Sawant must get Rs 10,000 cr (Sunday Guardian)

ROOTS OF POWER M.D. NALAPAT www.sunday-guardian.com/profile/m-d-nalapat hat, a mere Rs 100 cr for the indescribable torture and humiliation felt by Justice P.B. Sawant as viewers beheld the sage visage of the jurist for the abnormally long period of 15 seconds, that too in a report about a scam? The sum awarded ought to have been much more, given that the channel aired an apology for such a lapse for only five consecutive days, rather than the five hundred that such inhumane treatment of Justice Sawant merited. As for the relatively low value placed on Justice Sawant's reputation by the Pune trial court, well, there are precedents for such admirable generosity towards a defendant. Two decades ago, the Supreme Court fixed a sum of US $470 million as damages on Union Carbide, after the Madhya Pradesh government had demanded at least $3.3 billion in damages for the world's biggest industrial disaster. While many saw the amount of compensation decreed by the apex court as low, those involved in selection of judges for the International Court of Justice at The Hague clearly disagreed, as the Chief Justice who delivered the verdict, R.S. Pathak, was soon after made a judge of the ICJ, where no doubt he served with the same distinction as in his previous avatar. { The Pune trial court has struck a necessary blow in defence of press standards that would dry up 99% of reporting and commentary in India. And now comes another verdict, in which many feel that the Honourable Court has been extremely parsimonious in awarding damages. This relates to the derisory amount of Rs 100 cr that was decided by the Pune trial court as being sufficient compensation for the agony inflicted on Justice P.B. Sawant (a former judge of the Supreme Court) by a television channel flashing his visage onscreen in a report relating to a scam involving provident fund dues. The showing of such images in such a context would do irreparable harm to the good judge's reputation, perhaps to the point where longtime friends avoid his company, and close family members begin to seriously consider whether he may truly be involved in matters relating to provident funds. In such circumstances, perhaps an award of Rs 10,000 cr may have better met the ends of justice. After all, television channels are expected (presumably by the law and the Constitution of India, these being the only texts on which judges rely) to be 100% accurate in their reporting. Unless they ferret out all the information about a particular story, they would be committing an act of grave irresponsibility in telecasting such episodes. So what if it may take several years to gather all the evidence, or that in almost all the issues they seek to report on, such a perfect result is unobtainable? After all, most cases in India take dozens of years before finally getting settled, and hence there is a strong precedent for the media to follow the same example in their own work. Stories based on less than 100% information ought to be canned and never see the light of day. North Korean television can be a good model to emulate. There, nothing is conveyed that is remotely seen as suspicious or adventurous. It speaks of the generosity and capacity for forgiveness of Justice Sawant that he has not appealed against the small amount of Rs 100 cr that has been awarded as damages to him. Lesser men than him would have done so. It is perfectly in order that the television channel in question has been asked to deposit Rs 20 cr and furnish a bank guarantee for four times that amount before being given the right to have an appeal heard against the High Court verdict upholding the trial court's decision. Unless one has serious money, one should not expect to waste the time of courts through appealing against judgments that clearly err — if at all — on the side of generosity towards the defendant. Putting in place procedures that would limit the frequency of appeals is a step that has immense beneficial value in a country where few are sensible enough to live for the 125 years and more that is needed to see through legal procedures. Justice Markandey Katju has, with clear understatement, described in some detail the mentally challenged nature of those who (being unfit for useful tasks) work in the media. Clearly, the media — as it presently operates — is a grave danger to civilised society and indeed to Indian culture. What the community deserves is a media that comments only after a process of verification that will ensure that only the most anodyne of commentary pass muster. Knowing the allergy of UPA chairperson Sonia Gandhi towards any mediaperson not considered genteel enough to share a pot of tea with her (several of whom have figured in the conversations of the loquacious Nira Radia), it is clear why Justice Katju was made the chairperson of the Press Council by her followers. Hopefully, he will soon begin to levy damages on newspapers and television outlets for reportage not backed by 100% evidence of the kind that only the National Security Advisor can gain access to. Clearly, such damages need to be more, much more than the small amount levied on Times Now for committing such an egregious act of media frenzy as showing an image of Justice Sawant in a report about a scam. What horrors will come next if the media were to get away with its myriad transgressions? Allegations of corruption against political leaders or high officials, and that too without getting copies of all files relating to the subject? What would happen to the future of India if the population were to get exposed to negative views about the selfless individuals who dedicate their lives to serve the people, and who live in the humble accommodations that dot Lutyensway? he Pune trial court has struck a necessary blow in defence of press standards that would dry up 99% of reporting and commentary in India. Humble scribes such as this columnist, who will find it tough to pay even 1% of 1% of the (admittedly very low) level of compensation now established as a precedent in the Sawant case, will now need to pause before making comments about anything other than flowers in a park. The advantage will be that he will now need to visit the park more often, thereby improving his health. Thank you, Justice Sawant, for standing up in defence of all those who are being attacked by a media that seems to believe it has the same licence in its reportage as do its counterparts in backward, repressive societies such as those found in the EU or in North America. In a country like India, that is teeming with saints, especially at the higher levels of the administrative machinery, the sort of media favoured by Justices Sawant and Katju are exactly the saintisised — sorry, sanitised — media we need. http://www.sunday-guardian.com/analysis/sawant-must-get-rs-10000-cr

