Usual Suspects

By Swapan Dasgupta

For the past 100 years, there have been two sharply conflicting perceptions of Bengalis. The first takes off from Gopal Krishna Gokhale's astonishingly non-prescient testimonial, "What Bengal thinks today, India thinks tomorrow." The second centres on the Bengali bhadralok as the obvious inspiration for Rudyard Kipling's chattering, disruptive bandarlog in Jungle Book.

Few communities in India have been the object of so much simultaneous admiration and disdain as Bengalis. The enlightenment of Rabindranath Tagore, and the artistry of Satyajit Ray constituted a defining facet of the Bengali inheritance. But this awe was also offset by the exasperation with the indolent, over-politicised and disruptive Bengali. Till the early-20^th century the Bengali babu was regarded as an epitome of high-minded effeteness—the man who would be Devdas. By the 1960s, he had been transformed into a prickly contrarian, screaming cholbe na—a ridiculous Don Quixote with a Red Book.

For 34 years, the Left Front monopolised, the politics of West Bengal because it engulfed both traditions. It incorporated 'progressive' politics with its earnest concern for the 'struggling masses'—a romantic ideal that, along with the glorification of squalor and poverty, appealed to the lofty Bengali self-image. And in its espousal of endless bandhs, strikes and 'cadregiri', the Left blended a perverse sense of entitlement with cussedness.

The Communist movement did more than merely direct the course of politics: it reshaped the Bengali character. From aspiring to bourgeois refinement, the Bengali in Bengal (to be distinguished from their expatriate cousins) began worshipping at the altar of insolence and bloody-mindedness. In the shift from the stylised but happy rusticity of a Jamini Roy painting to the wall graffiti of angry, gorilla-faced peasants brandishing sickles and the Red Flag lie the story of Bengal's regression.

Election manifestos, as Devi Lal once famously remarked, aren't meant to be read. Yet, it is worth glancing through the Trinamool Congress manifesto for next month's Assembly election to gauge the extent of Bengal's decline. In 1975-76, the share of industry in West Bengal's Net Domestic Product was 19 per cent; by 2008-09, it was down to 7.4 per cent. In 1976-77, it had 7.6 per cent of the total number of factories in India; by 2008-09, it was 4 per cent. In 1976-77, after nearly a decade of Left-inspired turbulence, Bengal still accounted for 13.3 per cent of employment in manufacturing; it nosedived to 5 per cent by 2008-09. Although the TMC manifesto doesn't mention the gold medal Bengal got for the number of man-days lost in bandhs, strikes and closures, it admits "industrial workers…also lost the productivity race during CPI(M) rule."

The story of Bengal has been grim since 1967. As India advanced into the frontiers of the global economy, the state that was second only to Maharashtra in the early-1960s took large, determined strides backwards.

The Left claims it focussed on the regeneration of rural Bengal. The countryside certainly gave the Left unwavering support for seven consecutive elections. This was partly due to the irrevocable security of tenure granted to share-croppers between 1978 and 1981. This empowerment was complemented by the draconian control over rural life by the CPI(M)'s dreaded Local Committees.

Communists hero-worship tyrants like Stalin and Mao because they are control freaks. Starting from the silly notion that all human activity is inherently political, the Left Front sought to extend its control from the state to society. Its rule has seen political intrusiveness in every walk of life from policing to education. 'Cadre raj' has come to signify a million tyrannies perpetrated by the 'party' to control public institutions and private lives.

In three decades—far too long for any one dispensation to be in power—the CPI(M) has fractured Bengali society. In seeking total control it has pitted their cadres against those whose voting preferences were suspect, those who incurred the enmity of local apparatchiks and those who were contrarian. Dissidence could flourish in urban clusters but it needed exceptional courage and fortitude for anyone known to be anti-CPI(M) to withstand the oppressive regimentation in rural Bengal.

The Reds believed that with political control they could also regulate people's aspirations and freeze Bengalis in a state of permanent mediocrity. Fortunately, India's economic growth has led whetted expectations and triggered a realisation that Bengal has lost the plot. For a people that revel in its imagined intellectual master race status, the mere admission that Bengal has ceased to be at the centre of the world is a gigantic mental shift.

The coming election is only nominally a battle between the CPI(M) and TMC; it is a fight between the Left and those Bengalis who no longer want to be left behind. After 1967, Bengal was a great place to leave; after May 2011 let's hope it becomes a better place to live.

Sunday Times of India, March 27, 2011

By Swapan Dasgupta

One of the delightful gifts I gave myself last Christmas was a curious collection of diplomatic despatches. Parting Shots is a collection of what its editor Matthew Parris has called "an extraordinary beast", the Valedictory Despatch of an envoy before he retired to walk the Labrador on the South Downs. The valedictories (as they were called) weren't just a confidential report to the Minister or Permanent Secretary; convention deemed that they also be circulated to colleagues in the diplomatic service.

