok Sabha over the past 20 years.

It is also worth noting that even during the Modi hurricane of 2014, the combined vote of the two parties was less than half a percent short of that of the BJP. In the 2017 state elections, despite being routed in the number of seats they gained, their share was 5.5% higher than the BJP’s. With Dalit votes having gone consistently to the Samajwadi party or the Rashtriya Lok Dal in bye-elections between 2014 and 2018, it is a safe bet that these votes simply aren’t transferable to any other party.

BSP supremo Mayawati and Samajwadi Party chief Akhilesh Yadav. Credit: PTI


Two questions

Two other questions remain: Whom can Congress reach out to in UP with any hope of gaining their support and how strong is the Priyanka factor likely to be?

As to the first, one group that may still not have made up its mind is the twenty-odd million young voters who will be voting for the first time this year. After eight years of jobless growth, demonetisation and the bungled GST, and after Modi has failed to fulfill any of the promises he made to the electorate in 2014, it would be surprising indeed if these were not looking for a new party with a different and credible programme for reviving the economy, restoring the rule of law, cleansing politics and making the state accountable to the people, to which they can anchor themselves.

But even if Rahul Gandhi has such plans , he has not taken the people into his confidence so far and with the elections only months away, the time for doing so is all but lost.

As for the second, bringing in Priyanka only months before the next elections is an admission of despair. Is the collective memory of the Congress so short that it does not remember what happened when it tried to do exactly the same thing with Rahul Gandhi in the 2007 vidhan sabha elections?

On that occasion, Rahul had at least worked in UP as the secretary of the youth wing of the party and tried specifically to induct youth into the Congress. The Congress had convinced itself then too, that Rahul would work the miracle of reviving the Congress in Uttar Pradesh. Instead, the party’s vote share went down from 8.96% in 2002 to 8.61% in 2007.

So what will fighting all the seats alone actually achieve for the Congress? The answer is brief and depressing – nothing. The most that it will get is the two seats it already holds and the SP-BSP combine was willing to offer it – Amethi and Rae Bareli. What then is it risking by going it alone? Again the answer is depressing – the very future of the congress party.

In 2014, the size of the victory in both constituencies, but in Amethi in particular, was assured for the Congress by the Samajwadi party not putting up a candidate for either seat. If it and BSP jointly field a candidate now, there is a possibility that the BJP, which made a strong showing in Amethi in 2014, could walk away with the seat. Rahul Gandhi is therefore risking his own seat and the political future of his family, which means also of the Congress party, in the one state where he has the least chance of winning.

Would even the most addicted and reckless gambler in a casino risk his money against such odds?

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The central bank and the finance ministry must be able to have a mature discussion on how much of the RBI’s reserves can be handed over to the government.

After Urjit Patel Drama, RBI Must Turn Its Attention to How It Can Help India's Economy

Arun Jaitley and Urjit Patel. Credit: PTI/Files

By resigning as the Reserve Bank of India’s governor without a shadow of warning, Urjit Patel has delivered a coup de grace to India’s tottering economy.

One does not have to be a psychic to divine what made Patel take this drastic action now. He was almost certainly instructed to transfer some of the central bank’s reserves to the finance ministry to meet its expenditure commitments. He had already refused point blank during the marathon board meeting of November 19. He must have suspected, or been warned, that if he did not agree, he would be directed to do so under Section 7 of the RBI Act.

The forerunners of the deluge that Patel has let loose have not taken long to appear. On Tuesday morning, the rupee was trading 112 paise lower and on Wednesday morning, it opened 0.33% down from Tuesday’s close of 71.87.

More falls are certain because most investors will conclude that, sensing the need to compensate for the losses in the current round of state elections, the BJP will use the central bank’s reserves to  go on a spending spree to recover ground before the general elections next year.

This may well be true. But even if, by a miracle, Patel’s resignation makes the government pause before raiding some of the RBI’s reserves, this is unlikely to save the Indian economy from the major problems that now stares it in the face.

The trouble ahead is writ large in the Rs 1,140,000 crore worth of stalled and abandoned projects, in the Rs 1,00,000 crore worth of irretrievable bank debt, in the more than 200 large firms struggling desperately to stave off bankruptcy, in the country’s struggling small and medium industry, in the falling rupee, not to mention India’s stagnant employment growth.

