Showing posts with label Arun Jaitley. Show all posts
Showing posts with label Arun Jaitley. Show all posts

Wednesday, August 27, 2014

India Can Turn Its Backs on Pakistan

The Pakistan High Commissioner (HC) should not have met the Hurriyat leaders when he was asked by the Indian Foreign Secretary not to do so. Diplomatic norms obliged him to take this request communicated at such high level seriously and failure to do so, he knew, would have repercussions. He chose to snub the government and left our political leadership no choice but to cancel the Foreign Secretary (FS) level talks fixed for August 25. After this effrontery on the HC’s part-obviously on his government’s instructions- we would have opened ourselves to ridicule if we had gone ahead with these talks. Modi’s image of a tough “India-First” leader would have taken a battering, besides seriously weakening the Indian hand in the talks ahead. If India had blinked in these circumstances, the Pakistanis would have been encouraged to raise the ante in other areas of negotiation.

As it is, the Pakistan government chose to defy the government further by instructing its HC to meet the Hurriyat leaders the next day for a second round. Not content with that, the HC decided to speak to the press to justify his decision and also mock us by suggesting that these talks with anti-national elements in Kashmir were intended to promote “peace”. He referred to the Hurriyat leaders as stakeholders in the peace process and therefore eligible for Pakistan’s special attention, whereas we rightly consider these separatists adamantly disruptive elements.

It is unfortunate that our mainstream English language press and individual commentators wedded to the idea of a dialogue with Pakistan unconditionally have been critical of the government’s decision to cancel the FS level talks, describing it as an over-reaction on a trivial issue and insufficiently thought through. They seem to think that we have painted ourselves in a corner on the assumption that India will, sooner or later, have to find a way to resume the dialogue with Pakistan and will now find it more difficult to do so. They have also made the truly bizarre argument that by seeking to stop the HC’s meeting with the Hurriyat, we were challenging Pakistan’s sovereignty.

In a democracy all kinds of opinions get expressed, but the freelancers of opinion in our society seem sometimes to be confused about which side of the border they reside. It is also unfortunate that their bile against Modi and the BJP corrodes their judgment on the issues at stake in the latest India-Pakistan row.

The argument of the Pakistanis and the anti-Modi bilious lot in India that as these meetings between the Pakistani leaders and the Hurriyat have continued for years, they should not have been opposed to the point of cancelling the FS level talks. Now, even if they have been tolerated in the past for reasons that are difficult to fathom, there is no accord between India and Pakistan on this arrangement that we have violated. The fact that these meeting have taken place in the past does not give Pakistan a lien on such practice. If this logic were to be accepted, then Pakistan can argue that as Pakistan has planned and abetted terrorist attacks against India for decades and India has not gone to war with Pakistan over this, any toughening of India’s policy away from its past tolerance of such hostile acts would not be justified and would amount to India rejecting dialogue, not thinking things through and painting itself in a corner.
Pakistan regularly raises the Kashmir issue in the UNGA and the country celebrates Kashmir Day every year when provocative speeches are made. Should India decide, for instance, to lambast Pakistan in the UNGA on its record of treating its minorities and the sectarian conflict in the country and slam it for its links with terror, Pakistan and its friends in India would say that our policy shift was an uncalled for vitiation of the atmosphere of India-Pakistan relations.

As for the sovereignty argument, is it the case that we do not have the sovereign right to control who our adversaries meet on our own soil? Does another sovereign country have the right to supersede our sovereignty over our own territory? It is surprising that the Pakistani spokesperson should have used the sovereignty argument in her reaction. Evidently she meant that Pakistan as a sovereign country cannot be told what to do. This would mean logically Pakistan has the sovereign right to launch terrorist attacks against us, send in infiltrators in J&K and refuse any accountability as a sovereign country for the Mumbai carnage. Naturally, sovereignty for Pakistan over-rides international law, norms of inter-state relations and civilised behaviour.

Actually, Nawaz Sharif has, from the day he took over, been negative in his positions on India, whatever is said about his desire to normalise ties with us. It is true that during his election campaign, he expressed such sentiments and he accepted Modi’s invitation to his swearing-in. But we need to assess his actions coldly, without relying on his words alone. While professing friendly sentiments, he has repeatedly expressed his intention to agitate the Kashmir issue; he has on several occasions called for its resolution on the basis of self-determination and UN resolutions, thus violating the Simla Agreement; he has tried to involve third parties such as the US and the UK in resolving the problem, again in violation of the Simla Agreement; he has not moved on the trial of those responsible for the Mumbai terrorist attack; he has given Hafiz Saeed more political visibility and allowed him to carry on his venomous campaign against India knowing Indian sensitivities; he has delayed the grant of MFN status to India even under the camouflaged appellation of “Non Discriminatory Market Access”. If on such substantive issues, Pakistan can change its position or prevaricate, then why cannot India alter its position on the direct contacts thus far tolerated between Pakistan and the separatists on Indian soil, in India’s capital city to boot? Why do the supporters in India of amity with Pakistan take no cognisance of latter’s provocations, unhelpful positions and insensitivity to Indian concerns, and are ready to berate the government if it decides to react.

If the Hurriyat does not count for much, then why is it so important for Pakistan to maintain direct contact with it? Pakistan should have ended its contacts with the separatists long ago if they were so fruitless. The reality is that such contacts carry the implication that J&K is not India’s internal affair, that Pakistan has a legitimate role in Kashmir, that those in Kashmir who challenge India’s sovereignty over J&K can be direct interlocutors of the country that also rejects our sovereignty over the state, that Pakistan, in fact, enjoys extra-territorial rights in our part of Kashmir. We can, of course, ignore these implications, and previous governments in India have inexplicably done so, but why criticise the Modi government if it does a necessary course correction? This is not a trivial issue as some Modi-baiters in India would have us believe.

It is not clear why it is felt by some that we have painted ourselves in a corner by cancelling FS level talks. This suggests that we need dialogue more than Pakistan does, that Pakistan can do without a dialogue and we cannot, and that dialogue is not a favour that India does to Pakistan. This implies that we have no cards to play except to talk to Pakistan and that Pakistan has all the cards and can wait for India to return to a dialogue mode with it. In other words, Pakistan has the upper hand over us.
Why there is such defeatist thinking is puzzling, especially as Pakistan is being ripped apart internally with terrorism and sectarian strife and is in dire economic straits. Whatever there is of Pakistani democracy is being hollowed out currently by the double agitation in Islamabad in which we can see the hand of the military. Pakistan’s stock has dwindled dramatically internationally because of its terrorist affiliations, though it continues to have benefactors in China, Saudi Arabia and even the US despite all the problems that Pakistan has caused it in Afghanistan. India, on the other hand, is on a different trajectory altogether, steadily moving towards the big power status economically and otherwise, despite the current slowdown. India is in a different league altogether and does not need the support of Pakistan to realise its ambitions or its destiny.

The critics of the Modi government’s action have close connections with the civil society in Pakistan. Many of their Pakistani interlocutors in the think tank circuit come across as well-meaning individuals, articulate and plausible. Many may be sincere, others have guile. That such elements exist in Pakistan is no reason for us to shape our policies towards that country based on their preferences or exhortations. The civil society in Pakistan is not in a position to change Pakistan’s policies towards us. Their objective is to persuade us to make the kind of concessions that would satisfy the “deep state” in Pakistan, in the expectation that Pakistan as a result will become more liberal and a more congenial place for these more open-minded people to live in. In other words, they seek an answer to Pakistan’s self-created problems partially with India’s help, all the while being in no position to alter Pakistan’s hostile policies towards us. To think that by strengthening these elements we will be able to secure our interests better is to cling to illusions. Even these more palatable Pakistanis share the entrenched ideas of the Pakistani establishment on Kashmir, accusations of terrorism by India and water issues.

