Burning Bluchistan

Pragati
The Indian National Interest Review

August 2013 www.nationalinterest.in
A Burning Balochistan
Urdu poetry in Indias freedom movement Securing Indias cyberspace Bypassing the states
1
A clean air policy
Pragati- The Indian National Interest Review
Reforming labour laws
PERSPECTIVE
12 THE (WRONG) BATTLE FOR THE RUPEE
It is best to leave the rupee to go where it has to go, and take steps that address the problem, not the symptom Deepak Shenoy
39 LABOUR RESTRICTIONS: BREAKING SIX DECADES OF DEADLOCK

Initiatives to push the dynamics in the labour market to force regulatory practices to adapt to evolving economic and socio-political structures Hemal Shah
43 CONFUSION REIGNS
It is unclear as to which objective of RBI has been achieved with its recent announcements V Anantha Nageswaran
15 A CLEAN AIR POLICY

Pollution equals death, disease and economic burden Vivek Sengupta
18 SECURING INDIAS CYBERSPACE

India should enhance its domestic capabilities in cybersecurity, in terms of the development of institutional, legislative and technical mechanisms, and create a base of skilled professionals supporting government and private efforts to secure cyberspace Rohan Joshi
46 CONFLICT MINERALS TRADE IN INDIA

There is an opportunity for India to build a governance structure that can help end the trade in blood minerals and also protect its long-term business interests and indicate its legitimacy as a responsible state David Kepes
22 BYPASSING THE STATES

Can Parliament pre-empt state government resources through rights laws? M R Madhavan
BOOKS
50 DEMOCRACY AND THE ROLE OF THE CITIZEN ELITE
To uplift each and every citizen, the citizen elite should consciously attack the impediments and constantly engage with the state policies. Krupakar Manukonda
25 SLEEPING WITH THE ENEMY

Can the Congress and the BJP get together in a grand coalition and form a national government to reset India on the path to prosperity? Narayan Ramachandran
29 CLARITY BEGINS AT HOME

It is only through stepping up domestic production and improving technology, that India will attain self-reliance in energy Ameya Nayak
HIGHLIGHTS 4 BALOCHISTAN-- A BLIND SPOT

Removal of deeply embedded gender disparity in our education system needs a sustained effort from all social and political institutions
Priya Ravichandran
IN DEPTH
32 PAKISTANS POLITICAL PICTURE
The emerging contours of post-election politics in Pakistan raise the potential for sharper political conflicts should the PML-N push its formal powers past their contestable limits Colin Cookman
35 THE BACKWARD VISION

Nitish Kumars vision of a backward state for Bihar will only perpetuate poverty and dependency. Mukul Asher
9 INQILAAB ZINDABAAD
The role of Urdu poetry in the Indian independence movement
Rana Safvi
CONTRIBUTORS
Priya Ravichandran is Programme Manager for the GCPP programme at the Takshashila Institution
Priya&Ravichandran
Published by the Takshashila Institution, an independent think tank on Indias strategic affairs. Some rights reserved. This work is licensed under the Creative Commons Attribution 2.5 India License. Advisory Panel Mukul G Asher Sameer Jain Amey V Laud V Anantha Nageswaran Ram Narayanan Sameer Wagle Editors Nitin Pai Sushant K Singh Assistant Editor Sarah Farooqui Acknowledgements Josh Work (zippy) Contact [email protected] pragati.nationalinterest.in Neither Pragati nor The Indian National Interest website are afliated with any political party or platform. The views expressed in this publication are personal opinions of the contributors and not those of their employers or of Pragati. We accept letters and unsolicited manuscripts. Community Edition Pragati (ISSN 0973-8460) is available for free download at pragati.nationalinterest.in This edition may be freely distributed (in its complete form) through both electronic and non-electronic means. You are encouraged to share your copy with your local community.
Rana&Safvi Rana Safvi is the founder and moderator of #Shair , a forum for poetry lovers on Twitter
Deepak Shenoy writes at capitalmind and runs MarketVision, a financial education company
Deepak&Shenoy
Vivek Sengupta is Founder and Chief Executive of the consulting firm Moving Finger Communications. Rohan Joshi is a Fellow at the Takshashila Institution MR Madhavan is President of PRS Legislative Research
Vivek&Sengupta
Rohan&Joshi
M&R&Madhavan
Narayan Ramachandran is Fellow for Economics, Inclusion & Governance at the Takshashila Institution Ameya Nayak is a Takshashila Scholar
Narayan&Ramachandran
Ameya&Nayak
Colin Cookman is a political analyst focusing on Pakistan and the region, and a masters student at Johns Hopkins-SAIS
Colin&Cookman
Mukul Asher is Professorial Fellow at the National University of Singapore and Councillor at the Takshashila Institution
&&&&&Mukul&Asher
Hemal Shah recently completed this report, while a scholar at the Takshashila Institution. She is now a research assistant at the American Enterprise Institute in Washington, DC V Anantha Nageswaran is the Fellow for Geoeconomics at the Takshashila Institution
Hemal&Shah& &
V&Anantha&Nageswaran
David Kepes is a journalist and a member of Be Smart, an NGO that examines the contemporary trade in conflict minerals Krupakar Manukonda works on education policy at Takshashila Institution and blogs at Pratyaya
David&Kepes
Krupakar&Manukonda
PRIYA&RAVICHANDRAN Priya Ravichandran is Programme Manager for the GCPP programme at the Takshashila Institution.
PERSPECTIVE Brewhouse
Balochistan A blind spot
Removal of deeply embedded gender disparity in our education system needs a sustained effort from all social and political institutions.
Baluchistan
The&tragedy&of&Balochistan&can&be& explained&in&numbers.&Since&the& beginning&of&this&decade,&Balochistan& has&seen&200,000&displaced,&4,000&Shias& systematically&cornered&and&killed&and& over&23,000&missingmost&thought&to&be& tortured&and&killed.&But&the&greater& tragedy&of&Balochistan&lies&in&its&absence& from&all&national&and&international& discourse,&kind&courtesy&Pakistan.&It&is& not&that&liLle&aLention&is&being&paid&to& the&gross&human&rights&violations& currently&taking&place&in&the&province.&It& is&that&in&more&than&six&decades&of&its&
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existence&as&a&baLered&province&of& Pakistan,&not&once&has&Balochistans& cause&been&emphatically&raised&in&the& international&space.&The&genocide&has& gone&on&unquestioned&and&unheard. Since&its&forced&amalgamation&in&1947&to& the&newly&independent&Pakistan,& Balochistan&has&fought&o&the&Punjabi& dominated&Pakistani&state&four&times.& And&each&time,&the&Baloch&have&been& put&down&brutally&by&the&Pakistan&army.& 1948,&1958&and&1962&saw&the&Pakistani& state&violently&squash&the&vestiges&of&the& Baloch&movement.&These&military&
operations&were&accompanied&by& supercial&conciliatory&stances&that& Pakistan&hoped&would&assuage&the& demand&of&an&independent&Baloch&state.& But&the&most&vicious&military&crackdown& followed&the&dismissal&of&the&civilian& government&in&QueLa&in&1973&by&ZA& BhuLo&under&trumped&up&charges&of& treason.&It&was&led&by&the&infamous& General&Tikka&Khan,&the&Butcher&of& Balochistan.&80,000&troops&took&over&the& province&to&quash&the&strong&resistance& movement&led&by&the&Marri&and&Bugti& leaders.&More&than&8,000&Baloch&lost& their&lives&at&the&hands&of&the&Pakistan& Army.&It&ended&in&1977&with&some& dubious&promises&and&imposition&of& martial&law&by&Ziaùl`Haq,&who&had& earlier&ousted&BhuLo&in&a&coup.
situation&to&head.&This&war&is&now&in&its& eighth&year.&A&50,000&strong&Frontier& Corps&(FC)&mans&a&province&that&has&less& than&ve&percent&of&Pakistans& population.&Murder&of&journalists,& teachers,&doctors,&healthcare&workers& and&NGO&workers&have&become& common&place&as&have&disappearances,& abductions,&death&threats,&torture&and& maimed&dead&bodies&of&the&innocent& Baloch.&Most&of&these&have&been& aLributed&to&the&FC&and&the&army.& Despite&sporadic&interventions&by&the& judiciary,&few&of&these&cases&have&been& investigated&into&and&no&arrests&have& been&made. Even&the&recent&elections,&that&placed&Dr& Abdul&Malik&Baloch&as&the&Chief& Minister&of&the&province,&have&made& liLle&dierence&to&the&status%quo.&With& abysmal&voter&turnout&in&most& constituencies&(including&a&less&than&1& percent&turnout&in&one),&the&elections& carried&liLle&credibility.&The&polling&sta& refused&to&man&many&polling&stations& and&more&than&20&bodies&were&found,& dumped&after&torture,&during&the&polling& phase.&Much&was&made&of&Abdul& Balochs&middle&class&credentials&in&the& Pakistani&media&even&though&he&carried& liLle&credibility&with&the&Baloch.&That& credibility&has&further&declined&after&he& made&compromises,&allowing&Islamabad& to&exert&more&control&over&the&provinces& resources&without&addressing&the& grievances&of&the&Baloch&people. The&economic&numbers&that&trickle&out& of&Balochistan&tell&more&gruesome& stories&than&those&of&the&dead&and&the& disappeared.&Spanning&44&percent&of& Pakistans&land&area,&Balochistan&is&home& to&a&variety&of&resources&including&the& second&largest&copper&and&gold&mines&in& the&world.&It&has&iron&reserves&of&more& than&200&million&tonnes&and&copper&
!It!is!that!in!more!than! six!decades!of!its! existence!as!a!battered! province!of!Pakistan,! not!once!has! Balochistans!cause! been!emphatically! raised!in!the! international!space.!

The&current&resistance&movement&for&an& independent&Balochistan&began&in&2005,& triggered&by&the&gang&rape&of&a&Baloch& lady&doctor,&stationed&at&Sui,&by&an&army& major.&Two&subsequent&events,&both& ordered&by&Musharrafthe&murder&of& Balochistans&much&respected&ex` governor&Akbar&Bugti&by&Pakistan&army& in&2005&and&the&abduction&and&torture&of& Baloch&National&Movement&(BNM)& President&Ghulam&Baloch&brought&the&
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reserves&of&over&1.2&billion&tonnes.&The& Sui&and&Dera&Bugti&regions&account&for& almost&19&trillion&cubic&feet&of&proven& gas&reserves.&The&federal&government&of& Pakistan&and&the&Metallurgical& Construction&Company&(MCC)&of&China& have&bestowed&on&themselves&the& legitimacy&to&own,&operate,&produce&and& buy&these&resources,&thereby&depriving& the&Baloch&of&their&own&wealth.&With& control&of&two&of&its&biggest&natural& resources,&China&has&made&deep&inroads& into&Balochistan.&It&controls&the&copper& mines&of&Saindak&and&the&lead&and&zinc& mines&of&Duddar,&Lasbela.&Pakistan& recently&handed&over&the&Gwadar&port& to&China&and&has&also&unveiled&plans&for& the&construction&of&a&Gwadar`Kashgar& highway&with&Chinese&investment.&This& highway&will&provide&China&unfeLered& access&to&the&best&of&Baloch&resources,& while&the&Baloch&themselves&will&earn& nothing&from&the&deal.&This&coming&of& Chinese&corporations&and&their& labourers&has&resulted&in&the&Baloch& losing&ownership&of&their&land,&access&to& their&resources,&and&all&hopes&of&a&beLer& future. Despite&its&vast&reservoirs&of&natural& resources,&severe&economic&exploitation& by&Pakistan&has&resulted&in&Balochistan& becoming&one&of&the&poorest&in&that& country.&Plagued&by&low&income&and& high&unemployment,&46&percent&of&the& population&in&Balochistan&lives&below& the&poverty&line.&A&severe&water&crisis& has&crippled&agriculture&in&the&province.& The&ongoing&energy&crisis&only& underlines&the&fact&that&Balochistans& resources&have&failed&to&benet&its& people.&Balochistan&is&at&the&lowest& possible&measures&on&Human& Development&Indices.&34&percent&of&the& women&in&Balochistan&die&of& malnutrition&while&it&has&an&infant&death& rate&of&130&per&1000&live&births.&The&
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province&has&a&literacy&rate&of&37& percent,&with&female&literacy&down&to&a& mere&27&percent.&Over&300&schools&have& been&closed,&teachers&threatened&and& killed.&Health&workers&are&a&rarity&and& the&increasing&Islamisation&of&a& historically&secular&province&has&led&to& women&being&pushed&into&the&fringes&of& society. The&Islamisation&and&the&rise&of&radical& Sunni&outtsfuelled&by&the&increasing& inuence&of&the&Deobandi&School&of& thoughthave&destroyed&the&social& fabric&of&Balochistan.&The&public&and& unpunished&elimination&of&minorities,& particularly&the&Shia&Hazaras,&brings&to& mind&the&images&of&Nazi&Germany&at&its& worst.&The&Lashkar,%e,%Jhangvi&(LeJ),&with& its&avowed&goal&of&eliminating&Shias& from&Pakistan,&has&been&systematically& working&its&way&through&Balochistan& torturing&and&murdering&Shias.&The& brazenness&with&which&LeJ&operates,& without&being&taken&to&task&by&any&of& Pakistans&institutions,&indicates&tacit& acceptance&by&the&state&if&not&active& connivance.&By&censoring&their&media& coverage&and&labelling&these&genocides& as&foreign&conspiracies,&Pakistani& ocials&are&able&to&keep&the&truth& hidden&from&the&outside&world. Currently,&there&are&two&wars&being& fought&in&Balochistan.&One&by&the& government&against&the&Baloch& nationalists&that&involves&the&army,&the& ISI&and&other&agencies,&and&the&other&by& publicly&validated&terrorist&outts&like& the&LeJ&and&its&sister&organisations,& seeking&to&annihilate&Shias.&Pakistan&has& repeatedly&aLempted&to&tarnish&the& secular&and&political&nature&of&the& nationalist&movement&while&granting& platforms&to&recognised&terrorist&outts.& In&fact,&it&is&widely&accepted&that& Pakistani&agencies&are&using&these&
sectarian&terrorist&outts&to&target&the& nationalist&movement.&The&price&for&this& proxy&war&is&being&paid&by&the&ordinary& Baloch.&The&harrowing&tales&of&ordinary& Baloch&taking&arduous&boat&journeys&to& Australia&are&a&result&of&their& compulsion&to&escape&the&brutality&of&the& Pakistani&state&and&savagery&of&these& terrorist&organisations. There&is&a&need&to&look&beyond&the& violent&policies&of&successive&Pakistani& governments&and&address&the&core& issue`the&genocide&that&masquerades&as& kill&and&dump,&sectarian&violence,& armed&resistance,&foreign&sponsored& militia&and&many&other&euphemismsall& aimed&at&destroying&a&group&that&shares& the&Baloch&identity.&After&all,&the& convention&on&the&prevention&and& punishment&of&the&crime&of&genocide& denes&genocide&as&acts&commiLed& with&intent&to&destroy,&in&whole&or&in& part,&a&national,&ethnical,&racial&or& religious&group. In&an&eerie&throwback&to&what&happened& in&East&Pakistan,&the&international& communitys&reluctance&to&talk&about&the & ongoing&genocide&in&Balochistan&is& inexcusable.&Neither&publicly&nor& privately&have&the&United&States,&the& European&Union&and&the&United&Nations & raised&the&subject&with&Pakistan.& Obamas&much&touted&Atrocities& Prevention&Board&(APB)&does&not& mention&Balochistan&as&a&cause&of& concern,&neither&does&the&international& NGO,&Global&Center&for&Responsibility& to&Protect&(GCR2P). The&nomination&of&Samantha&Power&as& the&US&ambassador&to&the&UN&was&a& source&of&great&hope.&As&one&of&the& pioneers&of&the&Responsibility&to&Protect& (R2P)&doctrine,&her&work&on&genocide& has&aLracted&much&aLention&worldwide.& There&was&some&hope&that&she&would&
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use&her&ambassadorial&position&to&bring& aLention&to&Balochistan.&Those&hopes& have&been&belied&so&far.&Her& conrmation&hearings&covered&ground& on&Syria,&Rwanda&and&Myanmar&but& there&was&no&mention&of&Balochistan.& Regardless&of&the&controversies& surrounding&the&R2P&and&the&use&of&the& Power&of&Protection,&the&fact&that&not&a& single&country&stood&up&to&take&the& cause&of&Balochistan&in&the&international& arena&is&despicable.&What&credibility&do& the&exhortations&of&the&White&House&to& secure&an&international&stance&against& atrocities&commiLed&by&a&state&against& its&own&people&carry&when&Balochistan& is&missing&from&that&discussion?
Despite!its!vast! reservoirs!of!natural! resources,!severe! economic!exploitation! by!Pakistan!has! resulted!in!Balochistan! becoming!one!of!the! poorest!in!that!country.

