Trade falls victim to Mumbai attack

By Syed Fazl-e-Haider

Increased tension following the terrorist attack in Mumbai last month, which killed nearly 200 people in India's financial capital, has set back attempts to improve near moribund trade between close-to-bankrupt Pakistan and India.

Proposed secretary-level talks on enhancing trade ties between the two countries scheduled for this month in Islamabad have been postponed for an indefinite period, even as Pakistan denies direct involvement in the attack on civilians by gunmen. Ministerial-level talks that had been scheduled to be held in New Delhi on December 2had already been postponed.

Heightened hostility between the two neighbors in the wake of the Mumbai attacks comes after four years of improved bilateral trade, albeit from an almost non-existent base. The scope for further growth is glaringly obvious. For example, India, the world's biggest tea producer, wants to triple tea exports to Pakistan, the world's third-biggest buyer. In the other direction, Pakistan aims to capture more of the cement market in India's still expanding economy.

India, which exports about a quarter of its annual 800-million kilogram tea output, "Planned to boost sales to Pakistan to more than 20 million kilograms in the next three years ... from 5.47 million kilograms in 2007," Basudeb Banerjee, chairman of the state-run Tea Board of India, said after the attack, according to Bloomberg. The target may not be met after India blamed "elements" within Pakistan for the assaults, he said.

India is seeking to diversify from traditional markets, including Russia, where demand for tea and other commodities has declined because of the credit crisis.

India is the most feasible cement market for Pakistan, where companies have already completed adding capacity to reap possible benefits from India's rising demand for the commodity. Islamabad is committed to export about 100,000 tons of cement per month to India.

Pakistan offers India the most competitive transportation charges compared with other overseas sources in the region and Delhi has shown a willingness to take in the maximum that it can from Pakistan through sea and land routes by abolishing countervailing duties and additional customs duties on cement imports.

Before the Mumbai attack, the two countries had undertaken negotiations to remove bilateral trade barriers, which have increased the cost of doing business and led to trade being routed through Singapore, Hong Kong and elsewhere. Direct trade between India and Pakistan is not more than US$250 million a year of a total bilateral trade worth $2 billion.

The two countries were looking to raise bilateral trade to $10 billion a year after trade talks resumed between the two neighbors in 2003. The bilateral trade balance is strongly in favor of India, which exports 75% of the total and imports only 25%.

The outlook for improved cross-border links will severely diminish if Pakistan reacts to challenges that is was involved in the Mumbai attacks by diverting troops from the Afghan border to its border with India, a prospect Pakistani President Asif Ali Zardari has sought to diminish,

"Non-state actors wanted to force upon the governments their own agenda but they must not be allowed to succeed," Zardari reportedly told Indian Prime Minister Manmohan Singh by telephone.

A New York Times analysis last month argued that Zardari's background would act in favor of improved ties, not least because his financially beleaguered country has had to turn in the past month to the International Monetary Fund to help it pay off international creditors.

"A businessman at heart, Mr Zardari understands the benefit of strong trade between India and Pakistan. Now on life support from the IMF, Pakistan would profit immensely from the normalization of relations," the New York Times said.

The most immediate barrier to trade has been inadequate cross-border transport facilities. The two sides, still deeply suspicious of each other after a number of wars and armed clashes since they became independent of British rule in 1947, have agreed to allow trucks to move within about one kilometer of each other's border and to build truck terminal facilities. Pakistan has developed one such terminal at Wagha, on the Grand Trunk Road between Amritsar in India and Lahore in Pakistan, with space for about 100 vehicles. India has yet to construct a comparable facility on its side of the border at Attari.

Progress is more apparent in sea-going trade, after Islamabad and New Delhi in late 2006 signed a shipping protocol allowing flagships of both the countries to carry third-country cargo from each other's ports, restoring direct shipping links between the two countries after 35 years. Pakistan also added 202 more items on its list of imports allowed from India.

Reflecting the lost opportunities caused by continued hostility, Malik Sohail Hussain, vice president of Pakistan's National Traders Alliance, said trade and commerce should not be made victims of politics, and confrontational postures would hurt both Pakistan and India, according to the country's Business Recorder newspaper. "Bilateral trade is less than $1.5 billion while it should have been $10 billion," Hussain quoted as saying. "The standard of living of the people of the sub-continent cannot be enhanced without bilateral trade and we cannot live in tension or by ignoring each other."

While Pakistan is having to defend itself against claims that is helping to perpetrate terrorism outside its borders, it has suffered numerous attacks at home, particularly since the coalition government that took power early this year stepped up the fight against extremists in tribal areas near the Afghanistan border. Among them, at least 60 people died in a suicide attack on the Marriott hotel in Islamabad in September. In the first week of December, a bomb blast in Peshawar in North-West Frontier Province killed at least 22 people and wounded 80.

"While the terrorists may try to derail the peace process between Pakistan and India, we should not allow them to succeed in their nefarious designs," said Pakistan's Prime Minister Yousuf Raza Gilani. Speaking at a dinner hosted for European Union heads of mission last week, he said Pakistan was ready to engage India closely to expose the hidden hand behind the Mumbai terror attacks.

Relaxed tensions in the sub-continent would certainly be to the benefit of the US.

"A rapprochement with India would permit the Pakistani government to devote more military resources to the fight against terrorists," The Washington Post said in a November 29 editorial. "The United States, in what's left of the [George W] Bush administration's term and right from the start of [president-elect Barack] Obama's administration, must continue nudging these two rivals toward cooperation. As the bloodbath in Mumbai so vividly illustrates, terrorism is not only America's enemy, but Pakistan's and India's as well."

The United States could play a role in improving trade between Pakistan and India by offering duty-free imports if one of the sub-continental countries used the other's inputs in their exportable items to the US, according to study by CUTS International, an India-based research and networking group. The study cited a scheme instituted in 1996 that allows duty-free exports to the US market from Jordan and Egypt given a minimum level of inputs from Israel in the manufacturing of these products.

Even so, while trade can help in normalizing relations between the two archrivals, expecting more peaceful relations between the two economies through trade is a dream, the report said.

BANGALORE BLAST, A TERRORIST ATTACK OR POLITICAL PLOT?

The lone blast outside the BJP office in Bangalore yesterday sparked the usual flurry of media overkill. There was the usual, knee-jerk speculation about jihadis, Islamic terror, blah blah. This is, of course, par for course these days in the aftermath of a bombing, be it in Boston or Bangalore.

What makes the recent Bangalore incident an exception, however, is that it almost instantly triggered a flurry of political name-calling — an activity usually suspended in the immediate aftermath of a suspected terrorist attack. As wildly inaccurate rumours of multiple blasts circulated online, Congress party spokesman Shakeel Ahmad shot off his Twitter mouth: “If the blast near BJP’s office is a terror attack, it will certainly help BJP politically on the eve of election.” The allegation in turned spawned its BJP mirror, ie the Congress party staged the attack to consolidate the minority vote.

Risky Business: Are Teaser Rates for Home Loans Pushing Real Estate to the Edge?

At the Indian Banking Conclave (Bancon) in Mumbai on January 12, Reserve Bank of India (RBI) deputy governor Usha Thorat warned against what she considers risky mortgage lending practices. "In the area of housing loans, teaser rates are increasingly being offered, which is a cause for concern," she said. "I hope banks are ensuring that borrowers are well aware of the implications of such rates and the appraisal takes into account the repaying capacity of the borrowers when the rates become normal."

Teaser rates were introduced by banks last year to boost demand for housing finance in a slowing economy. The first off the block was the public sector State Bank of India (SBI) with its Easy Home Loan. Launched in January 2009, when home loans were on offer at interest rates between 8.5% and 11% depending on the amount and the tenor, SBI's rate was 8% for the first year and 8.5% for the next two years. After three years, the terms are highly confusing. According to SBI, the "interest rate after three years may be fixed or floating as per the borrower's choice at the time of sanction. If the floating rate option is chosen, then the rate will be 2.75% below SBAR. If fixed rate option is chosen, then the rate will be 1.25% below SBAR prevailing on the third anniversary date from the date of first disbursement, and shall have a reset frequency of five years from the third anniversary date of the loan. Fixed interest rate shall be subject to [a] force majeure clause."