All this suggests that we can actually turn our backs on Pakistan, neither be friendly or hostile towards it, engage it to the extent it wants and leave to it the initiative to reach out to us in a constructive way. So long as the Pakistani agenda of confronting India remains unchanged, its Kashmir obsession perdures, the revanchist sentiments of its armed forces endure, its policy of preventing India’s westward connectivity persists, India has every reason to look increasingly eastwards and strengthen links with BIMSTEC, ASEAN, Japan and Korea, which are areas of barrier free expansion for India, with no problem of territorial disputes, terrorism, religious antipathy and underdeveloped economic opportunities acting as obstacles.


Published Date: 26th August 2014, Image source: http://www.greaterkashmir.com
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)

State of Military Might in Resurgent India

Col (Retd) Karan Kharb

Powerful nations radiate powerful influence far across their geographical borders over countries and continents. And this influence is mostly coercive – often disregarding opinions of a majority of sovereign nations. President Bush was brazenly explicit in conveying his threat even to friendly countries when he said, “If you are not with us, you are against us.” The world has watched in the recent decades how a couple of powerful nations have not felt deterred from launching punitive operations against unfriendly regimes. Ongoing conflicts in West Asia and Central Asia are glaring examples of this reality.

Much as the weaker nations might despise such arrogance of mighty nations, the latter have been succeeding in enforcing their plans, even if partially, in different parts of the world. In the realm of geopolitics, it is clear that the powerful nations use a combination of soft power and coercive power to achieve compliance, cooperation and, wherever possible, even submission of targeted regimes. Effect of soft power is enhanced manifold if it is backed by credible hard power, that is, military power that gives meaning to diplomacy, strategy, trade and economy. If wealth alone were power, West Asia would be ruling the world. If geographical size were power, Russia would be Power Number One and the Soviet Union would not have disintegrated. Irrefutably, it is the Military Might that adds awe and aura to a nation’s standing in the regional and international equations. Israel would simply not exist today if it were not so. Today its utterance and posturing shakes up the neighbourhood and makes the world sit up and listen to it – their consent or dissent just don’t seem to matter.

Even so, in the reckoning of military might, an array of high technology, sophisticated fighting machines and equipment – an area where critical deficiencies have seriously hampered the Indian Army’s modernisation programme – is but one factor, significantly weighty though. The man behind the gun, however, shall always be the decisive factor in projecting and executing this military might. No amount of modern technology and wherewithal can substitute human – the soldier whose wellness makes the ultimate difference between victory and defeat in war. Modern world’s high-tech protective gear, high precision weaponry, satellite communication systems, computerisation and nano-tech breakthroughs will deliver little until the user is motivated to dare adversity and danger. Napoleon accorded three times more value to the soldier’s morale vis-à-vis material. In 1993, when the Government expressed inability to finance raising of the Rashtriya Rifles, Gen B P Joshi relied on military morale and raised the Force equipping and manning it from the existing manpower and equipment of the Indian Army. Again, at the outset of Kargil War, it was this intangible but enormous asset of military morale that prompted the Army Chief, Gen VP Malik to say, “…..we will fight with whatever is available….,” despite critical deficiencies of arms and equipment.

Traditionally, military personnel are not expected to demand favours nor admit weakness. Enquire about his ‘morale’ and even a dying soldier would spring up and scramble to fight. The same is true of his commanders too. No unit or formation commander would ever confess a decline in morale or erosion of spirit de corps in the Forces no matter how pathetic their state might be. On an expedition – war or adventure – Indian soldiers have never sought rest, comfort or even food until it is all over! Little wonder, Kautilya whom the world knows more popularly as Chanakya, had cautioned King Chandragupta, “The day the soldier has to demand his dues will be a sad day for Magadha for then, on that day, you will have lost all moral sanction to be King!” Edicts in Atharvaveda (Kaand 4/Anuvakah 7/Sukta 31 & 32) and Kautilya’s Arthashastra (Sangram/10th Adhikaran/Ch 3) also underscore a powerful advice to Governments, “To win wars, influence neighbouring states and to promote his national interests, the King must build up an Army of soldiers so honoured, privileged and motivated that their wrath unnerves the enemy; their sacrifices beget love and respect of their own people; and their valour is rewarded with the highest esteem and admiration by the King and his ministers.”

In the post Kargil period, however, the military morale has been sadly on a downhill slide as is manifestly evident from the increasing cases of soldiers committing suicides, fratricides, insubordination and defiance. Sporadic cases of mutiny in the last decade or so have raised many serious questions on the military management. What is even more shocking is that such incidents are not confined to units deployed in operational areas alone. Angst against exploitation and injustice to their families back home has been driving soldiers to suicide and fragging even in peace locations. Answering a question in the Rajya Sabha on 22 Jul 2014, Defence Minister Arun Jaitley admitted that suicides among security personnel of the armed forces were a serious issue. He informed the House that the Armed Forces had lost 597 personnel to suicide in the last five years (that is, at a rate of 10 soldiers every month or 120 every year). He also revealed that 1,349 officers quit the Army during the same period. And while the Army bears the brunt, this dangerous trend is shared by all three wings of the Armed Forces.

Causes for this onset of decay are many. For decades, a perception of ‘raw deal’ by the successive pay commissions has been allowed to grow in the Armed Forces by governmental neglect. Denial of growth opportunities, unfair salary and pension fixation, erosion of status, dilution of military privileges and isolation of military from decision-making process even in matters of national defence, security and welfare of military personnel are some of the sores that have festered over the years. Provisions such as preferential hearing of soldiers’ cases by civil administration and courts exist only on papers now and many district magistrates, police officers and judges are either not aware or remain deliberately callous in attending to genuine problems of soldiers and their families. Subsidised canteen facilities, medical facilities, military quota, field allowances and numerous other privileges that were once unique to military have been systematically usurped and multiplied by the civil services and politicians. Compare stocks and prices in Parliament House canteen or any other departmental canteen in Government offices and military canteens to know the difference. Today, AC suites in the state guest houses and Bhavans in New Delhi’s Chanakyapuri are available to politicians at Rs 45 per day with sumptuous non-veg dinner for Rs 130 per diner whereas Army officers passing through Delhi are gratified after paying Rs 500 or more for a room in a Delhi Cantt officers mess – if they get one at all!
Persistent representation on pay commission anomalies by the Services Headquarters to the MoD and Prime Minister yielded no positive result from the UPA Government even as hordes of anguished Ex-servicemen staged protests returning their service medals over non-grant of one-rank-one-pension (OROP). What is even more frustrating is that while both the Governments – UPA and NDA – had declared their approval and decision to implement OROP, no tangible gain has fructified yet.
The need to maintain a youthful profile of the Armed Forces implies that a large number of JCOs and other ranks retire from the service at an early age of 35-48 years. Likewise, a majority of commissioned officers also retire between 52-54 years of age. This period is the most crucial phase in the life of the retiring personnel since the burden of family and social responsibilities is heaviest on a man at such a juncture. Increasing expenses on ailing parents, education and marriage of children, separation from family and a host of other responsibilities suddenly surround the retiring soldier. There are no second-career opportunities, no assured lateral absorption in government services nor is there any satisfactory rehabilitation scheme for hordes of youthful retiring service personnel.

Unlike Civil Services, career progression in military narrows sharply as one advances in the service. With each successive promotion, the pyramid becomes narrower because in a unit of 800 personnel there can be only one Subedar Major who will occupy this position for 3-4 years. Likewise, there can be only one Chief and seven Army Commanders at the top who shall serve 2-3 years, implying thereby that only eight out of every set of 3000 officers can aspire to reach these levels no matter how competent the remaining are. Whereas nearly 90 per cent IAS officers make it to secretary/additional secretary level, only 0.003 per cent officers in the armed forces reach that level. The reason for mass screening out, unfortunately, is not incompetence or disqualification on grounds of merit but the scarce vacancies at the top. On the contrary, no civil servant retires without reaching the top pay scale in his stream, no matter how incompetent one might be. In such a situation, no cadre deserved a service compensation like ‘non-functional upgrade’ (NFU) more than the Armed Forces. Here ironically again, only civil service officers are granted NFU. There is no reason why such compensatory dispensation should be selectively granted to the civil services and denied to the soldiery.

