Derail Budget

Trivedi’s Railway plan shows courage — it’s a disgrace that his party wants him fired for that

Such Railway budgets happen rarely. Once in 10 years, literally. For Railway Minister Dinesh Trivedi of the Trinamool Congress, to muster courage and hike aam admi fares by up to 20 per cent, must have been a leap of faith. Because in India, general class passengers account for 95 per cent of total traffic. The balance 5 per cent is made up by those travelling in air conditioned coaches. The expert group for modernisation of Railways chaired by the prime minister’s adviser Sam Pitroda had recommended a one-time 25 per cent increase in fares to raise Rs 37,500 crore. Trivedi did not exactly do that but with an across-the-board passenger fare hike and a modest 5 per cent growth in traffic, the Railways projected earnings to go up by about Rs 7,000 crore in next year, 25 per cent more than the expected earnings in 2011-12.

The Railway Budget for 2012-13 is notable not just for the fare hike. It gives a much-needed fillip to public-private partnerships in railways by planning to induct a member in the Board who will specially pursue PPP projects. It also does not try to window-dress the Railways’ efficiency by accepting that the operating ratio (the ratio of amount spent to earn Rs 100) will slip to 95 this year. The budget also lays the groundwork for setting up a tariff regulatory authority, a move aimed at eventually depoliticising increases in passenger fares and freight rates. To do all this in one budget is commendable. Trivedi possibly anticipated that Railways was headed towards bankruptcy. He did not stop at just raising the alarm. He pulled the chain, but this time not to stop the engine, but to put the train back on track.

It does not require an economic genius to do all this, but definitely strong political will. Ideally, it would have made sense to spread the hike in fares over a period of time, especially for the bottom segment of passenger traffic. A modicum of increase every year since 2002-03 would have meant nothing to the aam admi. By effecting a sharp hike in one year, he provoked his party, rubbing it in with needless references to Bhagat Singh, God and the country. The capricious Mamata Banerjee has asked for his head — it will be a shame if she gets get it along with a rollback.

http://www.indianexpress.com/news/derail-budget/923760/0 

One verdict is in

Record high turnout means deepening political participation — and a tough task for the winner

The high turnouts in the states that went to polls — four of these states registered their highest ever voting percentages — have announced that participatory democracy in our country stands enhanced. It will be known today what the message of the new voter is. Has she voted for change? In a multi-cornered contest as in Uttar Pradesh, for instance, will the larger turnout mean a more decisive, less fragmented outcome? Given that a large part of the increase is attributed to the young first-time voter, will it mean politics will now grow younger in ideas, and an older politics centred on identity and congealed resentments overtaken? Whichever way it goes after the ballot boxes are opened, this much is certain: today’s victors will have to settle down to a task more challenging. They will have to deal with many more dreams and aspirations, they will be subject to greater watchfulness than governments before them.

The increasing turnouts must be seen in a larger context. In several Western democracies, there is much agonising about the setting in of voters’ cynicism and indifference, reflected in their dwindling numbers. India does not just buck the trend with its healthy electorates, it sends out a yet more enviable message: here, past surveys have underlined, voter participation is known to go up as one moves down the ladder of caste and privilege. That is, the enduring character of India’s democracy and its sturdiness is made up of the fact that the poor and the disprivileged, by and large — in spite of pockets of apathy and disillusion as in Naxal-affected areas — continue to have hope from and trust in the system. This is a message important not just in a comparative context. It must also be heeded by those in India who have, especially in recent months, tried to work up a mood of anti-politics. The unprecedented turnouts in this round are a direct snub to those feverish exertions.

