Rupee holds its own
CRUDE price has gone up by about 170 per cent during the past nine months, adding to the balance of payment pressure. Export is growing but not to the extent necessary to meet the rising import cost.

A repetitive exercise
THE National Human Rights Commission has issued a set of directives to the States and the Union Territories to improve the policing system.

Caught in the cleft
WHILE the collective conscience of the nation has remained glued to the Indian Airlines aircraft standing helpless in the freezing confines of Afghanistan, nobody is suffering more than the kith and kin of the 150-odd people held hostage by the hijackers.

PUNJAB FINANCIAL CRISIS
Political consensus is essential
by Surinder Singla
THIS article is being written for a definite purpose: To build a “political consensus” on the “financial crisis and collapsing economy of the state”.

In short, a true gentleman
by S.S. Barnala
I KNEW Dr Shankar Dayal Sharma since early forties when he was a Lecturer in the Law Department in Lucknow University and I was his student.

Ransom violates UN convention
By A. Balu
OF all the three demands made by the hijackers of the Indian Airlines Airbus for freeing more than 150 hostages trapped in the plane for the last six days, the one that is impossible for the government of India to concede is the ransom of $ 200 million. This is because, apart from its being outrageous, acceptance of the demand will be a gross violation of an international convention adopted by the UN General Assembly in the second week of December.

Glued to TV sets, they are keen to know hijack update
PEOPLE around the country are sitting glued to television and radio sets to keep track of the latest developments on the hijacked Indian Airlines plane, now parked at Kandahar in Afghanistan.

75 Years Ago

December 30, 1924
Swami Sachchidananda Prays for Mercy
SWAMI SACHCHIDANANDA, one of the pioneers of the Tarkeshwar movement, who had been convicted by the Deputy Magistrate of Hooghly in September under Section 379 and 143 and 447 IPC and sentenced to six months’ imprisonment filed an application before the District and Sessions Judge of Hooghly today praying for mercy.

Rupee holds its own

CRUDE price has gone up by about 170 per cent during the past nine months, adding to the balance of payment pressure. Export is growing but not to the extent necessary to meet the rising import cost. Interest rate has come down and the market believes that in the New Year another downward movement by one percentage point is likely. Textbook says these factors should buffet the currency leading to a steady erosion of its value. Actually the rupee remains steady at Rs 43.50 or thereabout to a dollar. In forward deals, it is quoted at Rs 44.75 after three months but Rs 44.35 after six months. In other words, long-term prospect is equally optimistic. Money dealers are normally a nervous lot and at the first sign of possible adversity, react rather violently. Not this time though. Even the certainty of a huge trade deficit has failed to unsettle the rupee-dollar parity and that calls for an explanation.

The first factor is the very comfortable foreign exchange position. In the middle of this month, the RBI was sitting on $ 34.39 billion, an increase in the holding by about 10 per cent in three months. With easier investment norms there are bright hopes of a continued inflow of foreign capital. Similarly more dollars should come to the stock market, thanks to the healthy look of the sensex. The New Year should see it cross the psychologically important barrier of 5000 points and stay above it. The combined effect can be a further accretion of the foreign exchange stock, with some hoping for as high as $ 40 billion by the end of 2000. This underpins the rupee value and is an excellent antidote to any possible slide. If there is no likelihood of a foreign exchange crisis, there is no need to rock the rupee.

The second reason is the overall positive mood across the world. The US economy is booming and Japan is clearly over the hump. Asian countries are well on the way to recovery and the mood of doom that spread in the middle of 1997 is now over. Everything is now predictable and it is a guarantee of order. In India additionally, inflation has remained very low, often less than 3 per cent at the wholesale price level. Coupled with a fairly high interest rate regime, compared to other countries, dollar deposits tend to stay put and not flee. If exports continue to grow at the latest rate of about 6 per cent, the rupee will remain steady deep into the next year. One expert, however, predicts that the tight balance of payment position will make its full impact by the middle of next year and the rupee will react by losing about 4 per cent or slightly more of its value. By the year end it should again stabilise at around Rs 45 to a dollar. That is no scare-mongering and the foreign exchange-starved Pakistan is desperately struggling to keep its own rupee afloat at Rs 70 to a dollar.

