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E D I T O R I A L P A G E |
![]() Monday, March 1, 1999 |
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spotlight today's calendar |
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Saying
it with symbolism Good
governance: basic principles-I |
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Missiles
at Judges: then A
week of baithaks, receptions
Saharanpur
riots |
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Saying it with symbolism A CRISIS is also an opportunity to make a clean break with the past. Finance Minister Yashwant Sinha had created a sustained crisis atmosphere during the run-up to the budget. Naturally everyone expected that he would shift gear and get rid of the old and accumulated baggage in one go. No luck, although for one brief moment he talked of a future stretching out to 500 years. After that one split-second digression, he reached out to all tried and tested methods to make his figures look pretty, including a bit of doctoring of the numbers, imposing surcharges and slapping a flat cess on all imports. In all this he seems to have ignored sound advice. For instance, a daring innovation was to be unfolded in direct taxes, as he bravely accomplished in the indirect ones. The many exemptions which help the very high- salaried gents to hide their real income were to be axed, a higher reduction was to be allowed to take out those with less than Rs 1 lakh as annual income from the tax net so that the present staff may hunt out the big sharks and generate a national mood that paying the government its due is also fashionable. In the event, Mr Sinha sought the easier way out and reversed a process for the first time in this decade. More, he also freed all income from UTI and other mutual funds from tax, thereby distorting the market. He obviously hopes that the proverbial small investor will now flood these funds with his money, enable them to invest big in the stock market, take the index very high and make everyone happy. If his dreams come true, he will have reasons to rue; individuals with an annual income of upto Rs 2 lakh will not pay a paisa as tax and this interference in the market may end up producing another Harshad Mehta and hence millions of new poor. The Finance Minister would have done well to use the US-64 troubles to concentrate on the root cause: namely, the industrial and exports slump and the resultant fall in share prices. A lower interest rate was a better option, particularly to revive housing. As it is, he has only administered a pain killer, leaving the disease pretty much untreated. There is a similar
contradiction, again arising out of his search for
sectional solutions. He is offering one-time subsidy to
raise water cess in rural areas. He is also trying to
encourage ultra-micro water supply programmes! He plans
to gift 10 kg of foodgrains to destitute senior citizens
to be identified by the panchayat. If the National Sample
Survey figures are anything to go by, he will soon run
out of money and ideas to reach food to remote villages.
Nor is his proposal to cover the entire country with a
revamped Rs 3500 crore employment scheme realistic. What
this has helped him is to erase the name of Jawahar from
the name and supplant it with Deendayal, after the late
Jana Sangh leader Upadhyay. He should read and re-read
the Planning Commission report on the employment
guarantee scheme in Maharashtra to disabuse his mind of a
shortcut to nirvana in the rural areas. Ideally, he
should have selected one very backward village in each
tehsil, involved local people to prepare a blueprint for
crash development, pour in money and ask the local MLA
and MP to run the show. If it is a marginal constituency,
the MLA will develop a vested interest in the success of
the plan. Right now, the budget approach to share market
or rural development is one of tokenism. Mr Sinha should
have believed in his own assessment of a developing
crisis, and plunged into the rescue act with arms
flailing and eyes blazing. He had an excellent chance of
winning. |
Good governance: basic
principles-I IN order to preserve our secular unity and democratic order, it is important that we understand the importance of good governance. What would be the key elements of this good governance? I think a few can quite clearly be identified. Good governance lies firstly in the rule of law. If I were asked to identify what element, more than anything else, makes up the inner core of democracy, the central feature that distinguishes a progressive, modern-minded society from a backward, medieval society. I would say quite categorically that it is the rule of law. Here the essential principle is that the basic law of society vests not in some human diktat, but on natural, or divinely-ordained wisdom which some call natural justice, others truth and yet others morality. Cicero, the great philosopher of republican Rome, had said, The law is not a product of human thought, nor is it an enactment of some peoples, but something universal which rules the whole world by its wisdom in command and prohibition. It is this basic law, whatever name one might give it, that is the best guarantee for the common good and the welfare of the nation, and so has it been since the beginning of history. Some 2500 years ago the Mahabharata, the great Indian epic of statecraft, said, Governance is rooted in Truth, and the people are rooted in Governance. It is the impartial working of