"SBAR" refers to the State Bank Advance Rate or the Benchmark Prime Lending Rate. And what is the Prime Lending Rate? Beginning June 29, 2009, it was revised to 11.75% per annum; it depends on the RBI's rate and other factors. In other words, the borrowers' monthly payments or equated monthly installments (EMI) three years from now will depend on the SBAR at that time. Little wonder borrowers are befuddled, regardless of whether they opt for fixed or adjustable rate mortgages.

"It is partially correct to state that loan terms are not fully explained to the borrowers," says Sudip Bandyopadhyay, group president of Spice Finance. "It is important to be transparent while providing loans. This does not happen in case of teaser loans." But even the banks have no clue about how much the EMI could be. It depends on the interest rate, and banks are obviously not going to talk about worst-case scenarios.

"While documentation necessarily has to be detailed, there is a strong case to be made for banks being compulsorily required to provide simple illustrations on how floating rates are pegged and what the precise implications are," says Jayesh Desai, national director (infrastructure, real estate and government services), Ernst & Young (E&Y). But it would be unfair to say that banks are taking customers for a ride, he adds.

Thorat's statement about repaying capacity and clarity on obligations drew an immediate response from SBI chairman O.P. Bhatt. "I don't know what the RBI means by teaser loans," he told morning newspaper DNA at the same Bancon a few minutes after Thorat spoke. "It is not right to refer to the 8% home loan scheme as a teaser ... there are no hidden costs in these loans or any add-backs."

On February 5, RBI deputy governor K.C. Chakrabarty added another dimension to the debate. Talking to journalists at a seminar on infrastructure financing in Mumbai, he said: "We have no concern [about] teaser rates." In a lighter vein, he quipped: "What we are telling banks is that you should tease everyone. Don't just tease new customers; also tease old customers by charging a uniform rate for both."

Five days later, on February 10, the RBI stepped in with a circular "to make credit pricing more transparent." Beginning April 1, housing finance can no longer hide behind a wall of banker-speak. A new Base Rate system will be introduced. According to the circular, "Since transparency in the pricing of lending products has been a key objective, banks are required to exhibit the information on their Base Rate at all branches and also on their websites. Changes in the Base Rate should also be conveyed to the general public from time to time through appropriate channels. Banks are required to provide information on the actual minimum and maximum lending rates charged to major categories of borrowers to the Reserve Bank on a quarterly basis. Apart from transparency, banks should ensure that interest rates charged to customers in the above arrangement are non-discriminatory in nature."

High Interest Rate Regime
The problem for banks is that the country is moving to a high interest rate regime. The RBI credit policy announced on January 29 did not raise interest rates; it only increased the cash reserve ratio (CRR) by 75 basis points. This squeezes liquidity out of the system and helps temper inflation. But interest rates are bound to go up; the only question is when. Teaser loans could then become uneconomical for banks. To add its earlier customers to this category will make things worse. On the other hand, if interest rates rise too much, EMIs will climb, squeezing borrowers further.

Bankers say a bubble in India is unlikely for another reason. In the U.S., loans were given based on the value of the asset (the house). In India, the primary yardstick is the capacity of the borrower to repay. Besides, banks in India have been traditionally conservative about lending to individuals.

Despite the insistence of the banks that they check on borrowers' ability to repay, one key issue is how much they are paying for the home in the first place. At the height of the boom two years ago, a mid-market apartment in Mumbai had a price tag of $200,000. This tumbled to $100,000 (in some cases). Buyers who had $170,000 in bank loans suddenly found themselves with a lot of negative equity. For the banks, they would be making significant losses even if they were able to seize the property and sell it off.

Another issue most borrowers don't realize is that most loans have a Depreciation of Security clause. A buyer is expected to contribute 15% of the cost of the house or apartment -- $30,000 in the example given. If the price falls to $100,000, the bank will still finance only 85% of the current cost -- $85,000. The borrower will have to pay the shortfall ($85,000) to avoid being labelled a defaulter. (In loans where shares are pledged as collateral, this has happened very often. Banks ask borrowers to top up their securities when prices fall. If they fail to do so, they sell the shares.)

So why are banks offering teaser rates? The reason is they make money through lending, and today there are limited takers. Banks have too much money sloshing around in their coffers. According to RBI data, by November 20, 2009, personal loans were up a meager 0.7% for the year. Advances against fixed deposits were down 11.80%; on credit cards they were down 24.70%, and on consumer durables down 11.80%. The saving grace was education, where loans went up 31%, and housing, where loans increased by 7.30%. The increase in housing loans was essentially the effect of teaser rates, without which mortgage lending might have declined. Loans to the real estate sector were up 15.30%. This looks fine until compared with the 49% growth of the previous period.

In this environment, once SBI took the plunge, everybody followed suit. When SBI launched its Easy Home Loan, Deepak Parekh, chairman of Housing Development Finance Corporation (HDFC), the country's biggest mortgage lender, declared it a gimmick. A few months later, HDFC itself was offering a similar product. But Parekh continues to insist the teaser loan is "playing with fire." In an interview with business daily Mint, he said: "It's not a very healthy way of lending. It can create problems in the future, particularly if the rates shoot up. Today what we are saying is, if the rate is 8% or 8.25% for the first two years, the rate will be 9% afterwards and so the gap is very small. Suppose interest rates in India shoot up in the next three years, then what will happen? 

These are all floating rate loans and fixed only for the first two years. So, 8% interest could become 12% or even more. Then, the gap will be too much and it's a problem for the individual homeowners.... Financial innovation doesn't take time; if one does it, everyone copies. It can be done in 24 hours. Now most banks have this product." More than 20 banks and housing finance companies in India have launched some variant of the teaser loan.

Competing for Borrowers
"These loan programs have proved to be extremely popular, and any large bank would be interested in getting on such a winning bandwagon," says Anuj Puri, chairman and country head of Jones Lang LaSalle Meghraj, a real estate services firm. "In the end, a successful business entity will not steer away from taking a leaf out of the competition's book." Adds Bandyopadhyay of Spice: "I guess competition forced HDFC to follow this route. They obviously did not want to lose customers."

"Banks as well as HDFC have always had variants of the teaser loan programs," says Desai of E&Y. "They always had floating loans, which were linked to prime lending rates, so you have had situations in the past, too, where interest rates start out low and then move up. Parekh's comment was probably linked to pricing loans initially below the cost of funds."

Business daily Business Standard agrees with Parekh's views about the risks of teaser rates. "Teaser rates are doubtful in themselves, but the experience of the recent global financial crisis makes them more so," the newspaper says in an editorial. "The U.S. sub-prime crisis, where defaults by a large number of home mortgage owners led to the collapse of the housing bubble, which in turn led to the overall financial crisis, was essentially a matter of those who could not afford to service a loan of a particular order for its entire life being lent funds. And this was facilitated by the offer of teaser rates which were to be reset at not-too-late a date, a provision that was part of the fine print which many borrowers initially ignored. With antecedents of this nature, teaser rates should not have been allowed (in India) in the first place. It is not clear why the regulators should have allowed this to happen even while sounding warnings that it is not a good thing. The banks' response, particularly that of SBI, is that it was awash with liquidity at the particular period when the practice was initiated and the stratagem has served its purpose. But this still leaves open the issue of quality of assets which will not be known unless the higher reset rates kick in."

Following the RBI's warnings, some banks have changed course. Two major banks, Canara Bank and Union Bank, have decided to end their teaser loan programs. Axis Bank has withdrawn the teaser loan program it had introduced as recently as January 6. Even Bhatt of SBI seems to have had second thoughts. "We will review the special home loan scheme sometime in March and see what kind of credit offtake has taken place, what kind of liquidity we have, what is the view on lending to various sectors and where we think the cost of funds is heading," he told the Business Standard Banking Round Table in early February.

