On governing India: “Then who will come to us?”

Mohan Guruswamy is Chairman and founder of Centre for Policy Alternatives, New Delhi, India. He has over three decades of experience in government, industry and academia. He can be contacted at mohanguru[at]gmail.com.

Mohan Guruswamy

India, as one state, has never been larger. Like Ashoka’s great empire, the Mughal Empire never went down southwards and eastwards very much. The British ruled directly only in the three great presidencies of Bengal, Madras and Bombay and the four smaller units of the Punjab, the United Provinces, the Central Provinces and Berar, and the Northwest Frontier Provinces. Even after the doctrine of lapse was repudiated 601 princely states remained administering themselves and managing their day-to-day affairs quite independently, as long as Britain was acknowledged as the paramount power in India.

Civil_ServiceThe India of today is also much more of a nation sharing a common perception of its origins and history. With a billion people under its flag, today’s India, a fractious and youthful democracy with a billion unsatisfied aspirations would easily be the toughest public administration challenge in the world.

Its system of public administration evolved over the millennia as a system of exercising imperial authority, maintaining law and order, and raising revenues. In return the state offered security and stability, leaving the myriad communities to manage their everyday affairs in the traditional manner. It was a complex set of systems meeting the needs of a very complex society. The imperial state had its system of provincial and regional governors, vassals and satraps, all vested with the authority and power to enforce allegiance, collect taxes, conscript and maintain order. The towns were generally directly governed by the imperial state. In the villages the traditional system held sway.

Since land was the main source of income for the state, the maintenance of land ownership records and a continuous stream of information pertaining to its productivity, produce and prices became the central aspects of administration. Since taxpayers are, irrespective of the age, extremely unwilling to part with even a part of their earnings, the most appropriate coercive mechanism to enforce this went hand in hand with revenue administration.

This led to a very interesting division of labor between the imperial and traditional governments. Often while a capital offence like murder was a matter for the traditional court, brigandage and highway robbery became a matter for the imperial government because it had the potential to derail the status quo. Then like now, quite often robbers became chieftains and chieftains became rulers. The easy transition from daku to baghi and from baghi to raja is quite an ancient institution.

All this ended with the 1857 revolt. The abortive revolt had three great consequences. It marked not just the end of the Mughals and Maratha power in central India, but also the end of East India Company rule. This “first great war of independence” actually further enslaved India when on November 1, 1858 when Lord Canning, wearing court dress and riding a black horse emerged out of the fort in Allahabad to read a long proclamation by Queen Victoria. 

The Queen then 38 years old and still happily married to Prince Albert who was considered to be somewhat of a progressive, insisted that the “document should breathe feelings of generosity, benevolence and religious tolerance.” Its another thing that the reality rarely matched the fine sentiments, but that is a tradition that still endures.

In 1861 the Indian Civil Service (ICS) came into being. Each one of the 400 district officers in British India was henceforth a ICS officer as were all members of the higher bureaucracy. At no given time were there more than 1200 ICS officers in India. Two other significant events took place in 1861. Thomas Babbington Macaulay’s codification of Indian law came into effect and the Indian Police Act introduced uniform police service throughout India. In addition to the British District Officer, each district in British India was henceforth to have a British superintendent of police.

The ICS was divided into separate departments: the executive, which administered the districts, and collected the land revenues and taxes; the judicial, which provided judges for the district and high courts; the political, which provided officers for the diplomatic corps, residents and agents in the princely states; and the secretariat, which provided senior officials for both the central and state governments. Below this came the largely Indian and uncovenanted civil servants of the police, medical and forestry services, and in the agriculture and engineering departments, all adding up to another 2000 civil servants. This much-vaunted steel frame of India consisted of no more than 4000 British and Indian officers at even the worst of times.

The bedrock of this system were the 400 district officers, variously called Collectors and District Magistrates or Deputy Commissioners, who administered the districts, each with an average size of 4430 square miles conciliating disputes, dispensing justice and collecting revenues. A ICS officer became a district officer soon after the completion of his probation and was usually in his twenties lording invariably over a million people.

Each ICS officer was carefully chosen and was an eclectic combination of brilliance, personality and integrity. It was probably the finest civil service ever drawing its men, usually, from Oxford or Cambridge and after a tough entrance examination that included “the ability to jump a five barred gate on horseback with arms folded and stirrups crossed.” They were well paid and cared for, and usually incorruptible with a well deserved reputation for accepting no gifts other than flowers or fruit.

They wore their three initials with pride and saw themselves “as the modern equivalent of Plato’s Guardians, men bred, selected and trained to govern, selflessly and devotedly.” But what helped them most to stay that way was that they were servants of an foreign empire and agents of an authoritarian system. In 1868 the first Indian, Satyendranath Tagore of that famous family, went to London to take and pass the ICS exam. The last Englishman in the ICS, JPL Gwynn, retired in Hyderabad in the early 1960’s.

Imperial and authoritarian government, racial arrogance coupled with superior education made the ICS a superb instrument to serve British interests. In 1947 all that changed. Preserving the status quo was no longer the major priority of government. As national goals ostensibly changed newer taxes replaced land revenue as the governments source of income. Serving rather than ruling became the impulse driving government. India was to be transformed into a modern and progressive democracy.

