IS GREAT DEPRESSION COMING?

                                    CITADEL OF SAND; HOW LONG WILL IT LAST?

Hello countrymen,

The economic slowdown is spreading like contageon in every parts of the globe. Is it the sign of great depression?

Here is my view in it.

IS GREAT DEPRESSION OF 1930s COMING?

Is great depression is coming? Everyone in the world including in India is asking this question, to which none of the financial pundits is able to answer correctly. ‘Market gurus’ are making wild guess that ‘worst is over, hurricane has passed and settling down process will start soon. But the worst ever crash in at least 15 years on Friday, (likely to continue further also) which was observed as ‘black Friday’ by hundreds of thousands of plundered and ruined investors, belied all such forecasting of economic experts. Dow Jones fell by more than 600 Points, Nikkei by 800 Points, etc. in fact Friday mayhem was caused largely due to crash in Asian Markets. For instance in India BSE and NSE fell by more than 800 and 834 Points respectively on this day. Similarly, almost all stock markets in Asia, like Nikkei, Hang sang, Singapore etc fell sharply. The fear psychosis is such that in spite of repeated assertions made by the concerned governments that the ‘fundamentals of the economy are strong’, the investors could not be instilled with sufficient amount of confidence. The rumour of Banks facing liquidity crunch and probably going bankrupt, was rife and investors as well as common customers thought that whether their money is safe with the Banks. This caused panic in the market and added fuel to fire. 

In fact, the beginning of this ‘humungous crisis’ has had started well in 2004-2005 itself in many parts of the world. The artificial boom, the ‘housing bubble’ created by Bankers and property dealers led to over assessment of value of the real estates. The lending by Banks on the over assessed value of properties continued for some time. But when the Bank rates were increased, the borrowers found it difficult to pay the EMIs to the Banks. When, in order to recover the money, the Bankers tried to sell the mortgaged property; they encountered the real problem, because no one was ready to purchase them on the ‘highly inflated’ price. Thus the NPA started accumulating as the ‘non-payment syndrome’ spread like a wild fire. Since many of the Banks had sold many of their shares to other financial institutions, the non payment led to fall in the prices of these shares also. Thus the ‘housing bubble’ has bust. 

Banks started getting dry of liquidity due to ‘withdrawal spree’ because news started ‘leaking’ that Bank would not be able to ‘honour cheques’. The Lehman brothers followed by Merrill Lynch and Morgan Stanley had collapsed by now. 

It is however, a wrong proposition that had Lehman brothers been saved, the market would have not collapsed. The problem by now had entrenched into the essentials of the stock market itself. The ‘over greed’, becoming billionaire overnight has dried up the ‘spring of business ethics’ almost totally. The desert left is capable of supplying sand and only sand, this contagion has spread globally and even India, the land of ‘Chanakya’ and ‘Megasthanes’ has turned into land of schamsters like Harshad Mehta and a host of such bookies. The ‘blind race’ of minting money resulted into overstretched competition among financial institutions which were unnecessarily exposed to ‘unhygienic business environment’ causing this disease to spread. 

Street Wall, the citadel of US economy, had collapsed. Walls were burgled and plunders were in. During Napoleon days it was said that ‘when France catches cold, the whole world sneezes.’ Now it should be said that when thorn pricks the US economy, the emanating pain reaches to whole of the markets including Bombay stock exchange. Therefore; the whole world including European Union, Russia, Japan, Middle-East and India is reeling under acute financial turmoil following the crash in Wall Street.

The situation is somewhat similar to what it was during the ‘great depression of 1930’. The results are similar, so are the reasons.

The great depression of 1930s was caused by a combination of factors like unequal distribution of wealth, high tariff and war debts, over production in industry and agriculture, stock market crash and financial panic. The effects were devastating, like wide spread huger and unemployment (25%), worldwide economic crisis, world market recession and collapse of concept of total free market economy etc.

The political result was defeat of republicans and victory of Franklin. D. Roosevelt (democrat). The history seems being repeated again. This depression is also caused when Bush (republican) is in power. Will it pave way Obama to come to ‘White House’?

President Hoover had said just before the crisis ‘economy is fundamentally sound’ and similarly Mc Cain said ‘the fundamental of US economy is strong’, just before the crash of Lehman Brothers. The American’s ‘war on terror’ has increased the debt by about 79% and is putting enormous economic pressure on economies of many European coalition partners including UK and France. Nobel laureate Joseph Stieglitz say ‘the war on terror’ in an attempt to ‘export American type of democracy’ to the rest of world has cost 3 trillion dollar, three times the GDP of a country like India.

Churchill had said ‘if socialism suffers from vice of and equal sharing of misery, then capitalism is afflicted with the vice of an unequal sharing of affluence’. The continued inequalities in affluence worldwide cannot allow the ‘glass house’ to remain unbroken for longer period. 

The hard earned money of citizens of these countries has been thrown and pumped into the unending wars and thus it was bound to have repercussions like those which we see today. The US type of economy and US type of democracy have been exposed once again. How long the citadel of sand will withstand the onslaught of realities. The stock market economy is basically based on the jargons of figures appearing on the computer screens. The bookies and brokers play with the figures and sometimes with the sentiments of investors also. The unethical business tricks are praised as ‘Business mantras’. The wooden pot cannot be kept for long on fire. 

Signs of crisis have started making their presence felt everywhere including USA and India. According to the data released by the Labour Bureau of US, about 7, 60,000 jobs have been cut by now, 1, 59,000 in September itself. Results are devastating, American psyche has shaken, so did the essentials of the economy. The US administration hurriedly came out with a rescue package of 700 billion dollars. The troubled asset rescue plan (TARP) is introduced to save the economy. Other European as well as Asian countries have also come out with similar rescue or what they called ‘Bailout package’ plan to save the market and especially financial institutions. But there was no concerted and well-coordinated financial effort by the European Union as such. 

In fact, G-7 leader began a meeting in Washington late Friday, to find common solution and propose concerted and coordinated steps in order to fight the menace jointly on global level. But despite several rounds of talks, no consensus could be arrived at. The concept therefore; of a ‘politically and economically unified Europe’ collapsed like ‘wall of sand’ and ‘myth of liberal democracy and export of American democracy’ seems ceased to exist. 

Every individual European country was taking steps on its own and for its own. If total bailout packages are summed together, it comes nearly about 3 trillion dollar. See the chart-

Country Bailout package

USA 700 billion USD in one go, total 990 billion USD 

RUSSIA 86 billion USD

UK 32.5 billion USD, revised 876 billion USD

GERMANY 50 billion USD

BELGIUM 16 billion USD

IRELAND 752 billion USD

IRELAND 864 billion USD ten times its total GDP

FRANCE 237 billion pound 

INDIA More than 60,000 Crores in form of CRR cut by R.B.I.

But even after this heavy dose of financial injection into the ailing economy, after initial hiccups, these efforts to stem financial markets and specially Banks dipped in the quagmire of crisis. There is stampede everywhere and panic has gripped the entire globe. According to figures made available, the total amount involved in the rescue package in Europe and America only, is about 1.8 trillion dollars, which is almost equal to double the GDP of India, which is about 46, 93,602 crores. Magnitude of crisis is such that Iceland is in foreign debt ten times its GDP. Just imagine the madness on part of the governments, sheer madness. The mad rush for conspicuous consumption and show off tendencies destroys not only individuals but Nations also.

Well tide would pass after some time, but leave the scares of devastation in the psyche of millions of people across the Nations. Questions that should be asked now, that whose money is being ejected into the economy? Did the governments take mandate for this package? After all why the tax payer’s money would be pumped into the financial markets to save it from, what they call financial tsunami, a problem or a crime which someone else have created. Is it a bailout package for Nation of or bailing out some economic offenders? Does it not sound unjustifiable that, why innocent citizen pay for the offence he or she has not committed? Will it not set in a new but dangerous trend in the economy of the world? 

IMPACT ON INDIA- Man Mohan Singh said in Marseilles that Indian economy is not immune to world economic meltdown, but ours is strong fundamentals. Chidambaram also is in resonance with the PM. But the fear is visible. Market broke a news, though not confirmed by the authorities that ICICI Bank is facing acute ‘liquidity crunch’ and suddenly share showed the signs by being plunged. The Bank authorities were quick to comment, ‘we are having enough of liquid with us’. In India, we believe in reading in between the lines, when govt say they have the majority, we believe that there is serious problem with the govt, or else why should it shout like this. This is what seems to have had happened with this Bank, because last Friday its share fell and fell sharply. 

REASONS WHY INDIA WOULD GET AFFECTED-

1. With the globalised economy, the ripples in one part of the world are bound to create hiccups in other parts. The world is a global village and therefore; the Indian economy cannot remain immune to what it is happening in the other parts of the world.

2. IT-BPO sector of Indian Industry has emerged like world giants. Infosys, Wipro, TCS, HCL etc have made a room for themselves in the world market. Hyderabad, Gurgaon, Bangalore, Pune and a host of such cities have gradually metamorphosed into cyber cities. These cities are fast becoming out sourcing centres. According to one estimate, about 15% of the IT professionals in USA come from India. The cutting of jobs in this sector in Europe and America would have disastrous consequences in India also. IT and BPO are likely to be hit hard. ‘Guys on the bench’ are getting ‘pink slip’ by many MNCs in cities like Delhi, NOIDA, Bangalore, Pune, Hyderabad etc. India is becoming an attractive market of ‘soft ware outsourcing’ for many foreign companies. They get cheaper but decisively better ‘software guys’ to word quickly for them. IT-BPO revolution began in India somewhere in early 2000 and gradually changed the Indian face abroad. Over a period of time, the export of this sector increased by 33.5% amounting to 8.4 b USD in 2007-07, it is expected to reach 10-11 b USD by the end of 2007-08. According to National Association of Software and services Companies (NASSCOM), the number of employees working in BPO-IT sector in India is under-

Year Number of employees(IT-BPO)

2003-04 2,16,000

2004-05 3,16,000

2005-06 4,15,000

2006-07 5,53,000

The current figure is certainly much more and is increasing day by day. They were getting salaries worth 1 b USD during the year before last year and naturally it has increase substantially in 2008-09. According to one estimate, about 82% of US software companies prefer Indian software professionals for obvious reasons. The humungous fall in Wall Street leading to unprecedented panic and catastrophic consequences in American industries would certainly affect this boom. The exact figures would come only when this financial tsunami is over. Nonetheless, it would certainly mean job cuts and increase in unemployment rate.

