EDITORIAL

Rail on road

It has been a unique sight --- railway coaches being driven by a truck to the Valley --- but it brings home the challenge of development in the State. There is no other way that this technological bonanza could have been passed on to the other side of the Pir Panjal. It became imperative to think of alternatives in the absence of train track between the two Capital cities of Jammu and Srinagar. The people on the top put their heads together to work out a strategy. First they thought of carrying coaches in a dismantled condition. The idea was to reassemble them at their destination in the Valley. It was given up as no such facility had yet been established locally. Secondly, it was proposed to airlift the baggage. This scheme also had to be shelved because no plane in the country was......more

Jammu's treasure

Although no formal study appears to have been carried out so far it is only too well known in knowledgeable circles that the State is getting attention of big companies as a natural producer of rare herbal plants. Some enterprising individuals who have got the hint have taken to agriculture only for cultivating medicinal flora. There is an almost regular flow of honey and garlic in particular from the hills of this region to the national capital and other places. Another item that has become immensely popular is anardana (it is a Persian expression for pomegranate (anar) and seeds (dana). It is mostly known as a spice employed as an acidic agent for chutney and curry making. Its medicinal properties, however, have got wide recognition. It stimulates salivary glands promoting dige.........more

Confusion in Delhi over Kashmir

Men, Matters & Memories

By M L Kotru

Will someone please, in the name of all the Gods, tell me if there is a voice emanating from Jammu and Kashmir that represents Indian aspirations in the on-going Indo-Pakistan parleys over the future of the State. We have Manmohan Singh,the Indian Prime Minister tell us one thing, his Security Adviser telling us another and the Defence Minister who is no..more

RBI's busy season credit policy

By K R Sudhaman

It goes to the credit of Reserve Bank Governor Yaga Venugopal Reddy who has done a clever balancing act to ensure that interest rates remain stable to maintain the high growth momentum and at the same time sent strong signals that it would take measures to contain inflation to pre-empt any overheating of the

.......more

Poll-eve political ferment in Bangladesh

By P Bhattacharya

Descent of poll season in Bangladesh means India has to brace up for shocks. Last time around, in 2001 the eastern neighbour had evicted at least 78,000 of its own citizens, fleeing mortal danger from Jaamat-e-Islami (JeI) Bangladesh Nationalist Party (BNP) activists seeking to ensure their opponent, Awami League loses its electoral bases. This number denotes only .......more

EDITORIAL

Rail on road

It has been a unique sight --- railway coaches being driven by a truck to the Valley --- but it brings home the challenge of development in the State. There is no other way that this technological bonanza could have been passed on to the other side of the Pir Panjal. It became imperative to think of alternatives in the absence of train track between the two Capital cities of Jammu and Srinagar. The people on the top put their heads together to work out a strategy. First they thought of carrying coaches in a dismantled condition. The idea was to reassemble them at their destination in the Valley. It was given up as no such facility had yet been established locally. Secondly, it was proposed to airlift the baggage. This scheme also had to be shelved because no plane in the country was big enough to fly them. Finally they made up their mind to transport coaches --- each of them 23 metres long --- through road as trailer to a wagon fitted with powerful engine. They were fitted with special rubber wheels to be pulled all the way through the B.C. Road at a slow speed. Two railway "compartments" have been taken in this fashion in the first instance. At least 12 more such trips are in the pipeline. In all 22 more coaches and two diesel engines are to be "driven" to meet the deadline of running regular train services within the Kashmir region in February next year. According to the original plans, an eight-bogey train must chug off in the Valley early next year. It will be a historic event and as all of us are aware making history has never been simple. Rubber tyres of coaches will again be replaced by iron wheels at Badgam (it has a railway yard) to enable them to get back into their normal shape. Who will remember then that these makeshift tyres had to be deflated at one stage during their journey to Srinagar? It was when the vehicles were to cross the Jawahar Tunnel. It was found then that coaches were six inches higher than the Tunnel. Air was again pumped into tyres after the immediate objective was achieved. A cost of Rs 15 lakhs is being incurred on the transfer of each coach.

