Open Forum

New Delhi, 24 December 2009

Indian Communists’ Gift

A MONSTER CALLED PRACHANDA

By Prakash Nanda

The Indian Communists have always had an influence on the country’s polity and foreign policy that is inversely proportional to their real strength. Their pockets of strength have vastly eroded over the years. They have some strength left in only three States -- West Bengal, Kerala and Tripura, though it is almost certain now that their governments in the former two will be overthrown in the next round of elections, not far away.

Yet the Communists wield considerable influence in many walks of life. They dominate totally in the education sector. No wonder why India’s record is so poor as far as fresh ideas, particularly in social sciences, are concerned. Indian media, specifically the English media, is virtually dictated by the Leftist elements. So is the case with non-government sectors.

Until recently, the Communists were the allies of the UPA government led by Prime Minister Manmohan Singh. They parted company following the vexed nuclear deal that the Manmohan Singh government concluded with the US last year. However, by the time they left, they had done enough damage to India’s long-term interests in the realm of foreign policy.

The Communists literally threatened the then minority government of Singh to close its eyes on China’s various acts of omission and commission having deleterious impact on India, be it China’s claims on Indian territories, or Beijing’s anti-India policies in international organisations, or dubious and unfair business activities of the Chinese companies in and outside India hurting the country’s interests.     

But there is another Communist legacy that the Manmohan Singh government is regretting now. Under Communist pressure in 2007, the Ministry of External Affairs literally handed over its Nepal desk to the Communist leader Sitaram Yechuri, who, along with his comrades, facilitated the virtual Maoist-takeover of Nepal. Yechuri brokered a so-called peace deal in September 2007 between the seven-party democratic alliance and the Maoists who had been engaged in a 10-year insurgency in which nearly 13,000 people were killed. Under Yechuri’s dictation, New Delhi treated the then fugitive Prachanda, supreme leader of the Maoists in Nepal, as a son-in law, who, under Indian tradition, gets limitless pampering.

What was the Communist logic then? The anti-democratic King had to go and democracy to be ushered in. The King has gone for good, but Nepal is far from a being a democracy. And who has gained the most? It is Prachanda and his Maoists, who openly now say that they do not believe in democracy and simply cannot simply co-exist with it.  

When he was the Prime Minister last year, Prachanda could not take the rest of Nepal’s democratic forces with him. He wanted his so-called “People’s Liberation Army” to virtually take over the country’s Armed forces, a most unthinkable goal. Imagine a situation when Nepal is led by a non-Maoist but democratically elected Prime Minister or President, but the merged PLA, now legitimately a part of the Armed forces, defies the orders of the government.     

Obviously, that was not acceptable to the genuinely democratic forces of Nepal. Prachanda resigned in protest. Nepal now has an alternate government, whose main job is to ratify a new Constitution for the country following which fresh rounds of elections will be held. But Prachanda has virtually gone berserk. His armed goons have literally seized the capital Katmandu and many other cities.

Worse, on blatantly communal or ethnic lines, Prachanda’s goons are declaring autonomy in many areas. Over the past two weeks, they have unilaterally declared 13 new “states.” They are openly saying they will not allow a new Constitution to be written as suggested under 2007 plan and that from January they will not allow the present government to continue.

Prachanda’s theme is simple: Either you make me the supreme or be prepared for consequences.  Literally, the Nepali Maoists have declared a war on Nepal’s nascent democracy.  Prachanda’s deputies are openly saying that their earlier stand on supporting the Yechuri-brokered plan was only “tactical”. 

In other words, Prachanda wants to establish another monarchy in Nepal. And he wants to ensure that Nepal has no other effective political forces to oppose him. He wants the institution of the Chinese political system in Nepal – where none other than the Maoists can rule. 

In retrospect, it was a monumental blunder on New Delhi’s part that Yechuri, and through him the then beleaguered Manmohan Singh government, brought Prachanda to the centre stage of Nepal politics, though he never had a popular mandate; he was essentially a terrorist, supported and armed by China and Pakistan’s ISI. 