3. Trade and commerce- USA is the largest trading partner of India. Share of USA in India’s export is 17%, and its monetary value is more than 100 billion USD. This economic meltdown would certainly adversely affect India’s export in general and export to USA in particular. According to Federation of Exporters Association (FOE), the exports from India are already showing signs of decline due to this slowdown syndrome. Figures suggest that it is experiencing a decline of more than 15%. According to one estimate, the NRIs remittances in India during 2004-05 had been about 22 b USD, out of which 60% comes from Europe and North America and rest 40% from Middle East. These remittances are definitely going to decelerate, if not stopped; contributing to depletion of FOREX which had reached all time high in recent years. The remittances coming into a country is a healthy sign and no country however strong it may be, would like it to grow substantially. If we look at this figure of inflow of foreign exchange flow into countries during three to four years ago, we can imagine that why and how our FOREX has swelled to nearly 

200 Billion USD. 

Countries FOREX( from IT-BPO)

India 21.7 billion USD

China 21.3 billion USD

Mexico 18.1 billion USD

France 12 billion USD

Philippines 12 billion USD

Pakistan 3.9 billion USD

Bangladesh 3.4 billion USD

4. This economic slowdown is not going to affect much more immediately to our overall economy but the consequential effect would manifest in deceleration of pace of economic after sometime. The Deputy Chairman of Planning Commission, Montek Singh has also apprehended that the growth rate would slow down to 7.5 and 8%. The industry and other sectors are also witnessing the same down ward trend. In fact Industrial growth slumps to 1.3%. There are some more perturbing figures in economic arena, but these after effects are not going to create situation like what it is in Europe or America.

5. The crash in stock market is very much perceptible. The BSE and NSE Sensex have fallen from more than 21000 in January to less than 11000 in September, 2008, registering a fall of more than 50%. As mentioned in earlier paragraphs, this fall has led to panic in financial markets. India stands at different platform vis-a-vis other economies following American type policy of lasez fairre in the sense that ours not a totally unregulated economy, even after we have eschewed the Nehruvian socialist economy in early 90s. As a matter fact, the total free and unbridled type of economy has resulted into this ‘financial catastrophe’. 

6. Stock markets constitute 15% of the total capital in India, therefore; this tsunami in the financial market worldwide is not going to be a contagion for all financial institutions including Banks. But if the situation is not handled with ‘utmost care’ it would infect ours also with greater degree of damage. 

WHY INDIA STANDS AT DIFFERENT FOOTING AS COMPARED WITH EUROPE AND AMERICA- 

When financial turmoil hit American followed by European economy, the anxiety in India was natural. The government acted swiftly as it should have acted. First thing which is very important under such situation is restoration of confidence and prevention of rumour mongering. Both PM and FM made calculated and balanced statements which was first right step in right direction. But unfortunately the rumour mongering has not yet stopped. Ours is not an unbridled and unregulated financial stock market. Moreover, the percentage of financial markets in the economy is 10-15% which is meager as compared to other sectors of the economy. Here are some constituents which make our economy different from many of others. Well, it would be a wrong and utopian proposition, therefore; only an etourdi can say India shall remain totally immune from this financial meltdown, but certainly the impact will never be of that magnitude as they are in the economies of laisez fairre. Reasons are obvious-

1- Indian economy is still agricultural based and the contribution of agriculture to GDP in India is decisively higher than any other countries in the world.

Countries % in GDP

INDIA 20-24

CHINA 13-14

BRAZIL 8-9

SPAIN 4-4.5

AUSTRALIA 3.8

MEXICO 4

S.KOREA 3.3

CANADA 2.2

FRANCE 1.0

ITALY 2.1

JAPAN 1.1

USA 1.0

GERMANY 0.9

UK 0.5

HONKONG 0.1

Thus it is clear that agriculture still contributes quarter of the GDP, rest 50% and 25% are contributed by services sector and industry sector respectively. This is perhaps one reason why PM, FM and RBI say that the fundamentals of our economy are strong. The upheavals in the financial markets have very little to do with rural economy.

2- Indian financial market especially Banks have always been under RBI scanner, even during normal times.

Banks % share

Public sector Banks 75%

Private Banks 18.2%

Foreign Banks 6.5%

Thus it is clear the role of private Banks as well as foreign Banks vis-à-vis Indian economy is very limited. Even the lending by these Banks has been dismal. In fact CD ratio of such Banks speaks that they are interested in deposits and not in lending. The 196 different Regional Rural Banks (RRBs) play a vital role in rural economy of India would remain by and large unaffected owing to this depression. We have a chain of banking system based still on concept of welfareism rather than profitism. The Urban (52) and State cooperative Banks (16) have been playing significant roles in making ‘fundamental our economy’ strong. We have had developed ‘a scientific fiscal mechanism of consistent monitoring’ system for our banking system which would keep our economy safe in extenso, when the world’s economy is in extremis.

3- Post offices are poor man’s Bank in India, started in 1850s still plays the role of ‘unsung heroes’ in capillaries of economy. The chain of more than 1, 50,000 post offices in India contributed to about 49.37% in overall revenues in 2004-05. What a significant role they are playing. Common men, pensioners and small domestic savings still prefer post offices for one simple reason, the high rates of interest rates in comparison with any other financial institutions. The government and RBI therefore; must nota bene on post offices and should not be swayed by media hypes on this issue. After all the 60,000 crore money that has been injected into the market, is the hard earned money of millions of tax payers, and why and how would they pay for economic offence, they never committed?

4- We have had developed an ‘iron jacket of social security system’ for the people sitting at fence, a step which Roosevelt took after ‘the great depression of 1930s’ in form of ‘ new deal’ and which many developed nation are taking as an emergency measures. Welfarism for us is a mission, for them it is fiction. Ours is a ‘democracy with humane face’ and not an ‘export brand democracy’, thus, it is a sermon also for those who want government to ‘throttle the accelerator of liberalization’ with much more intensity. It would cause, what economists say ‘overheating of economy’, bravo! We would certainly win the race. Don’t let loose the heart and patience.

Impeachment of Judges in India

Hello countrymen,
The letter of CJI has triggered the debate on impeachment process.
Here are the constitutional provisions with regard to impeachment of judges of higher judiciary.

IMPEACHMENT OF JUDGES
(REMOVING JUDGE IS MORE DIFFICULT THAN THE GOVERNMENT ITSELF)

The letter written by the CJI (Chief Justice of India) to the PM seeking his intervention in initiating impeachment proceedings against a sitting Judge of Calcutta HC, has triggered a debate again regarding corruption in higher Judiciary and its impunities. We have seen removal of Governments and PMs so many times, but removal of HC and SC Judges has not been so far heard after the Constitution of India came into force in 1950. Independent India has however witnessed one impeachment, when Justice Shiv Prasad Sinha of Allahabad High Court was removed by the then Governor General of India, C. Rajagopalachari in 1949 on the recommendation of the Federal Court. Reasons for this situation are simple, the impunity given to the Judges in the Constitution. 

The corruption in higher Judiciary and disciplinary action against the HC and SC Judges has again become talk of the day following the unprecedented move of the CJI K.G.Balakrishan in which he directly wrote to the PM that Justice Soumitra. Sen, sitting Judge of Calcutta HC be removed for his ‘Misconduct. The CJI has given detailed information about Justice Sen’s misconduct when he was appointed receiver by Justice A.N. Roy in Steel Authority of India vs. Shipping Corporation of India case in 1993.

The three Judge panel comprising A.P. Shah C.J of Madras H.C, A.K. Patnaik, CJ of MP HC and R.M. Lodha of Rajasthan HC inquired into the charges levelled against Justice Sen and found them true. The panel submitted its report in February, 2008. On March, the 16th, the Collegiums of the apex Court comprising of CJ himself, J.B.N. Agarwal and J. Asok Bhan asked Justice Sen either to resign or to opt for voluntary retirement, but the unrelenting Judge refused to comply with, which forced CJI to resort to this unprecedented move. The move is unprecedented, because neither there is any provision in the constitution about such recommendation nor before this, any CJI has taken such ‘extreme step’. In fact Article 124(4) of Indian Constitution provides for removal of HC and SC Judges. This Article says ‘A Judge of Supreme Court shall not be removed from his office except by an order of the President passed after an address by each House of Parliament supported by a majority of the total number of membership of that House and by a majority of not less than two-thirds of the members of that House present and voting has been presented to the President in the same session for such removal on the ground of proved misbehaviour or incapacity.’ There is no separate provision for removal of HC Judges and Article 217(1)(b) provides for this and says ‘ a Judge may be removed from his office by the President in the manner provided in clause(4) of Article 124 for the removal of a Judge of the Supreme Court’. This is how the processes of removal of High Court and Supreme Court Judges are the same. The above Article of the Constitution provides for impeachment, whereas; Judges (Inquiry) Act, 1968 determines the process of impeachment. 

According to this Act, the impeachment of a Judge can be done only by Parliament and impeachment can be initiated after a motion addressed to the President of India is signed by at least 100 members of the Lok sabha or 50 members of Rajya Sabha. Such is the process and such is the impunity. Such Judicial impunity has been conferred on Judiciary for the sake of its independence. The idea is perhaps taken from England. The above provision is similar to the rule prevailing in England, since the Act of Settlement, 1701, to the effect that though Judges of the Superior Courts are appointed by the Crown, they do not hold office during his pleasure, but hold their office ‘on good behaviour’ and the Crown may remove them only upon a joint address from both Houses of Parliament.

Any way the credit must be given to CJI, who could take such extra-ordinary step, because after all, extra-ordinary situation demands extra-ordinary steps. But unfortunately, the government was sitting over it as it was written two months ago and could only be known to public through media. This development has again triggered a debate on corruption in higher Judiciary and its overall functioning including the appointment procedure in the higher Judiciary. 

Before any debate on this issue, it should be clearly borne in mind that above cumbersome procedure of impeachment and other judicial impunities have been enshrined in the Constitution for making Judiciary independent. 

INDEPENDENCE OF JUDICIARY- the independence is guaranteed our Constitution and the concept has been borrowed from the US Constitution. Article III of US Constitution guarantees Indepenendece and Supremacy of Judiciary in United States. Independence of Judiciary is the tenet of Democracy and therefore; even Russian Constitution of 1993(Chapter-7 Section 120-122) also guarantees independence of Judiciary in Russia. In fact section 124 of the Russian Constitution says ‘Judges shall posses immunity and criminal proceedings may not be brought against a Judge except as provided for by federal law.

In India, this independence and limited Judicial Supremacy are enshrined in the Constitution and are expressed in (a) Methods of appointment of Judges (b) process of impeachment and (c) power of judicial review. Now, if all these provisions of the Constitution are analysed, inference can easily be drawn that the problems lay here themselves and so do solutions.