The resignation could not have come at a worse time. If there was a right moment for him to have registered his protest, it should have been on November 8, 2016, when Prime Minister Narendra Modi announced his controversial decision to demonetise Rs 500 and Rs 1,000 notes. But Patel has chosen to quit now, when two more years of suicidal economic policies have left the Indian economy in tatters and confidence abroad in the stability of the Indian rupee is at an all time low.

High interest rates

The inescapable fact is that the Indian economy has been hurt over the past decade by the intolerably high interest rates inflicted upon it. Inflicted by a central bank so single-mindedly focused on curbing an inflation that was not caused by an excess of demand in the domestic economy. That futile exercise led to a crash in demand for housing and consumer durables, and pushed up the interest burden and cost of infrastructure projects till investors simply left them incomplete and walked away.

Had anyone in the Modi government studied the experience of other countries  it might have been able to find an antidote to India’s epidemic of bankruptcies  long ago.

Today, only one narrow avenue remains open.

The first step is to lower commercial bank lending rates on medium and long term loans, of longer than three years to today’s core rate of inflation of 4%. Also, allow borrowers to refinance their existing debt at the new low rate and balance this by lowering interest paid on term deposits in the banks by 1 to 1.25%, in order to avoid a further constriction of bank revenues.

Readers may wonder how a 1 to 1.25% average reduction in interest paid out by banks to depositors will reduce outflows by enough to offset the fall in revenue from a 6% cut in lending rates. There are three reasons: first, only 37% of the commercial bank loans by public sector banks is for three years or more.

Second, most of the longer term loans within this category are now non-performing and therefore yield nothing. Finally, since even a 1% reduction in deposit rates will make some savings shift from the banks to the equity and bond markets, there will be a further reduction in the servicing cost of the PSB’s debt.

An examination of the balance sheets of several companies that are now facing bankruptcy proceedings before the National Company Law Tribunal shows that while many will be able to start meeting their liabilities if they are allowed to refinance their loans, a substantial number, including some of the biggest investors in infrastructure, will still remain in the red.

The Barack Obama model

To salvage the most important projects among these, the government will need to follow the example set by Barack Obama in the US in 2009, when he asked the Federal Reserve to buy a controlling share in General Motors and Chrysler, to save them from bankruptcy and bring in new management to turn them around. Not only did he succeed, but the Federal Reserve was able to resell its shares in the market at a profit within four years.

The second essential step, therefore, is  to persuade the RBI to transfer some of the reserves it holds within the central bank to a Special Facility that will buy controlling  shares in the most important and least severely indebted of the remaining companies.

Contrary to the impression created by the recent controversy between it and the ministry of finance, the RBI not only has the funds to do the buying, but the need for credibility abroad will ensure that it deploys the funds responsibly, chooses companies to buy into that are really capable of being revived, and not succumb to political pressure in making its choices.

It has the funds to do this because its two principal reserves, the Currency and Gold Revaluation Reserve (CGRR) and the Contingency Fund far exceed the maximum that any RBI committee has recommended. While the Subrahmanyam committee in 1997 had suggested 12% of total assets in each fund, the Usha Thorat committee had recommended 12.26% for the CGRR and 5% for the Contingency reserve.\

Today the CGRR  stands at 19.11%, and the Contingency Fund at 6.41%. The two together are therefore 1.52% above the limit prescribed by the Subrahmanyam committee and 10.4% above the Thorat recommendations.

If the RBI brings the CGRR down to Thorat’s 12.26% but simultaneously raises the Contingency Fund to 9%, it will be able to create a Special Investment Facility (SIF) with the remaining 5.5% and invest in the shares of companies in dire need of recapitalisation, without damaging confidence abroad in the RBI. The surplus amounted to Rs.198,967 crores in 2017-18.

This facility can be further enlarged by discontinuing, temporarily, the practice begun in 2014 of transferring all of the RBI’s annual profits to the government to help finance its budget, and transferring it for two years into the SIF. The net surplus in 2017-18 was Rs 50,004 crores. So this would add another Rs 100,000 crores to this facility by March 2020.

Asking the RBI to create the SIF will force it to take responsibility for reviving economic growth, something it has adamantly refused to do, even while it controls the one instrument that spells life or death for the economy. It will also have to understand the challenges industries faces both at home and abroad.