Often it is said that civilisation travels on roads. It seems that a country's intrinsic strength and potential pass through railway tracks. One can see the boost pilgrimage tourism has received after this city became a railhead. The traffic of devotees to the holy Vaishno Devi shrine has shot up by lakhs. Of course, one reason for such heavy rush is also remarkable improvement in facilities on the Trikuta hills. More tourists have heard of Patnitop as a tourist resort in the recent years than ever before. Passenger inflow and outflow has necessitated the increase in number of trains to different corners of the country. The extension of the railway link to Udhampur has led to the discovery of an entire virgin territory. It is a breathtaking trip to remember over high bridges and through numerous tunnels between Jammu and Udhampur. Nothing has happened to suggest that the emergence of Udhampur as railhead has nibbled into the arrivals in Jammu. Any apprehension, therefore, that this city or Udhampur for that matter may suffer once Katra (the base camp of Vaishno Devi cave) too becomes a railway station appears to be misplaced at this juncture. On the other hand there is every possibility that the vast railway network facilitates the surfacing of a larger tourist circuit. Actually one can only excitedly wait for miracles to be revealed once the Katra-Qazigund stretch is completed. It will expose one and all to the splendour of the Pir Panjal ranges. This hilly part which is the most testing of the Jammu-Baramulla national rail project will include the country's longest 11.429-kilometre tunnel. Undoubtedly this channel will generate thrill five times' more than that the construction of about 2-kilometre long Jawahar Tunnel had done some years ago.

With the targeted finale of the Jammu-Baramulla scheme in 2008 it should be possible for the concerned authorities to settle on new frontiers. Hopes are rising in Kargil and Leh districts at the same time. It will take another Herculean bid to extend the benefit to these areas beyond the seemingly impregnable Zozila Pass, Drass and the Himalayas. The progress so far gives one and all cause to think that it is a matter of time before the entire State has a reliable and efficient railway system. Human imagination and endeavour can move mountains. Who will deny this? It is literally proved in this instance. It is only the bold and ingenious who can think of putting railway coaches on road before making them run on the right track.

Jammu's treasure

Although no formal study appears to have been carried out so far it is only too well known in knowledgeable circles that the State is getting attention of big companies as a natural producer of rare herbal plants. Some enterprising individuals who have got the hint have taken to agriculture only for cultivating medicinal flora. There is an almost regular flow of honey and garlic in particular from the hills of this region to the national capital and other places. Another item that has become immensely popular is anardana (it is a Persian expression for pomegranate (anar) and seeds (dana). It is mostly known as a spice employed as an acidic agent for chutney and curry making. Its medicinal properties, however, have got wide recognition. It stimulates salivary glands promoting digestion and appetite and is prescribed for patients suffering from diarrhoea. In many other states like Maharashtra, Gujarat, Uttaranchal, Tamil Nadu, Andhra Pradesh and Karnataka it is being subjected to commercial exploitation. Our cultivators have been rather slow in realising its remunerative value. Now that they are aware it of they are a bit cautious. But it seems that they are not yet entirely careful as they ought to have been. How else can one explain the bid to smuggle 90 quintals of anardana from this region to Amritsar. Luckily, the truck carrying the forest produce was intercepted and seized at Lakhanpur. Available details suggest that it was loaded at Ramban without acquiring necessary permission for transportation. The total cost of the captured quantity has been calculated to be Rs 6 lakhs. It does not make sound business sense and suggests a distinct lack of knowledge about the price it commands in outside markets. Let's zealously guard our treasures

Confusion in Delhi over Kashmir

Men, Matters & Memories

By M L Kotru

Will someone please, in the name of all the Gods, tell me if there is a voice emanating from Jammu and Kashmir that represents Indian aspirations in the on-going Indo-Pakistan parleys over the future of the State. We have Manmohan Singh,the Indian Prime Minister tell us one thing, his Security Adviser telling us another and the Defence Minister who is now the Foreign Minister giving us a different take. That is only to be expected from New Delhi which has consistently refused to tell us anything, apart from mouthing platitudinous homilies which leave you no wiser than you initially were.

