Personnel Administration Stuff

Dear All ,
Here below is an article from business standard related to personnel administration. The article talks about some terminologies teeth - tail ratio
which is nothing but decision makers and decision implimenters which has to be part of our answer writing to make the difference in our answer.
Regards
GMStudycenter

Fat In the wrong Place

The generally accepted view is that the government runs a bloated bureaucracy. Its current employee strength is 3.32 million. But over 80 per cent of this number is accounted for by specific service departments: posts, central police forces and the railways. Logically, these should not be counted as part of a “bureaucracy”, which as a consequence stands reduced to a relatively modest 600,000. Since the overwhelming majority of even that consists of clerical and support staff, the operational part of the government is quite simply too small. In almost any direction one looks, there is a shortage of the required people. India has too few judges, one of the smallest foreign offices in the world, overworked officials dealing with trade negotiations in the commerce department, and desperate under-staffing at regulatory bodies in charge of areas like pollution control and drug safety. If service delivery is to improve in important social sectors like healthcare, water supply, education and irrigation (many of which involve state governments as well), governments need to hire more people. Governance standards too will improve if India’s jails are not over-crowded, its police forces not so stretched, and its district administration staffed adequately to deal with multiple responsibilities. Be it teachers, health workers or policemen, the level of employment in each of these areas is inadequate by any contemporary yardstick, and certainly well short of international norms. Matters are made worse by the fact that, in almost every branch of government, there is a large number of vacancies—in the courts, in the defence services, among policemen, in the game parks, in the forest department, and elsewhere.

An associated problem is the misallocation of resources, limited as they are. There is no reason why the commerce department should have a strength of 7,000, or the ministry of civil aviation as many as 1,100 people on its rolls. Commerce has actually seen an increase in its staff strength by over 30 per cent since the reforms began, yet other countries are able to mount much bigger negotiating teams to handle the intricacies of talks at the World Trade Organisation, while India fields a handful of officials. The department of civil aviation has seen its size shrink somewhat, but it is nowhere near fulfilling a former civil aviation minister’s promise that his primary task was to preside over the liquidation of his ministry!


The unfavourable teeth-to-tail ratio (between decision-makers and clerical/support staff) is made worse by a remuneration policy that rewards junior employees more than what the market is willing to pay, while the compensation package for senior employees is far too low to attract people of the required quality—as testified to by the steady drop in the calibre of those joining the all-India administrative services. Lateral induction too is made virtually impossible by the vast gap between government and private sector salaries. While many administrative reforms are required in the country, an essential component has to be a re-invention of the government itself.

Proposed Reform in Higher Education by Yash Pal Report: A Critique

Saturday 26 September 2009, by Prasenjit Biswas

The Professor Yash Pal Report (YPR) makes right noises about many of the inherently self-defeating practices, ideas and notions that have been the ‘ruling ideas’ of India’s higher education sector for the last four decades. The Report significantly persuades the existing university system and its ensemble of policy-makers, bureaucrats and teachers etc. to go for self-corrective measures that would redeem them from many a closure. As we go through the report, its frank and straightforward espousal of several unpalatable truths about Universities, IITs and IIMs engage the reader in a therapeutic introspection. Much of this introspection is also inspiring and enticing, as it takes one to a realm of hope, the hope of recovering the idea of University from the labyrinth of the insider’s subversion. A careful reflection on every section of this first-of-its-kind Report shall unravel a depth of intellectual and practical resources that are presented to the nation in a spirited optimism of will and pessimism of intellect. In reconceptualising the idea of University, the 


YPR states:
You would notice that we are placing supreme importance on the character of universities. They must create new knowledge. Besides making people capable of creating wealth they have a deep role in the overall thinking of society and the world as a whole. This job cannot be performed in secluded corners of information and knowledge. (…) But narrow expertise alone does not make educated human beings for tomorrow. Indeed, speaking more seriously, one could almost say that most serious problems of the world today arise from the fact that we are dominated by striations of expertise with deep chasms in between. (p. 5, emphasis mine)


This itself is a reaffirmation of the Nehruvian vision of university as ‘centres of humanism’. The report broadens this idea when it speaks of a holistic educational framework and substantial reduction of bureaucratic control. Seemingly, the Report raises serious concerns about the existing mechanisms of repressing both the seekers and givers of knowledge by disciplining them. The Report further takes a turn away from ‘dead uniformities’ that many of the present rules impose on universities, especially too many inspection and control by an overarching bureaucracy. The burden of University bureaucracy and its mis/interpretation of statutes, rules etc. act as a source of permanent ruination of any sense of justice that the universities are supposed to deliver to everyone. In sharp contrast to such a deeply ingrained culture of distortion in the normative framework of the universities, the YPR reminds us of the grounding values of higher education as a whole, which are autonomy and freedom of mind. It says:


The principle of moral and intellectual autonomy from political authority and economic power is ingrained in the very idea of the university. This autonomy ensures freedom in research and training and it is expected that the governments and the society would respect this fundamental principle. Teaching and research have to be inseparable, because the task of the university is not only to impart knowledge to young people but also to give them opportunities to create their own knowledge. Active and constant engagement with the young minds and hearts of the society also implies that the universities are to serve the society as a whole, and in order to achieve this, considerable investment in continuing education is essential. (p. 9)
This represents the deeper malaise of overpowering intellectual freedom by the disciplinarian and personified authorities of the University system, who in turn are subjected to political and economic powers of the state and the corporate. The situation is such that the universities provide a soft site of marketing of ideas and knowledge products along with the space for legitimising reasons of the State. All these grow within the University at the cost of the very purpose for which it has been created. The YPR, for the first time in the history of post-colonial India, clearly spells out the ways and means of removing these burdens of bureaucracy, state and corporate. The Report substantially recovers the lost space of autonomy of universities by emphasising the specific sites of advantages and disadvantages of the higher education scene, namely, socio-historical and cultural specificity and local conditions. Wherever a University/ Institution moved away from this primary locale of knowledge, the report prescribes a return to its ‘roots’ from the higher levels of knowledge enterprise without lowering itself. (pp. 12-3) The Report indicates the impending task of a live interface between the local and the global, the success of which can be observed in the role of the university in devising new ways of understanding and action in relation to real world problems. This is the kind of post-deconstructive realism that the Report evinces in. The Report suggests a self-conscious breaking of the walls of narrow isolationist practice of learning, research and specialisation. It gives a paradigm statement toward such an objective when it says:


We can then look forward to the day when IITs and IIMs would be producing scholars in literature, linguistics and politics along with engineering and management wizards who would have substantial motivation for engagement with the local community, and the opportunity to use and enhance learning by solving real-life problems in their immediate environment. (p. 15)
¨
The utopic contour of such an expectation is translated by the Report in practically realisable terms. The YPR recommended that the present state of erosion of democratic space1 needs to be stalled by refraining from issuing diktats and by engaging oneself in listening to ‘other’ voices. In fact, this aspect of the Report can be read as a silent recognition to responsible dissent within the system. A culture of consensus in every critical decision resulting into a seamless uniformity is critiqued in every recommendation of YPR.
Once again, the Report for the first time asserts the role of sufficient use of local data so that ‘knowledge covered in the syllabus come alive as experience’. (p. 18) This is one of the crucial steps towards translating the vision of a holistic knowledge system that requires an integrative mechanism between disciplines, which can be achieved, as per the YPR, by learning from the real-life situations as well as by learning across disciplines. The syllabus should therefore be cross-disciplinary and trans-disciplinary, instead of merely being disciplinary. For the first time, the YPR affirms the role of foundational and basic disciplines that open up the minds of pupils to an art of synthesising and creativity, in sharp contrast to what has been a practice of selective mingling of disciplines on a narrow pragmatic basis. Rather, the YPR advocates a line of exposing students to ‘work’ and its ‘performance’ in a playful mode: being free from narrow constraints of the discipline, the student directly learns from various kinds of works and workers in order to return to both academics and society. Earlier reports laid stress on performative aspect of work and study to lead the students to the ultimate goal of honing skills for a job, while the YPR makes it clear that skills divorced from theoretical grounding would only lead to a mechanical ineptitude. It suggests redesigning of the curriculum by relating theory and practice and developing a line of thinking that suggests a return of professional education within the University system. For this, the University system must create enough space by developing the interfaces between various disciplinary frames and skill based institutes that would help removing isolation of professional education as well as steep inequities between rural-urban sectors. Setting up of a National Skill Development Council is appreciated by the Report and it further suggested lowering of entry barriers to students trained from professional and vocational institutions for facilitating upgradation of their skills at any stage of their career.