Bhatt's concern is primarily the SBI's bottom line, not the borrowers' capacity to repay. Still, the two are linked because the quality of the bank's assets depends on the latter. "The points of contention are the short-term impact of low margins of teaser loans on bank balance sheets and the long-term impact on the quality of the loan books the banks build," says Bundeep Singh Rangar, chairman of IndusView, an advisory firm for multinational companies looking at business opportunities in India. "While the short-term pressure on margins is reflected in the debate between Bhatt and Parekh, the differences between SBI and the RBI stem from asset quality issues. The interest rates of such teaser loans automatically reset after the initial relief period. This resetting character of the interest rates is being compared to sub-prime mortgages in the U.S. The key difference, though, is that even these low rates are not being offered to unqualified buyers, only to people with predictable and documented incomes and repayment capacity." The consensus view is that there are dangers, but Indian banks have been much more careful. And the RBI should be able to head off the trend before banks get into serious problems.

Bubble Trouble?
Is a bubble building up in real estate prices? Opinions differ. "There is a recovery in certain pockets only," says Desai of E&Y. Agrees Rangar of IndusView: "The real estate industry is picking up, but slowly and unevenly." Bandyopadhyay of Spice, however, says that the prices of both commercial and residential properties have gone up significantly and they are close to their peaks. "The sharp increase in real estate prices during past six-eight months is definitely a cause of concern," he adds. "A calibrated approach needs to be taken by the regulator in consultation with the banks and the industry to slow down the pace, thereby ensuring more sustainable long-term growth."

The residential market is currently still largely end-user driven," says Puri of James Lang. "While there is a fresh complement of investors on the market as well, wholesale speculation such as we had seen in previous years is definitely not in evidence. It is speculators who create bubbles, not genuine investors." Adds Rangar of IndusView: "We don't believe there is any bubble in the Indian real estate sector."

Rating agency Fitch sees demand picking up but no dangers of overheating. "After a difficult period in early 2009, residential market demand picked up in the second half of 2009, as reflected by the absorption of new projects that were launched at a 25% to 30% discount versus prices during the previous peak in the second half of 2008," says a January 2010 report. "Developers reacted to the fall in demand by reducing prices and lowering unit sizes, and the focus shifted from high-value housing to the more mid-income affordable segment. Any significant increase in property prices by developers, and a tightening monetary policy, could have an adverse impact on future demand. With some recent launches already indicating an increase in residential prices, there is a risk that volumes may moderate if prices continue to appreciate." The commercial segment, says Fitch, continues to remain under pressure.

The sizzle is evident elsewhere. Nearly 20 real estate companies have lined up initial public offers (IPOs) totaling more than $6 billion. Some have already gone through and done remarkably well. During the boom of 2007, there were nine real estate IPOs. Today, only one of them has shares that trade above their offer price. Even if the homeowner has been a winner, investors in real estate stocks and speculators in property have been clear losers.

EDITORIAL: Sangh Poori Bahar

But who will give direction and friends back?

The RSS has decided on a “phased withdrawal” from the BJP’s day-to-day affairs, it will “micro-manage” the party no more. The BJP is to be given back to the BJP. Whatever the reason for the RSS’s decision — be it the pragmatic realisation that uncontrolled intimacies and blurring lines between political party and “cultural organisation” were helping neither, or belated acknowledgement of the autonomy of a political party — the prospect of India’s main opposition party emerging from the shadow of an unaccountable organisation is good news. For the BJP, however, it may still not be good enough.

The terms of the withdrawal are likely to be controversial and contested. A BJP that has lost a sense of self and an RSS that has become accustomed to bending the BJP to its will — can the two extricate themselves from the tangled mess and tell the tale? Will the RSS hand back the reins, as it has promised it will, to the BJP’s Big Two? Not so long ago it had urged a generation shift, declaring Vajpayee and Advani to be too old to lead. But even if it were possible to execute such a transfer of power, many of the BJP’s problems remain.

Can Vajpayee and Advani put the genie of factionalism back into the bottle? Can they revive the party’s somnolent second rung, or invent a new one? Too many of the BJP’s state units are convulsed by bitter infighting. Be it Rajasthan, UP, Madhya Pradesh or most notably Gujarat, there is no sense of common purpose in the party any more. The fact also is that none of the once-celebrated second generation leaders in the BJP has shown any signs of being able to rally the whole party behind him or her.

The BJP must ask itself why its allies are distancing themselves from it, one by one. The TDP now considers it an electoral liability; Jayalalithaa prefers the inchoate Third Front; the INLD and AGP have opted out of the NDA; the Trinamool wavers, so does the Shiv Sena and JD(S). It must also wonder why it has been so diminished in the bastions of UP that it straddled so confidently so recently. It must ponder its own bizarre backtracking on policies it advocated vigorously when in power, be it SEZs or the nuclear deal. The BJP has problems, other than the RSS.

Editorial: The Dream Of 'Digital India' Is Virtually Dying!

By M H AHSSAN | INNLIVE

Without intervention, Digital India looks to simply be a colony of US and China.

Last year, Prime Minister Narendra Modi announced Digital India and Startup India, to declare India's impending digital eco nomy and local entrepreneurship ecosystem. Today , it looks as though India's ability to build a local digital economy may be failing.

Editorial: A Region In Ferment

By M H Ahssan

Mumbai terror attack has redrawn earlier borders.

The divisions we split the world into during the Cold War have at long last crumbled thanks to the Mumbai terrorist attacks. No longer will we view South Asia as a region distinct from the Middle East. Now there is only one long continuum stretching from the Mediterranean to the jungles of Burma, with every crisis from the Israeli-Palestinian dispute in the West to the Hindu-Muslim dispute in the East interlocked with the one next door. Yet this elongated Greater Near East does not signify something new but something old.

For significant parts of medieval and early modern history, Delhi was under the same sovereignty as Kabul, yet under a different one from Bangalore. From the 16th to the 18th centuries, the Mughal dynasty governed a sprawling empire encompassing northern and central India, almost all of Pakistan and much of Afghanistan — even as Hindu Maratha warriors in India’s south held out against Mughal armies. India’s whole history — what has created its rich syncretic civilisation of Turko-Persian gems like the Taj Mahal — is a story of waves of Muslim invaders in turn killing, interacting with and ultimately being influenced by indigenous Hindus.

Hindu-Muslim relations have historically been tense. Remember that the 1947 partition of the subcontinent uprooted at least 15 million people and led to the violent deaths of around half a million. Given this record, the relatively peaceful relations between the majority Hindus and India’s 150 million Muslims has been testimony to India’s successful experiment in democracy. Democracy has so far kept the lid on an ethnic and religious divide that, while its roots run centuries back, has in recent years essentially become a reinvented modern hostility.

The culprit has been globalisation. The secular Indian nationalism of Jawaharlal Nehru’s Congress, built around a rejection of western colonialism, is more and more a thing of the past. As the dynamic Indian economy merges with that of the wider world, Hindus and Muslims have begun separate searches for roots to anchor them inside a bland global civilisation. Mass communications have produced a uniform and severe Hinduism from a host of local variants, even as the country’s economically disenfranchised Muslims are increasingly part of an Islamic world community.

The Muslim reaction to this Hindu nationalism has been less anger and violence than simple psychological withdrawal: into beards, skullcaps and burqas in some cases; selfsegregating into Muslim ghettos in others. The terrorist attacks in Mumbai had a number of aims, one of which was to set a fuse to this tense inter-communal standoff. The jihadists not only want to destroy Pakistan, they want to destroy India as well. India in their eyes is everything they hate: Hindu, vibrantly free and democratic, implicitly and increasingly pro-American, and militarily cozy with Israel.

Just as the chaos in Iraq through early 2007 threatened the post-Ottoman state system from Lebanon to Iran, creeping anarchy in Pakistan undermines not only Afghanistan but also the whole Indian subcontinent. The existence of terrorist outfits like Lashkar-e-Taiba that have links with the Pakistani security apparatus but are outside the control of Pakistan’s own civilian authorities is the very definition of chaos.

A collapsing Pakistan, and with it the loss of any real border separating India from Afghanistan, is India’s worst nightmare. It brings us back towards the borders of the Mughal world, but not in a peaceful way. The jihadist attack on India’s financial centre not only damages India-Pakistan relations, but makes Pakistan’s new civilian government — which has genuinely tried to improve ties with India — look utterly pathetic. Thus, the attack weakens both countries. Any understanding over Kashmir, the disputed Muslim-majority territory claimed by Pakistan, is now further than ever from materialising, with mass violence there a distinct possibility. Meanwhile, Pakistan’s military suspects that Washington will desert their nation the moment the leadership of al-Qaeda is, by any chance, killed or captured.

