Reservation Losing Appeal as Economy Expands

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

The concept of the melting pot has held social analysts in thrall.

Multi-ethnic countries such as the U.S. have been characterised

as places where this concept applies. However, an examination

of the reality, even in the U.S., will bring out that rather than a

'melting down' of different ethnic groups into a homogeneous

mix, there is a coexistence—sometimes placid, sometimes tense-

of different groups. There is, in other words, very little melting

taking place in the pot.

This parallel development of different ethnic strands exists

not just in the racial sphere, but in the cultural as well. In the U.S.,

for instance, the statistical readings for variables such as unwed

mothers, drug addiction and illiteracy are significantly different

for groups such as, WASPs (White Anglo-Saxon Protestants),

African Americans, Asian Americans and Hispanics. These create

invisible barriers in the all-important business sphere, where

WASPs do much better than either African Americans or

Hispanics.

India, too, is a congeries of ethnic groups, and here—despite

the frequent use of the 'melting pot' analogy—the mingling of

communities (through, for example, marriage) has been the

exception. However, unlike the U.S., this country has a well-

developed affirmative action policy implemented through the

mechanism of reservations. As a consequence, previously

disadvantaged groups have increased their representation in

administration, while sub-groups within them have reached the

stage of social take-off. This fact has been taken note of by the

judicial directive that the 'creamy layer' within the backward

communities be excluded from the benefits of reservation.

While affirmative action for the backward classes took deep 

root in the southern states of Tamil Nadu, Kerala and Karnataka, 

the forward castes retained their dominance in the Hindi- 

speaking states. A Karpoori Thakur or a Ram Sundar Das could 

do very little to dent the hold of the forward communities in the 

administrative machinery. However, the situation has changed 

with the coming to power of the SP-BSP in Uttar Pradesh and the

Janata Dal in Bihar. While within both regimes there is a

jockeying for positioning between different backward

communities, on one issue all such communities are united, and

this is on keeping the forwards out.

Why is it that four years ago, when V. P. Singh pulled the

Mandal rabbit out of his Kashmiri cap, there was such an outcry,

while today-when the backward class movement has become

such more strident—there is relative calm? The difference may

be a result of the liberalisation process set in motion in 1991. The

central motif of the entire process has been the steady

downgrading of the governmental apparatus as a system of

employment generation and decision making. Till 1991, it was

taken as axiomatic that growth in government was socially

beneficial. Very seldom were the hidden costs of such growth

examined. Indeed, few realised that the chronic inflation of the

currency and the anaemic performance of employment generating

units was linked to the expenses of maintaining a state structure

that, in many of its parts, was functionless.

Granted, the Narasimha Rao government has lost some of its

earlier reformist zeal. In particular, progress in the privatisation

of PSUs and reduction of subsidies has been slower in 1993-94

than the steps taken in 1991-92 would have led one to predict.

But, by placing on governmental units the onus of proving their

usefulness—rather than taking it as given—and by reducing the

flow of subsidies to loss-making units, the government has

helped generate a paradigm shift in social attitudes. Today, as

compared to 1990s, the sons and daughters of the middle classes

are far less likely to see their future as employees in a government

unit. On the contrary, these days the 'best and the brightest'

gravitate to the private sector, where rewards follow performance

more closely.

This displacing of the public sector by private industry as the

main engine of growth and employment has reduced the

significance of the Mandal formulations in middle class lives.

With the share of the state shrinking in the total employment pie,

the disadvantage caused by reservations will also be reduced.

Indeed, an argument can be advanced that those communities

which do not enjoy the benefit of reservation may actually find

their comparative positions improving, in that they will tend to

avoid the (declining) state sector and flock to the (growing)

private segment. An example of this is Tamil Nadu, where, from

1967 onwards the Dravida movement began to squeeze out the

Brahmin community from administration. As a consequence,

many went into business and thrived.

