EDITORIAL
J&K
PLan 2001-2002
The annual plan of Jammu
and Kashmir for the year 2001-2002 has been finalized at
Rs. 2050 crore ---- a step up of Rs. 300 crores over the
last year's annual plan for the State. Although the
increase of the plan outlay is welcome, it falls short of
the expectations and needs of this insurgency - hit
frontier State. Viewed in context of a stationary Rs.
1750 crore outlay for the last 3 years and the
astronomical increase in the cost of living index, the
Planning Commission has been rather less than fair in
allocating funds to the State. The State Government has
been pleading with the Planning Commission for these
years to raise the outlay to Rs. 2250 crores. Therefore,
the hike of Rs. 300 crore in three years ......more
COUNTERING
TERRORISM
Encouraged by the
stalemate at the Agra summit, major militant outfits like
Lashkar -e-Toiba, Harkat -ul-Mujahideen, Hizbul
Mujahideen, Jaish-e-Mohammad, Al-Badr et al have
threatened to step up their nefarious activities in Jammu
and Kashmir --- not that they have exercised any restrain
during the run-up to the conclave in the famed city of
Taj. In fact,...........more
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A
View Point
Shun
violence and
save
Kashmiriat
By Jagjit Singh Gandhok
Where Maharaja Hari Singh faultered, is now an
acknowledged historical blunder. That had he taken a
timely decision to....more
Larger
looms the
fourth estate, now!
By Dr R L Bhat
Whether the Agra Summit did clear the air between India
and Pakistan or not, it brought the role, reach
and.......more
Terrorism
has no
place in J&K
By Maqbool Ahmed
From times immemorial the people of Jammu and Kashmir
have
been advocates of peace and non-violence. Deplorably,
about a decade ago ....more
The
New Hindu rate
of growth
By S. V. Vaidyanathan
Official statistics have begun to reflect the slowing of
econom- ic growth in India. The CSO has revised its
......more
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EDITORIAL
J&K PLan 2001-2002
The annual plan of Jammu
and Kashmir for the year 2001-2002 has been finalized at
Rs. 2050 crore ---- a step up of Rs. 300 crores over the
last year's annual plan for the State. Although the
increase of the plan outlay is welcome, it falls short of
the expectations and needs of this insurgency - hit
frontier State. Viewed in context of a stationary Rs.
1750 crore outlay for the last 3 years and the
astronomical increase in the cost of living index, the
Planning Commission has been rather less than fair in
allocating funds to the State. The State Government has
been pleading with the Planning Commission for these
years to raise the outlay to Rs. 2250 crores. Therefore,
the hike of Rs. 300 crore in three years is just peanuts.
This is particularly unfortunate for the Deputy Chairman
of the Planning Commission Mr K C Pant during his
weeklong tour of Jammu and Kashmir recently had an
occasion to study the myriad problems of J&K's
economy shattered by 12-long years of militancy. Burnt
bridges, damaged schools, terminally sick industries,
languishing tourism sector, and a shattered economy calls
for huge investments. Then there are the expectations of
the much harried people of this State that the popularly
elected Government would expeditiously revive and
re-invigorate the economy and open up fresh avenue of
employment for the vast army of semi-educated and
educated unemployed youth coming out of shools and
Universities year after year. It is therefore,
unfortunate that Mr Pant has been tight - fisted in
releasing funds for this beleagured State. The Farooq
Government's record during its 56-month stint may not
have been flawless but it has made some remarkable
progress in raising the revenue receipts. The State's
revenue receipt which stood at Rs. 2004.29 crores in
1998-99 has increased to Rs. 3936.37 crore during
2000-01. The steps taken to further mop up the internal
resources by way of realising the recovery of huge tax
areas is noteworthy, notwithstanding the fact that much
more could have been done, and needs to be done, to shore
up the sick economy of the State. For instance the power
tariff recoveries have increased from Rs. 58 crore to Rs.