In 2006, the valedictories were formally discontinued by a humourless Foreign Secretary. Presumably she saw nothing funny in the observations of the pre-politically correct generation of Britons. Although the murder of yet another noble tradition was robustly denounced in the gentleman's clubs, New Labour's killjoy streak may have actually saved the United Kingdom from grave embarrassment in the age of WikiLeaks.

Random selections from two valedictories by Her Majesty's envoys to Thailand may explain why candour and confidentiality can't be separated. Writing on the eve of his departure in July 1967, Sir Anthony Rumbold debunked the belief that "Thais are rather easier for Europeans to understand". "It seems to me", he wrote uninhibitedly, "that Sino/ Indian/ Malay/ Thai ways of thought are so alien to ours that analogies between events in South-east Asia and events in Europe are nearly always misleading…The general intelligence of Thais is rather low, a good deal lower than ours and much lower than that of the Chinese. But there are a few very intelligent and articulate ones…"

In a similar vein, Sir Arthur De La Mare in his valedictory of November 1973 noted that like "other people including ourselves the Thais tend to gauge their status by the past…Inordinately vain and race conscious by nature they look upon themselves as the elite of South-east Asia. After 37 years' of acquaintance with them…I cannot say that I find their pretensions entirely justified. Except for those who have Chinese blood they are indolent and feckless." Before launching into a clinical dissection of the Thai character, Sir Arthur confessed he was doing so "since it is now immaterial whether my superiors consider me better fitted for a lunatic asylum than for a diplomatic post…"

It must be a matter of intense reassurance to Washington DC that most of its diplomats do not share the refreshing lack of earnestness that marks their trans-Atlantic cousins. The phased release of what the White House described as the "unauthorised release of classified documents and national security information" by WikiLeaks has titillated the charmed world of politics, diplomacy and the media. Only India's Prime Minister is in denial, insisting the cables are "unverified and unverifiable." However, contrary to what the State Department feared, the contentious cables have so far neither led to riots and regime change nor forced American diplomats into involuntary purdah.

The cables can be classified into two broad categories. First, there are the assessments of issues and events as seen through the prism of American interests. The US Embassy in Delhi thus inquired into the BJP's apparently unrelenting opposition to the Indo-US nuclear agreement and was urged by Washington to be inquisitive about the preferences and predilections of Finance Minister Pranab Mukherjee. Although the quality of some of these assessments have been called into question—a British columnist wrote that "What the American Embassy thinks about the (Conservative-Liberal Democrat) coalition (in the UK) suggests not an alliance at risk but an embassy with a talent problem"—their legitimacy is undeniable.

Diplomatic outposts, after all, exist to feed the home government with assessments of the goings-on in different parts of the world. What is, however, interesting is how little these assessments differ from conventional media wisdom of situations, suggesting the US Embassy's reliance on what are called 'open sources'—the euphemism for the lack of insider knowledge.

Secondly, there are reports (often woven into situation updates) of private conversations with public figures. It has, for example, emerged Rahul Gandhi's view of internal security is woefully one-sided and that the relationship of former National Security Adviser M.K. Narayanan with Prime Minister Manmohan Singh was tempered by mutual disrespect. The scepticism of one journalist over the political potential of Congress General Secretary Rahul Gandhi is the subject of an entire cable—a pointer not so much to the journalist's perceived proximity to the family as to the paucity of the US Embassy's open contacts.

WikiLeaks may have set out to damage US interests and perhaps even trigger a global wave of anti-Americanism. However, there is precious little by way of ammunition in the leaked cables to bolster the highly conspiratorial view of a US engaged in subversion. The 25,000 stolen US diplomatic cables don't as yet make for another Mitrokhin Archive. Arguably, CIA reports—if these were ever to find their way into the public domain—could point to the non-diplomatic games. But these WikiLeaks indicate a separation between legitimate diplomacy and undercover operations. For all their interest in the survival of the UPA Government in the Trust Vote of July 2008, US diplomats could only gain limited access the skulduggery of the operation to woo Opposition MPs—and that too because two unsavoury fixers chose to boast. If the UPA gets singed by witness account of a proposed act of criminality, it will amount to unintended collateral damage

The image of the Ugly American hasn't been strengthened by WikiLeaks. The cables have been remarkably restrained—so unlike the eccentric British valedictories. Yet, the WikiLeaks have damaged American diplomacy grievously. They have subjected it to peer group ridicule.

The sheer porousness of a system that can lead to one disgruntled man downloading 25,000 secret cables from secure servers has left the world in a state of bewilderment. A nation unable to respect private conversations has been decried with the disdain befitting a diplomat incapable of holding his drink. After WikiLeaks, few will be willing to engage US diplomats in uninhibited conversation. That's good news for the American spook community.

Asian Age/ Deccan Chronicle, March 25, 2011

By Swapan Dasgupta

Even in this age of cynicism and despondency, there is some sanctity attached to the personal statement of a Prime Minister to Parliament. Did Manmohan Singh consider the horrifying implications of what he told MPs last Friday afternoon while entering his 'not guilty' plea to the charges of bribing Opposition MPs during the Trust vote of July 2008?

