Magnanimity for the millions on the margins?

The spate of brutal killings of Salva Judem members by Maoists in Chattisgarh and encounter deaths of Maoists in Andhra Pradesh expose the fault lines of our society and polity. These are not acts of violence inspired by extra-territorial terrorist agencies to destabilize our nation. These are the products of anguish, despair and bitterness resulting from decades of misgovernance and an economic growth process which relegates millions to the margins. The causes are internal and rooted in the alienation of large segments of population on account of denial of opportunities and elementary justice.

Organized violence of all kinds undermines economic growth, destabilizes the society and weakens the nation. However, ideological violence can only be eliminated by addressing the causes of alienation and bitterness, even as the assaults against the constitutional order are firmly repelled. Mere counter-violence and intelligence may deplete Maoists for the time being.
But as long as the underlying causes are not addressed, more and more disenchanted citizens are likely to take to the gun to fight the injustices of the system, however misplaced their methods are.

Centuries of vertical fragmentation and social hierarchies led to unimaginable misery and denial of justice and opportunity. The social movements that accompanied freedom struggle gave some semblance of hope to the oppressed sections. The work of Mahatma Jyotiba Phule in Western India, Narayana Guru's remarkable efforts to liberate Ejhavas in Kerala from caste oppression, and Ramaswamy Naicker's Self Respect Movement are three noteworthy examples of such social mobilization for inclusion of sections which were hitherto on the margins of Indian society. The leadership and intellectual vigour of Babasaheb Ambedkar gave a new meaning to the quest for equality and justice, and made it an integral part of our constitutional order.

Sadly, independent India witnessed the decline of social movements. Simultaneously, the political commitment for the inclusions of Dalits and oppressed segments in the mainstream society has been symbolic at best. Issues of real empowerment have been neglected, and politics of tokenism have become the norm. If India pursued robust policies for human development and rapid economic growth, the situation might have significantly improved by now. But excessive state control led to politics of patronage and rent-seeking, and depressed economic growth. Politics of tokenism became a substitute to genuine empowerment and human development. The result is the extremely uneven growth process, and exclusion of large sections of population from the benefits of self government.

Ideally, economic liberalization, competition and the unleashing of the entrepreneurial potential should help bridge the social divide. As skills and capacity for participation in wealth creation determine social mobility, birth and patronage should cease to matter. But tragically, the Indian state did not create conditions for such social mobility. India never created conditions for human development of the disadvantaged sections. The limited educational opportunities created in the early decades after freedom benefited the upper castes, and created a sizeable body of people with skills, knowledge and entrepreneurship. But the Dalits and other disadvantaged sections were largely denied the fruits of education and development. Over the past three decades, the unmet demand led to growth of private education, and state institutions declined. The poor too started sending children to private schools, adding to their financial burden. But much of private education too is sub-standard. As a result, most of the poor children never fulfil their potential, despite the genetic endowment.

Today, the future of nearly 70% of children can be predicted with reasonable certainty on the basis of conditions at birth - caste, literacy level of parents and income. The bulk of the children have no opportunities for vertical mobility. Near collapse of public health systems and low level of skills even if some smattering of education is imparted have further compounded the misery of the poor. Ubiquitous corruption, over-centralization, oppressive state machinery, and failure of rule of law broke the backs of the poor already groaning under social inequity. Discrimination by birth is thus institutionalized, despite a liberal constitution and democratic trappings. Justice is denied to most of the people, and law applied to different people in different ways. Dominance of money and muscle power in elections made politics a huge part of the problem, not the solution.

It is these cruel circumstances which breed anger, alienation and violence. If we do not address these fundamental issues, violence will undo all fruits of freedom and economic growth. And growth itself will be stunted because of violence, and non-participation of the bulk of the people in wealth creation. As the illiterate eke out a precarious livelihood through drudgery, the 'educated' are unemployed for want of skills.

This spiral of violence can be reversed only if we focus on education, healthcare and skill promotion. All parties claim to be committed to these worthy goals. But for these fruits to reach the poor, we need to redefine politics. Politics as business should give way to politics revolving round the people's lives and empowerment. The oppressed sections which depend on the state for education and healthcare must be enabled to truly participate in politics and decision making. Total decentralization of power, comprehensive political reforms to restore the spirit of service to politics, and radical reforms of the police and the justice system to ensure swift and real justice to all sections must be integral to the new political culture.

As Martin Luther king said, the silence of good men is far more dangerous than the brutality of bad men. The thinking sections need to mobilize the people whose future is at stake, and act now.