Reserve Bank kills India growth story (PO)

By M D Nalapat
In 1997, then Prime Minister of China Zhu Rongji took note of the crisis in several Asian economies and launched a full scope reform of State-Owned Enterprises (SOEs) in China. Several of the worst performers were shut down, and others merged together or told to confine themselves to their core competences. Zhu’s slogan was “Grasp the big and ignore the small”. As a consequence, several smaller state enterprises were shut down. However, industrial reforms ensured that the slack caused by this was more than made up by private units, which were given much greater freedom than previously. Certainly the 1997-99 SOE reform was a very painful process, and it is estimated that about 40 million lost their livelihoods directly or indirectly as a consequence of the measures adopted by Zhu. However, several of these got new jobs in the next few years, as the Chinese industrial economy, both public and private, began to expand throughout the first decade of the 21st century. Today, several SOEs in China have emerged as some of the largest companies in the world.

The growth of Chinese companies has become a nightmare for companies in Europe, who are unable to compete on terms of price. Several markets that at one time were the exclusive preserve of European companies have now switched to Chinese imports. Even more troubling, during 2003-5,several Indian companies began to emerge as global competitors. Indeed, they were even able to buy out several companies in Europe, including huge enterprises such as Arcelor Steel, Jaguar-Land Rover and Corus. All of a sudden, there was fear in company boardrooms across Europe at this new competitor from Asia. Would even more of their global markets get lost because of the Indian private sector?. It was exactly at this time of gathering trouble for European businesses that the RBI, the Reserve Bank of India (the central bank of the country), began to put in place policies that were certain to

negatively affect the Indian growth story. Then RBI Governor Yaga Reddy began raising bank interest rates on loansdrastically, besides other steps designed to sharply reduce loans to industry and commerce. From the close of 2005 onwards, Reddy was determined to starve the private sector in India of money from commercial banks, and to see that they paid very high interest rates on the loans taken by them. In the process, he reversed the policy of low interest ratesthat had helped ensure a high growth rate (and moderate inflation) during the previous five years. Although the RBI is supposed to be an independent organisation, yet the government takes care to appoint only career civil servants as Governors, thereby ensuring that they will follow the habit of a lifetime and listen to commands (passed off as “informal requests”) from the Union Finance Ministry.