Making matters worse, every time the US launches an air attack into Pakistan from Afghanistan, it further destabilises the Pakistani state. That is why the Mumbai attacks bring true joy to the most dangerous elements of the Pakistani security establishment: the tragedy has caused the world to focus on India’s weaknesses that have been obscured by its economic success. See, many Pakistanis are saying, your beloved India is not so stable either. This is nonsense, of course. India, with all its troubles, is far more stable than Pakistan. In the meantime, every day that goes by without riots in India is a defeat for the Mumbai terrorists. Indeed, India’s own Muslims have demonstrated against the attacks.

But India, not just Pakistan, desperately needs help. Just as solving or at least neutralising the Israeli-Palestinian dispute is a requirement for reducing radicalism and Iranian influence throughout the Levant, the same is true of the India-Pakistan dispute at the other end of the Greater Middle East. Our notion of the “peace process” is antiquated and needs expanding. We need a second special negotiator for the Middle East, a skilled diplomat shuttling regularly among New Delhi, Islamabad and Kabul.

Our best strategy is, as difficult and trite as it sounds, to be at all places at once, not with troops, necessarily, but with every bit of energy and constant attention that our entire national security apparatus — and those of our allies — can bring to bear.

Editorial: Unite Against Terror

Let’s professionalise rather than politicise India’s anti-terror combat.

Terror is back. Twin bomb blasts struck Hyderabad Thursday, killing around 16 people and injuring over 117. Predictably, some opposition leaders accuse the Centre of bungling the job of fighting terror. If the charge can’t be entirely dismissed, the truth is there’s blame to go all round. Politicisation of terror poses the biggest hurdle to crafting a united approach to internal security. While politicians waste time debating whether terrorism is green or saffron, they put off critical nuts-and-bolts action to unify and professionalise anti-terror operations – with deadly consequences. 
    
Consider that we had information about an imminent terror strike. The home minister said this was a “general alert”, suggesting it didn’t amount to actionable intelligence. Was he clueless about Delhi Police’s claim last year that an Indian Mujahideen operative had confessed to staking out areas in Hyderabad including Dilsukhnagar, the site of Thursday’s bombings? This input was in fact subsequently circulated. Whether or not it has a bearing on the latest attacks is for investigators to establish. But there’s still a question to be asked. Given the recent terror tip-off, why wasn’t security beefed up in Dilsukhnagar, more so since this crowded locality was targeted twice in the past? 
    
Clearly, coordination is woefully lacking among central and state governments, and among security agencies under their command. The National Investigation Agency (NIA), set up in 26/11’s wake, is to aid Andhra police in probing the blasts. Whether that comforts people is debatable. NIA officials themselves claim to lack skilled manpower and access to a comprehensive database on terrorists. Moreover, they routinely face state-level jurisdictional constraints. No wonder NIA’s had a poor record of cracking terror cases. 
    
Add to this shameful neglect of basic anti-terror protocols, thanks to shoddy policing. This was glaringly evident when cops didn’t cordon off the blast sites, risking contamination of evidence being collected for forensic study. Surely it’s urgent that we invest in training policemen, boost their numbers and modernise police stations – including by digitally linking them to enable quick transmission of information. Forensics is another key area requiring urgent upgrade. 
    
Terror networks are tentacular. Terrorists don’t respect borders within or across nations when forming sleeper cells, conducting recces or plotting savagery. We can’t be ahead of their game, thwarting their depredations, unless we bury turf wars and stop politicking. Let’s revive the proposal to create a national counter-terrorism centre along the lines of America’s antiterror body, to facilitate data collation and analysis, intelligencesharing and coordinated operations on a national scale. Let’s also give the NIA more powers, such as the FBI enjoys in the US. 
    
If the US has successfully scotched terror bids since 9/11, it’s because its political leaders and crime-busters concentrate on fighting the enemy instead of one another. We need the same focus. For millions of Indians who could be targets, it’s a question of life and death.

Editorial: A Fresh Tack

By M H Ahssan

Obama approach hits a nerve in Pakistan. Going by defiant statements from Islamabad that it will review its options vis-a-vis Washington if the Obama administration doesn’t adopt a positive policy towards it, it has clearly been rattled by the Obama administration’s plans to rejig American policy towards Pakistan and Afghanistan. Foreign minister Shah Mahmood Qureshi has gone to the extent of flashing a China card against India and the United States by asserting that Beijing would come to its aid if necessary.

The new US approach includes inducting 30,000 more American troops into Afghanistan, building an alternative route to supply them that passes through Russia and Central Asia instead of Pakistan, and pouring in non-military aid to Pakistan which will be tied to better performance in the war against terror. It’s hard to see what’s objectionable about this package. If the Americans are pouring in billions of dollars into Pakistan, it’s legitimate to expect that Pakistan should, in return, cease to provide sanctuary to armed militants who cross the border into Afghanistan and attack NATO and Afghan troops there, not to mention terror groups which have targets all over the world. Neither has Islamabad done a good job of keeping the supply route that passes through western Pakistan open, as hundreds of NATO trucks have been burnt along this route. If the US doubles its troops in Afghanistan, it can’t be expected to keep their sole supply route hostage to closure by the Taliban.

What may seem disconcerting from Islamabad’s point of view is the shift from previous US approaches to Pakistan, which had their origins in US-Pakistan collaboration during the jihad against Soviet occupation in Afghanistan. Coordinating the jihad was outsourced, in large part, to the ISI by the US and other western powers. When the Bush administration focused on Iraq and took its eye off the ball in Afghanistan this approach was, to some extent, replicated and not too many questions were asked about how effectively Islamabad was conducting its war on terror. That may have led some elements in Pakistan to revive the old dream of strategic depth, whereby the West would eventually tire of Taliban attacks launched from safe sanctuaries in Pakistan, withdraw its troops and leave the Taliban free to reassert control in Afghanistan.

But alarm bells rang as Taliban began making deep forays into Afghanistan while asserting control over large swathes of Pakistani territory itself. That caused the Bush administration to change tack in the last few months to authorise missile and drone strikes on Taliban-held Pakistani territory. Now the Obama administration promises to tie aid to results in the war on terror. This may have its risks. But previous approaches have failed to stem the Taliban, which is making headway in both Pakistan and Afghanistan. Meanwhile, the Lashkar-e-Taiba uses Pakistani territory to launch terror attacks on India. It’s time for a fresh global approach to stabilising Pakistan.

Editorial: Done In By Hype

By M H Ahssan

Unqualified adulation of corporate leaders is dangerous. Flashback to the early 1980s and some people may recollect the name Agha Hassan Abedi. He was the founder of the Bank of Credit and Commerce International (BCCI) which in those days was the fastest growing financial institution in the world. It later emerged that BCCI’s success was built around a web of deceit and fraud. Abedi’s collapse into ignominy was as rapid as his rise to fortune. Fast forward to the 1990s and there is Ken Lay. He took Enron from revenues to the tune of $4.6 billion in 1990 to $101 billion in 2000, and then to bankruptcy by 2001.

While the company’s fortunes were on the rise Lay was the darling of the corporate community. He was showered with awards and those who asked troublesome questions about the company’s performance were dismissed as awkward Cassandras. And now there is Ramalinga Raju, the man who built Satyam into India’s fourth largest IT company, and who only last year was conferred the Golden Peacock Award for corporate governance. These are just three names out of the many that at one stage bestrode their professional domains like a colossus but then collapsed into a heap of public opprobrium, legal suits and personal shame.

Why did such people who had been hailed as iconic trailblazers and whose entrepreneurial and innovative initiatives were held up as models of inspired leadership for a competitive and connected world feel compelled to wilfully defraud?

There is no simple answer but of all the possible explanations there is one that calls for a psychologist’s comment — the subtly corrosive impact of public accolades and media hype. Abedi, Lay, Raju and their like were once the cynosure of shareholders, peers, financial journalists and industry federations. Their every initiative was given broad coverage. Their companies were the envy of the corporate community. But then hubris and overconfidence stepped in. They began to believe the hype. They began to behave as if they did have the Midas touch — that they could indeed convert dross into gold.