It is not that anyone has seriously accused the PM of inviting potential turncoats to Race Course Road to settle the proverbial terms of trade. Mercifully, such things still don't happen in the presence of the PM—although for how much longer is a moot point. However, most people will take his assertion that he was "unaware" of the political auctions being conducted that fateful fortnight after the Left withdrew support as being only technically correct. The PM was 'unaware' insofar as an average citizen is unaware that there are rampant cash transactions in the real estate business. We are aware that builders routinely demand under-the-table payments (and even the PM said so at the India Today Conclave) but we may be personally 'unaware' of specific transactions.

In July 2008, every remotely well-informed person in the political class was aware that the dalals had opened shop and were offering mouth-watering sums for every extra vote for the Government. At that time, A.B. Bardhan put the incentive payment at Rs 20 crore per MP—a sum that seems an exaggeration, if the version of the US diplomat realeased by WikiLeak is to be believed. It is also said that Opposition MPs were not approached indiscriminately: the targeting of potential defectors was preceded by a careful profiling exercise that bore a spooky signature.

As the principal political officer of the Government of India with the greatest access to information, the PM was probably aware that such an operation was being undertaken—every newspaper reader and TV watcher knew that. He was possibly "unaware" of the operational aspects of what the dirty tricks departments were up to. After all, even President Richard Nixon didn't have prior knowledge of the burglary in the Democratic Party office in the Watergate building in 1972.

Equally, it would be fair to say that the PM never "authorised anyone" to procure votes, just as another WikiLeak document states P.Chidambaram never authorised his son to Karti to dole out money to the voters of Sivaganga. People rarely authorise—was A.Raja 'authorised' to play havoc with 2-G allotments? These things presumably happen because, well, they happen.

It would be interesting to know if the daily intelligence briefing given to the PM by the heads of the two intelligence agencies and the National Security Adviser conveyed any information about the underground trade in MPs. If they did, it would call into question PM's initial remark to the India Today Conclave that he was "unaware". If the agencies made him broadly aware that the fears of horse-trading were real, did he do anything to save parliamentary democracy from disrepute? Or, did he wilfully choose to be the most habitually unaware PM in history? Since the price of knowledge involved the possible loss of power, did the PM choose the path of ignorance?

It is intriguing that in the course of 200 minutes, the PM shifted tack from being personally "unaware" to telling Parliament that the "Government rejects the allegations of bribery as mentioned in WikiLeak; nobody from the Congress or Government was engaged in any unlawful act."

The implications of this blanket rejection are profound. Unlike the morning when he hid behind being "unaware", this time the PM suggested that he was aware that "nobody" from either the Congress or the Government participated in any lawful act. The statement in Parliament suggested he was speaking from a position of knowledge. In asserting this, the PM was in effect standing surety for the army of disreputable characters—many of whom may well be primary members of the Congress—who were unleashed on Lutyens' Delhi to lure MPs.

The WikiLeak documents may well be nominally "unverified and unverifiable"—although Ambassador Mulford seems to believe that US diplomatic cables are not bereft of credibility—but they seem to suggest a significant role of the likes of Captain Satish Sharma and Nachiketa Kapoor in a cash and carry operation. Is the Prime Minister standing surety for such people? Does he realise that he has rendered himself a hostage to all those shadowy creatures who may have bribed MPs or at least tried to bribe them? Is the fate of the PM likely to be in the hands of individuals who may routinely threaten to turn approver or whistle-blower? Has the PM made his Government vulnerable to blackmail?

That bribes were paid by one Sanjiv Saxena, an aide of former Samajwadi MP Amar Singh, was noted by the Parliamentary Committee headed by Kishore Chandra Deo. Is the PM suggesting that Operation Bribery was independent initiative of a section of the Samajwadi Party? Has he calculated that in the event of the controversy persisting, he can make someone who was not in the Congress the fall guy?

In choosing to shift from ignorance to outright denial, the PM has gambled his reputation on the abrupt end of this controversy. But what happens if the fuss refuses to die and something more damaging emerges from a thorough criminal inquiry? Where will that leave Manmohan Singh?

Sunday Pioneer, March 20, 2011

 

The culture of political patronage seriously harms governance

By Swapan Dasgupta

With the Supreme Court coming down hard on the Government and Prime Minister Manmohan Singh taking full responsibility for an "error of judgment", the furore over K.V. Thomas' appointment as Central Vigilance Commissioner has come to an end. Although the Opposition had much more ammunition that could have demonstrated that the Prime Minister's misjudgement wasn't due to his being misinformed by a junior minister (who, incidentally, has also owned up to his full responsibility), Sushma Swaraj's magnanimous tweet that the country must "move on" prevented a confused BJP from going for the jugular.

Although the BJP deferred to the Leader of Opposition in the Lok Sabha, its heart wasn't with the forces of magnanimity. Would the Congress, many disgruntled backbenchers argued, have been so forgiving had any BJP-led Government been similarly devastated by the Supreme Court? Last Wednesday, when Leader of Opposition in the Rajya Sabha Arun Jaitley attacked the Government for its vindictive harassment of companies that had signed agreements to invest in Gujarat, he was targeting the political spite that accompanies official decisions. Even the Communists who see red at the very mention of Gujarat couldn't but agree with Jaitley's larger assertion that the federal grandeur of India has been tarnished by narrow partisanship.