A direct consequence of the confusion in Delhi is the marginalisation of all the mainstream political parties in the State which have in the past been steadfast in their loyalty to the Union forced now to talk in terms that only add to the confusion. The National Conference which is the oldest of the political parties in the State and its leaders are expressing doubts over New Delhi's sincerity.

And to go by their version, the party leaders have a point which makes good sense. When its Government was in power, the State Legislature passed a unanimous resolution or was it by an overwhelming majority. I am not sure ? reiterating the party's demand for autonomy within the Indian Union, as Dr Farooq Abdullah, the NC patron and the party chief Omar Abdullah maintain the Government in Delhi did very little except promising discussions or setting up a committee to consider the resolution passed by the Assembly. The party leadership has now gone back to urge a return to the pre-1953 era when the Government led by Sheikh Mohammad Abdullah (before he was toppled and arrested in August 1953) did enjoy far more autonomy vis-a-vis New Delhi. Sheikh Abdullah's was, if one may recall, the decisive voice in the State's accession to the Indian Union at a time when the late Maharaja Hari Singh was at best dithering. The rest is history.

Between then and now a number of Indian constitutional provisions have been extended to the State, a few of these in the best interests of the State. A succession of Governments, that followed the dismissed Sheikh's, went along with a New Delhi even as one or two of these had raised the question of internal autonomy. Things had nearly come to a head during the long negotiations between G Parthasarthy, one of Indira Gandhi's most trusted colleagues, and Mirza Mohammad Afzal Beg, speaking up for Sheikh Abdullah and his party.

The Indira-Sheikh accord which was born out of the Parthasarthy- Beg encounters and which brought the Sher-e-Kashmir back to power had also noted the Kashmiri leadership's reservations in certain key areas and which they had decided to address later in a less turbulent atmosphere. The Sheikh died, the on-again off -again Indo-Pak dialogues meandered along, with even Rajiv Gandhi giving it a try during his talks with the then Pakistan Prime Minister, Benazir Bhutto.

The Indo-Pak dialogue gathered pace, most surprisingly, when the Indian Government formed by the National Democratic Alliance was headed by the Bharatiya Janata Party's Atal Bihari Vajpayee. And with the emergence of a new military dispensation in Pakistan, under Gen. Pervez Musharraf, the dialogue for once looked like having gathered momentum. But even at that stage, one regrets to note, the mainstream, pro-India parties, were kept at a distance although it could be said that Omar Abdullah was a junior Minister in the Vajpayee Government. Militancy resulting in the migration from the Valley of some 3.5 lakh Kashmiri Pandits and the wanton killings of civilians during the past 15 years in the crossfire between the Pakistan-sponsored militants and the Indian Security Forces, is part of the State's recent grim history. And it was indeed the scale of militancy which gave birth to the valley-centric politics of Kashmir. Pro-militant, pro-Pakistan bodies pronounced their arrival on the scene smultaneously and they have stayed around ever since though without having much political clout.

Coupled with Pakistan's not-so-covert support to the terrorists was its open wooing of the pro-Pakistan separatists like the Hurriyat: Musharraf ensured that even New Delhi accepted their presence, insisting that the Hurriyat was the ‘‘sole representative’’ of Kashmiri Muslims. Over the past five years his persistence appears to have paid.

The mainstream parties feel hard pressed even when they have won in some of the ‘‘cleanest’’ elections to the Assembly in the State. In desperation people like Mufti Mohammad Sayeed, an old-time Congress man and a Minister in Rajiv's and VP Singh's Governments, sought to create a political space of their own, distinct from that of the Hurriyat, yet covering some Hurriyat ground. He formed his People's Democratic Party, letting his daughter, Mehbooba steer its course in the murky valley waters. Mehbooba identified herself with anyone who claimed to have suffered at the hands of the Security Forces, visiting distant villages where any action taken by the Security Forces had allegedly or in reality caused death of innocent people.

