A Paris Diary

By M J Akbar

When you take a texi in Paris you expect to be taken for a ride. The good news is that even a ride in Paris is enchanting. In the parks along the avenues the handsome, adult trees have turned to rust before the fall. In the stylised square garden of Louis XIII at Marais the trees are still a light bright green but there is a feel of a last flutter in the air. The gardener out here is either a mathematician or a barber. The trees have been haircut into identical oblongs. In another place, another city this affectation might have seemed gauche. Paris carries it off with panache. Louis XIII clearly took a singular decision and the citizens of this district, Marais, left their inheritance alone - it would have been gauche to interfere. The centuries old bakeries of this arrondisement have become shoeshops now but are still called bakeries. Everything changes and nothing changes. The Eiffel Tower wears electricity over its steel, and a lighthouse beam rotates at the top, searching for nothing more significant than attention. You can still crunch the leaves on the banks of the Seine, but the famous lovers are not around any longer to steal kisses. That stands to reason. There is nothing to steal these days, for no one has anything to hide in this Age of Just Do It. Lovers do not need the silence of the Seine; they are all in their drawing rooms, searching for inspiration from television during a pause. The fact of the matter is that sex has become a matter of fact. Even in Paris.

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You and I shrug. A Parisian does not shrug. A Parisian does a tap dance with his shoulders. There is nothing indifferent or diffident about a shrug in Paris. It is full of pathos, and fit for opera. The reason may be trivial or not. The reaction is never less than momentous. When a lady in a car a good foot lower than our taxi loses the balance of her nerves in the middle of a well-structured traffic jam on the Rue Bonaparte, and begins to scream, our driver responds with a Parisian shrug, some silence and then well-meaning advice on how she should spend her time home with her children before he slips through a glimmer in between the cars. I can report that the authorities are trying to do something about these famous traffic jams. The Rue Rivoli for instance now has a separate lane for taxis and buses, although every owner of a car has not been informed of this change. That jam has yet to become butter. The Parisian traffic settles in the mind before it congeals on the street. The Frenchman will never surrender his fundamental rights, having won them at such substantial cost two hundred years ago. The primary right of the motorist is to press the accelerator with as much force as he presses the brake, in quick succession. He also has the right to gesticulate his attitude towards life with both hands, while driving.

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Two centuries after the first, a second French Revolution is taking place. The French are speaking English. Arguably this achievement is on par with beheading the Bourbons, dealing with Danton, surviving the hope and despair of Napoleon and coming to terms with Waterloo. In 1815 the French accepted the victory of the English on the battlefield; they are learning to accept the victory of English in the classroom, the cafe and even the coiffure. Waiters now actually bring food when you ask for beef instead of boeuf, throwing in an indulgent smile for free. This is a stunning philosophical and psychological somersault. It would however be incorrect to say that all the old fire has died out. There are still twentieth century cabdrivers who, when it is midnight and wet, curl their upper lip at the sound of English and insist, with all the familiar ardour and zeal, that they are going in exactly the opposite direction to which you desire to travel. There is a glint in their eye as they leave you stranded and miserable on the Champs D'Elysee, the warmth of an excellent meal and fine company oozing out of your pores with each icicle of rain. But these are yesterday's warriors, content with minor triumphs in meaningless skirmishes. The war is lost. English is taught in every school.

The French are, though, trying to salvage a last laugh from this horrendous defeat. An advertisement inside a train on the fast Metro between St. German and Gare du Nord shows a young man leaping into the air because he has successfully mastered "Wall Street English". I had heard of cockney English, pidgin English, Indian English, Oxbridge English and BBC English. What was Wall Street English? It was a triumph of positioning. The French have bypassed the channel and moved directly across the Atlantic to Wall Street American. English has been shown its place, as it were.

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France's argument with America is political and cultural, not linguistic. There is muted glee in the French Government over having slipped a bit of smooth oil under the feet of George Bush as the American President strides purposefully towards war with Iraq. The Americans lost their way when they got stuck in a confrontation of words, specifically the United Nations resolution meant to authorise President Bush's demolition of Saddam Hussein. France, with the open help of Russia, has bought some very expensive time at a very cheap price for Saddam. Of course Iraq will pay for this through some fancy deals in oil and weapons with Paris, but that can only be to the greater glory of the tricolour Republic. There is also some superior sniffing going on at the manner in which the British have remained faithful to their American masters. Add to the sniff some mock horror: the poodle is supposed to be a French dog, is it not, so why is Tony Blair behaving like one ha ha ha? The only serious sign of British independence from America on Iraq is visible in some of the British media, which still knows how to laugh at itself better than the French. A plaintive cartoon in Private Eye has George Bush saying: "The only way to find out if Saddam has got those weapons is to attack him and see if he uses them."