The long awaited and direly needed modernisation programme of the Armed Forces has remained mired in the complex procurement processes and bureaucratic red tape at the MoD and departments. Instances of corruption in some cases have vitiated the processes even further. As per a report tabled by the Parliamentary Standing Committee on Defence, Army’s modernisation programme has been declining steadily and ominously. A mere 27 paisa out of every rupee was being spent on capital expenditure (CAPEX) during 2008-09. It slid to 18 paisa per rupee by 2013-14. Narendra Modi’s arrival as India’s Prime Minister did boost aspirations of strategists and thinkers within and outside the Armed Forces. For once, it appeared that in its quest for a global role India could now embark upon a ‘transformation programme’ repositioning the military from its defensive and counter-offensive posturing to the level of a potent fearsome war waging force capable of enforcing peace and deterring hegemonic adventures in South Asia and neighbourhood. Even as Arun Jaitley might seem overburdened as a Minister with two major portfolios – Defence and Finance, he is also the most suited man with acumen and understanding of both vis-à-vis the India’s strategic interests and military requirements. He will need to start streamlining the systems within the MoD itself.

Today the situation is dismal. The armour and the mechanised infantry remain equipped with obsolete or no night fighting capabilities. Only a small number of units have adequate night fighting capability. Deficiencies in armour ammunition including war wastage reserve have already reached critical levels. With no gun inducted ever since Bofors, artillery is ageing fast too. With no spares available, requirements are being met by ‘cannibalising’ – an emergency recourse that has reduced effectiveness by half. The state of army air defence is even worse. A major part of the main AD equipment is obsolete and inferior to what is being acquired by our adversaries. L-70, Zu23-2B and ZSU23-4B (Schilka) guns are from 1960s vintage. AD missile units are equipped with Igla 1M, Strela 10M, OSA AK and Kvadrat missiles – all obsolescent in the wake of more advanced and effective systems like Spider (Israel), S-400 (Russia) and Patriot (US) available in the international market. Army Aviation is similarly carrying on with obsolete Cheetah and Chetak helicopters. New acquisition of 197 helicopters is stuck even four years after trials and re-valuation of Russian Kamov 226 and Eurocopter AS 550 models.

For the infantry soldier, the indigenously designed INSAS rifle has proved to be inferior to the modern assault rifles being acquired by our adversaries. Critical deficiencies hampering infantry soldier’s combat potential include carbines, GPMG, anti-material rifles, anti-mine boots, lightweight bulletproof jackets, bulletproof helmets, third gen NVDs, anti-mine vehicles, snow scooters and new generation grenades.

One major reason why the situation is so dismal is the procurement procedure itself. In the high-tech high-speed digital age today, it takes as much as 3-4 years to have a procurement proposal approved because such proposals have to pass through a maze of tortuous processes involving more than 15 departments and agencies. “Expeditious processing also will take at least 48 months for a project to be approved,” says a senior IAS officer who retired early this year from MoD. How this bureaucratic lethargy is taking toll of life and equipment is evident from the increasing loss of combat aircraft, war ships and submarines. Official callousness has become so frustrating that a meritorious Chief of Naval Staff, Admiral DK Joshi resigned in anger owning responsibility that lay at someone else’s desk for the repeated mishaps in submarines and ships. Ill-equipped men pushed into operations are either committing suicide, killing their colleagues or seniors in sheer frustration.

Perhaps for the first time in post-independence India, political parties realised the value of military personnel and ex-servicemen but only during the few months preceding general elections. All parties attempted to placate soldiers and ex-servicemen with a view to winning their support and vote during the recent Lok Sabha elections. Utterances from the Bharatiya Janata Party and Narendra Modi himself, however, seemed more reassuring. They indicated evidence of strategic vision and understanding of military requirements and the plight of serving soldiers and ex-servicemen. In his maiden budget speech, Defence and Finance Minister Arun Jaitley eloquently declared in Lok Sabha, “There can be no compromise with the defence of our country. I therefore propose to allocate an amount of 2,29,000 crore for the current financial year for Defence.... Modernization of the Armed Forces is critical to enable them to play their role effectively in the Defence of India’s strategic interests.” Thus, it would be fair to assume that the present Government is sincerely sensitive and alive to military requirements and the country’s strategic needs. In the initiation of defence reforms, it would be prudent to start from revamping the MoD so as to weave military expertise in the policy-decision mechanism at all levels of defence, security and strategic planning and coordination.

Prime Minister Narendra Modi has shown his thrust lines fairly clearly. India enjoys a loathsome distinction as the world’s biggest importer of military hardware with a trail of defence procurement scams. Castigating this state of affairs, Modi indicated his vision when he said, “If we indigenised defence production and opened it up for FDI, we could save enormously on our foreign exchange outflows. This would enable us to utilise such savings for the welfare of jawans besides putting an end to the endemic corruption in defence procurements.” Besides a forward-looking political leadership, India now has some seasoned bureaucrats and Services Chiefs imbued with professional competence and understanding of vital necessities of national defence objectives. Prime Minister Modi has everything that a PM could ask for: a thumping mandate of the people, a loyal cabinet that has no visible fissures, a team of competent professionals with proven credentials to aid and advise him, and a Military eager to achieve his national and global objectives. Only, it needs immediate resuscitation and intensive re-invigorative programme to be able to give effect to the Prime Minister’s overtures at BRICS summit, relations with SAARC countries and India’s role in the region. India was perhaps never poised better to refurbish and lubricate its military might for bigger global roles.
The setting is perfect for the much needed transformation of the Armed Forces by revamping MoD and by making soldiery an attractive, prestigious career for the youth of the country.

(The writer is a military veteran, author and social activist)

Published Date: 25th August 2014, Image source: http://www.indiandefencereview.com
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)

Tuesday, July 29, 2014

Union Budget 2014-2015: Breathing Time to Evolve Long Term Economic Policy

Dr M N Buch, 
Dean, Centre for Governance and Political Studies, VIF

The Economic Times published on 11th July, 2014 carries the headlines “Narendra Modi aims for goal, hits crossbar”. This newspaper and some others, not to mention the Opposition have referred to the budget presented to Parliament by Arun Jaitley, the Finance Minister, as not containing anything radical which would signal a complete departure from the policies of the previous government. One newspaper describes the budget as “Chidambaram’s budget with saffron lipstick”. Whereas there is a cautious welcome of the budget by a cross section of people, there is also a sense of disappointment that the budget is not particularly radical. Of course it is recognised by everyone that the budget does hold out hope for the future, but in itself it is a form of continuation of the previous government’s financial policy.

Under Article 112 of the Constitution, the President is required to lay before both Houses of Parliament a statement of the estimated receipts and expenditure of the Government of India for that year. Article 112 (2) gives the two main components of the annual financial statement and it reads, “The estimates of expenditure embodied in the financial statement shall show separately – (a) The sums required to meet expenditure described by this Constitution as expenditure charged upon the Consolidated Fund of India; and (b) The sums required to meet other expenditure proposed to be made from the Consolidated Fund of India”. Article 112 (2) (b) has to be read with Article 113, which says that every estimate which relates to expenditure, other than charged expenditure, shall be presented to Parliament in the form of demands for grants and the House of the People may assent, refuse to assent or assent after reduction in the demand for grant. Under Article 114 all the demands for grants which have the assent of the House of the People are put together in the form of an Appropriation Bill, which is to be presented to the House of the People. This Bill has to be passed in toto by the House of the People because Article 114 does not permit any amendment after the grants have been individually approved. That is why if the Appropriation Bill fails, then this amounts to a vote of no confidence and government falls. Government can spend money from the Consolidated Fund of India only after the Appropriation Bill is passed into law. This slightly detailed reference to the provisions of the Constitution regarding the annual financial statement has become necessary to really understand the purport of what is popularly called the budget.