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Lal Bahadur Shastri Academy of Administration, Mussoorie/photo-wiki

The total annual outlay of the Central and various State governments is now in excess of Rs.35 lakh crores. District outlays have long outstripped provincial budgets. The scope of government too has expanded and it encompasses many more specialist areas. The district officer is no longer a mere collector of revenues, preserver of order and projection of imperial authority, but the prime change agent of government and the administrative pivot of all developmental activity. But yet the old steel frame of the Raj, now largely rusted, rundown and rapacious endures.

A typical district officer is usually still in his twenties or early thirties. But unlike his ICS predecessor the IAS District Collector or deputy Commissioner has neither the unquestionable authority conferred either by racial exclusivity or superb education or social class or all three to dominate and control the lower bureaucracy. As required in a democracy the executive is subservient to a government by elected politicians. According to a study by SK Das, IAS, the average tenure of a district officer is now about seven months. He or she invariably falls victim to the constantly changing and treacherous currents of an intensely competitive political system with the common people paying a heavy price for it. India still ranks among the bottom ten of the international human development index.

Clearly we need to restructure government and administration in each of India’s 568 districts. The District Collector/Deputy Commissioner, like his ICS predecessor must become the executive head of the district with all branches of government subject to his/her authority and power. This must particularly include the police. The district officer must be re-designated as the Commissioner and should be an officer with over 16 years of service, a mature and seasoned individual with the seniority and clout to exercise complete authority over the administrative apparatus. This seniority will also give him/her the experience and guile needed to deal with the political system. Above all the Commissioner must have a fixed tenure of at least five years and a board consisting of elected representatives of the district as well as administrative superiors must make his/her selection to the position.

In the late 1980’s the then Prime Minister, Rajiv Gandhi, was reportedly contemplating such a restructure of government. No sooner the word got around, the traditional politicians opposed it, as it would deprive them of much of their clout. The former Deputy Prime Minister, Devi Lal, jeered it as a PM to DM system which would by-pass all other political structures. I once suggested this to a group of Chief Ministers only to have it shot down with a terse “then who will come to us?”

 

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The Uighur Visa Controversy

Mohan Guruswamy is Chairman and founder of Centre for Policy Alternatives, New Delhi, India. He has over three decades of experience in government, industry and academia. He can be contacted at mohanguru[at]gmail.com.

Mohan Guruswamy

There is more than what meets the eye of the recent controversy on the issuance and withdrawal of visas to Dolkun Isa and Omar Kanat of the World Uighur Congress (WUC). Things are not what they seem. The visas were given despite or because of the antecedents of all the parties concerned.

The WUC describes itself as an international organization that represents the collective interest of the Uighur people both in East Turkestan and abroad. The main objective of WUC is to promote the right of the Uighur people to use peaceful, nonviolent, and democratic means to determine the political future of East Turkestan.

The WUC is Washington based. It also has a large presence in Germany. Ms. Rebiya Kadeer heads it.  A successful businesswoman, Kadeer was at one time one of the five richest people in China. Kadeer was not always at odds with the government, and was once a delegate to the National Peoples Congress. She was also an official PRC representative to the Fourth UN World Conference for Women in 1995. She left China in 1996 to fight for the rights of the Uighur people. She is clearly a woman of substance as well as means.

The other organization that was at the centre of the recent events is a somewhat lesser known outfit called Initiatives for China  (IFC). The IFC describes itself as grassroots movement dedicated to advancing a peaceful transition to democracy in China. It was ostensibly for the IFC organized Sixth Interethnic/Interfaith Leadership Conference to bring together various ethnic and religious groups from China. This conference series is funded by the National Endowment for Democracy (NED), which in turn is funded by the US Congress.

The NED’s aim is to support groups abroad “who are working for freedom and human rights, often in obscurity and isolation.” Clearly it aims to use aspirations for democracy and self-determination to pry open otherwise closed or highly centralized regimes. But very selectively. The NED is not concerned about the situation within many US allies like Saudi Arabia or Israel, but very concerned about what goes on in rivals like China or Russia. It has a clear agenda, which is to further the US interest. It operates in close co-ordination with the CIA, which also reports from time to time to the US Congress.

What is interesting is that the Interfaith/Inter-ethnic Conference was taking place in India. All such conferences need GOI permission. Did the Indian government grant it permission? The roles of some “think-tanks” which have come into some prominence after the regime change in New Delhi are being spoken about in this connection. The National Security Advisor, Ajit Doval, is by past association and present relationship at the apex of two of Delhi’s busiest and most well funded “think-tanks.”

Both these outfits have risen up the food chain due to the munificence of western agencies and other organizations that have increasingly kept them sleek and well fed with conference partnerships and research grants. Little of this money is for free. The advancement of agendas never lets up. But rightist think-tanks the world over usually think alike and act in concert.

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File photo/wiki

The raking up the Uighur issue is not without reasons. Along with Tibet, Xinjiang is a perceived weak link in the post 1949 Chinese empire. Both regions are also across India’s frontier with China. Xinjiang or East Turkestan abuts the Ladakh district of Jammu and Kashmir.