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The headquarters of the police and the headquarters of religion are literally next door to each other in Paris. Symbolic? Where should the wages of sin be paid? In prison or the confession box? Which is more necessary for the common good? The plain cell of the prefecture or the magnificent cathedral of Notre Dame?

One of the real dangers of this city is that even the mundane can tempt you towards philosophy. That is the power of beauty. Of all the sights of Paris nothing is grander that the Notre Dame, particularly now that the darkness of centuries has been scrubbed from its walls. The soul can search for sublimity here.

Luckily the police headquarters reminds me of The Pink Panther. I half expect Peter Sellers to come bumbling out, closely pursued by a tumbling Herbert Lom, both tripping into the Seine. Does my fancy exaggerate when I notice a veritable Inspector Closeau on the street? The police officer does have an expression that says that there is no point in trusting him too much. Tales of petty crime abound. I suppose they would in any city with so many tourists. Indians of course have the best stories. One is spreading word that all he did was look up at the flight timings at Charles de Gaulle airport to find that his suitcases had vanished from under his nose. He must have taken his time to read that screen. Or maybe he was confused to find French written in the English script. When he complained to the police they apparently told him that he was the 24th person to make a similar complaint within the hour. I just hope the other 23 were not Indians from the same flight.

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The true beauty of Paris is not in the tourist brochures or the sales pitch of cathedrals, however wondrous they may be. It lies in the love with which an anonymous architect has shaped the unknown cornice. Every corner of this city is a small dream; every district a collective inspiration preserved with passion. In the Second World War the French surrendered to the Germans rather than let Paris be destroyed by the Luftwaffe and artillery of Adolf Hitler. Six decades later the French have recovered the pride they lost in 1940. But if they had lost Paris as well in 1940 there would have been nothing to recover from the rubble.

It was a good bargain.

The best contemporary bargain in the city could be a bar. Buddha Bar, just off the city's most fashionable shopping area behind the Torcadero and Place I'Concorde, is setting the style in evening environment, decor and music. They might want to improve their food though. Guess which song they fusing their local genius to right now? Indipop. Things that go into the night with an Indian warble and Hindi words like Payon mein ghungroo lagte hain.... India has arrived, via Hollywood.

Will states pull up their fiscal socks?

By Sisir Basu

Predictably the build-up to the first meeting between the Prime Minister, Mr. Atal Bihari Vajpayee, and the Chief Ministers for evolving a workable consensus to restructure the fractured finances of States appears to have been misplaced. The media was also quick to dub the event – held in the Capital on October 18 – as a damp squib, without appreciating the underlying constraints in such an exercise for the coalition government.

The Vajpayee Government does deserve unqualified plaudits for having taken a bold step in convening such a conference in the first place, when competitive populism among States had inexorably led them down the road of misery and penury.

The issues discussed at the meeting on the "Fiscal Situation of the States" centred around the need to mobilise tax resources, put limit on State borrowings, transfer of funds under the Centrally-sponsored schemes, and the need for States to draw up medium-term fiscal reform programme to accomplish fiscal consolidation and debt stabilisation. Other much-ballyhooed items on the agenda included the debt swap programme proposed by the Centre and such contentious issues as freezing of the payment of dearness allowance, and bonus, and commutation of pensions, which did not come up for discussion. Apart from the politically explosive overtones, these two issues defied consensus and hence had to be deferred. By no stretch of imagination can the meeting be described as a futile exercise that failed to meet the original objectives of restoring the fiscal health of the States.

The Centre, bearing the responsibility for maintaining the fiscal fettle of its constituents, conducted itself with extreme care and executed the unenviable task with gravity, though the upshot was not on expected lines. But considering the circumstances under which the NDA Government had to erase the negative publicity it earned for postponement of disinvestment drive, the bailout it announced for some financial institutions, and the bonus payout for freezing minimum support price for wheat and rice this season, the convening of a meeting sends a loud and clear message that both the Centre and the States should chalk out a new path in cooperative federalism.

