Monday 31 August 1998

Ties with Pakistan - Why not Play the Business Card

(Originally appeared in the 1990s in the Times of India, as published in M. D. Nalapat's book "Indutva", Har-Anand Publications, 1999)

In medicine, it is not merely the symptoms that need to be

treated, but the causes. Otherwise, whatever the expense and
attention paid to the symptoms, they will recur, often with
greater virulence. This is what has been happening to relations
between India and Pakistan since 1947.

Indian policy towards Pakistan has concentrated on
addressing itself to the specifics of the hostile actions of that
country. Over the last decade and a half, emphasis has been laid
on security systems designed to tackle the problem of Pakistan-
financed terrorism. If Indian policy means merely preventing
aggressive action it is clear that it has failed. Indeed, the threat
from Pakistan is today more virulent than at any time during the
past two decades. The reason for this is a paradigm shift in
Pakistan’s strategy towards India since 1971, from concentrating
on a 'hot war involving regular troops to a covert war involving

The Indian response to this new strategy has been reactive
rather than proactive. It has focused on the effects of Pakistan’s
actions rather than on their roots. This is akin to dousing fires
while the blowtorch that set them off in the first place is left
untouched. Thus the ’victories’ that are being won over the
terrorists—at enormous cost——are merely paving the way for
future disasters.

Only Superpower
India has a lot to learn from the United States, and not merely
in the sphere of technology. The world's only superpower has
been clear-cut in the defence of its vital national interests, going
so far as to bomb the residence of a head of state (in Libya) and
jailing another (in Panama). The United States has therefore
expanded the concept of 'hot pursuit' to include countries
several thousands of kilometres away from its shores. As a
consequence, despite its openness, it is relatively free of terrorist
acts. Had the U.S. followed the Indian pattern of reacting only
within its boundaries, a rash of violence would have been the

This is not to argue that India should emulate the U.S.A
superpower has degrees of freedom not available to weaker
countries, and international opinion would be quick to condemn
the bombing of Benazir Bhutto s Clifton residence in Karachi, for
example, or the capture and imprisonment of General Hamid
Gul of the Inter-Services Intelligence (ISI). What can be done,
however, is to increase to unacceptable levels the cost to Pakistan
of financing insurgency and terrorism within India. This can be
achieved by permitting private organisations to provide financial
and material aid to elements within Pakistan that are facing
discrimination. The Sindhis, the Ahmediyas and indeed the
Shias would in substantial numbers fall into this category.

What is sauce for the goose should be so for the gautier. A
Pakistan that openly defends a policy of financing insurrection
in a neighbouring state should have no grounds for objecting to
that state repaying the compliment. Once Pakistan gets the
message that the financing of insurgency is a game that two can
play, the pressure within that country for a mutual cessation of
covert hostilities will grow and (hopefully) prevail.

Second Aspect
This brings us to the second aspect of the suggested paradigm
shift. Apart from instituting a system of responding not just
within India but within Pakistan as well, there is a need to
prepare and articulate a set of responses that can initiate a
dialogue not just with the armed forces establishment in Pakistan
and its subservient civilian cover, but those elements within
Pakistani society that have a long-term practical interest in
peaceful relations with India. The day the Punjabi entrepreneur
displaces the Punjabi General as the centre of gravity within
Pakistani society, peace between the two countries will be better

Within Pakistan, the most significant of the potentially pro-
peace groups is the entrepreneurial class. It is no accident that
sentiment in favour of accommodation with India is stronger in
business-oriented Karachi than in the more cantonment·oriented
Lahore. Rather than confine its dialogue with Pakistan to the
agenda set by that country India should expand the boundaries
of the discourse by emphasising economic and cultural interaction.
That the trade between the two neighbours is so meagre, and
largely confined to such items as cement and sugar, is to the
benefit of the trading class of neither country. Should India make
some unilateral trade-related gestures to Pakistan, it would
increase the pressure of the lobbies within that country which
recognise that Pakistan cannot make significant economic progress
except by befriending India.