The&World&Bank,&IMF&and&the&ADB&have & approved&loans&of&more&than&5&billion& US&dollars&for&Pakistan.&This&money&is& aimed&at&poverty&alleviation&and& boosting&growth.&Balochistan,&repressed& by&the&state,&has&only&seen&poverty&and& violence&grow.&For&many&years,&the& World&Bank&Group&considered&human& rights&to&be&political&activities&outside& its&mandate,&but&this&has&changed&now.& Currently,&the&World&Bank&Groups& ocial&position&is&that&it&may&play&a& facilitative&role&in&helping&its&members& realise&their&human&rights&obligations.& This&changed&position&is&however&not& reected&in&its&dealings&with&Pakistan.
To&continue&to&give&aid,&very&generously,& without&bringing&Pakistan&to&task&on&its& atrocities&is&irresponsible.&Hiding&behind& the&veil&of&nonìnterference&in&a& countrys&political&aairs&and&continuing& to&pump&in&money&that&never&reaches& the&intended&is&to&be&complicit&in&a& countrys&act&to&eliminate&an&entire& group.&A&greater&push&from&countries& like&the&US,&which&has&the&decisive&vote& share&in&these&institutions,&and&countries& like&India&with&their&commitment&to& democracy&and&peace&in&the&region&can& help.&The&World&Bank&and&the&IMF&have& to&strengthen&their&policies&and&stop& aiding&countries&that&openly&undertake& genocide. Unfortunately,&India&too&has&left&a&lot&to& be&desired&in&its&stance&on&Balochistan.& Indias&position&of&nonìnterference&in& another&countrys&internal&aairs&is&not& new,&but&its&no&stance&and&no& comment&policy&on&Balochistan&is& inhuman&and&negative.&For&a&country& that&has&had&its&media,&intellectuals,& politicians&and&NGOs&take&up&the&plight& of&the&Sri&Lankan&Tamils,&Tibetans,& Afghan&Sikhs&and&the&Rohingya& Muslims,&the&silence&on&Balochistan&is& deafening.&The&Indian&government,& operating&well&within&its&diplomatic& bounds,&can&encourage&NGOs&and&other& private&entities&to&bring&the&voices&of&the& marginalised&and&hunted&in&Balochistan& to&the&fore.&India&needs&to&push&for&a& stronger&action&to&prevent&this&genocide
&from&spinning&out&of&control.&With& some&urging&from&the&opinion`makers,& the&Indian&media&can&be&pushed&for& greater&global&recognition&of&conicts,& particularly&those&like&Balochistan,&that& dont&usually&interest&Western&media& networks. For&the&beLer&part&of&its&existence&as&a& province&of&Pakistan,&Balochistan&has& been&ghting&its&war&behind&closed& doors.&It&hasnt&helped&that&the&historical& narratives&about&Pakistan&have&been& geared&towards&its&conict&with&its& neighbours&or&its&teetering&democratic& movement.&The&imminent&withdrawal&of& the&US&from&Afghanistan&and&the&need& to&coòperate&with&a&moody&Pakistan&to& ensure&a&semblance&of&stability&in&the& region&has&made&the&West&turn&a&blind& eye&to&the&many&humanitarian&crises& within&Pakistan.&The&West&would&rather& have&a&supercially&stable&and&friendly& state&than&do&the&right&thing&by&bringing& it&to&task&for&its&state`sponsored& genocide. The&time&is&though&running&out&for&the& Baloch&and&for&the&Shias.&To&continue&to& turn&away&every&time&a&Shia&Hazara&is& dragged&out&of&his&house&and&shot&or&to& not&respond&when&a&Baloch&disappears& and&turns&up&tortured,&maimed&and& dead&is&no&longer&an&option.&The& international&community&risks&the& numbers&becoming&a&statistic&if&this& tragedy&continues.&Balochistan&needs& aLention&now.
PERSPECTIVE
RANA&SAFVI Rana Safvi is the founder and moderator of #Shair , a forum for poetry lovers on Twitter.
Inqilaab Zindabad
The role of Urdu poetry in the Indian independence movement.
Rajkumar1220
Any&struggle&across&the&world&for& freedom&or&rights&reverberates&with&We & shall&overcome.&It&was&the&unocial& anthem&of&the&AfricanÀmerican&Civil& Rights&Movement&in&the&United&States.& In&the&subcontinent,&that&honour&would& go&to&Inqilaab%Zindabad.&It&was&the&poet& Hasrat&Mohani&(1875&&1951)&who&coined& the&phrase&Inqilaab%Zindabad,&which& became&the&chant&of&Indian& revolutionaries.&Though&Mohani&is& remembered&today&for&his&romantic& ghazal&Chupke%chupke%raat%din,&his&poetry& reected&his&passionate&love&for&his& country&and&his&goal&of&total&freedom& from&the&British&rule.&He&was&in&fact&the& rst&person&to&demand%Azadi,e,Kaamil&or& complete&independence&for&India&in& 1921.
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Rasm%e%jafa%kaamyaab%dekhiye%kab%tak%rahe, Hubb%e%watan%mast%e%khwaab%kab%tak%rahe, Daulat%e%Hindustan%qabzah%e%aghyar%mein Be%adad%o%be%hisaab%dekhiye%kab%tak%rahe! (How&long&will&tyranny&succeed,&let&us& see Till&when&will&freedom&be&a&dream*,&let& us&see Hindustans&riches&are&in&the&clutches&of& plunderers Till&When&will&this&continue,&let&us&see) [*dream&here&alludes&to&awakening&of& Indians&from&their&slumber] Art&and&literatureand&in&particular,& revolutionary&poetryhave&always& played&a&signicant&role&in&any& movement&for&independence.&African&& American&protest&poetry&is&accepted&as&a &
complete&genre&in&itself.&Yet&bar&a&few& books&in&Urduwhich&means&limited& readershipthe&role&of&Urdu&poetry&and& poets&in&Indias&freedom&struggle&has& been&sadly&neglected.&Urdu&poetry&is& renowned&for&its&romantic&ghazals&and&it& has&unfortunately&become&the&victim&of& its&own&image.&We&rarely&read&about&the& inspirational%nazms&and&ghazals&wriLen& on&social&issues&of&the&day. Whether&it&is&Sarfaroshi%ki%tamanna%ab% hamaare%dil%mein%hai,&which&Bhagat&Singh,& Raj&Guru&and&Sukhdev&were&humming& as&they&marched&to&the&gallows&or& Allama&Iqbals&Saare%jahan%se%achcha% Hindustaan%hamaara,&which&became&an& anthem&of&the&freedom&struggle,&Urdu& poetry&played&a&huge&role&in&our& freedom&struggle.&The&most&well`known& poets&of&our&freedom&struggle&in&the&last& century&were&Altaf&Hussain&Hali,&Brij& Narain&Chakbast,&Hasrat&Mohani,&Zafar& Ali&Khan,&Mohd&Ali&Jauhar&and&his& brothers&Shoukat&Ali,&Allama&Iqbal,& Durga&Sahai,&Suroor&Jahanabadi&and& Trilok&Chand&Mehroom. The&rst&major&poet&to&put&forward&the& theory&that&literature&should&be& harnessed&into&the&service&of&the& community&was&Altaf&Hussain&Hali& (18371914).&He&used&poetry&to&advance& the&cause&of&social&welfare&and& beLerment.&His&poem&Hub%e%Watan& emphasised&the&virtues&of&patriotism& and&became&very&popular&with&children. Teri%ek%musht%e%khaak%ke%badle Luun%naa%hargis%agar%bahisht%mile (In&lieu&of&one&stful&of&your&dust Refusal&of&Paradise&in&exchange&is&for& me&a&must) Though&Akbar&Allahabadi&(1846&1921)& was&a&leading&intellectual&of&his&time,&his & satirical&style&of&writing&meant&that&often& people&didnt&get&the&very&deep,&
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underlying&philosophical&message&in&his& words.&The&initial&years&of&Mahatma& Gandhis&peaceful&movement&coincided& with&Akbars&later&years.&He&embraced& Gandhian&philosophy&and&worked&hard& to&bridge&the&gap&between&Hindus&and& Muslims,&which&was&widening&in&the& early&twentieth&century.
Urdu!poetry!has! witnessed!and! recorded!the!struggle! for!Indian! Independence!since! 1857.!

Budhu%miyan%bhi%hazrat,e,Gandhi%ke%saath% hain, Go%khaak,e,raah%hain%magar%aandhi%ke%saath% hain (Even&those&without&much&sense&are& convinced&by&Gandhi, They&may&be&specks&of&dust&but&are&with& this&&powerful&philosophy) Chandrashekhar&Azad&(1906&1931)&was& a&mentor&to&many&revolutionaries& including&Bhagat&Singh.&His& unforgeLable&lines&inspire&soldiers&even& today. Dushman%ki%goliyon%ka%hum%saamna% karenge Azaad%hi%rahe%hain,%azaad%hi%rahenge (The&enemys&bullets&we&face&and&feel&no& pain, Free&we&were&and&free&we&shall&remain) One&of&Azads&contemporaries,&Ram& Prasad&Bismil&(1897`1927)&wrote& patriotic&poems&under&the&pen&names& Ram,&Agyaat&and&Bismil.&He&inspired& the&masses&with&both&his&words&and& deeds.
Naujawaano%ye%hi%mauqa%hai,%utho%khul% khelo! Khidmat%e%qaum%mein%aayien%jo%balaayein,% jhelo, Phir%milengi%nay%eh%mata%ki%duayein%le%lo, Qaum%ke%sadqe%mein%mata%ko%jawaani%de%do! Dekhun%kaun%aata%hai%irshaad%baja%lane%ko! (O&Youth,&this&chance,&wake&up,&you& wont&get&it&again, You&must&face&all&perils&that&come&your& way,&in&the&service&your&nation. Ask&for&you&mothers&prayers&for&you& may&not&have&them&in&future. Sacrice&your&today&for&your& motherlands&tomorrow.) Equally&powerful&were&the&words&of& Bismils&fellow&revolutionary,& Ashfaqullah&Khan(1900&1927).&In&his& last&poem%Shorish%e%Junoon&(Roar&of& Frenzy),&he&described&his&chosen&path& seLing&an&example&for&others&who& followed&him. Sabhi%samaan%e%ishrat%thay,%maze%se%kaQi%thi Watan%ke%ishq%ne%hum%ko%hawa%khilwaai% zindaan%ki (All&the&provisions&of&pleasure&for&a& good&life,&had&I I&bore&tortures&of&jail&for&the&love&of&my& country) In&contrast&to&Bismil&and&Ashfaqullah& Khan,&Brij&Narain&Chakbast&(18821926)& was&a&moderate.&But&he&also&used&his& pen&to&inculcate&patriotism&in&his&fellow& countrymen. Yeh%khaak%e%Hind%se%paida%hain%josh%ke% aasaar Himalaya%se%uthe%jaise%abr,e%daryabaar (Hark,&the&swell&and&surge&of&youth&on& Indian&dust, As&if&from&the&Himalayas&it&was&a&cloud& burst)
While&remembering&revolutionaries,&it&is & hard&to&forget&Josh&Malihabadi&(1894& `1982)&who&was&known&as&Shair,e, Inqilaab&or&poet&of&the&revolution. Kaam%hai%mera%taghayyar,%naam%hai%mera% shabab Mera%naara,%inqilaab%o%inqilaab%o%inqilaab (My&name&is&Youth,&my&job&to&bring& about&change, My&slogan:&revolution,&revolution,&total& revolution) Ali&Sardar&Jafri&(1913&&2000)&joined&the& national&movement&and&went&to&jail& several&times&because&of&his&political& activities.&It&is&behind&bars&that&many&of& his&early&poems&were&penned. Raqs%karai%rooh%e%azaadi,%ke%raq%sam%hai% hayat Ghoomti%har%waqt%ke%mahwar%pe%saari% kainaat (Dance,&O&spirit&of&liberty,&for&life&is& eternally&dancing, The&universe&revolves&in&the&orbit&of& times,&in&an&eternal&dance.) Urdu&poetry&has&witnessed&and& recorded&the&struggle&for&Indian& Independence&since&1857.&Whether&the& shahr%e%ashob&(laments)&wriLen&after&the& fall&of&Delhi&in&1857&or&the&subsequent& protests&against&the&British,&Urdu&poets,& through&their&verse&have&faithfully& recorded&the&tyrannical&oppression&by& the&rulers&and&given&voice&to&the& aspirations&of&the&masses.&It&is&time& people&realised&that&there&is&more&to& Urdu&poetry&than&just&the&romantic& ghazals.&To&quote&Faiz&Ahmed&Faiz,&aur% bhi%dukh%hain%zamane%mein%mohabbat%ke% siwa&(There&are&more&concerns&in&this& world&other&than&love).
11
DEEPAK&SHENOY Deepak Shenoy writes at capitalmind.in about the Indian Markets and Money, and runs MarketVision, a financial education company.
PERSPECTIVE Acting Pricey
The (wrong) battle for the rupee
It is best to leave the rupee to go where it has to go, and take steps that address the problem, not the symptom.
DraconianRain
Freedom&is&a&wonderful&thing.&In&1947,& we&got&freedom&of&one&type,&in&the&very& month&this&article&is&published.&Yet,&since& then,&we&have&constantly&rubbished&our& freedom&by&imposing&various&rules&and& structures&about&smaller&but&otherwise& normal&things. Taking&away&our&freedom,&bit&by&bit,& were&government&rules&on&who&could&do& what&during&the&License&Raj,&and&you& were&called&out&even&if&you&did&the&right&
12
thing.&Bajaj&was&once&accused&of& building&more&scooters&than&it&was& licensed&to,&inspite&of&a&year`long&wait& for&most&customers&from&high&demand.& A&controller&of&capital&issues&would& determine&the&IPO&price&for&any& company,&which&meant&that&before&you& sold&your&company&to&people&itching&to& participate,&you&had&a&convince&a& bureaucrat.&Freedom&from&many&of& these&rules&comes&through&a&forced&
liberalisation&20&years&ago,&though& successive&governments&have&forced& some&licensing&back&on&us. Remaining&though,&are&rules&that&restrict& you&from&oending&other&people,& emboldening&many&to&take&oence&to& just&about&anything&remotely&negative.& Or&those&that&allow&anyone&to&take& down&a&web&page&for&something&that& oended&them&and&it&would& immediately&become&illegal&to&not& comply.
It!is!perhaps!best!we! leave!the!rupee!to!go! where!it!has!to!go,!and! only!take!steps!that! address!the!problem,! not!the!symptom.