To further simplify the above statement, it is clarified that the budget gives the entire programme of government for which government is seeking the approval of Parliament in the matter of funds. It is when grants are being discussed that every individual scheme of government comes under parliamentary scrutiny and in the budget government charts out the direction in which the entire programme of government will be driven. Of course the revenue portion of the budget states how government intends to raise the funds for meeting proposed expenditure. This means that the taxation policy of government also forms a part of the budget and when the budget is read as a whole it really gives the ideology, the political philosophy and the programme of the party in power and tells the people in which direction the country will move. That is the real importance of the budget and that is why Modi and his Finance Minister are being subjected to judgemental scrutiny.

The present government succeeded a government led by a party which claims to have fundamental ideological differences with the present party in power. Its successive budgets, therefore, reflected that party’s philosophy and programme. The change of government in India has come through a democratic process which has two components, the first being continuity and the second being change. Change is a process in which there is also continuity and has to be evolutionary, which means that if the incoming government wants to have different priorities from the previous one, or different programmes, it has to achieve the change over a period of time and not overnight through total radicalisation. Change of government in a democracy is not a Bolshevik revolution of the Soviet model. In Russia, Lenin and the Marxists overthrew the Tsar and his government by armed revolution and stated that the objective of the revolution was to completely destroy the old political and social order. Earlier the French Revolution also had the same aim and in both cases royal regimes and everything that they represented were destroyed lock, stock and barrel. That is not the way of democratic change. In this context, let us examine what chance the new government had of immediate radical departures from the past. For example, Narendra Modi has held out for “minimum government, maximum governance”. Did he have the choice in the budget presented within forty-five days of coming to power to say that he would immediately reduce the number of government servants by ten percent, a quarter or perhaps half? Part XIV of the Constitution would have to be scrapped if this were to be achieved. Any such attempt would have caused blood to flow on the streets as unemployed government servants would have revolted against it. Would Modi’s own Members of Parliament have found this acceptable? What “big bang”, to which irresponsible journalists and TV commentators refer, was possible for government in this behalf?

Let us take another issue, which is the National Rural Employment Guarantee Scheme. The previous government had a huge programme of providing hundred days of employment per person in rural areas and for this a very substantial budgetary provision had been made. Could the new government have abandoned the scheme overnight, creating almost universal rural unrest? Therefore, not only has the government budgeted for the scheme but has also proposed enhancement of the allocation of the funds but with a specific rider that government would review the contents of the programme and would move away from just an employment objective into a more productive programme of creating permanent village assets. To those who really understand rural India, this one simple statement contains a message virtually of revolution. NREGS as at present administered is entirely a muster roll based programme and, as is well known, it is not possible to run a muster based programme honestly. If the objective is the same, that is, providing employment in rural areas, a programme aimed at creating permanent assets would radically change it because now employment activity would be sharply focused and at the end of the day the village would acquire a long term asset. The old integrated watershed management programme, of which the Congress government in Madhya Pradesh made a great success, was invaluable because it resulted in improving the water regime of thousands of villages, led to soil and water conservation and a sharp increase in the availability of fuel and fodder. Its abandonment on the insistence of the National Advisory Council and conversion into a populist muster based employment programme was a disaster. The present budget which gives the determination of government to provide rural employment, but to do it productively is, therefore, a big bang.

The leaders of the present government had promised at the time of election that skill development, employment generation and creation of a climate in which investment would flow in would have high priority. Does the present budget reflect this? There is no specific mantra which would make this happen, but the budget has made provision for skill development, it has assured the corporate world that in the future the tax regime would be simplified and an environment would be created which would facilitate investment and, by proposing a venture capital fund for Rs. 10,000 crores, the government has certainly signalled that it wants new enterprises to be created. Specifics can be provided only in the next budget because in the coming year the government would be able to fine-tune the policies which would lead to achievement of pronounced goals in the matter of investment, economic growth and employment generation.

Let us take the question of taxation. For the average tax payer, the budget proposals are on the one hand cautiously welcome and on the other an indicator that the tax regime in future will be liberal, aimed at maximising government revenues but not unduly burdensome to the tax payer. Where it misses out is in the matter of taxes to be paid by business and corporations which could be designed to encourage corporations to invest in major infrastructure projects, whether in terms of capital investment or in investment for maintenance and upgradation. Some of the sectors in which government have chosen to go on the Public-Private Partnership (PPP) model could be chosen for long term involvement of the private sector through an appropriate tax regime. Education which is universal and leaves out no one on account of affordability, health care which reaches down to the least fortunate, transportation corridors such as roads and railway tracks, power systems , in fact everything which gives the basics for development, creation of and management of rural assets are all areas in which we need to attract corporate investment, not because they will give direct returns on the money invested but rather because of tax incentives which attract the corporate world to invest in infrastructure which serves people at large. If PPP mode development and tax incentives for private investment are seen as one, then we may find that in the future private investment in public infrastructure could show a sharp increase. Perhaps there was not enough time to do any real thinking in this behalf, but by the time the budget of the year 2015-16 is presented , the Finance Minister, as a part of government, must come up with very specific, doable proposals for radically changing how the Indian economy functions. One word of caution. Using taxation as an inventive would be restricted to long term private investment in useful projects, but could not be used to cover corporate social responsibility.

The present budget talks about a disinvestment programme in which government gradually moves out of selected public sector undertakings and encourages privatisation. Even though it might reflect a continuation of the British obsession on the one hand with the Great Game and on the other the means of rapid troop movement to deal with another mutiny, the fact remains that the Indian Railways have an enormous strategic role to play in joining the country together. Therefore, public ownership of the railways is a necessity dictated by strategic and tactical requirements, but equally by the fact that this is the common man’s main mode of transport. Total commercialisation of the Railways would hit the average citizen very hard. With this as a constant factor, government has to ensure a much higher investment level in maintaining the Railways, improving them and extending them. In the United States, Railways were always in the private sector and it is only when competitive modes of transport such as roads and air traffic began to affect the profitability of the private railway companies and the railway system was on the verge of collapse that that U.S. Government created AMTRAC, a public sector organisation which took over strategic railway lines. AMTRAC has been criticised for not always being very efficient, but it has at least kept the railways alive in America.

We, while continuing to have the Indian Railways as a public sector organisation, need to identify those schemes of the railways which can be run through the corporate sector. Tata Motors started as the Tata Engineering and Locomotive Company (TELCO), which manufactured steam engines for the Indian Railways very successfully. Why should the railways themselves run the Chittaranjan Locomotives Works? Why can they not privatise the manufacture of locomotives, rolling stock and the maintenance of the existing stock? This is an area which the railways need to explore so that they can concentrate on efficient operation of the railways. There is enough money for both the corporate world and the public sector for running the railways and a partnership mode in which the dominant position is that of government can certainly make the railways an organisation which is profitable but which does not become burdensome to the average traveller. The next budget must go beyond generalities about FDI in the railways and must come up with specific proposals which can be implemented within three years.