Despite increasing protests from industrial groups in India, who began losing out in international markets because of the high bank interest rates and the drying up of credit, the RBI continued its suicidal policy. Clearly, the approach of the central bank met with approval from the Chairperson of the United Progressive Alliance government, Sonia Gandhi, despite the fact that it gave an unfair advantage to European (and Chinese) companies competing in the Indian market. It is noteworthy that Sonia Gandhi is very popular in both China and the EU, being the subject of frequent and flattering media reports in both locations. While Manmohan Singh is the Prime Minister, the reality is that the ministers in his team report to Sonia Gandhi. In a way, he can be compared to President Ahmedinejad of Iran, whose ministers report to Supreme Leader Ali Khamenei rather than to him. Being an expert economist, Manmohan Singh understood the harm that the policy of restrictive credit and high interest rates was doing to the Indian economy, yet he was forced to remain a silent bystander while Finance Minister P Chidambaram ( who is much closer to Sonia Gandhi and her family than is Manmohan Singh) orchestrated the RBI policies which began to apply the brakes on economic growth in India.

Naturally, Yaga Reddy became a hero in Europe, including in the UK, because of the benefits that his policy was showering on industry in that continent. By the time he retired in 2008, the once-feared Indian private sector had diminished into a shadow of is previous self, wounded by the policies of its own government. The Finance Ministry and the RBI were fully aware that rising inflation (which they gave as the reason for higher and higher interest rates) was not at all lowered by higher interest rates. Instead, the higher rates fuelled more inflation, by adding to the costs of doing business. This increase was passed on to the consumer, thereby raising prices still more. The increase was promptly used by the RBI to justify still higher interest rates and sharper cutbacks in bank lending, a cycle of disaster that began picking up steam just when the international financial crisis hit in 2008.

Although the RBI has claimed credit for the relatively better health of Indian banks as compared to those in the US or the EU, the reality is that the lack of problems with Home Lending by Indian banks is because there is a sizeable “black money”( ie undeclared) component in the value shown of houses that are mortgaged to the banks for a loan. This underestimation of the money value of houses in India provides a cushion for the banks in case of a fall in house prices, a factor that is not present in economies where 100% of the value of a dwelling is declared to a bank. That India weathered the 2008 crisis better than several other major economies is a tribute to the resilience of the Indian people and to its entrepreneurial community, not to the policies of a government that has been working overtime since 2005 to slow the indian economy down.

In order to ensure the continuation of Finance Ministry control over the RBI, another career civil servant was made Goverrnor of the RBI in 2008,after Reddy finally retired. Duvvuri Subbarao was a former Finance Secretary, used to taking orders from the Union Finance Minister. He has continued, with still greater viciousness, the policy of higher andhigher interest rates and reduction in the flow of credit. To the delight of those VVIPs who want to ensure that Europe and China do not need to feel the pain of competition from India, Subbarao has increased interest rates by as much as thirteen times so far, all in the name of fighting inflation. He has ignored the fact that prices have risen, not fallen, each time he has raised interest rates. After all, he has to fulfill the wishes of those who seek to derail the India growth story. He has to obey those who want to see that Indian industry never emerges as a serios competitor to European and Chinese companies, a job he is carrying out so well that his term in office has been extended from 2011 to 2013.By that time, Reserve Bank of India Governor Subbarao would have succeeded in finishing off several thousand enterprises in India, which are being closed down each week because of the unbearable burden of high interest rates.

The India that was roaring upwards in 2003-2005 is now going downhill, writhing in agony. The Indian growth story has been replaced by steep falls in Manufacturing and even in Services. The only thing growing exponentially is government expenditure. The RBI is merrily printing currency notes to finance the wasteful expenditure of a government that spends more in a single year than others ever did in five. Another “achievement” of Subbarao has been the steady fall in the value of the Indian riupee, which has gone down by 20% in just a year, another factor causing higher rates of inflation. Of course, Subbarao’s political masters do not bother about the falling rupee, because he knows that VVIPs are happy that their Swiss bank deposits get more in rupee terms each time the currency in India gets reduced in value. If the fence begins to eat the crops, what hope is left? When the RBI itself becomes an engine of economic stagnation, India’s once-bright future seems to be darkening.


http://pakobserver.net/detailnews.asp?id=125579

The ISI: U.S. backers run for cover (Gateway House)

18 NOVEMBER 2011

 ,

Gateway House

The 'double-dealing' of the U.S. and Pakistani army - all with the ambition of military dominance - has significantly aided various terrorist groups. After 26/11, there is no place to hide for the Mike Mullens and countless others who have been apologists for the Pakistan army and the state it controls.