No wonder then that soon after Prachanda became the Prime Minister the two countries that benefited the most were China and Pakistan. Beijing has managed to get many sensitive projects, including the making of roads and infrastructures adjacent to the Indian border. Tibetans have been expelled and their offices have been forcibly closed down. A predominantly Hindu nation, Nepal has been made “secular” and thousands of mosques have been built with Pakistani and Saudi Arabian money on the Indo-Nepalese border.

Prachanda now says that his real enemy is India. He asserted on Tuesday (December 22) that after assuming office he would abrogate the India-Nepal Peace and Friendship Treaty and recaptures territories that were “illegally” lost to India, when the latter was under the British rule. Prachanda is also openly saying that his comrades have close links with Indian Maoists, who, in turn, now constitute India’s gravest internal security threat.        

One does not know what Yechuri and his comrades now think of a monster called Prachanda. But, given their history, they have no reasons to regret. After all, they had opposed India’s struggle for independence. They had openly sided with China when it attacked India in 1962. In fact, they had taken disciplinary action against a leading comrade of theirs when during the 62 war the concerned comrade (he is Chief Minister of Kerala) had donated blood for the fighting soldiers on the battlefront.

Coming back to Prachanda, what should India do if he manages to establish his fascist rule in Nepal? The best thing is to abrogate the 1950 treaty unilaterally. After all, this is a treaty that allows Nepal more transit points that are normally allowed to a landlocked country under international law. This is the treaty that keeps India-Nepal border open, a feature that helps the Nepalese thousand times more than the Indians. It is this treaty that allows Nepalese to take any number of jobs in India.

Let us see how a Nepal under Prachanda manages normally like an independent country, not under India’s benevolence as is the case now, with features that in reality do more harm than good to Indian interests. Let us ask Prachanda to take back millions of Nepalese working in India. Let every Nepali secure a visa to come to India. Let the open border between Nepal and India be closed. And let Prachanda export what he says is all his country’s abundant hydropower to China (through satellites?). --- INFA   

(Copyright, India News and Feature Alliance)

Economic Highlights

New Delhi, 26 December 2009

Asian Year-End

INDIA BRINGS CHEERS TO WORLD

By Shivaji Sarkar

Asia with large contributions from India is likely to give the New Year toast to the world. The West is looking towards Asia for economic revival. American President Barack Obama told Prime Minister Manmohan Singh during his US visit that he hopes, “India will create jobs in the US”.

The US is leaning on the Indian civilian nuclear energy sector for generating business prospects of $ 150 billion. It would be a great beneficiary of the nuclear deal signed with India. It expects to generate several thousand jobs in the US. As of now unemployment is increasing in the US.

Likewise, the West is also looking towards China and South Korea primarily as also towards Vietnam and Malaysia as they have started spending. Consumers from India to the Philippines are spending with increasing zeal. Some see consumer spending in Asia boosting business profits. Unemployment rates are falling in most of the region. Asian consumers have also low debt compared to the West encouraging banks to lend more rather than shrinking it.

The International Monetary Fund forecasts inflation adjusted growth in developing Asia will be 7.3 per cent in 2010 compared to 3.1 per cent globally. Indeed, the Indian consumers despite facing high inflation have started spending. The government-backed Rs 60,000 crore stimulus is apparently creating some positive vibes. The core sector, accounting for 26.7 per cent of the country’s industrial output is clocking a growth of 5.3 per cent in the year-end against 3.5 per cent in October.

The steel sector registered impressive 11.7 per cent growth as demand jumped due to the increased auto sales and revival of construction activity. Cement production went up by nine per cent. Petroleum refinery production grew by 4.9 per cent again aided by higher auto sales and transport sector gaining momentum.