the rule of law which gives dignity to the weak and justice to the powerless. It is the rule of law that ensures the separation of powers and stands guard against the arbitrariness of absolute rule. It is the rule of law which protects individual freedoms and civil liberties, and frees the human spirit to search for excellence. Without protection of the rule of law, a democracy can quickly descend from majority rule to mob rule. There are enough examples, even in todays world, to warn us that a society that lacks the rule of the law will eventually have the law of the jungle, where might is right and those with the guns set the rules. It is the duty of civil society to ensure that the rule of law is maintained, that power is not unduly concentrated and that all civil liberties and human rights are given the fullest of protection. Those who wield executive power have particular responsibility to uphold the rule of law and the dignity of civil institutions and liberties that go hand in hand with them. The subversion of the law, by those charged with maintaining it is the very anathema of civilised conduct in a democracy. This is true not only nationally, within nations, but internationally, among nations, as well. Codes of conduct can only be maintained by the example and encouragement of those vested with power and authority. When those who have been vested with this power and authority act in brash arrogance and in cavalier disregard to the spirit of law or against the public sentiment, then this only creates a climate of general lawlessness which in the long-run gives birth to more problems than it solves. The second feature of good governance is to have special regards for the disadvantaged and the weak. There is no democratic society that does not go out of its way to protect its weaker, more disadvantaged members. Ultimately, if there is a yardstick to assess the strength and durability of a civilisation it is not in the arms and armaments that it possesses, but in the courtesy and compassion with which it treats its most disadvantaged and powerless citizens. This is one of the more enduring lessons of history, the fact that every great society, throughout history, has been built upon the bedrock of basic human rights and values. These include civil and political rights such as the right to life, liberty and security, to hold property, the right not to be discriminated against, the right to vote, to freedom of speech and freedom of the Press, protection of arbitrary invasion of privacy, family or home, etc. In the contemporary world it has also come to be recognised that the scope of human rights cannot exclude crucial social, economic and cultural rights, including most prominently the right to development, and the rights of minority and disadvantaged groups, such as religious or linguistic minorities, women, children and tribal folk. Thirdly, good governance implies tolerance and the broadmindedness which allow us to accept and embrace diversity and to see the essential unity of the universe in the rainbow colours of contrasting truths and beliefs. Those who practice tolerance show the courage and conviction of their own essential beliefs for as, Mahatma Gandhi had said, If we want to cultivate the true spirit of democracy we cannot afford to be intolerant. Intolerance betrays a lack of faith in ones cause. Just as tolerance and democracy go hand in hand, so are tolerance and openness essential for progress. It may sound odd but a curious and constant feature of history is the fact that heretics have made far larger contribution to the progress of the world than those who stuck to the comfortable groove of narrow conformity. Todays heresy often turns out to be tomorrows truth. Shutting the door to dissent is foolhardiness, for it amounts to closing one of the main avenues of innovation and improvement. If dissent had been shut out, we would still be believing that the earth was flat and that it was the sun that circle around the earth. This is not exactly a recipe for great socio-economic progress, and the tendency to close our minds to new ideas and hard truth is a failing that developing countries particularly must constantly be on guard against. Good governance also means self-reliance. I mean self-reliance not in the sense of a political slogan but in the sense of an assertive self-confidence that is inculcated in the hearts and minds of each and every citizen. Self-reliance means essentially to have belief in oneself individually and also collectively as a nation. This self-confidence is not a synonym of conceit or arrogance. It is a quest to find the means to ones own growth within oneself without seeking props and short-cuts such as the charity of others or the support of the state. Finally, I would say a participatory democracy encourages openness that facilitates the acquisition of new ideas and new influences and the winds of change. No society has grown to greatness behind closed doors. Jawaharlal Nehru, the chief architect of modern India, had called it scientific temper, a mind that rejects conformity and is always curious and enquiring. It is these five principles that I think constitute the essence of good governance. And if these measures can become a part and parcel of the daily governance of our societies. I think we would have made up for a good part of the institutional weakness that inhibit our social development and growth. But good governance is just the beginning. We have also to modify our