80 crore. This still leaves a gap of about Rs. 400 crore
an amount of purchase of power. Huge amounts account of
sales tax and excise tax arrears remain unrecovered. Due
to the failure of the authorities during the recent past
to finalise the annual plans in time, coupled with
paucity of funds, the entire exercise of planned
development had gone haywire. For example, last year's
plan was finalised only in January this year. It is some
improvement that the current year's plan has been
finalised practically three-and-a-half month's lapse.
Hopefully, the bureaucrats in the State Planning
Department will put their heads together to recast and
re-allocate the funds for various development projects at
the earliest. The earlier the better. It is encouraging
to hear that the State Government is contemplating moves
to augment Jammu and Kashmir's internal resources. The
proposal to diversify agriculture production and laying
greater stress on commercialization of medicinal plants
and other cash crops is laudable. It must be some
satisfaction for the authorities in Srinagar that Mr Pant
is satisfied with the State Government's success in
achieving an average annual growth rate of 4.9 per cent
during first two years of ninth Plan as against 4.7 per
cent during the eighth plan period. However, the State
cannot afford to relax its tight monitoring of non-plan
expenditure and expeditiously liquidate its spiralling
interest liabilities. The State will also have to
undertake measures to curb wasteful expenditure and to
improve power generation, especially hydel power.
COUNTERING TERRORISM
Encouraged by the
stalemate at the Agra summit, major militant outfits like
Lashkar -e-Toiba, Harkat -ul-Mujahideen, Hizbul
Mujahideen, Jaish-e-Mohammad, Al-Badr et al have
threatened to step up their nefarious activities in Jammu
and Kashmir --- not that they have exercised any restrain
during the run-up to the conclave in the famed city of
Taj. In fact, the Lashkar chief Hafiz Mohammad Saeed has
gone so far as to warn that the Fidayeen will extend
their activities beyond the borders of Jammu and Kashmir.
"Our freedom fighters will start targetting Indian
Government facilities everywhere in India," he added
urging Gen. Pervez Musharraf to "abandon diplomacy
and embrace war", he has said "we should not
worry about war because through war we will liberate
Kashmir. Sayeed Salahuddin, chief of the Hizbul
Mujahideen has echoed the rhetoric of Hafiz Mohammad
Saeed and passed the edict: "The failure of the
summit had opened the door for more violence. The Muthada
Jehad council, an umbrella conglomerate of 15 militant
organisations, operating from its base in Muzaffarabad,
capital of Pakistan occupied Kashmir, has endorsed the
stand of these firebrand militant leaders. That the hawks
in the underground militant movement were not indulging
in empty rhetoric and mean business, is apparent from the
unusually high rate of infiltration of foreign
mercenaries into Jammu and Kashmir from across the Line
of Control and escalation of violence in the State during
the last few days. The stance of the hot-heads in the
various militant outfits is in sharp contrast to the
extreme caution displayed by the Pakistan's Foreign
Affairs Minister Abdul Sattar during his damage control
exercise at Islamabad on Tuesday. But then, the Inter
Service Intelligence (ISI), the mentor of these militant
outfits, doesn't always toe the official line. Pakistani
rulers must, however, realize that its failure to relent
on the issue of cross border terrorism in Jammu and
Kashmir, was the main cause for deadlock at the summit.
Pakistan has initiated a feverish damage control exercise
and has expressed the hope that President Gen Musharraf
and Prime Minister Vajpayee will soon pick-up the threads
of negotiations from where they left at Agra. It is to be
hoped that the commando-turned politician, Gen Musharraf
would, in the meantime, take measures to rein in the
jehadis who are threatening to let loose a fresh reign of
terror in Jammu and Kashmir and elsewhere in India, if he
is sincere in resuming the aborted dialogue with India.
As far as India is concerned, there is no denying the
fact that it can ill-afford to lower its guard in view of
the fresh threat perceptions.