Indian companies, be it the Tata or Arcelor Mittal, are generating hopes in many parts of Europe. The US General Motors and German Volkswagen are looking towards India for selling their cars and pepping up the sagging economy in their homes. In fact General Motors is in a severe crisis in the West and is trying to either hive off its Swedish unit Saab or simply close it down. Importantly, while automobile sales are dipping in the West, in Indian these are making records. In November, vehicles sales rose to 130,000, 61 per cent more than a year ago, according to the Society of Indian Automobile Manufacturers.

Retailers are also having better returns because of higher consumer spending. It is a rare consumer growth, says managing director of Pantaloon Retail India, Kishore Biyani. The spending is also reflected in higher corporate tax collection by the Central government. Advance tax payment increased to Rs 1.13 lakh crore during April-December compared to 0.94 lakh crore in the same period a year ago. Finance Ministry officials estimate direct tax collections to exceed the budgeted Rs 3.70 lakh crore, given the robust collection of advance tax.

Though largely public sector companies – SBI, ONGC, LIC, SAIL - contributed to the growth, the consumer goods sector also saw an improvement in advance tax collections confirming higher consumer spending. Maruti Udyog, Bharti Airtel and Bajaj Auto paid higher taxes. Consumer goods’ company Hindustan Lever paid Rs 200 crore, up 29 per cent, and Grasim Industries paid Rs 150 crore advance tax up 100 per cent against last year’s figures.

The World Bank in its year-end review gave cheering news and showered praises on India for vastly improved health conditions and becoming one of the world’s fastest growing economies despite a global slowdown. On an average during the past four years India maintains 9 per cent growth.

Consumer spending in The Philippines rose four per cent in the third quarter, said to be the fastest pace during the past few years. Remittances from workers abroad have grown this year. The Philippines seems to have weathered the economic storm better than the West. Car sales have gone up by 4 per cent. Other consumer spending is also on the rise.

The Chinese consumers are queuing up luxury shops in Hong Kong. Job prospects have improved. Credit Suisse regional Asia economist Dong Tao says that Chinese consumers are buying, asset prices of property and stocks are appreciating. China has accounted for more than half of the world’s economic growth in the past three years, according to the IMF.

The IMF sees an ushering of a change in the Chinese growth pattern. So far the Chinese economy has been export dependent. Now domestic demands are adding to the growth. The recent Group of 20 nations’ meet had aimed at getting the US consumers to save more and Asian consumers to spend more. It seems households have now become a driver in the recovery across the region.

Except for China, in all other economies the domestic consumption makes up for more than half of the GDP. Exports contribute to less than 15 per cent of the Indian growth pattern. This, IMF surmises, means higher consumer spending will make a bigger contribution to overall growth in the Asian economies. Consumption has grown faster in these economies, a change from the last decade.

Tourism, which has seen a fall in the West, is re-bouncing in many countries in Asia. There is a new trend. Many more tourists are from the Asian countries. Higher numbers of Asian tourists are flocking to Malaysia, Vietnam and South and North Korea. Malaysia in fact is setting a sort of records. More than 22 million tourists, most of them from Asian countries, including India, have arrived on its shores, much more than expected. For the first time, a million Chinese tourists visited Malaysia. More tourists are arriving in Sri Lanka and India as well. The sagging hotel industry is looking at 2010 with great hopes.

The rebound of Asian economies is not only good news for these countries but it is also good for the Western economies. A small flow of emigrants towards these economies from the West has started seeking presently high profile jobs.

However, this does not mean that Asian dependence on the exports to the West would come to an end. The recent crisis, however, is an eye-opener for the region. It is giving a new confidence that they can survive without depending on the West, on their own and also with increased regional cooperation. This may bring in a new economic regime and change the global trade and political negotiations scenario. Indeed, the West may have to depend more on Asia in the near future. It is likely the New Year would bring in a qualitative change and Asia may really help beat the global downturn. --INFA

 (Copyright, India News and Feature Alliance)

Events & Issues

New Delhi, 29 December 2009

Formation Of Telangana

SMALL STATES IN THE OFFING?