There is one very tricky area which cannot be ignored but which can probably also not be instantly cured and that is agriculture. All our efforts at agricultural development tend to be compartmentalised and segmented. There are a number of players in the agricultural scene which, incidentally, is and must remain the largest single employer. In China, ten percent of the land is arable, but in India sixty percent of the land is arable. With such a huge area available to us for agriculture why should this sector not get the highest priority? There is a whole coterie of people who feel that if India is to progress it must draw people from rural areas and put them into urban employment. This, mind you, in a country which is largely ryotwari and in which the cultivator is the bhoomiswami or the owner of the land. In China, the cultivator was a serf, a tenant at will and, therefore, leaving the land and seeking a job elsewhere was not a great hardship. In India, people who want to follow the Chinese model want to replicate China in the matter of migration from rural areas to urban areas. Because of this attitude there is no wholehearted attempt to bring about that qualitative improvement in agriculture which makes it a truly profitable vocation.

As stated earlier, agriculture has a number of players, of which the primary one is land. Then there is the owner of the land. For cultivation land needs water and for high yields it needs manure. Manure can be natural, for which we need animal dung and agricultural waste, or it can be synthetic, that is, chemical fertilisers. With water and nutrients, the land can be made productive and by selecting the correct cropping pattern productivity can be optimised. In those areas where this has been done, for example, the catchment of the Punjab Agriculture University at Ludhiana, the results are spectacular. This needs to be replicated throughout India, but in the context of local soil conditions, water availability and climate. That is why the next budget must give greater importance to developing of agriculture universities in India to the level of the Punjab Agriculture University. Today, for example, two fine agriculture universities in Madhya Pradesh, at Jabalpur and Gwalior, are being strangulated for want of funds. This must not be allowed to happen.

The producer grows a product, but the product has to be marketed. For this one needs roads for transportation and develop mandies or market towns for marketing of the product, value addition through processing and the backward linkages for providing services to agriculture, such as finance. There is need for warehousing and cold storage so that by releasing product in the market in a steady stream there is price stabilisation throughout the year. During the season of glut, tomatoes and onions sometimes have to be thrown away, but at certain times when there is no fresh inflow and there is no supply stabilisation through release from appropriate storage facilities, prices rise very high and this creates a crisis for government. No agriculture policy, no price stablisation policy can succeed unless government intervention ensurs that storages gives a fair price to the farmer because there is a median price which prevails throughout the year, whilst at the same time ensuring steady release into the market so that there is constant inflow which stabilises prices. In fact this is so important that it must form the core of agricultural policy and the price stabilisation policy. Will the 2015-16 budget reflect this? In other words, the budget can be an instrument in ensuring that there is long term agricultural policy which is stable and there is no need for knee jerk reaction to an emergent situation.

One welcome signal that can be read is that the Human Resource Development Ministry is considering a review of the PPP mode policy for six thousand new model schools. School education is the responsibility of government, the Navodaya Schools have proved that if good quality schools are established in rural areas there can be significant improvement in education and in any case unless we improve the level of school education, all our universities and Indian Institutes of Technology, Science Education and Research, Information Technology and Management will be worthless pimples on our fair face. The new government, in future budgets, must make so much of funds available for school education that in one cycle of schooling we completely transform the education picture. If everyone, the disempowered, the socially ostracised, the backward and even the socially advanced are all given equally good education they would all become equal in every sense, able to compete with their peers and no longer in need of the support of reservations. In fact education can be the main instrument of making India a casteless society in which everyone is equal in terms of opportunity to acquire knowledge and skills. This is much more important than providing sops to the corporate world, reservation to the deprived or subsidies which provide only immediate relief.

Are subsidies justified? Europe and America shamelessly use subsidies in areas of interest to them, especially agriculture. The entire social security programme is a form of taking from the rich and giving to the poor but as a balanced programme, aimed at levelling out inequalities by raising tax revenue to meet the cost of subsidies. In India, unfortunately, deficit financing is generally used not to kick-start a flagging economy on the Keynesian model, but to distribute largesse ad infinitum. The budget must quickly visit this situation, remedy it and make subsidies part of a self sustaining regime.

This paper is not an analysis of every scheme of the budget. But it is a kind of report of what, under the circumstances, can be considered to be a good, workable budget which gives government the breathing time to evolve its long term economy policy. Mr.Modi has neither scored a goal nor hit the crossbar. He has, however, started to evolve a kind of field strategy which would enable him to repeat what Dhyanchand achieved in the 1936 Berlin Olympics, that is, proved that Hitler’s theory of so called Aryan superiority was a complete myth and that it is Indians who are true Aryans.


Published Date: 24th July 2014, Image source: http://currentaffairs.nirdeshak.com

Friday, July 18, 2014

A Good Budget, Devoid of Populism, Dramatics and Fudged Accounts

Dr. A Surya Prakash, 
Distinguished Fellow, VIF

Mr.Narendra Modi is perceived as a tough Prime Minister who will take tough decisions. He is also seen as one who will even take harsh decisions if need be. In the run up to his government’s first budget, Mr Modi reinforced this image by warning the people that he may have to administer some “bitter medicine” in order to revive the economy. Since no Prime Minister in recent times had ever given the people such advance warning, the people expected some really harsh measures in the Union Budget, but that did not happen.

The only “bitter pill’ was the increase in railway fares by 14 per cent but the government gave the tax payers some sops in the general budget, which more than made up for the railway fare hike. In the Union Budget. the government announced measures to revive the manufacturing sector, stepped up investments in infrastructure, declared its intent to woo back the foreign investor and empower youth with skills and jobs. The Railway Budget too was a pragmatic one with particular emphasis on improving the financial condition of the Railways, completion of on-going projects and improvement in railway safety, cleanliness and speed.

All this is in line with the promises made by Mr.Modi and the Bharatiya Janata Party (BJP) during the Lok Sabha election campaign, but it was done without flamboyance or dramatics. The two budgets were drawn up with a great deal of responsibility to ensure continuity where needed and to effect change where essential. That is why many observers say that there is no ‘big bang” proposal in this budget. But what they forget is that the budget signifies the near absence of populism and some extra dose of pragmatism. Also, the past practice of fudging figures and using the Union Budget as a vote-catching measure is clearly absent in this budget. Clearly, this was something expected of the Modi government. That is why, overall, the Prime Minister and his team deserve to be complimented for taking stock of India’s financials, accepting the terrible economic situation which they have inherited more as a challenge than a curse and using Budget 2014 to prepare the ground for the government’s vision for overall economic growth.

The Subsidy Basket

In recent years, a major concern of some economists has been the ballooning subsidy bill of the Union Government. In their view, if the government lacks the political will to cut subsidies, it will not be able to pull the country’s economy out of the morass that it is in today. The total subsidy bill runs to over Rs 2.6 lakhs crores and this includes the food subsidy (1.15 lakh crore), Fertiliser subsidy (72,000 crores), Petroleum subsidy (Rs 63427 crores) and Kerosene subsidy (Rs 29488 crores). In fact, the government has provided around Rs 20,000 crores more towards food subsidy in this budget. The Finance Minister has wisely appointed an Expenditure Management Commission and put off a decision on subsidies until the committee’s findings are known. Although the government has not tinkered with the subsidy budget, it has taken the initiative to examine subsidies de novo by appointing an Expenditure Management Committee. This is possibly the best example of non-flamboyance in this budget.
This budget is different from those of the past on many counts. For example, the government has announced its firm resolve to ensure a stable, predictable tax regime – something that is critical for investors, both domestic and foreign. Next, it has announced several measures to boost the manufacturing sector, which had gone into a slump over the last two years; to improve the job market and to enhance the skills of the working class; to give a big push to the infrastructure and Real Estate sectors; and to woo back foreign investors, who were losing interest in India in recent years.