Even according to published records, military spending in
Pakistan as a proportion of total government spending is, at 39
per cent, three times greater than India's. Defence spending in
that country (even excluding the hidden items) rose by more
than seven times between 1980 and 1994. This has eliminated the
advantages enjoyed by a Pakistan freed in 1971 of its poorest
province (Bangladesh) by its ostensible foe. Within Pakistan, the
business class is increasing its first-hand contact with India, a
process that needs to be encouraged, and is thereby becoming
aware of the benefits of a policy of peace. By offering greater
trade, India would expose the essentially anti-Pakistan policy of
the armed forces of that country.

Today the military and its feudal allies in Pakistan are
confronting a bourgeoisie chafing under autocratic rule. Although
Pakistan passes off as a democracy, the fact remains that neither
its press nor its politicians dare to take on the armed forces. The
brief empowerment of the entrepreneurial classes ended on
April 18, 1993, when Nawaz Sharif was dismissed from office
and - to the relief of the armed forces - lost to that convert to
traditionalism, Benazir Bhutto, in the elections that followed.
However, the public support that was generated for the caretaker
government of Moeen Qureshi indicated the support within
Pakistan for a policy that focused on economic progress rather
than on seeking to harass its bigger neighbour.

Failed Reforms
The ruling elite within Pakistan has cleverly used Islam as a
shield protecting it from exposure by prying eyes. After the
infructuous agrarian reforms of 1949 and the Ayub reforms of
1959, Pakistan has not experienced the changes in land ownership
and tenure that have become commonplace in most parts of
India. Even the earlier attempts at reform were modest, the
ceiling being 150 acres of irrigated land in 1949 and 500 acres of
irrigated land in 1959. That even such reforms failed is testimony
to the grip of the Bhuttos and the Pagaros, the Jatois and the
Mazharis, over agriculture in Pakistan.

As in the industrial sphere, a well-crafted offer by India of
trade in agricultural commodities with Pakistan would
immediately divide the farming community there into the
pragmatists and those die·hards who are willing to forgo
economic benefits in the hope of dividing India. Indeed, the
much-maligned GATT agreement can be used as a lever to
generate free trade between the two neighbours.

By simultaneously increasing the costs to Pakistan of its
policy of interference in India, and by waving the carrots that
would accrue from closer economic co-operation, relations with
that country can be put on a less troubled track far more
effectively than the present policy of treating the symptoms
while leaving unattended the source of the disease.

Tuesday 18 August 1998

Regionalism Rainbow Bridge or Great Divide

(Originally appeared in the 1990s in the Times of India, as published in M. D. Nalapat's book "Indutva", Har-Anand Publications, 1999)

In the 11th Lok Sabha, the second largest group after the B]P is
not the Congress but the regional parties. If the CPI and CPM are
counted as regional parties—of Kerala, Tripura and Bengal-
and 12 Independents are added to the tally, 195 out of the 534
seats declared have gone to regional groups, leaving 29 for the
three national parties—the BJP, Congress and Janata Dal. Even
in 1967- the first flood-water mark of regionalism—the then
three national parties, Congress, Swatantra and Jan Sangh, won
362 seats to the others' tally of 158. 

In 1967 regional parties came to office both in the Hindi belt
as well as in Tamil Nadu. Indeed, the year before Conjeevaram
Natarajan Annadurai had warned in Parliament that Tamil
Nadu may secede if Hindi was imposed. Maoist guerrillas
laxmched armed struggles in Kerala, Bengal and Andhra Pradesh.
Thanks to a drought and to Indira Gandhi's decision to devalue
the rupee by 57 per cent, inflation soared. Agitations erupted,
and those who predicted that within five years there would be
a completely centralised policy were laughed at. That is precisely
what happened.

Perhaps as a reaction to the chaos of 1967, Indira Gandhi
initiated the process whereby almost all power remained in
Delhi. Between then and her defeat at the polls in 1977, Indira
Gandhi used the imposition of l’resident’s Rule 23 times against
opposition governments, and five times against her own Congress
governments. Central control of finance and foodgrains were
used to literally starve states which had assertive chief ministers.
The centrally-engineered "food crisis" in Gujarat, that saw the
fall of Chimanbhai Patel on February 9, 1974 is a case in point.