Like Tibet, Xinjiang also had a troubled relationship with China. Chinese dominance waxed and waned with the ebbs and tides of imperial power in Beijing. After 1912 when Sun Yat Sen proclaimed a republic, by now enfeebled China for all practical purposes lost all authority in Tibet and Xinjiang. Chinese garrisons were driven out and local leaderships assumed complete authority.

While Tibet was securely under the control of the Buddhist theocracy, Xinjiang came under the sway of several warlords till 1941 when a renegade KMT general turned warlord, Sheng Tsi Tsai, established a Soviet Republic under the close guidance of the Comintern in Moscow. The Russians now moved in. They took over all international relations and trade.

It had consequences in India, because it caused the British to Ladakh’s border outwards by incorporating Aksai Chin to create a buffer. In 1949 Stalin handed over Xinjiang to the newly established Peoples Republic of China of Mao Zedong. It was in the process of occupying Tibet and Xinjiang that China occupied Aksai Chin.

In 1949 the population of Xinjiang was comprised almost entirely of various Turkic nationalities of which the Uighurs were the largest. Han Chinese only accounted for 6%. Thanks to a continuous migration sanctioned and blessed by the authorities in Beijing that proportion has now gone up to almost 48%. Much of this is centered in Urumqi, Xinjiang’s capital, which is over 80% Han. The Uighurs are still the majority in the region below the Khotan and Kashgar line. This is the region that abuts India.

The gas and oil finds in the immediate region have given impetus to the development of the area. But unfortunately the gains have not been equally shared. The Uighurs still continue to be less well off and deprived. The feeling that it is their national resources that are being exploited by the Chinese authorities to mostly benefit the Han migrants is quite pervasive among the Uighurs.

When I visited Xinjiang some years  ago, shopkeepers in the bustling ancient marketplace were quite open and vocal about their sentiments. Many Uighurs speak a bit of Urdu due to the burgeoning relationship developed with Pakistan after the construction of the Karakorum highway. Urumqi has several restaurants that advertise themselves as serving Pakistani food.

There is also another unintended but nevertheless burgeoning Pakistan connection. Well known Pakistani institutions like the Lashkar-e-Taiba and the Jamat ul Dawa have trained no less then four thousand Uighurs to wage a jihad in their homeland. The ISI connection with these outfits is well known. It helps the Pakistanis keep the Chinese obliged to them.

The downfall of Punjab

 Mohan Guruswamy is Chairman and founder of Centre for Policy Alternatives, New Delhi, India. He has over three decades of experience in government, industry and academia. He can be contacted at mohanguru[at]gmail.com.

Mohan Guruswamy

The Badal and family managing agency in Punjab has done better than many of our industrialists in fraudulently extracting funds from our PSU banks by borrowing for its food purchase scheme against non-existent stocks or by disposing off hypothecated stocks. The RBI has now ordered the lending PSU banks to declare the advances as NPA’s. It is learnt that about Rs.20,000 crores worth food stocks are not in stock. They either were never there or hypothecated stocks were disposed or both. The hole is huge and the banks will be unable to lend the Punjab Government more money to further perpetrate the fraud.

So who comes to its rescue? It is the friendly Central Government, which is now going to give it cash credit of Rs.20,000 crores so that “food purchases’ can go on as usual. It was only last week that the Supreme Court had to tersely order the Central Government to immediately release budgeted MNREGA funds for famine relief works in acutely drought hit regions like Marathwada. Consequently Rs.12,000 crores was reluctantly released. Maharashtra has a BJP led government, but unlike Punjab it doesn’t have elections soon. So BJP ministers like Eknath Khadse can use scarce water to bind the dust down at helipads and Pankaja Munde, streaked hair and bejeweled hands and all, can take  selfies at drought relief works in Latur. But in Punjab the viability of the Badal business is seriously challenged and the rejected MP aspirant from Amritsar, who is now the Finance Minister, responded with alacrity to help his friends tide over a tight spot.

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file photo/wiki

Despite this the Punjab Civil Supplies and Food Minister, Adarsh Prakash Singh Kairon, a man with a prominent and known lineage, has the temerity to say: “The food purchase scheme is not a profitable proposition. Punjab is mainly doing it in the national interest.” The notion that Punjab feeds India is quite absurd now. India has for a few decades now produced much more food grains than it needs. India exported an Foodgrains worth an average of Rs.6000 crores a year since 1991 and last year it touched Rs.27,000 crores. The production has been in the vicinity of 260 million tons during the past three years, despite the droughts. India has food reserves of 49 million tons worth Rs.50,000 crores and twice more than is needed.

So it is actually the other way around. The rest of India supports Punjab, with this absurd minimum support price (MSP) scheme, which is actually an above the market price scheme. This combined with the PDS of low priced cereals is actually a gigantic subsidy scheme. The total subsidies allocation in Budget 2016 is Rs. 2,50,433.00 crores, of which more than half goes towards food subsidy and another quarter goes for fertilizer subsidy. The bulk of the procurement accrues in the states of Punjab, Haryana, AP and MP. Which means the bulk of the MSP subsidy accumulates here.