Apart from this large integrative and holistic paradigm of higher education, the YPR advocates a lot of institutional freedom and removal of top-down control. It takes a bottom-up line of educational thinking that could be put to use by a single and multipurpose seven-member National Commission for Higher Education and Research (NCHER) under an Act of Parliament. The YPR designs two steps for achieving this: subsuming all the bodies such as the UGC, ICMR, BCI etc. under one regulator and then reorganising the University system bottom-up by allowing the good quality affiliated colleges to become University in its own right. Other bottom-up measures include the freedom to design curricula to address various needs such as keeping the community abreast of the cutting edge, many-sided inter- and trans-disciplinary linkages with social and cultural environment. For reforming the whole system of higher education, the Report evolves a novel path of constituting only one regulatory body for the entire higher education that acts as a think-tank with the power of intervention for facilitating a self-correcting mechanism. The purpose of this kind of indirect regulatory role is to ensure the fullest autonomy of everybody within the system. The YPR spells out details of how both the regulator and the institution in particular is going to evolve the right perspective on any educational concern. The YPR states:


Co-ordination among agencies which have different views of knowledge and education and which tend to treat knowledge within narrow confines is extremely difficult, if not impossible. It would, therefore be necessary to have a single apex body in the field of higher education which treats all knowledge areas in an integrated manner and works towards convergences which overarching regulatory powers. Only such a body would ensure that there is a live and close interaction among cothinkers and co-workers and there is no dilution of any idea, which it has to suffer if made to traverse a bureaucratic maze. (p. 53)


In other words, the highest regulatory body would exercise its power by way of sharing and deliberating together with co-thinkers and co-workers. This is the exact opposite of the current top-down style of functioning of authoritative bodies that run diktats and decide unilaterally by a select coterie of experts. The YPR makes a radical shift from the current state of exercise of power that tramples differences of opinion by invoking arbitrary positional authority which gets sanctified under some Act of the legislature. Diktats from the MHRD or UGC rules the roost now as such orders and directives carry the weight of the system. The YPR lightens such bureaucratic feats that institutions suffer from.  


It states:
The National Commission for Higher Education and Research (NCHER) would perform its regulatory function without interfering with academic freedom and institutional autonomy. It would not take recourse to inspection-based approval method. From the current inspection-approval method, it would move to a verification and authentication system. As a matter of fact, we envisage universities and institutions to put out self-declarations mandatorily in the public domain for scrutiny. Universities are to be seen as self-regulatory bodies and the Commission is to be seen as a catalytic agency which is more interested in creating more and more space for the individuality of each university and protecting their autonomy. (pp. 57-8)


This aspect of ‘individuality’ of the institutions in terms of transparency and self-regulation would enable the Indian University to become more ‘authentic’ about itself, as it would play out its specific characteristics in the public domain. This is also a long-term vision for transforming universities into self-sustaining citadels of knowledge. This is what the YPR terms as ‘recovering the idea of University’, which essentially is directed at recovering the lost space of autonomy and creativity in both the areas of academics and administration. In academics, the YPR suggests the creation of ‘virtual departments’ that develop emerging thematic concerns of various disciplines and departments. (p. 59) At the level of administration an evolution toward self-regulatory and transparent mechanism that would ensure bottom-up participation of the faculty has been the mainstay of its recommendations.


In Lieu of a Conclusion:
The first thing that one notices in this ambitious plan for “Renovation and Rejuvenation of Higher Education” is an agenda for institutional autonomy, accountability, transparency and a suitable mechanism of delivery and reach out to all possible beneficiaries. This directionality to ideal goals of higher education could have been better contextualised by way of suggesting means and ways of democratisation of various decision-making bodies within the University/ Institution. Although the Report speaks of the minimisation of the freedom of the VCs vis-a-vis faculty members (p. 61), it does not spell out how this internal curtailment of freedom can be overcome. One concern that arises from the current scenario is the non-representation of elected representatives of teachers, students and non-teaching staff members etc. in the Board or Executive Council of a University/Institution. Most often, the Vice-Chancellor, even bypassing the Acts and statutes of the University indiscriminately decide on all crucial matters thereby reducing every other shade of opinion into a non-entity. That the Vice-Chancellors create their own bureaucratic mechanism to stifle academic freedom is one area of concern that the YPR does not speak of in so many words. The Report emphasises on the criterion for evaluation of teachers by the students, which is a highly debatable proposition. The thrust of the Report on self-regulation and the talk of ‘formal procedures’ against teachers in case a teacher whose ‘feedback report remains poor in successive years’ (p. 44) are absolute contradictions. It gives the impression that the teachers can be subjected to hire and fire in the service conditions and the concerned authorities in the University are empowered to do so. This may in a moment establish an area of tyranny within the self-reforming, self-regulating body of the University, as it strengthens penal provisions, which universities, as liberal and humane institutions, are by definition opposed to. In a country deeply divided in ideological, religious, casteist, tribal and other such divisive categories, any assessment would have these hidden parameters that can mar academic neutrality.


The YPR is also silent about the democratic rights of teachers and students, which is considered as an essential component of any idea of autonomy. Internal democracy in an academic institution is possibly the most important contributing factor towards protection of its autonomy against external interference. It would have been possible to connect academic excellence with the level of internal democracy in an institution, as this stands out as the most crucial parameter of autonomy in an institutional setting where the Vice-Chancellor’s/Director’s word most often becomes the last word on any subject. The Report seemingly disconnects the need for a representational democratic practice in running the affairs of an institution from its academic, financial and research objectives.


This disconnect calls for a little more introspection on some of the disparaging practices of the University system today. One example that comes to my mind is the disproportionate allocation of funds for construction of buildings, roads and communication hubs in comparison to purchase of books, journals and grant of scholarships. This is a recent phenomenon that most of our Central universities/institutions are busy in new constructions and projects for beautification as they have already become the haven of contractors and builders. The YPR could have laid emphasis on a separation of the regular duties of academic and administrative authorities from such engineering activities so that the tendency of financial mismanagement does not arise at all in public funded institutions. Many of the Universities and IITs and IIMs are busy sprucing up campuses to give them a five-star look, while academics and research wise, they do not make an equally outstanding mark.


Compounding such malaises is the random commercialisation of University services, starting from transport to health to photocopying facilities. The YPR could have suggested some checks and balances on such commercialisation. The YPR retains a neoliberal streak in it as its autonomy talk is not complemented by an idea of expanding the academic and administrative freedoms in the University in all possible ways. Minus this little loophole, the YPR promises to plug many a loophole that subvert and damage our institutions today beyond any hope of redemption. Although the Report is politically correct in bringing out the new ways of reconnecting the University with society, it falls short of addressing the crucial link between education and the political status quo.




Footnote
1. YPR observes the use of the University’s official machinery to prevent peaceful debates between rival social forces that damages the institutional space for research and dialogue to a large extent. (p.16)
The author is a Reader, Department of Philosophy, North-Eastern Hill University, Shillong.

Where democracy shines through

(the hindu Jan 14 2009)

In the recent Assembly elections in different States, millions of people exercised their franchise. Yet, the verdict in two States, Jammu and Kashmir and Chhattisgarh, deserve special mention because there democracy emerged victorious in spite of heavy odds. Separatists in J&K and naxalites in Chhattisgarh had openly called for an election boycott. Their language was similar as was the nature of the threat. Yet, both were conclusively defeated by democracy.



