Corrupts made accountable (PO)

M. D. Nalapat

M A Jinnah, the founder of Pakistan, was a tactical genius who succeeded in dividing the Subcontinent in two. Unlike the Congress leadership, Jinnah understood that World War II would have so weakened the UK that freedom for India would be inevitable, even without the exhaustive - and exhausting - agitations launched by the Congress Party. After the fatal tactical error of withdrawing from government both nationally and regionally in 1939, the Congress Party began to rapidly lose the support that it had hitherto enjoyed within the British establishment. In contrast, the Muslim League under its leader M A Jinnah supported a British establishment that he knew was in a severely weakened state. Jinnah kept away from the freedom struggle because he saw that independence was a foregone conclusion. Instead, through gaining the goodwill of London, he ensured the backing – both open and quiet - of the British government in his single-minded pursuit of Pakistan.

Interestingly, as soon as the Union Jack was pulled down at midnight of August 15,1947, the new government of “free” India retained the entire framework of colonial rule. It retained the colonial administrative structure and the legal framework of the colonial past. Indeed, within five years of gaining control, Nehru began to introduce more and more restrictions on the non-governmental sector in India. Much of private industry - which had flourished during World war II as a result of military orders - was nationalised. Tax rates were brought up to absurd levels, reaching 97.75% by the 1970s. After three decades of Nehru family rule, almost any activity needed prior governmental permission. Finally, in 1977, in a reaction to such colonial-style control, the electorate reacted and threw out the Congress Party led by Indira Gandhi. Since then, no subsequent government dared to add on to the web of regulations and prohibitions, or to once again show the contempt for public opinion that was demonstrated by Indira Gandhi during 1975 and 1976, a time when several citizens (including this columnist) faced police incarceration. Of course, it was only in the 1990s that a few steps were taken to liberalise the economy, steps that were added on to till 2004, when the Congress Party once again came to power as the lead actor in a coalition.

From the final decades of the 18th century to almost the first half of the 20th century, a small number of British and other colonialists skimmed the cream from the Indian national product. Several stately homes in the UK were built out of the money gained from stints in India. Even jewels of historical value, such as a Koh-i-noor, were taken away and made the property of inhabitants of the conquering power. This loot by a relatively small and distinct segment of society finally roused tens of millions in the Subcontinent to protest, and to revolt. Even in the armed forces, anger grew at the double standards practiced on those not of the “Master Race”. The career prospects and salaries of those from the UK were way higher than that given to those unfortunate enough to have been born in India.

Since 1947,has there really been a change?

A political storm across India (PO)

By M. D. Nalapat


Although Prime Minister Manmohan Singh has a personal commitment towards a peaceful resolution of outstanding issues with Pakistan, he is no Indira Gandhi and hence may not be able to fulfil his vision. The first - and thus far only - woman PM of India had a substantial political base, one that she demonstrated in both 1969 as well as 1978. Both those times, she split the Congress Party, and while in 1969,more than 40% of the party remained with her rivals rather than cross over to her side, in 1978 about 80% of the party cadre joined her in preference to those she was opposed to. Since that time, the Congress Party has been synonymous with the Nehru family, and neither its cadres nor its leaders would even dream of looking beyond The Family for the top leadership were Manmohan Singh to ever split the party in the way that Indira Gandhi did, it is doubtful if even 1% of the cadre would come over to his side. The rest would remain loyal to the Nehru family, now represented by Sonia Gandhi, who has established her control over the Congress Party and the Union Government efficiently and smoothly. Of course, Prime Minister Singh is himself loyal to the Congress President, and hence the question of his walking away does not arise. The problem that he faces is that this lack of a political base makes it difficult for him to implement the policies that he favours.

From 2004 onwards, economic reform has slowed to a crawl, and can even be said to have been reversed by the many new restrictions that have been introduced by dirigiste ministers eager to strengthen their (lucrative) roster of discretionary powers. Had economic reform of the type favoured by Manmohan Singh been pursued by the United Progressive Alliance (UPA), the country’s rate of growth would have been closer to 15% than the 9% presently achieved. Much of the demand in the economy has come because of money held abroad by Indian nationals, that is returning to the country because of the fear that foreign financial institutions may collapse. These funds are helping to keep the stock market from collapsing, and are ensuring a steady rise in property prices India is one of the few countries where regulators were unable to distinguish between short-term and long-term funds. The same treatment is given to both investments in the stock and money market (that can be withdrawn any time) and money invested in plant and machinery, that is tied to the enterprise.