They got so taken in by the spin and hyperbole of third-party analysts and a superficially knowledgeable media that instead of focusing on business fundamentals like managing cash flows, they expended disproportionate effort on sustaining the stories of their success. Matters had to eventually come to a head. Whether it was because of a mistimed bet or a shift in market conditions their companies started to falter. The rot set in when against this backdrop of deluded grandeur and
fear of failure they crossed the line that divides the bending of rules from the breaking of them.

How did the board of directors — in particular the independent directors — allow such a situation to come to pass? What were the external auditors doing? The answer to the latter is clear. The auditors were asleep at the wheel. They were negligent and in breach of their responsibilities. The answer to the former is, however, more complex. The independent directors must of course share the blame. But to what extent? Are there extenuating circumstances?

Independent directors are expected to have the knowledge to help the company meet its corporate objectives of profitability, growth and social responsibility and also to ensure adherence to legal and financial propriety. They are better able to do the latter than the former. This is because most directors do not have the time to get a grip of the details of a company’s operations, its business strategy, its people and its organisational complexities. They are either preoccupied with a full-time responsibility elsewhere or, if retired, with multiple boards and consultancies. Management is also all too often economical with information. The board’s papers contain no more than the bare bones of important proposals and they arrive but a few days before the meeting. This may be a prudent precaution against leaks but it does not facilitate a meaningful dialogue.

The Satyam board, for instance, could not have had a more distinguished pedigree and yet it approved a proposal that was clearly in transgression of the spirit, if not the letter, of corporate governance norms related to conflict of interest. Why did the board approve the proposal? The charitable explanation would be that the information presented was sparse and possibly misleading, and that the board’s agenda did not allow for a rigorous and structured discussion. But the more likely explanation would be that the directors did not have the detailed knowledge needed to penetrate the veil that covers operational and financial numbers. The fact is that a management bent on fraud would under such circumstances have little difficulty in pulling wool over the eyes of its directors.

The Satyam saga must not lead to the assumption that every CEO is a potential Lay or Raju, or that in the absence of a further tightening of rules there will be a run of corporate scandals. But it does offer a useful lesson. Independent directors should have a more formal involvement in the setting of corporate strategy. The creation of a subcommittee on strategy would not only play better to the strength of the directors but it would also help check the ‘strategic’ forays of ambitious, and possibly greedy, owner-managers.

PONZI SCHEMES: WHY THERE WILL BE MORE SUCKER?

Despite tighter vigilance, Ponzi schemes have been sprouting like weeds in dirty patches. Our inability to punish the guilty quickly emboldens them. Ponzi schemes are keep coming back one after the other.

Only some time back we were talking about the Stockguru ponzi scheme. Before that the emu ponzi scheme and Speak Asia had been in the news. More recently the MMM Ponzi scheme and Saradha chit fund have taken up a lot of news space.

MMM India recently put itself into what it calls a calm regime where operations like money transfer will remain suspended and hence those who have put money into the scheme won’t be able to withdraw it. The Saradha Chit fund has collapsed.

After The Polls, BJP May Collate Regional Players For 'Game'

By M H Ahssan | INNLIVE

EDITORIAL In an interesting development, senior Congress leader and political secretary to Sonia Gandhi Ahmed Patel has hinted that Congress might consider lending support to a non-BJP coalition after the Lok Sabha polls. 

This amounts to a tacit admission that Congress believes it might not be in a position to lead a grand alliance after the results are out on May 16. It also suggests that Congress is looking at a scenario similar to that in 1996 when it had propped up the United Front government. 

Congress’s track record of propping up Third Front governments has been extremely lacklustre.

Editorial: The Useless 'Madness' Of Bengaluru Crowds

By M H AHSSAN | INNLIVE

Don't make excuses for racist mob violence in Bengaluru, was the site of shameful, racist mob violence, after a Sudanese man drove over and killed a local woman. Much later a young Tanzanian woman, who had nothing to do with the crime but happened to be from the continent of Africa, was dragged out of her car and assaulted by the crowd, her clothes torn, her friends beaten for trying to protect her.

Editorial: The Importance Of Being Indian

Despite its warts, India’s democracy has fired global imagination for over six decades. It is not the politest thing to do, but it has to be done. We need to drop Brics, or at least not take it too seriously, and step out on our own. Brazil, Russia, China and South Africa may look a little like us, but deep down this resemblance is superficial. Brics is a catch-up club that turns to richer, fatter countries for inspiration, but India, in many ways, is inspiration itself. 
    
When India dared to birth democracy, many thought it was premature and that it would soon be history. Sixty-six action-filled years later, India’s democracy is now a little too old to die young. What is more, the world watches every move we make; in fact, cannot have enough of us. This is not because India is efficient and affluent – far from it. Rather, it is the way India goes wrong that fires global imagination. 
    
In any other country of comparative vintage and want, ethnicity, once introduced, would have run wild. Indian politicians too have repeatedly played this dirty trick, but our democracy has limited its appeal. The ultra corrupt may be ultra rich but because of India’s judiciary and the press they often wake up in jail to swill bad tea. Even army officers might face court martial if they mess with the rules. Political bosses, and their cronies, are forever bending and twisting the law, but for all their power and pelf, they can never quite ignore it. 
    
Indian politicians err time and again, but their overbites serve as object lessons because procedures hold. This not only pulls us out of periodic crises with a just-backfrom-the-dentist feel, but also tells the world, the advanced West included, how easily democracy can be lost. If India had been another underperforming tin-pot dictatorship, it would not have been the thought experiment it is today. 
    
Take a look at the following: 
Corruption, assaults and political conspiracies happen worldwide, but when they strike India they excite the mind like nothing else. For example, South Africa is 
a serious centre of gang rapes, or “jack rolling” in the local lingo, but that does not cause an international stir. Yet the news of the December rape and murder in Delhi ricocheted within minutes across the world. 
    
This was not because the protests were passionate, or because the police should have gone to a finishing school. What was being observed was whether our Constitution would hold. Eventually it did; false cases were withdrawn and, boorish cops notwithstanding, no bullets were fired. 
    
Ethnic intolerance again is an international affliction. When Putin tells Russian minorities to put up or shut up he gets a standing ovation at home and hardly any press abroad. In Burma, Rohingya Muslims foxhole themselves in fear, but that does not make big news. With India it is different. If the western world was horrified with the 2002 Gujarat killings, it was because our free press and civil society, also gifts of democracy, brought things out in the open. 
    
Corruption in China is monumental. It periodically fells bridges and schools, killing hundreds. Brazil has a homicide rate three times higher than India’s and political violence in Russia is just too bad to be true. The world may condemn all of this, and it does. However, it is only when India goes wrong that tongues wag the mind just about everywhere. 
    
That India can make this happen again and again is what makes us special. Had we been too perfect, we would be Scandinavia, and nothing unique. On the other hand, had we been too violent, we would have been just another Honduras, or maybe Zimbabwe. But because our stubborn democracy has held to its frame, our leadership blunders light up the sky. This is our real USP! 
    
India’s imperfections make for its significance. In terms of economic underdevelopment and dodgy politicians, we have a fair amount in common with many troubled nations, some of whom are our neighbours. But even in the darkest of times, we hardly expect military coups and mass arrests, as they do. To their credit, millions of Chinese bloggers also noticed that Delhi’s anti-rape agitations did not turn Vijay Chowk into a Tiananmen Square. 
    
Advanced democracies too owe us a debt of gratitude. For years India has acted as a not-forprofit laboratory so that they might remember the fundamentals of citizenship that made them rich and kept them that way. It is now payback time and they should tell us how exactly they set up universal health and education that served their citizens so well. 
    
When democracies reach out to each other this way, the world becomes a better place and friendships stay secure. This is something that neither G-20 nor Brics meets can do as it is in the nature of the economic beast to cross wires and compete. For starters, South Africa is as unhappy with Brazilian chickens flying in as it is with China’s promiscuity with other African countries. The distant hope of a Brics Development Bank or of currency swaps will not blow these fears out of the water. 
    