(a) APPOINTMENT- Articles 124 and 217 provide for appointment of Judges of SC and HC respectively. They clearly stipulate that the appointments have to be made by the President in consultation with CJI. The word ‘consultation’ has been always a matter of dissent and controversy. In fact, when A.N. Ray was appointed as CJ after superseding three senior Judges namely Hegde, Grover and Shelat, there were a lot of uproar in Judicial community including the Bar council of the apex Court. They argued that Judges have been superseded owing to their judgement in Keshavanand case (AIR 1973 SC) which went against the Government. Gradually the discretion of Executive in matters of appointment of Judges started diminishing. In 1993, a land mark judgment came from Supreme Court in ‘Advocates on record vs. union of India’ case. The apex Court ruled that the recommendations for appointment of Judges in HC and SC will be made by collegiums of three Judges and shall be in a way binding on the Government. After a ‘presidential reference’, the number in the collegiums was increased from three to five. This judgment was landmark because it took virtually all discretionary powers of the Executive in matters of appointment of Judges in higher judiciary. Thus the word ‘consultation’ became ‘concurrence’. Some people in legal domain argue that it was a dangerous development and was against the principles of the Constitution itself. How can a person or a group of persons appoint themselves which goes against the ideas enshrined in Article 311? They opine that there must be a transparent and justifiable procedure for such appointments. There are instances where persons from one family are becoming Judges for two to three generations. The judicial community of higher Judiciary is becoming an elite club of few ‘privileged families’. Candidly, it is not what ‘independence’ meant for.

(b) IMPEACHMENT- The process of impeachment as discussed earlier in this Article clearly indicates, that it is a cumbersome process and this is why in 50 years of our constitution not even a single Judge could be removed. In 1991, the impeachment proceedings for removal of Justice V. Ram swami could not be carried due to abstention of Congress party in the voting. The process of impeachment is laid down in Judges (Inquiry) Act, 1968 which says that even if the motion is accepted, the presiding officer of the House has to constitute a three Judge committee to again inquire into the matter. After receiving the report, the motion will be put to voting, which requires 2/3rd number. Thus falling of Government (no confidence motion) which requires a simple majority only, whereas; removal of a Judge requires 2/3rd majority. That is why, it is truly said that it is easier to decide the fate of 100 billion people by way of forming and toppling Governments than removing a Judge. In our country, laws have sent many ministers and bureaucrats behind the bars on charges of corruption, but what to talk of sending Judges to jails, not even a single Judge has so far been impeached. Instances of corruption in higher judiciary are not unheard of. The ‘Transparency International’ in its report of 2007 has counted judiciary as the third most corrupt institutions in India, an inference totally in contrary to the common perception.

The former CJI Y.K. Sabarwal himself is in the eyes of storm for his judgements pronounced in ‘Delhi Sealing Case’, which allegedly benefitted his son. When a report in this regard appeared in one Newspaper, a suo motto contempt proceeding was initiated and the concerned reported was sought to be punished. The Contempt of Court Act, 1971, which itself is not yet codified, is another tool which sometimes is used to gauge the voice of dissent.

In another infamous case, Vigilance department of UP Police exposed misappropriation of 23 Crore rupees from GPF account of Class III and IV employees of Ghaziabad Civil Court. One of the accused arrested in this connection, made startling revelation that he has parted the money both in cash and kind, with one sitting Judge of SC, ten Judges of HC and 23 Judges of lower Courts. The investigation is not proceeding as Police cannot interrogate Judges without the consent of SC, though such protections are not given in Judges (Inquiry) Act. The matter is still pending with the apex Court and CJI has to convince the citizens of this Nation, as to whether there is equality before the law or not. Such corruption charges are often covered beneath the carpet in the name of Judicial Independence and impunity.

Names of two Judges of Haryana High Court figured in a case in which one law officer of Haryana sent Rs 15 lakh to them. Matter has been referred to CBI by the apex Court. List is long and result is dismally naught. 

It is easy preaching than done. The question being asked by common citizen that who will judge the Judges? Every one advocates for transparency and delegation of powers, but up to him only. CJI reacted sharply on provision of RTI Act by saying that it does not apply to them, as they are the Constitutional authorities. But the same authorities preach others about the benefits of RTI in detail and reprimands for not complying with the Act. Time has come to make introspection into the system so that the hope of millions of people of this country could be protected from being torn apart. 

REMEDIES:

1. The provisions of RTI should be made applicable to all components of functioning of Judiciary. Accordingly, suitable amendments in RTI Act, 2005 can be made.

2. The procedure of selection of Judges should be made more transparent and justifiable. Panel of Judges can be made well in advance before recommendation and be known to public by way of websites or media. Idea of setting up of a National Judicial Commission can also be made into reality, after all if you are required to go for a test for becoming a clerk, why does selection of Judges not require any test. An all India test might also be conducted to select Judges of Higher judiciary.

3. The Government is sitting over the Judges (inquiry) bill, 2006 for more than two years, therefore it should be passed, but before that necessary amendments are required, because the concept of ‘brother judges’ doing inquiry has proved ineffective if not futile.

4. The contempt of Court Act, 1971 be amended suitably, because healthy criticism of any institution is generally beneficial for the system itself in the long run. The Judiciary should prepare itself for listening to its criticism and bring about change by itself, a change though painful but helpful.

SINGUR FIASCO; NO TO NANO, TATA BID GOOD BYE

                                      RATAN; A RANTNA IN BUSINESS TYCOON

The TATA’s fiasco at Singur in West Bengal has again triggered a debate on land acquisition processes and rehabilitation issues, not only in W.B. but in the whole country.

Steel Authority of India (SAIL) says that there is a little bit of steel in every one’s life. It is true because one needs steel i.e. strength to stand tall and survive. Similarly, it is also said that there is a little bit of politics in every economics. That is why perhaps, Politics without economics is fool man’s politics and economics without politics is naive business man’s venture. Well, this may not be true for TATA, because it is said for them, that they return back to society more than what it takes from it. Then, what went wrong in Singur which led to this great fiasco. Many believe that it is the beginning of 2nd deindustrialisation of Bengal, first happened in the colonial period. 

Nonetheless, it is too simple a proposition to believe that it is only Mamata or Budhadeb or for that matter Ratan Tata, who is responsible to this sad and unceremonious exit of India’s one of the biggest Industrial house from this State.

The story began when this dream project of Ratan Tata of manufacturing a ‘lakhtakia car’ choose Singur , a small block town in Hoogly district, situated about 50 kilo-meters North-West of Kolkata on N.H. no-2 i.e. Kolkata- Delhi Highway, as the suitable site for this venture. It required about one thousand acres of land, which Budhadeb readily agreed to make available. The Land acquisition process began in August- September, 2006 and required area of land was acquired. We all know that the lands in our country are acquired through Land Acquisition Act, 1894, last amended in 1984. This is a colonial law and speaks about acquisition of land for ‘public purpose’ even without the consent of the tillers or land owners. In fact Section 4 of the Act categorically mentions about the manner in which the lands would be acquired.

About 997.11 acres of land for this project was acquired, which involved about 8890 farmers. Tata began the construction in January, 2007, when the problem started. Initially, it was confined to the locals who were opposing this acquisition under one ‘bhumi uchhed committee’ banner. The inept handling of the situation by the Government and subsequent intermingling of communist cadre further deteriorated the situation. Gradually, this movement started gaining in momentum and turned violent leaving many people dead and several injured. Some eye witnesses are of the opinion that this was the worst kind of violence the communist State has ever witnessed. As generally so happens, the movement gradually slipped into the hands of politicians and made the situation more precarious. The entry of Mamata Banerjee into the movement metamorphosed it into a full-fledged political agitation. The issue by now had turned to be an issue of two political person’s individual rivalry, therefore; in spite of Governor’s personal intervention, the matter could not be settled. Mamata made the demand of restoring the 400 acres of land to the farmers because, what she said, this much land was not in the plant area and was kept for ancillary industries. This was the demand, Tata was unable to accept and thus road was finally paved for the final exit of Tata from Singur.

The questions remained unanswered are that, who is /are responsible for this fiasco and could it have been averted? Why are such problems occurring so frequently? Such protests leading to change in decision of industrial houses have taken place in Jharkhand, Orissa, Karnataka, Nandigram (W.B.) and many such places. Farmers have violently protested in NOIDA and Karnataka also, which resulted in police firing leaving some farmers dead.

Is it not oversimplification and extreme generalisation of the fact that these movements are politically motivated? Is it not administratively wrong to squarely and solely blame Mamata for this fiasco? It appears that one has to peep into the entire gamut of issue and find the real and root cause of the problem, otherwise the dream of industrialisation would face rough weather not only in WB but also in other States.

REASONS- Some people are of the opinion that the Communist Cadres have had been in possession of many lands illegally. They did not have legal documents, therefore; they were not likely to get compensation for those lands, because compensation, according to the law, would be paid to those who posses legal and valid documents. It is therefore they, who started the problem. There are one other group of experts who are of the opinion that the rate of compensation and ‘solacium’ money being paid here are perhaps the lowest in the country and that is why the farmers were unwilling to give their lands to the Government. According to information available, amount of compensation which was/is being paid was 8.40 lakh /acre for single crop land and 12.00 lakh/ acre for double crop land. As Singur is located on the National High way and that too is located only 40 K.Ms away from the State Capital, the amount fixed for compensation was definitely less than the actual market price. Actually, the price of compensation is fixed as per ‘market value’ which is calculated according to price of the land registration. But the problem is that the value shown in such registration is always very less as compared to the real price. This calculation is done as per the provisions of this Land Acquisition Act and therefore; Collectors do not have discretion in enhancing this rate. Of course, there are ways for the Government to do away with this discrepancy by way of framing policies.

RECONSTRUCTION AND REHABILITATION POLICY-

In Bihar for instance, one ‘Bihar Reconstruction and Rehabilitation Policy, 2007’ has been framed and the amount of compensation to be paid to the land owner has been considerably hiked. The provisions have been made to add flat 50% amount to the rate fixed by the collector. The existing rate of 30% Solacium money has also been doubled. The policy also seeks to provide compensation for other losses like structures, trees, ponds, etc. which are there on the acquired land. Thus, the amount of compensation has been increased many folds. This is the reason perhaps, why Bihar is facing ‘no problem’ in land acquisition processes’. Lands are being acquired in Bihata for some ‘public purpose’. This place is a block town and is incidentally 40 K.Ms away from State Capital Patna. Here, about 20 lakh/ acre and 24-25 lakhs/acre are being paid as compensation for single crop and double crop land respectively. Such is the gap and such is the difference, which the Government failed to understand.