It will be forced to bring top flight industrial managers, past and present, onto its board and perhaps also look abroad for talent and ideas. Over time, this will end the poisonous dichotomy that exists today, without any need for strong arm measures by the government.

A Reserve Bank of India (RBI) logo is seen at the gate of its office in New Delhi, November 9, 2018. Credit: REUTERS/Altaf Hussain

The RBI can invest in the shares of companies in dire need of recapitalisation, without damaging confidence abroad in the bank. Credit: REUTERS/Altaf Hussain

Commercial and public sector banks

Two more bridges will still remain to be crossed. The first is how to make the commercial banks actually pass through the RBI’s cuts in policy rates to their borrowers. They have now enjoyed autonomy in setting their minimum lending rates (subject to guidelines set by the RBI) for several years, and may therefore drag their feet in doing so, as they did two years ago. The second is that the RBI lacks any experience of running an industrial or infrastructure enterprise, so may baulk at taking the responsibility for doing so.

These are real challenges that will have to be met with circumspection, but they cannot be allowed to block the reforms altogether. As to the first, the fact that the bad loans are almost entirely concentrated in the public sector may prove a blessing in disguise, because these are more likely to fall in line with the government’s wishes. Among them, the most stressed banks will do so first, because they will have the least to lose. After that, competition for business will make the rest fall in line.

As to the second, the RBI will have to hire retired professional managers from the private and public sectors to sit on their boards and bring in internationally renowned consultants to assist them. This will start a learning process within the bank that will end the dyarchy that has developed between it and the ministry of finance.

This learning process will take time, but the alternative, of allowing the present bankruptcy procedures to continue, will take much more.

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To save the future the world does not need carbon dioxide capture and removal. All it needs is a ban on the setting up of new coal-based power plants, and stable price agreements with producers of synthetic fuels.

katowice,IPCC,katowice summit

COP24 President Michal Kurtyka and Executive Secretary of the UN Framework Convention on Climate Change Patricia Espinosa pose with the heads of delegations after adopting the final agreement during a closing session of the COP24 UN Climate Change Conference 2018, Katowice, Poland, December 15(REUTERS)


In a media dominated age, no international conference is allowed to end in failure. The Katowice climate summit is no exception. Michal Kurtyka, the Polish President of the conference, admitted that finding global consensus on the issues discussed at the summit had been “politically fraught”, but claimed nonetheless that “through this package, you have made 1,000 little steps forward together”.

The truth is the exact opposite. The Katowice summit was a resounding failure. The size of the failure has to be measured against the urgency of the challenge it refused to face. A bare six weeks earlier, the IPCC had warned that the world had to reduce net carbon emissions by 45% by 2030 and bring them down to zero by 2055, if it wanted to keep the planet livable in the 21st century. But the conference turned its back on the warning.

There was no agreement on financing, and little of it even on the verification methods to be used for assessing claims of carbon reduction. even There was no consensus even on whether the conference should accept a reduction of the limit to global warming by 2100 from 2 degrees Celsius to 1.5 degrees Celsius.

Why has the world buried its head in the sand ? The short answer is that it does not know what else to do. Nearly everyone is blaming US President Donald Trump, but his denial of climate change is only a brusque way of saying that he would rather not know about something that he cannot prevent.

Emission reductions of this magnitude seem impossible because they can only be achieved by a rapid shift out of fossil fuels. But no one knows what to replace them with. This is not because renewable energy technologies that draw their power from the sun do not exist, but because none of the 24 climate summits held since 1994 ever discussed technology.

The job of finding alternatives to fossil fuels was left to the free interplay of market forces. A Clean Development Mechanism was set up under the Kyoto Protocol to encourage the search for alternatives. But in the first 10 years of its existence it reduced greenhouse gas emissions by an estimated 1.58 billion tonnes. In the same period, human-induced CO2 emissions increased by 10 billion tonnes.

Today it is apparent that the market has led us astray. The only renewable energy technologies that it has promoted vigorously are wind and solar photovoltaic power. This despite the common knowledge that these can only limit and not replace fossil fuels because they can neither supply guaranteed, round the clock power, nor the process heat that industry consumes in prodigious quantities.