Politics in J&K has seen many ups and downs. Certain rounds of elections in the State in the past lacked credibility, and this created lingering grievances. The 2003 elections were perceived to be fair.


The separatists had learnt from their failure. This time their intention was clear: the poll boycott call must succeed at least in the valley. The manner in which the government had surrendered on the provision of land to create facilities for the Amarnath Yatra pilgrims in spite of legislation passed by the J&K Assembly had emboldened them.


It is a different matter that overwhelming popular protest in the Jammu region led to the withdrawal of that decision. Naturally, the separatists as well as their patrons across the border were angry and upset. It is a reassuring fact that the people of J&K overcame pressure, terror and threats and voted in large numbers, marking perhaps the highest rate of polling there in recent memory. The most noticeable aspect was the large-scale participation of young voters whose support the separatists always claimed. Naturally, the leaders of the Hurriyat have been not only surprised but deeply distressed. Some of them have been led to introspect on the need to rethink their entire strategy. Have the people turned down the call for “azadi”?


The fact that Kashmiris in Pakistan Occupied Kashmir live in undemocratic and pitiable conditions was certainly not lost on them. The election results represent a proud affirmation by the people that they want their destiny to shine with India alone. The other indication is that the people want the interests of all the regions including Ladakh and Jammu to be taken into serious account. Hopefully, there will be a new dawn in Kashmir.


Momentous occasion


The victory of the Bharatiya Janata Party that has led Dr. Raman Singh to a second term in government in Chhattisgarh is an equally momentous occasion in India’s democratic polity. The State is seriously afflicted by naxalism. The geographical location of the State is unique in many ways: it shares its borders with Andhra Pradesh, Madhya Pradesh, Orissa and Jharkhand, and also a tip of Uttar Pradesh. This has given naxalites a locational advantage in terms of mobilisation. The area in and around Bastar and Dantewada are close to the Andhra Pradesh border while those around Sarguja and Ambikapur are close to the Jharkhand border. The naxalites wield considerable influence in many of these areas, particularly in the Bastar region consisting of Bastar Kanker, Dantewada, Narayanpur and Bijapur districts. These are tribal-dominated areas.


Naxalites abhor democracy and elections. They had openly called for a boycott of the Assembly elections and warned people of serious reprisals in case of any defiance. As one of those who were in charge of the BJP’s election affairs in the State, I travelled extensively in these areas and experienced the overpowering and looming fear as a result of the threats. I had gone to a meeting in Dantewada and the next day the district BJP vice-president was killed in Bijapur while campaigning. Similarly, a Congress worker was killed. In the Ambikapur area close to the Jharkhand border, Inspector General of Police B.S. Marawi was attacked by naxalites and critically injured. The naxalites’ strong hostility towards the BJP is well known. The Raman Singh government has taken a strong stand against naxalite violence and atrocities.


Yet, on election day people defied the dreadful call for a boycott and displayed their unflinching commitment to democracy by coming out in large numbers to vote. Many poor tribal voters walked 5 to 8 km to polling stations. The polling percentage in some of the chronically naxalite-affected Assembly constituency areas were as follows: Bastar: 74.81, Kondagaon: 78.7, Jagdalpur: 71.78, Keshkal: 70.56, and Dantewada: 54.68. These figures not only show the sheer courage of the voters but the inherent strength of Indian democracy. No one complained of unfair conduct of elections. The Election Commission of India had made elaborate arrangements.


The results were a pleasant surprise. In the entire Bastar region there are altogether 12 Assembly constituencies, of which the BJP won 11. In the Ambikapur Sarguja area the BJP won nine out of 11. In Korea district the BJP won all the three seats. Dantewada and Bijapur, which saw some of the worst naxalite violence in recent years, elected BJP candidates.


Obviously, the innocent people of Chhattisgarh are fed up with the naxalite violence and they responded aggressively with the only weapon they have —their votes. Since 2000, about a thousand tribals have been killed who opposed or disagreed with naxalites. Nearly 350 policemen have lost their lives in naxalite violence during the same period. About 90 school buildings have been blown up by the naxalites in these areas. About 77 roads have been damaged in landmine explosions. Damage to railway stations, banks, hospitals and panchayat buildings, besides electrical installations and telephone facilities in periodic attacks has been considerable. Nearly 60 per cent of the weekly markets (which are a usual feature in tribal areas) have been closed down because of naxalite atrocities. The tribal people have not been able to send their children to school in these areas, the teachers having fled in the face of repeated threats.


Campaign against Salwa Judum


We have seen a sustained campaign against Salwa Judum camps, but the critics conveniently ignore some fundamental questions: why were these innocent tribal people forced to leave their village homes and take shelter in the camps? Was it by choice, or to save one’s life in the face of torture and killing by the naxalites? We hear a lot about human rights and obviously these need to be respected. But what about the human rights of the innocent tribal people who are the victims of naxalite violence? Does anyone speak for them? There should not be double standards. Obviously, the pent-up anger against all this found a powerful voice — which explains the election results.


Congress leader Ajit Jogi had promised to close all the camps if voted to power. The people denied him the opportunity and gave a convincing new mandate to the Raman Singh-led BJP government. The conclusive defeat of separatism and naxalism by popular will is a great achievement of democracy. It will have long-term implications. If the leaders of these two violent movements draw the right lessons from these elections, then a new dawn awaits us. During campaigning, I had continuously appealed to the naxalites to learn a lesson from the Maoists in Nepal and opt for the democratic way if they are so sure of popular support for them. Maybe the Chhattisgarh result will lead to some rethinking on their part.

Higher education needs a better deal

One more annual session of the Indian Science Congress has come and gone. The Prime Minister delivered the ritual inaugural address, and it contained pious homilies of the kind served up on such occasions for at least three decades. The scientific community knows that the task of improving India’s universities calls for radical organisational and managerial reform. The omnibus one-size-fits-all application to universities of government rules, regulations and practices, especially in administrative, financial and personnel matters, stands in the way of substantive reform.


The government is extensively and micro-managerially involved in the quality aspects of the development and growth of teaching and research in universities, and not merely in the quantity aspects as argued by the Prime Minister. As the political and administrative policy-makers, governments ought to concern themselves with overall macro-level parameters of university governance, that too in the capacity of facilitators making critical interventions that are needed episodically in an otherwise self-regulating system. In the present circumstances, the ‘scientists and teachers’ addressed by the Prime Minister are in no way empowered to bring about any of the changes required to improve standards and promote excellence in teaching and research.

A university or college department can sustain a collegiate and stimulating intellectual environment only if it is staffed and run by people committed to a corresponding work culture. At the same time, bread-and-butter issues such as pay scales and teaching loads need to be addressed and conditions have to be radically improved, particularly in the colleges of affiliating universities. Governments need to support the universities, treating them on a par with the Tata Institute of Fundamental Research or the Indian Institute of Science, which have had the requisite backing to flourish as fine institutions. Why should universities in India suffer such deprivation in terms of human and material resources when all over the world they are acknowledged to be vital nurseries of talent?

The rot goes deeper and hence the good doctor must consider radical surgery. The University Grants Commission’s (UGC) practice of generously bestowing ‘deemed university’ status to institutions that are just not qualified has damaged teaching quality and standards, not to mention research. The same applies to the proliferation of State universities, which often have shoddy and even non-existent infrastructure.

Under such circumstances, the Prime Minister’s assertion that “the government [which includes the State governments] can at best ease supply-side constraints on teaching and research” is, with all due respect, misleading because what the government is actually doing is to ease quantity constraints, wreaking havoc on the maintenance of even minimal levels of quality. As a distinguished university teacher and researcher who has also served as Chairman of the UGC, Dr. Singh knows the grim realities. When Rajiv Gandhi castigated universities for their research mediocrity in his Inaugural Lecture at the 1986 Science Congress, he was rapped on the knuckles by the scientific community, which did not bother to explain why such a sorry state of affairs had come to be.