However, there is no need
to panic. The ultras have not left any stone unturned to
create bloodshed and mayhem in this border State and
target other installations elsewhere in the country. Our
violent forces are fully prepared to meet any
eventuality. Their performance in combating the recent
spurt in militant activities is commendable. India, to
quote Prime Minister Vajpayee, is determined to counter
terrorism from across the border and it has stamina to
continue to resolutely deal with continuing
violence." Hopefully, authorities in Pakistan and
their minions among the so-called jehadis will heed Mr
Vajpayee's warning. Gen Musharraf was candid enough to
admit that the three wars between the two neighbours
since Independence have failed to pay any dividends. He
should also be aware that the low-intensity proxy-war
will lead Pakistan no where.
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A
View Point
Shun
violence and save Kashmiriat
By
Jagjit Singh Gandhok
Where
Maharaja Hari Singh faultered, is now an
acknowledged historical blunder. That had
he taken a timely decision to declare
accession of J&K State, with the
Union of India well before the stipulated
dead-line of the partition of India, the
people of this sub continent would have
not faced three wars, which have claimed
thousands of innocent lives, division of
J&K State, the unending miseries and
sufferings by the people of J&K and
the acute bitterness between India &
Pakistan. Billions of Rupees spent on
wars, defence and enormous stockpiling of
armaments and other related huge
expenses, could have been saved by both
the countries, which otherwise would have
wiped out poverty, ignorance, illiteracy
and disease from the two poor nations of
South - East Asia. Instead good and
brotherly reltions between 'now the
bitter enemies', could have encouraged
trade, exchange of expertise and above
all peace and tranquility between the two
countries, by virtue of which the people
of this sub continent could pass peaceful
nights. Had goodsense prevailed upon the
Maharaja in time and Pak-aided invaders
would have not been able to capture a big
chunk of the State in Oct-Nov; 1947,
resulting in division of the State and
now a bone of contention between the two
countries, which is being talked of 'A
flash Point' in South-East Asia. Thus a
stitch in time could have saved many
nines.
But who
knew that the untimely stitch of the
Maharaja would prove to be a timely
stitch by the wise leadership of Sheikh
Mohammad Abdullah for the people of
Kashmir. After the belated declaration of
accession of J&K State with India by
the Maharaja, the Indian forces had
stated pushing out the Pak tribals from
the soil of J&K, but at a time when
they had liberated the Kashmir valley
upto a point from where the non-Kashmiri
Muslim culture was to start, the wise and
foresighted Sheikh rose to the occasion
and pleaded before Pt. Jawahar Lal Nehru,
the then Prime Minister of India for a
ceasefire, with
the
pretext that in the process of
liberation, thousands of Muslims were
being killed. The hidden but wise agenda
of Sheikh Mohammad Abdullah, which best
suited to Kashmiri Muslims, worked with
the unilateral declaration of ceasefire
by India. By this, he (Sheikh) meant that
if the remaining part of J&K which is
presently under the occupation of
Pakistan and is predominantly inhabited
by non-Kashmiri Muslims, was wrested
back, the Kashmiri Muslims shall ever
remain to be ruled by the majority
non-Kashmiri Muslim and would never see
the dawn of freedom. Thus halting the
advancement of Indian forces at the
behest of Sheikh Abdullah became the
turning point which enabled the Kashmiri
Muslims to be the masters of this part of
J&K after about a century of Dogra
rule. This foresightedness on the part of
Sheikh Mohd. Abdullah proved to be a
'stitch in time' for the Kashmiri
Muslims. His foresighted plan to rule
this State, stands vindicated that they
have been ruling the State for the past
53 years and shall ever remain so, till
the present demographic character of this
part of J&K is maintained. The heads
of Kashmiri Muslims should therefore bow
before him in reverence. He (Sheikh) in
furtherance of maintaining this
statusquo, got introduced article 370 in
the Indian constitution which has proved
to be a deterrent to temper with the
demographic complexion of this part of
J&K State. In other words as long as
the area across LoC remains under the
occupation of Pakistan and article 370
remains inforce, the "Kashmir-Muslim
majority" shall always remain an
authority. It is in the same spirit and
ideology that the National Conference
headed by the wise leader ship of Dr.