The intelligent way to assuring security

Once again, cowardly and murderous terrorist groups attacked India's financial capital. Once again, the citizens of Mumbai, in the midst of the shock and grief, have exhibited uncommon courage, resilience and tolerance. As in April 1993, in July 2006, all of India showed how a great nation could transcend prejudice and bigotry, and uphold its liberal, humane traditions.
But the hurt and anger remain, and they need to be channelized constructively and creatively to secure the nation against future dangers. The economic consequences of terrorism are obvious. Direct loss of life, limb and property cause great misery. Disruption of economic activity on account of infrastructure breakdown undermines growth. The psychological impact of terrorism, fear and insecurity could dampen investment, depress capital markets, damage work ethic and lead to gloom and pessimism. The swift and demonstrable return to normal life in Mumbai is the best answer to the terrorists and their foreign backers.

The Prime Minister echoed the sentiments of the nation while paying wholesome tributes to the citizens of Mumbai and Srinagar and asserting that India would defeat the merchants of death and destruction by our resolve and defiance. The Leader of the Opposition rose above politics and focused on unity and national purpose.

These murderous bombings once again show that sleeper cells in Indian cities can be activated at will to unleash horror and destruction. While these cells may be ultimately controlled from Pakistan, the links are increasingly complex, involving several tiers within India, Bangladesh, Nepal, UAE , Gulf region and Europe. The telecommunications revolution and globalization have given enormous advantages to the terrorist outfits, just as they have accelerated growth and promoted prosperity.

The recent spurt in terror attacks in Jammu and Kashmir and the Mumbai blasts show that our national security capabilities need strengthening. In particular, we need to focus on three areas.

First, the intelligence and security infrastructure to fight terrorism needs to be strengthened. In a highly globalised, technologically sophisticated world, this would need greater access to technology, and highly trained, adequate manpower. Investment in these may be expensive in the short term, but could prevent far greater losses later. Our total security related expenditure is about 4% of GDP now. More expenditure would mean diversion of precious resources; but being penny-wise could greatly enhance the risks to our national security and economy. It would be sensible to invest in smart technologies and excellent training instead of massive expansion and visible presence of security forces. Equally important is effective integration and coordination among the many security agencies - R & AW, Military Intelligence, State intelligence wings, and all police forces.

Second, the intelligence agencies need to be given the freedom and flexibility to operate effectively. Democratic accountability should not mean tying up intelligence and security forces in procedural bottle necks. Recruitment of personnel on short-term basis in India or abroad would be necessary from time to time. The heads of intelligence agencies need the freedom to act swiftly and secretly. Similarly, procurement procedures need to be relaxed to suit intelligence requirements. Obviously the IB cannot procure high quality surveillance equipment or other sophisticated gadgets through advertising, open tendering or display of specifications on the web! The authority to discretely purchase state-of-the art equipment to suit our special requirements is vital in order not to alert terrorist outfits and hostile powers. Many such procedures need to be streamlined, with suitably amended processes of accountability, to enhance the capacity of security agencies to cope with growing challenges.

Third, we need to revisit the legal framework which exists to combat terrorism and other threats to national security. Many jurists and security experts argue that the normal criminal laws are not adequate to bring terrorists to book. Witnesses are silenced by fear of reprisals; judges and their families are threatened with violence and retribution; and rules of evidence and standard of proof required to establish guilt have become tools in the hands of terrorists to escape the clutches of law. Foreign nationals determined to undermine our unity and security cannot be allowed to use our constitutional freedoms against us. The imperatives of national security have to be acknowledged and recognized while making laws to combat terrorism. It is better to have strong laws enforced justly and humanely, than to have weak laws forcing the security agencies to act extra-legally. The money laundering law is widely regarded as toothless, and needs to be strengthened so that the international supply chains of terrorists can be cut off.

Finally, domestic political rivalries should not be allowed to come in the way of national security. The union government must be seen to be firmly in command, and its authority needs to be respected whichever be the party in power. A perception of weakness or lack of cohesion will only embolden terrorists. Our democratic system has been our greatest asset to national security, and unrestrained squabbles should not be allowed to weaken the country. Similarly the Union and States should work, and be seen to be working, in concert. For instance, SIMI network is suspected to be involved along with LeT in the Mumbai blasts. And yet, the UP government is said to be reluctant to extend the ban on SIMI. Such discord can only harm the country.

In the ultimate analysis, our security is guaranteed only when all segments of society share in prosperity, and have common stakes in the future. Alienation breeds resentment and violence. Harmony in society and opportunities for all are the best safeguards for the future. Meanwhile, the threats of foreign-sponsored terrorism cannot be underestimated. We need to do whatever it takes to eliminate such threats. Only then freedom, peace and growth can be assured.