Indian democracy is moving in contradictory directions. At one level, the system of one-party dominance that prevailed till 1989, is now history. Rahul Gandhi may harbour ambitions of restoring the Congress to its dominant status but there is no indication as yet that India is inclined to revert to political uniformity. Most of the national parties have had a shy at power at the Centre and a change in government in the states has become routine. There is no party which can claim to have ruled uninterruptedly for a prolonged spell. The only exception, the Left Front which enjoyed 34 years of uninterrupted rule in West Bengal, may well find itself in opposition after May this year.

Paradoxically, the willingness of voters to experiment with alternatives has truncated the boundaries of political tolerance. There may be lots of convivial clubability among the young, English-speaking MPs, across party lines, in the Central Hall of Parliament. The scions of political dynasties in particular are inclined to socialise with each other and even travel together for 'leadership' junkets organised by American universities. Yet, this fraternity rarely extends to political decision-making and governance. From the Republic Day awards and gubernatorial postings to placements in quangos and even institutions of higher learning, patronage is guided by the narrowest considerations of political loyalty. There is little space for generosity and broad-mindedness.

In determining the choice of the CVC, both the Prime Minister and the Home Minister seemed determined to ignore the legitimate objections of the Leader of Opposition. In insisting on Thomas, for reasons that still remain in the realms of feverish speculation, it gave the Supreme Court the necessary opening to make executive appointments justiciable. Had the principle of consensus been adhered to—although this is not easy if the Opposition decides to be cussed—the judges may have had no occasion to intervene in a matter that belongs to the legislature and executive.

It is said that Thomas was chosen for his malleability. If so, it is an example of political short-sightedness. By preferring unilateralism over reasoned agreement, the political class made itself vulnerable to judicial encroachment.

The use of executive prerogative to reward political loyalty is souring the spirit of democracy and encouraging confrontational politics. All parties have been infected by perception that political power involves 'adjusting' the faithful in the state-controlled institutions. In the six years it was in power at the Centre, the BJP often reinforced its outlander image by placing bumpkins in positions of importance. In West Bengal, the backlash against cadre intrusiveness was occasioned by the single-mindedness with which CPI(M) supporters were accommodated in all public institutions, notably schools and colleges.

The foibles of red and saffron, however, pale into insignificance at the systematic way in which the Congress has undermined governance. To most Congress activists, it is the exercise of political power that attracts them to the party. This has been so since Indira Gandhi chose to extend public ownership and exert political control over the entire public sector. From loan melas to the disbursement of industrial licenses in a shortage economy, India came to be governed by discretionary powers.

True, many of these powers have been whittled down with the erosion of the licence-permit-quota raj but in the psyche of the Congress, political patronage still remains an entitlement. The politician who lost his seat in a parliamentary election still demands to be 'adjusted' in some job so that he can retain a white Ambassador and official accommodation in the centre of Delhi. The man approaching senility still manages to pressure the Government into sending him to a Raj Bhavan. And obliging ex-bureaucrats and lesser political functionaries expect to be provided berths in the thousands of state-funded bodies that have mushroomed all over India. Most important, the party is unhappy if this special courtesy is extended to either a non-party professional or worse to someone linked to an earlier regime.

The mindset of exclusion that is implicit in the exercise of political patronage has had a debilitating effect on governance. For a start, it has distorted the conduct of our legislatures. The Government believes that all decision-making is its exclusive domain and, by way of a reaction, the Opposition is convinced that obstruction and street politics are the only options available to it. Many important economic reforms have been kept in abeyance because the Government is not convincingly placed in the Rajya Sabha. But rather than take the route of meaningful consultation—as was done in the case of the Nuclear Liabilities Act—it prefers to keep the Opposition in the dark. The Congress and BJP have broadly similar approaches to many facets of economic management. Yet, there is precious little display of bipartisan politics.

Secondly, in issues of appointments to positions of great importance, a partisan approach has wreaked havoc. Ideally, the President of India should be a common nominee of both the Government and the main Opposition. In recent times, this was the case with the election of N. Sanjeeva Reddy, K.R. Narayanan and A.P.J. Abdul Kalam. On all these occasions, it is important to note, the Congress wasn't in power at the Centre. Indeed, the Atal Bihari Vajpayee went back on its earlier plan to nominate P.C. Alexander after the Congress objected to his name. Sonia Gandhi, it was said, couldn't countenance Alexander, a former Principal Secretary to Indira Gandhi and Rajiv Gandhi, having a cosy relationship with the 'other side'. If the US assessment in WikiLeak is to be believed, she innately distrusts a Rashtrapati with independent judgment.