BY

 M.D. Nalapat

DIRECTOR, DEPARTMENT OF GEOPOLITICS, MANIPAL UNIVERSITY

In September, the recently-retired U.S. Joint Chiefs of Staff, Mike Mullen, warned of the risks to international security because of the propensity of the Pakistan army to back – sometimes covertly, but usually openly – Wahabbi extremist fighters. However, he left unsaid the name of the country that has been most responsible over six decades for causing this risk to develop.

Since the 1950s, the Pakistan army has been, in a significant way, the creation of the U.S. military and intelligence services, including its fraternisation with jihadis. Even as the former admiral was talking of the 'double-dealing' of the Pakistani military, U.S. military and intelligence officers were going through the very same ‘double-dealing’ machinery in order to gain access to elements such as the Taliban. And as before, they were using the Pakistan side to gain information about the country that has become the biggest challenger to U.S. military dominance – China.

Prior to the fall of the Soviet Union in 1991, the U.S. had teamed up with China in encouraging the Pakistan army to weaken its Indian counterpart through non-conventional and clandestine methods. After that, Washington's policy changed to one of benign acquiescence to the ISI's operations in India – even after 9/11. It was only after the 26/11 attacks showed that Western interests were almost as much at risk as India's, that the U.S. began to actually – as distinct from formally – discourage Islamabad from using Wahabbi and other proxies to launch attacks within India. Of course, China's People’s Liberation Army has, to date, continued the policy of seeing in the ISI's antics a useful way of slowing down the progress of a country that it sees as a rival – India.

It was easy to play these games in the early days. Till 9/11, the U.S. regarded Wahabbi-based terrorism as a problem far from home. This perception was shared by many Europeans, even though other manifestations of the scourge had for decades hit the continent, such as the actions of the Basque separatists in Spain or the IRA in the UK. The latter country, in fact, prided itself on the sanctuary it afforded to any extremist who was a self-labelled 'freedom fighter.' To this day, collections are made by citizens of the UK, which are sent directly to organisations active in Kashmir or for the Naga insurgency. The latter is made possible by Anglican church groups which still have collections for ‘charities’ active in Nagaland that oppose Indian ‘domination' – without a peep from Indian authorities.

In the past, a large share of the funds used by the Khalistan movement were formed out of collections made in cities such as Los Angeles and Toronto. In fact, the latter location, together with Paris, was a prime source of funds utilised by the LTTE until its 2009 collapse at the hands of the Sri Lankan army. These days, countries that are more 'progressive' in Europe, notably Norway, have picked up some of the slack, encouraged by a state that believes it has a magic wand that can turn extremists into good citizens in any part of the globe. Flush with cash and with a taste for exotica, Norwegian-funded NGOs have blossomed in conflict locations, usually on the side of those confronting established authorities. Should the Sri Lankan or another government ask Interpol for an international arrest warrant to be issued against those funding and otherwise backing groups engaged in organised violence, it may have some effect on the volume of such 'Good Samaritan' contributions. The Government of India is, of course, far too genteel to even think of such measures, no matter what the havoc such funds collected from the 'civilised world' have done to its internal security.

While others may argue that it is better late than never that the former Chairman of the Joint Chiefs of Staff realised the truth about the ISI and the broader Pakistan army, the reality is that the fusion of the military in that country with terrorists has been known across the globe. In its very first war, waged against India over Kashmir during 1947–1948, the Pakistan army relied on irregulars armed by itself to soften up resistance from the forces of the Maharaja of Kashmir. This fact was not unknown to Pakistan's backers in the UN, notably the U.S. and the UK, both of whom succeeded in making a fool out of Indian Prime Minister Jawaharlal Nehru when the latter placed the issue of Pakistan's aggression before a UN Security Council – a body dominated by those unhappy with his anti-colonial rhetoric and impressed with the effusive promises of Pakistan to remain as loyal a follower of the superior wisdom of the Occident as Mohammad Ali Jinnah was of Winston Churchill.