Our&ght&for&the&rupee&is&the&latest& drama&in&the&freedom&act.&It&is&true&that& the&rupee&is&falling.&It&is&also&true&that&it& will&impact&India&in&a&way&that&frightens& us&&it&will&increase&ination,&it&will& make&many&companies&unable&to&pay& back&their&dollar&loans,&it&will&cause& panic&in&what&is&a&net&importing&country.& And&to&ght&it,&we&have&chosen&means&of& both&excellent&and&dubious&reputation.& Among&the&excellent&is&the&RBI&move&to& restrict&rupee&liquidity.&The&theory&is& simple.&There&are&some&dollars,&and& there&are&some&rupees.&In&the&grand& scheme&of&things,&if&the&growth&in&the& number&of&rupees&is&more&than&the& growth&in&the&number&of&dollars,&people& will&demand&more&rupees&per&dollar,& eventually.&We&are&at&the&eventually,& now. So&one&answer&is&to&restrict&the&growth& of&the&rupee,&and&one&way&to&do&this&is&to&
13
reduce&the&access&to&emergency&money& (which&is&created&by&RBI&on&demand)& unless&it&is&at&very&high&rates&&now,& 10.25&percent.&The&grand&scheme&of& things&also&operates&in&the&grand&scheme & of&time,&which&means&eventually.&In&the & last&16&years,&the&RBI&has&printed&rupees& with&abandon,&growing&its&own&balance& sheet&available&by&an&average&16&percent& per&year&since&1997.&Much,&was&required& &the&ow&of&foreign&dollars&was&heavy& in&the&mid&00s,&and&there&was&a&mad& rush&to&build&foreign&currency& reserves,&and&so,&the&RBI&would&print& rupees&to&buy&dollars.&And&after&2009& when&the&nancial&crisis&struck,&the&RBI& decided&that&the&correct&way&forward& was&to&buy&government&bonds&through& OMO&auctions,&in&eect&printing&some& more&rupees. While&not&solely&responsible&for&the& crisis,&the&excess&rupee&availability&has& been&a&factor&in&the&rupee&slide&recently.& When&we&did&print,&we&were&an& aLractive&investment&destination;&so,& even&though&we&imported&way&more& than&we&could&export&(a&factor&that& typically&would&take&down&the&rupee),& we&were&stabilised&by&foreign& investment&ows.&Now,&that&ow&has& reversed,&and&the&natural&course&for&the& rupee&is&a&few&oors&below.&The& mechanism&to&remove&rupees&from&the& system&is&one&that&will,&by&its& macroeconomic&nature,&take&years&to& operate.&Therefore&an&RBI&statement&that& these&things&are&short`term&is&like&saying& pimples&are&short`term&to&a&teenager.&In& our&age&of&instant&gratication,&if&it& hasnt&already&worked&it&is&too&late. So&the&other&methods&are&used,&which& will&have&near`term&results&but&cause& long`term&damage.&Like&forcibly&cuLing& down&imports&of&gold,&and&puLing& ludicrous&customs&duties.&(You&cant&
easily&put&huge&duties&on&what&is&an& investment&avenue.)&Eventually,&what& will&happen&is&the&return&of&the&good` samaritan`gold`smugglingùnderworld` don. More&dubious&is&asking&debt&free,&cash` rich&public&sector&organisations&like&Coal& India&to&borrow&in&dollars&so&that&there& are&at&least&some&investment&dollars& coming&in.&This&essentially&passes&on&the & problem&to&the&point&when&these& companies&need&to&return&those&dollars. Or&mechanisms&that&reduce&trading.&The & RBI&has&decided&that&speculation&is&the& problem,&not&the&symptom.&So&now,& there&are&limits&on&large&positions&in&the& hot&currency&futures&market.&Even& before&this&position&limit,&the&RBI&would& know&that&the&trading&in&the&exchange& was&a&very&small&part&of&the&overall& trading&of&the&rupee,&including&all&the& other&parts&of&the&world&where&it&trades& without&the&RBI&sword&hanging&over&it.& But&it&had&to&be&seen&as&doing& something,&I&suppose. And&then,&the&mad&mechanism&of& market&intervention.&The&RBI&routinely& buys&and&sells&dollars,&intervening&in&the& forex&market.&It&can&do&so&at& inopportune&times,&and&try&to&hit&prices& so&they&create&an&impact.&Which,&like&a& headache&tablet,&can&give&you&relief&only& for&a&few&hours.&There&is&no&other& mechanism&so&opaque&where&our& countrys&printing&presses&are&used&on& demand&without&any&prior&intimation&& even&when&the&RBI&buys&government
bonds,&it&has&to&announce&it&a&few&days& in&advance&and&buy&in&a&participatory& auction.&Yet,&we&let&this&dollar&market& intervention&happen&because&it&tells&us& the&RBI&is&in&control. It&is&perhaps&best&we&leave&the&rupee&to& go&where&it&has&to&go,&and&only&take& steps&that&address&the&problem,&not&the& symptom.&The&cuLing&of&liquidity&is&a& good&move,&even&if&it&is&longer`term.&We& will&also&have&to&reform&our&labour&laws& so&that&manufacturing&interest&returns.& We&will&have&to&ease&up&on&restrictions& on&the&rupee&so&that&at&least&the&few& countries&that&would&like&to&use&it&for& trade,&can&do&so.&We&will&have&to&change& the&way&our&government&functions&& read&no&freebies&&so&that&the& governments&decit&is&under&control.&& We&will&have&to&make&our&people&buy& local&&not&by&force,&but&because&things& manufactured&here&are&beLer&and& cheaper.&This&might&only&happen&at&a& dollar`rupee&rate&of&100,&but&as&we&get& more&ecient,&we&will&get&less& dependent&on&dollar&inows&&which,&as& we&will&nd,&make&their&way&into&our& country&chasing&that&very&eciency.&Net& result:&a&stronger&rupee,&almost&like&we& never&planned&it. The&way&you&dont&disturb&the&natural& ow&of&a&river&without&consequences,& the&rupee&cant&really&be&controlled&if&the& move&is&strong&enough.&After&trying& what&we&have,&it&may&be&beLer&to&focus& on&the&things&that&make&it&weak&rather& than&the&rupees&exchange&rate.
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VIVEK&SENGUPTA Vivek Sengupta is Founder and Chief Executive of the consulting firm Moving Finger Communications.
PERSPECTIVE Public Affairs
A clean air policy

Pollution equals death, disease and economic burden.
hapal
In&the&hurly&burly&of&politics&in&an& election&year&(nine&states&and&the&runùp& to&next&years&parliamentary&election)& and&in&the&backdrop&of&an&economy& baLling&stagation,&the&release&of&two& reports&has&gone&relatively&unnoticed&by& those&who&set&the&national&policy& agenda.&&But&the&ndings&of&both&are& alarming&in&the&extreme.&If&ignored,& there&can&be&serious&repercussions&since& they&relate&to&the&economy&of&the& country&as&well&as&the&well`being&of&its& populace. First,&the&more&recent&of&the&two&reports:&& Just&last&month&the&World&Bank&released& a&report&titled,&IndiaDiagnostic& Assessment&of&Select&Environmental& Challenges.&It&contained&the&most& damning&revelation&that&the&total&cost&of&
15
environmental&degradation&in&India&is& an&estimated&Rs&3.75&trillion&(US$80& billion)&annually,&equivalent&to&as&much& as&5.7&percent&of&the&GDP.&Of&this,&air& pollution&itself&accounts&for&Rs&2&trillion& (outdoor&air&pollution&for&Rs&1.1&trillion& and&indoor&air&pollution&for&Rs&0.9& trillion). Earlier&this&year,&the&pathbreaking&and& mammoth&Global&Burden&of&Disease& Study&was&released.&&Involving&the& World&Health&Organisation&and&funded& by&the&Bill&&&Melinda&Gates&Foundation,& this&was&a&50`country&collaborative& project&that&looked&at&187&countries.&&It& found&that&outdoor&air&pollution&was&the & fth&leading&cause&of&death&in&India,& with&indoor&air&pollution&being,&hold& your&breath,&the&second&leading&cause&of&
death.&More&people&are&dying&due&to&air& pollution&related&respiratory&and& cardiovascular&diseases&than&ever&before.& The&total&number&of&healthy&years&of&life& lost&due&to&air&pollution&is&estimated&at&a& whopping&18&million.&The&concomitant& impact&on&the&economy&is&truly& debilitating.&While&all&sections&of&society& are&aected&by&poor&air&quality,&the& lower&income&groups&pay&a&much&higher& price.
certainly&an&eyeòpener&that&the& poisoned&air&we&breathe&is&directly& linked&to&disease&and&death&and&causes&a & major&loss&to&the&economy. This&ies&in&the&face&of&the&long`held& belief&that&green&initiatives&address& irritants&and&are&for&the&rich&because& they&are&costìntensive&and&they&are&anti` growth.&Developing&countries&that&are& on&the&rise&have&to&factor&in&air&pollution& as&acceptable&collateral&damage&in&the& pursuit&of&the&holy&grail&of&double`digit& growth.&Clean&air&policies&come&in&the& fast`paced&development. Now&that&it&is&clear&that&toxic&air&takes& lives&and&hurts&the&economy,&it&would&be & salutary&to&see&what&might&be&the& consequence&of&reversing&the&trend&and& making&policy&interventions&that& encourage&and&even&promote& investments&in&green&initiatives. It&has&been&argued,&and&in&the&same& World&Bank&study&mentioned&here,&that& a&lowèmission,&resourceècient& greening&of&the&economy&can&take&place& at&a&very&low&cost&in&terms&of&GDP& growth.&In&other&words,&adaptation&and& mitigation&policies,&programmes&and& projects,&if&pursued&on&a&moderate&scale,& will&have&anything&but&a&severe&impact& on&growth.&For&instance,&a&ten&percent& particulate&reduction&will&lead&to&only&a& 0.3&percent&loss&in&GDP&and&a&negligible& reduction&in&GDP&growth&rate.&This& tradeò&should&be&acceptable,& considering&the&gains&that&will&accrue&in& terms&of&a&cleaner&environment&and& saved&or&healthier&lives&for&the&citizenry.& Overall,&it&would&ensure&the& sustainability&of&future&growth. Delhis&switchover&to&compressed& natural&gas&(CNG)&for&buses,&taxis&and& auto`rickshaws,&combined&with&an& aggressively&pursued&mass&rapid&transit& programme,&has&worked&wonders&in&
Delhis!switchover!to! compressed!natural! gas!(CNG)!for!buses,! taxis!and!autoJ rickshaws,!combined! with!an!aggressively! pursued!mass!rapid! transit!programme,! has!worked!wonders! in!terms!of!countering! the!poison!plumes!of! the!corrosive!sulphur! dioxide.
That&air&pollution&had&assumed&crisis& proportions&in&the&country&was&well` known.&A&recent&study&had&ranked&India & 126th&among&the&132&countries&surveyed,& behind&every&country&in&the& subcontinent&and&even&behind&China.& We&have&some&of&the&most&polluted& cities&on&earth.&As&many&as&13&out&of&the& 20&most&toxic&cities&in&the&world&are&in& India.&It&was&also&known&that&indoor& pollution,&the&bane&of&rural&and&semi` urban&India,&is&as&bad&as&the&outdoor& pollution&in&urban&India.&But&it&is&
16
terms&of&countering&the&poison&plumes& of&the&corrosive&sulphur&dioxide.&Delhis& air&is&unacceptably&poisoned&in&other& ways,&with&some&experts&saying&that&it&is& more&so&that&even&Beijings.&But&this&is&a& sterling&example&of&a&green&approach&to& public&policy&that&has&paid&dividends& and,&therefore,&deserves&to&be&adopted& elsewhere. The&need&of&the&hour&in&India&is&to& explore&a&basket&of&solutions&that&can& collectively&help&improve&the&air&quality& scenario.&Besides&cleaner&fuel&sources,& we&should&look&at&seriously&promoting& solutions&like&energy&eciency&in&all& areas,&including&thermal&generation;& renewable&energy;&clean&coal& technologies;&legally&binding&national&air& quality&standards;&action&plans&for& critically&polluted&areas;&and&
conservation&as&a&part&of&holistic& mitigation&approach. The&biggest&challenge&in&India&is&not&of& awareness&among&policy`makers&of& either&the&seriousness&of&the&challenge&or& the&solutions&thereof.&What&is&lacking&is& the&realisation&that&the&challenge&needs& to&be&addressed&on&a&war`footing&since&it& exacts&a&heavy&toll,&through&death&and& disease,&which&in&turn&impacts&the& economy.&&A&way&to&address&this&would& be&introduce&a&health&cost&in&decision& making.&Policy&makers&and& implementers&would&be&less&inclined&to& under`play&pollution&control&measures& and&more&forceful&in&their& implementation&if&they&were&constantly& reminded&that&there&is&a&tremendous& health&cost&to&pay&for&tardiness&on&either& score.
17
ROHAN&JOSHI Rohan Joshi is a Fellow at the Takshashila Institution.
PERSPECTIVE Spice Route
Securing Indias cyberspace
India should enhance its domestic capabilities in cyber-security, in terms of the development of institutional, legislative and technical mechanisms, and create a base of skilled professionals supporting government and private efforts to secure cyberspace.
Intel&Free&Press
After&years&of&slumber,&India&appears&to& be&awakening&to&the&challenges&inherent& in&governing&electronic&communication& in&the&country.&In&July&2013,&the& government&published&its&National& Cyber&Security&Policy&(Refer&to&the& Takshashila&Institutions&comments&on& the&Department&of&Information& Technologys&(DoITs)&March&2011&draft& of&the&National&Cyber&Security&Policy).& This&was&followed&closely&by&news&of& progress&in&the&implementation&of&a& framework&for&lawful&electronic& interception,&referred&to&as&the&Central& Monitoring&System&(CMS)&(Refer&to&the&
18
Takshashila&Institutions&discussion& document&on&Indias&Central&Monitoring& System).&Cyber`security&as&a&domain&of& governance&is&something&that&most& countries&are&grappling&with&and&India& is&no&exception.&Indeed,&India&is& projected&to&lead&the&world&in&Internet& trac&growth&over&the&next&ve&years,& making&it&critical&for&New&Delhi&to&both& collaborate&with&other&countries&and& develop&domestic&capabilities&to&secure& this&rapidly&growing&domain. The&implementation&of&the&CMS&makes& for&an&interesting&case&study&on&how&the& government&of&India&has&approached&
threats&to&Indias&cyber&security&thus&far.& The&initial&mandate&of&the&CMS&included& lawful&interception&of&all& telecommunications&and&Internet&data.& But&the&interception&of&calls&made& through&BlackBerry&devices&posed&a& hurdle&due&to&the&devices&unique& architecture&and&security&controls.& Prolonged&negotiations&between&the& government&of&India&and&Research&in& Motion&(now&BlackBerry&Limited)& ensued&and&now&appear&to&have& concluded.&&A&recent&report&in&The%Times% of%India&indicates&that&BlackBerry& Limited&will&provide&the&government&of& India&the&ability&to&intercept&data&from& non`corporate&BlackBerry&devices. However,&technological&challenges&with& regard&to&intercepting&data&from&popular& websites&such&as&Gmail&and&Facebook& are&proving&harder&for&the&government& to&overcome.&Their&use&of&strong& encryption&has&impeded&the&ability&of& government&agencies&to&intercept&and& monitor&content&transmiLed&through& these&websites. The&mandate&of&the&CMS,&therefore,&is& now&eectively&reduced&to&intercepting& land&and&mobile&telephony&data&and& unencrypted&internet&trac,&leaving& large&swathes&of&encrypted&internet& trac&unmonitored.&Given&these& challenges,&it&is&not&clear&why&the& government&decided&to&proceed&with&a& programme&with&such&extensive&a& mandate.&One&can&surmise&that&either& the&Indian&government&wasnt&given& appropriate&technical&input,&or&that&it& chose&to&ignore&the&input&and&proceed& with&the&implementation&of&the&CMS.& Either&way,&it&does&liLle&to&inspire& condence&in&a&program&that&is& apparently&being&implemented&to& mitigate&threats&to&Indias&national& security.
19
Indeed,&other&than&Indias&National& Security&Advisor&(NSA)&Shivshankar& Menon,&few&others&in&Indias&political& leadership&have&clearly&articulated&the& challenge&India&faces&with&regard&to& cyber`security&or&laid&out&a&vision&for&the & way&forward.&In&an&internal&note&to&the& Home&Ministry,&the&NSA&aptly&described& cyberspace&as&an&anarchic,&lawless& domain&and&favoured&an&approach& involving&enhanced&cooperation&with& other&countries&on&cyber`security,&rather& than&single`handedly&aLempting&grand& pursuits&(an&apparent&reference&to&the& CMS).
Given!the!limitations! in!technology!and! jurisdiction!that! impede!Indias!ability! to!substantially! secure!cyberspace,! collaborating!with,!or! seeking!the!assistance! of!other!countries! should!be!an!essential! component!of!Indias! approach.!
Cyber`security&is&already&a&component& of&the&USÌndia&Homeland&Security& Dialog.&But&old&suspicions&linger&and& continue&to&hinder&closer&cooperation& between&India&and&the&US.&Bridging&the& trust&decit&between&India&and&the&US& will&take&time&to&overcome,&but&if&the& story&of&IndoÙS&ties&over&the&past&two& decades&tells&us&anything,&it&is&that&these& challenges&can&indeed&be&overcome.&It&is& time&that&the&prole&of&the&cyber`
security&dialog&be&elevated&to&address& both&Indian&and&American&concerns&to& current&and&emerging&threats&in& cyberspace. In&this&regard,&the&government&India&will& not&be&not&the&only&beneciary&of&an& elevated&cyber`security&relationship& with&the&US.&Certainly,&working&closely& with&the&US&and&developing&protocols& on&information&sharing&will&potentially& allow&India&to&overcome&technological& challenges&and&gain&access&to& information&that&can&identify&and& mitigate&threats.&But&equally,&the&US&has& a&vested&interest&in&developing&closer& ties&with&India&on&cyber`security.&A&US& House&of&Representatives&Foreign& Aairs&subcommiLee&hearing&in&July& highlighted&the&need&for&closer& collaboration&with&India&on&cyber` security,&given&the&manifestation&of& common&threat&perceptions&in& cyberspace&(via&China&and&Pakistan). That&both&the&US&and&India&are&leading& sources&of&international&spam&presents& security&risks&that&impact&not&just&these& two&countries&and&their&businesses,&but& the&rest&of&the&world&as&well.&Thus,&closer& collaboration&between&India&and&the&US& in&identifying&and&eliminating&botnets& and&other&sources&of&spam&was& identied&as&being&important&by&Karl& Rauscher,&Distinguished&Fellow&at&the& East&West&Institute,&during&the&same&US& congressional&hearing. A&third&beneciary&of&closer&IndiaÙS& cooperation&in&cyber`security,&though& not&immediately&apparent,&could& potentially&be&Indias&citizens,& particularly&with&regard&to&legal& interception.&&Since&the&intention&to& implement&the&CMS&was&announced&by& the&Indian&government,&Indias&legal& experts&and&open&society&advocates&have& mounted&vehement&opposition,&
20
charging&the&government&with&giving& itself&extensive&powers&that&circumscribe& the&constitutional&rights&of&citizens.& Their&concerns&are&not&without&merit.&& The&absence&of&privacy&and&data& retention&laws&in&India&means&that&there& is&no&clarity&over&how&and&under&what& conditions&personal&data&of&Indias& citizens&is&stored&and&how&it&may&be& used. The&concern&that&data&captured&through& the&CMS&could&be&susceptible&to&political& misuse&therefore&is&valid.&However,&the& inability&of&government&agencies&to& decrypt&secure&data&transmissions&from& popular&Internet&websites&means&that& they&are&eectively&reliant&on&foreign& service&providers&and&their&host& governments&to&obtain&access&to&data. Now,&such&an&arrangement&could&curtail& Indias&ability&to&obtain&information& timely&to&mitigate&threats,&lets&say&in&the& event&of&an&ongoing&terrorist&aLack,&or& in&the&case&of&the&suspected&organised& rumour`mongering&that&saw&thousands& of&Northeast&migrants&ee&Bangalore&in& August&2012.&But&it&could&also&prevent& misuse&if&strong&data&privacy&and& retention&legislation&exists&in&the&foreign& country&(e.g.&the&US)&that&governs&the& use&and&disclosure&of&such&information.&& The&potential&for&political&misuse&and& overreach&would&therefore&be&limited&by& design.&&Of&course,&Indian&displeasure& over&the&USs&clandestine&collection&of&its& citizens&personal&data&is&well&warranted,& but&that&is&a&subject&for&a&separate& discussion. Given&the&limitations&in&technology&and& jurisdiction&that&impede&Indias&ability&to& substantially&secure&cyberspace,& collaborating&with,&or&seeking&the& assistance&of&other&countries&should&be& an&essential&component&of&Indias& approach.&&However,&the&goal&for&the&
government&of&India&should&be&to& enhance&domestic&capabilities&in&cyber` security,&both&in&terms&of&the& development&of&institutional,&legislative& and&technical&mechanisms,&as&well&as&a& base&of&skilled&professionals&supporting& government&and&private&eorts&to&secure
cyberspace.&&These&are&mid`&to&long`term& projects&no&doubt,&but&they&require& adequate&stewardship,&and&investment& in&resources&and&capacity&building&by& the&government&and&the&countrys& private&institutions.
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M&R&MADHAVAN MR Madhavan is President of PRS Legislative Research.
PERSPECTIVE In Parliament
Bypassing the states