development models that may have partly succeeded, and instead evolve a new paradigm of development. It is acknowledged that the most valuable resource of any society is its people. Far more important than its material or natural resources are a societys human resources. Its wealth and prosperity will generally depend upon how effectively it uses its human resource. A developed society is one that has successfully nurtured and made the best use of its given endowment of human talents, skills and resources. Under development, conversely speaking, represents negations or the wastage of a nations human resources, an injury which not only weakens the nation but also diminishes the collective capability. It is human spirit that has somehow to be harnessed, and the focus of our national development efforts has to be upon ways and means of best realising, and our productively utilising the abundant human energies, resources and talents, which for a variety of reasons, lie dormant and suppressed at present. So, good governance is part of the answer. The other part of the answer would stem from imparting education, training and skills on demand to the young and upcoming citizens. Human development, in other words, has to be the core of our endeavour, and the most effective means of realising this goal is to redouble our efforts in the fields of literacy, education and training. The article is based on the P.C. Lal memorial lecture delivered by the author, a former Prime Minister of India, in New Delhi on February 23. |
Budget: poor on pro-poor bounties IT can probably be proved as a more or less well established correlation that any budget which is stung on rhetoric and mouths big words like empowering the poor and the Dalits would in reality be so much weaker on the provision and transfer of real benefits to the poorer sections. More or less as a corollary of the same proposition is the other tendency that where the budget seems apparently to hit the most and invite flak may in reality turn out to be the areas where the real bounties are bestowed. My reference is to the corporate sector where so much adverse reaction is coming from the so-called captains of industry regarding the 10 per cent surcharge on corporation tax which effectively would translate to no more than 4 per cent of whatever the corporates choose to pay to the public exchequer after considerable manipulation of their accounts. Afterall, it is well known that most of the big companies have been for long zero-tax companies, and are now paying taxes under the MAT scheme. Naturally, the increase imposed would by and large leave such companies untouched. Even at the aggregate level, one finds that over the revised estimates for 1998-99, the total additional tax liability likely to be imposed on the corporate sector is even less than Rs 3,000 crore of which Rs 1,100 crore would be on account of the surcharge. Looked at another way, one finds that the share of the corporation tax in total government revenue, which had been static at 8 per cent for the past three years, is expected to increase to 9 per cent. Viewed in the light of a number of tax concessions like tax holidays and the reduction in capital gains tax, the provision of buyback facilities and the reduction in excise duty on several commodities and so many other incentives for purposes like R & D spending would mean that the corporate sector will on balance have a lot to gain. The expectation as a result of the overall impact of the financial and monetary implications of the budget will be that a backward-looking tendency in the interest rates should also lead to gains for the corporates. The short point is that the basic tendency observed in Indias public policies in general and fiscal policy in particular of persistent divorce between the real and the stated objectives continues to mark the new budget proposals. A telling example of this tendency can be seen in the hyperbole regarding the empowerment of the poor and the launching of a number of schemes for rural development, which is not matched by commensurate increases in the allocations for these sectors. For example, the Central Plan outlays for sectors like agriculture and allied activities, rural development, irrigation and flood control and energy generation sector are lower even in nominal terms than what was budgeted in 1998-99. Even for a number of other sectors, if one takes into account the 26.6 points increase in the wholesale price index upto December, 1998, one would see that there is hardly any sector for which the allocation has been increased in real terms. An example of the symbolic proposals is the announcement regarding the downsizing of the government by doing away with four Secretary by level posts! In a country where the expenditure on salaries and pensions during the past fiscal year by the Central government was as high as over Rs 33,000 crore, the saving by reducing the posts of Secretary by four with unknown implications regarding the total size of the Secretary-level positions would certainly be something to write home about. It is all-right that zero based budgeting and the Expenditure Reforms Commission have been proposed, but neither a technique nor an agency is a substitute for introducing austerity and a healthy proposition between the perks and privileges provided to the public servants and public representatives, and the living standards of the majority of the population. Such symbolic efforts may not add up to anything