Remedial action

To get to grips with the real issues, the Prime Minister, while addressing the next Science Congress, should commit the government to remedial action by setting up a panel, independent of the UGC, comprising outstanding and independent scientists and scholars. That panel should conduct an impartial review of higher educational institutions that have been accorded deemed university status in the last five years for their compliance with norms, and recommend in which cases such status should be rescinded and under what conditions they could be restored. It should conduct a similar review of the State universities. Besides, the panel should review the working of the UGC and fix responsibility for the blatant disregard of norms which has resulted in an unholy mess.

Barely a month before his Science Congress address, the Prime Minister chaired a Cabinet meeting at which a poorly-thought-out Central Universities Bill 2008 was cleared with hardly any discussion. Writing in the Hindustan Times (January 7, 2009), N. K. Singh, member of the Rajya Sabha and a former member of the Planning Commission and Finance Secretary, pointed to the flawed nature of this piece of legislation: “The Central Universities Bill 2008 in its present form is a retrograde step. It negates citizens’ aspirations that contemporary legislation must reflect modern management and governance practices based on delegation and not old style regulations. It fails to signal any reform of our higher education system and more importantly, of investing them with the academic freedom and autonomy for encouraging research, fostering innovation and kindling the urge for excellence.”

It is puzzling that under these circumstances the Prime Minister could assert in Shillong that “the challenge before us is to ensure that (a) the light of modern education touches [one and] all, and (b) at the same time, the pursuit of excellence is encouraged and cherished.” The tight-rope walk this calls for is by no means easy. India’s record since Independence shows that time and again quality has been sacrificed at the altar of quantity, including during the tenure of Dr. Singh’s government. Yet the Prime Minister states that the theme of the Congress, ‘Science Education and Attraction of Talent for Excellence in Research,’ “is the priority of our government.”

However, in the entire address, the long list of initiatives taken or promised by Dr. Singh’s government did not include even one that reflected such an ‘emphasis’. Even the ‘action’ in the context of the recommendations of the Sixth Pay Commission is worded thus: “The Pay Commission has made a recommendation that scientific personnel may be provided a new Performance Related Incentive Scheme (PRIS). The government has accepted this special recommendation and we will implement a suitable scheme to reward good performance.” Nothing could be more bland, more non-committal and non-operational. Contrast that with the across-the-board increase in salaries, not linked to performance, to officers of the defence services announced by the government just days before the Science Congress.

Both the Prime Minister and the Minister for Science and Technology are surely aware that the Scientific Policy Resolution (SPR), drafted by Jawaharlal Nehru and passed by Parliament on March 4, 1958, clearly said that “we, both the Executive and Parliament, are committed to providing the best of service conditions to our scientists.” Over the last half a century, governments of various hues have indeed honoured that commitment. But compared to other career choices, science and technology research or teaching in a university or a college holds little attraction for our youth. Even if they are not swept off their feet by careers in the field of information technology, they head for the elite triad of atomic energy, space and defence research and development which offers pay scales, working conditions, opportunities and challenges that are way above even the most favoured Central universities such as the Jawaharlal Nehru University or Delhi University, let alone in the Indian Institute of Science or the Indian Institutes of Technology.

These being the realities, mere exhortations by Dr. Singh such as “our higher educational institutions must be receptive to the needs of young people,” “they must promote younger talent, indeed youth, to lead,” and “scientific institutions must be led by intellectual leaders, irrespective of age,” are, even to an aspiring youth, water over a duck’s back. For all evidence shows that the government does not practise what it preaches. The reality is that Manmohan Singh and some Prime Ministers before him were unable or unwilling to effect change. Last year, scientists in the Department of Atomic Energy and the Indian Space Research Organisation had a bonanza of financial incentives showered on them, which no university department can dare dream of.

If this situation is not fundamentally altered, and altered fast, the numerous ‘new schemes’ listed at such length by the Prime Minister in Shillong will tragically amount to “much said but nothing done.”

President and choice of Prime Minister

The most important function of the President under the Constitution is in the appointment of a Prime Minister when no party in Parliament has a majority. President R. Venkataraman, who died on January 27 this year, had the onerous task of appointing three Prime Ministers in two hung Parliaments during his tenure between 1989 and 1992. As the next general election looms close and there may be a hung Parliament, it is instructive to examine the basis on which he appointed th e three.



President Venkataraman evolved a rule that in a Parliament where no party had a majority, political parties in order of their strength should be given the opportunity to form a government and the President was not to consider the viability of a government so formed. According to him, that was to be left to the Lok Sabha. He believed that this was supported by British Constitutional practice.


He applied this rule in 1989 when he appointed V.P. Singh the Prime Minister as he was the head of the second largest party group, the Janata Dal/National Front — after Rajiv Gandhi as leader of the largest party, the Congress party, on his suggestion declined to form the government. Likewise, following the outcome of the next general election in 1991, he appointed P.V. Narasimha Rao Prime Minister when the Congress party secured the largest strength but not a majority in the Lok Sabha. In between, in November 1990, he called upon Chandra Shekhar who defected from the Janata Dal to form a minority government with the support of the Congress party.


This view of President Venkataraman cannot be a prescription for all situations. Inviting the leader of the single largest minority party in a divided house without ascertaining the likely support to it in Parliament would be highly chancy. In the two cases of the appointment of V.P. Singh and P.V. Narasimha Rao, it was antecedently reasonably clear that the other parties would not, at least immediately, outvote the minority government. President Venkataraman was therefore on fairly safe ground in his decisions.


In cases where other parties in combination have declared their opposition to the largest party, it would be futile for the leader of the largest party to even meet Parliament and only to be defeated straightaway. This was demonstrably shown when President Shankar Dayal Sharma invited A.B. Vajpayee to be the Prime Minister in 1996 because he was the leader of the single largest party in the 11th Lok Sabha without the support of any major party. Mr. Vajpayee had to withdraw his motion of confidence in the Lok Sabha and resign within 13 days when defeat stared him in the face.


Later Presidents have not subscribed to the view of President Venkataraman. President K.R. Narayanan correctly added a qualification to calling the party with the largest strength at the time of the 12th Lok Sabha in 1998, which also presented a hung Parliament.


After sounding all parties, he called upon Mr. Vajpayee of the BJP to form the government. He rightly said at that time that the rule of giving the first opportunity to the leader of the largest number of seats “is not an all-time formula because situations can arise when MPs not belonging to the single largest party or combination can as a collective entity outnumber the single largest claimant.”


Similarly, President A.P.J. Abdul Kalam called upon Sonia Gandhi to form the government in 2004 after the 14th Lok Sabha election only after he had ascertained the support other political parties would give to the Congress party, which had secured the largest number of seats but not a majority.


However, President Venkataraman was on sound ground when he declined to heed the advice given in 1989 to him by several leading constitutional experts that the Congress should not be given an opportunity to form a government because it was “rejected by the electorate” by not getting a majority of seats. He correctly referred to the practice in the United Kingdom where an outgoing Prime Minister was reappointed by the monarch even when his party did not secure a majority in the election.


In November 1990, Mr. Singh resigned as Prime Minister when the BJP withdrew its support to the Janata Dal/National Front, leaving the President once again the difficult task of finding a party to form the government in a hung Parliament. The situation became highly complicated when Chandra Shekhar defected from the Janata Dal with more than one third of its members and held himself out to form the government. President Venkataraman consulted the Congress party and the BJP, both of whom declined to form a government. He then got an assurance from Rajiv Gandhi that the Congress party would give unconditional support to the Chandra Shekhar government.


He was faced with a dilemma: not being able to dissolve the house as the outgoing Prime Minister, Mr. Singh, had not asked for dissolution of the house; and not finding a person who could form the government except the Chandra Shekhar faction of defectors with the support of the Congress. He recorded in his memoirs that in desperation, he decided to “take a plunge for good or bad and to entrust the government to Chandra Shekhar and trust in God to save the Constitution.”


