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

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

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.

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.

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.

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.

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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