worthwhile. Before coming to the basics, making an assessment of the present situation presented along with the Budget, one may like to point out a few things about which the Budget speech seems to be making much of. Take the question of fiscal deficit. In absolute terms, it is budgeted to be a little under Rs 80,000 crore compared to the preceding years budgeted figure of a little over Rs 90,000 crore which has been revised upwards to over Rs 1 lakh crore. The window-dressing here is quite interesting. The amounts collected by the government through small savings are public account borrowings in every sense of the term, and yet the amounts have been excluded from the Budget estimates of the fiscal deficit. However, it may be appreciated that in a footnote one of the Budget documents clearly states that on the same basis as in earlier years, the fiscal deficit is Rs 1,04,955 crore. It has been observed that during the entire period of structural adjustment and fiscal stabilisation, the axe has fallen on capital expenditure. The process of chopping down capital expenditure has continued unabated, and the total capital expenditure budgeted for the year 1999-2000 at nearly Rs 47,000 crore is substantially lower than even the actual figure for 1997-98, and nearly Rs 17,000 crore lower than the revised estimates for 1998-99. The point which needs to be noted with some concern is that the bulk of the financing of public expenditure is by means of taxing the future generations, as public borrowing, after all, is nothing else. But what we are spending for the benefit of the coming generations is barely half of what we are proposing to take away from them. Naturally, with this kind of an approach, which it must be said is not a new departure in this year but is basically a continuation of business as usual; the incentives offered to the business sectors are unlikely to produce significant positive results. A basic condition for reviving the economy is public spending on infrastructure and capital formation. With slippages on this score, the liberally offered incentives may come to nought because the preconditions for successful growth-fostering activities constitute a plentiful availability of quality infrastructure. It is widely admitted that neither foreign capital nor Indian business interests would be equal to the task of providing infrastructure needed for strengthening the economy. It is true that additional resource mobilisation by means of taxation of the magnitude of Rs 9,334 crore has been attempted. But does it amount to more than 1 per cent of the fiscal deficit? The tremendous faith reposed by the liberalisers on the regime of low tax rates has been under experimentation throughout the 1990s, and yet we know that industrial production in general and manufacturing output in particular has not picked up and has not fast decelerated. The less than 4 per cent rate of growth in industrial production is reminiscent of the industrial slowdown of the late sixties and early seventies, which was rather religiously blamed by the liberalisers on the quota-licence-permit raj. One wonders what has happened to the entrepreneurial spirits which have been freed now by all-round deregulation, delicensing and a certain amount of debureaucratisation, though with a liberal mix of cronyism. As far as resource mobilisation is concerned, a significant lost opportunity is in terms of the service tax. Nothing new has been proposed in this area despite the fact that the service sector, with a 48 per cent contribution to the GDP, is also the fastest growing area of the Indian economy. What it is budgeted to contribute in the fiscal 1999-2000 at Rs 2,300 crore is one-fourth of 1 per cent of the GDP. Such a sparing of this sector becomes all the more unjustified when so much din and noise is being made about taxing agriculture, which, with about 27 per cent contribution to the GDP, is still providing a vital life-support system to over 60 per cent of the population. The Indian economy is really at the crossroads, not because the calendar would be drastically changed owing to the end of the millennium but because eight years of liberalisation has turned out to be a total waste of efforts. We are back to square one with the additional admission even in the Budget speech that we have made only a limited impact on the problems of poverty and unemployment. This may be regarded as a gross understatement of the year because during this period of liberalisation, the total additional jobs created amount to no more than 19 lakh both in the public and private sectors put together. This means a little over two lakh jobs a year, when the number of young persons moving out of the plus-two institutions is more than 60 lakh. This is the real challenge which the growth-first-and-employment-as-a-byproduct approach just cannot meet. Probably, we will have to wait for a major socio-political surgery in the coming years to be able to respond to the emerging needs of our people. (The author is
Professor and Head, Department of Economics, Indian
Institute of Public Administration, New Delhi.) |
Missiles at Judges: then and now