Within three months, Rajiv Gandhi withdrew his support to the government on the flimsy excuse of the Haryana police keeping surveillance on him. Thereupon Prime Minister Chandra Shekhar resigned and advised that the Lok Sabha be dissolved. Eminent constitutional experts told President Venkataraman that he was not bound by the advice of Mr. Chandra Shekhar. He disagreed with them and referred to the British practice of the monarch not rejecting the advice of the Prime Minister to dissolve the House even when he was defeated.


President Venkataraman therefore dissolved the Lok Sabha and fresh elections followed. This was the most dubious decision of his tenure. First, he could not have called upon Chandra Shekhar to form a government by rewarding defectors. Secondly, his view that a President could only dissolve the Lok Sabha if an outgoing Prime Minister had advised dissolution was unduly restrictive of the powers of the President in a crisis.


The events of 1989 to 1992 show that in the choice of a Prime Minister in a hung Parliament, the President must have independence, foresight, the confidence of all parties, and a basic knowledge of constitutional conventions to make a difficult decision on his or her own — an unenviable task for a constitutional head of state.

HDI Oscars: slumdogs versus millionaires

(the hindu Mar 18 2009)

It has been the night of the long knives for our burgeoning billionaire population. Its band has just been decimated, falling by more than half from 53 to 24. The latest Croesus Count, also known as the Forbes Billionaires list, makes that much clear. We also fell by two notches to the sixth rank in the list of nations with the most billionaires. Our earlier No. 4 slot being slyly usurped by the Chinese who clock in with 29. More mortifying, we are a rung below the Brits w ho’ve grabbed Perch 5, with 25.



The net asset worth of India’s brightest and best has also shrunk by over a third from the time of the last Forbes scroll. By 2007, that worth had reached $335 billion. That is, 53 individuals in a population of one billion held wealth equal to almost a third of their nation’s GDP at the time. This year, that worth plunged to $107 billion. (A moment’s respectful silence in memory of the dear, departed billions seems in order.) But there is some comfort in that our team is still worth more than twice what its Chinese rivals are. And we even now have eight billionaires more than all the Nordic nations put together — though they boast the highest living standards in the world.


“Four Indians were among the world’s top ten richest in 2008, worth a combined $160 billion,” points out Forbes. Today, alas, “that same foursome is worth just $54 billion.” But the 29 Indian tycoons reduced to the penury of mere millionairehood should not lose heart. Forbes offers us these words of reassurance. “The winds of wealth can change quickly … They may yet again blow favourably in the direction of these tycoons.” So what if the big balances fly at half mast briefly? There could be gales ahead.


Alongside this grim tragedy runs a slightly longer-term saga. India has fallen to 132 in the new rankings of the United Nations Human Development Index (HDI) for 179 nations. Each year since 1990, the U.N. Development Programme has brought us this index, as a part of its Human Development Report. The HDI “looks beyond GDP to a broader definition of well-being.” It seeks to capture “three dimensions of human development: a long and healthy life (measured by life expectancy at birth). Being educated (measured by adult literacy and enrolment in primary, secondary and tertiary education). And third: GDP per capita measured in U.S. dollars at Purchasing Power Parity (PPP).”


Worst in a decade


In the Index of 2007-08, India ranked a dismal 128. Now we’re at 132. That is our worst ever grade on the Index this decade. It means, among other things, that little Bhutan, never once in the Forbes hall of fame, has trumped us in the new HDI rankings. The tiny Himalayan nation clocks in at 131. That is, a notch above its “second-fastest-growing-economy-in the-world” neighbour. Bhutan once languished amongst the bottom 15 nations in the U.N.’s HDI. It has never been among the world’s fastest growing economies.


At rank 132, India also lags behind war-ravaged Congo, Botswana, and Bolivia. (The last often called Latin America’s poorest nation). The Occupied Territories of Palestine (torn by conflict for 60 years) are also ahead of us. Another neighbour — Sri Lanka — has been devastated by war for over two decades and has slipped a few notches. It still logs in at 104 — 28 rungs above India. Vietnam suffered casualties in millions in the war waged against it by the United States. Decades after, its agriculture is yet to recover from the planned destruction, lethal bombing, and the conscious use of deadly poisons. But Vietnam clocks in at 114. And China at 94 despite falling several places.


The bad news about the bad news is that these figures reflect the good news days. They relate to the year 2006. (The Sensex was booming. It breached the 10,000 and even 14,000-mark for the first time ever. The Indian economy also grew at 9.6 per cent in 2006-07 and 9.4 per cent in 2005-06.) Those were the glory days our 132nd rank is rooted in. The same period when we churned out 53 dollar billionaires. So the updated HDI numbers do not begin to capture the economic downturn. The picture will be even less pretty when those factors kick in.


They do capture, though, the revised purchasing power parity (PPP) estimates that clocked in by late 2007. These columns foretold this problem at the time (The Hindu, Dec. 24, 2007). It was clear that if the Index was using the older PPP data, then “even our awful HDI performance could get worse” once those were revised. (India’s GDP per capita (PPP) fell from $3,452 to $2,489 with the new data.)


And yet, we’d be even lower down than rank 132 but for our showing on the GDP-per capita front. Even now, our rank on that front is six notches higher than our HDI rank. It makes us look better than we are. For instance, in making out the current rankings, U.N. researchers point out that the GDP per capita data for 2006 “caused India to rise one place.” But “new data (for 2006) on life expectancy caused India to fall one place.” India then also fell two more places as two more nations — Montenegro and Serbia — joined the list. Both fared better than we did. We fell a further two places “as a result of revised PPP estimates.” That’s how we ended up four slots below our last rank.


What does it mean to rank much better on GDP per capita than in the HDI, as we do? It means you have been less successful in converting income into human development. Our GDP per capita rank is six rungs above our HDI rank. Vietnam’s HDI rank of 114 is 15 rungs above its GDP per capita rank. Unlike us, Vietnam has — despite awful historic handicaps — converted its wealth into human development far better.


Cuba logs in at 48, thus breaking into the top 50 nations in the HDI. (While India firms up its place in the bottom 50.) That’s seven places above wealthy Saudi Arabia, whose per capita GDP is three times higher than Cuba’s. In that ranking, Saudi Arabia is No. 35, towering above Cuba’s 88. But when it comes to human development, Saudi Arabia lags seven rungs below Cuba. Apart from suffering lower income, Cuba has lived under crippling sanctions for decades. Sanctions that have imposed huge constraints and high prices on all essentials. Yet, life expectancy at birth in Cuba is now 77.9 years. That’s almost the same as the U.S. (78). And about 14 years better than India’s 64.1. Meanwhile, the U.S. has logged its worst rank ever, falling to 15 from 12. Between 1995 and 2000, the U.S. was always in the top 5, even staying at rank 2 for a couple of years. Like with India, its decline in HDI has come in the very years seen as its best, the Golden Age of the Free Market. The Nirvana point of neo-liberalism. A year into the economic reforms, India in 1992 ranked 121 among 160 nations then covered by the Index. Today, India is at 132 among 179 nations. Straight comparisons across that time are hard as the Index has changed in numbers and methodology. But the trend is clearly not joyous.


Steady decline


The HDI figures since 2002 signal a steady decline in the nation’s conversion of wealth into human development — even as the numbers of its billionaires and millionaires doubled and trebled. Now the billionaires have shrunk in number, but not the slumdogs. There are at least 836 million Indians living on less than Rs. 20 a day, as the government’s own report told us in 2007. Over 200 million of those get by on less than Rs.12 daily. And those are pre-downturn numbers, too. Maybe, we need a new Forbes 500 list — naming the world’s 500 poorest citizens. Who could beat us on that one?

What caused the global economic crisis?

(the Hindu Mar 16 2009)
The global economy remains mired in a deep crisis. Very recently the World Bank, in one of its bleakest assessments yet of the ongoing crisis, has said that the global economy and the volume of global trade would both contract this year, the first time since World War II.