The first big step announced by the Finance Minister to reassure the foreign investor was the promise that the government would normally avoid retrospective taxation and that should issues arise, such matters would be referred to a committee appointed specifically to handle such cases. Other decisions announced by Mr.Jaitley to woo back investors include raising the limit for Foreign Direct Investment (FDI) in Defence and Insurance Sector from 26 per cent to 49 per cent. In order to revive the manufacturing sector, the Finance Minister announced a venture capital fund with a corpus of Rs 10,000 crores to attract private capital towards micro, small and medium enterprises, promotion of mega industrial zones and to promote manufacturing hubs for electronic goods. On the infrastructure front, the Finance Minister has allocated Rs 37880 crores for roadways, announced major expansion of the gas distribution grid and allocated significant sums for developing waterways along the Ganga, metro rail projects and airports for tier I and tier II cities. Mr.Jaitley has also sought to inject fresh impetus into the Real estate sector with huge allocations (Rs 7060 crores) for Smart Cities – satellite towns near big cities -to be built for the aspiring classes.

This budget more than trebles the target for construction of highways (23 kms per day as against 8 kms in 2012-13). Mr.Jaitley has laid out the blue print for building 100 new cities and prioritises development of 100 most backward districts. It also smoothens the process for creation of special economic zones. The budget also offers tax incentives to Infrastructure Investment Trusts and Real Estate Investment Trusts in order to step up investments in these sectors.
As regards the average citizen, the budget left greater disposal income in the hands of ordinary tax payers so that they could increase their savings and also have surplus funds to spend. Side by side, the Finance Minister announced tax cuts for a number of consumer goods.

The `Modi Effect’ in the Union Budget

One can also discern a distinct “Modi Effect” in this budget. A major promise made by the Prime Minister to the people during the campaign was that he would like to work towards ensuring 24X7 electricity to every home in the country. Mr.Modi appears to have begun work on this ambitious scheme in right earnest with his government’s first budget allocating funds for the Deendayal Upadhyaya Gram Jyoti Yojana . The Prime Minister has often spoken of the need to impact skills to the youth, so that the degrees and certificates that they carry guarantee the acquisition of skills which employers want. The budget has provided for creation of a National Multi-Skill Mission to impact skills to youth in the employment market. “Swach Bharat” ( Clean india) has been another pet project of Mr.Modi and the budget has taken due notice of this by allocating funds for the `Swach Bharat Abhiyan’ with 2019 as the target for ensuring toilet facilities in every household.

When Mr.Modi visited Varanasi during the campaign he told the people that he had come to the holy city because he had been called by ‘Maa Ganga’. Mr.Modi has displayed his reverence for India’s most revered river and city by allocating over Rs 2000 crore in the budget for a project titled “Namami Ganga”, meant to clean up the holy river. The budget also allocates over Rs 4200 crores for creating a Ganga Waterway and another Rs 100 crores for repairing and renovating the ghats at Varanasi, Haridwar and other pilgrim centres along the Ganga.

During the campaign Mr.Modi laid special emphasis on the Himalayan region and the North-Eastern states and his special concern for this region is more than visible in his government’s first budget. The budget allocates an extra Rs 1000 crores for railway projects in the North-East apart from funds for a Sports University in Manipur, Rs 100 crores for a National Centre for Himalayan Studies, a separate 24X7 television channel for the region and special measures to promote organic farming in the region. The budget has something substantial for the state of Jammu and Kashmir as well with Rs 200 crores for sports stadia and Rs 100 crores to train sports personnel from the Himalayan region. The plight of Kashmiri migrants from the valley has been a matter of concern for the Prime Minister and that is why in his government’s very first budget Mr.Modi has ensured allocation of Rs 500 crores for this community. Some other sectors and programmes which are close to the Prime Minister and which have found mention in the budget are solar power and wind energy, metro rail projects, smart cities and heavy investment in the infrastructure sector.

First Budget by a Single Party Majority Government in 30 Years

The political significance of this budget is that it is the first Union Budget presented by a single-party majority government in 30 years. The last time this happened was in 1984, when the Congress led by Rajiv Gandhi won a massive majority in the Lok Sabha. Thereafter, all governments until May, 2014 were coalition governments or minority single-party governments supported from the outside by some political parties. This is an important political aspect that needs to be factored in while discussing the budget formulations of governments because if a single party does not command a majority in the Lok Sabha, the dominant party in the government has to cope with pulls and pressures from many coalition partners while drafting its fiscal policy for the year. Such constraints rob the budget of a clear focus and make it a bag of compromises. This is what makes the first budget of the Narendra Modi government quite distinct from the budgets prepared over the last three decades.

Therefore, the BJP government led by Mr.Modi has the fullest freedom to choose its course of action, without any restriction whatever from any quarter. Such freedom of action also comes with a caveat, namely that such a government does not have the luxury of blaming others or proffering excuses for decisions taken or not taken. Given the overall direction of the Union Budget, it must be said that the Modi government has made the best of the clear mandate given by the electorate and taken certain decisions which would coalition governments would have hesitated to take. For example, the decision to establish an Expenditure Management Commission to review the subsidy regime that consumes over Rs 2.6 lakh crores per annum could never be taken by a government which stands on crutches provided by the Congress Party, the Samajwadi Party, the Janata Dal (United) or such other parties which are trying to perfect the art of providing doles to people in exchange for votes. Though the Modi government has not scrapped or slashed subsidies, it has definitely signaled its intention to take a fresh look the subsidy basket. This has been possible only because the BJP enjoys a clear mandate and the Prime Minister remains committed to his promise to provide good governance.

Similarly, the decision to provide over Rs 2000 crores to clean the Ganga as also funds to repair the ghats in Varanasi, Haridwar and other pilgrim centres along the banks of this holy river, would never have been possible if the government depended on pseudo-secular political entities like the Congress or the Samajwadi Party for its survival. Over a period of time, these parties have begun to display contempt for the emotions and concerns of the majority in the country and this is the reason why they have allowed the Ganga, which is regarded as the soul of Bharat by one billion Hindus, to deteriorate. Likewise, the decision to increase the FDI in the Insurance and Defence sectors could never be taken by a government dependent on the communist parties for its survival.

Mr.Modi is happily free of all such political encumbrances and that is why he is able to focus on priorities in order to revive the Indian economy and put the country on a high growth path all over again

Published Date: 17th July 2014, Image source: http://economictimes.indiatimes.com

India Budget 2014: An important Step in the Right Direction

Ravi Venkatesan

Prime Minister Narendra Modi was voted into power on the basis of some very clear ideas and promises of getting the economy back on track, creating lots of jobs and on making India an easier place to do business for both Indian and foreign companies. This first budget is therefore an important signal of his government’s commitment to following through on its promises. This was a complex budget and the longest ever budget speech by a Finance Minister. There is a confusing amount of detail and new proposals and it is easy to miss the forest for the trees. In assessing this budget, I believe it is important to step back and ask four critical questions.

The first is fiscal consolidation. How does the FM plan to reduce expenditure, attack subsidies, raise money through disinvestment.?

The FM has promised to rein in government expenditure and maintain the deficit to 4.1% of GDP and reduce that to 3.6% then 3% over the next two years. He has appointed a high level Expenditure Management Commission to focus on curbing spending; more details are awaited but the intent seems clear.

He has also set a target of raising $13B through disinvestment. There is a special focus on government-owned banks, which must raise $40 billion by 2018 to recapitalize themselves. A booming stock market should help the government achieve its target.

Subsidies are a different matter. There is disappointingly little detail in terms of reining in the US$43bn subsidy regime which accounts 14% of all expenditure. Saying that the government proposes to "overhaul the subsidy regime, including food and petroleum subsidies, and make it more targeted while providing full protection to the marginalized, poor" and linking programs like MNREGA to asset creation amounts to a motherhood statement. More specificity is necessary.

Overall, these are directionally correct measures but given the harsh economic situation, the weak execution capability and the absence of details, restraining the deficit to 4.1% may be aspirational.
The second big question is what is the progress towards shifting to a more open economy with less friction? Basically this is about two things taxation and FDI.