I THINK we may, said John Keats, class lawyers in the natural history of monsters. Mumbai lawyer Nandlal Balwani provided a bizarre physical vindication of the poets pungent remark when he hurled shoes at the Supreme Court last Friday. Disgracing himself and the profession he joined the Mumbai Bar only four years ago, we are told, after seeking premature retirement from the postal department Balwani fully deserved the punishment that was slapped on him by a shocked court. He should consider himself lucky, in fact, that he got away with less than the full dose of six months imprisonment permissible under the Contempt of Courts Act. More a litigant than a lawyer, Balwani had lost two rounds of litigation with the estate officer over dispossession from his postal department flat in Mumbai before he approached the court of last resort. His appeal was dismissed by a Supreme Court Bench headed by Justice G.T. Nanavati early last week. That he chose to vent his insolent frustration before a different Bench one headed by the Chief Justice of India before whom he had no cause or matter pending, bespeaks the conscious and symbolic nature of his reaction. The self-congratulatory tone of legal and judicial discourse notwithstanding, it is remarkable how litigation warps and stultifies the psyche of the average consumer of justice. And not only in India. Shakespeare, in Hamlet, counted the laws delay amongst the whips and scorns of time no less than the oppressors wrong, the proud mans contumely and the pangs of disprizd love. As a litigant, said US Court of Appeals judge Learned Hand who ranks in fame and erudition with Oliver Wendell Holmes, Benjamin Cardozo and Felix Frankfurter, though unlike them he never made it to the Supreme Court I should dread a lawsuit beyond almost anything else short of sickness and of death. Speaking of Holmes and Learned Hand, litigants everywhere must be told about this incident recounted by Hand himself and reproduced in Irving Dillards The Spirit of Liberty. It was before they had a motor car. Seated in an old, horse-drawn carriage, the two judges jogged down one Saturday to the Supreme Court where Holmes had to confer with his colleagues. As Holmes disembarked near Capitol Hill and walked off, Hand called from behind: Well, sir, goodbye. Do justice! Holmes turned sharply and said: Come here, come here. That is not my job. My job is to play the game according to the rules. The Nandlal Balwanis of the world come to grief because they fail to appreciate this central fact: that the job of the judges is not to do justice but to play, simply to play, the game according to the rules. And, more often than not, according to rules made not by the judges themselves but by others seated in the legislature or (in the case of delegated legislation) in obscure government offices. That, not unoften, judges themselves succumb to the illusion that they sit to do justice and take credit for that grand commitment adds to the confusion of laymen. And leads them to conduct which, though ridiculous in the extreme, cannot but attract stiff penalties under the law of contempt. To conduct which the Honourable Sir Robert Megarry with matchless precision brands contempt by missiles in his work Miscellany-at-Law. Queens counsel for eleven years, Megarry was appointed a High Court Judge in 1967 and retired 18 years later as head of the Chancery Division. The earliest reported instance in history of contempt by missiles goes back to the year 1631 when an accused, convicted for felony, threw a brickbat at the judge. It narrowly missed him but an indictment was immediately drawn up and severe punishment imposed: the right hand of the accused, used in the act, was cut off and then as if that was not enough he was hanged in the presence of the court. That was in Salisbury (in England) and the judge was Chief Justice Richardson. Not only Megarry but all the leading authors on the law of contempt Oswald (now outdated), Arlidge, Eady and Smith (1999) and Borrie and Lowe (1996) cite the case as the beginning of the law of contempt in the face of the court. Literally in the face of the court. Two and a half centuries later the punishment was far less drastic in Cosgraves case (1877), when an egg was thrown at Justice Malins in court at Lincolns Inn. Five months in prison. The judge, too, was far more understanding. That must have been intended for my brother Bacon, he said. Justice Bacon sat in an adjoining court. Once again, the incident and the exact words are reported in all the legal classics. A more recent example comes from Lord Denning, one of the greatest English judges of this century. In The Due Process of Law, the second of his five famous books, Denning recounts the 1970 case of Miss Stone who argued in person. She made an application which the court refused. She was sitting in the front row near a book-case. Picking up a law book, she threw it at the judges. It passed between Lord Denning and Lord Justice Diplock. They took no notice. She picked up another. That went wide too. They took no notice again. She left, saying: I
congratulate your Lordships on your coolness under
fire. |
A week of baithaks, receptions