Can Parliament pre-empt state government resources through rights laws?
Austin&Yoder
The&Food&Security&Bill&is&expected&to&be& discussed&in&Parliament&in&the&next&few& days.&There&have&been&several&critiques& of&this&Bill&in&terms&of&the&coverage&of& the&population,&amount&of&grain,&the& mode&of&subsidy&(food&versus&cash& versus&vouchers),&availability&of&food& grains,&the&overall&cost&and&scal& implications&etc.&Importantly,&in&the&last& few&months&the&chief&ministers&of&Tamil& Nadu&and&Gujarat&have&wriLen&leLers&to& the&Prime&Minister&on&Direct&Benets& Transfer&and&the&National&Food&Security& Ordinance.&&Among&other&issues,&both& leLers&talk&about&the&roles&of&the&centre& and&the&state&governments. However,&there&has&been&liLle&public& discussion&on&the&issue&of&mandatory& expenditure&related&to&statutory&rights.&&
22
Most&development&programmes&and& subsidy&systems&in&India&have& traditionally&been&in&the&form&of& government&schemes.&The&expenditure& required&to&implement&these& programmes&has&to&be&approved&by&the& legislature&on&an&annual&basis&through& demands&raised&in&the&annual&budgets.& Through&this&process,&the&legislature& expresses&its&priorities&by&allocating& nancial&resources&among&various& competing&demands. The&Constitution&places&the& responsibility&of&allocating&resources&on& an&annual&basis&on&the&legislature&by& stating&that&all&government&expenditure& (except&a&few&charged&items)&have&to&be& approved&by&the&legislature&through&a& vote.&The&last&decade&has&seen&a&
divergence&from&this&principle&by& enshrining&certain&development/subsidy& entitlements&as&statutory&rights.& The&Mahatma&Gandhi&National&Rural& Employment&Guarantee&Act&(MNREGA)& was&passed&in&2005,&and&provides&the& statutory&right&to&people&living&in&rural& areas&to&get&a&job&for&a&certain&number&of& days&every&year&at&a&specied&rate.&The& cost&is&borne&by&the&union&government.&& This&right&is&justiciable,&i.e.,&any&person& who&fails&to&get&the&job&on&demand&can& approach&the&courts&for&remedy&and& compensation.&Therefore,&Parliament& has&no&choice&but&to&provide&for&the& amount&required&to&deliver&this&right.&& Indeed,&if&Parliament&underàllocates&the & amount&required,&and&a&court&rules&in& favour&of&any&complainant,&the& government&will&be&bound&to&spend&the& money.&This&is&due&to&the&Constitutional& provision&that&any&expenditure&arising& from&the&ruling&of&a&court&is&a&charged& item,&and&is&not&subject&to&a&vote&by& Parliament. Of&course,&if&a&future&Parliament&decides& to&change&its&priorities,&it&has&the& freedom&to&amend&or&repeal&the&law&that& mandates&the&right.&However,&some&of& the&new&laws&mandate&expenditure&by& state&governments,&and&state&legislatures& may&not&have&the&power&to&undo&or& modify&the&statutory&right. The&Right&to&Free&and&Compulsory& Education&Act&(RTE)&was&passed&in&2009,& and&entitles&every&child&between&the&age& of&six&and&14&years&to&elementary& education&in&a&neighbourhood&school.&& The&costs&for&doing&so&are&to&be&shared& by&the&central&and&state&governments. Unlike&MNREGA,&the&right&to&education& stems&from&a&fundamental&right&that&was & read&into&the&right&to&life&by&the& Supreme&Court&in&1993,&and&was&wriLen& into&the&Constitution&as&Article&21A&in&
23
2002.&&Therefore,&future&Parliaments&will& have&limited&freedom&to&amend&the&law.&& Indeed,&this&fundamental&right&diers& from&the&others&in&the&sense&that&it& obliges&the&state&to&perform&a&duty& whereas&the&other&fundamental&rights& protect&people&from&the&actions&of&the& state&or&other&persons.
The!core!concept!of!the! federal!structure!and! the!implications!for!the! role!of!Parliament!and! state!legislative! assemblies!to!determine! spending!priorities!need! to!be!discussed!in!the! context!of!resourceJ intensive!statutory! rights!being!enacted.
A&second&concern&is&that&Parliament&has& enacted&a&law&that&obliges&state& governments&to&allocate&resources.&& Given&that&this&is&a&concurrent&list&item,& state&legislatures&cannot&amend&the& provisions&to&override&the&central&law.&& The&question&is&whether&this&infringes& on&the&role&of&state&legislatures&to& determine&their&preferences&and&allocate& funds&accordingly. The&National&Food&Security&Ordinance,& 2013&and&the&associated&Bill&have&a& similar&issue&in&terms&of&the&expenditure& by&state&governments.&&The&law&provides& a&statutory&right&to&a&certain&quantity&of& foodgrains&(or&equivalent&cash)&to&all& persons&who&fall&within&its&coverage& criteria.&The&cost&of&procuring,&storing& and&transporting&the&foodgrains&up&to&
the&state&storage&depots&are&to&be&borne& by&the&union&government.&The&cost&of& the&subsequent&supply&chain&is&to&be& borne&by&the&state&governments,& although&there&is&an&enabling&provision& that&permits&the&centre&to&provide& nancial&assistance.&Again,&the&issue&is& whether&Parliament&can&preèmpt&the& role&of&state&legislatures&in&allocating&the& resources&of&the&state. Purists&may&argue&that&the& establishment&of&any&statutory&body& (such&as&central&and&state&information& commissions)&has&similar&implications,& and&it&has&been&customary&to&establish& them.&&The&key&dierence&is&in&the& materiality&of&the&amounts&involved.&& Typically,&the&establishment&of&such& bodies&requires&a&few&hundreds&of& million&rupees,&which&would&be&a&small& part&of&the&overall&budget&(the&central& budget&is&now&about&Rs&16&trillion).&& These&three&Acts&&MNREGA,&RTE&and& the&Food&Security&Law&will&together&cost& between&Rs&3&trillion&and&Rs&4&trillion& (estimates&for&the&costs&of&the&food& security&law&have&a&wide&variation).& Therefore,&the&impact&on&resource& allocation&is&signicant.&That&is,&these& rights&have&the&eect&of&preèmpting&the
resource&available&to&other&potential& programmes. On&the&receipts&side,&there&is&an& established&system&of&Finance& Commissions&determining&the&division& of&resources&between&centre&and&states.& Also,&there&has&been&a&contentious& debate&with&respect&to&the&Goods&and& Services&Tax&(GST),&with&extended& negotiations&on&a&framework&to&reach&a& common&GST&system&within&the&federal& framework.&The&enabling&amendment&to& the&Constitution&is&still&pending&before& Parliament. There&has&been&liLle&such&debate&on&the& expenditure&side.&The&core&concept&of& the&federal&structure&and&the& implications&for&the&role&of&Parliament& and&state&legislative&assemblies&to& determine&spending&priorities&need&to&be & discussed&in&the&context&of&resource` intensive&statutory&rights&being&enacted.&& The&scheduled&debate&in&Parliament&on& the&food&security&bill&is&an&opportunity& to&nesse&the&various&arguments.&&We& will&have&to&see&whether&our&MPs,& including&those&who&have,&in&the&past,& voiced&their&concerns&on&issues&related& to&the&aspirations&and&rights&of&states,& discuss&this&maLer.
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NARAYAN&RAMACHANDRAN& Narayan Ramachandran is fellow for Economics, Inclusion & Governance at the Takshashila Institution.
PERSPECTIVE In-Security
Sleeping with the enemy

Imagine&this.&The&Bharatiya&Janata&Party& (BJP)&and&the&Indian&National&Congress& (INC)&join&in&a&coalition&to&run&the& country&for&the&next&ve&years.&There&is& no&beLer&time&than&now.&Like&the& proverbial&slow&boiling&frog,&Indias& economic&case&has&progressively& worsened&over&the&last&few&years.& Employment&growth&is&practically&zero,& real&income&growth&negligible,&the& current&account&decit&at&alarming&levels& and&gold&imports&o&the&charts&at&2.5& percent&of&the&GDP.&To&top&that,& investments&have&completely&dried&up,& consumption&is&slowing&and&with&a&large& scal&decit&the&government&is&out&of& repower&to&provide&any&growth& cushion.&Make&no&mistake;&India&is&one& oil`shock&away&from&an&old`fashioned& balance&of&payments&crisis.&And&as&Vijay& Kelkar&so&eloquently&said&a&year&ago,&we& are&on&the&edge&of&a&scal&precipice&as& well.&In&other&words,&Indias&economy&is& perched&precariously&on&a&knifeèdge& between&the&scal&and&current&account& abyss. A&common&cause&and&a&common&enemy& can&make&for&strange&bedfellows.&In&the&
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Can the Congress and the BJP get together in a grand coalition and form a national government to reset India on the path to prosperity?
same&way&that&a&group&of&freedom& ghters&got&together&to&pursue& independence&&even&though&they&had& their&dierencesthe&two&main&parties& of&today&could&(maybe&even&should)&get& together&in&a&grand&coalition&to&arrest&a& potentially&fatal&economic&decline&and& reset&India&on&the&road&to&prosperity. Grand&coalitions&come&in&dierent& forms.&They&can&be&power`sharing& devices&in&countries&divided&deeply&by& religion,&ethnic&or&linguistic&groups.&The& government&in&Lebanon&would&be&one& such&example.&Some&grand&coalitions& have&been&formed&as&a&result&of&political& bargaining&that&results&from&hung& parliaments,&such&as&in&Israel.&Others& have&been&formed&in&response&to&crisis& such&as&the&UK&government&from&1931&to& 1940.&Ramsay&MacDonald&then&Prime& Minister&of&UK&agreed&to&form&a& government,&event&though&there&were& more&members&from&the&other&party,&to& combat&the&ill&eects&of&the&Great& Depression&on&Britain.&&This&laLer&type& of&coalition&&a&national&government&&is& the&one&I&suggest&here.
&wintersweet
26 Pragati- The Indian National Interest Review
The&mechanics&of&this&coalition&could& work&in&the&following&way.
All!frivolous!and!small! regional!parties!at!the! centre!would!lose!their! ability!to!blackmail! their!coalition!partner! on!account!of!their!pet! peeves.

In&a&deal&akin&to&the&Tony&Blair/Gordon& Brown&one&in&the&United&Kingdom,& Prime&Minister&(PM)&ship&would&rest& with&one&party&for&half&the&time&and& with&the&other&for&the&remaining.&The& rst&PM&would&be&decided&by&an& Election&Commission&(EC)&toss.&Four& other&ministries&would&be&split&between& the&two&parties&&Home,&Finance,& Foreign&aairs&and&Defence.&The& ministries&would&be&rotated&when&the& PM&rotates.&This&50/50&rotation&would& hold&even&if&one&of&the&two&parties&has& an&elected&Member&of&Parliament&count& that&was&dierent&from&the&other. Senior&bureaucrats&would&be&appointed& for&the&entire&period&of&the&Government.& They&would&be&chosen&not&on&seniority& but&on&merit.&The&clear&signal&to&them& should&be&that&they&work&for&the& Government&of&India,&not&for&a&politician& or&a&party.&The&price&for&being&chosen&on& merit&and&allowed&to&function&without& interference&is&that&they&would&forsake& all&claims&to&a&post`retirement& Government&position.&Based&on&the& quality&of&their&performance,&they&would& be&free&to&seek&private&sector&jobs&upon& retirement.
The&rst&meeting&of&such&a&newly& formed&government&would&list&all& pending&legislations&and&work&on& clearing&as&many&of&them&as&possible.&No& new&legislations&would&be&proposed,& until&two`thirds&of&all&pending&bills&are& either&passed&or&retired.&The&priority&for& the&entire&ve&year&term&of&both&parties& together&would&be&on&geLing&things& done&that&are&already&on&the&books.& After&such&time,&any&new&legislation&can& only&be&proposed&and&passed&only&with& a&clear&death&date. The&parties&will&be&paid&at&the&end&of&the & term&and&the&amounts&would&vary&based& on&performance.&The&adjudication&of& performance&and&the&respective& payments&would&be&coordinated&by&the& Election&Commission&Rs&5,000&crore&to& each&party&for&satisfactory,&Rs&2,500&crore & to&each&party&for&unsatisfactory&and&Rs& 10,000&crore&for&outstanding& performance.&&One&party&can&earn&an& amount&dierent&from&the&other&judged& by&a&commiLee&of&elders&appointed&by& the&EC.&This&implies&that&the&parties&will& have&only&to&nance&their&campaigns& not&seek&donations.&&Campaign& contributions&would&importantly&move& from&being&an&irrecoverable&but&quid& pro&quo&grant,&to&a&fully&returnable& working&capital&loan. This&arrangement&has&other&advantages.& All&frivolous&and&small&regional&parties& at&the&centre&would&lose&their&ability&to& blackmail&their&coalition&partner&on& account&of&their&pet&peeves.&&Only&the& Lest&among&them&will&survive,&and& they&will&have&to&restrict&their&sphere&of& activity&to&the&State/region.&The& government&will&likely&complete&ve& years&in&oce&thus&obviating&the&need& for&a&costly&mid`term&election.&&With& such&a&plan,&maybe,&just&maybe,&India& can&return&to&winning&ways&again.
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Post&Script:&&You&and&I&know&that&the& probability&of&this&happening&is&near& zero.&What&then&is&the&purpose&of& discussing&something&like&this?&I&think& there&are&several.&&For&one,&there&is&still& some&complacency&about&whether&or&not& the&economy&is&in&trouble.&We&should& put&that&one&to&rest,&the&economy&is&in& trouble&and&there&is&clear&and&present& danger&that&it&will&fall&into&deep,& possibly&irrecoverable,&trouble.&It&is&also& time&we&put&the&words&public&and& service&back&into&public&service.&Many& politicians&are&paying&their&way&into
oce&to&recover&and&prot&from&that& oce.&It&is&important&that&the&pay/ recover/proteer&cycle&be&broken& somehow. If&politicians&of&both&parties&can&imagine& geLing&together&in&this&way,&then& ordinary&collaboration&becomes&much& easier.&It&is&a&thought&experiment&that& allows&politicians&to&stretch&their&mind& beyond&the&partisan&and&peLy. And&last,&but&certainly&not&least,&you& never&know,&stranger&things&have& happened!
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PERSPECTIVE
AMEYA&NAYAK Ameya Naik is a Takshashila Scholar.
Clarity begins at home