This is a moment to congratulate the Election Commission. As it ensured that voters’ slips are made easily available, relaxed norms related to access to polling booths, campaigned to enrol the new voter, and kept a strict vigil on expenditure and law-and-order in the poll-going states, the EC was a reassuring presence. It has sealed its formidable reputation as a neutral arbiter.

http://www.indianexpress.com/news/one-verdict-is-in/920526/0

Back to backchannel

Resumption of talks with Islamabad is welcome, even more so given Pakistan’s instability

Prime Minister Manmohan Singh’s go-ahead to the resumption of backchannel talks with Pakistan is a welcome step in the right direction. As this newspaper reported, India’s Satinder Lambah and former Foreign Secretary of Pakistan Riaz Mohammed Khan have met once over the last few months and are in regular contact. Pakistan’s civilian government and Prime Minister Yousuf Raza Gilani have been pitching for talks for a year. These talks were designed with Kashmir in mind and, this time, too, the envoys from the two sides will discuss primarily Kashmir in addition to other bilateral matters. The backchannel talks played a very important role in India-Pakistan diplomacy during the Musharraf years. As a leaked US diplomatic cable revealed last September, the two countries were close to reaching a “non-territorial solution” to Kashmir, which would allow freedom of movement and trade.

Even now, India would like an acknowledgment from the Pakistani side of the understanding reached under former Pakistan President Pervez Musharraf and the progress made in bilateral relations then. However, not only had the backchannel talks been on hold after Musharraf’s exit — under a new government and a new army chief — but Islamabad is not keen on associating itself with that legacy today. But the talks, as Singh rightly believes, can do no harm. Rather, they can ease a lot of other issues, including the peace proposals discussed with Musharraf. As it happens, the Pakistani cabinet is scheduled to take its “final” decision on the negative list in trade with India on February 29. If trade were to open up, a whole new dimension of opportunities would be added to the relationship. Eventually, the backchannel diplomacy can help discuss Kashmir and Afghanistan too.

Nevertheless, patience is India’s great virtue in dealing with Pakistan and the backchannel conversation has to frame itself within its own opportunities and limitations. While New Delhi has doubts about the Pakistan military’s interest in and support for the civilian government’s agenda, the primary problem is the uncertainty about what is happening in Pakistan. With Gilani’s troubles with the supreme court and the military, the question of the civilian government’s survival casts a shadow over everything else. But that instability and unpredictability are all the more reason India should establish as many lines of communication with Pakistan as possible.

http://www.indianexpress.com/news/back-to-backchannel/917584/0

First past the boast

Cong threatens President’s rule in UP if it doesn’t get the numbers. Who is it trying to impress?

Of course, Union minister Sriprakash Jaiswal isn’t deluded into believing Congress will get 200-plus seats and form the next government in Lucknow, to hell with everybody else. So when he suggests the Congress will form the government in Uttar Pradesh or it will be Congress rule by other means — that is, President’s rule — it’s more than macho polltalk. His colleague and general secretary in charge of UP, Digvijaya Singh, said the same thing earlier. Taken together, both statements point to a peculiarly Congress syndrome. While India’s politics has transformed in the last two decades, opening up to new players and becoming more competitive, the Grand Old Party, now under the leadership of the Angry Young Man, remains resolutely frozen in a long-ago political moment. Incredibly enough, it appears to have gone through the motions of alliance-making since 2004 when Sonia Gandhi first reached out a hand to allies in the run-up to Lok Sabha polls, without learning the realism or the humility necessary to that process. Even after running a coalition at the Centre for nearly eight long years, it’s yet to unlearn the art of alienating friends and antagonising possible allies.

As UP winds its way towards the end of its seven-phase poll process, the dominant common sense points to a close contest, if not a hung verdict. In that scenario, government formation would necessarily require parties to join hands and participate in a process of give-and-take — not at all an unusual compulsion in a state where the last government was the first in nearly two decades to achieve a clear majority. Statements such as those made by Messrs Singh and Jaiswal do not just threaten to queer their party’s pitch, they also resonate unhappily among the Congress’s restive allies at the Centre.