The single biggest expectation of the world was that FM would repeal the retrospective amendment of tax laws on indirect transfers- the infamous Vodafone case. The FM emphasized the importance of a stable and predictable tax regime and set up a high level committee to deal with future issues but left the Vodafone matter to the legal system. This may have been pragmatic but failed to send the unambiguous signal foreign businesses are looking for, However, there are also changes proposed to make transfer pricing laws more consistent with international practices; this will greatly alleviate the concerns of MNCs.

While there are promises about action on the much awaited taxation reforms—Goods and Services Tax (GST) and Direct Tax Code—there is nothing concrete on either front. On GST, the FM said the government is ready to approve a legislative scheme to enable the introduction of a GST, but didn’t really deal with the revenue loss concerns of the states which have to approve this nor did he set a deadline for the implementation of GST.

On foreign direct investment, the FM has opened up FDI in ecommerce, and upped the cap on FDI in defence & insurance to 49 per cent, from 26 per cent previously. This is good but perhaps doesn’t go far enough. Defence contractors may be reluctant to part with technology unless they control 51%
Question # 3 is what is government intending to do to improve India’s dreadful infrastructure?
The FM did well here. He has committed large allocations to infrastructure- over Rs.37,000 crore for 8500 km of new roads, fuel guarantees for thermal power plans, a focus on developing new airports in tier 2 & 3 cities and 16 new ports and an additional 15000km gas grid and so on.


But more importantly, he has proposed several ideas to facilitate better policy framework for execution of projects as he looks to tap private sector investment . For instance, an eBiz platform that will bring in transparency and accountability into the process of getting statutory clearances such as land acquisition, environment and forest clearances which are major hurdles for project implementation.

To help fund infrastructure projects, the FM has encouraged banks to extend long-term loans to infrastructure sector. Banks will be permitted to raise long-term funds for lending to infrastructure sector with minimum regulatory pre-emption. In another move that could mobilize large investments, the FM announced infrastructure investment trusts similar to those for real estate. These are all practical and positive steps.


The fourth and final question is How does the government intend to create a vibrant manufacturing sector that creates lots of jobs?


Here the biggest impact will be indirect and felt over time through the implementation of GST and through improvements in infrastructure. Infrastructure projects in particular will trigger demand for construction machinery to cement and steel. Besides these, the increase in defence production, increased Custom duties on some electronics products and the expansion of an existing Tax incentive for large investments will all help.


There are many who are disappointed with the incrementalism of this budget. They expected bigger reforms and more details on the How’s. I am not one of them. I believe this budget is pragmatic and directionally sound. There is nothing retrograde and that in itself is a big deal after the experience of the last few years. A journey of a thousand miles begins with a single step and that’s what this budget really represents; in seven months, the government will present another budget for the full year and have an opportunity to be clearer and bolder. In any case, much of what is needed to be done to revive the economy lies beyond the budget- in legislative reforms and in administration. So, while there is great appetite for grand vision and big pronouncements, what we really need is better execution. If the government is able to avoid bruising confrontations and can actually deliver on what it has set out, it would represent substantial progress in an economy crippled by empty rhetoric, bad ideas, red-tape, and corruption.


(Ravi Venkatesan is the former Chairman of Microsoft India and Cummins India. He is a Director on the Boards of Infosys Ltd and Rockefeller Foundation and author of the book, “Conquering the Chaos: Win in India, Win Everywhere” published by Harvard Business Review.)

Published Date: 15th July 2014, Image source: http://st1.bgr.in
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Vivekananda International Foundation)

Friday, July 4, 2014

Appointment of Judges and Independence of Judiciary

Dr M N Buch, 
Dean, Centre for Governance and Political Studies, VIF

Though India is a Union of States we have a judicial system which is hierarchical, from the court of first instance right up to the Supreme Court. In all legal matters competent judicial officers can pronounce judgements on both Central laws and State laws. By contrast, in the United States, federal laws are interpreted and adjudicated upon by Federal courts and State laws by State courts. In India, the Supreme Court is at the apex, but under Article 227 of the Constitution, the power of superintendence over all courts and tribunals throughout the territory over which a High Court has jurisdiction vests in the High Court. At the same time, under Article 141, the law declared by the Supreme Court is binding on all courts and, therefore, the position of all courts, including High Courts vis-a-vis the Supreme Court is one of judicial subordination.

The appointment of judges to these two courts is strictly defined by the Constitution. In the scheme of things there is separation of powers between the three organs of the State which, nevertheless, are equal, that is, the Executive, the Legislature and the Judiciary. In order to ensure the balance of power, the Constitution provides for the Legislature to be constituted through a process of election, the Executive through a process of recruitment governed by an independent constitutional body called the Public Service Commission and the Judiciary to be completely free from interference by the Executive or the Legislature by giving the judges complete independence. Article 124 governs the appointment of judges to the Supreme Court and Article 217 does the same for the appointment of judges of a High Court. In the case of the Supreme Court, Article 124 (2) reads “Every judge of the Supreme Court shall be appointed by the President, by warrant under his hand and seal, after consultation with such of the judges of the Supreme Court and of the High Courts in the States as the President may deem fit… Provided that in the case of appointment of a judge other than the Chief Justice, the Chief Justice of India shall always be consulted”. In the matter of judges of the High Court under Article 217, the President is required to consult the Chief Justice of India, the Governor of the State and the Chief Justice of the High Court. The Supreme Court, in its wisdom, decided that consultation of the President with the Chief Justice means that a Collegium of Judges to be constituted by the Chief Justice will vet every case and on its recommendations the Chief Justice will give his advice to the President. This is an internal matter of the Supreme Court and need not be commented upon. As it is, there is a move to legislate for the setting up of a Commission for recommending judicial appointments, but this is still only at the proposal stage. Despite opinions to the contrary I would suggest that the system as it has evolved has served us quite well and we should not hasten to alter it.

The process of appointing judges to fill present vacancies in the Supreme Court had begun quite some time ago. Apparently in Septemebr 2013 Arun Jaitley wrote to the then Prime Minister, Dr Manmohan Singh, that the name of Gopal Subramaniam who, incidentally, had to resign as Solicitor General of India in an unconnected matter, was under consideration and, in the opinion of Arun Jaitley and the party of which he was Leader of Opposition in Rajya Sabha, there were strong reservations about this name. As has been reported, Arun Jaitley said that initially Gopal Subramaniam had offered his services to government in the Sohrabuddin case, which was pending before the Supreme Court. When it was decided that the Attorney General would handle the case, Gopal Subramaniam offered to assist the court as amicus curiae and though the court never formally invited him to do so, Gopal Subramaniam acted as if he was the amicus curiae and gratuitously advised the Supreme Court that (1) The investigation of the Sohrabuddin case be transferred from the Gujarat Police to CBI and (2) If Amit Shah was given bail, which had already been granted by Gujarat High Court, he should be restrained from entering the State of Gujarat. The Supreme Court ordered accordingly. In his letter, Arun Jaitley is reported to have said that this indicates the bias of Gopal Subramaniam and, therefore, he is not fit to be considered for appointment to the Supreme Court.

In a parallel development, it seems that CBI very foolishly had earlier recorded a note that Amit Shah should be arrested because this would cause Gujarat Police officers to be intimidated and through them CBI could reach its real target, Narendra Modi. This view was endorsed by Ashwani Kumar, then Director of CBI. Whereas I cannot vouch for the veracity of this report I would not be surprised if it were true because this is how CBI seems to function. Normally one should not interject a personal experience in an essay of the present sort, but I am forced to quote a personal experience in my official capacity as Head of the Delhi Development Authority to show that the notes recorded in the Sohrabuddin case are about par for the course for CBI. I received a letter from CBI in 1978 seeking permission under section 197 Cr.P.C. to prosecute Jagmohan, Ranbir Singh and other officers of DDA in what was known as the Kapashera, Samalkha and Andheria Mor demolition case. Sanjay Gandhi, Jagmohan and others were accused of mischief under section 427 IPC, criminal trespass under section 447 IPC, criminal intimidation under section 506 IPC, read with sections 34 IPC, that is, common intention and 120B IPC, that is, criminal conspiracy. I asked CBI to send me the case diary so that I could take a decision about giving permission to prosecute and after much hesitation and correspondence it was sent to me. I was horrified to find that the supervising officer’s note was also attached, which stated the purpose of the investigation was to bring home charges of criminal trespass, mischief, criminal intimidation, etc., against Sanjay Gandhi and others. This note itself indicated bias because the purpose of any investigation is to arrive at the truth and not try and fit the facts to arrive at a predetermined conclusion. The investigation was obviously tainted.