A repetitive exercise

THE National Human Rights Commission has issued a set of directives to the States and the Union Territories to improve the policing system. Together, the series amounts to thoughtfulness and good intentions. Briefly, the governments or the administrations should improve the deteriorating police-public relationship, build confidence in the collective consciousness of the citizens with regard to the law-enforcement agency at various levels, prevent the violation of the law of the land and detect crimes. The Director-General (Investigation) of the NHRC, Mr D.K. Karthikeyan, while conveying the instructions, which demand compliance, has theoretically done well a job done equally well by commissions, committees and the highest judiciary many times earlier. The Constitution itself lays down the parameters of the rule of law in a Welfare State. We have volumes of suggestions buried in archival dust. There is the Protection of the Human Rights Act (1993) with an abundantly clear provision for special human rights courts. The Criminal Procedure Code, the Indian Evidence Act and the Indian Penal Code, which worked effectively during British rule, are being considered ineffective, if not redundant, now. True, organisational nature must change with the changing times. An oft-repeated observation is that the police administration has to be subjected to democratic norms through regulatory mechanisms. There are legislative bodies, ministries and courts to evolve and make such mechanisms work. Why does crime not get necessarily punished? Why are numerous innocent persons put to harassment, torture and worse? And how is it that the police plays a major role in committing and suppressing crime?

Prof David H. Bayley of the School of Criminal Justice in the State University of New York, authoritatively said in Chennai a few months ago: The police can play a significant role in both helping to build and transform civil society. He disagreed with the popular conception that the police, by the very nature of the institution, maintained the status quo in society. We agree with him. The police has an enormous capacity, which is often unrecognised and undervalued, to transform people's attitudes towards the law and the government. There are two propositions: "First, reform society and the police will change. Second, reform the police and society will change." The average policeman is a product of society. He may have to rescue himself from unemployment and get recruited by unfair means. He is a foundational person. His boss may be a meritorious member of the Indian Police Service. But he works on the basis of the reality he has faced. Later, he has to have divided bureaucratic and political loyalties. The NHRC has to understand the circumstances which go into the making of a "modern" policeman. If the States and the UTs create conditions in which the policemen begin to indicate that they are not working for the government or for themselves, the people's conception of the force will change. Free telephone calls for giving information about crime, prompt registration of first information reports, fair investigation and, finally, sermons on "why the police must enjoy the trust, confidence and respect of the people" are unquestionably good points. But the internal culture of society too must change. Societal reforms will lead to police reforms and a reformed police force will change the face of the nation. The NHRC will do itself much good by remembering Simmons: "The failures of life come from resting on good intentions, which are in vain unless carried out in wise action."

Caught in the cleft

WHILE the collective conscience of the nation has remained glued to the Indian Airlines aircraft standing helpless in the freezing confines of Afghanistan, nobody is suffering more than the kith and kin of the 150-odd people held hostage by the hijackers. Their plight has been as bad as those of the persons in the plane because they too cannot breathe freely till the lives of their dear ones are in jeopardy. The least that the officials could have done was to keep them duly informed of the goings-on but even that has proved to be a tall order for a government which has been bumbling its way from one error of judgement to another right from Kathmandu to Kandahar via Amritsar. Being kept in the dark has taken its toll and the relatives have turned almost violent repeatedly, either storming the press conference addressed by the Foreign Minister or laying siege to the Prime Minister's house. Their desperation and anger are understandable but unfortunately, these cannot retrieve the situation in any way. On the contrary, there is a real danger that the pressure might make the government buckle more than it should to the hijackers. In all this, the role of the audiovisual media has been less than balanced. Some TV channels have been understandably eager to be the first with the news and have ended up focussing excessively on the anger of the family members. The radio and TV of Pakistan have gleefully used these clippings to generate the impression that the Indian public has risen in revolt against the government.