The Trinamool Congress, for one, has complained loudly about not being consulted by its senior partner in major decisions and policies of UPA 2. The DMK is also easily cast in the role of the resentful ally. For both regional parties, such loose talk of President’s rule would only confirm their worst fears about Congress arrogance. Be it UP or at Centre, and if only for reasons of political correctness, the Congress needs to acknowledge that the days it could brandish President’s rule as a means to subdue opponents, or to get the better of a difficult situation, are long past. It pays to be humble a week before the verdict.

http://www.indianexpress.com/news/first-past-the-boast/917016/0

Frightening fisc

Everyone is losing sleep over deficit. Mukherjee has three weeks to show that govt is waking up

The government’s finances are in a mess. But its gravity has not really sunk in. Prime Minister Manmohan Singh expressed serious concern on fiscal stability in his New Year address. Finance Minister Pranab Mukherjee recently said he is getting sleepless nights thinking of subsidies and deficits. But politics has held back both leaders, and the entire Congress, from taking even small steps to deregulate diesel prices. High global crude oil prices have increased the subsidy outgo for the year by Rs 1 lakh crore. With a mitigation of the eurozone crisis and a pick-up in the US economy, crude oil prices are only expected to sustain their current high price levels. So, the subsidy burden will rise dramatically next year.

The Prime Minister’s Economic Advisory Council, chaired by C. Rangarajan, sounded the latest alarm on the government’s worsening finances. Not only does it expect the Centre to slip in meeting its fiscal deficit target for 2011-12, the council also foresees difficult times ahead. Privately, some of its members exchanged notes with the PMO and the Planning Commission about the deterioration of the government’s financial health, much before the EAC released its review of the economy for 2011-12 on Wednesday. It will be foolish to think economic ministers do not know what to do, but all await a political green signal. Politicians still do not reckon that high fiscal deficits will put pressure on interest rates besides leaving little resources for the private sector. This, in turn, can slow down growth and mar the job prospects of millions entering the labour market every year. Surely, this will not happen overnight but the economic situation may get really nasty when they face general elections again in the first half of 2014.

The recipe is clear — set a deadline for completely deregulating prices of diesel and other petroleum products in a phased manner, withdraw the fiscal stimulus imparted in the aftermath of the 2008 global meltdown and pursue policy reforms vigorously. Of course, action on subsidies requires support from allies. The Congress, that leads the UPA, must start building consensus, because fiscal stability is the backbone of economic security. India could hold its head high post-1991 only because it managed its fiscal resources well. It must get back to the path of prudence by putting in place a credible medium-term fiscal consolidation programme. Mukherjee has exactly three weeks to do this.

http://www.indianexpress.com/news/frightening-fisc/915890/0

Let the verdict speak

2G case is on, Justice Ganguly should avoid commenting on the ‘meaning’ of his judgment

The recently retired Justice Ashok Kumar Ganguly can look back on his innings with satisfaction — in his own words, he always played “with a straight bat”. He has always upheld the highest ideals of the judiciary — in his interview with this paper, he said he didn’t want any holidays when he died, a reference to the many delays and holidays that hold up the system and clog the courts. He capped his career with the 2G case, which he and Justice G.S. Singhvi had presided over from Court 11 since 2010. Right before he retired, he delivered some ringing judgments in the case — first, ordering that sanctions to prosecute public officials must be granted within four months, and second, cancelling the 122 licences awarded by then telecom minister, A Raja, in 2008.

In a recent interview, Ganguly clarified and nuanced certain aspects of the judgment. He explained that the court had not recommended auctions as the only way to allocate all natural resources and that the criticism of the first-come-first-serve method was confined to the context of the 2G case. He also explained why the judgment has drawn a distinction between the prime minister and his office, why the focus was on Raja’s dodgy decision-making, rather than the cabinet’s collective responsibility.

Ganguly was scrupulous about not going into the “nitty-gritties of the judgment”. He repeatedly underlined that his judgment would not have an impact on the ongoing criminal proceedings against Raja in the trial court. But given the saturation coverage of the 2G case, his most recent comments on the verdict have been splashed everywhere. So, with all due respect, even this trickle of commentary is perhaps avoidable, given that the 2G case is still under judicial consideration. There is a trial on in the lower court and some of the parties affected by the cancellation order have said they intend to file a review or seek the court’s clarification. While Justice Ganguly is free to reflect on his own decisions — and such reflection does richly add to public discourse — it would be advisable to refrain from any commentary while the legal process is on. For, the verdict and only the verdict should speak for itself.