Indian politicians could also do us a favour by occasionally learning from their mistakes. The importance of being Indian would then become obvious to all. 

Editorial: A Fresh Tack

By M H Ahssan

Obama approach hits a nerve in Pakistan. Going by defiant statements from Islamabad that it will review its options vis-a-vis Washington if the Obama administration doesn’t adopt a positive policy towards it, it has clearly been rattled by the Obama administration’s plans to rejig American policy towards Pakistan and Afghanistan. Foreign minister Shah Mahmood Qureshi has gone to the extent of flashing a China card against India and the United States by asserting that Beijing would come to its aid if necessary.

The new US approach includes inducting 30,000 more American troops into Afghanistan, building an alternative route to supply them that passes through Russia and Central Asia instead of Pakistan, and pouring in non-military aid to Pakistan which will be tied to better performance in the war against terror. It’s hard to see what’s objectionable about this package. If the Americans are pouring in billions of dollars into Pakistan, it’s legitimate to expect that Pakistan should, in return, cease to provide sanctuary to armed militants who cross the border into Afghanistan and attack NATO and Afghan troops there, not to mention terror groups which have targets all over the world. Neither has Islamabad done a good job of keeping the supply route that passes through western Pakistan open, as hundreds of NATO trucks have been burnt along this route. If the US doubles its troops in Afghanistan, it can’t be expected to keep their sole supply route hostage to closure by the Taliban.

What may seem disconcerting from Islamabad’s point of view is the shift from previous US approaches to Pakistan, which had their origins in US-Pakistan collaboration during the jihad against Soviet occupation in Afghanistan. Coordinating the jihad was outsourced, in large part, to the ISI by the US and other western powers. When the Bush administration focused on Iraq and took its eye off the ball in Afghanistan this approach was, to some extent, replicated and not too many questions were asked about how effectively Islamabad was conducting its war on terror. That may have led some elements in Pakistan to revive the old dream of strategic depth, whereby the West would eventually tire of Taliban attacks launched from safe sanctuaries in Pakistan, withdraw its troops and leave the Taliban free to reassert control in Afghanistan.

But alarm bells rang as Taliban began making deep forays into Afghanistan while asserting control over large swathes of Pakistani territory itself. That caused the Bush administration to change tack in the last few months to authorise missile and drone strikes on Taliban-held Pakistani territory. Now the Obama administration promises to tie aid to results in the war on terror. This may have its risks. But previous approaches have failed to stem the Taliban, which is making headway in both Pakistan and Afghanistan. Meanwhile, the Lashkar-e-Taiba uses Pakistani territory to launch terror attacks on India. It’s time for a fresh global approach to stabilising Pakistan.

EDITORIAL: Generally modified

Research must be ramped up. Farmers need GM

So much alarmist pseudo-science is still in the air that a one-year delay in gaining permission for large-scale field trials in India of genetically modified brinjal appears just the blink of the eye. The go-ahead by the Genetic Engineering Approval Committee, the country’s apex regulatory body, to Mahyco to test Bt brinjal also addresses many concerns about public safety.

It is therefore expected that forthcoming requests for field tests of other food crops like rice, okra, tomatoes and other varieties of GM brinjal will be swiftly obtained. The GEAC has specified that field trials are not to be conducted on farmer-owned lands and will take place under the scrutiny of specified institutions. This is abundant caution, in case of unforeseen consequences by cross-pollination.

The case for India’s research and regulatory regime for GM crops to be more responsive cannot be overstated. One, we still know too little about how GM crops could affect specific environments. Therefore, when we see that farmers in countries like the United States, Argentina and, to a lesser extent, China are finding it more viable to commercially grow GM crops like cotton, soya bean and maize, the seeds cannot be instantly made available to our farmers. Trials have to be conducted locally, and the slow clearance regime only delays the process further.

Two, state-initiated research in GM crops in India is paltry, with most result-oriented work coming from private companies and foreign institutions. The state bears a responsibility to undertake work on, for instance, crops specific for rainfed areas — perhaps higher-yield coarse grains or less water-consuming varieties of other crops.Much of rural India is still dependent in some way on agriculture as a source of livelihood. Increasing income can no longer come by increasing the area under cultivation — because there is now very little cultivable land lying fallow.

It has to be done by increasing productivity and by minimising the farmer’s probability of losing his crop, especially in the absence of crop insurance. According to one estimate, the annual loss of brinjal crop — planted on small holdings — due to fruit and shoot borers is Rs 900 crore. The 21st century is said to be the biotech century. India’s farmlands still await its full benefits.

Editorial: Beyond The Boundary

By M H Ahssan

Safe havens for terror leave the rest of us unsafe

That international cricketers can be attacked with assault rifles, grenades and rocket launchers on their way to playing a Test match in Lahore is a shocking indictment of the current security situation in Pakistan. While cricketers have been peripherally involved in terror incidents before, this is the first time a cricket team has been directly targeted. Six Sri Lankan players were injured, leading to the termination of the tour. Sport is not beyond politics at all, particularly politics of the unhinged kind.

Plans for South Asian countries to co-host the 2011 cricket World Cup are now in jeopardy. Pakistani venues are almost certainly ruled out. Bangladesh and Sri Lanka look iffy at the moment. The former has just suffered a bloody mutiny with possible political repercussions down the line, while the latter is embroiled in a messy civil war.

That leaves just India. Although the Mumbai terrorists inflicted far greater havoc on 26/11 similarities have been observed in the modus operandi of terrorists in Mumbai and Lahore, leading to speculation that the Lashkar-e-Taiba was responsible for both. In which case, as India goes to the polls, election rallies could represent the next target of opportunity for terror. The problem, as US defence secretary Robert Gates has noted, is that any number of major terrorist networks have found a safe haven in Pakistan.

Unless that changes the world is threatened, with South Asia at the bleeding edge. Concerted pressure must be brought to bear on Pakistan by the international community to dismantle its terror networks. As the attacks on the bus carrying the Sri Lankan team show, Pakistan itself is paying a big price for harbouring them. It’s not only well on its way towards becoming a sports pariah, investors and tourists will largely shun it as well, making any prospects of economic rescue bleak unless it does something about those safe havens.

Instead of joining forces against the fundamentalist threat, the manner in which Pakistani politicians continue with their infighting is almost surreal. Asif Ali Zardari, on coming to power in a democratic election, has gone back on promises and done nothing to review the dictatorial powers that had accrued to the presidency in the Musharraf era, perhaps because he is president himself now.

His government has also been party to a peace deal that, in effect, cedes power to the Taliban in Swat. Nawaz Sharif, as principal opposition leader, has been pandering to the dangerous myth that the fight against terror is America’s war, not Pakistan’s. Key players in Pakistan need to be persuaded that while democratic debate is fine, jockeying for political advantage by placing their country in peril isn’t.

Editorial: The Andhra Pradesh Jigsaw Puzzle In Elections'14

By M H Ahssan | INNLIVE

One of the hallmarks of this Lok Sabha election is that certain big states that had settled into bipolar, two-party or two-alliance contests have gone multi-polar with a vengeance. Bihar, where the BJP, the JD(U) and the RJD are competing with each other, is an example. The trend is most obvious though in Andhra Pradesh.

The verdict of 2009 - when the Congress won 33 of 42 seats in Andhra Pradesh - seems a distant memory. The state has suffered due to the prolonged and clumsy process of its division and the formation of Telangana (17 seats), leaving behind a rump Seemandhra (25 seats). This summer, Andhra Pradesh votes as one state but with the knowledge that it is really electing two separate jurisdictions. Telangana officially comes into being at the beginning of June.

A STING IN A STORY

Are exposes good journalism? Who exactly should media organisations be trying to inform and what is the information they should bring to their audiences? Darryl D'Monte finds himself in an unexpectedly pleasant bookshop in Mumbai, at a panel discussion on sting journalism.

It's not often these days that bookshops are opening - rather than closing. And, what's more, are spacious enough to accommodate a sufficient number of interested people to hold a discussion around books or writerly pursuits. So it was a pleasant surprise recently to step into a spanking new shop in Santa Cruz, in suburban Mumbai, called The Reader's Shop for a panel discussion on "Media! Where is thy sting?" The store's basement had hundreds of books along the walls, and was liberally strewn with cane chairs that would permit people to read at leisure.