For a better tomorrow,see the big picture

One of the great challenges in any society is increasing administered prices, or reducing subsidies in a politically palatable manner. All democracies wrestle with the problem of reconciling the clash between the short-term political price a government has to pay for temporarily unpopular decisions, and the long-term social good which results from such decisions.

The recent increase in petrol and diesel prices holds a mirror to this classic dilemma. But such a dilemma is not merely the government's problem; the interests of future generations and the whole society are linked to the capacity of a government to take the painful but correct decision. The media, civil society, political parties and opinion makers have the duty to examine these issues and raise the standards of debate.

The oil pool deficit in the current year would have been about Rs. 73,000 crore if prices were not increased to partially offset this deficit. Even then the impact of price increase is only Rs.9,200 crore.

The government also reduced the customs duty from 10 to 7.5% and thus exchequer loses about Rs 6500 crore, reducing the deficit further. The Government is issuing oil bonds to a tune of Rs. 28,000 crore to reduce the oil pool deficit. To that extent, the burden on government increases, except that there is deferred cash outflow. Finally, the oil companies will share a loss of revenue of Rs. 24,000 crore, which in effect is a subsidy to consumers. All these and other steps would bring down the deficit to a manageable level of Rs. 3000 crore. Clearly even with price increase, the government and oil companies are bearing an additional burden of Rs. 52,000 crores, and government is foregoing a revenue of Rs. 6500 crore.

With international crude prices skyrocketing beyond $70 per barrel, any government would have to pass on at least part of the burden to the consumers. Most countries have enhanced oil prices. Britain which imports only 20% of its oil needs, in contrast to our 60%, has priced its petrol at 95 pence per litre (nearly Rs. 82). Most of the nations have realized that global oil prices are likely to further increase as demand continues to grow and supplies stagnate. Over the next few decades we are going to face the severest oil crisis for over a century.

Importing countries have to brace themselves for two consequences of this crisis. First, oil prices need to be increased, as governments cannot absorb the costs. Second, the world's dependence on oil needs to be reduced, and consumers and industry should have an incentive to go for energy efficient technologies, more sustainable life-styles and renewable fuels. Otherwise unmanageable fiscal deficits will force governments to bankruptcy; and societies will suffer grievously as oil becomes costlier and more scarce. That is the reason why even rich countries are also raising prices in the interests of society.

One of the criticisms and concerns raised by our economists and parties is the low tax-GDP ratio in India. Our taxes probably account for 16 - 18% of GDP making it one of the lower shares among large economies. Clearly, better infrastructure, education, healthcare, justice, policing and other public goods cost more money, and low tax base will hurt the poor and inhibit economic growth. If governments give up taxes in order to keep oil prices low, it will only deplete the treasury at the cost of much-needed public goods and services. If other taxes are raised to subsidize oil, it only means that the government is removing the money from the citizen's right pocket and putting it in the left pocket!

Given our low tax-GDP ratio, and the appalling quality of infrastructure and public services, the burden of oil price increase has to be borne by consumers. What we should demand is that every rupee collected is wisely spent by the government for the larger good of our children. Greater transparency, decentralization, accountability, and citizen empowerment must be the watch words.

In fact, the subsidies in energy sector have largely been just dysfunctional and detrimental to the economy. Low price of LPG and kerosene is leading to unauthorized diversion of subsidized LPG and kerosene as automobile fuel. The government is losing an estimated Rs. 15,000 crore per annum in subsidies through diversion. Adulteration with kerosene, which is priced low, is leading to serious environmental pollution and damage to vehicles. Subsidized oil and excise duty concessions on automobiles are promoting private motors leading to more pollution, congestion, higher oil consumption and trade deficits.

But if subsidies have to be given there are two prime candidates. First is high quality, reliable public transport which will reduce oil consumption, pollution and congestion. Second, viable alternative, renewable, indigenous fuels like ethanol. This will pave way to the shift to indigenous fuels and reduce green house gas emissions and global warming, rejuvenate agriculture and put our money in our own people's pockets. Even the US is subsidizing ethanol to promote its production. Brazil is saving vast amounts of foreign exchange by producing ethanol at about $ 25 - 30 per barrel.

Sometimes, being wise and compassionate requires toughness. We need to have a comprehensive review of our energy and pricing policies, and delink government from oil pricing decisions. The market should determine the prices, and all subsidies saved should be used for education, healthcare, infrastructure and alternative fuels. We must focus on long-term energy security, renewable biofuels and reduced dependence on costly, imported oil. Politicians have an obligation to look at the bigger picture, speak truth, and mobilize public opinion in favour of rational policies. If today's transient comfort is at the cost of better tomorrows, our children will pay a heavy price for our thoughtless follies.