Had technology, and not target setting, been the focus of COP summits, the world would have known that technologies that can harness the energy of the sun for meeting all the three needs — power, heat and transport fuels — already exist and have been now refined to the point where they are fully competitive with fossil fuels.

The two that can do so virtually without limit are Concentrated Solar Thermal (CSP), as opposed to photovoltaic (SPV) power, and biomass gasification, as opposed to fermentation. Far from being new, these have been in sporadic use for between four and ten decades. The first CSP power station that fed electricity into the grid came up in California in the 1980s. The first plant that turned municipal solid waste into methanol — a clean and superior transport fuel — came on stream in the USA in 1922!

CSP power stations solved the problem of storing the energy of the sun at night in the late 1980s. The first power station to supply round-the-clock power to a small town near Seville in Spain came on stream in 2011 and has been doing so for seven years. The cost of generation from CSP plants has fallen almost as fast as that from photovoltaic plants. The most recent power purchase agreements for such plants have been signed in Chile and Dubai for 5 to 6. 7 cents per kwh. That is half the average cost of power in the US in 2017, which was 12.06 cents.

What is more important, these are lower than the cost of power generation by new coal based power plants. So the way is now open for more governments to join the 30 countries have already agreed to put a ban the establishment of new coal based power plants.

Most of the world’s attention has been focused so far on power generation. But there are now several proven, versatile, technologies that can also produce transport fuels and petrochemicals from literally any crop residue or waste biomass. They do this by first gasifying the biomass to obtain a mixture of carbon monoxide and hydrogen called synthesis gas, and then synthesise these into the desired fuel or petrochemical, using appropriate catalysts.

Unlike solar thermal power, these technologies have not so far got off the ground because the investment in them, that has been planned repeatedly since the early 2000s, has been repeatedly postponed or abandoned because of steep, albeit temporary, falls in the price of oil and natural gas. These have made it impossible for the investors to get the long term purchase price agreements that will make their investment secure.

To save the future, the world does not need carbon dioxide capture and removal. It does not need to pump sulphur dioxide into the atmosphere to reduce sunlight. It does not need hundreds of billions of dollars of subsidies for expensive renewable energy technologies. All it needs is a ban on the setting up of new coal-based power plants, and stable price agreements with producers of synthetic fuels that are linked to the long term average cost of oil and gas. These will suffice to make private capital flow as spontaneously into solar thermal and biomass energy projects as it is doing into wind and solar PV projects today.

Prem Shankar Jha is a senior journalist and former member of energy panel of the World Commission on Environment and Development ( 1985-88) and the author of Dawn of the Solar Age: An End to Global Warming , and to Fear

The views expressed are personal

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What Pakistan has essentially done at Kartarpur is to ask for India’s help in ending its own impossible predicament.

 A view of the Sikh shrine in Kartarpur. Credit: PTI

When opportunity comes knocking, unbidden, to one’s door, a wise person does not let it slip away. India has done this twice in the past 70 years: First when it shooed away American companies that came to Asia in search of a cheap labour platform to manufacture goods for the world market, and sent them on to southeast Asia.

It did this a second time when risk averse advisors in both India and Pakistan succeeded in delaying the fleshing out of the Manmohan Singh-Pervez Musharraf framework agreement to end the Kashmir dispute signed in Delhi in 2005, till Musharraf lost his power to push it through the Pakistan national assembly in 2008.

The monumental silence with which Prime Minister Narendra Modi greeted Pakistan’s offer three months ago, the curt reassertion last week by foreign minister Sushma Swaraj that India would not attend the SAARC summit in Pakistan, and the Congress leadership’s tepid reaction to the initiative, has made it likely that we will send it away yet again.

Also read: After Kartarpur, Mehbooba, Congress Leaders Bat for Sharada Peeth Cross-LoC Route

The reason for the Modi government’s lack of enthusiasm is written in saffron across the sky: having wrecked the economy, failed to create any jobs and alienated each and every one of India’s neighbours, it has nothing left to fall back upon in its bid to win the 2019 general elections except the whipping up of paranoia towards Muslims, towards Pakistan and towards China.