The panel was organised by Humanscape magazine, and consisted of three journalists. Arun Sadhu, a veteran who has now retired from active journalism, spoke first and was very much the old school. He deplored sting journalism in general and even questioned Arun Shourie's celebrated expose of Maharashtra Chief Minister Antulay in the early 1980s. One can still recall the title of the first part of the searing front-page series in the Indian Express, which was "Indira Gandhi as Commerce". The series revealed how the wily CM was taking a percentage of every bag of cement sold for an Indira Gandhi Pratishtan, a somewhat ham-handed method of raising funds for the Congress party. Antulay had to resign for his misdemeanours; his reputation was already dubious even before this, but with the expose he was well and truly finished politically.

According to Sadhu, Shourie was not quite the media knight in shining armour. There were dissensions within the Congress party, and the anti-Antulay faction engineered this investigation. Nor was this a closely-held secret: to anyone connected with the building trade, it was open knowledge at the time. All the same, Sadhu was probably protesting too much: it is one thing to be aware of some scandal somewhere, and quite another to publish it. Precisely the same situation arose at a morning editorial conference of The Times of India early in 1977, when Mrs. Gandhi was to call elections to legitimise her emergency.

That morning, the story had been scooped by Kuldip Nayar in the Indian Express - come to think of it, so many exclusives, including the Bhagalpur blindings and, more recently, the murder of Satyendra Dubey, the junior engineer who exposed corruption in the Golden Quadrilateral project, have featured in this intrepid newspaper, which must be a tribute to its feisty founder, the late Ramnath Goenka. At the morning conference, ToI editor Girilal Jain poured scorn over the story, remarking that everyone (who mattered, obviously!) in Delhi knew about it. An otherwise taciturn Assistant Editor, \r\nG.M. Telang, piped up: "But he had the courage to publish it!" - which was surely the point. \r\n\r\n\r\n\r\n\r\n\r\n And for that matter, the dissensions within a political party - or any other major establishment, including corporate bodies - is surely the stuff of which scoops are made. Everyone talks about Deep Throat, the mysterious and unidentified source who fed Bob Woodward and Carl Bernstein, the intrepid reporters of the Washington Post who broke the Watergate story and ultimately brought President Richard Nixon down. Deep Throat, recently revealed to be former FBI Deputy Director Mark Felt, was obviously disenchanted with "Tricky Dickie\'s" misdemeanours in bugging the Democrat\'s party office in the Watergate hotel and telling outright lies about other matters. He would not have been operating on his own, but representing an entire section of the administration who objected to such underhand methods. But that ought not in any way detract from the two reporters\' devastating scoop. \r\n\r\n \r\nWhile there are many misgivings about Shourie\'s ideological predilections - incidentally, his latest book, Governance, waxes eloquent about the NDA government\'s initiatives with his ministry\'s disinvestment of public sector enterprises, but has been overshadowed by the current scandal surrounding the sale of the Juhu Centaur hotel - one should give the devil his due for unseating Antulay. Many have also forgotten that when he was the Executive Editor of the Indian Express earlier, he published.

That morning, the story had been scooped by Kuldip Nayar in the Indian Express - come to think of it, so many exclusives, including the Bhagalpur blindings and, more recently, the murder of Satyendra Dubey, the junior engineer who exposed corruption in the Golden Quadrilateral project, have featured in this intrepid newspaper, which must be a tribute to its feisty founder, the late Ramnath Goenka. At the morning conference, ToI editor Girilal Jain poured scorn over the story, remarking that everyone (who mattered, obviously!) in Delhi knew about it. An otherwise taciturn Assistant Editor, G.M. Telang, piped up: "But he had the courage to publish it!" - which was surely the point.

And for that matter, the dissensions within a political party - or any other major establishment, including corporate bodies - is surely the stuff of which scoops are made. Everyone talks about Deep Throat, the mysterious and unidentified source who fed Bob Woodward and Carl Bernstein, the intrepid reporters of the Washington Post who broke the Watergate story and ultimately brought President Richard Nixon down. Deep Throat, recently revealed to be former FBI Deputy Director Mark Felt, was obviously disenchanted with "Tricky Dickie's" misdemeanours in bugging the Democrat's party office in the Watergate hotel and telling outright lies about other matters. He would not have been operating on his own, but representing an entire section of the administration who objected to such underhand methods. But that ought not in any way detract from the two reporters' devastating scoop.

While there are many misgivings about Shourie's ideological predilections - incidentally, his latest book, Governance, waxes eloquent about the NDA government's initiatives with his ministry's disinvestment of public sector enterprises, but has been overshadowed by the current scandal surrounding the sale of the Juhu Centaur hotel - one should give the devil his due for unseating Antulay. Many have also forgotten that when he was the Executive Editor of the Indian Express earlier, he published an article by
\r\n \r\nThe second speaker was the well-known columnist V. Gangadhar, who quite rightly ridiculed the "couching cast" sting, which was virtually entrapment. It may have earned India TV a few TRPs for some moments of glory, but it has done the channel far more harm than good for calling into question its credibility, which is by far the most precious thing that any mass media enjoys. The third speaker, Thomas Abraham, who edits the website \r\nindiantelevision.com, also queried why there was no public curiosity when Indian TV exposed politicians in earlier sting operations, which this correspondent was even unaware of. \r\n\r\n \r\nThere were, inevitably, many references to the Tehelka operation, where BJP politicians, George Fernandes, and several senior army brass were exposed in an undercover operation. This would constitute a legitimate exercise, but the speakers questioned the validity of such stings, considering that the only casualty was the BJP Treasurer, since Fernandes was subsequently reinstated as Defence Minister. Ironically, the only other casualty was Tehelka itself, which was hounded into bankruptcy, along with a couple who ran a finance company which had in good faith invested in the pioneering website.

Abraham made a controversial presentation, where he stressed how readers now had the choice of choosing between different media: newspapers, according to him, were almost passé; there were TV channels, websites and blogs, where one could fashion the news to suit oneself. He emphasised that news could be directed at the level of communities, rather than some amorphous mass readership, which he believed would be more relevant. But the newspaper\'s job is to inform the mass of people and help them make up their minds on issues of national and global importance. They were failing to do so, but if anything the websites and blogs were only targeting individuals, not society as a whole, and could not replace the mass media. Abraham\'s plea sounded suspiciously like the campaign for DNA - Daily News & Analysis, the forthcoming Mumbai daily - to the effect that it would speak directly to the reader, who could dictate the content.

K.F. Rustomji, a member of the National Police Commission, about the abysmal plight of undertrial prisoners in prisoners. From memory, a public interest litigation was filed on their behalf and around 30,000 such prisoners, who had served more than the sentence they would have received had they been convicted, were let off, which is surely a big achievement on the part of any journalist.

The second speaker was the well-known columnist V. Gangadhar, who quite rightly ridiculed the "couching cast" sting, which was virtually entrapment. It may have earned India TV a few TRPs for some moments of glory, but it has done the channel far more harm than good for calling into question its credibility, which is by far the most precious thing that any mass media enjoys. The third speaker, Thomas Abraham, who edits the website indiantelevision.com, also queried why there was no public curiosity when Indian TV exposed politicians in earlier sting operations, which this correspondent was even unaware of.

There were, inevitably, many references to the Tehelka operation, where BJP politicians, George Fernandes, and several senior army brass were exposed in an undercover operation. This would constitute a legitimate exercise, but the speakers questioned the validity of such stings, considering that the only casualty was the BJP Treasurer, since Fernandes was subsequently reinstated as Defence Minister. Ironically, the only other casualty was Tehelka itself, which was hounded into bankruptcy, along with a couple who ran a finance company which had in good faith invested in the pioneering website.