The Morarji Desai government quickly forgot its commitment
to federalism when confronted with the thirst of Janata party
workers to come to power in the states. Nine Congress ministries
were dismissed, a "favour" returned by Indira Gandhi on her
return to power in 1980, when she dismissed nine non-Congress
state governments. The only exception was Bhajan Lal, who
presumably made an offer that she could not refuse. In the event,
he remained in office not just during her time, but in the reign
of Rajiv Gandhi and P.V. Narasimha Rao as well, falling to the
ballot last month. As for Rajiv Gandhi, while he mostly let non-
Congress governments be, during 1985-89 he changed Congress
chief ministers 22 times.

The V.P. Singh government was too involved in intra-party
clashes to be a threat to the states. However, his successor,
Chandra Shekhar, dismissed the DMK government in Tamil
Nadu and the Asom Gana Parishad government in Assam, the
reason given being "collusion with terrorists”. What Chandra
Shekhar was too diplomatic to mention was that in both cases the
terrorists-the LTTE in Tamil Nadu and the Bodos in Assam—
had been encouraged by the Congress government at the centre
to embarrass the Sri Lankan and the AGP governments

In line with its policy of inaction, the Narasirnha Rao
government adopted a similar attitude towards the states, except
when two Rajiv Gandhi appointees, - S. Bangarappa of Karnataka
and N. Janardhan Reddy of Andhra Pradesh - were replaced
with Veerappa Moily and Vijaybhaskar Reddy. Unfortunately,
neither was as much a hit with voters as they were with Rao. In
both states the Congress lost power in 1995.

However, while Rao was less adventurous than the two
Gandhis in dismissing state governments, he excelled them
when it came to centralising power. Indira Gandhi allowed her
trusted ministers to function autonomously. Rajiv Gandhi allowed
those officers whom he liked to do what they pleased (and their
ministers be dammed!). Not so Rao. By the beginning of 1994,
almost all major decisions were in effect taken by the PMO, with
the principal secretary Amar Nath Verma functioning as the
deputy Prime Minister.

Cabinet meetings in the Rao period were a delight. If any
minister offered an opinion on a pending matter, he was quickly
silenced with: “Let the officers decide on that. In the meantime,
drink your coffee". Verma dispensed with the formality of going
through the ministers, routing his orders directly to the secretaries.

The frequent misuse of Article 356 to dismiss state
governments, combined with the growth of the PMO has meant
that in effect India has a presidential system of government. It
is small wonder that the regional parties are anxious to use their
new-found clout to ram through amendments that may make the
Indian structure of governance more federal. It is the total
centralisation of power at Delhi and the fact that all parties want
their state units to act as vassals of the central leaders, which has
weakened the state-level units and allowed regional groups to

The chances are that in the coming week the Vajpayee
government will be replaced by one led by H.D. Deve Gowda.
Should this government attempt to correct the distortions in the
federal structure—a fallout of the Gandhi family's mistaken
perception of India being a family-owned company—there will
be applause. Greater financial and administrative powers to the
states will strengthen rather than weaken the Union. However,
should the government succumb to the blackmail of regional
leaders and dole out largesse in fear of loss of parliamentary
support, it will quickly become unpopular and face the possibility
of both the Left Front and the Congress withdrawing support.
Most are aware that the 11th Lok Sabha is unlikely to have a long
life. Unless, that is, a miracle provides us with good governance.

Monday 17 August 1998

Regressive Restrictions - make Honesty the Best Policy

(Originally appeared in the 1990s in the Times of India, as published in M. D. Nalapat's book "Indutva", Har-Anand Publications, 1999)

By 1988, Rajiv Gandhi decided that he had had enough. He had
removed corruption from the system and given India growth
rates that rivalled China’s, yet the newspapers refused to
acknowledge this. They preferred instead to concentrate on
Bofors or the volte-face on the Muslim Women’s Bill. The press,
it would appear, prevented the Indian voters from realising how
lucky they were to have Rajiv Gandhi as their leader.

Fortunately for the then Prime Minister, he had a Harvard-
educated adviser in the home ministry who helped draft a
"defamation Bill" which would have, if passed, put most
journalists behind bars. Sadly, the media did not realise how
beneficial the legislation was to the public interest. In its myopic
way, it opposed the Bill and finally got it shelved. 
The proposer of the defamation Bill in 1988.