There is no doubt that Punjab is a major food grains production centre, but the notion that it feeds India is quite exaggerated. In 2015 of the total national food  grains production was 264 million tons, of which Punjab produced 27.4 million tons or about 10%. Admittedly Punjab’s productivity is much higher than the rest of the country’s as it accounts for only about 5% of the 54 million hectares of irrigated farmland.

The claims of the Punjab government too foster this fiction. Its website claims “ It contributes nearly two thirds to the total production of food grains and a third of milk production in the country. It is the leading producer of wheat, thereby contributing to the national food security. Even though Punjabis account for less than 2.5% of the Indian population, they are one of the most prosperous races in India. Their per capita income is twice the national average.” The national per capita income at current prices is Rs.74000 and Punjab’s is Rs.92,000. Yet most of us have internalized the long gone story of Punjab standing between India and starvation, and Punjab being the most prosperous state in the country.

God and this country have both been good to Punjab. Today 85.15% of all land in Punjab is arable and 89.72% of it is with perennial irrigation. More than half of this is due to the huge central government projects, Bhakra Nangal being the most notable among them. The British in their quest for land revenue rightly chose Punjab for special attention. They invested in its irrigation. But after 1947 this trend accelerated. In this year 1955 the total national outlay for irrigation was Rs.29,106.30 lakhs. Of this Punjab got Rs.10,952.10 lakhs or 37.62%. By contrast Bihar got only Rs.1,323.30 lakhs, which is only 4.54% of the irrigation outlay. The Bhakra Nangal dam, one of Jawaharlal Nehru’s grandest temples of modern India, planned with an outlay of Rs.7,750 lakhs, alone irrigates 1.44 million  hectares or about 40% of Punjab’s net irrigated area. The consequences of this bounty are manifold.

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file photo/wiki

The spectrum of regional inequalities in India is a very wide one. Punjab and Bihar represent the two ends of the wide spectrum. Though this might even have been the case historically, a study of state GDP’s in the decades after independence reveals that the width of the spectrum has only widened. In 1965 Punjab’s per capita income was Rs.562 and was 1.7 times that of Bihar’s Rs.332. Punjab now has a per capita income of Rs. 92,000 and Bihar Rs.31.000, or about 3:1. But other changes have also set in. Once India’s most prosperous state, it now lags behind Haryana, Maharashtra, Gujarat, Kerala and Telangana as is about par with the neighboring hill state of Himachal Pradesh.

Punjab has all the bounties nature can give, and it has had more than its rightful share of central government assistance, not just in terms of food procurement and subsidies but also by way of employment.  Punjab has also benefited by a disproportionately large recruitment into the armed and paramilitary forces giving most rural families a second stream of income.  Each year about 60,000 Punjabi officers and men retire from the armed forces and  over a million draw pensions. Yet Punjab is afflicted with a severe blight. A study by the department of Social Security Development of Women and Children found that 67 percent households in Punjab have at least one person addicted to drugs. Yet another study by the Narcotics Bureau discovered that almost 40% of men in Punjab are addicted to drugs.

So what has brought Punjab to this pass? One is that Punjab has been reeling under bad governments. Its politicians and their bureaucratic fellow conspirators, irrespective of party affiliations, have been among the country’s most venal and corrupt. A Punjab Police SP allegedly facilitated the attack on the Pathankot airbase by Pakistani terrorists. The silence that has descended around him is understandable. According to a former Punjab DGP, a few years ago the intelligence department had compiled a list of the drug barons. This list had names of powerful politicians from every political party and police officials at every level. Salwinder Singh is only the tip of the iceberg. Unless Punjab gets a better government the downfall will continue.

JFK, China and India

Mohan Guruswamy is Chairman and founder of Centre for Policy Alternatives, New Delhi, India. He has over three decades of experience in government, industry and academia. He can be contacted at mohanguru[at]gmail.com.

Mohan Guruswamy

Book Review: JFK’S FORGOTTEN CRISIS: Tibet. The CIA. And the Sino-Indian War / Bruce Riedel / Harper Collins India

The complex tale of the evolution of India-USA relations is well known. But the close tango by the two for a brief period in 1962 is little known and seldom told. Ever since its birth as a communist state, China and the USA had an intensely adversarial relationship. India’s choice of remaining uncommitted during the age of Containment and Cold War, and Pakistan’s geography making it a frontline state and political choice of becoming a Cold War partisan, largely shaped Indo-American relations, as they do even now.

In 1950 China entered the Korean War against the US led UN forged alliance, a war that cost the US almost 34000 combat deaths. North Koreans and their Chinese allies together lost over 1.5 million, but it was still considered a Chinese victory. It will be worth remembering that India sent a military medical unit to Korea to serve with the UN forces. India nevertheless served as a conduit between Communist China and the USA that helped them come to the table at Panmunjom to end the Korean War. The USA had also conveyed its threat to use atomic weapons should the PLA continue with its offensive via India.

JFK-china-indiaIndia and China were never neighbors. India’s northern neighbors were always Tibet and Xinjiang. These two territories have a long history of being alternately under China’s over-lordship and free. In 1947, when India became independent, both these nations were enjoying freedom from China. Xinjiang was an independent Soviet Republic under Russia, and Tibet was enjoying full political freedom.