Abraham made a controversial presentation, where he stressed how readers now had the choice of choosing between different media: newspapers, according to him, were almost passé; there were TV channels, websites and blogs, where one could fashion the news to suit oneself. He emphasised that news could be directed at the level of communities, rather than some amorphous mass readership, which he believed would be more relevant. But the newspaper's job is to inform the mass of people and help them make up their minds on issues of national and global importance. They were failing to do so, but if anything the websites and blogs were only targeting individuals, not society as a whole, and could not replace the mass media. Abraham's plea sounded suspiciously like the campaign for DNA - Daily News & Analysis, the forthcoming Mumbai daily - to the effect that it would speak directly to the reader, who could dictate the content.

This would amount, if one can paraphrase the ads, to DNA addressing itself only to those readers who could afford to buy the goods and services that would be advertised in this medium, whatever the protestations to the contrary. In a globalised world, the idea that a newspaper would speak to the nation or city as a whole, for most classes, seems to have fallen by the wayside. This is a pernicious doctrine, as pernicious as the assumption that globalisation is here to stay and to entrench itself even more strongly in the hearts and minds only of those who are already well-to-do.

This would amount, if one can paraphrase the ads, to DNA addressing itself only to those readers who could afford to buy the goods and services that would be advertised in this medium, whatever the protestations to the contrary. In a globalised world, the idea that a newspaper would speak to the nation or city as a whole, for most classes, seems to have fallen by the wayside. This is a pernicious doctrine, as pernicious as the assumption that globalisation is here to stay and to entrench itself even more strongly in the hearts and minds only of those who are already well-to-do.

Editorial: Riding The Hindutva Tiger

By M H Ahssan

BJP’s mixing of politics and religion has backfired

Like geriatrics reminiscing over the exploits of their youth, BJP leaders refer to the Ram temple at regular intervals. The nostalgia is understandable. It is the only issue that brought the party some success in its nearly six decades of existence under two names, the Jan Sangh and the Bharatiya Janata Party (BJP). This period included the three years when it disappeared altogether by merging in the Janata Party in 1977. This curious record underlines the BJP’s unstable nature. It is possible that the party hasn’t yet stabilised, for the temple plank to which it is now clinging to stay afloat in turbulent political waters may not bring it much solace.

The reason is that the circumstances in which the BJP floated the idea in 1989 have changed. When the temple issue helped raise its tally of the Lok Sabha seats from two in 1984 to 86 in 1989, its main adversary, the Congress, was slowly sinking. As in 1977, some Congress stalwarts like V P Singh and Chandra Shekhar had left the party to become prime ministers of non-Congress parties. The BJP was, therefore, seen as an alternative by a sizeable section of the people.

But the BJP’s six years in power from 1998 onwards spelt its doom. For starters, the hope raised by the change from a Bofors-tainted Congress to a supposedly purer BJP was nullified by the likes of Pramod Mahajan. In addition, except for Atal Bihari Vajpayee, no other BJP leader seemed to have a vision that did justice to India’s pluralism. Yet, for this very reason, Vajpayee became persona non grata to saffron hardliners. Not surprisingly, the BJP’s share of votes began to stagnate at 20 per cent in 1991 and 1996 after rising from 11.5 per cent in 1989. It did rise to 25.5 per cent in 1998, but only to drop to 23.7 in 1999 and 22.1 in 2004.

If the BJP’s fate was typical of parties whose ascent to power is a first step towards an erosion of their credibility, the Congress’s loss of power seemed to have had the opposite effect of reviving its fortunes. No one can say why this transformation took place. Was it because Bofors became a distant memory? Or because Sonia Gandhi’s high ratings, next only to Vajpayee’s, indicated that voters expected the party to make a new beginning? Or was it because of the BJP’s mistakes?

If it is the latter, then the explanation lies in the fact that the BJP never thought through the implications of its temple agenda. It is a part of history that Advani clambered on to his kamandal chariot in 1990 to counter
V P Singh’s Mandal card. But, in his haste, both he and his party chose to ignore Vajpayee’s warning not to allow Rambhakts to become the vanar sena or monkey brigade that devastated Ravana’s Lanka. Indeed, this is exactly what happened. But it is not so much the country that has suffered — except during the communal riots of 1992-93 and in Gujarat in 2002 — as the BJP itself.

The BJP apparently never considered the possibility that an uncontrollable vanar sena in the form of the VHP, Bajrang Dal, Sri Rama Sene and others might emerge from the temple movement. Rather, it saw a straight line from rising voting percentages after the Babri masjid demolition to untrammelled power in New Delhi and ultimately to the establishment of Hindu rashtra. “We are all kar sevaks now,” a saffron scribe crowed at the time. If the BJP never anticipated any bumps on the road to power by whipping up religious sentiments, it was because it had never before reached such heights and had little understanding of the rarified atmosphere far from the madding crowd. Its transition from the political periphery to centre stage was so sudden, it may have muddled its thinking.

Since the BJP had no time to assess the long-term political fallout of its atavistic policies, one could hardly expect its nonpolitical brethren in the sangh parivar — VHP, Bajrang Dal, etc — to do so. Instead, these outfits, which made their appearance on the eve of the temple agitation, interpreted the BJP’s initial successes as a licence to impose their own version of Hindu rule in accordance with Golwalkar’s categorisation of Muslims and Christians as internal threats. They were so sure the time had come to push ahead with the pro-Hindu agenda that, led by the RSS, they ascribed the BJP’s 2004 defeat to a failure to do so.

For the BJP, the defeat and the tapering off of the voting percentage were signs that it had overreached and that Vajpayee was right when he had advised Advani against embarking on his yatra. Hence Advani’s donning of the former prime minister’s mantle of moderation. But, now, it is too late. Even if the BJP favours a tactical retreat, the vanar sena will not let it, for they have taken upon themselves the task of carrying on with their anti-minority and pro-Hindu agenda, which gels nicely with attacking couples celebrating Valentine’s Day. The BJP now apparently understands that breaking mosques and burning churches are not the best way to win friends and influence people, something it didn’t when Advani started out from Somnath to build a grand temple at the mythical birthplace of Lord Ram.

Editorial: Terror Laws: Some Questions Remain

By M H Ahssan

The UPA government, which would like to appear to be on the ball in fighting terrorism after the Mumbai outrage, has introduced two bills in Parliament. One aims to establish a National Investigating Agency (NIA) to deal with terrorism and related offences, the other to tighten procedures to aid prosecution and trial by amending the Unlawful Activities Prevention Act. In seeking to create the NIA, the government is in uncharted waters. News reports suggest that the NIA cannot begin investigating a case on its own. It appears that the first step is to be taken by the state government where a terrorist crime may have occurred. The state in question will have to ask the Centre for the NIA to be pressed into service. It is far from clear if states will approach the Centre for the NIA’s help in the first place. State governments are known to guard their turf jealously.

Since law and order is a state subject, they have thwarted efforts in the past, irrespective of their political colour, to create an all-India agency to deal with terrorism. The federalism argument is used to stymie moves in this direction. The Left parties reiterated this view in Parliament on Monday when the bill was introduced. The BJP supported the bill since it has long been asking for so-called "tough laws" against terrorism, but we can only know later if its chief ministers will ask for the Centre’s help in investigating terrorist crimes, especially if the BJP is not running the Union government. In bringing an amendment to the UAPA — in order to tighten procedures to deal with terrorist cases in court and to facilitate investigation — the government has done well to allow for the admission of communications intercepts as evidence.

This is a much-needed reform, although there is a downside to it, theoretically speaking. It has also shown wisdom in not throwing the onus of proving innocence on the accused, for that amounts to an inversion of civilised jurisprudence. It is also good that confession before the police will not count as evidence, as was the case with Pota and Tada, which were widely misused and could not help the police in getting convictions from the courts in more than five per cent of cases. These were, in retrospect, over-hyped laws of little utility. Effective and tighter laws are needed to fight the menace of terrorism, but laws are not everything. A lot depends on the state of repair of the intelligence services and the investigating machinery.

Remember, the Mumbai carnage could take place although Maharashtra has the MCOCA, which is a replica of Pota. So it is not laws alone which deter terrorism. Part of the trouble in India is that even existing laws have not been put to effective use on account of a creaking administrative machinery. Introducing the two bills in Parliament, the home minister said these laws were being proposed because the country was a victim of terrorism sponsored from across the border. Does this mean a state government will ask for use of the NIA only if it determines that a given terrorism incident is inspired from outside the country? We shall know better with time.