The IMF, which in January had forecast the global economy to grow by just 0.5 per cent in 2009, now predicts a contraction. Developed countries will see their economies shrink while developing countries will grow but a much slower rate than what they have been used to. There is near unanimity that the world economy will not recover until the raging financial sector crisis is brought under control. However, despite committing several hundred billion dollars of public money, governments in the U.S and other developed countries have not been able to come to grips with the crisis. Extreme measures such as outright nationalisation of banks — to save them from the crisis — are being contemplated. In April, heads of G-20 countries will meet in London to discuss a number of proposals to reinvent the world financial order. The decision to call such a meeting was taken earlier, in November 2008, at the Washington summit. What are the factors behind the crisis? Ahead of the G-20 meeting the question assumes topical significance.


Global imbalance


Obviously identification of the causes would help in finding long lasting solutions or at least mitigating the immediate impact of the crisis. So far there has been no unanimity on the factors responsible for the crisis. There have been two different, but not mutually exclusive viewpoints on what is behind the crisis.


According to one view, shared among others by Nobel prize winner and New York Times columnist Paul Krugman, the financial sector debacle has its origins in the “global imbalance” — the phenomenon of large current account surpluses in China and a few other countries co-existing with large U.S. deficits. The global imbalance is reflected in large mismatches in the current account positions of some countries and its mirror image in the form of domestic savings — investment mismatches. Understanding such imbalance is not that difficult even for lay people. The U.S has been running huge deficits. Countries such as China and Japan needed an outlet to deploy their surpluses. It was mutual convenience, as it were, for the savings of Asian countries to find a haven in the U.S., which needed the money because it saved very little.


An important manifestation of the global imbalance has been the flood of money into the U.S. that kept interest rates low, inflated prices of real estate, shares and other assets. When the bubble burst the financial sector crisis surfaced. So an ‘orderly’ unwinding of imbalance alone will help mitigate the crisis. If this viewpoint is accepted, macro economic policies of countries need fine tuning.


The U.S government’s efforts to persuade China to revalue the yuan, making its exports less competitive arises from the belief that global imbalance is a primary cause for the current crisis. The U.S. has not been successful so far and similar efforts to influence other countries will not bear fruit unless there is a high degree of understanding and co-operation among nations. A consensus is highly doubtful at the forthcoming summit.


Poor regulation


A very different view has been presented by the IMF in a recent paper. Global imbalance is only an indirect cause. The main culprits were deficient financial regulation and the failure of market discipline resulting in a systematic flouting of rules and regulations by banks.


As the sub-prime crisis showed, practically all banks used their ingenuity to develop structures and products that were outside the normal regulatory confines of banking in order to satisfy their customers seeking high returns. In the process they created a large number of shadow banking institutions — investment banks, hedge funds and the like. These shadow institutions grew over time to be systemically important. Through securitisation and other means the banks convinced themselves that the risks were spread out.


The complex instruments presumed to minimise risks with the original issuer and guarantee a high return for those who bought them. In the end those who created them did not comprehend their risks.


The collapse of the housing market was followed by a great squeeze in the credit markets.


The IMF’s prescriptions (in one of the background papers to the G-20 summit) are to step up regulation, to bring ‘shadow banking’ within the ambit of regulation.


Obviously, both viewpoints have merit and at the forthcoming summit a judicious mix of the two — winding down global imbalance and enhanced regulation — will be agreed upon.


The Indian connection


While on the subject of global imbalance and global economic crisis it is worth recalling the prescient observations of former RBI Governor Y. V. Reddy. In an address at the Financing for Development (FFD) Office, United Nations, on May 11, 2006, he had this to say: “One wonders whether there is a dissonance between the perception of financial markets and that of policy makers in regard to global imbalances.


“The policy makers appear to give some signals of concern, but the response of the financial markets is often out of alignment with the signals. Interestingly, anecdotal evidence shows that analysts in financial intermediaries are sensitive to the downside risk of imbalances but the conduct of the participants does not reflect the awareness... If such dissonance is true, and persists, what would be the effectiveness of public policy?”


The speech was delivered 29 months before the collapse of Lehman Brothers and other institutions and the full impact of the crisis began to be felt around.

School education: struggling to learn

How would you feel if half of the buses and trains that are supposed to be running on a particular day were cancelled at random — every day of the year? Quite upset, surely (unless you can afford to fly). Yet a similar disruption in the daily lives of children has been quietly happening for years on end, without any fuss: in rural north India, on an average day, there is no teaching activity in about half of the primary schools.



Positive changes


In 1996-1997, the Public Report on Basic Education (PROBE) team surveyed primary schools in about 200 villages in undivided Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh. In 2006, we revisited the same areas to find out whether and how the schooling situation had changed over ten years. There were many signs of positive change.


First, school enrolment rates have risen sharply, for example, from 80 to 95 per cent in the age group of 6-12 years. For the first time, the goal of universal school participation is within reach.


Secondly, social disparities in school enrolment have considerably narrowed. For instance, the gap between boys and girls has virtually disappeared at the primary level. Enrolment rates among Scheduled Caste and Muslim children are very close to the sample average – about 95 per cent in each case. Enrolment among Scheduled Tribe children, however, is lower at 89 per cent.


Thirdly, the schooling infrastructure has improved. For instance, the proportion of schools with at least two pucca rooms went up from 26 to 84 per cent between 1996 and 2006. Nearly three-fourths of all primary schools now have drinking water facilities. Toilets have been constructed in over 60 per cent of all schools.


Fourthly, school incentives are reaching many more. To illustrate, free uniforms were provided in barely 10 per cent of primary schools in 1996, but this went up to more than half in 2006. Similarly, the proportion of schools where free textbooks are distributed was less than half in 1996, but close to 100 per cent in 2006.


Fifthly, cooked mid-day meals have been introduced in primary schools – they were in place in 84 per cent of the sample schools. The bulk of the gap was in Bihar, where mid-day meals were still in the process of being initiated at the time of the survey.


Economic growth, rising parental literacy, and the rapid expansion of rural infrastructure and connectivity have certainly facilitated these achievements. But public initiatives such as Sarva Shiksha Abhiyan, Supreme Court orders on mid-day meals, and active campaigns for the right to education have also made a major contribution to this new momentum for the universalisation of elementary education.


Idle classrooms


Having said this, we must highlight the fact that the quality of education remains abysmally low for a vast majority of Indian children. To start with, school enrolment does not mean regular attendance. Almost everywhere, children’s attendance as noted in the school register was far below enrolment. Actual attendance, as observed by field investigators, was even lower.


Further, classroom activity levels are very low. One reason for this is the shortage of teachers. Despite a major increase in the number of teachers appointed, the pupil-teacher ratio in the survey areas has shown little improvement over the years. The proportion of schools with only one teacher appointed has remained much the same – about 12 per cent. In 2006, an additional 21 per cent of schools were functioning as single teacher schools on the day of the survey, due to teacher absenteeism. Aggravating the situation is the fact that teachers often come late and leave early. Even when they are present, they are not necessarily teaching. In half of the sample schools, there was no teaching activity at all when the investigators arrived – in 1996 as well as in 2006.


Even in the active classrooms, pupil achievements were very poor. Teaching methods are dominated by mindless rote learning, for example, chanting endless mathematical tables or reciting without comprehension. It is therefore not surprising that children learn little in most schools. For instance, we found that barely half of the children in Classes 4 and 5 could do single digit multiplication, or a simple division by 5.


No quick fix


Some quick fixes have been tried, but with limited results. One of them is the appointment of "contract teachers," often seen by State governments as a means of expanding teacher cadres at relatively low cost. In the government primary schools surveyed, contract teachers account for nearly 40 per cent of all teachers. Owing to the contractual nature of their appointment, and the fact that they are local residents selected by the Gram Panchayat, these contract teachers were expected to be more accountable than permanent teachers. This has not happened. The inadequate training and low salaries of contract teachers affect the quality of their work. In some schools, they were certainly more active than the permanent staff; but not in others where they were protected by their connections with influential people in the village.