Deepwater&Horizon&Response
It is only through stepping up domestic production and improving technology, that India will attain self-reliance in energy.
The&failure&of&the&Indian&oil&and&natural& gas&industry&to&aLract&investment&is& symptomatic&of&the&malaise&gripping&the& Indian&economy.&The&results&are&visible:& hydrocarbons&are&in&ever&shorter&supply& domestically,&imports&are&rising,&and&the& power,&fuel&and&fertiliser&sectors&account& for&a&major&chunk&of&government& subsidies.&That&is,&while&we&import&at& market&prices,&we&are&selling&at&a& discount.&This&does&no&favours&to&our& economy&and&balance&of&trade. The&obvious&solution&would&be&to& promote&domestic&Exploration&and&
29
Production&(E&P)&wherever&possible.& Curiously,&while&leading&International& Oil&Companies&(IOCs)&and&Nationalised& Oil&Companies&(NOCs)&are&active&in& E&P&the&world&over,&in&India&they&are& conspicuous&in&their&absence.&Despite& the&potential&for&development,&this& sector&languishes&because&confused,& contradictory&and&perverse&policies&have & driven&investors&away. Investing&in&E&P&is&a&complex&decision,& involving&substantial&amounts&which& must&be&invested&regularly&across&ve& (or&more)&years&before&yielding&returns&&
and&there&is&always&the&risk&that&a& particular&project&fails.&An&investor&will& fund&a&project&only&when&he&believes&it& will&be&protable.&The&terms&on&which& he&is&ready&to&invest&are&spelled&out&in& the&relevant&contracts&and&agreements,& but&that&assessment&itself&relies&on& certain&fundamental&assumptions&about& the&legal&and&regulatory&environment&in& the&country.&Broadly&speaking,&these& assumptions&are&that&contracts&are& negotiated&and&performed&in&good&faith,& and&that&the&regulatory&authorities&are& impartial&and&promote&fair&competition.& India,&however,&has&shaken&the& condence&of&the&investor&in&these& prerequisites;&the&resultant&uncertainty& is&the&single&largest&factor&starving&key& Indian&sectors&of&desperately&needed& capital&and&expertise. Potential&investors&hedge&their&bets&by& participating&in&various&projects.&Very& crudely,&each&successful&project&would& lead&to&diminishing&returns&for&the&next,& as&it&drives&global&supply&up&and&global& prices&down.&The&opposite&is&true&if&a& string&of&projects&fail.&On&balance,&the& investor&makes&a&prot&precisely&due&to& such&variations.&Where&a&government& moves&to&appropriate&such&prots,&it& makes&such&a&strategy&unviable.&The& government&is&saying:&you&bear&the& risks,&and&any&losses,&but&we&will&corner& the&rewards.&To&the&investor,&this&means& that&success&and&failure&both&entail&a& loss.&If&you&lose&even&when&you&win,& why&play? The&willingness&to&alter&production` sharing&or&long`term&supply&agreements& is&part&of&this&impression,&but&it&is&hardly& a&new&concern.&After&all,&even&if& renegotiation&is&aLempted,&the&parties& are&still&playing&by&the&rules&to&come& to&a&new&arrangement.&The&real&problem& is&when&a&nation&cheats&by&altering&the&
30
rules&underlying&the&agreement&itself.& India&has&done&this&through&various& changes&in&tax&categories&and& assessment&rules,&especially&as&it&is& related&to&capital&gains.&The&decision&to& impose&the&General&AntiÀvoidance& Rules&(GAAR)&with&retrospective& impact&was&seen&as&a&cynical&step,&taken& by&a&government&ready&to&bypass&even& its&own&Supreme&Court.
One!possible!measure! would!be!for!the! government!to!show! that!it!is!serious!about! promoting!investment! in!hydrocarbons,!by! investing!its!own! money!in!building!up! the!support! infrastructure.
The&current&controversial&proposal&for& renegotiation&of&gas&prices&is&also& perceived&widely&as&a&cynical&step,& undertaken&to&benet&a&single&private& player.&In&fact,&rms&participating&in&the& last&three&rounds&of&the&National& Exploration&Licensing&Process&(NELP)& have&complained&that&the&same&player& has&enjoyed&an&undue&advantage&in&its& bids;&other&rms&have&also&petitioned&to& have&limits&on&the&amount&of&acreage&for& which&state`run&rms&(especially& ONGC)&can&bid.&While&such&perceptions& do&not&evince&great&faith&in&the& impartiality&of&the&process&or&the& authorities,&one&can&hope&that&beLer& guidelines&will&evolve&for&such& situations,&especially&as&the&still`young&
eld&of&Competition&Law&comes&into&its& own&in&India. None&of&this&would&maLer&much&if&India & planned&to&follow&the&Chinese&or& Russian&model&of&state`led&exploitation& of&hydrocarbons.&Unlike&China,& however,&we&can&scarce&aord&to&pump& in&the&requisite&investment&on&its&own,& and&must&turn&to&outside&investors.& (Russia&has&turned&to&the&Chinese,&but& that&too&is&an&unpalatable&option&for& India.)&In&diplomacy,&one&often&hears&of& Condence&Building&Measures&(CBMs)& between&hostile&nations.&Today,&we&need& shrewd&economic&diplomacy,&and&we& urgently&need&CBMs&targeted&at& potential&investors. One&possible&measure&would&be&for&the& government&to&show&that&it&is&serious& about&promoting&investment&in& hydrocarbons,&by&investing&its&own& money&in&building&up&the&support& infrastructure.&Pipeline&networks&in& India&tend&to&be&concentrated&in&specic& regions.&Access,&especially&at&ports&and& to&the&trunk&line,&is&jealously&guarded.& Accelerated&progress&on&the&national& grid&as&proposed&by&key&distributor& NOCs&(Gas&Authority&of&India&Limited&& GAIL&and&Oil&India&Limited&&OIL),& combined&with&priority&or&subsidised& access&for&successful&wells,&would&assure & investors&that&they&could&transport& extracted&oil&to&reneries.&This&would&be& particularly&benecial&in&considering& blocks&in&more&remote&parts&of&the& country.&Along&with&work&on&ports&and& storage&facilities,&it&would&also&convey& that&the&government&is&geared&up&for& higher&domestic&production,&and&if&we& eventually&succeed&in&laying&overland&
pipelines&through&the&Pakistan&or& Myanmar`Bangladesh&routes,&this& national&grid&will&help&take&gas&from& those&sources&to&every&corner&of&the& country&as&well. The&most&crucial&signal,&though,& concerns&not&physical&but&legal& infrastructure.&Determining&a&policy&on& oil&and&gas&pricing&&whether&calculated& through&a&weightedàverage&formula,&or& by&any&other&method&&is&the&most& urgent&need.&A&commiLee&headed&by& Vijay&Kelkar&(former&Secretary&in&the& Ministry&of&Petroleum)&is&seized&of&this& question.&Once&its&report&is&presented,& and&presuming&it&is&accepted,&the& government&must&formulate&a&detailed& Model&Production&Sharing&Agreement& that&incorporates&those& recommendations.&Such&a&model& document,&especially&one&that&species& and&limits&the&conditions&for& renegotiation,&would&go&a&long&way&in& returning&clarity&to&the&pricing&debate. Just&as&importantly,&it&would&place& unambiguous&guidelines&before&the& government&itself,&and&remind&various& functionaries&of&the&goal&of&such&an& exercise&&that&is,&to&promote&domestic& production&of&oil&and&natural&gas.&The& nature&of&the&industry&is&such&that&the& proportion&of&available&reserves& technically&recoverable&rises&as&the&price& oered&increases.&Ultimately,&while& imports&are&here&to&stay,&it&is&only& through&stepping&up&domestic& production&and&improving&technology& that&we&will&aLain&some&measure&of&self` reliance&in&energy;&a&reminder&that&this& entails&market`driven&prices&may&curtail& future&cynical&measures.
31
IN DEPTH
COLIN&COOKMAN Colin Cookman is a political analyst focusing on Pakistan and the region, and a masters student at Johns Hopkins-SAIS.
Pakistans political picture

The emerging contours of post-election politics in Pakistan raise the potential for sharper political conflicts should the PML-N push its formal powers past their contestable limits.
CeeKays&Pix
On&May&11,&Pakistans&national& parliamentary&elections&swept&the& Pakistan&Muslim&League`Nawaz&(PML` N)&back&into&power&for&the&third&time.& The&PML`N&victory&&secured&in&a& broadly&competitive&contest&that& recorded&the&highest&level&of&Pakistani& voter&turnout&in&decades&&was& resounding,&as&it&received&close&to& double&the&national&vote&share&of&its&next& closest&competitor,&and&secured&an& absolute&majority&in&Parliament&after&the&
32
dust&from&independent&candidates&post` election&bandwagon`hopping&seLled. Success&at&the&polls&was&echoed&this&past& week&with&the&election&by&the&new& parliament&and&provincial&assemblies&of& the&PML`Ns&nominee&for&the&Pakistani& presidency.&Presidentèlect&Mamnoon& Hussain,&a&Karachi&businessman&who& briey&served&as&Sindh&governor&in&1999,& possesses&no&independent&political& support&base&of&his&own&and&assumes&an&
oce&whose&formal&powers&have&largely& been&curtailed&to&the&ceremonial&and& procedural.&PML`N&party&chief&Nawaz& Sharif&now&appears&to&enjoy&a&position& of&comparative&political&stability&and& consolidated&authority&that&his&recent& predecessors&in&the&prime&ministers& oce&could&only&dream&of.
The!PPP!and!PTI! opposition!currently! remain!divided,!and!the! PMLJN!enjoys!a! considerably!stronger! position!in!power!than! its!predecessors!from! which!to!begin!tackle! these!and!other!issues.

The&PML`Ns&position&comes&at&the& expense&of&a&divided&political& opposition.&The&previous&Pakistan& Peoples&Party&(PPP)`&led&government& ultimately&survived&through& compromise&and&concession&with&both& elected&and&unelected&challengers&in& order&to&complete&its&ve`year&term&in& oce.&But&consumed&as&it&was&by&the& demands&of&coalition&politics,&the&PPP& limped&across&the&electoral&nish&line& under&the&weight&of&a&stagnating& economy,&its&representation&at&the& national&level&reduced&to&its&traditional& Sindhi&stronghold&and&a&holdover& plurality&in&the&senate. Imran&Khans&upstart&Pakistan&Tehreek,e, Insaaf%(PTI)&dominated&much&of&the&pre` election&media&landscape&and&red&the& passions&of&a&contingent&of&new&voters,& but&the&partys&ability&to&translate&that& into&signicant&electoral&wins&was&
33
ultimately&conned&to&Khyber& Paktunkhwa&province.&Khan&himself& was&sidelined&for&weeks&after&sustaining& neck&and&back&injuries&sustained&during& a&rally&in&April,&depriving&the&party&of&its& standard&bearer&in&the&nal&weeks&of&the& campaign&and&in&the&immediate& aftermath&of&the&vote.&After&divisive& intra`party&elections&in&April,&gaps& within&the&party&organisation&are&still& evident,&notably&between&the&new& Khyber&Paktunkhwa&administration& headed&by&chief&minister&Pervaiz& KhaLak&and&some&of&the&partys&more& ideological&elements. Approximately&three&months&out&from& the&elections,&with&the&annual&summer& and&Ramazan`&induced&political&lull& approaching&an&end,&the&limits&of&the& Sharif&governments&mandate&are& beginning&to&show,&however,&as& opposition&parties&have&begun&to&nd& their&footing.&After&Pakistans&Supreme& Court&accepted&a&PML`N&petition&to& move&up&the&date&for&the&presidential& vote&by&a&week&(overriding&the&initial& Pakistan&Election&Commissionìssued& schedule)&the&PPP&responded&with& aprotest&boycoL&in&the&assemblies.& Although&the&outcome&of&the&vote&was& never&in&doubt,&the&PPPs&secretary& general&Latif&Khosa&accused&the&court&of& colluding&with&the&PML`N&to&interfere&in& the&presidential&contest. The&PTIs&supporters&were&principally& drawn&from&the&urban&educated&classes,& many&of&whom&had&in&the&past&shown& liLle&interest&in&advancing&their&interests& through&electoral&politics.&Although&this& cohort&may&form&only&a&small&fraction&of& the&overall&population,&should&Imran& Khan&manage&to&retain&its&support,&it&has & the&potential&to&play&an&outsized&role&in& shaping&elite&politics,&particularly& through&its&inuence&within&the&media&
and&social&media&environment&in&which& the&governing&PML`N&must&now& contend.&After&returning&from&his& recovery&abroad,&Khan&renewed& complaints&that&the&judiciary&and&the& Election&Commission&had&failed&to& address&allegations&of&fraud&in&the&May& elections&invited&contempt&of&court& proceedings&from&Chief&Justice&Iftikhar& Chaudhry.&Preliminary&contempt& hearings&were&held&on&August&2,&during& which&Khan&denied&any&intention&to& malign&the&judiciary&but&stood&by&his& complaints.&Further&hearings&are&now& set&for&the&end&of&the&month. Although&these&allegations&of&fraud&by& losing&parties&are&hardly&unique&in& Pakistans&electoral&history,&the& combined&(if&not&closely&coordinated)& PPP&and&PTI&critique&represents&a& challenge&to&the&Chaudhry&courts&eorts & to&publicly&position&itself&as&an& independent&actor&with&the&authority& and&legitimacy&to&oversee&the&actions&of& the&executive&branch.&After&clashing& repeatedly&with&the&PPP&and&Musharraf& governments&over&the&past&six&years,& Chaudhry&himself&is&due&to&retire&by&the& end&of&the&year.&The&prospect&that&the& judiciary&may&shift&back&into&quiescence& and&remove&one&of&the&few&formal& checks&on&the&PML`N&executive&appears& to&have&invoked&latent&fears&among&the& opposition&parties&of&Punjabi& dominance,&sparking&the&latest&eorts&by& the&opposition&to&reassert&itself.&The& PPP&in&particular&has&begun&to&voice& concerns&that&the&PML`N&is&overriding& the&interests&of&the&smaller&provinces,
whose&autonomy&from&the&federal& government&was&strengthened&with&the& compromise&passage&of&the&18th& Amendment&to&the&Pakistani& constitution&in&2010. After&years&of&contests&within&the& Pakistani&system&between&elected&and& unelected&ocials&seeking&to&dene&the& limits&of&their&decision`making& authority,&the&PML`Ns&solid&victory&in& the&May&polls&has&raised&the&prospect&of& an&empowered&prime&minister&with&a& strong&political&base&in&the&countrys& largest&province.&Its&policies&on&how&to& respond&to&the&threat&of&domestic& militancy&remain&vague&and&ill`dened,& and&Sharif&has&approached&relations& with&the&military&establishment&with& caution,&maintaining&a&united&public& front&on&Afghanistan&policy&and&moving& slow&on&the&potentially&inammatory& treason&prosecution&of&former&president& Musharraf.&But&the&PML`N&is&keenly& aware&of&the&high&public&expectations&it& faces&to&turn&around&the&countrys& economy,&and&has&prioritised&take&steps& in&that&regard,&particularly&focusing&on& the&revival&of&the&energy&sector. The&PPP&and&PTI&opposition&currently& remain&divided,&and&the&PML`N&enjoys& a&considerably&stronger&position&in& power&than&its&predecessors&from&which& to&begin&tackle&these&and&other&issues.& But&even&in&this&position,&its&authority& will&be&constrained,&raising&the&potential& for&sharper&political&conicts&in&the& coming&months&and&years&of&its&term& should&it&push&its&formal&powers&past& their&contestable&limits.
34
MUKUL&ASHER Mukul Asher is Professorial Fellow at the National University of Singapore and Councillor at the Takshashila Institution.
IN DEPTH PubEcon
The backward vision
Nitish Kumars vision of a backward state for Bihar will only perpetuate poverty and dependency.
Wonderlane
The&vision&of&current&political&leadership& of&Bihar&led&by&Chief&Minister&Mr&Nitish& Kumar&of&Janata&Dal&(United)&is&to&lobby& the&Union&government&to&declare&Bihar&& a&Backward&State.&This&will&qualify&the& state&to&obtain&additional&government& grants&which&will&predominantly&be& subsided&directly&or&indirectly&by& citizens&and&taxpayers&from&rest&of&India.& Currently,&eleven&states&have&been& granted&the&Backward&State&status,&and& Bihar&is&not&among&them.&But&with&2014&
35
General&Election&approaching,&the&issue& has&acquired&partisan&political& dimensions. From&a&development&perspective,& focusing&energies&on&the&backward& state&vision&is&likely&to&severely&limit& Bihars&economic&and&political&options,& and&perpetuate&poverty&and& dependency&on&the&Union&government& and&on&the&rest&of&the&country. Reasoning&leading&to&such&a&bleak& assessment&is&presented&below.
In&2012,&Bihar&accounted&for&8.5&percent& of&Indias&population&but&only&about&3.0& percent&of&the&GDP.&Bihar&is&among&the& least&urbanised&states&in&India,&with& more&than&four`fths&of&the&population& in&nonùrban&areas,&but&the&share&of& primary&sector&in&GSDP&(Gross&State& Domestic&Product)&is&only&about&a& quarter.&This&suggests&urgent&public& policy&priority&in&narrowing&the&gap& between&the&proportion&of&population& making&a&living&from&nonùrban& activities,&primarily&agriculture,&and&the& share&of&GSDP&generated&by&it.
debated,&declining&consumption& expenditure&inequalities&in&rural&areas& were&reversed&sharply&in&2011`12,&while& in&urban&areas&inequalities&increased& sharply.&The&Planning&Commission&has& projected&sharp&decline&is&poverty&ratio& is&Bihar&from&54.5&percent&of&the& population&in&2004`05&to&53.5&percent&in& 2009`10,&and&to&only&33.7&percent&in& 2011`12. Such&inconsistent&projections&have& undermined&credibility&of&the&Planning& Commission&as&a&competent&and& objective&institution.&BeLer&and&more& timely&data&from&more&independent& sources&than&currently&available&are& needed&to&analyse&linkages&between& growth&rates&and&their&composition&on& the&one&hand&and&poverty&and& inequality&trends&for&the&country&in& general&and&for&Bihar&in&particular&for& nuanced&and&objective&analysis. Limitations&of&data&notwithstanding,& without&narrowing&&of&the&gap&between& proportion&of&population&dependent&on& agriculture&for&livelihoods&and&the& income&generated&by&the&sector,&Bihar& cannot&improve&quality&of&life&of&its& people. Such&a&narrowing&can&only&be& accomplished&by&pursuing&traditional& drivers&of&growth,&and&by&improving& public&nancial&management,&including& making&public&service&delivery&systems& more&eective.&The&relevant&literature& and&the&country&experiences&over&a&long& period&suggest&that&key&drivers&of& growth&are&capital&investments&in& infrastructure&and&in&machinery&and& plant&equipment;&employable&labor& skills&in&an&economy&which&generates& productive&livelihoods;&managerial& competence;&and&ability&to&apply& existing&knowledge&improving&
Without!new!private! sector!investments,! dynamism!and! diversification!of! Bihars!economy!is! likely!to!be!adversely! impacted.