Sixteen years ago, Gene Madding, an official in the Clinton administration, organised a meeting for this columnist in the innards of the Clinton administration. More than a dozen analysts and officials showed up for the inquisition, and there was a knowing cynicism about the part of the presentation that held the Pakistan military as a pro-terror force. "That's because you're an Indian (that such a point was made),” was the comment of a State Department analyst who was introduced as an expert on South Asia. Despite the first World Trade Centre attack – and its obvious link to Pakistan – the Clinton administration remained in total denial about the actual nature of the only organised military in the world that has 'jihad' as its motto. Small wonder that a year prior to the (1995) meeting, former Assistant Secretary of State for South Asia, Robin Raphel and U.S. Ambassador to Afghanistan Zalmay Khalilzad, had already begun the program of facilitation that ensured the takeover of 86% of Afghanistan by the Taliban in 1996. A check of the output of journalists of that period will show the credulity of the U.S. and UK media of the actions and analysis of Raphel and other Pakophiles within the Beltway.

Faith in the Pakistan military, and in the Wahabbi elements within the ruling elites of the Gulf Cooperation Council countries, comprise the hole in the ozone layer of counter-terrorism strategy – a gap through which numerous terrorist groups and individuals have escaped punishment. Till today, the U.S. hesitates to place international sanctions against even those members of the ISI that the Defense Intelligence Agency and the CIA know are aiding terror groups, in contrast to their zeal against a defanged and collaborative Muammar Gaddafi.

Until the United States accepts that the only path to success in cleansing Afghanistan of significant terror groups is to take the war to the Pashtun areas as a whole, including those located in Pakistan, the Taliban will continue as a potent threat. The former Soviet Union made the mistake of not even trying to interdict weapons and explosives supplies from Pakistan that had been flowing into Afghanistan since 1978. President Obama has been more robust in the drone program than the pro-Pakistani Defence Secretary Dick Cheney, allowed George W. Bush to be. But these attacks – like those on Mumbai – represent only a small fraction of the attention needed to be paid by the Pentagon to the Pashtun territories as a whole. And after 26/11 (which incidentally this columnist was the first to expose as being an ISI operation inUPIAsia.com), there is no place to hide for the Mike Mullens and countless others who have, throughout their careers, been apologists for the Pakistan army and the state it controls.

M.D. Nalapat is the director of the School of Geopolitics at Manipal University in Manipal, India.

http://www.gatewayhouse.in/publication/gateway-house/2611-reflections/isi-us-backers-run-cover

India’s rubber civil frame (Sunday Guardian)