Another way of improving school performance, related to the first, is to promote community involvement and decentralised school management. Most of the schools in our sample had a Village Education Committee or some other committee of this sort. In most cases, these committees have helped to improve the school infrastructure, select contract teachers, and supervise midday meals. However, they have been much less effective in improving the levels of teaching activity. Power in most committees rests with the President (generally the sarpanch) and the Secretary (generally the head teacher), who need to be held accountable in the first place. With the exception of Parent-Teacher Associations (PTAs), representation of parents in these committees tends to be nominal, and their active involvement is rare. The survey found numerous instances where committee members did not even know that their name had been included in the committee.


This does not detract from the importance of community participation in reviving classroom activity. But active and informed community participation requires much more than token committees, especially in India’s divided and unequal social context.


A third quick fix is greater reliance on private schools. The proliferation of private schools in both urban and rural areas often creates an impression that this is the solution. A closer look at the evidence, however, does not support these expectations. The quality of private schools varies a great deal, and the ’cheaper’ ones (those that are accessible to poor families) are not very different from government schools. Their success in attracting children is not always a reflection of better teaching standards; some of them also take advantage of the ignorance of parents, for example, with misleading claims of being "English medium." Further, a privatised schooling system is inherently inequitable, as schooling opportunities depend on one’s ability to pay. It also puts girls at a disadvantage: boys accounted for 74 per cent of all children enrolled in private schools in the 2006 survey (compared with 51 per cent of children enrolled in government schools). Private schooling therefore defeats one of the main purposes of ’universal elementary education’ – breaking the old barriers of class, caste, and gender in Indian society.


Despite the recent mushrooming of private schools, about 80 per cent of school-going children were enrolled in government schools in 2006 – the same as in 1996. This situation is likely to continue in the foreseeable future, which makes it imperative to do something about classroom activity levels in government schools, instead of giving up on them.


The future


The title of the last chapter of the PROBE Report, published in 1999, was "Change is Possible." In many ways, this assertion has come true. Much has indeed changed – for the better – in the schooling system during the last ten years or so. The need of the hour is to consolidate the momentum of positive change and extend it to new areas – particularly those of classroom activity and quality education. The forthcoming Right to Education Act may help. But the first step is to stop tolerating the gross injustice that is being done to Indian children today. Wasting their time day after day in idle classrooms is nothing short of a crime.

Reflections on the global economic crisis

The hindu Mar 9 2009

A terrible recession is sweeping the world, playing havoc with the lives of millions of people. Each day comes news of job cuts, decline in consumer spending, and the downward trend of the stock market. All sorts of explanations and cures are being offered. Some say it is due to greed. Others blame sub prime mortgages, hedge funds, derivatives, monetary policy, or interest rates. To my mind, these are superficial explanations.



An economic recession is a feature of an industrial, not agrarian, economy. In agrarian economies, too, there were such catastrophes, but these were due to natural calamities such as drought, flood, and epidemics. An economic recession is a feature peculiar to industrial economies.


There have been recessions every eight or ten years since the 18th century Industrial Revolution but recoveries followed shortly. There was, however, one Great Depression, which lasted from 1929 to 1939. It was ended only by the Second World War, which claimed 50 million lives. The War generated massive demand for armaments, supplies to armies and affected civilian populations, and capital for reconstruction.


We now witness a Second Great Depression, and its sweep is wider than that of the 1929 Depression. While the latter affected mainly America and Europe, the present crisis affects the whole world.


The principal cause of an economic recession is the lack of sales, which in turn is due to the lack of purchasing power among the masses. There are other causes, but these are incidental. A large part of the world’s population is so poor that it hardly has any purchasing power. Even the developed countries have many poor people.


As the industrial economy develops, industries tend to become larger and more capital-intensive. This is necessary for them to face the competition in the market, otherwise their rivals will do it and drive them out of the market, by underselling them. The process is inevitable in most industries, but it leads to large-scale unemployment, since many workers in a labour intensive industry are laid off when it becomes capital intensive.


Now the worker, apart from being a producer, is also a consumer. A worker in a steel factory does not consume steel, but he and his family consume food, clothes, shoes, and so on. When he loses his job, his purchasing power is drastically hit. When large-scale unemployment occurs (because industries increasingly become more capital intensive) the market correspondingly contracts. While production increases, sales decrease and this leads to a recession.


Thus the very dynamic of an unregulated industrial economy is that by the inevitable process of its growth, it keeps destroying its market. The goods produced have to be sold. But how can they be sold when people have lost their purchasing power owing to unemployment?


Mass production must be accompanied by mass consumption. By taking purchasing power out of the hands of mass consumers, industrialists deny themselves demand for their products that would justify reinvestment of their capital accumulation in new plants – which would also provide employment. Thus while productive capacity keeps rising, demand contracts until the system self-destructs.


Before the Great Depression, large-scale employment was generated by a high level of debt in the form of mortgage debts and so on. The same happened recently. But this cannot continue endlessly. A time comes when people cannot repay their debts because of unemployment or a cut in real wages. Then debtors curtail their consumption, which reduces demand, and the producing units have to close down or cut production.


In modern economies, most businesses require loans for their normal operation. Banks retain a fraction of their deposits (5 per cent or less) and give out the rest as loans. When the banking sector does not work properly because of defaults by borrowers, businesses do not easily get loans. They then curtail production and lay off workers. Consequently, they require less raw material and other supplies. Hence their suppliers reduce their output and lay off workers. The same then happens to the suppliers of these suppliers, etc. In other words, a chain reaction sets in (known as the multiplier effect in economic theory).


If manufacturers cannot sell, they cannot generate enough revenue to repay loans. The business goes bankrupt and the bank finds in its hand non-performing assets. Hence banks want to lend less. This becomes a vicious cycle. Depositors panic because some banks would have collapsed. They withdraw their money, and more banks collapse.


The economic recession is thus caused by the reduction of purchasing power among the masses, which is due to the very dynamics of unregulated growth. Productive capacity has been enhanced enormously, but the majority of people are too poor to be able to buy.


The problem, therefore, does not relate to increasing production, but increasing the purchasing power of the masses. Production can be increased several times because there are tens of thousands of engineers, technicians, and so on, and there are immense reserves of raw materials in India. But the goods produced have to be sold. How can they be sold when the people are poor or unemployed and have very little purchasing power?


The problem is also not how to increase demand. The demand is there but people do not have the money to purchase goods. In India, for instance, 70 per cent of the people live on incomes of Rs. 20 a day. This is not sufficient even to buy necessities such as food or medicines, not to speak of durable goods.


The solution to the economic crisis lies in raising the purchasing power of the masses. How this is to be done requires a great deal of thinking and discussion, and all serious thinkers must address this problem facing India, and the world.


To my mind, one of the methods to resolve the economic recession is to reduce taxes drastically. The purpose of imposing taxes is to generate revenue for the state so that it can perform its functions. If rates are reduced, the prices of goods will go down and people can buy more. In other words, by reducing taxes we increase purchasing power. That will be an important step to resolve the crisis.


No doubt the government needs tax revenues. However, that revenue should not exceed what is genuinely required. There is a lot of waste of public funds owing to mismanagement, corruption, and so on, because of which the Government expenditure gets grossly inflated. Wastage of public funds should stop, which means stamping out corruption, mismanagement and wastage. This calls for strict accounting of public funds and vigilance by the public, including professionals.


In a country like India with its immense poverty and income disparities, the current tax rates seem inequitable and unjust. The maximum rate of 30 per cent for all income over Rs. 5 lakh needs to be reviewed, and a more realistic sliding scale of income introduced for those in higher income groups. It is absurd that the income tax rate for a person making Rs. 5 lakh or Rs. 100 crore a year is the same.


On top of this, those who play the financial markets are not required to pay any taxes on long-term (12-month) capital gains or on dividends, making the Indian financial market perhaps the most tax-free in the world. Even for short-term gains, unique tax exemption vehicles (via Mauritius and so on) have been ingeniously evolved. It is rules and regulations like this, specially crafted for the rich and affluent, which are increasing income disparities.