According&to&the&Planning&Commission& data,&in&2011`12,&measured&in&2004`05& prices,&and&using&the&Tendulkar& methodology,&Bihar&ranked&last&among& the&17&states&sample&in&per&capita&GSDP,& and&15th&in&proportion&of&poor& population.&This&suggests&that&there&is&a& high&correlation&(not&necessarily& causation)&between&the&level&of&per& capita&income&and&the&poverty&level. International&experience&strongly& suggests&that&public&policies&are&more& eective&in&reducing&poverty&than&in& reducing&income&and&consumption& inequalities,&though&public&policies& could&worsen&them.&&According&to&the& Planning&Commission,&&the&poverty& levels&in&India&as&a&whole&have&declined& signicantly,&though&its&extent&is&being&
36
eciency&of&resource&use&in&a&context& specic&manner. During&the&early&years&of&the&current& administration&when&it&was&in&alliance& with&the&Bharatiya&Janata&Party&(BJP),& improvement&in&community&safety,&and& emphasis&on&road&and&electricity& connectivity&did&lead&to&beLer&growth& environment. But&the&focus&on&the&Backward&State& status,&reiterated&in&the&chief&Ministers& Independence&Day&message&on&August& 15,&2013,&is&likely&to&create&perverse& incentives&towards&highlighting&the& states&backwardness,&not&rapidly& modernising&agriculture&and& manufacturing,&and&continue&the& lopsided&dependence&on&the&public& sector&&whose&organisational&and& institutional&capacities&to&use&knowledge & are&weak. The&erratic&behaviour&of&the&Chief& Minister&Mr&Kumar&indicated&by& decision&to&end&alliance&with&the&BJP,& and&his&immature&reaction&to&the&mid` day&meal&tragedy&of&July&16,&2013&in& which&23&children&died&and&more&than& 20&fell&sick&in&a&primary&school&in&the& Saran&District,&have&increased&risk& perceptions&of&investing&in&Bihar.&&Such& behavior&will&also&make&it&dicult&to& pursue&Public&Private&Partnerships& (PPP),&which&the&state&hopes&to&pursue& for&urban&transport&and&other&areas. The&Backward&State&vision&is&also& unlikely&to&persuade&aspirational&class& with&talent&to&regard&Bihar&as&a&location& for&their&economic&activities.&This&will& also&hamper&realisation&of&the&benets&of& the&demographic&advantage&due&to& rising&proportion&of&the&working&age& young&in&the&total&population.&Without& new&private&sector&investments,& dynamism&and&diversication&of&Bihars&
37
economy&is&likely&to&be&adversely& impacted. The&ending&of&the&alliance&with&the&BJP& has&also&deprived&Bihar&of&some&of&its& more&competent&Ministers.&In&particular& the&absence&of&Sushil&Modi,&former& Finance&Minister&of&Bihar,&will&impact&on& the&public&nancial&management&(PFM).& Key&elements&of&PFM&concern&ability&to& raise&own&resources&from&conventional& taxes,&and&from&non`conventional& sources&such&as&states&land,&mining&and& other&assets,&ability&to&deliver&public& services&eectively,&and&focusing&on& outcomes&or&results&rather&than&on& merely&spending. Total&budgetary&expenditure&as&percent& of&GSDP&at&around&25&percent&in&Bihar&is& well&above&the&average;&but&its&own` source`&revenue&as&percent&of&total& revenue&(or&current)&expenditure&at& about&a&quarter&is&substantially&lower& than&the&average&of&around&three`fths& for&&India&as&a&whole.&It&is&thus&already& heavily&dependent&on&the&Union& government&and&other&outside&sources& for&nancing&expenditure.&Absence&of& the&former&Finance&Minister&Sushil&Modi& will&deprive&the&State&of&a&person&who&is& well&versed&in&the&intricacies&of&the& Goods&and&Services&Tax&(GST)&to&be& introduced&in&the&coming&years.&Mr& Modi&&had&chaired&the&Empowered& CommiLee&of&the&state&nance&ministers& on&GST. Higher&risk&perceptions&of&Bihar&along& with&slower&growth&are&also&likely&to& increase&risk`premium&in&re`nancing&of& Bihars&public&debt&(it&was&about&30& percent&of&GSDP&in&2010`11).&The&state& will&need&to&continue&to&borrow&as&its& Gross&Fiscal&Decit&(GFD)&to&GSDP& ration&has&been&around&2.5&percent&in& recent&years.
The&Backward&State&vision&will&make& Bihar&even&more&dependent&on&the& outside&sources&reducing&scal&policy& autonomy&of&the&State,&and&this&in&turn& will&spill&over&in&even&more&constrained& policy&options&in&social,&political&and& other&areas.&It&will&also&create&perverse& incentives&discouraging&reliance&on&own& eorts&to&improve&living&standards.&In& economic&reasoning&this&is&called&moral
&hazard. In&a&column&in&the&Indian%Express,& titled&Modi`hit,&Shekhar&Gupta&stated& that&&Nitish&is&now&not&talking&about& governance&or&development.&Unless&the & current&course&is&reversed,&pessimism& about&the&future&economic&and&social& well`being&of&the&people&of&Bihar&is&fully& warranted.
38
IN DEPTH
HEMAL&SHAH Hemal Shah recently completed this report, while a scholar at the Takshashila Institution. She is now a research assistant at the American Enterprise Institute in Washington, DC.
Labour restrictions: Breaking six decades of deadlock

Initiatives to push the dynamics in the labour market to force regulatory practices to adapt to evolving economic and socio-political structures.
Water&Lemon
India&suers&from&one&of&the&most&rigid& labour&markets&in&the&world.&The&1991& reforms&liberalised&the&economy&to&some & extent,&but&labour&regulation&continues& to&remain&archaic,&restrictive,&and& convoluted.&As&a&result,&while&growth& rate&quadrupled,&the&rate&of&good& quality&jobs&has&remained&stagnant.&The& costs&imposed&by&labour&regulation&force& businesses&to&remain&in&the&informal&
39
sector,&where&regulation&is&lax&or&absent& and&social&protection&programmes&are& limited.&As&a&result,&93&percent&of&the& Indian&workforce&derives&their& livelihoods&from&the&informal&sector&& making&economic&modernisation,&and&in& turn,&generation&of&good`quality& livelihoods,&a&distant&goal. A&quick&look&at&growth&versus& employment&post`1991&brings&out&the&
inconsistent&relationship&between&the& two:&As&growth&rates&increased&from& around&3.5&percent&to&6&percent&between& 1991`2000,&employment&growth&fell&from& 2&percent&to&1&percent&in&the&same& period.&The&situation&improved&in& 2000`2005&when&Indias&growth&rate& averaged&7&percent,&and&employment& went&up&by&1.6&percent.&But&as&a&U`turn,& in&2005`2010&when&growth&averaged& higher&at&8&percent,&employment& dropped&by&5.4&percent,&as&per&World& Bank&gures.
casual&jobs.&This,&of&course,&saw&the& continuing&enlargement&of&the&informal& sector&to&93&percent&today. On&the&other&hand,&formalisation&&and& larger&rms&&is&associated&with&higher& productivity,&innovation,&and& competition&for&exports.&But&of&course,& most&Indian&businesses&cannot&avail&of& this&opportunity&owing&to&disincentives& of&moving&to&the&formal&sector.& However,&formalisation&is&not&desirable& until&labour&laws&are&relaxed,&statutory&
The&rate&of&good&jobs&creation&has&also& suered,&as&per&data&from&CRISIL.&For& instance,&in&2005`10&compared&to& 2000`05,&the&number&of&casual&(informal)& jobs&rose&substantially,&from&8.6&to&21.9& million.&But&regular&jobs&dropped&from& 18.6&million&to&5.7&million.&However,&the& selfèmployed&took&the&biggest&hit&with& a&drop&of&25&percent&in&2005`10& compared&to&2000`05.&In&short,&92.7& million&jobs&of&beLer&quality&were&added& in&2000`05,&compared&to&the&2.2&million& increase&in&2005`10,&mostly&composed&of&
40
costs&decline,&and&service&quality&of& social&security&organisations&is& improved. Analysts&and&policymakers&have& debated&the&challenge&of&inexible& markets&in&India&for&decades.& Recommendations&often&proposed& drastic&measures&that&have&met&with& staunch&resistance&from&parties&whose& interests&are&vested&in&an&inexible& labour&market&&including&employees,& trade&unions,&and&the&labour&ministry.&
However,&in&the&face&of&challenges&such& as&falling&growth&rates,&rising&scal&and& current&account&decits,&and&a&stagnant& or&declining&manufacturing&sector,&less& sensitive&labour&market&reforms&merit& urgent&consideration.&A&workable&set&of& initiatives&in&the&following&three&areas&& by&accounting&for&those&in&favour&of& status&quo&and&others&who&favour& immediate&reform&&could&result&in& beLer&outcomes.
Even!if!it!is!the! intention!of!the! government!to!reform! in!this!area,!selling! those!reforms!in!a!way! that!fully!compensates! the!short!term!reform! losers!is!an!extremely! difficult!task.!