But how does one explain the ambivalence of the Congress? For was it not Prime Minister Manmohan Singh who said in 2007 that his dream was to be able to have breakfast in Delhi, lunch in Islamabad and dinner in Kabul on the same day? Was it also not Singh who fashioned the Delhi Framework Agreement? If these initiatives were not popular, why did the Congress win the 2009 election with a near-majority of its own?

An opportunity with a difference

The opportunity created by Kartarpur Sahib must not be allowed to slip away, for it is born of radically different and deeply enduring roots. While previous peace initiatives originated in the corridors of Islamabad and New Delhi, this one has originated in a small village close to the India-Pakistan border. While previous negotiations have been carefully planned and orchestrated, this one is unplanned, disorderly and very largely spontaneous. Finally while all previous initiatives have started at the top of the social and political pyramid, this one has been born out a yearning among the poorest people on both sides of the Punjab border for peace and reconciliation.

The gurudwara at Kartarpur Sahib was established by Guru Nanak in 1522. It was there that he lived for 18 years, wrote the Guru Granth Sahib and, in all probability, died. It is therefore the second holiest shrine in the Sikh religion.

Partition forced the Sikhs of Punjab to one side of the newly created border, but left Kartarpur Sahib a bare three km on its other side. As a result, for 70 years Sikhs have been going in their hundreds of thousands to the closest point on the border, from where they can see the domes of the gurudwara, to pray.

Also read: Five Questions that the Modi Government’s Latest U-Turn on Pak Talks Raises

The idea of a visa-free corridor from the border to Kartarpur Sahib was first mooted by Prime Minister Atal Bihari Vajpayee during his bus journey to Lahore in February 1999. Despite the Kargil War, the Nawaz Sharif government responded positively the next year, but the Pakistan Army, which was smarting from its defeat in Kargil, was in no mood for compromise. The spate of ISI-backed terrorist attacks on high value targets in India that followed and eventually triggered Operation Parakram, and the ISI’s reckless use of mujahideen in Kashmir put an end to any further discussion of the subject.

The possibility of a corridor was raised by Navjot Singh Sidhu three months ago when he attended Imran Khan’s swearing in as prime minister. Sidhu had gone in his personal capacity, as one of the three Indian cricketers whom Khan had invited. According to his account of what followed, not only did Khan leap at his suggestion but General Bajwa, the Pakistan Army chief, who was present at the function, immediately offered to build a barricaded corridor from the border to the gurudwara. This would prevent any actual contact between the pilgrims and people in the intervening area. It was this spontaneous offer that made Sidhu give Bajwa a Punjabi jhappi.

The Pakistan Army’s enthusiasm

Was the offer from Khan and Bajwa really a spur of the moment reaction to Sidhu’s suggestion? It might have been had only Khan made it, for he has been saying from the day of his inauguration, “If India takes one step forward, then we will take two steps forward toward friendship.”

But why should General Bajwa have gone that step further? A knee-jerk assessment would be that he saw it as a propaganda opportunity and, in case Delhi reacted negatively, a chance to rekindle disaffection in Punjab. But Khan made it crystal clear in his speech and press conference that he and the army are “all on one page” in wanting to mend ties with India.

Is such a radical change of heart in the Pakistan Army really possible? The answer, with suitable caveats, is ‘yes’, because seven decades after independence, its policy of jumping from the back of one circus-horse to another, while keeping its gaze locked firmly on Kashmir, has reached its pre-destined end – there are no more horses left to ride.

Thirty-five years ago, General Zia-ul-Haq felt that he could afford to adopt a forward policy because Pakistan’s GDP had been growing at 5-6% percent per annum for three decades; it was an indispensable ally of the US in the latter’s proxy war against the Soviet Union in Afghanistan, and therefore had no dearth of foreign exchange to buy military toys.

The Lahore-Delhi bus at the Attari Wagah border on November 26. Credit: PTI

Today’s Pakistan could not be more different. It has been chastened by its failure to spark secession in Punjab and Kashmir: Despite every pain that India has inflicted on Kashmir, a 2009 Chatham House poll in the Valley showed that while a majority of its people wanted a radical change in Kashmir’s relationship with India, only 2.5% to 7.5% wanted to join Pakistan.

Not only has it lost the patronage of the US, but the Donald Trump administration, and most of the world, considers Pakistan to be a dangerous and unpredictable breeding ground for terrorists, and the principal threat to Pax Americana in Afghanistan.