In 1913 the Tibetans declared independence after the collapse of the Qing dynasty and the establishment of a Republic in China under Sun Yat Sen. They attacked and drove the Chinese garrisons in Tibet into India over the Nathu La. Also in 1913 the British convened the Simla Conference to demarcate the India-Tibet border. The British proposed the 1914 McMahon Line, as we know it. The Tibetans accepted it. The Chinese Amban however initialed the agreement under protest.

At the crux of India-China conflict or rivalry is the larger question of the national identities of the two nations and when and how they evolved. The Imperial India of the Mughals spanned from Afghanistan to Bengal but did not go very much below the Godavari in the south or Brahmaputra in the east. The Imperial India of the British incorporated all of today’s India, Pakistan and Bangladesh, but had not Afghanistan, not for want of trying.

Despite the Simla Agreement of 1913, it was only in 1935, at the insistence of Sir Olaf Caroe ICS, then Deputy Secretary in the Foreign Department, the McMahon Line was notified. There was a hiatus again for it was only in 1944 that JP Mills ICS established British Indian administration in NEFA, but excluding Tawang. Tawang continued to be administered by the Lhasa appointed head lama at Tawang despite the fact that it lay well below the McMahon Line. This was largely because Henry Twynam, the Governor of Assam lost his nerve and did not want to provoke the Tibetans. In 1947 the Dalai Lama (the same gentleman who is now in Dharamsala) sent the newly independent India a note laying claim to some districts in NEFA/Arunachal, including Tawang.

On October 7, 1950 the Chinese attacked the Tibetans at seven places on their frontier and made known their intention of reasserting control over all of Tibet. As if in response, on February 16, 1951 Major Relangnao ‘Bob’ Khating IFAS raised the Indian tricolor in Tawang and took over the administration of the tract.

The point of this narration is to bring home the fact that India’s claim over Arunachal Pradesh doesn’t rest on any great historical tradition or cultural affinity. We are there because the British went there. But then the Chinese have no basis whatsoever to stake a claim, besides a few dreamy cartographic enlargements of the notion of China among some of the hangers-on in the Qing emperor’s court.

After independence the relationship between the US and India was cold and often thorny due to the USA’s Containment policy that sought active participation of Communist country neighbors in their ring fencing.  Pakistan with its eye on India happily became a length of this ring fence. India-USA relations further soured with India actively and stridently espousing “Non-Alignment.” American officials perceived India’s policy of non-alignment negatively. US Ambassador Henry F. Grady told Jawaharlal Nehru that the United States did not consider neutrality to be an acceptable position.

Nehru also rejected American suggestions for resolving the Kashmir crisis. India also rejected the American advice that it not recognize the Communist regime in China. India in the meantime established a warm relationship, or so it thought, with Maoist China. Using that as a footstool India tried to climb up into global diplomacy by acting as an honest broker to help end that war. India was also loud in its advocacy of China’s immediate membership in the United Nations and taking a seat on the Security Council instead of the Kuomintang led Republic of China.

But in 1959, the long festering Sino-Indian border dispute sprang into the open when the Dalai Lama once again sought refuge in India. The Chinese saw it as yet another proof of India’s inimicality towards it. There were other things happening that further convinced the Chinese of this. In 1950 the CIA office in Calcutta  established a link with the Dalai Lama’s older brother, Thupten Norbu. The USA was keen to use Tibet to open up another front against China. Which is exactly what they did in 1957.

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Bruce Riedel

The CIA began training Khampa warrior tribesmen from Amdo, the home district of the Dalai Lama, in Colorado where the high altitude mimicked Tibetan conditions. The CIA established a forward base for them at the then Pakistani airbase at Kurmitola near Dacca. They then parachuted sticks of them into Tibet to lead the expected insurrection. Very few survived. The USA was also to later use this airbase, as well as the airbase at Peshawar, to launch U-2 flights over China and Russia.

The Chinese believed that the Tibetans were being air dropped by the Indian Air Force and protested several times about “Indian” air incursions. Delhi didn’t seem to have a clue about what these protests were about. The Americans were quite happy to make the Chinese believe just that, as it served the added purpose of discomfiting the Nehru government, which had made the Pancha Shila doctrine its cornerstone for foreign policy.

In 1960, the newly elected US President, John F Kennedy, initiated a foreign policy change that envisaged India as a democratic bulwark against communism. JFK invested heavily in this notion and his administration sent a presidential confidant, John Kenneth Galbraith, as the US Ambassador to India. Galbraith quickly established a rapport with Nehru and began to be counted as a personal friend of the PM.

Galbraith was also a famous economist and Nehru turned to him for advice on domestic policy matters also. Galbraith worked his connections with the White House to sponsor a $1 billion economic assistance package for India. A billion dollars was colossal amount of money those days. Clearly JFK was putting his money where his mouth was. This only alarmed the Chinese and confirmed to them their still widely held notions of the perfidious Indian.

The 1962 border war caused more than a panic in India. Indian leaders were devastated by the speed and relentlessness of the Chinese assault. The collapse of India’s vaunted 4th Infantry Division in just two weeks of fighting in NEFA caused a despondency never seen before or again in New Delhi.