The&rst&area&concerns&increasing& contestability&in&the&labour&market.& Initiatives&are&needed&to&identify&clearly& the&diculties&in&scaling&up&social& security&in&the&informal&sector.& Currently,&the&schemes&under&the& Employment&Provident&Fund& Organisation&(EPFO)&make&no&economic& sense&&they&are&not&only&expensive,&but& also&oer&substandard&services.&Interests & of&poor&workers&take&the&biggest&hit&with& almost&50&percent&of&their&monthly& wages&channelled&towards&the&EPFO.& With&low&perceived&value,&tendency&for& poor&employees&to&avoid&the&EPFO&is& higher.&There&is&also&evidence&of& collusion&between&employers&and&labour& inspectors&to&avoid&extending&these& options&at&all&to&employees&&for&bribes&
41
lower&than&the&required&value&to&be& matched&by&the&employer.&Two&reforms& are&needed&&First,&reform&the&EPFO&and& protect&contract&workers.&Competition& from&the&newer&National&Pension& System&(NPS)&could&force&EPFO&to& reform.&Unlike&the&EPFO,&it&oers&a& dened&contribution,&higher&rate&of& return,&is&webènabled,&and&well& regulated,&but&employers&need&to&extend& this&option.&The&government&could&also& look&into&investing&in&private&companies& whose&services&are&similar&to&Team& Lease&and&Randstad,&whereby&contract& labour&can&be&protected&by&security& provisions.&Aadhar`linked&benets& transfers&could&play&a&role& simultaneously.&These&small&reforms&can& reduce&the&tradeò&to&stay&informal&& but&in&the&interim,&states&should&focus&on& creating&sustainable,&productive,& livelihoods&that&are&based&on&the&main& drivers&of&growth,&including&the& application&of&knowledge&economy. The&second&area&involves&devolving& more&power&to&the&states.&Currently,& labour&regulation&lies&in&the&Union&List,& with&some&other&subìtems&&trade& unions,&social&security,&and&working& conditions&&on&the&Concurrent&List.&It& would&make&more&sense&to&move&these& to&the&State&List&so&that&states&can& exercise&freedom&over&contextualising& legislation&around&their&own&economic& and&political&structures.&There&is& increasing&evidence&from&the&2012& Labour&Bureau&report:&states&that& amended&their&legislation&in&further&pro` worker&directions&lost&out&on&industrial& production,&compared&to&those&who& improved&on&the&same.&This&ts&with& Bibek&Debroys&warning&that&federal& freedom&could&be&used&irresponsibly.& However,&there&is&a&stronger&probability& that&increased&federal&freedom&could& force&states&to&modernise&labour&laws&as&
development&becomes&increasingly& important&to&voters,&especially&young& job&seekers.&Competition&from& dierentiated&labour&market&dynamics& could&nudge&states&in&the&desired& direction&&as&reected&by&indices&such& as&the&Teamlease&labour&ecosystem& index&or&Catos&economic&freedom&in& Indian&states. The&third&area&highlights&the&importance& of&substantive&dialogue&among& stakeholders.&Trade&unions&often&view& reforms&as&a&dilution&of&their&rights.& While&this&may&be&true&in&some&cases,&it& may&also&be&that&they&do&not&fully& understand&the&long`term&implications& of&reforms.&It&is&important&to&balance& exibility&with&security.&Though& exibility&is&a&threatening&term&for& unions,&their&perceived&severity&could&be & reduced&by&clearly&unbundling&dierent& degrees&of&exibility&and&enforcing& them.&For&instance,&layos&and& retrenchment&with&adequate&benets&are & more&palatable&to&the&trade&unions&and& political&parties&than&closures&&thereby& making&it&easier&to&sell&such&reforms.&It& has&been&speculated&that&if& compensation&for&layos&and& retrenchment&were&increased&from&30& days&pay&per&year&worked&to&45&days,& political&resistance&may&diminish.& Higher&severance&packages&could&be& more&acceptable&to&unions,&oer&greater& exibility&to&business,&beLer&policy& design,&and&lower&transaction&costs&for& new&companies.&Furthermore,& employers&should&take&initiatives&to& make&union&bargaining&unnecessary&by
&investing&in&community&development& measures,&work&benets,&timely&breaks,& and&beLer&work&conditions&&successful& approaches&by&large&construction& companies&in&India.&Under&the&new& Companies&Bill,&compulsory&spending& on&community&development&will&be&a& step&forward&in&this&direction. This&is&not&a&comprehensive&package&of& reforms&but&a&combination&of&suggested& initiatives&to&push&the&dynamics&in&the& labour&market&to&force&regulatory& practices&to&adapt&to&evolving&economic& and&socio`political&structures&&as& without&adaptability&welfare&cannot&be& advanced.&Even&if&it&is&the&intention&of& the&government&to&reform&in&this&area,& selling&those&reforms&in&a&way&that&fully& compensates&the&short&term&reform& losers&is&an&extremely&dicult&task.&It&is& time&we&start&a&nuanced&discussion&on& how&to&develop&the&labour&market:&to& think&about&initiatives&in&the&three&above & areas,&which&are&compatible&with&the& current&political&economy,&and&include& the&informal&sector&in&the&reforms& dialogue&&to&create&a&beLer&climate&for& future&reforms&in&the&labour&market.&In& the&face&of&sluggish&growth&rates,&rising& scal&and&current&account&decits,&and&a& demographic&dividend&that&could&be& exploited,&Indias&political&elite&must& remember&that&boosting&good&quality& jobs&is&a&maLer&of&top&priority&for&social& cohesion&and&economic&stability. This&piece&is&a&part&of&the&research& report,&Towards&greater&labour&market& exibility:&Issues&&&Options&for&the& Takshashila&Scholars&Programme.
42
IN DEPTH
V&ANANTHA&NAGESWARAN V Anantha Nageswaran is the Fellow for Geo-economics at the Takshashila Institution.
Confusion reigns
It is unclear as to which objective of RBI has been achieved with its recent announcements.
Luciano&Belviso
The&title&of&this&article&is&not&just&about& RBIs&bizarre&announcement&three&days& ago&(Tuesday,&August&20)&that&it&had& largely&achieved&the&goals&it&set&out&for& itself&in&mid`July&when&it&raised&interest& rates&by&200&basis&points.&Yours&truly& applauded&the&move.&I&wanted&RBI&to& stand&rm.&It&diluted&its&stance&a&liLle& when,&in&the&monetary&policy& communication&of&July&30,&it&said&that& the&rate&move&of&mid`July&was& temporary.&That&was&a&confusing&signal& and&second,&it&reduced&the&eectiveness& of&the&rate&move&as&it&alters&expectations& and&hence,&behaviour.&Then,&this&week,&it& said&that&it&would&add&liquidity&by&
43
buying&long`dated&bonds.&The&rupee& had&not&stabilised&and&more&broadly,& nancial&market&conditions&in&India&had& not&stabilised.&So,&it&is&unclear&as&to& which&objective&of&RBI&had&been& achieved?&The&announcement&of&August& 20&was&baing,&to&say&the&least. It&gives&one&the&impression&that&there&is& really&no&one&in&charge&now&or&that& multiple&people&are&in&charge&of&the&RBI& at&the&same&time. Even&now,&we&nd& careless&arguments&being&advanced& about&how&the&rupee&should&be&allowed& to&nd&its&level.&In&normal&
circumstances,&yes.&If&the&country& fundamentals&are&right,&let&asset&prices& nd&their&own&level.&If&fundamentals&are& bad,&governments&have&two&tasks.&One& is&that&asset&prices&should&be&stabilised& lest&they&worsen&the&fundamentals& beyond&repair&(the&reverse&feedback& eect&from&asset&prices&to&economy&will& happen)&and&the&government&should&get& to&work&fast&and&focused&on& fundamentals.&India&is&in&this&situation& now. Arguments&as&to&why&the&rupee&should& be&stabilised&were&made&by&yours&truly& on&several&occasions&in&the&last&one& month.&You&can&nd&the&most&recent& one&here.&Also,&read&this&excellent& primer&by&Sajjid&Chinoy&in&Business% Standard&few&days&ago. First,&it&is&careless&to&argue&that&a&falling& rupee&would&boost&exports.&Other& things&being&equal,&it&might.&Other& things&are&not&equal.&Global&demand&is& weak: 1.&US&recovery&is&shallow&and& supercial.&Just&check&out&the&Chicago& Fed&National&Activity&Index&and&the& weekly&percentage&change&in&new& mortgage&applications. 2.&Europe&is&just&trying&to&get&its&head& above&water.&How&long&can&it&stay&above & water&is&any&ones&guess. 3.&Japans&Fukushima&reactor&radioactive & water&leak&&it&appears&to&be&a&huge& problem&&is&yet&to&sink&into&peoples& consciousness.&It&could&seriously&erode& the&governments&authority&and&the&PMs& credibility. 4.&HSBCs&Purchasing&Manager&Index&for& China&prints&an&inexplicably&strong& headline&number&when&its&the& components&are&weak.&Go&gure.&
5.&Most&other&key&emerging&economies& are&in&a&crisis&mode. Lastly,&Indian&costs&have&gone&up&so& much&in&recent&years&and&productivity& so&low&that&we&do&not&know&the&extent&of& rupee&depreciation&that&is&needed&to& make&Indian&exports&competitive&again& on&a&sustainable&basis.
The!government!should! consider!incentivising! its!manufacturers!to! trade!in!clean! diamonds,!possibly! through!economic! means!such!as!tax! breaks,!subsidies,!or! guaranteed!contracts.!

So,&a&weak&rupee&is&likely&useless&when& demand&elsewhere&is&anaemic.&Second,&a& weak&rupee&raises&domestic&costs.&A& weak&rupee&has&made&crude&oil&costlier.& The&50`paise&per&month&hike&in&diesel& price&has&been&nullied&by&the&weak& rupe&and&rm&trend&in&the&global&crude& oil&price.&The&under`recovery&in&the& price&of&diesel&is&INR10.22&per&litre&as&of& August&16.&Check&out&the&website&of&the& Indian&Oil&Corporation&where&it&is& updated&regularly.&The&under`recovery& is&the&same&as&what&it&was&when&the& diesel&price&normalisation&started.&We& are&back&to&square&one.&If&rupee&remains& weak,&the&under`recovery&would&worsen& further.&Domestic&price&of&diesel&has&to& be&raised&one&shot&and&freed.&Fat&chance& it&would&happen. Third,&this&point&has&been&made&ad% innitum:%Indian&corporations&have& borrowed&50&billion&dollars&in&the&last&
44
four&years.&The&twiceà`year&Financial& Stability&Report&of&the&Reserve&Bank&of& India&gives&all&the&information&one& needs&on&this.&These&loans&are&now& anywhere&between&10%&and&50%&costlier& to&repay&because&of&rupee&depreciation.& If&the&rupee&were&to&weaken&further,&it& would&make&many&Indian&corporations& default&on&their&foreign&loans.&That& would&shut&India&o&from&foreign&debt& markets&for&a&long&time.&It&has&both& reputational&and&real&consequences&& serious&ones. So,&the&rupee&had&to&be&stabilised&and& measures&include&funding&and&reducing& the&current&account&(CA)&decit.&What&is& the&reality? (1)&The&Reserve&Bank&of&India&has&not& done&enough&to&stabilise&the&rupee& beyond&its&rate&hike&in&mid`July.&Since& then,&it&has&diluted&the&measure.&It&has& not&allowed&sucient&time&for&the&rate& hike&to&play&out.&RBI&is&being&pulled&in& dierent&directions. (2)&CA&decit&must&be&funded.&But,& funding&it&now&should&not&be&at&the& expense&of&making&too&many& concessions&to&foreign&investors&and& lenders&that&would&be&long`term&costly. (3)&Reducing&current&account&decit& means&reducing&imports.&We&have&seen& how&export&revival&is&a&harder&task&now.& One&way&to&reduce&import&growth&is&to& slow&the&economy,&near`term.&That&is& what&RBIs&rate&hike&of&mid`July&would& have&achieved. But,&that&measure&is&being&diluted&since& the&government&does&not&seem&to&be& willing&to&sacrice&growth&further&for&
several&reasons&&economic&(tax& revenues),&political,&etc. (4)&Another&way&to&reduce&the&current& account&decit&is&to&reduce&the&scal& decit&drastically&&yes,&not&only&the& Food&Security&Bill&but&many&ad`hoc&tax& concessions&made&to&corporations&can& and&should&also&be&withdrawn&now. (5)&Raising&import&duty&on&at&screen& television&set&and&reducing&Indians& foreign&exchange&outows&are&a&bean` counters&response&to&the&problem. In&sum,&the&rupee&is&not&being&stabilised& with&full&commitment.&Hence,&nancial& conditions&too&would&remain&unstable.& The&current&account&decit&is&not&being& tackled&the&right&way&because&the& government&is&unwilling&to&pay&the& growth&bill&for&doing&so. What&is&the&way&out?&It&is&possible&that& all&the&confusion&has&further& undermined&Indias&business&sentiment& and&condence&and&that&economic& growth&would&be&lower&on&its&own.&That& would&lower&imports&in&any&case.&Hence,& the&governments&confusion,& prevarication&and&vacillation&appear&to& be&working,&in&reducing&economic& growth!&That&is&some&strategy! Investors&misplaced&faith&in&the& economic&recovery&in&the&US&and& obsession&with&the&Fed&reducing&asset& purchases&might&ease,&reducing&pressure & on&emerging&market&currencies,& including&on&the&Indian&rupee. There&can&always&be&strokes&of&luck& although&the&dice&has&not&rolled&in& Indias&favour&since&2004.
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IN DEPTH
DAVID&KEPES David Kepes is a journalist and a member of Be Smart, an NGO that examines the contemporary trade in conflict minerals.
Conflict minerals trade in India
There is an opportunity for India to build a governance structure that can help end the trade in blood minerals and also protect its long-term business interests and indicate its legitimacy as a responsible state.
Kim&Alanis
In&November&2010&the&district&court&of& Surat&convicted&two&men,&Robai&Hussain& of&Guyana&and&Yusuf&Ossely&of&Lebanon& to&four&years&in&jail&for&the&trade&of& conict&diamonds.&Hailed&as&an& important&step&in&improving&Indias& legitimacy&in&the&ght&against&the&blood& diamond&trade,&today&the&judgment& unfortunately&remains&a&footnote&in&the& otherwise&thriving&industry.&While&the& Indian&government&continues&to&be& embarrassed&by&its&inability&to&curb&the&
46
trade&of&blood&diamonds,&the&country& now&faces&a&new&taint&on&one&of&its&most& promising&industries:&the&mining&and& usage&of&conict&minerals&such&as&Coltan& and&tantalite&in&electronic&devices.&As& the&Indian&government&looks&to&navigate & the&growing&international&eort&to&end& the&mining&of&conict&minerals&it&should& look&to&the&past&failures&of&the&Kimberley& Process&and&the&countrys&own& institutional&failures&in&combaLing&the& trade&of&conict&diamonds.&In&doing&so&
the&country&may&yet&have&a&chance&to& take&advantage&of&a&unique&opportunity& to&remove&a&stain&from&one&of&its&most& important&industries&and&rebuild& international&legitimacy. Failures&of&the&Kimberley&Process&and& the&Indian&government The&Kimberley&Process&(KP),&established& in&2003,&is&a&certication&scheme&that& seeks&to&prevent&conict&diamonds&from& entering&the&market.&India,&a&founding& member,&has&supported&the&organisation& for&a&decade&in&an&eort&to&stop&the& trade.&Unfortunately&a&number&of& Kimberley&supporters&and&founders& have&accused&the&KP&of&suering&from&a& number&of&institutional&barriers&that& have&stied&its&ecacy&including& consensus&decision`making&that& requires&unanimity,&ill`dened&sanctions& requirements,&loose&monitoring& mechanisms,&and&operational& disorganisation.&At&the&heart&of&these& problems,&unfortunately,&is&often&the& recalcitrance&of&states&locked&deeply&into& political&struggles&for&power&and&wealth. The&failure&of&this&concerted& international&eort&manifests&itself&no& more&clearly&than&in&the&city&of&Surat.& Processing&92&percent&of&the&worlds& stones,&nearly&half&a&million&workers& frequently&face&unsafe&work&conditions& as&they&process&the&ow&of&diamonds& that&have&bypassed&the&KP&certication& scheme.&The&Indian&government,& meanwhile,&struggles&to&make&progress& on&the&issue.&Instead&private& organisations&such&as&the&Diamond& Development&Initiative&(DDI)&and&the& Responsible&Jewelers&Council,&formed& by&partnerships&between&civil&society& and&private&sector&companies,&and&now& supported&by&a&number&of&nations,&have& been&created&to&succeed&where&the&KP& failed.&As&many&countries&in&the&G7&who&
47
welcomed&the&creation&of&the&DDI&at&the& 2007&summit&continue&to&combat&the& trade&of&conict&diamonds,&India&is&left& behind.
The!government!should! consider!incentivising! its!manufacturers!to! trade!in!clean! diamonds,!possibly! through!economic! means!such!as!tax! breaks,!subsidies,!or! guaranteed!contracts.!