The life of every citizen is precious and left to themselves, the relatives would like to see their family members back home, so what if 35 or even 3500 terrorists are released and millions of dollars given as ransom. The trouble is that even that won't solve the problem and would rather complicate it further. The country is still repenting the decision to release terrorists to ensure safe return of Rubaiya Sayeed. In all this, the families of the Kargil martyrs have acted as a sobering influence, consoling the relatives of the hijack victims and urging them to be rational and courageous. Civilians cannot be expected to be as gallant as their uniformed counterparts but the wife or sister or father of a civilian has to stand as firm as the wife, sister or father of a soldier in this hour of crisis. One cannot help looking at Israel in such circumstances. It has faced the spectre of hijacking more than any other country. Its official policy is never to give in to the pirates' demands. This brave posture is matched by a steely resolve to save every single life, of which the raid on Entebbe was the most magnificent manifestation. The problem in India is that the government has the history of differentiating between the life of a VIP and that of a mere mortal. No wonder, it has no face to exhort the family members of the hostages to be patient and prepared to make any sacrifice for the nation.

PUNJAB FINANCIAL CRISIS
Political consensus is essential
by Surinder Singla

THIS article is being written for a definite purpose: To build a “political consensus” on the “financial crisis and collapsing economy of the state”. The people of the state are suffering acutely and have awakened to the final belief that leaders of the state have failed them. All political parties and their leaders have competed with each other in offering unrealistic populist policies. They brought the state to the brink of ruination.

Now, we find that slowly a directional change of policy has started indicating a change of old political mindset.

Punjab Chief Minister, Parkash Singh Badal recently articulated a demand of creating a central fiscal correction fund of Rs 10,000 crore to meet the fiscal crisis demands of the states in India. He thinks that this financial crisis is limited and short term and the facility of this fund would also help this state. In the recent supplementary budget of December, 1999, the Finance Minister got approval of Parliament for establishing such a fund with Rs 3,000 crore, indicating support to those states willing to sign a Memorandum of Understanding with the Central Government to finance short-term revenue expenditure. One may not deny that this facility is useful for a while. But one doubts whether Mr Badal and his government understand the full dimension of state bankruptcy which is fast travelling to its people very furiously.

That is why we refuse to examine why, in the whole decade of economic reforms, the potentials of Punjab economy remained untapped and unable to provoke the global and national capital to hunt for this destination, that is Punjab.

We know that the first Green Revolution in India took place in the agriculture and rural economy of the state of Punjab. Punjab is demonstrated globally the entrepreneurial qualities of creating wealth. India’s political leadership in Pandit Jawaharlal Nehru and Punjab’s leadership in Sardar Pratap Singh Kairon laid the foundation stone of the modern state of Punjab. Thus, it was natural that Punjab achieved the unique position of having the highest per capita income among the states of India. Its contribution to the Central food pool is immensely demonstrated and made India selfreliant in food production. It also established a fairly large industrial base covering the textile industry and small mechanical and electrical goods. This slow and steady economic progress continued till 1982. But it came to be disrupted by terrorist and separatist movements.

Two major things happened between 1981 and 1991. There was a phenomenal increase in security-related expenses up to Rs 700 crore in 1992. And this was financed by special borrowings from the Centre and the state had to fall in the debt trap. The public as well as private investment declined sharply, both in agriculture and in industry. That affected adversely the growth rate and revenue collection, both from tax and non-tax revenues.

After 1992, when terrorism was ending and normalcy was being restored in the state, a new phase of development started. This was the period when robust entrepreneurial activity of Punjab asserted itself. A substantial private investment came in industry and generated huge resources in the form of increased volume of tax and non-tax revenues. But it could not continue uninterruptedly as the two main items of expenditure. A huge expenditure in the form of unproductive subsidies to various populist schemes and the debt-servicing in the form of larger interest payments leaving lesser resources at the disposal of the state for investment purposes.

After a lot of political effort by Beant Singh, then Chief Minister, who lobbied with the Central government as well as in the Tenth Finance Commission headed by Mr K.C. Pant, the state had a relief of Rs 892 crore which was waived off. Similarly, Mr Parkash Singh Badal, also succeeded in having nearly Rs 2,200 crore waived off by Mr Inder Kumar Gujral. It did help for a while. But, at the same time, a new phase of large-scale subsidies programme was undertaken on free power to agriculture, free irrigation water and urban health and sewage system etc etc. That derailed the whole finances of Punjab and today we have a first rate financial crunch in the state of Punjab.