Farooq Abdullah hs been toeing the stand
by reiterating time and again the demand
of converting the LoC into International
Border.
In this
context it looks very strange, when we
find that the ongoing movement of
"The so called Azadi" has been
started by the same people of a region
who are actually the rulers of the State.
The present statusquo of J&K is a
thron in the beds of Pak rulers which
always makes their sleep uncomfortable.
The ever power-hungry Punjabi-dominated
Pak rulers have no love lost for the
people of Kashmir but have their own axe
to grind by grabbing "the paradise
on earth" and for that matter they
have been raising the bogey of the so
called "Jehad" in the name of
Islam.
Sheikh
Mohd Abdullah who lived and died for the
Independent identity of Kashmir and the
Kashmiriat, has possibly neither been
understood by the new generation of
Kashmir, nor the Kashmiri leadership has
been able to convey the agenda of
Sher-e-Kashmir to their masses, specially
to the Kashmiri youth in its proper
perspective. It is so that they have been
swayed away by the malicious propaganda
of fanatic forces in the name of Islam
and at the behest of their masters in
Pakistan, who during the past 11 years of
militancy have given them nothing but
destruction and turned Kashmir "The
Paradise on earth" into a hell.
Sher-e-Kashmir's another decision of
opting the destiny of Kashmir with India
was in the same spirit and direction. He,
by putting on it the legal seal,
successfully got passed a resolution by
the first democratically elected and
constituted assembly of J&K, to tell
the world that Kashmir is part of India
and not of Pakistan. And this decision
has proved to be a blessing for Kashmiris
that their authority has never been
eroded.
The past
experience of five decades has proved
that though voices of discrimination
towards the minority population and the
other two regions of the State at the
hands of majority in Kashmir region, are
being heard, is a natural and global
phenomena, but the fact remains that the
majority community of the State has tried
to maintain, harmonious and brotherely
relations with other minorities in the
State. They have never allowed the
secular character of the State to get
vitiated on their own, which was so dear
to Sheikh, unless the provocation has
come from across the borders.
In the
context of historical fact, let us hope
that the youth of Kashmir shall deeply
ponder over the wise agenda of
Sher-e-Kashmir which was very timely,
well conceived and nicely achieved by him
for the Kashmiris and shall not fall prey
to the designs of Pak rulers in the name
of Jehad, which shall lead them to no
where but to a Doomsday the day where
slavery awaits them.
It is
therefore hoped that those who really
mean 'Azadi' they would:-
* Shun the
violence and instead channelise their
energy towards maintaining 'The Kashmiri
Majority Status' intact for all times to
come by way of guarding the LoC shoulder
to shoulder with the Indian security
forces.
* Thwart
any nefarious design of the enemies of
Kashmir to change the demographic map of
Kashmir.
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Larger
looms the fourth estate, now!
By Dr R
L Bhat
Whether
the Agra Summit did clear the air between
India
and Pakistan or not, it brought the role,
reach and influence of the media into
sharp focus. Today when the world is
almost rid of the lords and realms, the
estates of the press gallery have risen
to greater heights. There is the
inevitable consequence of ever-extending
information brought to fore by the media.
As the dispensers of news, views and
reviews the media-men are demigods who
have come to rule all they serve out.
From celebrities to public-opinion guurs
they are the toast of peoples' in senses
more then one. They may not order
executions, nor dictate policy statements
but it cannot be denied that, today the
media is having a much larger influence
in shaping policies and perspectives.
And, of course, the public opinions. What
once opon was the forte of rhetoricians
and then the privilege of demagogues, is
now fully taken up by the media-men. They
push, pummel and point the public at
large with a centrality that can be
frightening.