Statutory warning

Congress’s plan to undercut the EC is dangerous — and needs to be promptly abandoned

When a Congress spokesperson talked of the need to give statutory status to the model code of conduct in the middle of the row sparked by Salman Khurshid’s defiance of the Election Commission’s directive during the UP campaign, it appeared to be a diversionary ploy at best and a crude threat at worst. The latter may have been closer to the truth. As a report in this paper today reveals, a proposal to take the model code of conduct out of the EC’s purview and place it in the realm of the law and the court is on the agenda of a Pranab Mukherjee-headed Group of Ministers scheduled to meet this week. The Congress is being both authoritarian and unwise. By seeking to cut down the EC’s powers after its law minister defied it — although he did send a subsequent apology — the party confirms that the show of grace was purely superficial. Lurking below the surface was the same hauteur and cavalier approach to institutions that the party has been accused of in the past, often deservedly. In the process of settling scores with the EC, the Congress could end up not just downsizing a crucial institution but also undercutting the system’s efficacy to correct electoral impropriety.

The EC’s credibility has been hard won. Nudged by the flamboyant T.N. Seshan, it transformed itself from a sleepy institution to an energetic watchdog that has raced ahead of all institutions in terms of the popular trust vested in it. The model code of conduct — and there are elements of it that this newspaper has often questioned — may not be statutory but it has a sanction more compelling than that. In the best of democratic traditions, it is observed because of the respect for the unwritten rules of the game, the line drawn by mutually acknowledged convention, a pact between parties and voters with the EC cast in the role of neutral umpire. Writing this code into the lawbook would needlessly undo this exemplary compact. It would also mean that the corrective that can now be swiftly imposed by the EC within the course of the campaign will be delayed. Given our over-burdened courts, violations of the electoral code of conduct may go unchecked indefinitely.

Surely the Congress has plenty on its plate. The fallout of several corruption scams is still to be fully dealt with. Every time it takes a big policy initiative, there is the pull and tug of allies. Confrontation is brewing between the government it leads at the Centre and non-Congress ruled states. The Congress can do without taking on an institution that it can only pull down at its own — and the system’s — peril. It should abandon any such plan.

Fuelling power

PMO’s intervention takes care of short-term needs. Long term calls for coal policy overhaul

The crisis of coal appears to have been stemmed, for the short term at least. With the PMO stepping in and directing Coal India Limited (CIL) to convert its preliminary fuel supply pacts into legally binding fuel supply agreements (FSAs), India’s fuel-starved thermal power projects will not come to a standstill any time soon. But last December, that fear did not seem exaggerated, when 26 thermal plants had entered “super-critical coal-stock positions” and 44 others were “critical”. The PMO’s intervention will ensure FSAs for all projects that came up till last December and all due for commissioning till end-March 2015 — for the latter lot, as long as they sign long-term power purchase agreements (PPAs).

This takes care of domestic needs for a while, supplying almost 35 thermal projects and adding more than 14,000 MW. A fresh 30,000 MW awaits commissioning. Private power producers, battling CIL for a couple of years now — and reduced to watching their assets get stuck in CIL’s consistent inefficiency in getting coal off pitheads and delivering it — will be relieved. With the FSAs, CIL has to provide the full quantity of coal mentioned in the letters of assurance (LoAs) for 20 years. In case of a shortfall, CIL will have to import. All of this is welcome, but there is much more the government needs to do.