P. Chidambaram, is today the Union finance minister. That he
has lost nothing of his belief in tough laws is clear from the 
manner in which he is introducing one punitive legislation after 
another. The first was to give income-tax officers the right to levy
a penalty of up to 300 per cent on unaccounted income. The next
is to make the mere possession of "unexplained" money an
offence. According to this legislation, it will not be necessary to
prove that an illegality or crime was committed to get an
individual in trouble. What next, one wonders? A law that
makes the mere possession of property a criminal offence?

Nehru Family
But one should not judge Chidambaram too severely. After all,
he does owe much of his political career to the Nehru family
which had very clear views on the subject of whether Indians
could be trusted to behave as responsible adults. Under Nehru,
large-scale private business became an undesirable activity. The
effects of such an attitude are evident today, when this country
has dwindled economically. Indira Gandhi, through another
finance minister, Pranab Mukherjee, raised the marginal rate of
income-tax to 97.75 per cent. By the time Rajiv Gandhi came to
power, it was much more difficult to live up to this patrician
legacy, though to his credit he tried. It is nobody’s case that those
possessing black money should not be punished. They should
be, and severely at that. However, before this, the tax rates
should be brought down to sensible levels. There is a strong case
for just three rates of income-tax on individuals: 10 per cent, 20
per cent and 30 per cent. As for companies, 40 per cent should
be the highest rate for them. Should such a downsizing of rates
take place, the number of taxpayers will multiply by tens of
millions, and collections will go up.

The option is the present one of keeping in place a system
that makes it almost impossible to thrive while remaining
honest, and building up a police state to punish the numerous
defaulters. Morarji Desai, a staunch follower of Gandhi, was the
unwitting prime mover behind the growth of the Mumbai mafia.
As in the United States, these groups flourished because of
prohibition. Thanks to another of his edicts, that on gold control,
an entire community lost its livelihood. Today Bansi Lal is going
the Morarji way, breeding corruption within his police by
attempting to stop the sale and consumption of alcohol in
Haryana. This he did even after it was clear that Andhra Pradesh
has gone bankrupt due to the same policy.

Liberaliser's Image
If Chidambaram is to justify his image as a liberaliser, he should
look for ways of creating within India the conditions for enterprise
that operate in countries like South Korea or the United States.
He should nudge the government to bring forward legislation
and policies that encourage people to use their money
productively rather than hoard it. Then, just as the people
responded positively to the good king in times of crisis, they will
respond now by voluntarily coming forward to pay taxes and
fulfil their obligations to a regime that, at last, has begun to treat
them fairly. This country is too big for the stick. It needs
individuals who not only have big minds but also big hearts.

Friday 7 August 1998

India's Defence-Capability, Must Match Rhetoric

(Originally appeared in the 1990s in the Times of India, as published in M. D. Nalapat's book "Indutva", Har-Anand Publications, 1999)

Jawaharlal Nehru had his weaknesses - as readers of
Edwina Mountbatten's biographies know - but what
compensated for them was his vision of India. It was to be
secular, it was to be technologically advanced. Where he erred
was in using rhetoric that had no relation to the reality of a
dwindling defence strength. The off-the-cuff remark that he had
"ordered the Army to throw the Chinese out" of Aksai Chin was
ineffective in staving off that country's 1962 war on India.

Strategic Reason
The Chinese had strategic reasons for keeping Aksai Chin, such
as the need to provide a corridor between Tibet and Sinkiang.
Also, till 1960-61, when Indian rhetoric about Chinese
"expansionism" escalated, that country had not interfered in
internal Indian tensions. Afterwards, both in the north-east and
briefly in the Naxalbari movement, Beijing retaliated for what it
saw as Indian "encouragement" to the Free Tibet movement. By
1971, however, Beijing's obsession with domestic matters led it
to refuse to intervene when the Bhutto-Yahya Khan armies were
being defeated by the Indians.

For six or seven years prior to 1962, the Nehru government
had deluded itself into believing that diplomatic gestures and
tough talk were sufficient to avoid war. As a result, defence
capabilities got eroded, especially in the air and on the eastern
frontier with China. Believing perhaps that the Chinese were as
prone to words unmatched by action as the Indians are, Nehru
escalated the toughness of his language even as our defence
preparedness declined. Simultaneously, kinship—both genetic
and social—was allowed to become the dominating factor in top-
level defence appointments, General B.M. Kaul being the most
obvious example.