Why is it that the question of reservations has generated

much less friction in the three southern states compared to the

Hindi belt states? The reason could lie in the fact that the latter,

because of their statistical dominance in Parliament, had till 1991

enjoyed a flood of government investment. Even today, the role

of the organised private sector is less significant than the

governmental one in most of the Hindi belt. Whether as a

policeman or as a village officer, employment in the state

machinery is still a respectable option in the region. As a

consequence, any reduction in this due to reservations will be

contested. The reply to this is not (the politically impossible task

of) ending reservations, but creating conditions in the Hindi belt

for a faster growth of the private sector, a sector which is not the

parasite of the state sector, which itself is a parasite of the

exchequer.

For this to happen, standards of governance—especially law

and order—will need to be significantly improved. Unhappily,

such a process does not as yet seem to be occurring. Neither

Mulayam Singh Yadav nor Laloo Prasad Yadav are noted for the

high quality of their governance. By concentrating on getting

benefits from the shrinking govemment cake, rather than on

building up systems for private sector expansion, both of them

are—albeit unwittingly—blotting their political futures, for only

economic expansion will generate the conditions needed for

them to retain their popularity.

The danger in the populism seen in these two states is that,

on seeing that the governmental goose is no longer generating

sufficient political rewards, a cry may go up to extend reservations

to the private sector as well, thus killing the golden goose. So

long as reservation is confined to the state sector, the disincentives

inherent in it will not in themselves be sufficient to weaken the

pace of economic expansion. However, should it be forced on the

private sector, the negative effects could abort this country’s

nascent attempt to enter the economic major leagues.

What then is our defence against such a contingency? The

same as has acted as a bulwark for the liberalisation process. This

is the emergence of the first pan-Indian class, which is the Indian

middle class.

The process of economic expansion has created a class of

individuals who are ’at home' in most of the larger cities of India,

whether it be Calcutta or Madras or Bombay.

Should this development proceed, the middle class is likely

to be the country's largest voting bloc, rivalling farmers or even

the backward classes in number. The significance of this is that

this class, being very economics-centred, is likely to support that

political grouping which promises economic growth with

reasonable price stability. The future may, after all, be with

Manmohan Singh rather than with Mulayam Singh. 

India was 'Forced' to Conduct Nuclear Tests

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

The reasons behind the resuming of nuclear testing are the

continuing negative reaction of the United States of lndia's

nuclear restraint since the 1974 test; the increasing threat from a

nuclear-armed China intent on providing Pakistan with offensive

capability against India; as well as the need to ensure that the

Indian deterrent is safe and reliable. After waiting for nearly 25

years for a positive response to India's soft policy, the country

has been forced into a series of tests to ensure its defence against

future nuclear blackmail.

Despite avoiding further testing since the 1974 "peaceful

nuclear exploration", India was met with sanctions on a range of

nuclear technologies "that were 85% civilian", in the words of

top policy-maker. He added that "even essential safety equipment,

as well as technology and material needed for peaceful

applications such as weather forecasting, were denied to us by

Washington". However, these sanctions had the effect of spurring

Indian scientists into developing supercomputers and other

equipment "that even China cannot match", he added.

Another reason for the resuming of testing by the world’s

sixth declared nuclear power was the stepping-up of China’s

assistance to Pakistan through its North Korean ally. The near-

total absence of United States reaction to such technology transfers

convinced Indian policy-makers that "we cannot expect any

credible US action to prevent cross-border proliferation by two

countries described by Washington as “strategic allies". In

contrast, the United States has taken an offensive position on

India, especially through favoured media outlets such as The

New York Times, "despite New Delhi’s total prevention of the

proliferation of strategic technology to other countries", said a

cabinet source, who added that "it is clear that by the time the

Clinton administration wakes up to the danger posed by the

China-Pakistan-North Korean axis, it will be too late for India,

unless we perfect our own deterrent".

Analysts believe that the policy of nuclear restraint followed

by India has encouraged both China and Pakistan to step up

their covert war against India. Islamabad has backed organisations

active in the terror campaign in Kashmir. China has given help

to insurgents in the North-east, and has provided logistical

support to terrorist groups operating within Bangladesh,

Myanmar and Thailand. "Enough is enough. It takes two hands

to clap, but only one to molest. Thus far, India’s restraint has

been met 'only by increased anti-India activities", said a high-

level policy-maker.