On November 19, 1962 Jawaharlal Nehru wrote a letter to Kennedy entreating stepped up US military assistance. India even proposed joint air operations by the USAF and IAF to defeat the Chinese and save Assam from falling into Chinese hands. Delhi was already buzzing with rumors that China had promised to give Assam to Pakistan. For a brief moment in its modern history India contemplated becoming an active US ally and a vital cog in its Cold War containment policy.

Bruce Reidel has been a top CIA official and its in house expert on South Asia. He is now a Senior Fellow at the Brookings Institution and the Director of the Brookings Intelligence Project. His views still matter and successive US presidents, including Barack Obama, hugely relied on him for advice on the region.

Reidel writes with immense knowledge and access to hitherto top secret documents, but with eloquent brevity. He tells all and says all without using up many lines of wordage. He has an eye that can focus with hawk like precision on the relevant detail and keep looking at the big picture also. This is a book that everyone who is interested in the brief shining moment that was Camelot, should know about the brief shining moment when India and America came together. And how the Chinese wrongly credited US’s Tibet policy to India.

 

Economy: Time to get Real?

Mohan Guruswamy is Chairman and founder of Centre for Policy Alternatives, New Delhi, India. He has over three decades of experience in government, industry and academia. He can be contacted at mohanguru[at]gmail.com.

Mohan Guruswamy

To claim that things are getting better in their tenure and because of them is an old Prime Ministerial habit. A PM is undoubtedly a very important person in our dispensation.  The office is vested with great authority and there is an aura about the incumbent that often fools even the cameras whose lights seem to caress rather than expose the object of their focus. 

Our system of government, with so much power of patronage concentrated in one person, ensures that mostly fawning and obsequious people who constantly whip up a lather of simulated adulation surround the Prime Minister. PM’s consequently confuse the power of patronage with the power that ensures compliance. It is small wonder when our supreme leaders start thinking of themselves as King Canute’s who can order the waves about.

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Image Source: PM Narendra Modi’s Facebook page

The reality is that like the ocean’s waves, economic waves too are cosmically controlled and PM’s are like King Canute’s who futilely wave their hands about. Happily most PM’s realize this and make sure they are seen waving their hands appropriately with the tides of growth and the ebbs of inflation. But once in a while we get a leader who actually believes that the waves are obeying him. That is when we enter dangerous waters.

I recently attended an event that Prime Minister Narendra Modi addressed. Unlike most other PM’s he came promptly at almost the appointed minute and walked briskly to his place on the dais with his characteristic wrestler’s swagger. He listened as the host, an Englishman with a wry sense of humor, exclaimed how fortunate India is to be united as never before under one charismatic and bearded man. The Prime Minister looked on expectantly and the audience was suitably primed to roar its approval, when the host added, sotto voce, Virat Kohli. Mr. Modi wanly smiled at the denouement.

The Prime Minister then spoke and without much ado took the fight straight to the critics, a few of who like me were seated in the front row. He said: “For India to be at the top of the growth tables is an unusual situation. Obviously, there are some who find that difficult to digest and come up with imaginative and fanciful ideas to belittle that achievement.” This is unfair. But it is churlish to say that his critics do so because his government is getting tough on businesses with huge NPA’s.  To be truthful based on facts as perceived does not mean a person takes pride in belittling one’s own country? Is the next litmus test of patriotism going to be supporting the PM’s extravagant flights of fancy?

The Prime Minister’s case is that “India’s economic success is the hard-won result of prudence, sound policy and effective management.” He repeated: “India’s growth rate is acknowledged as the highest among major economies.” With evident sarcasm he added that his critics are confused when they say, “the growth rate does not feel right” and generously offered to alleviate the confusion with “facts in place of feelings.” The point here is no critic of any consequence ever argued that the growth rate “does not feel right.” They have just said that his government’s interpretation of the facts is not right.

Take GDP growth for instance. Few argue that the “real’ GDP growth is 7.4%, as his government is claiming though there have been serious misgivings on how the GDP calculations were tweaked to jump growth a further 2.2%. The problem here is the use of the term “real.”  In the real world the number that matters is the “nominal” GDP growth rate, which is a measure of current market prices.

For much of the past decade India’s nominal GDP growth was in the 10-15% range and corporate profitability growth was also in that range. Since inflation used to be in the 4-8% range, real GDP was in the 6-9% range. The present nominal GDP growth is 5.2% and instead of inflation we have a deflation of 2.2% giving a real GDP growth of 7.4%.

But the popular mood is determined by actual accruals and not by economic sleight of hand.  In the real world it is the nominal GDP that matters. Corporate sales and profitability are calculated in nominal terms. Everyday commerce and business takes place in nominal terms. Government revenues are collected in nominal terms and levied on nominal incomes or sales. It is not a matter of feeling but the reality of life.

The fact is that 2015-16 has been a bad year for the Indian economy. In the budget for 2015-16 the government set a nominal GDP growth target of 11.5%. The nominal GDP growth turned out to be just 5.2%, or 6.3% below target.  The real GDP growth of 7.4% is because of the collapse of world commodity prices and has little to do with the so-called “prudent policies.” Comparing apples with oranges can only fool some people for some of the time, and not all the people for all the time.