Islamabad has attempted to replace the US with China and Saudi Arabia as its political, military and economic sponsors, but China has been far less tolerant towards its use of terrorism to realise its regional aspirations than Washington was three decades ago.

This is because, contrary to the prevailing impression in India, Beijing’s huge investment in the Karakoram-Gwadar transit corridor is, like other projects of its Belt-Road Initiative, more defensive than offensive. It is primarily intended to create one of several backdoors for its trade with Asia, Europe and Africa to pass through in case the US and its allies decide to block the sea lanes through which most of its imports and exports currently pass.

Its fear of the US’s naval power is understandable, because its dependence upon trade for economic growth is the highest for a large industrial economy that the world has ever known. China’s dependence on trade to generate employment is even greater. So from the early days of its investment in Pakistan, Beijing has been putting a quiet but unrelenting pressure on Pakistan to crack down on terrorist groups and maintain peace with India, especially in the Karakoram region.

Till the end of February this pressure was private and bilateral. Then, on February 23, China stopped shielding Pakistan and agreed to put it on the “grey list” of the Financial Action Task Force, a global body created to monitor the financing of terrorist organisations all over the world. Pakistan was put on the list in June. It now has till June 30, 2019 year to show that it has taken decisive action against organisations in the country that are sponsoring terrorist activities.

This withdrawal of support could not have come at a worse time for Pakistan, for it is facing its worst economic crisis in a decade. In 2017-18, it recorded a $19 billion balance of payments deficit, amounting to 5.7% of its GDP. The Pakistani rupee has depreciated by 20% in less than a year and its foreign exchange reserves have fallen to under $10 billion.

Till now, Islamabad has relied upon loans from China and Saudi Arabia to remain solvent, but Saudi Arabia too agreed to put Pakistan on the grey list last February. Pakistan has therefore been left with no option but to go to the International Monetary Fund for another – its 13th – bailout. That loan will now almost certainly come with conditionalities that will cross the border between economics and politics.

Also read: The Real Googly: More than Imran, the Pakistan Army Wants Peace With India

Finally, the Pakistan Army has been locked in a civil war for more than a decade. It has managed to establish a semblance of peace in the tribal areas by denuding its Indian border of troops. But insurgency and sectarian killings have continued to grow in other parts of the country. It would be surprising indeed if it had not begun to look for a way out of the morass.

To the army high command too, therefore, peace with India must have begun to look like the silver bullet that can end most of its miseries. The is almost certainly why General Bajwa seized the olive branch that Sidhu innocently extended at Khan’s swearing in with such alacrity.

What Pakistan has essentially done at Kartarpur, therefore, is to ask for India’s help in ending its own impossible predicament. Peace with India will remove the very ground on which much of the Islamist extremism which has spawned terrorism feeds in Pakistan. Since these groups gain legitimacy by posing as the champions of the oppressed in Kashmir, finding a solution to the dispute that Islamabad can present to its own people as a fulfilment of its commitment to them is the best way forward.

It would therefore be folly for India not to seize the opening that Kartarpur Sahib has created to end the Cain versus Abel conflict that has held both countries back, while the rest of Asia has raced ahead. An immediate cease fire along the Line of Control in Kashmir, the resumption of talks, involving Kashmiri leaders in the deliberations, and an agreement to review the Manmohan-Musharraf framework agreement will get the ball rolling towards peace.

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The Emergency may be the most controversial part of her legacy but Mrs Gandhi’s greatest contribution to India was the way she handled the economic, political and foreign policy challenges the country faced after 1966.

On Her Birth Centenary, We Need to Pay Tribute to the Early Indira Gandhi

This article was originally published on November 19, 2017. It is being republished on November 19, 2018 to mark Indira Gandhi’s birth anniversary.

Indira Gandhi is the most controversial prime minister that India has had. A third of a century after her tragic and untimely death, an older generation of Indians remembers her mainly for India’s victory in the 1971 war, and the Emergency. Scholars have also accused her of undermining democracy by splitting the Congress in 1969, repeatedly sacking chief ministers to concentrate power in her own hands, and splitting the party a second time for the same purpose in January 1978. But the poor of India remember her for her programme of ‘Garibi Hatao’ and still call her ‘Amma’. On the foreign policy side, all of us, without exception, remember with pride the way in which she stood up to Nixon and Kissinger during the run-up to the Bangladesh war. . .