Punjab faces the worst financial crisis in its entire history of existence as the state has no funds even to pay its employees their monthly salaries as well as the monthly interest payments to its lenders. One can say that after 1996, not a single paisa of capital investment has been made into the economy.

The worst phase has started and the state bankruptcy is travelling to its people. And it can grow faster and deepen further. For example, the state has to pay nearly Rs 400 crore of subsidy to its industrial units and for the last four years, the subsidy is not being paid and the units, whose economy is based on the subsidy calculation, are becoming sick which will ultimately affect the finances of the financial institutions like State Finance Corporation and banks and the owners of these units. Well, that is only one example of the state bankruptcy making the people more bankrupt.

Before one goes into how to come out of this ever-growing bankruptcy of the state, it must be mentioned that political parties and their leaders are indulging in their pastime of blaming each other. All are blameworthy. This is a problem accumulated over a very long period. The various recent populist decisions have rapidly contributed to the present scenario of the state being bankrupt.

Well, this is the time when political parties and their leaders should realise that competitive populism has its limits and it can certainly harm the state grievously.

Privately, major political parties of the state honestly admit that the present economic policies of extensively subsidising economic and social services (like free power, free irrigation water and almost free higher education) cannot go on and this will certainly not leave any revenue for development activities as well as productive investment in infrastructure. To give a wider picture of subsidisation, we are only getting 11 per cent of its cost from the economic services and 2 per cent from the social services.

The ruling Akali Dal-BJP combine has realised finally that its populist policies cannot keep retaining electorate support as the overall consequence is that the economic welfare of every citizen in the state gets affected. Thus, it was not unnatural that electoral promises of abolishing octroi could not be implemented. But they raised octroi rates to mobilise funds for municipal committees in the state.

The government of Punjab has already signed a memorandum of understanding with the Central Government that it will roll back its policy of blindly subsidising economic services and assured it that it will raise the rates of these services to not only collect the cost of maintenance and operation but it would also add some rates of return on the investments made in the economic and social services sector. A clear understanding has been reached between the Punjab Government and the Central Government that the national consensus of 50 paise per unit of power would be reintroduced. That will help the state to collect nearly Rs 650 crore. And irrigation water would be collecting Rs 45 crore to meet the expenditure of maintaining and operating the Punjab canal system.

The Punjab Government also promised to mobilise resources by rationalising its tax policies and administrative measures to improve its tax compliance. To give an example, sales tax today forms around 2.86 per cent of the state domestic product (SDP) whereas in Kerala, it is 9.8 per cent of SDP. The state government has increased certain taxes and will introduce a four-tier system with other states and will also introduce a computerised system of checking evasion of sales-tax in the state. And it has also shown some results. In this area, the sales tax collection is bound to increase to Rs 2,200 crore this year and the next year’s target likely to be pulled up by Rs 3,000 crore.

Another area is, the state government is providing a lot of subsidy to public sector undertakings like PEPSU Roadways and Punjab Roadways. This reform will cut every subsidy to the sector and increase the cost on the basis of any increase in the cost of diesel and others. The government will not buy any new fleet of buses to incur any capital expenditure in the sector, bring in private bus operators on pre-determined prices on a cost-plus basis.

The point is the state government has started moving in two clearcut directions — a phased reduction of subsidy to various economic services; and mobilisation of resources in tax as well as non-tax areas. A few steps of these reforms as well as promises of new steps under the MoU signed with the Central government will, certainly, lift the state out of the present morass of fiscal bankruptcy, but will not release any investible resources for infrastructure projects as well as development activities. Thus, there is a need for long-term economic assistance to the tune of Rs 1,500 crore in the next two or three years so that the people of the state could chart out new programmes of economic progress and stability.

As I have said earlier, a political consensus is needed in the state of Punjab amongst various parties so that the Punjab Government’s new agenda of rolling back the regime of irrational subsidies and mobilisation of new resources from the tax and non-tax areas, is not met with violent opposition from the state political forces. And this will bring a historic responsibility on every political party in the state which is committed to the welfare of the people of Punjab. Every political party in the state, at one point of time or another, has adopted economic policies of extensive subsidisation of economic services or cross subsidisation which has done the worst harm to the entrepreneurial qualities of the people of the state. The state, in fact, is becoming the killer of entrepreneurial talent of Punjabis who are known creators of wealth of every kind in any society, Punjab or outside.