By Dhurjati Mukherjee

The big question about the need and justification of forming small States has oft been debated but the announcement of a new Sate of Telangana has set off an avalanche of competing demands from across the country. While some of the demands cannot be ignored, many are just intended to seek political mileage. Already UP Chief Minister Mayawati has suggested the bifurcation of the State into three parts, while the agitation for a separate Gorkhaland has been stepped up. This apart, RJD leader Lalu Prased, has lately revived the demand for a new Poorvanchal, comprising Bhojpuri-speaking districts of UP and Bihar.

However, the demand for Telangana and Vidarbha was recognized by the Congress Working Committee way back in 2001 when it accepted a report of one of its study teams. Over the past 60 years successive governments have tinkered with State boundaries and carved out new States from the old. The last three – Chhattisgarh, Jharkhand and Uttarakhand – were created in November 2000. Thus, today India has 28 States compared to 14 shortly after it became a Republic. Some experts believe that nine years after the creation of these States, there is reason to believe in the justification of creating small States to ensure better governance.

Indeed, all these three States have grown quite fast. Uttarakhand averaged 9.31 per cent growth annually Jharkhand 8.45 per cent and Chhattisgarh 7.35 per cent. Today, the three have become dynamic States and poised to grow fast. Special mention may be made of Jharkhand and Chhattisgarh where, according to a report, “the share of manufacturing in their GDP has risen dramatically as they have attracted industrial projects …. Raipur in Chhattisgarh has now entered the top 10 districts of the country in manufacturing with two industrial estates at Urla and Siltara”.

The National Family Health Survey-3(NFHS-3) found that both these States improved access to electricity with Jharkhand recording a spectacular increase of 70 per cent from 23.6 per cent to 40.2 per cent between NFHS-2 and NFHS-3. In fact, the per capita income of Chhattisgarh in 2008-09 was Rs 29,621 much higher than that of Madhya Pradesh, which stood at Rs 18,051.

However, an argument against splitting the existing States in that the new ones are slow to mobilize their own funds from taxes or cess and depend heavily on Central grants. It is a fact that Uttarakhand, after its formation, joined the list of special category States which get 70 per cent of Central funds. But it is well-known that even the established States such as West Bengal and Bihar are still slow to collect local revenues that match funds from the Centre which sadly often go unused.  

The case with Telangana is that most of the districts which are to be part of the new State are underdeveloped. Only Hyderabad is the prize. However, it is surrounded by districts such as Nalgonda, Madak and Warangal, which are backward and need to be developed. It may be pointed out that the most productive areas like investment-rich Visakhapatnam and K.G. Basin will stay in Andhra. It is also a fact that the per capita income of the proposed State of Telangana (even including Hyderabad) in less than that of Andhra Pradesh.

It is necessary to understand the geography and geology of the propped new State. Telangana is an arid, resource-poor and landlocked area perched in the highlands. It has no minerals and its coal is of inferior quality. The Godavari cuts through the area but it may be difficult to funnel water from the river into the fields. Many suicides by farmers have been reported from this region. Though there are two power projects in the region, most of the power and water goes to the non-Telangana part of Andhra. Thus, the case of neglect and deprivation is very well manifest.

If development is the basic criteria and the experience of the three new States is considered, there is reason enough for the formation of Telangana. Andhra has a population of 90 million people which is larger than countries like France or Britain and its bifurcation is expected to ensure better and faster development. Moreover, the districts that are proposed in this new State are infested by Maoist activities because of poverty and squalor over the years and it is time to understand the grassroot problems, lay stress on social and physical infrastructure development and mitigate the sufferings of the common man.          