LAST week has been hectic here. Each day crammed with events, activities, baithaks, receptions and meets. To begin with, on that weekend when some of our men were listening to political music in Lahore we, in New Delhi, sat in rapt attention to Gangubai Hangals renderings at Anita Singhs apolitical home interiors. Monday saw Admiral Vishnu Bhagwats Press meet at the Press Club of India. Its finer points are already splashed. But what left one amazed is the very duration of this meet. A near two hours and as the President of the Press Club, Mr AR Whig, put across This has been the longest Press meet we have had in the last two years. What left one a little taken aback were the Admirals taut nerves. He lost his cool on three occasions. I really dont know whether this was because he was finding it frustrating to repeat the same facts, instances and incidents or was it because he couldnt possibly mention the names of all those whos who said to closely linked to arms dealers or dealings (he knew those names but because of legal implications couldnt utter them). But, then credit goes to him that after each such flare-up he would promptly apologise. If I am not mistaken he apologised atleast thrice. Having earlier interviewed his spouse Niloufer (just after his dismissal orders) one could see a marked difference between the manner she had put across the arguments and his way of communicating similar arguments. She being a trained senior lawyer came up with a better manner of argument and reasoning. But the way hes gone ahead and nailed Defence Minister George Fernandes ought to be taken in all seriousness and a special committee should be set up to study those specific charges. As Bhagwat candidly spoke about the gravity of breaking the Navy traditions. It takes three years to build a ship 300 years to build a tradition but just a few days for a minister to destroy it all... Adding more The day I was removed there were celebrations by many....but even if they make a General Vaidya out of me it does not matter. Also it was pathetic to hear the way he had to state his wifes religious record; as he put: Is it a paap (sin) that she is half Muslim and half Parsi. She is not a Jew, she is an Indian...Dont you think that there seems something wrong with the system, something definitely amiss in the very governance, if a day has come when the (former) Navy chief has to stand up and explain his wifes religious background or for that matter his secular credentials. Moving on, on Wednesday a dinner was hosted by the French Ambassador, Mr Claude Blanchemaison, on the occasion of the world premiere of Dominique Lapierres latest book A Thousand Suns (Full Circle). I think I have mentioned in one of my earlier columns that the French Ambassadors home is one of the finest examples of decor and layout and that evening there were present Dominique his spouse, is nephew together with his publishers and several of the prominent citizens of this city. Lapierre spoke from his heart about the people of Calcutta. To be precise the 75,000 people living in Calcuttas slums and the 9 lakhs living on the islands around. In fact this book was launched there in their midst, just a day before and proceeds from its sale would go towards the various medical programmes and programmes he is running for these very people. And he also spoke about the delay tactics of Indian Airlines, stranding him and the publishers for over six hours at the Calcutta airport. I think he managed to reach this dinner venue just in time. On Wednesday evening one also attended the MN Kapur memorial lecture by professor Irfan Habib, presided over by Mr IK Gujral. The lecture topic Envisioning India: The making of a nation attracted and Irfan Habib didnt disappoint. I will have to disappoint you all for space will definitely not permit me to include all those details but let me try to fit in some crucial pieces of information: The first time the mention of India appears is in the sixth century...The first major work on India was Al Baraunis Indica, written by him in Arabic in Lahore in 1035 AD. This book carries not only philosophical aspects but even states that the Bhagwad Gita is the core of Hinduism. (Mahatma Gandhi said the same)....Amir Khusros 14th century written volume has a patriotic tinge, when he compares India with other countries. But in all this patriotism religion doesnt figure at all. His usage of the word Hindustan signifies that this word is not a Sanskrit word rather of Iranian origin...16 century texts (of Abul Fazl) show that perceptions during those times were such that the sovereign had to practise religious tolerance in a multi-religious society ....In 1830 Raja Ram Mohan Roy had said that India is not a nation because we are divided into castes. And it is not common history and nor religion that made us into a nation. What made us into a nation is the British rule. Colonialism was a very important factor in making India become a nation from a country, for it is nationalism that actually united us... Thursday was again packed with the start of a full range of cultural events at the Hungarian Information and Cultural Centre. Artists, poets and musicians have come down from Budapest. Standing tall amongst them was Hungarys well known poet Eva Toth, who read out several of her poems. And it is relaxing to spend an evening at this centre, for not only is the ambience one of informality but the sheer atmosphere eases nerves...And straight from here, I went to the Kuwaiti Embassy for their National day celebrations hosted by their Charge dAffaires Abdul Rahman Al Otaibi (since the new Ambassador is yet to be appointed). Need I repeat that the Kuwaitis spread out a feast for every occasion. The national day being one of the prime events so you can imagine the lavish arrangements. And today, that is Friday,
as I am filing this column there starts at the IIC a
two-day workshop conducted by the Guild of Service on the
state of widows. I think I will be writing about it next
week. And also stands arranged tonight a special
reception hosted by Uma Vasudev for Satish Gujral. |
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