Finally, the appointment of party hacks to public sector bodies has seriously hindered good governance. With the state underwriting sinecures, there has been a temptation to constantly add to the number of useless bodies funded by the government. In his first year in office, the Prime Minister promised thoroughgoing administrative reforms which would have rationalised and professionalised quangos. After seven years in office, he is yet to take even a modest step in that direction, not least because it would be unacceptable to a parasitic class that conducts its politics on taxpayers' money.

As India's governance deficit intensifies, it is time to look more closely at the strands linking inefficiency and venality with the culture of partisanship.

The Telegraph, March 18, 2011

By Swapan Dasgupta

There were facets of this year's Union Budget that were subjected to searing criticism in a country hungry for rapid growth and a better life. Income tax payers were disappointed that the exemption limit wasn't raised further; the health sector flayed the 'misery tax' on air-conditioning in hospitals; the National Advisory Council and NGOs tore into the freeze in welfare spending; and the Left mocked the concessions extended to the corporate sector. It was all very predictable and democracy as usual.

However, if the British media was the definitive guide to India, the most controversial feature of the Budget was the allocation of nearly Rs 178 crore to the Human Space Flight and Chandrayan missions—a provision that, at best, secured a footnote mention in India. Space travel is a "luxury" that India "cannot afford" lamented Stephen Glover in Daily Mail: it "should be spending less on defence and nothing on its space programme, and diverting more funds to the alleviation of poverty." Poverty will persist, declaimed Gerald Warner in a Daily Telegraph blog, "as long as the Indian Government indulges in a space programme while millions of its underclass sleep in the streets." To him, "more reprehensible than the financial cost…is the ISRO's monopolising of 1,000 scientists who could be engaged on work of more service to humanity."

Before xenophobes and professional "anti-imperialists" launch a star wars against perfidious Albion, some clarification may be in order. The average man on the Clapham omnibus doesn't give a toss for ISRO's grand plan to plant the tricolour on the moon. He is preoccupied (and understandably so) with high food prices, savage public spending cuts, the Duke of York's shenanigans and the Premier League. So for that matter is Daily Mail and Daily Telegraph—the authentic voices of Middle England. So, why this obsession with a space programme that may even have spin-off benefits for British companies?

Mammon is the villain. At a time the Britain is teetering precariously between recovery and bankruptcy, the Department of International Development has sanctioned £300 million (around Rs 2,190 crore) of its £2.9 billion budget for aid to India. Some 90 countries are to receive British government aid but India is the biggest beneficiary.

The outrage is understandable. Why, it is being asked, should the UK underwrite a country whose rulers love playing "space cadets", a country that boasts 69 dollar billionaires (compared to Britain's paltry 29), a country with a predicted 9 per cent GDP growth and a country that has its own overseas aid programme? Rather than Britannia playing Lady Bountiful, couldn't the money be better utilised in 'poverty alleviation' and employment generation schemes at home? After all, UK needs the £300 million more than does India.

The arguments are compelling and a restive House of Commons has despatched a dozen MPs from a Parliamentary Select Committee to travel to the boon docks to examine how the money is being spent on the ground. Is aid the euphemism for a gravy train of 'development consultants' and sanctimonious NGOs? Or, is British aid making a difference and "saving lives" in the four states where DfID programmes are operational? Will the withdrawal of £300 million of aid prompt the BBC to proclaim in a suitably quaking tone that India is faced with an impending "humanitarian disaster"?

What could make the task of the visiting delegation either easier or more difficult are two awkward facts. First, the £300 million constitutes less than one per cent the State and Union governments spend on health and welfare schemes. This makes the emotional claims of a special British role in preventing a Darfur in Darbhanga seem contrived, if not self-serving. Secondly—and this is something Britons burdened with post-colonial angst find unpalatable—India has clearly indicated it will be unmoved if the £300 million of British taxpayers' money is spent elsewhere. This doesn't indicate India's "ingratitude", as one Times columnist angrily suggested, but it does suggest realism and a rejection of a self-degrading entitlement culture.

There is something else the MPs must consider: the palliative role of aid. Both the proponents and opponents of British aid to India have used the debate to flay an imaginary opponent—the uncaring Indian elite obsessed with glitzy symbols of 'national pride'. The disgust may well be aesthetic but it is also laced with profound envy. The gloom and doom of Britain is being juxtaposed with the brashness of Indian resurgence. There is an emerging caricature of Indian fat cats overwhelming Oxford Street and buying up British companies. Aid gives some Britons a handle to look virtuous and feel superior.

India needn't react with prickliness but with the indulgence due to outbursts of gap year insolence. We too must learn to be grown up.

Sunday Times of India, March 13, 2011

By Swapan Dasgupta

President Barak Obama is reported to have told some of his officials that it would be much easier to be the President of China than be resident at the White House. This backhanded compliment to autocratic governance is certain to be endorsed by the mandarins of at least one Ministry in South Block.