In the State of Jharkhand also, Reconstruction and Rehabilitation Policy, 2008 has been framed. But the amount of compensation and solacium money has not been hiked like those of Bihar. This State is also facing similar problems in land acquisition process. One R.P.G. group of company is setting up a power plant in Dumka district. The company is willing to acquire more than 600 acres of land. Sanjeev Sengupta, the General Manger of this company says that the tribal whose lands are to be acquired are ready, but suddenly a woman Munni Hansda of a so called NGO namely ‘Ulgulan Manch’ came here and created trouble by spreading rumours that once the land is acquired, the company will excavate the area and take out the coal from underground. This is how the company is facing unforeseen problems and is yet to get the land.

So far as Singur is concerned, there were communication gaps also between the owners and tillers on the hand and Tata on the other. The company was perhaps of the opinion that it is the Government which has to make them available the land and it is their ‘headache’. It appears that the real problem lie amidst here itself. In fact, as per the counter-affidavit filed by the Government in the Kolkata High court in one PIL filed against this acquisition, these lands were being acquired for W.B Industrial development corporation (WBIDC) and later the WBIDC was supposed to lease out these lands to TATA. Therefore; naturally the company did not like to play a pro-active role vis-a-vis the land acquisition and its transfer to it. This communication gap later boomeranged and snow ball into this large scale anti-land acquisition agitation.

Apart from land owners, there were two other groups namely sharecroppers and agricultural labours. They thought that well, the land owners would get compensation, but what would they get? In absence of a transparent dialogue, this apprehension could not be addressed properly and timely, which added fuel to fire.

ROLE OF NGO-

One more reason which deserves attention is the ‘Role of so called NGOs’. One should think over the situation that how and why suddenly so called NGOs appear in far flung areas. Is it not a matter of interest that how and who did sustain the months long agitation in Singur? Who financed the supply lines? Who are they that catered to every needs of agitation and thrive it for so long periods? In some quarters, there is a perception that perhaps business rivalry played a vital role in it. Well, no body, right now, have any evidence in favour of it. But the possibility of such nexus cannot be flatly ruled out. The Government must probe into it, because most of them are proving to be a major hurdle in the progress of the Nation. Well, it does not mean that all the NGOs are involved in such acts, but if there is a smoke, there must be some fire.

REMEDIES-

Taking into account all above mentioned issues, the Government has to reorient its approach with regard to land acquisition process. One can take examples of other Nations also. 

EXAMPLES OF OTHER COUNTRIES

In Vietnam for instance, the process of land acquisition is not done without taking into confidence the land owners. The ‘Doi Moi Policy’ which is based on a coalition of Land owners- Entrepreneur-Government is the corner stone of Vietnam’s success. This policy has been working very successfully and smoothly for many years and has change the socio-economic and industrial face this war strife torn Nation. 

The Land Acquisition Act of Thailand is another success story. ‘The land pooling and land re-adjustment policy’ of this country has five basics viz community organisation, land sharing agreement, densification-re housing, reconstruction and capital investment. This policy has changed the civic life of this country to such an extent that almost all the slums have been metamorphosed into well planned cities. They have set up millions of industries without causing much pain to the population. We can do it here also, but what we require is a strong political will and vision. 

China is another magnificent example of transformation. Den Xiao Peng had launched one ‘Town and Village Enterprise’ (TVE) movement in 70s with the help of Land Administration Law. This movement changed not only the settlement pattern but also the industrial milieu also. The Land Acquisition Act, 1966 of Singapore has the same type of philosophy in which thrust is on the wilful coalition of all the stakeholders. Similarly, the Constitution(1988) of Brazil, Expropriation Law 1936 of Mexico, Expropriation Act 1975 of South Africa, Constitution of USA (5th Amendment), Town and Country Development Act, 1990 of U.K. etc have similar provisions which are based on the coalition of all the three stakeholder viz State, Entrepreneurs and Land owners.

SENSE OF ALIENATION AND FEELING OF SUSPICION-

In India, for instance the mistrust and suspicion on part of the farmers are not unfounded. Have we made them stakeholders in the development processes? Have not we created oasis in the deserts? If you go to the surrounding areas of Bokaro Steel factory, B.C.C.L at Dhanbad in Jharkhand, you will find that the farmers and land tillers, whose lands have been acquired four decades ago, are still displaced. Just see the skyscrapers in NOIDA, greater NOIDA, Faridabad, Surajkund, Guragaon, Ghaziabad, Tronica City etc. and inquire that how many uprooted farmers and tillers and sharecroppers live in these buildings. Just find that how many uprooted farmers drive their limousines on the express high ways which are constructed on the lands acquired from them. Once their lands are acquired, they have to eschew all their rights and attachments both physical and emotional. The kinds of experiences that these farmers pass through during the process of land acquisitions are also, most of times, horrible. They have to run from pillar to post for the money to be paid in lieu of their own lands, in Government offices. These experiences and hardships have made the farmers and tillers alien, if not hostile, towards the entire process of land acquisition itself. But unfortunately, efforts that are being made are not farmer centric. Only cosmetic surgeries are being made and jargons are used in government policy papers. 

LAND ACQUISITION BILL,2007

The Government is sitting over the Land Acquisition Bill, 2007 over more than a year. Let this Bill be circulated amongst the stakeholders and amend it suitably. The problem with such legislation is that, the language used therein, is so complicated and jargonised, that a common person fails to understand it and could not participate in it. In nut shell, we can say that unless all the stakeholders and specially the farmers, tillers and sharecroppers are made coalition partners, such problems are likely to come up with more intense magnitude.

DO WE NEED A NEW GLOBAL FINANCIAL ORDER?

                                                 ALL THAT GLITER IS NOT GOLD

NEED TO HAVE A NEW GLOBAL FINANCIAL ORDER-

The crisis at Wall Street has spread like a contagion and miseries are felt now within walls of each street in the world. Slum in bourses gradually travelled and crossed the ocean; the crisis is trans-continental. The economic slowdown is gradually metamorphosing into a ‘worldwide recession’. The architect of ‘economic and housing boom’, Allan Greenspan, former chairman of US Federal Reserve (1987-2006), has also candidly accepted ‘mistake’ in the free market ideology. Green span, hailed as the ‘genius of serial bubble maker’ and sometimes ‘harbinger of post-war economic boom’ has become villain now. The ‘housing bubble’ did burst, because financially, it was ‘inherently malicious’ based on ‘excessive fiscal leverage’ and ‘un-principled greed.’ Results, as we witness today, are devastating both in terms of money, morality and mundanely. The burst led to withdrawal spree, which Banks and other financial institutions failed to withstand against, culminated into bankruptcy of a number of Banks like Lehman Brothers, Stanley-Morgan, and Merrill Lynch etc. Most of the Banks in America by now had moved far away from the basic preamble of Glass-Steagall Act of 1933, which was the first legislation to keep the Banking industries away from the investment ventures. Even the ‘bailout packages’ have been misappropriated by many Banks, and reports suggest that Bankers might instead use this money in giving dividends and bonus to its executives, buying other banks etc. FBI is probing into the matter, it is also probing into the ‘mortgage fraud’ in general and role of Fannie Mae and Freddie Mac’, the mortgage giants of USA, vis-a-vis ‘burst of bubble’ in particular. It is important therefore to understand the workings of the Banking system of USA, because the collapse of the Banks was largely due to inherent weakness in the banking system itself. Here are some important bubbles in economic history of world-

NAME OF BUBBLE PERIOD

TULIP BUBBLE 1600

SOUTH SEA BUBBLE 1700

MISSISSIPPI BUBBLE 18TH CENTURY FRENCH STOCK MARKET CRASH

FLORIDA REAL ESTATE BUBBLE 1920s

GREAT DEPRESSION 1929

MARKET CRASH 1987

NIKKEI BUBBLE 1991

NASDAQ BUBBLE 2000

BANKING IN USA-

The Banking sector in America was initially based on ‘English Model’, which advocated for separation of Banking and investment. ‘Banks should not be allowed in Investment’, is the crux of this model. USA adopted this model in 1865 and passed one National Banking Act (NBA) of 1865. With passage of time, this system felt the strain of pro-investment lobby. In response to the growing competition from trust companies and the pressure of the lobby, state-chartered commercial Banks demanded additional powers from the state legislatures. By the early 1900s, legislatures granted most state banks many of the same powers to engage in investment activities already possessed by trust companies. National banks, however, were left out, and they sought justification for securities activities under the NBA. One of the first national banks to engage in underwriting activities was the First National Bank of New York. In 1908, in response to criticism from the comptroller concerning its securities dealings, the bank formed a securities affiliate, the First Security Company. The affiliate was incorporated under state law and was arguably free to conduct investment activities. In 1911 a second affiliate, National City Company, was organized, and by 1916 that affiliate was actively. 

Thus, it is clear that the restrictions imposed by NBA on Banks had by now eroded almost completely. Banks started full-fledged activities in securities and investments and had for all practical purposes, adopted ‘German Model’ which advocated for ‘Banks to venture in investments also’. 

As it always happens, unless you are ill, you are not diagnosed. Here came ‘great depression’ in 1930, and prescriptions were written to cure the ‘ailing economy’.

Roosevelt came and saved the economy by injecting small ample of ‘socialistic drugs’ into the ‘liberal democracy blended with Laissez-fairre’, in form of ‘New deal’. It was felt that Banking sector, which keeps deposits of millions of citizens and are ‘the pulmonary arteries of the economy’, should be protected against ‘unhygienic financial exposures of speculative stock markets’. In this background, the entire Banking sector was again overhauled. Senator Carter Glass brought a law called Glass-Stegall Act (GSA), 1933. This Act was based on twin features, firstly, it sought to insulate Bank’s depositors from risk involved when a bank deals in the securities and to prevent ‘Bank collapse’ like one happened in 1930. 

Secondly, it prohibited commercial Banks from owning full service brokerage firms. The GSA of 1933 remained guiding principle for the Banks, but it too, gradually faced rough weathers due to changing politico- economic milieu after 1990s. The ‘post war boom’ as evident from the USA’s share in global GDP (graph attached) necessitated some drastic changes in the Banking industry.

Increase in NNP and GDP in USA, during contemporary period emboldened the financial system of entire Europe and America, if not whole globe. Graph attached suggests that the wars in any part of the globe have by and large benefitted US economy. The post ‘first gulf war’ with Iraq has helped American economy to experience ‘boom’, which further instilled pseudo-confidence in the policy makers of entire western world. 

In fact, It is in this background, Bill Clinton got a legislation called Graham- Leach Bliley Act (GLBA) passed on 12 November, 1999, further unfettering the financial system to a ‘maximum level’. 

GLBA did away with most of the restrictions imposed on Banks by GSA and a ‘new era of freer and unbridled Banking industry’ ushered in. Here lies the difference between Indian and US banking.