It is an understatement to say CIL’s record is discouraging. For instance, registering negative growth through Q1 and Q2, it had supplied 192.5 million tonnes of coal in April-November 2011 as against a target of 221 MT. But CIL is only the effect. The cause lies in counter-productive coal policy. CIL’s continued monopoly over the nationalised mineral spells continued trouble. Imports, necessitated by CIL’s inefficiencies, can only provide for a fraction of the deficit — and it is more expensive. Not only will CIL have to step up production, but the government has to move on the pending Mines and Minerals (Development and Regulation) Bill 2011. Coal must be opened up and competition added to reduce dependence on the sole provider. Units with captive mines need to produce extra coal and sell it in the open market, along with opportunities for the private sector to enter commercial coal-mining and the encouragement of e-auction of coal. Also, a coal regulator is needed to take care of pricing — not transparent at the moment. Last but not least, CIL itself needs a full-time chairman to get the results expected of it.

Waiting for Pakistan

India is right to be disappointed, but wrong to despair. It must also keep its side of the bargain

It’s not done, until it’s all done. This is particularly true of India-Pakistan relations, where done deals often unravel at the last moment. If we take into account the fragility of Indo-Pak relations, there would be little reason to write off Commerce Minister Anand Sharma’s on-going visit to Pakistan as a failure. After all, the first visit by India’s commerce minister to Pakistan since Independence is valuable in itself. New Delhi was indeed hoping that the Pakistani cabinet would make a historic announcement on trade liberalisation with India during Sharma’s visit. It did not come through because not “all stake holders” in Pakistan were on board, according to a top Pakistani spokesperson.

India is right to be disappointed, but wrong to despair. Since April last year, India has been actively negotiating with Pakistan an ambitious agenda for establishing normal trade relations. Pakistan’s civilian government has been an enthusiastic partner. Breaking a longstanding political taboo in Pakistan — which insisted that there can be no commerce with India until the Kashmir question is resolved — the government of Asif Ali Zardari was ready to deal. His cabinet approved a decision, in principle, to grant the Most-Favoured-Nation status to India last year, and promised to implement it step-by-step.

While appreciating the new approach, Delhi was acutely conscious of the political and other obstacles in Pakistan to free flow of commerce. The army was reportedly on board, but the extremist groups had mounted a powerful campaign against trade relations with India. Some sections of the business community remain deeply concerned about Indian goods flooding the Pakistani market. For the moment at least these reservations have prevailed. For India, patience is a virtue in dealing with Pakistan. As it waits, India must keep its side of the bargain. Delhi must dismantle all non-tariff barriers and reaffirm India’s strong commitment to a mutually beneficial economic partnership. The lesson from Sharma’s visit is that India needs to offer a lot more political reassurance to its partners in Pakistan. Sharma’s decision to take along a hoard of Indian businessmen eager to make money on the Pakistani market was perhaps not such a good idea.

Internal, external

New Middle East conflicts touch India; security and diplomatic establishments must work together

The bottomline of a terror attack in broad daylight in the heart of New Delhi can only be this: a security failure. When that attack takes place in the diplomatic zone close to the prime minister’s residence and the heavily guarded Israeli embassy, the magnitude of that failure gets amplified. Monday’s bomb attack on the car of Tal Yehoshua-Koren, on the Israeli mission staff and wife of an Israeli defence department official at the embassy, happened in a zone with several CCTV cameras and police personnel. Yet it’s anything but easy to wrest evidence from grainy footage, especially when the attacker was reportedly on a moving vehicle — as manoeuvrable as a motorbike — who may have turned a corner and sped off. Therefore, it’s necessary to look at what preceded this security breach. The government has said the bomber was “well-trained” and the target deliberately chosen. In other words, the attacker(s) had been in the vicinity before, made observations and planned the attack.

The nature of the attack — the first ever in India where a bomb is supposed to have been attached to a target car — and the nature of the target expose a new vulnerability in India’s internal security. As security agencies probe the attack, and as Israel and Iran trade allegations, New Delhi has to walk a diplomatic tightrope. It enjoys friendly relations with both Israel and Iran, as it does with several Arab states also not on the best of terms with Tehran. These relationships are not mutually exclusive and India’s interests are tied up with all of them. Israel is a vital ally — this year marked the 20th of diplomatic ties — making enormous contributions to India’s defence; almost 50,000 Israelis visit India annually. India’s political class may have found itself divided over Israel but there has been no violence against Israeli or Jewish targets in India until the 26/11 Mumbai attacks, perpetrated through imported terror.