The Indian situation is that while we have increased the number of billionaires, the poor have become poorer and even the middle class is finding it difficult to make ends meet because of rising prices. This could lead to widespread social turmoil and social disturbances. It is unfair to the vast masses of our people and it will not be tolerated much longer.


Society owes subsistence to all its citizens either by enabling them to work on a reasonable wage, or ensuring a livelihood to those unable to work. The great French thinker Jean-Jacques Rousseau observed in his Discourse on Inequality: “Nothing can be farther from the law of nature, however we define it, than that… a handful of people be gorged with luxuries while the starving multitude lacks the necessities of life.”


In Maharashtra, hundreds of thousands of farmers have committed suicide and are still doing so, while one industrialist is reported to have built a 40-storey building for his residence. This state of affairs cannot continue much longer.


Unfortunately, most people are silent about this terrible plight of our people. Those who should be speaking out are mostly beneficiaries of the present system and hence do not want to disturb it. This is the time for patriotic intellectuals to break the pattern and speak out. They must study economic theory and read the books of economists such as Adam Smith, Ricardo, Marx, and Keynes, or at least some commentaries on them. This will enable them to better understand the economic crisis, so that they can propose measures to alleviate it.

Combating terrorism, and some management issues

Every constitutional order provides for modifications in law to enable the state to face challenges to its unity and integrity and the security of its citizens. In fact, the entire criminal justice system which gives the state the power to use force against its own citizens, going even to the extent of resorting to killings, is designed for the purpose. In case of emergency situations such as an internal rebellion or external aggression, the state’s power to use forc e is further enhanced, but with suitable checks to prevent abuse or denial of the due process of law. In the process, what happens is a fresh balancing of the interests of liberty and security — both of which are the foundations of the rule of law in a constitutional system. Without security there is no liberty or freedom; and without liberty and freedom, security is not worth preserving for democratic societies. The challenge, therefore, is to find an acceptable balance between the two and to ensure that the government keeps within the limits set by law in the exercise of its authority.







The Indian Constitution, born in difficult times after Partition, does provide for a legal regime which can accommodate reasonable restrictions on liberty, the standards of which can vary depending on the gravity of the challenge and the risks involved for basic rights and constitutional values. We have an independent judiciary to test the constitutionality of the standards set by the laws and to ensure the accountability of those who exercise public authority under those laws.






It is only in this framework that one can appreciate the recent enactments on terrorism and seek to understand the fresh balancing between liberty and security that is attempted through them. Of course, opinions may differ as they always do in a democratic set-up. But partisan considerations should not be allowed to cloud judgment.






Laws and enforcement


Though laws, no matter how harsh they are, cannot by themselves prevent terrorist attacks, they can help in the successful investigation and prosecution of cases against terrorists and those who aid and abet terrorist acts. Therefore the need for special laws to combat terrorism cannot be underestimated. However, equally important are institutions set up to implement terrorism-related laws, and the level of motivation and competence of persons appointed to run those institutions. The problem lies with the implementation of laws and the abuse of powers conferred on the authorities under the special laws.






The record in this regard has been far from satisfactory, to say the least. Popular criticism against these laws has been based more on the manner in which they are implemented than on any modifications in the laws and procedures. Had the regular criminal justice system performed its task with reasonable results, there would have been no need for special laws or institutions to deal with terrorist acts. In the long run, only good governance can control terrorism. Meanwhile, as a temporary measure, the country needs special laws that empower the government to combat terrorism. Hard crimes and soft justice cannot co-exist for long if security is desired.






The fight against “terror” is larger and more complex than the challenge of dealing with terrorists. The former requires more of statesmanship and good governance. The latter demands legislative and administrative reforms to plug loopholes in criminal law and the criminal justice administration. In this regard, the reform of the police and the prosecution machinery has been identified as an essential step. Reforms are needed to achieve professionalisation and capacity-building. Specific recommendations in this regard are already on the table and even the Supreme Court had given directions to implement certain minimum measures. The lack of political will, the fear of the unknown, and manipulation by vested interests in the administration are reportedly holding up the changes in the States.






Three distinct functions are involved in combating terrorism. They relate to pre-empting and preventing; containing and managing; and investigating and prosecuting. There may be a need for a convergence of these three functions at operational levels. The challenge before the government is managing the three-fold counter-terrorism mechanism for optimum results. A management plan and a management team are to be put in place with adequate powers and resources as some of the developed countries have done. The Constitution will not come in the way of mounting such an effort with appropriate legislative support.






Terror law gets teeth


The most important change brought about recently is in respect of streamlining the investigation and prosecution of terrorist offences at the Central level. The establishment of the National Investigation Agency under the NIA Act of 2008 is the first step towards effective handling of terrorism-related offences. Parliament passed the law with near unanimity, which indicates the willingness of different political parties ruling the States to enable the Centre to act on the issue. Combating terrorism is a joint responsibility of Central, State and local governments.






Timely, accurate intelligence and up-to-date databases on terrorist elements are essential to evolve strategies to counter terrorist activities. This requires multi-agency coordination and time-bound action which only an empowered central body with regional and local field offices with instant connectivity can accomplish. Similarly, a dedicated team of highly motivated, well-trained and fully professionalised officers supported by adequate resources, equipment and authority alone can take timely action to combat terror.






The foundation for this is laid by the NIA Act. It envisages Centre-State partnership in the investigation of terrorist cases. It limits the jurisdiction of the proposed agency to certain scheduled offences under seven Central Acts relating to atomic energy, unlawful activities, anti-hijacking, civil aviation safety, maritime safety, weapons of mass destruction and SAARC Terrorism Convention obligations. From the Indian Penal Code, offences against the state (Sections 121 to 130) and offences relating to currency and bank notes (Section 489A to 489E) are included in the scheduled offences for NIA responsibility.






The second piece of legislation, the Unlawful Activities (Prevention) Amendment Act, 2008, makes a number of substantive and procedural changes to empower the NIA to act effectively and decisively on terrorism-related activities. The Act does incorporate some of the provisions of the earlier law on terrorism (now repealed), such as for detention in police custody for 30 days (instead of 15 days) and extension of the maximum period for filing a chargesheet to 180 days (instead of 90 days) if the court is satisfied with the report of the Public Prosecutor on delay in completing investigations.






The powers of the police to arrest and search have been tightened. Sections 43A to 43F have been substituted with provisions that enlarge the power to search any premises or arrest any person about whom such an officer knows or who the officer has reason to believe has a design to commit an offence covered under the Act. The provision of anticipatory bail (Section 438) does not apply to offences under the Act. Further, bail on one’s own bond can be considered only after the Public Prosecutor is heard on the subject. And if the court believes that a prima facie case exists against the accused on a perusal of the Section 173 report and the police diary, bail is to be denied. If the accused is a foreigner who entered the country illegally, bail is not to be granted at all.






The Unlawful Activities (Prevention) Act of 2008 is more significant for the procedural modifications brought about than for any substantive changes that are attempted. Section 43E introduces the principle of presumption of guilt in respect of a terrorist act when arms, explosives or other substances specified in Section 15 are recovered from the possession of the accused and there is reason to believe that substances of a similar nature were used in the commission of the offence. Similarly, presumption is raised when fingerprints or any other suggestive evidence involving the accused is found at the site of an offence.






An obligation with penal consequences for failure to perform is cast on officers of government as well as non-government organisations and individuals to furnish information in his or their possession in relation to the offence when the authorised officer demands it (Section 43F). Finally, the Act empowers the Central government to freeze, seize or attach the financial assets of those engaged in or suspected to be engaged in terrorism. These are strong measures if imaginatively and responsibly employed in combating terrorism.






The Central government will be watched by the States on how the power assumed in setting up a central agency is being exercised on a subject that has been considered so far to be a part of the States’ exclusive domain. In short, it is more a question of management and governance which is under test. The new law on NIA is conceived as a joint enterprise of the States and the Centre, which is what it ought to be. Will the officers who manage the system take it that way and give a chance for the experiment to succeed in the interest of national security, human rights and rule of law?