INDIAN BANKING- RESERVE BANK OF INDIA (RBI) Act of 1934 is the corner stone of banking industry in India. Ours is also a democracy, but flavoured with a socialistic pattern.

Even in 1990s, when the Liberalisation, Privatisation and Globalisation (LPG), became new mantras of development, we did not let the Banks completely free from the clutches of the government. Narsimghan Committee formed to bring reforms in Banking sector gave its reports and the Cash reserve ratio (CRR) and statutory liquid ratio (SLR) were rescheduled. These jugglery (CRR AND SLR as per section 42 of RBI Act) for a common man is that the Banks have to keep a minimum cash with RBI and with themselves respectively, before lending and doing some other businesses. It ensures safety of depositor’s money, an element conspicuously absent in American Banks.

On contrary, in USA, the Banks can lend up to 8 dollars, as against 1 dollar deposit. Such is the risk and such is the unbridled state of affairs. This unjustifiable risk played a vital role in the ‘mortgage crisis,’ and banks after banks failed because every bank knew about other’s liquidity.

Nevertheless, this crisis came and came with great intensity. Some called it great depression, some economic tsunami and other economic slow or meltdown, but the after-effects and pains emanating from it, does not seem different owing to this different nomenclature. It would however be financially naive to prescribe remedies for what had happened, because, it is easy to write ‘prescription in retrospection’. But certainly, this does not mean that no inference is drawn from this ‘economic catastrophe’. 

It would be however be wastage of time to further analyse the causes and circumstances which led to this fiasco, but it would be great injustice to the economic history also, if some glaring aberrations and maladies of this financial order are not enunciated and diagnosed. ‘Crisis is the engine of change’; therefore, this crisis would also bring about changes in the global financial order, an order which came into existence after ‘Bretton-wood conference, It is therefore; when the global economy is facing the threat of recession and global financial order has failed, the demands are being made not only by the leaders of the developing nations but also by developed nations like UK and France to change the global financial order. 

BRETTON WOOD CONFERECE 1944- 

‘Bretton Wood system’ of monetary management came into being after a meeting attended by 730 delegates from 44 allied Nations who gathered in Mount Washington Hotel in Bretton wood, New Hampshire on 22nd July, 1944. 

This agreement led to establishment of two important financial institutions viz IMF and IBRD. This ‘duo’ played very important roles with respect to economic and financial order of the world thereafter. Although, this system sought to establish a just and equitable global financial order, it was hijacked by US and some European countries right from the outset. The IMF and IBRD (it later became 5th Wing of World Bank) failed to serve the interests of the entire globe, especially poor and developing nations. The succession list of Managing Directors suggests that no Asian has ever been made MD of IMF. These figure suggests that how the IMF is working and how is the discrepancy.

MEMBER COUNTRIES OF IMF( total members are 185) VOTING RIGHTS IN % SPECIAL DRAWING RIGHTS (SDR) million US dollar (USD)

USA 16.77 37149.30

UK 4.86 

FRANCE 4.86 

CHINA 3.66 

INDIA 1.89 4158.20

GERMANY 5.88 

AFGANISTAN 0.08 

BRAZIL 1.38 

SOUTH AFRICA 0.85 

Similarly, World Bank also failed to represent the globe in real sense of term. See the figure-

NAME OF MEMBER COUNTRIES OF WORLD BANK PERCANTAGE OF VOTING RIGHTS

USA 16.41

UK 4.31

JAPAN 7.9

GERMANY 4.5

FRANCE 4.31

The workings of world Bank has always been under severe criticism, even the chief economist of this organisation Joseph Stieglitz criticised it by saying ‘so-called free market reform policy’ is often harmful for the developing nations’. It proved correct in this crisis also. Even the ‘President of the World Bank’ is nominated by US President and the world on the other hand, has no say whatsoever, on this issue. 

So far as the monetary policy adopted during the Bretton wood conference is concerned, it was agreed upon that all nations would adopt monetary policy that would maintain the exchange rate of its currency within a fixed value in terms of gold, but it 1971, US created a unique situation by resorting to suspension of convertibility from dollars to gold and made dollar as ‘reserve currency’. Today USD has become an undeclared ‘world currency’ so much so that monetary health and even budget statements of many countries of Asia, Africa and even Europe are explained in terms of USD. Such is financial hegemony on America. Until this crisis, world was apparently comfortable with dollars, but now situation has changed, although, US is trying to convince the world that ‘it shall again be comfortable with it’, but ‘much water seems to have spilled over’ and it is ‘too late’. Demand to have a new global financial order is being made surprisingly not by Asia but by the west, the ‘trusted economic satellites’ of US.

The ‘feeble hatred’ of west is not unfounded and the roots are lying in post gulf war situation. The post 2nd Gulf war situation slanted strategic balance of power towards US, and these international financial institutions came under almost total control of the US. The eclipse of USSR in the 1990s paved the way for unipolarisation of world both militarily and financially and the financial order slanted favourably towards US.

The American military, financial and economic hegemony were by now, established totally and unquestionably. The ‘first gulf war’, ‘which actually did not take place’ as coined by Baudrillard, a French philosopher, further encouraged America which resulted in 2nd Venture of US into Iraq by Junior Bush in 2002-03. This proved ‘too costly’ for America, because it increased the war debt by 79%. Grounds were being prepared for ‘this crisis’, which unfortunately, no one including US Federal reserve could understand. This graph suggests how Europe and America have made fortunes during concerned periods. 

The crisis has surfaced all the inherent weaknesses in the liberal democratic economies based on ‘unbridled and unfettered financial order’. Now the demand for a more just and equitable global financial order is not going to halt. Brown and Sarkozy have unambiguously raised this issue and called for a ‘global summit’ in New York to discuss and find solutions to this problem. The problem emanated from America, therefore; solutions should also be found here. Bush was virtually forced to accept this proposal. Europe is hobnobbing with powers of Asia to garner support and ASEM held in China may be seen from this angle also. The developing nations are also set to raise demands of their ‘due share’ in the ‘proposed financial order’. China, India, South Africa, Brazil, South Korea etc are poised for ‘take off’. IMF and World Bank, the engine of economic development, hitherto driven by west and America, need new co-drivers, because the drivers alone have failed to drive it smoothly.

SUGGESTED CHANGES IN PROPOSED NEW GLOBAL FINACIAL ORDER (PNGFO)

Now the wheel has turned and no one can prevent change of guard. Following changes can be made so that the PNGFO fulfils aspirations of billions of under-nourished and starved people across the world-

1. IMF and World Bank’s functioning should be overhauled to make them more democratic. Voting rights of member countries should be changed and ‘bossism’ of west should go. ‘Each Nation equal vote’ theory should be enshrined into.

2. Appointments in IMF especially on the post of Managing Director (MD) should be made in a more transparent manner so that poor nations should also get a ‘comfortable say’. The system of nomination to President of World Bank by US President should be done away with.

3. World Bank and its different organisations should also undergo radical changes. The basis of percentage of voting in World Bank should be changed so that developing nations should have a ‘greater say’ in fund distribution and other administrative matters. In nut shell steps to evolve mechanism of, what Dr. Man Mohan Singh says ‘substantial increase in multilateral institutional funding of economies’ should be taken. 

4. Some short of ‘global financial regulatory body’ may be set up to ensure proper monitoring of global monetary health and to ‘inject curative drugs’ when necessary. The fate of global market can no longer be left in the hands of elements of ‘excessive financial leverage enjoyed by greedy speculators and fund managers.’

5. United Bank of Switzerland (UBS) or Swiss Bank has been depository of hundreds of trillions dollars from across the world. Corrupt politicians and big business men have used ‘Banking Act, 1934 of Switzerland’ in their favour, because this law enables this Bank to maintain secrecy with respect to money deposited into it. Tons of gold deposited during ‘Nazi’s Nuremberg trial’ can play vital role in tiding over this crisis. Time has come to amend or repeal this law altogether, so that the ‘rich men from poor nations’ cannot drain the wealth and make the citizen to suffer. 

6. Radical changes are required in WTO also. Protectionism and favouritism should be done away with. The present food crisis is likely to be metamorphosed into ‘global food crisis’ if not addressed to immediately. The ‘bio fuel’ and US role on this issue is going to create an unprecedented situation in the world very soon. It is allowed to ‘go unabated’ will be more devastating that this economic crisis also. The humanity has to decide that whether ‘vehicles would be allowed to move at the cost of poor man’s stomach’.

7. The unequal distribution of wealth and prosperity has resulted into creation of a number of economic blocks in the world. SAFTA, NAFTA, IBRA, ASEAN, SAARC, OPEC, OIC, EU etc are manifestations of growing tendencies of groupism and blocism, which ultimately are proving hindrance to free flow of trade and commerce, harming the world at last. If PNGFO addresses all such issues, such groups and blocs would render useless and prosperity would transcend to all sections and all territories across the globe.

8. If we see the graph (GDP of India, China, America etc), we find that the 16th, 17th and even 18th centuries were the time of India and China, the Asian giants. Hopefully, history would repeat itself and ‘this duo’ would occupy the driving seat of the future ‘International financial institutions’. Permanent membership in Security Council to countries like India, Brazil, Japan and Germany should be given so that this world forum may not arbitrarily be used in one country’s favour and against other. 

9. The West’s honeymoon with ‘west type liberal and free economy and American type democracy’ seems to be on the verge of divorce, therefore; world is set to emerge with new set of ‘politico-strategic-economic ideologies’ based on weltgeist, which is more equitable and less discriminatory. Market is a good servant but bad master, therefore; regulation and restriction on servant is essential.

10. Prioritisation of development has to be rescheduled, after all in spite of all sorts of sky soaring achievements, Bread, Cloth and Shelter’ would remain on the top of the list. No civil society can afford to ignore the equitable distribution of ‘these basics’ otherwise, the social fabric will tatter like what is happening today.

commission of inquiry, grave to justice and heaven for judges

INQUIRY COMMISSION
(Grave to justice and heaven for Judges)

The first part of report of Justice G.T. Nanavati Commission, which was constituted in 2001 to probe into the Godhara incident, in which one bogey of Sabarmati express was burnt carrying kar sevaks led to communal violence across many parts of Gujarat state, has sparked the chain of political reactions around Godhara again. The report has given clean chit to the Narendra Modi Government and supported the theory of conspiracy. Many call it ‘eye wash’ and other call it ‘sponsored report’. Communists have termed it a ‘piecemeal’ and fabricated report, whereas; NDA naturally, calls it ‘triumph of truth’. On the other hand, Justice U.C Banerjee Committee had indicted Narendra Modi Government for the same incident. The question is which report is true and which is not, because both reports cannot be true. Interestingly even the NHRC has pointed needle towards this report. Justice (retired) J.S.Verma has serious reservation about the report.