India is a rumbustious democracy with a citizenry that is infuriatingly inquisitive and argumentative. However, the demands for transparency don't seem to apply to the conduct of foreign policy. Rarely does Parliament witness a serious debate on India in the world; foreign policy doesn't intrude into competitive politics unless the issue happens to be Pakistan—the furore over the Indo-US nuclear agreement was a rarest of rare case; the media is seriously smitten by 'client-itis' and the principle of keep-the-source-happy; and the 'strategic community' is a cosy club for collecting dollops of air miles. The comfort level of the foreign policy establishment is so incredibly high that the Government can afford to persist with a minister who is incapable of telling the difference between a speech written for him and a speech drafted for the Foreign Minister of Portugal.

Such a system is calculated to trigger flights of whimsy which, very occasionally, even come into the public gaze. Last week, the official website of President Ahmadinejad of Iran did India a great service by divulging a version of his conversation with India's National Security Adviser Shiv Shankar Menon—a man who has acquired the reputation for being the single-window clearance for foreign policy.

It's a riveting account and for that reason features (as of Saturday morning) as the lead item of the website, complete with a photograph of the meeting. The NSA apparently told Ahmadinejad that "New Delhi is after the establishment of comprehensive relations with Iran, including strategic ties." To further cosy up to a leader who is regarded in most of the democratic world as an oddball, Menon referred to an earlier meeting of the President with Prime Minister Manmohan Singh and observed: "Many of the predictions you had about the political and economic developments in the world have come to reality and the world order is going under basic alterations, which has necessitated ever increasing relations between Iran and India." This generous tribute had been preceded by a rambling Ahmadinejad rant about the need to dismantle the "oppressive world order".

Since both the PMO and MEA have chosen to pretend that the meeting was a non-event and that there is nothing to clarify, we can presume that the Iranian version was a true account and that India does value the prescience of Ahmadinejad and shares his agenda of global reconstruction. Such a presumption would, of course, be a facile caricature of the niceties and silences that often accompany diplomacy. Yet, there are questions that need to be answered by the Government.

Menon was apparently carrying a personal letter from our PM to Iran's President. The grapevine suggests that the letter and Menon's Teheran visit was a sweetener for a bid to cadge a firm invitation for a Singh visit to Iran later this year. The letter, according to the well-informed correspondent of Telegraph in Washington, "may turn out to be the pivot around which India's West Asia policy may be calibrated to meet… new realities of this…volatile region."

That India needs to come to terms with a West Asia that is certain to experience a multi-cornered conflict between the forces of autocracy, democracy and Islamism isn't in any doubt. From the time in the 1930s when the Indian Rupee was the local currency in much of the Persian Gulf, New Delhi's influence in the region has diminished alarmingly. For this we have no one to thank but Jawaharlal Nehru's preference for ideological abstractions over neighbourhood interests. If an economically resurgent India now seeks to reclaim some of the lost ground, it is a welcome move.

Yet, going by this logic there is something extremely bizarre about using Iran as the launching pad for such an exercise. For a start, Iran views the Arab upsurge as the first step in the creation of a West Asia driven by the principles of the Iranian Revolution—a perception that is both contentious and frightening. Secondly, for all the lip service paid by Ahmadinejad to the creation of a just world order, the Iranian regime is turning increasingly autocratic and intolerant of the democratic urges at home. Indeed, it is entirely possible that the fire that began in Tunisia, engulfed Egypt and is raging in Libya, Yemen and Bahrain could also consume the theocracy in Iran at some point in the near future. Thirdly, the adventurist anti-Israel thrust of Teheran runs counter to Indian interests. Israel is unquestionably India's only enduring ally in the region—however much we choose to pretend otherwise. Finally, in view of the heightened concern in the West over Iran's nuclear ambitions, any move to cosy up to Iran—more than what is demanded by the imperatives of energy security and a western route into Afghanistan—would create diplomatic complications elsewhere.

India needs to be 'correct' in its dealings with Iran. But there is a difference between being correct and becoming obsequious—what happened to Britain in its dealings with Gaddafi's Libya. In the absence of transparency and domestic scrutiny, even foreign policy can go overboard.

Sunday Pioneer, April 13, 2011

 

By Swapan Dasgupta

The unwritten British Constitution operates on the quaintly-expressed principle that 'the Queen can do no wrong'. In the Congress' monarchical system, it is understood that Sonia Gandhi can do no wrong; she is just 'misled'.

It does no good to the self-esteem of Prime Minister Manmohan Singh that his spin-doctors have to fall back on the same plea that in pushing through P.J. Thomas' appointment as Central Vigilance Commissioner, he erred because he too was 'misled'.

Being 'misled' is a human frailty; it is not an obligation. In the case of the CVC appointment, was the PM and Home Minister P.Chidambaram genuinely convinced that the unresolved criminal case against Thomas was a trivial issue, akin to a long-forgotten charge of rash driving, that shouldn't be allowed to blot his otherwise flawless service record? Did they proceed on the belief that the CVC is not very different from just any other post-retirement sinecure for malleable babus? Were they inspired by the way the Government bulldozed the appointment of Naveen Chawla as Chief Election Commissioner in 2009, disregarding the advice of the incumbent N.Gopalaswami to remove him from Nirvachan Sadan altogether? Did a need to whitewash the 2-G scam enter their calculations?