There are
ample instances to illustrate this larger
than life role of the media, both print
and electronic, though it is the latter
that is impinging more upon everything
and everybody. You can think of many but
take just two incidents, Qandhar hijack
and the recent money-menace. It is
debatable whether the Indian Government
would have managed the hijack, which
ultimately saw the forced release of the
Jaish-e-Mohammad chief Moulana Azhar, any
better but the TV channels did actually
catch the GOI by the scruff to be handed
over to the hijackers at Qandhar. One has
to have seen the media coverage of the
event, how it virtually organized the
relatives of the passengers and herded
them to the central secretariat and the
PM's residence, to apreciate how
pervasive the effect was. Kargil was
still fresh and sacrifices the whole
nation had made were still a palpable
memory. Yet the appeals by the parents
and children of the Kargil martyrs fell
on fully shadowed ears as the nearly
violent gatherings blocked all
functioning of the Government. More than
the threatening hijackers, it was the
media that was holding India hostage. Of
course, GOI capitulated. And you can
always ask to whom: the hijackers of the
menacing mobs at Delhi?
No body
knows what the 'monkey' who terrorised
Delhi just months ago was: a prank gone
out of hand, a mischief played by some
vested interest or a stray event that
grew on the public credulity? The media
hand in flaming it up is a good study in
responsible journalism, or the lack of
it. Even as expert after expert in the
round the-clock coverage laughed at the
possibility of an ape or a robot fitting
the description, the live coverages, some
in the throbbing darkness of the night to
'catch it live', came through as 'facts'
giving the 'fiction' (of expert opinion)
a broad lie. The 'sightings' grew, the
'attacks' increased and the media men
collected more lively copies. As
Government, caught by the scruff again,
increased the power supply in the
'affected areas, more localities began to
raise the bogey of 'attacks' just to
escape the routine load shedding. News
that is supposed to assure appeared to
unsettle the public, playing upon fears,
even fostering them. Role of the media
during the recently concluded Agra Summit
appeared to be a mix of the two.
Of course,
media is the watchdog of the people. Its
claim to freedom lies in that duty. There
lies the importance of media; that is the
role of ordained for it. And thus does
the media serve as the guardian; it is
supposed to be, of the rights, privileges
and prerogatives of the people. Thus does
it held in check the authority that tends
to overstep, restrains the political
caprice and secures the public at large a
ring-side view of the unfolding events.
And the media is also the guage of public
opinion. It brings the perceptions and
apprehensions to the general notice. It
has a duty to inform, educate and help in
formation of opinions. But which
opinions, which facts, which education?
Mature education or myopic
sensationalism; responsible factfiles or
premature conjectures; informed opinion
or credulous surmises? As we analyse the
Musharraf visit the role of media come in
for a fair scrutiny.
In fact
there is need for situating the media in
the present day scenarios. The almost
sacrosanct Freedom of Press where the
media - men get the full benefit of
doubt, even covering up their
responsibilities, belongs to an era that
had not seen the incessant glare of TV
cameras. There the reporter was fighting
a battle against draconian control; here
the reporter is a privileged being who is
feared not afraid of anything. That basic
shift in the ground realities puts
greater responsibility upon the reporter
of the moment. Then, there is the
question of the modalities. The progress
of a summit meeting between two nearly
-at-war neighbours is qualitatively
different from that between two amicable
neighbours. It certainly cannot be
reported in the same manner as say, the
progress of an election-count. There the
mobile vans taking in every new round and
reporting it out is good reportage, but
here the blow by blow account of how one
word was crossed out and changed, and
then changed again may actually stand in
the way of the sentence being completed.