With his characteristic plain-speaking. Mr. Jashwant Singh told the States that their borrowings would have to be brought in line with the prudential debt limits set out by them in their State Fiscal Reform Programme. So also their issuance of government guarantees since spurt in defaults on debts servicing obligations by State-owned enterprises, backed by state guarantees, remain a matter of concern. Large defaults have supervened in the last year on loans guaranteed by the State Government. It is germane to draw attention to a Crisil study which puts conservative estimates of default in 2003-04 alone at Rs. 4,500 crore. Small wonder that Standard and Poor’s decided to downgrade the credit rating for the Indian Government’s sovereign domestic debt from BBB minus to BB plus towards the end of September. Such defaults on an increasing scale by States, as a direct result of the silently ticking debt bomb, will definitely impact the country’s sovereign credit rating by global agencies, unless a combined bid is made by both the Centre and the States to retire high-cost debt, and render the debt position sustainable through a medley of expenditure-control and revenue-raising steps immediately. Instead of appreciating the mild alarm raised by S&P’s, the authorities got unduly upset, since such warnings are a sort of wake-up call to the government to bestir itself to action.

A few figures could capture the grim situation and straightened spots on which the States find themselves today. The outstanding debt of the States, which was 18.62 per cent of GDP at the end of 1993-94, rose disturbingly to 23.39 per cent by the end of 2001-02 from a level of Rs. 1,60,028 crore to Rs. 5,87,780 crore. According to an official background note prepared by the Finance Ministry, the worsening and fragile finances of the States can be gleaned from the following aggregates: Gross fiscal deficit as a percentage of GDP rose from 2.72 per cent in 1996-97 to 4.76 per cent in 2002-03. The revenue deficit rose from 1.24 per cent of GDP to 2.85 per cent during the same period. The revenue deficit as a percentage of the gross fiscal deficit (GFD) rose to 63.23 per cent by 1999-2000.

State government guarantees to public sector entities, State Electricity Boards which constitute a part of State’s contingent liabilities reached Rs. 1,35,600 crore to stand at 7.18 per cent of GDP. Interest payments as a proportion of revenue receipts moved up from 14.96 per cent to 21.40 per cent over the span.

Full fallout of repayments remains yet to be felt by the States as negotiated loans of medium tenor and high cost, which rose pronouncedly after 1997-98, are due for repayment from this fiscal.

A worrisome development is that over 63 per cent of the borrowings by the States went for current consumption and a little over 36 per cent for capital formation.

The Planning Commission too, for its part, has shared the concerns raised by the Finance Ministry over the frequent recourse to off-Budget borrowings by States and their excessive use of government guarantee. However, in his intervention during the Chief Ministers conference, the Deputy Chairman of the Planning Commission, Mr. K.C. Pant, is understood to have suggested that any fiscal reform programme, which impinges adversely upon the ability of the States to carry out the requisite public investment, would tell upon the growth prospects of the economy quite adversely.

The Tenth Plan recognises the contribution of the States in carrying out public investment, especially in social and physical infrastructure, which is markedly larger than that of the Centre. So, what Mr. Pant has advocated is that it is quite feasible to drum up the desired levels of public investment without compromising on medium-term fiscal sustainability, provided due stress is laid on improving the tax-to-GDP ratio, and controlling the discretionary components of non-Plan revenue expenditure. This is also emphatically put by the Madhya Pradesh Chief Minister, Mr. Digvijay Singh, as States alone should not be able to bear the cross.

However, it is a matter of regret that the Finance Minister said, before the meeting had barely began, that on the issue of the payment of DA, bonus and commutation of pension as broader consensus was not there as of now, and hence a decision on this would have to be deferred.

This was expected because just a few days before the meeting, the BJP’s Parliamentary Whip, Prof. Vijay Kumar Malhotra wrote to Mr. Jaswant Singh, asking him not to freeze the government employees’ dearness allowance as the NDA was yet to recover from the harsh budget which cost the then Finance Minister, Mr. Yashwnat Sinha, his job, Contrast this with the fact that most States are ruled by the Congress and other parties where any suggestion to freeze DA, bonus or commutation of pensions would make the ruling dispensation unpopular among the voters.

Yet, it was some of the non-BJP ruled States, such as Tamil Nadu and Haryana, that pleaded for an end to "guaranteeing the ever-increasing slice of cake to those privileged to have it in the first place", as picturesquely put by Tamil Nadu Chef Minister Ms. Jayalalithaa in her remarks. Rightly, she asked that "if this forum cannot bell the cat, who will".

But her plea fell on deaf ears, particularly the ruling coalition at the Centre, which does not want to be privy to any unpopular measures at this juncture, after the setback it received in Jammu and Kashmir, and with Assembly elections round the corner in some States and the general elections due in less than two years. It is time BJP reined in its members and went for "difficult decisions" in the interest of the economy to carry for itself a credible and convincing reformist image.(INAV)