I feel strongly that the Punjab Congress has a historic responsibility to perform towards its people and thus discuss a new change in the economic policies of the Akali-BJP government after signing an MoU with the Government of India. The Punjab Congress must offer constructive cooperation to the government in ending the financial crisis of the state.

(The writer is a former Member of Parliament)

In short, a true gentleman
by S.S. Barnala

I KNEW Dr Shankar Dayal Sharma since early forties when he was a Lecturer in the Law Department in Lucknow University and I was his student. He was a perfect teacher, very knowledgeable and scholarly with a lot of humour. He used to spice his lectures with interesting anecdotes. Students liked him and adored him. The twinkle in his eye was particularly popular.

Next I met him in Raj Bhavan at Chandigarh when he came as Governor of Punjab. Even after such a long time he remembered me as his student and mentioned it while addressing the welcome function organised on the lawns of Raj Bhavan. As Chief Minister I had most cordial relations with him and often used to seek his advice and guidance as an elder statesman. He was a very balanced person and in case he had no readymade answer to a query he would like to take time to come up with a solution. As a true Gandhian he generally had a Gandhian approach to problems. Punjab was passing through a difficult phase of militancy and terrorism and his advice always was to deal with a situation with firm determination and compassion. We never had any problem of working together as long as he was Governor of Punjab.

I had the occasion to meet him as Vice-President also. Then I was not Chief Minister. His warmth and affection was no less and he discussed with me on a scholarly plane about Guru Granth Sahib and the bani of certain saints who belonged to different communities like Bhagat Kabir, Bhagat Ravi Dass and Namdev. He showed great reverence for Guru Granth Sahib and called it the most secular scripture. He could even recite many shalokas from Gurbani. It showed that he was not only well versed in Hindu scriptures and philosophy but had made comparative study of other religions also. As Vice-President he conducted the proceedings of the Rajya Sabha as its Chairman with great dignity and ability and maintained the decorum of the House. The members always had regard and respect for him as an elder statesman.

When he was President of India I had the occasion to meet him quite often. He always wore a disarming smile while talking to visitors and created a sense of confidence in them by keenly listening to their problems. He discharged his duties without fear or favour. There were many occasions when as President of India, knotty and intricate problems were faced by him. He was always able to solve them ably showing a great sense of justice and equanimity. In the wake of demolition of Babri Masjid he showed appreciable firmness in upholding secular values.

In his death India has lost a great statesman, a veteran freedom fighter and an erudite scholar. Dr Sharma will be remembered for a long time for his love and affection for his countrymen and his sense of duty and service to the Nation.

Ransom violates UN convention
By A. Balu

OF all the three demands made by the hijackers of the Indian Airlines Airbus for freeing more than 150 hostages trapped in the plane for the last six days, the one that is impossible for the government of India to concede is the ransom of $ 200 million. This is because, apart from its being outrageous, acceptance of the demand will be a gross violation of an international convention adopted by the UN General Assembly in the second week of December.

The convention designed to cut off funding for terrorist activities was adopted without a vote. The 28-article convention on the suppression of the financing of terrorism requires states parties to criminalise the provision or collection of funds for acts defined as offences by previous anti-terrorism conventions or as further defined in its own provisions. Subscribing states would also have to cooperate with one another in investigations and extraditions in respect of such offences. Funds known to be allocated for terrorist purposes would have to be frozen or seized.

It may be futile to expect the hijackers who have taken law into their own violent hands to be put off by international conventions, but the international community at least can understand and appreciate that India will be in no position to oblige the hijackers and make a mockery of a convention before the ink is hardly dry on the text of the agreement endorsed by 188-member states.

The convention, which is intended to supplement the eleven existing anti-terrorism conventions covering such issues as bombings, hostage taking and hijackings, will open for signature on January 10, 2000, and will enter into force once it has received 22 ratifications.

In the General Assembly debate, many nations had welcomed the growing determination of the international community to cut off sources of income for terrorist groups and organisations.