The end of the Nehruvian honeymoon

So vivid is the image we have of the later Indira that very few remember the young and unsure, woman who came to power after the sudden death of Lal Bahadur Shastri in January 1966. Even fewer, therefore, appreciate the difficult circumstances in which she did what she did and her immense contribution to stabilising the nascent India she inherited. For in January 1966, the country was in the grip of a multi-faceted crisis, and did not even know it.

The production of food grain had hit a plateau in 1961. The resulting food shortage had combined with two wars in 1962 and 1965, and the worst drought of India’s history in 1965, to generate the kind of inflation the country had never known and therefore had never dealt with. Inflation and a closed economy had landed us in a foreign exchange crisis – the first of many. Devaluing the rupee was the only way forward, and the World Bank had been urging India to do this since 1961. But the Nehru and Shastri governments had procrastinated till India had run out of time.

As if this was not enough, two wars in four years had emptied India’s coffers. And two successive droughts had brought the poor to the verge of starvation, to be saved only by PL 480 wheat from the United States.

The challenges she faced within the party were no less severe. In 1966, most people believed that Indira Gandhi had been chosen as prime minister because of her father’s charisma and because the “syndicate” believed that she would be more malleable than her seasoned opponent, Morarji Desai. But the party’s organisational leaders were also disenchanted with Nehruvian socialism. Huge sums of money had been sunk into heavy industries in the public sector that had yet to yield even a notional surplus on investment, let alone profits and dividends that could be ploughed back into growth and employment. The increasing uncertainty about finding jobs had created a rising wave of discontent among students. In mid-1966, this had turned violent.

These challenges could not be met without taking hard decisions, but the country was not aware of the need for them because it did not know that it was in a crisis. The glow of independence had not faded. The 1950s had been a honeymoon period in which almost nothing went wrong: food production grew rapidly because cultivation was extended to most of the remaining arable land in the country. Industrialisation was not hindered by foreign exchange shortages because of the sterling balances inherited from the war. Nehru had carved a niche for India on the world stage. People, therefore, trusted the government implicitly and could not imagine that the difficulties they had faced were anything more than temporary.

The first devaluation and after

Indira Gandhi’s first important decision therefore shattered this cocoon of security. In June 1966, she devalued the rupee by 57.5%. The move shocked the country and aroused bitter criticism in parliament from both Left and Right. Had it succeeded in rebalancing the economy speedily, her future economic policies might have been very different. But first, a $900 million aid package that the World Bank had promised to meet the increased cost of imports till exports picked up was held up in the US Congress. Second, India was hit by its second consecutive, and equally severe, drought in 1966. As a result, by the time the promised aid began to trickle in, prices had risen by a full 32% and neutralised the price advantage that devaluation had been intended to give to India’s exports.

Indira Gandhi taking her oath of office from President S. Radhakrishnan, 1966. Credit: YouTube

The devaluation did eventually boost India’s exports. From barely one per cent a year between 1952-53 and 1965-66, export growth jumped to 14% a year between 1968-69 and 1982-83. The Green Revolution, which had been piloted through a recalcitrant Congress by food minister C. Subramaniam, also took off in 1967. So good was the response of the economy in the years that followed that despite another drought in 1972 and a four-fold rise in oil prices the next year, India began to record balance of payments surpluses in January 1976, and continued to do so till the second oil price hike in 1979-80.

But it took two years for this recovery to begin. By then, the Congress had lost four major state assemblies and come within 10 seats of losing its majority in parliament in the 1967 general elections. This, and a pronounced leaning towards the left-wing of the party under the influence of ideologues like P.N Haksar and Mohaan Kumaramangalam, was the true reason behind the Congress split of 1969.

Who split the Congress?