Then there
is the 'wisdom' of catching every nuance
and building whole outcomes upon it. The
way full-scale theories were built, in
the afternoon of the first day itself,
upon the words 'positive' and
constructive' used in the Pak and Indian
briefings, is a case in point. But more
important is the spectacle of media
getting taken for a good ride by astute
manipulators or even by simply less
circumspect people. During the Agra
Summit while the Indian delegation kept a
befitting silence, the Pakistanis from
the general - president downwards took
advantage of an eager media and pushed a
PRO-stunt through. The willing media just
lapped it up. Even as the Indian foreign
office gave out a mere 84-word briefing
on the first day and a single - line
communique at the end of the second day
the Pak - president's spokesman went to
town with a full interview. Of course, he
blamed India. But it was a partisan
version. Though some media - men did
observe restraint, others did not wait
for the balancing report. And, often it
looked that more then the interlocuting
parties, more than the people of the
countries negotiating, it was the
media-men who wanted a breakthrough at
whatever cost. So that they got a good
copy to file?
Does that
make a case for a restrained access for
the media? A shackled press? No certainly
not. The media can suffer no restraints
for the people deserve, nay need a free
media giving out full reportage. The
press and electronic media need to
operate in full freedom. That alone can
guarantee that no restrictions are placed
on the exercise of freedom by the people
at large. Freedom is the rightful
privilege of the media. And, it makes it
incumbent upon the media-men that they be
much circumspect, much cautious, much
discerning in what they report and how.
There is a thin line between full freedom
and anarchy. There is a thinner one
dividing the full reportage and
sensationalism. That line must be seen
and observed in words-of-mouth as well as
the photoflashes. By the media - persons
themselves.
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Terrorism
has no place in J&K
By Maqbool Ahmed
From times
immemorial the people of Jammu and Kashmir have
been advocates of peace and non-violence.
Deplorably, about a decade ago some vested
interests having their bases across the borders
decided to pervade the atmosphere of amity and
harmony and sponsor violence in the State. What
followed needs no mention, as the events
witnessed deserves a place only in the dark,
lamentable catalogue of human crime.
The clouds of
bestiality, brutality and bloodshed, which have
been looming over Jammu and Kashmir now, appear
to be fading away. The darkest hour is before the
dawn, they say; it is now a hope widespread that
the time has come when signs of peace are
discernible. The statesmanship displayed by Prime
Minister Atal Behari Vajpayee in inviting the
military ruler of Pakistan, General Pervez
Musharraf for talks to India manifests India's
genuine desire to live in peace with her
neighbours in general and bring back peace to
Jammu and Kashmir.
During the last
ten years, it is the people of Jammu and Kashmir
who have been subjected to unsurpassable misery
and awe. The unimaginable statistics pertaining
to killings, extortion, kidnappings and
intimidation throw light on the fact that
violence has no place in a civilized society. The
prosperity of the masses suffered immensely, with
no developmental projects launched. The progress
of the State came to a screeching break as the
very environment of security was struck by the
activities of terrorists, the large majority
amongst them being foreign mercenaries who lacked
ideology and vitiated the tranquility of Jammu
and Kashmir only for money.
Delving into the
history of Pakistan at this juncture will not be
out of place. Notwithstanding the horrific tales
of partition, it is considered significant to
mention that Pakistan today is not what her
Quaid-e-Azam had perceived. "......You may
belong to any religion or caste or creed ----
that has nothing to do with the business of the
State...." is what Jinnah had declared on
11th August 1947 in his address to the
Constituent Assembly. That was to be the very
basis of Pakistan's existence. But the
Governments in Pakistan have indulged in
selective denial of Jinnah's legacy. This led to
a situation wherein Pakistan and Pakistanis have
been living a lie for the past fifty-four years.
A lie after lie was procreated which resulted in
a tremendous impact, adverse of course, on the
domestic and external scenes as pertinent to
Pakistan. The fact of the entire issue is that
the effects of such an impact have been felt
across the board; and has manifested the insecure
and phobia - ridden mindset of the people at the
helm of affairs in Pakistan. Her obsession with
Kashmir is one such manifestation.
Pakistan has
always been beset with monumental problems.