ROOTS OF POWER M.D. NALAPAT www.sunday-guardian.com/profile/m-d-nalapat

	Jawaharlal Nehru changed the Indian Civil Service (ICS) to Indian Administrative Service (IAS); that, to him, seemed momentous. The Indian Civil Service was commonly regarded at the time as a triple misnomer, being neither Indian nor civil nor even remotely a service. Whatever the factual position, the ICS considered itself the "steel frame" supporting the British Raj. It is uncontestable that for several generations, first the agents of the John Company and later Her (or His) Majesty's loyal servants in the Government of India ensured that the flow of treasure to the UK continued, undisturbed by the growing poverty and pain within the country. One of the most signal achievements of the ICS and its masters in Whitehall was to leave behind a country that had one of the lowest literacy rates and life expectancies in the world. Of course, such a record did not stop Jawaharlal Nehru from continuing in office as many members of the service as could be persuaded to remain in harness rather than migrate to the Mother Country. However, Nehru did make a change that to him seemed momentous, the nomenclature. The ICS became the Indian Administrative Service (IAS), which — together with the IPS, the IFS, the IRS, the IA&AS and sundry other formations — has formed a new steel frame, this one designed to buttress the powers and privileges of the successors to Whitehall, the political leadership of the administrative machinery of the state. It is a task in which they have, unfortunately, been very successful. Since 1947, political dynasties in India have zoomed to the top of the economic ladder, despite having no obvious qualifications except their genetic makeup. As Papa (and Mama) knew that the source of the wealth that the family enjoyed with such abandon came from access to the discretionary powers of the state, both were keen that their offspring should continue to amass fortunes that would in a day's collection feed thousands of families for a month. The best feature of politics is that so little time need be spent in the country. Much of the year can be spent in exotic locales with interesting people, all without attracting the attention of the Income-Tax or the Enforcement Directorate (which was anyway neutered by the understanding A.B. Vajpayee by being divested of almost all its punitive powers). And in this lies the truth behind the so-called "Steel Frame". Since the latter half of the 1950s, civil servants in India have increasingly adapted to the needs of their political masters and facilitated them, despite the fact that in the process, the people of India were being short-changed. So flexible have the spines of so many gallant administrators become that they can now — with justice — refer to themselves as the Rubber Frame. In the process of enriching politicians as they subvert the public good for individual interest, several members of the numerous administrative cadres have themselves become wealthy, able to build mansions to retire in and send their children to the most expensive education providers in the world, again of course without a peep from agencies that are presumed to look into such egregious mismatches between income and outlay. Every now and then, television screens fill with images of some officer or the other being discovered to have assets worth several thousand times his known sources of income. Were that such people be the exception. In many parts of the country, and in several corners of each service, they are becoming the rule. Indeed, so deep has the canker reached that an "honest" police officer such as Kiran Bedi (who is apparently spending much of her day battling graft) does not consider it even moderately unseemly to double charge on travel expenses or overcharge on them. Her conduct is reminiscent of the scenario painted by Chief Minister Devaraj Urs to this columnist in 1978. "If somebody just steals 50% of what is given to him to carry out a particular task, then I define him as honest," a weary Urs said. "A crook would steal 90%." Clearly, given the disproportion between government expenditure and public good, there are far more "crooks" within the system than "honest" persons, even if one uses the standard mentioned by Urs. These days, elements of the political class have teamed up with a section of the administrative cadres to enter into private business, usually in units that are inefficient and need to be eliminated if a healthy churn is to take place. But because they are loath to see their enterprises affected, these policymakers keep efficient units from competing with them, by misuse of state power through unjust recourse to the hundreds of thousands of regulations that Nehruvian India has spawned. Will there ever be a change? Certainly within the civil service there are individuals of outstanding integrity. In the 1950s, the redoubtable ICS officer A.D. Gorwala challenged the statist policies of his Prime Minister, pointing to the harm that these would do to national interest. His bluntness led to an early retirement and to a new avatar as a columnist for a prominent newspaper, which too was persuaded by the powers that were (all great democrats, of course) to stop the column aptly signed "Vivek" that Gorwala used to write. We have Arun Bhatia at Pune and E.A.S. Sarma in Hyderabad, two of many dozens of officers who have refused to accept Business as Usual. However, usually it is not the Bhatias and the Sarmas who thrive in the services, but those with a rubber spine and an absent conscience.
	lthough pliant civil servants claim that they have no option "but to follow orders", the reality is that this has never been the case. Had they stood firm — on record — a multitude of ills could have been avoided. The Indian politician may have a lot of bluster accompanying his words and gestures, but deeper down he or she is still nervous about being held to account. Only the immunity from any accountability that was provided by pliant officers (for example in the CBI) has led to the exponential increase in corruption that we are now enduring. Ladies and gentlemen of the IAS, the IPS and other services, now is the time to show that the rest of the country can feel pride rather than contempt for you. http://www.sunday-guardian.com/analysis/indias-rubber-civil-frame