Alternatively, did Singh and Chidambaram say "ours not to reason why" and blindly follow orders?

In a nutshell, were two accomplished politicians casualties of calculated misjudgement or were they 'misled' by the forces of darkness?

To many, concerned by the sharp dip in national morale, a post-mortem of an unhappy episode that has shamed both the PM and the UPA Government and established the principle of judicial review of questionable appointments to Constitutional and statutory posts may seem needless. What matters is that the 'system' has learnt its lessons and thinks twice before colluding in future acts of subterfuge.

The furore over what the PM has called "irregularities" in the 2-G spectrum sale, the S-band contract, the Hasan Ali Khan case and the conduct of the Commonwealth Games has been salutary. They have firmly reminded all players that there is a principle of accountability that extends to politicians, bureaucrats and other holders of public posts. Even the judiciary has not been insulated from the process. The fury of the popular revulsion against corruption may well be having some effect.

Have the lessons from the ongoing process of ethical cleansing been learnt and internalised? Is it time to lower the temperature, allow the investigations to be completed in an atmosphere of calm and let the Government get on with the business of governance? This certainly is what Leader of Opposition Sushma Swaraj has magnanimously suggested in her tweet—an unhappy medium of communication for India's politicians.

It is possible that the tone of the PM's statement to Parliament on Monday will be contrite and address these questions. If he speaks from the heart and conveys a message of sincerity and determination to make a fresh start, he may yet reassure a nation deeply troubled by the prevailing deficits in governance and ethics. A disoriented Congress is extremely fortunate that despite all the opprobrium heaped on him, Singh enjoys a personal credibility—considerably eroded after his admission of helplessness before coalition pressures and, now, the CVC judgment. With the Government having completed just over one-third of its full term, the electorate hasn't yet moved from exasperation to disgust and anger. There is still a willingness to give the PM a final chance—something that has restrained an Opposition buoyant after a series of political victories.

A feature of political life in India is the constant mismatch between the popular mood and the expectations of the karyakartas (activists) of political parties. The people may be inclined to indulge the Prime Minister for a little while longer, not least because it is fearful of the in-house alternative, but the mood in the Congress is far more restive.

It is interesting that in the aftermath of the Supreme Court judgment on the CVC—coming within a month of the farcical ministerial reshuffle and days of the Government's surrender on the Joint Parliamentary Committee probe of the 2-G scam—a large section of the Congress has been gripped by doubts over the PM's skills of political management. There is a growing perception that the system of dyarchy that served the UPA so well in its first term is coming unstuck. The vicious attacks by National Advisory Council members on the Government are being seen as a proxy war.

Like P.V. Narasimha Rao who was undone by a 'royalist' revolt from within, Singh is being targeted by those who can no longer accept the separation of ownership and day-to-day management.

The danger is that brewing revolt also contains the seeds of a potential 'counter-revolution'. A party that has traditionally prospered on the strength of government-disbursed patronage is inclined to favour brazenness as the natural response to political attacks—a hallmark of Indira Gandhi and the latter Rajiv Gandhi. Such a mindset deems it natural for all government appointments (not excluding judicial appointments) to be governed foremost by considerations of loyalty and accommodation. By this logic, a weak Singh has conceded too much space to the forces of rectitude and has been unable to safeguard partisan self-interest deftly, perhaps because he is 'non-political'.

For too many in the political class, good politics still means venality. They will not rest until the happy days are here again.

Sunday Pioneer, March 6, 2011

Oil prices could make or break this year's Budget

By Swapan Dasgupta

Finance Ministers are not astrologers. Nor for that matter are the economists on whose inputs Finance Ministers bank on—although large numbers do well crafting beguiling econometric models that supposedly anticipate future trends. As such, Pranab Mukherjee was wise to seek the blessings of Indra and Lakshmi for a Budget based on the gamble that India will witness a 9.5 per cent GDP growth in 2011. If the gamble succeeds, all will be well. But if the Indian economy underperforms, this year's Union Budget of 2011 will come to be seen as a piece of wilful deception by a beleaguered UPA.

For Mukherjee and his economist Prime Minister it may not suffice to propitiate Indra and Lakshmi only. The Hindu pantheon is not short of deities for all occasions. Unfortunately, it has no god and goddess controlling the one thing that could make or break the Budget and, indeed, the Government: oil prices.

The Hindu faith being inherently non-dogmatic and eminently pragmatic, some theological improvisation is always possible to cater to contemporary exigencies—the ancient Romans revelled in additions to the pantheon—but the pran sthapana should have been a consideration the day Tahrir Square became the newest icon of the Arab world. Secular India, it would seem, needlessly delayed its divine obligations.