While on apples and oranges, food inflation is the inflation that matters to most people in this country where the average family expends over 60% of its income on food. This inflation has been well over 25%. The WPI that that government favors has been in the negative zone because of a huge fall in commodity prices. The prices of oil, steel, cement, engineering goods and many other items that mostly comprise the WPI basket have been falling. The global economy is suffering from a surfeit of overproduction and excess capacity.

In his unspooling of statistics the PM made a particular mention of a ‘smart pick up of credit.” He gave a figure of a pick up by 11.5% in February. Its still March now and it is unusual to get data out that fast. But then a PM can always get the data he wants? The fact is that for the last year credit off take growth for manufacturing has fallen from 21% to 7.1%; construction from 27.4% to 4.1%; mining from 17.1% to a negative 8.2%; industries from 9.6% to 5.2%. Only electricity credit off take has just about held course by dropping from 13.7% to 12.7%. Maybe February 2016 is the point of inflection. But shouldn’t we wait a bit to see if a trend is in the making?

The PM referred to a smart upturn in FDI and mentioned a figure of $42 billion for the year. It might be so. But Global Financial Integrity (GFI), a respected Washington DC based think-tank estimated that last year Indian illicit outflows amounted to $83 billion. Last year Indian entities also officially invested $18 billion overseas as FDI. So how and where does this leave us?

In his speech the PM also specifically referred to the Pradhan Mantri Mudra Yojana. The MUDRA (Micro Units Development and Refinance Agency) CEO Jiji Mammen claims it has disbursed 3.22 crore loans amounting to Rs.1.22 lakh crores. The PM then makes the rather far-fetched assumption that every such loan would have created at least one job each. Thus he gets an astounding figure of 32 million jobs created by just MUDRA alone. 

One is tempted to dismiss this as just fanciful claims, but in these times when ones patriotism and professional integrity is apt to challenged for lesser lese majeste, it will be prudent to just say: “Aap key muh mein ghee aur shakkar!” But it is time to get real too.

Obama breaks the ice: Viva Fidelismo!

Mohan Guruswamy is Chairman and founder of Centre for Policy Alternatives, New Delhi, India. He has over three decades of experience in government, industry and academia. He can be contacted at mohanguru[at]gmail.com.

Mohan Guruswamy

On January 1st, 1959 the 32-year-old Fidel Castro’s guerilla army entered Havana driving out the US supported dictator Fulgencio Batista.  There was a huge excitement in the USA over Fidel Castro as his campaign to oust Batista was being reported in the New York Times by its correspondent Herbert Mathews who was, to use a term current these days, embedded with the guerilla army.

Under the Batista regime Havana was a favorite holidaying place for American tourists looking for fun on the cheap, Cuba being just 90 miles from Florida. US gangsters like Meyer Lansky and Charles “Lucky” Luciano owned beachfront properties in a Havana glorified in the writings of expatriate American writers like Ernest Hemingway. Hemingway immortalized two of his favorite watering holes with the quote: “”My mojito in the Bodeguita del Medio and my daiquiri in the Floridita.” Tourists poured in for the cheap booze, the nightlife and easy morality.

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In Havana

Since 1820 when Thomas Jefferson thought “the most interesting addition which could ever be made to our system of States” and told Secretary of War John C. Calhoun that the United States “ought, at the first possible opportunity, to take Cuba”, the Spanish colony was high on the US agenda.

In 1897 President William McKinley tried to buy Cuba from Spain for $300 million. Spain’s refusal triggered off the Spanish-American War in which Spain was defeated and forced top “free” Cuba. Till the advent of Castro, US backed dictators, for the convenience of US business interests, ruled Cuba. Since 1898 the US militarily intervened in Cuba four times and had a military base in Guantanamo to keep an eye on events on the island, much like a British garrison in one of India’s princely states. US corporations owned 60% of Cuba’s sugar industry and imported almost 95% of its sugar crop.

Thus, the advent of the revolutionary, Fidel Castro, marked the end of US business as usual. One of Castro’s first acts was to drive out the American gangsters and nationalize US businesses. His romantic idealism won him overwhelming popularity of the Cuban masses and fired the excitement among young people in US campuses. The dictionary got a new word- Fidelismo, meaning “belief in, adherence to, or advocacy of the principles of Fidel Castro.”

On April 25, 1959 Fidel Castro was invited by the Harvard Law School’s student law forum to speak to its members at a Cambridge café. But soon over 3000 students registered to attend. The meeting was then shifted the Dillon Field House, where over 35000 wilding cheering and supportive students from the Boston area’s many educational institutions. Watching this an alarmed McGeorge Bundy, the Dean of Harvard College, thought that the US needed a plan to counter Castro’s charisma. The following year he became the recently elected President John F Kennedy’s choice as National Security Advisor. The die was thus cast for the future US-Cuba relations.