Critics have accused Indira Gandhi of being an autocratic prime minister who weakened Indian democracy split, citing her splitting of the Congress in 1969 and her declaration of the Emergency in 1975 as proof. The truth is rather more complex. Space does not permit a study of the Emergency, but there is ample evidence that the 1969 split was forced upon her by the party organisation in an attempt to wrest control over economic policy

The spark that set it off was the selection of a successor to President Zakir Husain after his untimely death in 1969. The syndicate chose N. Sanjiva Reddy over the incumbent vice-president and briefly acting president, V.V Giri, and did it rather obviously without consulting Mrs. Gandhi. She had every good reason to oppose this. First, V.V Giri was already the acting president. Second, choosing Reddy broke an immensely important unwritten convention drawn from Westminster’s democracy, that like the British constitutional monarch, the Indian head of state had to be an eminent, non-political, person. V.V Giri fulfilled this requirement because, as vice-president, he had not only been far removed from current politics but was a highly respected veteran trade union leader. Sanjiva Reddy was, on the other hand, very much a practicing politician.

Morarji Desai, the Union finance minister, in conversation with John Foster Dulles, U.S. secretary of state at the time, when he met the latter in the State Department, Washington. (September, 1958). Credit: Photo Division, GOI

Despite this, Indira Gandhi first sought to avoid a showdown with the syndicate. She filed Reddy’s nomination but when Giri decided to compete as an independent, announced that she preferred an open vote. Had the syndicate agreed, there would have been no split in the party when Giri won. But by then, its members had the bit between their teeth so when Congress president S. Nijalingappa found that two-thirds of the Congress parliamentary party had declined Indira Gandhi’s implicit invitation to revolt against the organisation, he took the unprecedented step of expelling the sitting prime minister from the Congress party, nor renamed Congress (O) while Indira Gandhi’s party was called Congress (R). In the March 1971 general election, she won handily, securing 350 seats to the 51 seats won by the ‘National Democratic Front’ led by the Congress (O), Bharatiya Jan Sangh, the Swatantra and socialist parties.

Over the years, many personal motives have been ascribed to Mrs. Gandhi for defying the collective will of the party organisation and refusing to resign. But history will back her because she was defending not only the primacy of the prime minister over the party but the party in parliament over the party organization. As the eminent French political scientist, Maurice Duverger, pointed out in his classic 1957 work Party Politics, these are the two fundamental principles that distinguish democratic from ideological political parties.

The birth of Bangladesh

Indira Gandhi’s determination to be a prime minister in substance and not only in form was vindicated within only days of the 1971 election, when the Bangladesh crisis erupted. Only a leader with a clear vision of India and immense national pride would have been able to resist the subtle blandishments of western leaders who wanted India to absorb the 10 million refugees from East Pakistan and let sleeping dogs lie. The members of the syndicate were all seasoned politicians, but they were, in the end, provincial leaders without this vision. It is, therefore, doubtful whether they would have remained unmoved. Indira Gandhi, by contrast, had inherited a clear-cut idea of India from her father, and developed it through her own education and experience. So she had no difficulty in giving the West a clear-cut warning of her intentions and developing a multi-pronged strategy to safeguard India’s security.

Prime Minister Indira Gandhi with Sheikh Mujib-ur-Rehman, Prime Minister of Bangladesh at Palam airport prior to latter’s departure on April 11, 1974. Credit: Photo Division, GOI

Contrary to a near-universal belief, Indira Gandhi did not have her heart set upon breaking up Pakistan from the very beginning. Confronted by a seemingly endless flow of refugees into West Bengal, Mrs. Gandhi first did her best to persuade General Yahya Khan to allow the Awami League of Sheikh Mujib-ur-Rehman to form the government in Pakistan. When she failed, she sent emissaries to all major countries, and herself went to several European capitals and to Washington, to make they put pressure on Pakistan to release Sheikh Mujib. But to insure against failure she made the army train the Mukti Bahini, and draw up contingency plans to invade East Pakistan if it became necessary. This was her second use of both stick and carrot to achieve her goal, the first having been the election of V.V Giri as president. In both cases, force was her weapon of last resort.

The Bangladesh war, and the Congress’s sweeping victory in the state elections a year later, marked the high point of Indira Gandhi’s prime ministership. The Emergency is considered the lowest. But as I have argued earlier in these columns, it was the product of her understandable, and probably justified, belief that stepping down from the prime ministership then would have left the country in even greater turmoil than it already was in. She also redeemed herself in the peoples’ eyes by resisting every exhortation to extend the Emergency and holding a fresh general election in 1977 despite the near-certain knowledge that she would lose.

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