That’s why Delhi cannot afford the Middle East’s emerging conflicts — whether between Israel and Iran or Saudi Arabia and Iran — to spill over onto Indian soil. But this challenge will not be met with mere diplomatic niceties. The geopolitics of the Middle East is changing and, although it’s not known who’s responsible for this attack, India’s internal security establishment has to gear up for this new reality.

Out of Afghanistan

As the US prepares to exit sooner, India must step up consultations with all stakeholders in Kabul

Military retreats are never pretty and can rarely stick to a plan. Washington’s signal that it might end the combat role of US forces in Afghanistan sooner than the earlier deadline of 2014 reflects the inevitable confusion surrounding the Western retreat from the prolonged war in the northwestern parts of the subcontinent. US Defence Secretary Leon Panetta announced international forces might shift to training and supportive roles in 2013. The US move comes after French President Nicolas Sarkozy declared he would pull out of Afghanistan in 2013. Both US President Barack Obama and Sarkozy are up for re-election this year and are responding to the growing disenchantment with the decade-long intervention in Afghanistan. While Washington plans to retain a small residual force, the ground realities are likely to evolve rather fast in the coming months.

Until now, all domestic and international stakeholders in Afghanistan have been working with the 2014 deadline for handing over security responsibilities. The US military leadership wanted to backload the process by proposing US forces retain a fighting role until the very end. That the military had been overruled by the White House is the new political message. Afghan President Hamid Karzai, his coalition partners representing non-Pashtun ethnic minorities, and the Taliban will all scramble to secure their own interests. So will Pakistan and Afghanistan’s other neighbours.

India has little reason to be surprised at the US rush to the exits. It must now prepare for an accelerated endgame in Afghanistan and step up its own consultations with all the major forces that have the potential to shape Kabul’s uncertain future.

Dirty picture

Script behind the Karnataka porn clip: the gap between BJP’s public sanctimony and reality

Karnataka’s Cooperation Minister Lakshman Savadi, Women and Child Development Minister C.C. Patil, and Mangalore-in-charge Minister Krishna Palemar have now resigned, after they were spotted watching porn on a cellphone, during assembly proceedings.

The opposition cannot contain its glee: Veerappa Moily called the ministers “shameless”, Kapil Sibal made a jibe about the BJP and “all kinds of entertainment”, while the Karnataka Pradesh Congress Committee actually demanded the assembly be dissolved after this desecration. Meanwhile, Kiran Bedi takes this as evidence of the perils of electing the “morally degraded”, and for the rest of us, it’s open season for off-colour jokes.

By itself, this should only prompt some eye-rolling — there’s no real ethical breach, apart from the fact that they were surfing for entertainment on the House’s time. (Though legally, at least one of the ministers could be in trouble for transmitting objectionable online content.) The scandal is only in what the incident says about the gap between rhetoric and reality in the Karnataka BJP — that a group of ministers can go from a public debate about “morality” (in their view, threatened by cultural pollution, sexual freedom, etc) to furtively eyeballing exactly what they claim to despise. The hypocrisy in Karnataka is almost Victorian in its intense public sanctimony and its private flouting of those norms. Only last month, Patil had put forward the idea that working women should know how much skin to cover, and that provocative clothing was the reason sexual assault was rising. Karnataka has become a mini-Maharashtra, where right-wing cultural forces have set out to define what’s permissible. This is the state where harmless things like Valentine’s Day and a drink at a pub are met with violence. There’s a continuum of such cultural activism, from those angry squads to the BJP’s mainstream politics. Only a couple of days ago, the CM warned that “nothing that went against Indian culture would be tolerated.” In a state roiled by corruption in mining, land and real estate, much of the BJP is largely preoccupied with culture wars. This incident is bound to be seized on to embarrass the party, only because of the delicious object-lesson it offers in political hypocrisy.