Conict&minerals Told&in&short&and&surface&remarks,&the& brushstrokes&of&the&story&appear&much& the&same&as&they&did&in&the&late&1990s& when&organisations&such&as&Global& Witness&and&Partnership&Africa&Canada& were&leading&the&charge&against&the& trade&of&diamonds&mined&in&conict& zones.&Myriad&boats&arrive&from&the& shores&of&Arabic&and&African&nations,& transactions&are&done&in&cash&and&with& no&questions&asked,&the&diamonds&are& processed&in&with&clean&ones&and& afterwards&shipped&o&to&other& manufacturers&or&retailers&down&the& supply&chain,&ultimately&ending&up&in& stores&as&polished&jewelry&and,& frequently,&certied&conict`free.&While& this&story&encapsulates&much&of&the& conict&mineral&trade&it&fails&to&engage& with&both&the&scope&of&our&usage&of&the& minerals&in&society&today&as&well&as&the& breadth&of&the&industry&producing&and& processing&it.
Coltan&is&the&industrial&term&for& columbite&tantalite,&a&metallic&ore.& Because&of&its&high&impact&strength&and& unique&ability&to&conduct&heat&and& electricity,&it&is&sought&after&as&a&material& in&electronic&capacitors.&Such&capacitors& power&many&of&the&devices&that&have& become&ubiquitous&in&our&daily&lives& such&as&computers,&mobile&phones,&DVD& players,&and&video&game&systems.& Manufacturers&and&retailers&such&as& Nokia,&Motorola,&Compaq,&Dell,&IBM,& Ericsson&and&Sony&are&among&the&major& companies&that&produce&goods&with& Coltan,&often&with&India&acting&as&the& middleman&between&the&companies&and& the&conict&zones&in&which&the&mineral& originates. The&comparative&size&of&the&electronic& industry&to&that&of&the&diamond&industry& also&cannot&be&overlooked.&While&Indias& diamond&industry&is&the&fastest&growing& in&the&world,&turning&over&some&$8bn& per&year&as&of&2007,&the&electronic& industry&comes&in&at&nearly&8&times&that& size,&at&$65bn.&While&this&remains&a& fraction&of&the&global&industry,& constituting&only&3.5&percent,&this&should& be&no&comfort&for&a&nation&that&is&adding& 2&million&cell&phone&users&a&month.&As& India&grows&so&too&will&its&collusion&in&a& supply&chain&that&is&directly&fuelling& internal&conicts&in&the&Democratic& Republic&of&Congo,&puLing&workers&into& forced&labour&conditions&tantamount&to& slavery,&and&destroying&the&surrounding& ecosystem. Employing&lessons&of&the&past Given&the&failures&both&at&home&and& abroad&in&stopping&the&ow&of&conict& diamonds&the&government&must&seek& new&and&innovative&ways&to&join&the& international&eort&to&stop&the&ow&of& conict&Coltan.&India&possesses&a& number&of&potential&tools&for&improving&
48
its&foreign&aairs&policies&in&this&eld& and&should&rst&look&westwards&at&the& recently&implemented&Dodd`Frank&Act& in&the&United&States.&Though&the&Act&has & sparked&a&restorm&of&controversy&&its& critics&accusing&it&of&asphyxiating&the& clean&mineral&trade&in&the&DRC&and&thus& devastating&the&livelihood&of& innumerable&artisanal&miners&&India& should&use&it&as&a&prototype&for&the&type& of&legislation&that&the&country&needs&in& order&to&engage&with&its&mineral&trade. India&should&also&work&with&its&foreign& partners&as&well&as&international&private& sector&actors&to&work&towards& determining&whether&or&not&the&minerals& they&are&using&are&coming&from&conict& zones.&Thwarting&smaller&actors&that& would&seek&to&bypass&any&sort&of& regulation,&as&India&has&witnessed&in&its& ght&against&conict&diamonds,&will&be& no&easy&task.&The&government&should& consider&incentivising&its&manufacturers& to&trade&in&clean&diamonds,&possibly& through&economic&means&such&as&tax& breaks,&subsidies,&or&guaranteed& contracts.&Corporate&Social& Responsibility&policy&instruments&of&this& kind&have&been&widely&adopted&in&the& West&but&are&by&no&means&new&to&India& either.&Recently&the&government&passed& the&Companies&Bill,&an&overhaul&of& Indias&antiquated&private&sector& governance,&with&a&mandate&that& companies&having&a&net&worth&of&Rs&500& crore&or&turnover&of&Rs&1000&crore&must& spend&2&percent&of&their&net&prot&on& CSR&activities.&The&Bill&serves&as&an& excellent&precedent&for&the&kind&of& measures&India&would&have&the&power& to&adopt&in&looking&to&engage&with&the& private&sector&in&the&conict&mineral& trade.&With&proper&enforcement&and& monitoring&incentivising&instruments& could&help&many&Indian&businesses&to& work&with&multi`national&corporations&
without&having&to&deal&in&cheap&stones& from&conict&areas. Though&India&is&well&within&its&means&to& take&the&rst&steps&in&ending&the&conict& mineral&trade,&working&with&partner& nations&will&prove&invaluable.&Many& western&countries&such&as&the&United& States,&Canada,&and&Belgium&have&taken& an&interest&in&the&subject&and&would&be& powerful&allies&in&incentivising& companies&that&use&Coltan&to&take& action.&That&a&global&problem&requires&a& global&response&is&nothing&new&to&India& but&the&issue&remains&a&unique& opportunity&for&the&country&to&repair&the& legitimacy&it&lost,&and&continues&to&lose,& from&its&failures&in&engaging&with&the& conict&diamond&trade. A&founding&member&of&the&Kimberly& Process,&India&has&watched&the& organisation&falter&over&the&last&decade& and&is&well&placed&to&build&on&the
lessons&of&those&failures&were&it&to&help& construct&a&new&international& organisation.&Combined&with&eorts&that& serve&artisanal&miners&and&those&who& are&mining&minerals&cleanly&in&countries& whose&trade&is&tainted&by&violence&there& may&still&be&hope&for&a&certication& scheme.&Regardless&of&method,&however,& it&is&clear&that&only&a&concerted& international&eort&will&be&able&to& properly&implement&changes&to&a&global& supply&chain&that&is&witness&to&conict&in& the&DRC&and&increasing&violence&in& countries&such&as&Venezuela&and& Colombia.&For&India,&at&a&time&when&the& institutional&architecture&of&the&world&is& shifting&to&include&the&so`called&BRICS& nations,&there&is&an&opportunity&for&the& country&to&build&a&governance&structure& that&can&not&only&help&end&the&trade&in& blood&minerals&but&also&protect&its&long` term&business&interests&and&indicate&its& legitimacy&as&a&responsible&state.
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BOOKS
KRUPAKAR&MANUKONDA Krupakar Manukonda works on education policy at Takshashila Institution and blogs at Pratyaya.
Democracy and the role of citizen elite

To uplift each and every citizen, the citizen elite should consciously attack the impediments and constantly engage with the state policies.
Should&democracy&be&a&mere&reection& of&the&will&of&the&people&or&should&it&be& shaped&by&individuals&with&a&vision& towards&aLainment&of&greater&fraternity& and&common&citizenship?&In&his&latest& book&Revolution%from%Above:%Indias% Future%and%the%Citizen%Elite,&Dipankar& Gupta&provides&a&compelling&argument& for&the&laLer.&He&calls&the&individuals& who&take&this&mantle&of&shaping& democracy&as&citizen&elite&or&elite&of& calling.&If&democracy&is&viewed&only&as& a&reection&of&the&given,&then&it&will& eventually&get&caught&up&in&the&forces&of& inertia&and&restrict&the&imagination&of& the&leaders&to&be&aspirational.&In&the& contemporary&political&scenario&where& retrograde&concessions&are&enforced&to& appease&identities&and&restrictions&on& individual&freedom&are&justied&as& political&realities,&the&need&for&the&citizen& elite&who&can&bridge&the&barriers&of& multiple&identities&and&foster&common& citizenship&is&a&refreshing&argument. Professor&Gupta&gives&many&examples& of&how&the&citizen&elite&transformed& developed&countries.&In&India,&Gandhi& was&a&citizen&elite&who&challenged&the&
50
status&quo&using&his&own&distinctive& methods&to&give&India&a&modern,&liberal& democratic&state.&Gandhis&inuence& pervaded&the&nature&of&our&constitution.& Gandhi&who&has&always&been& prompting&us&to&be&modern,&secular&and& democratic&even&if&the&bulk&of&us&were& looking&the&other&way.&Gandhi&forced&us& to&reject&untouchability,&embrace& fraternity,&protect&minority&rights,&give& equal&space&to&women,&and&question& unchecked&industrialization&Without& Gandhi,&India&may&well&have&become& independent,&perhaps&even&earlier,&but& would&we&have&been&a&liberal& democratic&nation?&This&question&gives& us&pause&before&we&make&liLle&of& Gandhis&legacy,&Professor&Gupta& correctly&underlines.&Similarly,&Nehru& was&a&citizen&elite&for&his&strict& adherence&to&secularism,&his&vision& while&building&premier&educational& institutions&and&for&his&ve`year&plans.& In&contrast,&Mandal&Commission& recommendations,&OBC&reservations,& caste`based&census,&and&preventing& criminals&from&politics&are&some&of&the& instances&where&political&leaders&
succumbed&to&the&forces&of&inertia&or& short&term&political&gains&and&failed&to& emerge&as&the&citizen&elite. According&to&Professor&Gupta,&what&we& now&have&in&India&is&not&a&citizen&elite& but&philanthropists&helping&the&poor&out& of&sympathy.&This&may&result&in& individual&mobility&for&a&few&but&the& scale&of&transformation&in&India&requires& structural&changes&and&signicant& investments&in&delivery&systems.&The& citizen&elite&should&consciously&aLack& the&impediments&and&constantly&engage& with&the&state&policies,&which&can&uplift& each&and&every&citizen.&Elites&have&a& voice&which&the&poor&do&not&have.&Elites& have&an&experience&which&the&poor& cannot&imagine.&Hence&the&performance& of&public&services&in&a&country&is&a& reection&of&elite&engagement&in& reforming&them.&This&forms&the&central& argument&of&this&book. The&driving&force&of&the&citizen&elite& could&be&necessary&and&sucient&to& bring&about&political&transformation&and& the&author&lucidly&connects&the&concepts& of&fraternity,&citizenship&and&the& inuence&of&the&citizen&elite&in&a& democracy.&However,&the&extension&of& the&inuence&of&the&citizen&elite&to& address&the&issues&of&public&services&is&a& hyperbole&and&the&book&loses&its& direction&in&the&second&half.&It&is&from& this&point&onwards&that&all&the&economic& reasoning&goes&for&a&toss&and&the&author& oers&simplistic&policy&prescriptions.& Professor&Gupta&accurately&identies&the & problems&when&he&says&that&most&of&the& spending&in&the&education&and& healthcare&sectors&is&private&or&when&he& laments&the&lack&of&social&security&for&a& majority&of&the&workforce.&The&shortage& in&both&the&quantity&and&the&quality&of& public&service&delivery&systems&has& indeed&resulted&in&extensive&
51
privatisation&of&education&and&health& care.&These&public&services,&which&ought& to&be&a&platform&for&greater&fraternity,& have&actually&become&a&source&of&class& based&compartmentalisation.
The!driving!force!of!the! citizen!elite!could!be! necessary!and!sufficient! to!bring!about!political! transformation!and!the! author!lucidly!connects! the!concepts!of! fraternity,!citizenship! and!the!influence!of!the! citizen!elite!in!a! democracy.
But&leadership&alone&is&not&enough&for& delivering&public&goods;&it&should&be& backed&by&sucient&resources&and& calculated&tradeos.&Professor&Gupta& calls&for&universal&polices&in&the&social& sector&as&targeted&policies&make&liLle& sense&with&a&huge&population&group& being&poor.&He&argues&that&the&money& for&these&services,&is&not&a&problem& because&when&the&growth&rate&is&about& 8&percent,&there&is&a&lot&of&money& around&and&in&any&case&welfare& systems&in&Europe&and&Canada,&as&well& as&in&East&Asia,&were&set&in&place&not& when&the&countries&were&rich,&but&when& they&were&poor.&Hence&India&should& also&implement&universal&policies& without&assessing&its&resource& constraints. The&importance&of&universal&coverage&in& health&care&and&education&for& sustainable&growth&and&human&
development&has&also&been&echoed&by& economists&like&Amartya&Sen&but&what&is& peculiar&about&Professor&Guptas& argument&is&the&authority&with&which&he & claims&that&money&is&not&an&issueso& much&so&that&he&titles&the&chapters&on& education&and&health&care&as&It&Is&Not& About&Money:&Fraternity&and&Universal& Health&and&It&Still&Is&Not&About& Money:&Call&for&Universal&Education& respectively.&His&ideas&are&similar&to& those&of&the&National&Advisory&Council& (NAC),&that&believes&in&throwing&money& and&legislations&to&resolve&complex& problems&of&poverty&and&social&services.& It&is&this&line&of&thinking&that&got&us&into& the&present&macro&economic&crisis.&The&
blanket&policy&prescriptions&in&this&book& will&only&exacerbate&the&economic& downturn. The&philosophical&argument&about&the& need&for&citizen&elite&to&challenge&the& status%quo&and&to&shape&the&democracy& makes&Revolution%from%Above&an& interesting&read.&The&book&should&have& ideally&been&concluded&there.& Unfortunately,&the&vertigoìnducing& economic&reasoning&that&follows&while& advocating&universal&public&services&has& beliLling&eect&on&the&ne&sociological& arguments&made&earlier.&A&book&that& begins&so&promisingly&leaves&the&reader& dissatised&at&the&end.
52
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The Graduate Certicate in Public Policy (GCPP) Programme is an intensive twelve-week distance learning course suited to the demands of today's dynamic Indian. Gain the knowledge of the policymaking process and the factors that inuence it. Acquire skills required to analyse policy in your own context and apply this understanding to your personal, professional and political goals. Learn from an international network of academic experts through an innovative, exciting and inspiring curriculum. Open to individuals from any sector, any discipline, any place. If you are studying or working in politics, media, civil service, non-government organisations, law, advocacy, regulatory aairs and international business, expertise in public policy will set you apart from the rest. Financial assistance available for deserving candidates.
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Pragati

The Indian National Interest Review

A clean air policy

Pragati- The Indian National Interest Review

Reforming labour laws

39 LABOUR RESTRICTIONS: BREAKING SIX DECADES OF DEADLOCK

15 A CLEAN AIR POLICY

18 SECURING INDIAS CYBERSPACE

46 CONFLICT MINERALS TRADE IN INDIA

22 BYPASSING THE STATES

25 SLEEPING WITH THE ENEMY

29 CLARITY BEGINS AT HOME

HIGHLIGHTS 4 BALOCHISTAN-- A BLIND SPOT

35 THE BACKWARD VISION

Pragati- The Indian National Interest Review

Pragati- The Indian National Interest Review

Balochistan A blind spot

!It!is!that!in!more!than! six!decades!of!its! existence!as!a!battered! province!of!Pakistan,! not!once!has! Balochistans!cause! been!emphatically! raised!in!the! international!space.!

Despite!its!vast! reservoirs!of!natural! resources,!severe! economic!exploitation! by!Pakistan!has! resulted!in!Balochistan! becoming!one!of!the! poorest!in!that!country.

Pragati- The Indian National Interest Review

underlying&philosophical&message&in&his& words.&The&initial&years&of&Mahatma& Gandhis&peaceful&movement&coincided& with&Akbars&later&years.&He&embraced& Gandhian&philosophy&and&worked&hard& to&bridge&the&gap&between&Hindus&and& Muslims,&which&was&widening&in&the& early&twentieth&century.

Urdu!poetry!has! witnessed!and! recorded!the!struggle! for!Indian! Independence!since! 1857.!

Pragati- The Indian National Interest Review

PERSPECTIVE Acting Pricey

The (wrong) battle for the rupee

It!is!perhaps!best!we! leave!the!rupee!to!go! where!it!has!to!go,!and! only!take!steps!that! address!the!problem,! not!the!symptom.

Pragati- The Indian National Interest Review

PERSPECTIVE Public Affairs

A clean air policy

Pragati- The Indian National Interest Review

ROHAN&JOSHI Rohan Joshi is a Fellow at the Takshashila Institution.

PERSPECTIVE Spice Route

Securing Indias cyberspace

government&of&India&should&be&to& enhance&domestic&capabilities&in&cyber` security,&both&in&terms&of&the& development&of&institutional,&legislative& and&technical&mechanisms,&as&well&as&a& base&of&skilled&professionals&supporting& government&and&private&eorts&to&secure

cyberspace.&&These&are&mid`&to&long`term& projects&no&doubt,&but&they&require& adequate&stewardship,&and&investment& in&resources&and&capacity&building&by& the&government&and&the&countrys& private&institutions.

Pragati- The Indian National Interest Review

M&R&MADHAVAN MR Madhavan is President of PRS Legislative Research.

Bypassing the states

2002.&&Therefore,&future&Parliaments&will& have&limited&freedom&to&amend&the&law.&& Indeed,&this&fundamental&right&diers& from&the&others&in&the&sense&that&it& obliges&the&state&to&perform&a&duty& whereas&the&other&fundamental&rights& protect&people&from&the&actions&of&the& state&or&other&persons.

Pragati- The Indian National Interest Review

Sleeping with the enemy

All!frivolous!and!small! regional!parties!at!the! centre!would!lose!their! ability!to!blackmail! their!coalition!partner! on!account!of!their!pet! peeves.

Pragati- The Indian National Interest Review

Clarity begins at home

Pragati- The Indian National Interest Review

Pakistans political picture

oce&whose&formal&powers&have&largely& been&curtailed&to&the&ceremonial&and& procedural.&PML`N&party&chief&Nawaz& Sharif&now&appears&to&enjoy&a&position& of&comparative&political&stability&and& consolidated&authority&that&his&recent& predecessors&in&the&prime&ministers& oce&could&only&dream&of.

The!PPP!and!PTI! opposition!currently! remain!divided,!and!the! PMLJN!enjoys!a! considerably!stronger! position!in!power!than! its!predecessors!from! which!to!begin!tackle! these!and!other!issues.

Pragati- The Indian National Interest Review

The backward vision

Without!new!private! sector!investments,! dynamism!and! diversification!of! Bihars!economy!is! likely!to!be!adversely! impacted.

Pragati- The Indian National Interest Review

Labour restrictions: Breaking six decades of deadlock

Even!if!it!is!the! intention!of!the! government!to!reform! in!this!area,!selling! those!reforms!in!a!way! that!fully!compensates! the!short!term!reform! losers!is!an!extremely! difficult!task.!

Pragati- The Indian National Interest Review

5.&Most&other&key&emerging&economies& are&in&a&crisis&mode. Lastly,&Indian&costs&have&gone&up&so& much&in&recent&years&and&productivity& so&low&that&we&do&not&know&the&extent&of& rupee&depreciation&that&is&needed&to& make&Indian&exports&competitive&again& on&a&sustainable&basis.

The!government!should! consider!incentivising! its!manufacturers!to! trade!in!clean! diamonds,!possibly! through!economic! means!such!as!tax! breaks,!subsidies,!or! guaranteed!contracts.!

Pragati- The Indian National Interest Review

Conflict minerals trade in India