However, there can be no doubt that the new State would require huge funds for development. The region has virtually no native entrepreneurs but carpet-baggers from the coastal parts have moved in. The possibility of raising enough resources for its massive developmental needs appears quite remote which the Centre would have to provide, at least in the coming few years. If governance is sincere and honest, the new state of Telangana, when if actually comes into being, would also go a long way in curbing Maoism and other extremist activities.

Recall, Mahatma Gandhi had emphasized the need for political and economic decentralization. The Panchayati Raj institutions were visualized by him that have in recent times become quite active. But even these institutions do not have much financial powers as also decision-making powers regarding projects in their region. It is thus necessary that where development has been at a low ebb and where problems are galore, a new State could fulfill the objective of better results. Even corruption is expected to be lower and one need not harp on the recent example of Jharkhand former Chief Minister Madhu Koda. 

Clearly, there is strong case for a separate state of Telangana and the ruling Congress has taken a right decision. However, more deliberations are needed at this juncture and it is time it stops vacillating. Most experts, both political analysts and economists, agree on this point. The backlash effect obviously has to be tackled with skill and the demands such as the one for Gorkhaland or the splitting of UP. Political sentiments should not be allowed to take centre stage for demands for creation of new States where there is no economic or other worthwhile justification.

Undoubtedly, population of States is growing very rapidly and in the future some of these may have to be bifurcated for devolution of power and better governance. It is generally agreed that the ideal population for a State should be around 30-50 million. However, demands for new States need to be examined by an expert committee like the Second States Reorganization Commission and only then can a reasoned and judicious decision be taken. India’s federal structure may also become stronger with more States as no one State can wield excessive clout over the political system by virtue of its size. One cannot also dismiss the fact that the United States, with one-third of our population, has as many as 50 States and a strong federal structure. ---INFA

 
(Copyright, India News and Feature Alliance)

Round The World

New Delhi, 22 December 2009

PM’s Moscow Visit

TAKING STRATEGIC TIES FORWARD

By Monish Tourangbam,

Research Scholar, School of International Studies, JNU

Prime Minister Manmohan Singh’s visit to Russia came close on the heels of another high-profile State visit by him to the US.  India’s ties with Russia and Washington are often projected as an “either-or case”; one coming at the expense of the other. But the back-to-back visits will, to some extent, put at rest the concerns and showcase India as a mature democracy not myopic in its foreign policy calculations. The camaraderie shown by the Indian and Russian leadership in Moscow should mean only one thing -- a rewarding future ahead for India-Russia relations.

The high point of Manmohan Singh’s visit was sealing a broad-based civilian nuclear agreement that should go a long way in furthering the already significant bilateral ties in this field. The deal is reported to go beyond the confines of mere transfer of fuel and reactors involving cooperation in the areas of research and development. The Nuclear Suppliers’ Group (NSG) waiver to India has opened the doors of nuclear commerce.

India, being one of the fastest growing economies with a huge consumer base would definitely see it prudent to look for diverse sources of energy and the growing energy ties with an energy-rich Russia could not have come at a more appropriate time. The US-India ‘123 Agreement’ definitely faces some competition but at the same time, the Bush Administration should be complemented for significantly improving India’s prospects for getting the NSG-waiver.

According to reports, the civilian nuclear deal with Russia goes beyond one signed with the US in some crucial aspects. As per the deal with Russia, New Delhi will have reprocessing and enrichment rights. Moreover, no ongoing nuclear power project or uranium fuel supply arrangement with Russia would be affected or stopped in the event of termination of bilateral cooperation for any reason.

On the other hand, the Indo-US nuclear deal talks of termination of ongoing cooperation and the return of US supplied components and fuel in the event of the termination of agreement. The deal with Russia involves construction of four more nuclear reactors in Kudankulam, in Tamil Nadu, where Russia is already building an atomic power station. Moreover, another four reactors are coming up at a new site in West Bengal and there are plans for getting a third site to build more reactors.