Instability of successive Governments and
military takeovers; and failure to tackle
ascendancy of fundamentalist forces, gunrunning,
sectarianism, lawlessness and narco-trade have
contributed to her very instability. The use of
the Kashmir factor has been a deliberate move to
divert the attention of the Pakistan from the
dismal conditions existing in their country; this
again proves the point that the lack of courage
to concede errors by Pakistani leaders has
actually led them to a point of no return.
Contrary to what the Pakistani leadership has
been attempting to assert on Kashmir for the last
five decades (General Pervez Musharraf included),
the ground situation is that they have been
living lies. Today, with international pressure
mounting against Pakistan and with her increasing
isolation in the world, she is in dire straits.
She is running out of time and options; the
rhetorics emanating daily from that country are
intended for domestic compulsion only, else why
should she decide to enter into a dialogue which
belies her very stance on Kashmir professed over
the years. Her living a lie that she has been
offering no material support to terrorists
operating in Jammu and Kashmir is now no more a
hidden lie; the facts are there for everyone to
see.
Coming back to the
ground realities in Jammu and Kashmir, there are
two managers to the issues. On one side are the
misguided youth that have been subverted by the
players across through their agents here and
impelling them are the socalled jihadis. While
the former have fallen prey to the bait of
religion and easy money, the latter cateory are
foreign mercenaries who have no love lost for
anybody. The truth of the matter is that the
foreign mercenaries are the root cause of all
woes of the people of Jammu and Kashmir because
the youth, which are the future of the State,
have been lured away to the jungles and
mountains. The lives of such youth are evidently
measured in weeks and months, as statistics
indicate. The question is that should we allow
such a condition to persist? When others like
them are attending schools and colleges, why
should they waste their potential on the far-off
air? The undeniable fact is that they themselves
realize the futility of their actions, but are
tremulously apprehensive of returning to their
homes. In the recent months there have been
increasing instances when such youth have shed
their diffidence and taken the bold step to free
themselves of slavery imposed by the socalled
jihadis. It is high time that these so-called
jihadis get a cue of their unholy glory!
Spring gives way
to summers and likewise autumn to winter. Times
always change. The time now have also changed. It
is now time to spread the message of peace. The
time has come for the people of Jammu and Kashmir
to send a message loud and clear that they will
no more endure the machinations of a collapsed
nation on their west. Their agony is now going to
be short lived, as peace is the yearning of all.
Terrorism has no place in Jammu and Kashmir, it
is once again reiterated.
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The
New Hindu rate of growth
By S. V. Vaidyanathan
Official
statistics have begun to reflect the slowing of
econom- ic growth in India. The CSO has revised
its optimistic advanced estimates of GDP growth
during 2000-01, with the provisional figures now
pointing to a 5.2 per cent rate of growth rate as
compared with 6 per cent expected earlier. This
5.2 per cent compares with the 6.4 per cent rate
of growth achieved in 1999-2000, pointing to a
significant deceleration. There is no area of
economic activity in which GDP growth has not
decelerated.
Agriculture
continues to stagnate, manufacturing growth has
fallen from 6.8 to 5.6 per cent, and the services
sector, which was responsible for raising
aggregate growth even with when the
commodity-producing sectors were languishing, has
finally begun to experience a degree of
slackness.
This slowing of
growth is significant because the government had
all along held that, despite the fiscal
compression resulting from its effort to contain
the fiscal deficit in a period when the tax-GDP
ratio was falling, the economy had been placed on
a new, higher growth path after
liberalisation. In its view, the stimulus to
private "animal spirits" that
liberalisation provided, had spurred private
investment to an extent where it more than
adequately compensated for the sharp deceleration
in public capital formation during the 1990s.