The case diary itself made strange reading. The demolitions were carried out at the behest of and as an agent of the Municipal Commissioner of Delhi, B.R. Tamta. He, therefore, was the main accused. In the case diary itself the investigating officer recorded that because B.R. Tamta had agreed to give evidence on behalf of the State he was not being named as an accused. Under Chapter XII Cr.P.C. the police has no power to drop from the list of the accused a person against whom there is prima facie evidence, nor can the police add to the list of accused a person against whom there was no prima facie evidence. Regarding pardon, that is governed by section 306 Cr.P.C. The Chief Judicial Magistrate, Metropolitan Magistrate or Magistrate First Class may tender pardon, but only in cases triable exclusively by the court of session or the court of a special judge and only where the offence is punishable with imprisonment of seven years or more. The police cannot tender pardon and in any case the maximum penalty for the offences for which Sanjay Gandhi, Jagmohan, etc., were charged only carried imprisonment for a maximum of two years. In such a case pardon cannot be tendered. I wrote to CBI that sanction could not be issued unless B.R. Tamta was also made an accused in the case. R.D. Singh, Special Director of CBI met me and threatened me with dire consequences if I did not issue sanction, on which I not only threw him out of my office but also finally rejected the application for sanction. The accused were never charge-sheeted or prosecuted in this case, but it did leave a lasting impression in my mind that CBI is not an ideal police force whose objective is to fight crime. Therefore, the attitude of Ashwani Kumar and his officers probably represented the reality of the matter, that is, CBI’s objective was not justice but to fix Narendra Modi so that he could be politically finished.

To return to the issue of appointment of judges, the Chief Justice of the Supreme Court recommended to government that four names, those of the Chief Justices of the Calcutta and Orissa High Courts and Gopal Subramaniam and Rohinton Nariman had the approval of the Chief Justice and the Collegium of Judges for appointment as judges of the Supreme Court. The President ultimately approved three names, but expressed reservation about Gopal Subramaniam. On this Gopal Subramaniam withdrew his assent for the post and in the process made scathing remarks about government. His allegation is that he was amicus curiae in the Sohrabuddin case and on this account he has been targeted by government for denial of the post of a judge of the Supreme Court. According to him, the Government of India is prejudiced against him and further, by denying him the post, has proved that it wants convenient judges on the Bench. He has further alleged that this will affect the independence of the Judiciary and will have harmful long-term effects.

Without going into the merits of the Gopal Subramaniam’s charges one cannot help but feel that in making an allegation that government wants to reduce the independence of the Judiciary there is a hint of slander. This is not the first time that government has rejected some names recommended by the Chief Justice of India or denied elevation to the Bench to certain judges of High Courts and to lawyers. In the United States of America, it is a well known practice to try and pack the Supreme Court with judges whose political views are in consonance with the philosophy of the ruling party. Franklin Delano Roosevelt, struggling with the Great Depression and wanting to push the New Deal, wanted liberal judges in the Supreme Court. President George Bush and President Ronald Reagan wanted conservative judges. Certainly Indira Gandhi wanted judges like A, N. Ray who, with Justice P.N. Bhagwati and others forming a Constitutional Bench of the Supreme Court ruled that when a proclamation of Emergency under Article 352 was in force the fundamental rights stood suspended, which meant that the right to life under Article 21 also stood suspended. Of course, the court did not clarify whether this meant that the Executive could arbitrarily and without trial put a man to death, but in effect that is how it can be read. Justice H.R. Khanna, in the lone dissenting judgement, strongly opposed this view and upheld the right to life and further ruled that the fundamental rights could not be suspended. Indira Gandhi never forgave him and he was not elevated to the post of Chief Justice. During the Emergency in the Bhimsen Sachar case, Chief Justice Tatachar of the Delhi High Court ruled that though the fundamental rights may have been suspended, the Code of Criminal Procedure remained intact, section 482 Cr.P.C. gave the High Court the inherent power to secure the ends of justice and, therefore, using the power of habeas corpus, he ordered the release of Bhimsen Sachar, Kuldip Nayyar and others. Similarly, the Gujarat High Court, in the case of Himmat, a journal produced by Rajmohan Gandhi, ruled against censorship and Himmat published without censorship thereafter. The Chief Justices of Delhi and Gujarat High Courts were denied elevation to the Supreme Court. Despite this, what is proved is that even during the Emergency, our Supreme Court and High Courts did not compromise on their independence, especially the High Courts, which proved that the independence of the Judiciary is strong and zealously guarded. Is it Gopal Subramaniam’s case that what could not be done in the Emergency, that is, bringing the courts to their knees has become possible because Gopal Subramaniam has not been elevated to the Bench? He is too eminent a lawyer to be pardoned for even suggesting such a thing.

The method of appointment and the autonomy of an organisation may be interconnected, but they are not inter-dependent. In any case, the scheme of the organisation of the State in India is such that the three major pillars, the Executive, the Legislature and the Judiciary are all autonomous within their own spheres. The Legislature has untrammelled powers of legislation, subject only to constitutional validity, approving the budget, calling the government to account through the collective responsibility of the Council of Ministers and through the various mechanisms worked out for legislative control. The Executive power vests in the President, who exercises it through officers appointed by him, but on the aid and advice of his Council of Ministers. The business of government is conducted according to the Business Rules framed under Article 77. This applies mutatis mutandis to the States also. In the exercise of executive powers, the Executive is autonomous, but subject to accountability to the Legislature and to such pronouncements that courts may make if adjudication is called for. Similarly, the Judiciary is autonomous, appointment of judges is not within the exclusive purview of the Executive, they cannot be removed except through due constitutional process and they are free in the matter of adjudication to pronounce judgement according to law. There is no encroachment on this autonomy nor ever has been. At the same time, the Legislature is constituted through election, a process under a constitutionally created Election Commission of India. Despite this the House is constituted by the President, who also summons it to session. The officers of the Executive are selected by a constitutionally created Public Service Commission, but their appointment is made by the President and protection is provided by Articles 311 and 312. In the case of the Judiciary, the selection is made by the Chief Justice of India and the appointment is made by the President. In all three cases, there is convergence at the level of the President. Article 124 makes consultation with the CJI mandatory, which means that a person not recommended by the CJI cannot be appointed to either the Supreme Court or a State High Court. That, however, does not mean that the President, on the advice of his Council of Ministers, cannot reject a name suggested by the CJI. There would be interference with independence if the President arbitrarily appoints judges. There is no interference if the President rejects a name suggested by CJI. That has happened in the past and may happen in the future also, which is precisely why Article 124 provides for a process of consultation.

Gopal Subramaniam is a legal luminary whose erudition and brilliance is universally recognised. He is eminently qualified for elevation to the Bench, which would be richer by his presence. Conversely his absence from the Bench is not tantamount to jeopardising the autonomy of the Judiciary. This last remark is made because by suggesting that the independence of Judiciary is in danger, Gopal Subramaniam has done no service to government, the Judiciary or even to himself.


Published Date: 3rd July 2014, Image source: http://www.orissadiary.com