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Obama shakes hands with Cuba’s Castro at Mandela service

The Kennedy Administration inherited plans made by the CIA to bring down the new Castro regime and restore the days of business as usual. The Eisenhower administration prudently left its plans for the next administration to execute.  The main plan was an invasion of Cuba ostensibly by a émigré Cuban army. This was modeled on the template provided by the CIA orchestrated overthrow of the leftist Jacobo Arbenz regime in Guatemala in 1954. 

The CIA was coming from a run of successes having overthrown the nationalist Shukri al-Quwatli government in Syria in 1949, the nationalist Mohammed Mossadegh government in Iran in 1953, almost pulling off the overthrow of the communist regime in Hungary in 1956, and overthrowing the new post colonial government of Patrice Lumumba in Congo in 1960.

The CIA plan for Cuba called for the seaborne invasion by about 1400 US Army trained fighters organized into one paratroop and five infantry battalions, at a place called the Bahia de Cochinos or Bay of Pigs in Trinidad at the foot of the Escambray Mountains. The invasion of April 17, 1961 was preceded by softening up bombing missions undertaken by eight B-26 aircraft with barely concealed USAF markings flying from Guatemala. The invasion was an unmitigated disaster. Castro’s forces were better prepared, and the invasion force floundered on the rocky shoals, which the US satellite photo analysts opined was sponge. As the rebels tried to wade ashore, Cuban militiamen on the shore moved them down with a relentless machine gun fire. 

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President Castro and Vice-President Nixon in Washington on April 15, 1959

This is when the plan came a cropper. President Kennedy refused to sanction the CIA’s disguised plan of for converting the covert plan into the overt support of the invasion with US Navy ships and marines. As America watched in horror, Castro’s forces either killed or took prisoner the entire invasion force. Kennedy quickly took responsibility for the defeat and privately was furious that he was taken in by the CIA’s assurances of a “popular revolt.” He asked his brother Robert Kennedy: “how could we have been so stupid?”

But this obsession with getting rid of Castro persisted.  While the CIA upper echelon was quickly fired, other elements of the CIA’s notebook of plans to liquidate Fidel Castro were put in motion.  Project Mongoose was to take the help of the US mafia chieftain, Sam Giancana, to assassinate Fidel Castro with either gun or knife or poison. Giancana had another Kennedy connection also. He shared the favors of a lady called Judith Exner with the American President.

One of the more exotic plans was to cause depilation and hence loss of the charismatic Fidel’s signature beard. Several attempts were discovered and the would be assassins were promptly executed. These attempts only fuelled more Cuban insecurities and pushed Castro further into the Russian camp.

This led to the events of October 1962 when Soviet nuclear IRB missiles were detected in Cuba. The crisis as a consequence of the US naval quarantine took the world to the precipice of a nuclear Armageddon. Luckily good sense prevailed and Soviet missiles in Cuba were publicly taken back, in exchange for a more discreet withdrawal of US’s nuclear tipped Jupiter missiles in Turkey, and the assurance that the US will not involve itself again in trying to overthrow the Castro government. From October 1962, this situation remained frozen.

The US’s émigré Cuban population concentrated in Florida became a strong and permanent anti-Castro voting bloc in the state and was the bedrock of the Republican Party. This influence over US politics required Cuba’s quarantine continued by other means. Trade and tourism with Cuba was outlawed and Cuba in many ways remained frozen in time. Even today automobiles of the 1950’s vintage predominate Havana on roads, and art deco architecture still dominates its skyline.

But the revolution had its many benefits. It promoted a degree of self reliance and innovation that helped Cuba exist despite the end of the USSR, and the end of communism in China. Cuban medical care and educational achievements is now the model for the developing world. Its sportspersons, particularly its boxing teams won world renown for their excellence. Most of them remained loyal to the Castro regime despite lucrative US blandishments. In a region that was determined to be under the US sphere of dominance, Cuba remained a solitary symbol of defiant independence.

This was so till last week, when US President Barack Obama decided to junk a over half century old shibboleth and break the ice with Cuba. Cuba will now change. But history will record that the USA changed first.

माल्या को माल देने वालों पर कार्रवाई कब?

मोहन गुरुस्वामी दिल्ली स्थित सेंटर फॉर पॉलिसी ऑल्टरनेटिव्स के संस्थापक अध्यक्ष तथा केंद्रीय वित्त मंत्रालय के पूर्व सलाहकार हैं. उनसे mohanguru[at]gmail.com पर संपर्क किया जा सकता है.

हमारे कारोबारी समूहों से पैसे की धार राजनीतिक समूहों की तरफ बह रही है. इनमें मुख्यधारा की राजनीतिक पार्टियों के अलावा बस्तर के नक्सलवादी और असम के उल्फा उग्रवादी तक शामिल हैं. हमारे यहां कई उद्यमी हैं जो उद्यम कम करते हैं और जिनके पास मौजूद ज्यादातर पैसा सार्वजनिक बैंकों का है. सवाल यह है कि भारतीय रिजर्व बैंक इस प्रक्रिया को रोकने की कोशिश क्यों नहीं करता. कंपनी मामलों का विभाग चुप क्यों है? अरुण जेटली का मौन समझ में आ सका है, लेकिन रघुराम राजन को बैंकों की नकेल खींचने में क्यों हिचक हो रही है?

पूरा आलेख सत्याग्रह पर पढ़ें.