"Given that universal nuclear disarmament is utopian, and

that China is merrily proliferating, there was no option but to

take steps to perfect our deterrent", said a military source. He

added that "India being a full democracy, is much more

responsible than China or even Russia, where government

authority has ceased to exist in most sectors. Pakistan, using

money from its friends, is shopping for scientists and materials

to become a nuclear power. Under the circumstances, India was

left with no option but to resume testing", said a top policy-

maker, who added that "our scientists informed us that a

minimum number of tests was needed to ensure safety, especially

as the United States has banned all safety technologies to us since

1974".

Substance, not Form - Mistaking Posturing for Progress

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

The cooktail cliques reserve their choicest endearments for those

who have wounded Indian interests most. Zulfikar Ali Bhutto

was a particular favourite, despite his constant attempts to

actualise the ISI objective of a balkanised India. These days,

whenever Henry Kissinger comes to Delhi or Mumbai, there is

a scramble among the well—heeled to host him—possibly as an

expression of gratitude for the consistent hostility he displayed

towards New Delhi during his years in power.

Anatoly Dobrynin has, in his memories of Washington life,

revealed that the US and Pakistan signed a secret protocol in

1962 that assured that country of American support in the event

of any "aggression" by India. Not being aware of the nuances of

decision-making in a democracy, poor Ayub Khan believed that

this agreement guaranteed US military intervention on Pakistan’s

side in case the Indian Army beat back his offensive and entered

Pakistan territory. As a result, he grew bellicose and went to war

twice in 1965. The Soviets being as unused to democracy as the

Pakistanis panicked when told by Kissinger of this secret protocol

and put pressure on New Delhi to refrain from recapturing

"Azad" Kashmir.

Frontline State

Even an administration as paranoid as Nixon's would not have

dared to inflame public opinion in the US by militarily attacking

the world's largest democracy. Thus this "protocol" was another

of the placebos used to pacify dictators. Even today such

nostrums are being handed out—witness the many interjections

on Kashmir in western chancelleries. Except for the ISI, and its

dupes in the Valley, all others know that no country has the

capability to change Indian policy on Kashmir in a manner that

will dilute New De1hi’s sovereignty over it. Now the US claims

it wants to involve China in "resolving" India-Pakistan tensions-

a clever move to increase tensions between New Delhi and

Beijing.

During his first term in office, President Clinton gave

indications that his administration would be almost as hostile to

India as Nixon’s was, However, there seem to be glimmerings of

recognition of India’s status as a frontline state against terrorism

and hegemonism. Sadly, many of the officials in New Delhi

appear to be caught in the 1970s time warp, perceiving the US

as a hostile country. A recent example of this was the Indian

defence secretary's refusal to go to Washington to attend a

meeting cochaired by a "less senior" US official.

Strategic Objective

While India has had clear internal markers on the parameters

outside which it will block or otherwise stymie unfriendly

initiatives, thanks to politeness few of these have been made

public. Apart from the continued development of strategic

programmes to build up deterrent capability against the two

countries that have attacked India in the past, other markers

include the willingness to march into Pakistan-occupied Kashmir

and liberate the territory should Islamabad’s covert war against

India spill over into major population centres, as seems to be

happening now, Again, should Pakistan provoke another "hot"

war by further intensifying its terrorist campaign within India,

this time the strategic objective needs to be the liberation of the

Sindhi, Baluchi and Pashtun people from Lahore's domination.

Indeed, a mosaic of smaller states would not only damp

sectarian tensions in what is now Pakistan, but would also

develop much faster. The borders of these states can be guaranteed

by a common SAARC defence set-up. Finally, the goal should be

visa-less travel and a common intra-SAARC currency acceptable

within the region, even while the national identities of all the

states are protected. Rather than develop into fundamentalist

breeding grounds, as has taken place in Taliban-controlled

Afghanistan, these SAARC nations need to evolve into secular

democracies where minorities are given equal rights.

However, for such an outcome, it is important that our

policy-makers not accord primacy to form over substance. Silly

disputes over protocol are less important than the need for large

democracies to work together for international stability.

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
guerrillas.'

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
result.

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
assured.

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.

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

respectively.

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

flourish.

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.

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.

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.