Keeping apart from such allegations and counter allegations, the issue has again come to fore that ‘Is Inquiry Commission a substitute of criminal prosecution? Do these Commissions serve any purpose? Is it not an eye wash? Are these Commissions able to bring culprits to book? Etc. After all, they are putting in enormous cost on public exchequer, the hard earned money of ours.

To understand the entire issue, one has to discuss the Commission of Inquiry Act, 1952 itself. Before this Act came into being, the Government used to order an inquiry by executive notifications under Public Service Inquiry Act, 1850. Sometimes, they used to enact adhoc and temporary legislations also. To meet the public demand for impartial and judicial inquiries, the Government thought to come out with a comprehensive legislation, which resulted into passage of this Commission of Inquiry Act, 1952 in 1952.

Since its enactment, the constitution of Inquiry Commissions has become a tool for the Government to white wash the public anger and delay and diverts the attention of both public as well as media.

Since Independence, more than a hundred Inquiry Commissions have been set up, but a very few have served the purpose. Reasons are obvious. First, the provisions enshrined in this Act are not of deterrent in nature and secondly, most of the time the Commissions are set up under retired Judges for obvious reasons. Section 4 the Act provides for powers and it is clear that the Commission has no power to compel a person to adduce before it and give evidence. It cannot pass verdicts or judgements which could be enforceable. The helplessness is such that when any offence is committed in view of or presence of Commission, the Commission shall forward the case to the Magistrate for trial as provided in Criminal Procedure code.

The appointment of retired Judges, as head of the Commission is very much suitable for the Government. It is not merely a chance that one Judge has headed more than one Commission. The public perception is such that these Inquiry Commissions are becoming post retirement placement schemes for the favourite retired Judges.

We have a long list of such Commissions, which have made inordinate delay in submitting their reports. Many of them have taken decades in so called’ conducting inquiries’ and even then the report which was submitted were so voluminous that we required another committee to find out ways to implement the recommendations. For example, as many as ten Commissions or committees have so far been set up with regard to the anti-Sikh riots in Delhi after the assassination of Mrs Gandhi. First of all, Marvah Commission (Ved Marvah, Addl C.P.) was set up in November, 1984. The Commission was about to finish the assigned task, but it was abruptly wounded up in May, 1985 and a new Commission headed by Justice Rangnath Misra was constituted and was asked to carry out the further inquiry hitherto done by Marvah Commission. But surprisingly the terms of reference was, to find out whether this was an organised riot only? This Commission submitted its recommendations in August, 1986 and recommended for setting up of three committees to do further work. Therefore; Kapur-Mittal Committee in February, 1987, Jain-Banerjee Committee in November, 1987, Potti-Rosa Committee in March, 1990, Jain and Agarwal Committee in December, 1990, and finally Justice G.T. Nanavati Commission in 2000 were set up. Incidentally, the same Judge was made in charge to inquire into Godhara incident.

It is needless to mention that what has happened to reports and how much amount have been spent on these exercises. Has any prominent leader been punished so far? Many persons, against whom levelled charges were being inquired into, have died. Such are the frustrating results of these Commissions and Committees. 

So far as the time and money aspect of these Commissions are concerned, one or two Commissions find special mention in this regard. One Liberhan Commission was set up under retired Justice M.S. Liberhan on 16th December, 1992 to probe into Babri mosque demolition. This Commission has so far been given more than 41 extensions and about 90 million rupees have been spent on this single man inquiry Commission. What a joke and what a mockery of this legal provision. Who cares and who dares to put a question mark on such legal exercise. 

Similarly, Justice B.N. Kripal Commission of inquiry was set up on 13th July, 1985 to probe into the bombing of Air India Flight 182 Boeing 747 on 23rd June 1985 which led to crash of this plane into Atlantic Ocean leaving 329 passengers including crew dead. The Commission submitted its report after extensive tours of countries like Canada, USA etc, but when the prosecution began, nothing could be proved and none could be punished. The entire ‘investigation and inquiry’ went in vain. It is needless again, to calculate the amount which was spent on such inquiries.

After ‘tehelka’ expose, one Phukan Commission was set up to look into it. Everyone saw the tape on television and the then Government just to avoid immediate legal course, set up this Commission. In May, 2005 the Newsweek reported that Justice Phukan along with his wife and eight officials used IAF plane and went to Pune- Mumbai and Shirdi. The Ministry later said that the Judge was not entitled to use the military plane and it was made available to him by the then government in order to influence the Judge. Such allegations and incidents definitely erode public faith in such Commissions. The situation is such every Government in power use this provision to oblige the retired judges.

In Bihar for example, one Justice Amir Das Commission was set up to probe into the alleged connections of political leaders with a banned outfit called Ranveer sena in 1997. After elapse of more than eight years, the Commission could hardly do anything except for some tours and recording of statements some leaders. It was finally wounded up in 2006. Similarly one Justice Ali Ahmed Commission was set up to look into excess withdrawal in 1996. What recommendations did it submit or what actions had been taken, hardly anyone knows. 

Commission under Justice RCP Sinha and Justice Samsul was set up on Bhagalpur communal riot in 1989. Reports were submitted in 1995. But when the new Government came to power it set up NN Singh (retired Justice) Commission to re-investigate the matter again. In 2008 one Commission under retired judge Sadanand Mukherjee was set up to probe into the Kahalgaon police firing. This commission is still a non starter vis-a-vis investigation of the incidence.

When Kosi eastern embankment was breached on 18th August, 2008, there were lot of allegations and counter allegations. The Government constituted a Commission under Rajesh Walia, again a retired Judge to probe into it. 

The question that every sensible citizen would like to ask is that, whether Commission is a substitute of criminal investigation? How can a Judge be better equipped to do forensic test, do scientific investigations than a professionally trained police officer? Has the Commission power to make arrests to the persons likely to tamper evidences? The effectiveness of the Commission or for that matter the Commission of Inquiry Act was looked into by two Judge commission, which was constituted in 1987, it gave its observations and said the Act as ‘ ineffective and toothless’.

Ours is the criminal justice system, which is based on the twin pillars of investigation and dispensation of justice. How can the Judiciary be asked to do the work of investigation, which is the work of the State as enshrined the law of the land? The Criminal Procedure Code and for that matter entire Criminal Justice System is erected on this principle and perhaps it is due to this principle, that the Judiciary and Executive have been completely separated in 1973, when the Code of Criminal Procedure was amended. After almost every police firing or so called fake encounters, the government sets up Commissions of Inquiry and tends to defer the problem so years. The list of such commissions is long and still names are being added to it. Once the commission is set up, public tends to forget the real issue and Commission embarks on an unending process of investigation, inquiry and facts finding. It took years and years in submitting the reports, which are so voluminous that it again requires some committees to suggest measures to implements the recommendations. What is the use of such reports, which themselves are not obligatory and mandatory for the Government to implement. Millions and millions of rupees have so far been spent on these nearly futile exercises, but the investigating agencies are languishing in the same state for years. Instead of modernising and equipping the investigating agencies, we go on doing cosmetic make ups. Public perception is therefore that, if the Government wants to bury the truth, it sets up a Commission. Public memory is short and it tends to forget everything. In the mean time these Commissions are becoming a post retirement engagement for Judges. Ours is an independent Judiciary and that is why Article 220 provides for restriction on practise by the retired Judges. The idea is that there should not be any scope whatsoever, of favour or disfavour by the serving Judges. By appointing the retired Judges in these Commissions or for that matter in any other body is a clear cut violation of the spirit of the Constitution itself. This type of public perception is detrimental for our democracy as well as Judiciary also. Judges should perform the duty of dispensing judgments only and not do the work of investigation; otherwise the entire edifice of our institutions would start eroding and crumbling.

BIHAR LAND POLICY ON ANVIL

LAND POLICY OF BIHAR

The Government of Bihar is coming out with a comprehensive policy namely, Bihar Land Policy, 2008. The draft in this regard has already been prepared by the Revenue and Land Reforms department and is likely to get the Cabinet’s nod within a couple of months. The proposed policy is aimed at streamlining the Land and Revenue Administration, which is already in shambles.

>‘Singur’ and ‘Nandigram’ incidents in the Communist State of W.B. have compelled both Union as well as State Governments to reconsider the existing age old land laws in general and land acquisition law in particular.

This Policy is reportedly divided in four chapters related to land acquisition, re-settlement & re-habilitation, ceiling and land management respectively.

Lands are acquired under the provisions of Land Acquisition Act, 1894 (Act 1 of 1894), which is a Central Act. As this Act has been enacted by the erstwhile Britishers, many provisions are not farmers or land owners friendly and are not congruent with the changing socio-economic and political milieu. Many people from legal luminaries say that this law is biased against the land owners and farmers. In fact, this biasness is the crux of all such problems which are being experienced in many areas including Singur and Nandigram.

This Policy seeks to provide solution to all such problems by framing ‘Ground Rules’ for acquisition. Instead of awarding monetary compensation, the land losers would be rehabilitated by re-settling lands in ‘freely surrendered urban/ semi-urban areas.’ The amount of compensation and ‘solacium’ money have already been enhanced in ‘The Bihar Land Acquisition, Rehabilitation and Re-settlement Policy, 2007, this Policy seeks to ‘institutionalise’ it and make it further investment and rehabilitation friendly. Section 11 of the Land Acquisition Act, 1894 is sought to be amended to give the Collectors more discretionary powers in matters of awarding compensations. Idea is to give ‘human face’ to whole gamut of land acquisition and land management process.

Secondly, the ‘Ground Rules’ are to be framed for re-settlement and re-habilitation to the affected persons. The Policy also seeks to provide livelihood to the land losers and agricultural labours by way of creating jobs in the vicinity of the projects. The policy seeks to constitute a ‘Grievance Redressal Mechanism’ so that the grievances are disposed off more quickly and amicably. It also seeks to make ‘Social Impact Assessment’ of the entire acquisition process and take suitable steps accordingly. The uprooted people will continue to enjoy some of the ‘rights’ like fishing, grazing etc, hitherto not permitted, once the land is finally acquired. 

This policy also seeks to make some exemptions in land ceiling laws in districts like Kisanganj, which is becoming an attractive destination for Tea Cultivators. But surprisingly, it does not say anything about the other districts. The Land Ceiling Act, 1961 has hopelessly failed in this State and there are numerous instances where people are fighting legal battles for the land given to them under this Act in 1970s itself. Moreover, the cultivation itself is fast becoming unattractive and unprofitable, therefore the very continuity of ceiling laws themselves are being questioned today. Urban Ceiling laws have been repealed in most of the States including Bihar and time has come when the entire ceiling laws should reviewed.