Looking at the belligerent rhetoric of Rajesh Pilot, the bold
statements of Pranab Mukherjee, the continuation in office of the
obviously dysfunctional General Krishna Rao and the consistent
inattention paid to Indian defence capabilities, there is a sense of
history repeating itself. Once again, an escalation in language
matches—though in reverse—accompanies a fall in defence
preparedness. Should such a policy continue for the rest of the
current decade, it will take a generation before Indian defence
technology once again approaches world standards. One looks
in vain for any national interest that will be served by such
sabotage, carried out under the guise of "shortage of funds".

There has been substantial comment about "pressure" from
the U.S. on India to throttle its nuclear and space programmes.
The Clinton administration, arguably the most pro-Pakistan
team in Washington since the Nixon-Kissinger one, cannot be
blamed for attempting to ensure that this country does not
develop a substantial defence capability on its own. The model
favoured by the U.S. is clear from the example of Saudi Arabia,
which—despite its huge capital inflows—is technologically
deficient. Such underdevelopment ensures dependence on
Washington as a source of armaments, a situation favourable to
the U.S. not just strategically but financially.

However, it is not Saudi armaments that are a reason for
worry within India, though the same unconcern should not be
shown to the Saudi money being funnelled to fundamentalist
organisations in India. Pakistan, as has been the case since 1947,
is the major security concern for India, a concern now multiplied
by the desire of the Clinton administration to rearm that country.
Despite the evidence that international terrorist organisations
are using Pakistan as a logistical base, the U.S. State Department
considers Pakistan a "moderate" state. As for Pakistan stealing
and buying nuclear technologies from outside, Washington is
seeking to reward this unique path to nuclear disarmament by
revoking the Pressler amendment.

Specious Argument
As long as India was "within the Soviet sphere" and declined to
join U.S.-inspired defence pacts; as long as fundamentalist
terrorism was considered a useful weapon against communism,
some defence was possible for the flow of U.S. arms into
Pakistan. However, this alibi no longer holds. The clear fact that
any transfer of arms to Pakistan can only be the result of a policy
hostile to India needs to be stated. The argument that "moderate
Islamists" will be better able to beat back "radical Islmists" 
through the revival of the U.S.-Pakistan arms link is specious.
Today the Pakistan army is among the leading backers of
"radical Islam". lt's very war cry is jehad. Thus the transfusion
on arms to such an organisation can only be taken as one of the
steps in a policy aimed at containing the development of India
as a major strategic force.

Apart from the US, the other enthusiastic player in such a
game-plan is the Indian government, in particular that part of it
which deals with defence. The absence of not merely strategic
but even tactical thinking in recent defence policies has resulted
in the ignoring of the positive impact of adequate defence
systems on security, and consequently stability. Just as a police
force promotes economic development by deterring crime, an
adequate defence system discourages hostile intervention. It is a
reasonable hypothesis that an India that had pushed ahead with
its nuclear and missile programmes would not have been so
attractive a target as it is today for Pakistani intervention. That
Islamabad is contemptuous of this country’s ability to defend its
interests is clear from the war the ISI is (publicly) engaged in.

An Example
South Korea is an example of how greater defence spending can
coexist with rapid progress. If the security of that country had
not been ensured by effective defences, its development may
never have taken place. The blows struck by Pakistan—whether
in Kashmir or elsewhere—are costlier, even in purely economic
terms, than the expense of developing strategic systems. Pakistan,
it is argued by its backers, has a difference of perception with
India only about Kashmir. On the contrary, should the ISI
succeed in that state, the consequent weakening of this nation's
integrity will lead Islamabad to intensify terrorist activities in
other Indian states. The mindset that breeds terrorism (or, in
Washingtonspeak, "moderate democracy") feeds on success and
does not stop until the enemy is totally destroyed.

While unapologetically taking care of its own security, this
country needs to engage the world’s biggest economy in a
friendly dialogue. There is much more to Washington than the
State Department or even the White House, and there is much,
much more to the United States than Washington. After the love
affair between the ISI generals and the Pentagon cools off,
Washington may finally notice that the only major armed force
in Asia that has remained non-fundamentalist and non-political
since freedom is India’s. In the meantime, this country needs to
build bridges with major U.S. interests, such as business, rather
than indulge in the luxury of alienating what could be a decisive
ally in the attempt to change American policy into an India-
friendly one.