It is not that North Block was caught totally unawares by the creeping sense of alarm in the financial world. Last week, as the demented Colonel Muammar Gaddafi threatened his own people gunfire and damnation, the price of oil touched $114 per barrel, a 64 per cent jump from May 2010. If, in addition to Libya and Bahrain, the Jasmine Revolution triggers upheavals and uncertainty in other countries of West Asia and even Iran, the price is expected to cross $120, sending the world economy into a tizzy. Even if regimes are not toppled, vulnerable sheikhs and Ayatollahs may decide that raising oil prices is the easiest way of placating a restive citizenry with freebies, to compensate for the lack of personal and political freedoms.

The impact of a steep oil price hike on an oil-importing economy is potentially devastating. In a scary article in Financial Times last week, Martin Wolf summarised its potential consequences vividly: "it transfers income from consumers to producers; it lowers overall spending, as consumers normally cut their spending more quickly than producers increase theirs; it shifts spending away from other goods and services; …it raises the price level; it lowers real wages and the profitability of energy-using industries; and it reduces supply as capacity becomes uneconomic." Wolf also ominously noted that each of the past five global slowdowns had been preceded by sharp rises in oil prices.

On Budget day, even those economists supportive of Mukherjee's attempt to control the fiscal deficit admitted that all calculations could go awry if oil prices crossed $120. Yet, putting his faith in the ultimate benevolence of the known Gods, Mukherjee chose to ignore the distant thunder. Yet, the mere fact that he consciously departed from National Advisory Council-speak and stressed the importance of pending reforms suggests that saner minds in the Government realise the need to bolster India's economic defences against the unexpected.

"The bomber", Stanley Baldwin used to admit fatalistically during the rearmament debates of the 1930s, "will always get through." By that same logic, India cannot entirely insulate itself from the dark forces. The Government has admitted its helplessness against inflation—although the Prime Minister insists that all will be well, soon. It has decided that the EMI-paying classes with housing, car and education loans no longer need to be insulated from high interest rates. At the same time, it has banked on a spurt in manufacturing and services and the Laffer curve to generate the necessary wealth for the non-aam aadmi to pay for the sharp increases in the prices of food, healthcare, petrol and cooking gas. And it has reposed faith in the Adhar-led direct cash transfers to Below Poverty Line families to tangibly demonstrate the munificence of a 'pro-poor' administration to the voting classes.

Politically speaking, Mukherjee has engaged in shrewd packaging. Buffeted by pressure from Corporate India for purposeful reforms and from the Sonia Gandhi-led NAC for even more generous welfare hand-outs, he has tried to show he has accommodated everyone. If there is a visible tilt, it is in favour of the wealth creators: the proposed expenditure on the non-audited Mahatma Gandhi National Rural Employment Generation scheme has actually been lowered from Rs 40,100 crore to Rs 40,000.

In the context of the state's move from occupying the commanding heights to becoming a gigantic welfare agency, this symbolic snub to a flagship programme created by Sonia Gandhi is telling. For the first time, the Government (and particularly a Congress-led Government) seems to be taking some interest in the quality and effectiveness of government expenditure on welfare. The Economic Survey endorsed a study that suggested that 18.2 per cent of rice and a staggering 67 per cent of wheat supplied to the Public Distribution Scheme is diverted to the open market and sold at higher prices. The stylistically elegant and erudite Economic Survey was understandably more circumspect in its assessment of the MGNREG scheme—it didn't allude to studies that indicate horrifying misappropriation—but its understated conclusion said it all: "there is scope for improvements like shifting to permanent asset creation and infrastructure building activities, reducing transaction costs, better monitoring, and extension to urban areas."

 

More telling, its observation that "For India to develop faster and do better as an economy, it is…important to foster the culture of honesty and trustworthiness. Thanks to the fact of this social prerequisite of economic development remaining unrecognized for a very long time, this has not received adequate attention…" Rarely has an official document said so much by saying so little.

 

The champions of inclusive development appear to have put their faith in Nandan Nilekani devising a secure system of identification and verification. But whereas the Unique Identity Device and direct cash transfers will help minimise corruption and even promote a degree of efficiency, it will not be able to cope with the resistance the Government is certain to confront in moving from universal to targeted subsidies, particularly in fertilisers. It is doubtful if the UPA Government will be able to cope with the farmer backlash once the new proposal for channelling fertiliser and even kerosene subsidies become operational. Like tax-free agriculture, the subsidy raj has become far too much of an entitlement to be rationalised in the lifetime of one Budget.

 

As someone attempting, however tentatively, to put good economics into the realm of good governance, Mukhejee could do with all the luck he can muster. But what if the Arab thirst for change turns out to be relentless and forces oil prices northwards? The UPA has approached for this exigency in the same way as Britain and France prepared for Hitler's aggressive designs prior to September 1939: through a gamut of less than half-measures and the hope that the danger will pass.

 

If the danger doesn't pass, the Government will be forced into exercising harsh options. Lower GDP growth, the return of the fiscal deficit and more stealth taxes are only to be expected. But if India is to come of any crisis with its fundamentals intact, the political class must acknowledge an elementary rule of household income: that expenditure cannot wildly exceed income. The Government is spending beyond its means and replacing a failed socialist model with a discarded Scandinavian one.

 

The Telegraph, March 4, 2011