Lastly, the Policy seeks to introduce modern technology in Land Management. The land records in this State are hopelessly in shambles. Most of the districts do not have updated land records. The ‘Khatiyan’ or the ‘records of rights’ have had been prepared by the British Government in 1890-1914. Barring few exceptions, the State Government has not been able to complete the second survey operation known as ‘Revisional Survey’ as yet, which had started in 1960s itself. The Policy throws some light on the pathetic conditions of the land records and seeks to update it by way of application of ICT. 

But, according to the information available, the progress in the digitalisation and computerisation of land records is dismally poor. 

The Policy has comprehensively dealt this issue also and seeks to remove all such bottlenecks and make entire records digitalised within stipulated period of time.

But the experiences suggest that here bureaucracy talks more and does less. Few months ago, the Nitish Kr Government constituted one ‘Land Reform Commission’ under the chairmanship of Debvrato Bandhopadhaya, one retired IAS from W.B. cadre to look into the entire gamut of issues and suggest measures to streamline and strengthen the Land Revenue Administration. The Commission has already submitted its report few months ago, but nothing in this regard has been done so far. The bureaucracy treats this issue as ‘low priority areas’ perhaps, because offices like ‘Board of Revenue’ and ‘Land Record Directorate’ are considered as punishment postings for IAS officers. Even when the Government wants to punish some officers, they are posted in these offices. Therefore; attitudinal change has to take place before getting the policy move.

Impeachment of Judges

IMPEACHMENT OF JUDGES
(REMOVING JUDGE IS MORE DIFFICULT THAN THE GOVERNMENT ITSELF)

The letter written by the CJI (Chief Justice of India) to the PM seeking his intervention in initiating impeachment proceedings against a sitting Judge of Calcutta HC, has triggered a debate again regarding corruption in higher Judiciary and its impunities. We have seen removal of Governments and PMs so many times, but removal of HC and SC Judges has not been so far heard after the Constitution of India came into force in 1950. Independent India has however witnessed one impeachment, when Justice Shiv Prasad Sinha of Allahabad High Court was removed by the then Governor General of India, C. Rajagopalachari in 1949 on the recommendation of the Federal Court. Reasons for this situation are simple, the impunity given to the Judges in the Constitution.

The corruption in higher Judiciary and disciplinary action against the HC and SC Judges has again become talk of the day following the unprecedented move of the CJI K.G.Balakrishan in which he directly wrote to the PM that Justice Soumitra. Sen, sitting Judge of Calcutta HC be removed for his ‘Misconduct. The CJI has given detailed information about Justice Sen’s misconduct when he was appointed receiver by Justice A.N. Roy in Steel Authority of India vs. Shipping Corporation of India case in 1993.

The three Judge panel comprising A.P. Shah C.J of Madras H.C, A.K. Patnaik, CJ of MP HC and R.M. Lodha of Rajasthan HC inquired into the charges levelled against Justice Sen and found them true. The panel submitted its report in February, 2008. On March, the 16th, the Collegiums of the apex Court comprising of CJ himself, J.B.N. Agarwal and J. Asok Bhan asked Justice Sen either to resign or to opt for voluntary retirement, but the unrelenting Judge refused to comply with, which forced CJI to resort to this unprecedented move. The move is unprecedented, because neither there is any provision in the constitution about such recommendation nor before this, any CJI has taken such ‘extreme step’. In fact Article 124(4) of Indian Constitution provides for removal of HC and SC Judges. This Article says ‘A Judge of Supreme Court shall not be removed from his office except by an order of the President passed after an address by each House of Parliament supported by a majority of the total number of membership of that House and by a majority of not less than two-thirds of the members of that House present and voting has been presented to the President in the same session for such removal on the ground of proved misbehaviour or incapacity.’ There is no separate provision for removal of HC Judges and Article 217(1)(b) provides for this and says ‘ a Judge may be removed from his office by the President in the manner provided in clause(4) of Article 124 for the removal of a Judge of the Supreme Court’. This is how the processes of removal of High Court and Supreme Court Judges are the same. The above Article of the Constitution provides for impeachment, whereas; Judges (Inquiry) Act, 1968 determines the process of impeachment.

According to this Act, the impeachment of a Judge can be done only by Parliament and impeachment can be initiated after a motion addressed to the President of India is signed by at least 100 members of the Lok sabha or 50 members of Rajya Sabha. Such is the process and such is the impunity. Such Judicial impunity has been conferred on Judiciary for the sake of its independence. The idea is perhaps taken from England. The above provision is similar to the rule prevailing in England, since the Act of Settlement, 1701, to the effect that though Judges of the Superior Courts are appointed by the Crown, they do not hold office during his pleasure, but hold their office ‘on good behaviour’ and the Crown may remove them only upon a joint address from both Houses of Parliament.

Any way the credit must be given to CJI, who could take such extra-ordinary step, because after all, extra-ordinary situation demands extra-ordinary steps. But unfortunately, the government was sitting over it as it was written two months ago and could only be known to public through media. This development has again triggered a debate on corruption in higher Judiciary and its overall functioning including the appointment procedure in the higher Judiciary.

Before any debate on this issue, it should be clearly borne in mind that above cumbersome procedure of impeachment and other judicial impunities have been enshrined in the Constitution for making Judiciary independent.

INDEPENDENCE OF JUDICIARY- the independence is guaranteed our Constitution and the concept has been borrowed from the US Constitution. Article III of US Constitution guarantees Indepenendece and Supremacy of Judiciary in United States. Independence of Judiciary is the tenet of Democracy and therefore; even Russian Constitution of 1993(Chapter-7 Section 120-122) also guarantees independence of Judiciary in Russia. In fact section 124 of the Russian Constitution says ‘Judges shall posses immunity and criminal proceedings may not be brought against a Judge except as provided for by federal law.

In India, this independence and limited Judicial Supremacy are enshrined in the Constitution and are expressed in (a) Methods of appointment of Judges (b) process of impeachment and (c) power of judicial review. Now, if all these provisions of the Constitution are analysed, inference can easily be drawn that the problems lay here themselves and so do solutions.

(a) APPOINTMENT- Articles 124 and 217 provide for appointment of Judges of SC and HC respectively. They clearly stipulate that the appointments have to be made by the President in consultation with CJI. The word ‘consultation’ has been always a matter of dissent and controversy. In fact, when A.N. Ray was appointed as CJ after superseding three senior Judges namely Hegde, Grover and Shelat, there were a lot of uproar in Judicial community including the Bar council of the apex Court. They argued that Judges have been superseded owing to their judgement in Keshavanand case (AIR 1973 SC) which went against the Government. Gradually the discretion of Executive in matters of appointment of Judges started diminishing. In 1993, a land mark judgment came from Supreme Court in ‘Advocates on record vs. union of India’ case. The apex Court ruled that the recommendations for appointment of Judges in HC and SC will be made by collegiums of three Judges and shall be in a way binding on the Government. After a ‘presidential reference’, the number in the collegiums was increased from three to five. This judgment was landmark because it took virtually all discretionary powers of the Executive in matters of appointment of Judges in higher judiciary. Thus the word ‘consultation’ became ‘concurrence’. Some people in legal domain argue that it was a dangerous development and was against the principles of the Constitution itself. How can a person or a group of persons appoint themselves which goes against the ideas enshrined in Article 311? They opine that there must be a transparent and justifiable procedure for such appointments. There are instances where persons from one family are becoming Judges for two to three generations. The judicial community of higher Judiciary is becoming an elite club of few ‘privileged families’. Candidly, it is not what ‘independence’ meant for.

(b) IMPEACHMENT- The process of impeachment as discussed earlier in this Article clearly indicates, that it is a cumbersome process and this is why in 50 years of our constitution not even a single Judge could be removed. In 1991, the impeachment proceedings for removal of Justice V. Ramaswami could not be carried due to abstention of Congress party in the voting. The process of impeachment is laid down in Judges (Inquiry) Act, 1968 which says that even if the motion is accepted, the presiding officer of the House has to constitute a three Judge committee to again inquire into the matter. After receiving the report, the motion will be put to voting, which requires 2/3rd number. Thus falling of Government (no confidence motion) which requires a simple majority only, whereas; removal of a Judge requires 2/3rd majority. That is why, it is truly said that it is easier to decide the fate of 100 billion people by way of forming and toppling Governments than removing a Judge. In our country, laws have sent many ministers and bureaucrats behind the bars on charges of corruption, but what to talk of sending Judges to jails, not even a single Judge has so far been impeached. Instances of corruption in higher judiciary are not unheard of. The ‘Transparency International’ in its report of 2007 has counted judiciary as the third most corrupt institutions in India, an inference totally in contrary to the common perception.

The former CJI Y.K. Sabarwal himself is in the eyes of storm for his judgements pronounced in ‘Delhi Sealing Case’, which allegedly benefitted his son. When a report in this regard appeared in one Newspaper, a suo motto contempt proceeding was initiated and the concerned reported was sought to be punished. The Contempt of Court Act, 1971, which itself is not yet codified, is another tool which sometimes is used to gauge the voice of dissent.

In another infamous case, Vigilance department of UP Police exposed misappropriation of 23 Crore rupees from GPF account of Class III and IV employees of Ghaziabad Civil Court. One of the accused arrested in this connection, made startling revelation that he has parted the money both in cash and kind, with one sitting Judge of SC, ten Judges of HC and 23 Judges of lower Courts. The investigation is not proceeding as Police cannot interrogate Judges without the consent of SC, though such protections are not given in Judges (Inquiry) Act. The matter is still pending with the apex Court and CJI has to convince the citizens of this Nation, as to whether there is equality before the law or not. Such corruption charges are often covered beneath the carpet in the name of Judicial Independence and impunity.

Names of two Judges of Haryana High Court figured in a case in which one law officer of Haryana sent Rs 15 lakh to them. Matter has been referred to CBI by the apex Court. List is long and result is dismally naught.

It is easy preaching than done. The question being asked by common citizen that who will judge the Judges? Every one advocates for transparency and delegation of powers, but up to him only. CJI reacted sharply on provision of RTI Act by saying that it does not apply to them, as they are the Constitutional authorities. But the same authorities preach others about the benefits of RTI in detail and reprimands for not complying with the Act. Time has come to make introspection into the system so that the hope of millions of people of this country could be protected from being torn apart.

REMEDIES:

1. The provisions of RTI should be made applicable to all components of functioning of Judiciary. Accordingly, suitable amendments in RTI Act, 2005 can be made.

2. The procedure of selection of Judges should be made more transparent and justifiable. Panel of Judges can be made well in advance before recommendation and be known to public by way of websites or media. Idea of setting up of a National Judicial Commission can also be made into reality, after all if you are required to go for a test for becoming a clerk, why does selection of Judges not require any test. An all India test might also be conducted to select Judges of Higher judiciary.