Even with a clean proliferation record, India has often been at the receiving end whenever the issue of Nuclear Non-Proliferation Treaty (NPT) comes up. But, putting all confusions to rest, the Russian President categorically stated that no foreign-imposed restrictions will affect the Indo-Russian nuclear agreement, further specifying that the G8 resolution restricting the sale of reprocessing technologies to non-NPT countries have no relevance in the India-Russia cooperation. Prime Minister Singh also commented that the partnership between the countries was independent and “not influenced by our relations with any other country”.

As a step towards continuing and re-energizing the goodwill between the two countries, 2008 was held as the year of ‘Russia in India’ and 2009 is the year of ‘India in Russia’. This symbolic gesture has been equally matched by the regularity of high-level contacts between the two countries, including the one by President Pratibha Patil this September.

However, a thorny issue in the Indo-Russian relationship that has often threatened mar an otherwise progressive course has been the Gorshkov pricing issue. Before Singh’s visit to Moscow, there were concerns that the issue might create some cold vibes. But if reports are to be believed, India and Russia have resolved the differences on the price of the refurbished aircraft carrier Admiral Gorshkov rechristened INS Vikramaditya.

Rounds of dialogues and negotiations have been conducted over this issue and it seems that both the sides have come to an agreement, and accordingly the aircraft carrier could arrive by 2014. The cancellation of the deal would not have severely derailed the comprehensive ties but such an outcome would have dented the reliability of the robust defense cooperation. Moreover, the induction of the aircraft carrier into the Navy would increase India’s potency in the Indian Ocean.

Efforts have been made to take the robust defence cooperation to the area of joint development and production, beyond the confines of a buyer-seller relationship. During the visit, three military pacts were signed to bolster the cooperation and iron out the differences between the countries. Both sought to revitalize an agreement on a multi-role transport aircraft signed in 2007, the existing military technical cooperation was officially extended for another decade and an agreement was worked out for supplying spares for Russian-origin equipments. Talks were also held regarding the supply of Sukhoi-MKI fighters, MiG-29s and the production of a next generation fighter plane.

An added promise to the Indian kitty is Russian hydrocarbon. The talks between the leaders resulted in a promise of immediate and long-term access to the vast hydrocarbon resources in eastern Siberia and far eastern Russia. Productive tie-ups exist between India’s ONGC Videsh Limited (OVL) and major Russian companies and the current understanding is an important asset to an India diversifying its sources of energy.

Clearly, the demand for energy will increasingly play an important in foreign policy decision-making and the diversification of sources will go a long way in helping India chart an independent foreign policy, not pressured by any external actor. A joint resolve to fight terrorism was agreed upon, within the framework of the Russia-India Working Group on Combating International Terrorism, acknowledging the importance of intelligence sharing.

Besides the military sphere, India and Russia showed satisfaction at the sustenance of trade and investment amid the global recession. Energy, Pharmaceuticals, Information and Technology and Communications was agreed as the area of focus and a target was set to triple the modest bilateral trade of $ 7 billion to $ 20 billion in the next five years. But no definite resolutions could be found on some of the irritants in these focus areas.

Russia wanted some standard-setting in view of the recent seizure of fake drugs in some Indian consignments. Moreover, no solutions could be brought forth to the issue of non-recognition of many Russian degrees in India. There is thus a need to be a more concerted focus on the educational ties between the two countries as Russian education seems to be the last resort and not the primary choice of Indian students.

True, the India-Russia relationship is one that has stood the test of times. Ties between New Delhi and the erstwhile Soviet Union were unquestionable and new Russia is revitalizing the durable ties in a rapidly changing world. In an interdependent and globalized world, where even enemies have to work together on some issues, every relationship is significant on its own footing. Russia and India have enough complementariness and shared interests to sustain a durable relationship. The challenge is to diversify the ties and create more inter-linkages so as to make the relationship more enticing for both the nations in a world of options and choices.--INFA

(Copyright, India News and Feature Alliance)