The convention, first proposed by France last year, criminalised collection of funds to individuals or groups planning or carrying out acts of terrorism. Mr Philippe Kirsch of Canada, chairman of the general assembly’s ad hoc working group on terrorism, which prepared the text of the convention told a press conference in New York following the adoption by the General Assembly that if there were a broad adherence to it, the convention could effectively cut off sources of funds for the terrorists.

The next step, he said, would be to promote its adherence by states. States parties would be obliged to prosecute alleged offenders on their territories, or to extradite them to other states for prosecution. Mr Kirsch noted that the French initiative had received exceptional positive momentum as soon as it had been announced, indicating that states were very interested in its adoption. The convention was part of a new generation of international legal instruments, starting from 1997 with the international convention against terrorist bombings. The convention included a number of new problems. It included, for example, the possibility of using political motives as any kind of defence. It prohibited extradition when the purpose was discriminatory on a variety of grounds. The methods of cooperation among states were much more sophisticated than had been envisaged in older conventions.

As noted by Mr Kirsch, anti-terrorism conventions or instruments normally require adoption of fairly extensive legislation at a national level. Some of the conventions had been very widely ratified, but it is expected that it could take a few years for an instrument such as the new one to receive ratification. For example, the international convention on suppression of terrorist bombings adopted by the General Assembly in 1997, required, like most of those conventions, 22 ratifications to enter into force. It has received eight ratifications so far, although there are 52 signatories.

In its recently concluded annual session, the General Assembly also adopted another resolution on terrorism by a vote of 149 in favour to none against, with two abstentions (Lebanon and Syria). The resolution asks states to enact legislation to ensure that violators of the 11 United Nations anti-terrorism instruments are brought to trial. It strongly condemns all acts of terrorism — regardless of who perpetrates or why — as criminal and unjustifiable, and urges states to consider, as a matter of priority, becoming parties to the various anti-terrorism instruments previously adopted by the general assembly.

Glued to TV sets, they are keen to know hijack update

PEOPLE around the country are sitting glued to television and radio sets to keep track of the latest developments on the hijacked Indian Airlines plane, now parked at Kandahar in Afghanistan.

In New Delhi’s commercial and shopping centres people stood in groups around TV sets and transistors for the hijack update that entered the sixth day on Wednesday.

Some of the locals feel the government is taking a calculated and cautious decision, keeping in mind the delicate nature of the situation.

But then there are others who feel that mistakes have been committed by the government in dealing with the hijackers.

The government has been severely criticised for allowing the plane to take off from Amritsar.

“Yes, at present the government is taking quite satisfactory steps. But what I feel where they slipped up was when they allowed the aircraft to fly out of Amritsar. The decision and planning took little too much of a time in Delhi and it was not left at the discretion of authorities at Amritsar to take on-the-spot action,” said Deepak Sinha, a bank officer.

Simran Gupta, a college student, supports Sinha’s view of things being a lot easier if the plane was inside Indian territory. “I think it’s become tougher than what it would have been if the plane had been in India itself,” Gupta said.

Pramod Kumar, a shop owner, says: “Well I think whatever they have done, to a limit it might look they have been quite slow in taking a decision. But they have to look at all the permutations and combinations, look at all the pros and cons. So they can’t take a decision in a jiffy which can endanger life of all the hostages.”

Many people feel the government should have sent a team for negotiating with the hijackers much earlier.

An Indian delegation went to Kandahar for negotiating with the hijackers on Monday. — ANI

75 YEARS AGO

December 30, 1924
Swami Sachchidananda Prays for Mercy
Released on bond of good behaviour

SWAMI SACHCHIDANANDA, one of the pioneers of the Tarkeshwar movement, who had been convicted by the Deputy Magistrate of Hooghly in September under Section 379 and 143 and 447 IPC and sentenced to six months’ imprisonment filed an application before the District and Sessions Judge of Hooghly today praying for mercy.

The petitioner, an old man of 72, having already been in jail for a long time in connection with the Tarkeshwar Satyagraha, submitted that he would undertake not to meddle with Tarkeshwar affairs any more. The whole atmosphere there having cleared up, he offered an apology for having infringed the law under a mistaken idea of duty for which he was sincerely sorry.

The judge ordered that the Swami be released on a surety of good conduct, and directed that he should execute a bond for good behaviour for a period not exceeding three years.