3. The Government is sitting over the Judges (inquiry) bill, 2006 for more than two years, therefore it should be passed, but before that necessary amendments are required, because the concept of ‘brother judges’ doing inquiry has proved ineffective if not futile.

4. The contempt of Court Act, 1971 be amended suitably, because healthy criticism of any institution is generally beneficial for the system itself in the long run. The Judiciary should prepare itself for listening to its criticism and bring about change by itself, a change though painful but helpful.

Indian Economy, Robust economy with tattering masses

Indian Economy has been moving with a great speed for more than a decade. It has registered a growth of 8-9 % last two consecutive fiscal years, although, it is expected a slow down this financial year, but it is certainly going to be near 8%. Many people of new generation might not appreciate this phenomenal growth because they tend to compare these figures with countries like US, UK, Japan, Germany France etc., but if we make retrospection into 1950s and 1960s, only then we realise the difference. For example, in 1960 India’s per capita income was 73 US dollars, whereas; in the same period that of Thailand was 92 US dollars. In 1991, it rose to 300 US dollars and in 2004; it further rose to 500 US dollars. The per capita income is expected to touch 1500 US dollars in 2020 in today’s dollars. Now the so called ‘Hindu rate of growth’ myth is allayed.

When Budget is presented in the Indian parliament, the entire world loves to watch it, so much so that even the Sensex of the Wall Street gets affected by the speech of the FM of India. Such an achievement, by no means can be under estimated. So far as the growth of Indian Economy is concerned, the FM said in his Union Budget speech that in the last three years GDP is increased by 7.5%, 9.4% and 9.6% i.e. an average increase is about 8.8%. Almost every sector of the Economy, the growth has been nothing short of spectacular. For example, the Industries sector registered about 10.6 %, Service sector 10.4 and Non-agriculture sector registered 10.4% growth in the 2007-08. But the Agriculture sector’s performance in this regard is dismal, it is only 2.5%. If we look at the picture of area wise performance of these sectors, at least the economic indicators are very encouraging. If we see the Sector wise developments for 2007-08, the indicators are very satisfactory. Agricultural production, for example is about 219 million tonnes, decisively more than the previous year, thanks to favourable monsoon and hard labour of our farmers. Similarly, other sectors of economy also, are making the same kind of success story. The Service sector and especially the IT sector, has been writing spectacular success stories year after year. The IT professionals of India are now second to none. This Sector has been the key driver of growth in recent years, but not so much so in 2006-07, when industry and services contributed in like fashion to GDP growth. Growth in the service sector was 9.6 and 9.8% in 2004-05 and 2005-06. It picked up to 11.0% in 2006-07. The rapid growth communication and transportation in this country are gearing up the economic growth to much accelerated speed.

Railways, hitherto the ‘White Elephant’ of Indian Government has made a turn around. The operating ratio has been brought down from 1.02 to 78.03. In non-technical terms the cost of running railways has been considerably reduced. The deficit has been overcome and profit has been made. According the budget speech made by Lalu Prasad, the Railway Minister, the Railways has earned a profit of more than 20,000 crore rupees. Indian Railways has carried more than 728 MT of revenue cargo in the year 2006-07 recording a growth of 9.2% over previous year. Ministry of Railways is constructing ‘dedicated freight corridor’ to further increase the freight carriage. These are the success stories of Railways which is considerably contributing to the robust growth of Indian Economy. 

MANUFACTURING SECTOR- on the other hand is again doing well. The growth of GDP arising in this sector jumped to 12.3% in 2006-07 from 9.1% in the previous year and 8.7% in the year prior to that (i.e. in 2005-06). Overall GDP grew by 7.5% and 9.0% respectively in these two years, indicating the relatively larger contribution of manufacturing, and industry more generally, to the current heightened pace of economic expansion. 

ENERGY- Any developing economy would require energy to sustain and move forward the pace of social and economic development.

OTHER CONTRADICTIONS-

1-According to the FAO, number of hungry people in India has increased by 19 million between1991 to 2001. Nearly half the children are chronically malnourished. 

2-India has largest number of medical colleges in the world and is among the largest producers of doctors. We have now more than 20000 hospitals whereas; it was 2717 in 1951, 11174 in 1991 and 18218 in 2001. Approximately 15000 new doctors qualify every year. Paradox is that about five lakh people die from tuberculosis every year. This number is almost unchanged since independence! Almost two million cases of malaria are reported every year and are not decreasing.

3- Largest number of children in India is undernourished and they do not get adequate food to eat. According to 2001 census the infant mortality rate is 64/1000 and access to sanitation facilities is only 28%

4- India is the 4th largest producer of medicine in the world and also a large exporter of It., whereas; DPT coverage is only 55%. Number of T.B patients in India is 5 million and number of deaths due to T.B is nearly 4, 50,000(2004-05). This is the paradox in which we live.

5- The condition of children of this giant economy is far from satisfactory. According to one estimate, number of children who died before the age of 5 yrs is 63 out of 1000 . The condition of tribal children is much more precarious. In Orissa for example, number of children (below 3 yrs) severely malnourished is 21%. In Maharashtra number of tribal children who died in 2003-04 under 6 yrs of age due to malnutrition is 9000. The number of doctors in this country is only 48 in every one lakh population, which is very less in comparison with other developed nations.

These are some indicators which cry about glaring contradictions in Indian Economy. One quarter of world population is poor and according to one estimate, there are about 200 million slums in India. Dharavi in Mumbai is the biggest slum of the world. More than 40% of Indian family live in single room, whereas; Mukesh Ambani has constructed the biggest house in the world which costs about 700 crore rupees. What a contrast! 

MENIFESTATIONS OF THESE CONTRADICTIONS IN PARADOXES- even after such robust growth in Industry, construction, service and other such sectors, the growth in agriculture sector remained far from satisfaction.

The growth in agriculture sector, though lower than in the non-agriculture, nevertheless remained higher than the growth of population in 1950s. For example, the population growth during 1951-2006 was on an average 2.1%, whereas; during the same period the growth in agricultural food production was on an average 2.5%. It is perhaps due to this reason, that during this period we were, except few exceptions, self sufficient in this area. This equilibrium started showing signs of disturbance after 1990s, not incidentally when liberalisation era was ushered. With the advent of LPG , the agriculture sector gradually became victim of government’s apathy. It was during this period the food grain production started showing signs of down ward trend. In the beginning of 21st century, the production of food grains remained at 1.2% whereas; population growth came down only to 1.9%. Due to this mismatch in food production and its consumption, the Indian Economy started showing aberrations which could not precipitate till 2007-08. The data available with the Ministry of Agriculture, the per capita availability of food grains in 1990-91 was 468 grams, which declined to 419 grams in 2005-06 registering 13% decline. The euphoria of Liberalisation, Privatisation and globalisation (LPG) was such that the required amount of attention towards agriculture was/is not paid resulting in a decline of 0.26% in cultivation area over a period of 16 years. Even the cropping pattern underwent remarkable change. People in many areas switched over to commercial and cash crops. For example farmers in the states like A.P., Maharashtra, Tamilnadu some parts of Kerala switched over to cotton crop. They went on using hybrid seeds like B2 cotton indiscriminately in order to get more and more yield. Initially, all went well but gradually the problem precipitated. The cost of production soared and farmers were indebted. In absence of well a pronounced and properly implemented credit policy of Banks, the farmers were trapped in the web of money lenders. Results are devastating. More than one lakh of farmers have so far committed suicide in these areas. Situation in areas like Bidharbha, Telengana etc is very pitiable. The government came out with a loan waver policy in 2008-09 budget presented in the parliament, but it too, is not proving effecting in bringing down the cases of suicides in these areas.

According to NSSO , about 1/3rd or 200 million rural Indian populations spend only 12 rupees/ a day and consume only 12 kilograms of cereals per month. 

The urban areas are also far from good. According to reports of NSSO, urban poor consumes only 10 kilograms of cereals per month, whereas; an average rich in Delhi spends rupees1, 40,000 on wedding reception. Such is the paradox and such is the gap.

The data regarding glaring inequalities are numerous and difficult to arrange but the picture is clear. The gap between rich and poor is increasing with enormous speed. The inter-personal and inter-regional gap in economic prosperity is widening with a great speed. The rich are plucking flowers, whereas; thorns are pricking the poor. All attempts in this regard have failed to yield desired results. When India registered 8-9% growth rate, many people called it ‘robust’, ‘remarkable’ and ‘excellent’ but few called it ‘over heating of economy’. Such high speed and pace of economic growth, if allowed to go unabated without equitable distribution would precipitate in catastrophic consequences. This is the reason why the discrepancies in our economy are manifesting in different social, economic and political forms. 

RISING INFLATION- The inflation is rising and so are the prices essential commodities. The figure has reached all time high in 16 years. National and international debates have started on this issue. The rise in crude oil prices led to price rise of Petrol and diesel in many parts of the world including India. Protests in many parts of Europe became major concern for the governments. A summit to end the food crisis was held in Rome and discussions were held. The entire world leaders were unanimous at least on a point that, if they fail to feed the poor population of their country, the very roots of democracy would be at stake. We cannot allow vehicles to run at the cost of hungry people. We cannot follow the American pattern where 15% of the land is used for bio-fuel. They even destroy their farm yields to maintain market price. This is causing serious food scarcity all across the world. Such is the magnitude of problem. India is not an exception to it. If we follow the European and American model with closed eyes and folded hands, we will have to face much harsh and tough times in years to come. The bio-fuel is not only a fuel of vehicle; rather it is the blood of poor people across the world. 

Therefore, it is the right time when our policy maker will have to think twice and thrice that what ways they would evolve to lessen the gap between rich and poor. The glaring and abhorring contradictions in the economy would mar all the achievements which we had made during these years. If rich are moving in lememosine, the poor should be allowed to move in the buses also. If the HNIs spend crores on wedding, the daughter of poor should not be allowed to be sold due to economic hardships. Corporate Hospitals are here to cater to needs of big businessmen and babus, but Government Hospitals should also properly run so that no one dies for want of life saving drugs. Sky soaring buildings of Public Schools with air-conditioned class rooms are no harm to the society, but government schools should have at least wooden benches and hand pumps. The mushroom like growth of English schools in every streets of every town and city are perhaps due to failure of government educational institutions. It is said that if legal ways are closed, people take recourse of illegal means. Similarly when government fails to deliver, so called NGOs come and usurp the position hitherto legally meant for government agencies.

If India has to stand tall amidst the developed Nations, it has to ensure that the sharp differences are blurred and gaps plugged, or else we will go on creating ‘oasis’ in ‘deserts’.