Clearly, the
government itself is not convinced by this
argument any more. In his effort at reversing the
slowdown in growth, the Finance Minister, Mr
Yashwant Sinha, has directed financial advisors
in all ministries, to step up capital
expenditures. In addition, PSUs are to be tapped
to obtain additional dividends and interest
payments, so that the non-tax revenues of the
government can be beefed-up and overall
expenditures expanded. This becomes necessary
because the government has already borrowed
substantial sums in the very first month of this
financial year, possibly to meet payments that
were postponed at the end of the last financial
year in order to keep the deficit during the last
fiscal under control. If additional non-tax
revenues are not garnered, expenditures could be
squeezed to a degree where the deceleration in
growth translates into a slump.
If expenditure
increases in general and capital expenditures in
particular are being seen as the panacea for the
slow down, there are two implicit judgments that
the government has arrived at. First, that the
current deceleration in growth is the result of
slack demand in the economy. Second, that this
has to be corrected with public expenditure,
including capital expenditures, with the latter
expected to spur private investment. This implies
that the government too sees government
investment as "crowding in" rather than
"crowding out" or displacing private
investment.
These perceptions
are in complete divergence with the views
advanced by the advocates of reform who have held
that there is a direct link between
reform and growth inasmuch as the
former spurs private investment, that public
investment tends to "crowd out" private
investment and should be curbed, and that
sustaining growth requires sustained
liberalisation.
With trade having
been almost wholly liberalised, with domestic
regulation having been virtually wiped clean,
with privatisation being pushed through even at
rock-bottom prices for public assets and with the
fiscal deficit being controlled to a far greater
degree than earlier, there is a lot the
government has already done on the liberalisation
front. If growth still tends to slacken, the
problem must lie with the neo- liberal reform
process itself, as Mr Sinha is implicitly
accepting, though he would never admit the same.
In assessing this
turn around in the pace of growth and change in
perception regarding the determinants of growth,
there is a larger question that is at issue. Does
and did reform spur growth at all?
Advocates of reform have often argued that,
whatever else may be said about the effects of
the reform process, it cannot be denied that it
has helped India move up from the earlier
"Hindu rate of growth" of 3-3.5 per
cent to a new rate of more than 6 per cent per
annum. If liberalisation is persisted with, they
hold, India, can move up to the 9 per cent rate
of growth that the Prime Minister dreams of.
What this argument
conveniently ignores is the fact that the new
rate of growth occurred well before the reforms
of the 1990s. In fact, the 1980s was also a
period when the rate of growth of GDP was close
to 6 per cent.
The estimates of
recent base years indicate that the rate of
growth of GDP rose from around 3.5 per cent in
the 1970s to 5.5 per cent in the 1980s and 6.5
per cent in the 1990s. (The growth rate for the
1990s has also been computed separately with
1992-93 as the initial year, as is done by the
advocates of liberalisation on the grounds that
1991-92 was a crisis year and should be ignored.)
The continuous
process of acceleration of growth rates through
the 1980s and 1990s comes through in the case of
figures from the series with base year 1980-81 as
well, though the acceleration in growth in the
1990s (up to 1996) is sharper in this case
a point we return to later.
Thus the first
point to be made is that the transition to a high
rate of growth occurred during the 1980s, when
liberalisation was limited and halting, and not
from the 1990s, when the pace of liberalisation
was substantially accelerated and was far more
widespread. It could of course be argued that the
salutary affect of liberalisation on growth comes
through from the facts that the 1980s were also
years of liberalsiation and that the acceleration
of the pace of liberalisation in the 1990s
resulted in an acceleration of GDP growth as
well.
This view,
however, does not stand up to scrutiny. In fact,
if we break the three decades between 1970 and
2000 into five year periods , we find that rate
of growth of GDP rose from around 3.5 per cent or
less during the 1970s to 5 per cent during the
early 1980s, before decelerating to around 6.5
per cent during the first half of the 1990s and
less than 6 per cent during the late 1990s. The
recent fall in growth rates is only a
continuation of this decelerating trend. Thus, if
the attempt is to focus on the acceleration in
growth rates, it occurred before the 1991
liberalisation and has only been reversed since
then. INAV
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