The idea clearly was to occupy the space which Hurriyat and its ilk had made its own.

Not to be denied its share, Omar Abdullah and his National Conference also started to espouse the cause of ‘‘suffering’’ Kashmiris. What seemed to have forced both Mufti and the Abdullahs to effectively assert their political clout was the Centre's failure to take the mainstream parties in various regions of the State into confidence about, for instance, the kind of ‘‘out - of -box’’ solution Prime Minister Manmohan Singh had in mind whenever the Indo-Pak dialogues took place.

Musharraf on the other hand was handing out solutions on a daily basis and in public too. The track-two dialogues, sponsored for the most part, only made the mainstream parties feel further excluded. Hence the need for them to publicly air their reservations about New Delhi's attitude. By enforcing its agreement with Mufti Sayeed to share the six-year term of Chief Minister with it, the Congress left the PDP a bit bewildered although the party has to this day not openly questioned the Congress Party's insistence on installing Ghulam Nabi Azad as Chief Minister.

The upshot is that the Mufti has moved away a lot from his original position. He still talks of the State's union with India but has since publicly announced his support to the idea of self-ruling regions of the State, each with a sub-legislature of its own, it own civil and police services, appointment of an elected Governor of the federation of the self-ruling regions- a kind of a federation or ‘‘united states of Jammu and Kashmir’’. He advocates a similar scenario for Pak-controlled Kashmir which would have fraternal relations with the self-ruling Kashmiri regions. New Delhi would have no role in the appointment or dismissal of a Governor or of the Government. Of course, his federation of Kashmir would remain a part of India. How exactly, remains to be explained.

The Mufti's grand design probably approximates to Musharraf's self-ruled regions of the State. The Mufti wants to steal the thunder for his political survival, if nothing else, and needs to be different, even marginally. The National Conference which had so far confined itself to implementation of autonomy will perforce have to up the political ante and of it doing just that there are indications aplenty.

All this may well have been avoided if Manmohan Singh had been more forthright in his dealings with the mainstream political parties in the State, the BJP, Panthers, the Kashmiri Pandits and others included. Manmohan Singh may be a well-meaning man but does he have the vision even at this late stage to carry the mainstream parties with him? His approach to-date does not look very inspiring. Has he developed a national consensus on his out-of-the-box solution ?

RBI's busy season credit policy

By K R Sudhaman

It goes to the credit of Reserve Bank Governor Yaga Venugopal Reddy who has done a clever balancing act to ensure that interest rates remain stable to maintain the high growth momentum and at the same time sent strong signals that it would take measures to contain inflation to pre-empt any overheating of the economy.

The only key rate instruments the Central Bank hiked was the repo rate, the rate at which it lends short-term funds to banks by 0.25 per cent to 7.25 per cent to ensure surplus liquidity with certain banks are sucked out. It has left all other key rates like bench-mark bank rates and reverse repo rates unchanged at six per cent and Cash Reserve Ratio at five per cent.

This means that it wants to ensure that interest rates remained stable so that the high growth is not dampened by easy availability of credit. Indicating the buoyancy in the economy, Reserve Bank hiked the growth projections for the current fiscal to eight per cent from the earlier forecast of 7.5-8 per cent. It has, however, retained the earlier inflation projections of 5-5.5 per cent. By raising the repo rate, Reserve Bank has tightened the policy stance as banks' right to access liquidity support was no longer automatic. Thus fund starved banks will have to pay more for access to money.

As a result, Credit for productive purposes would not get affected but loans for consumption purposes might go up. However, bankers have indicated that home and auto loan rates would not go up though there are possibilities of loans for personal purposes and commercial real estate becoming costly. By making funds costly for banks depending on RBI, is an attempt to make those banks to balance their portfolios to tackle demand pressures.

As Reddy himself said : ‘‘The RBI will ensure that appropriate liquidity is maintained in the system so that all legitimate requirements of credit are met, particularly for productive purposes, consistent with the objective of price and financial stability.’’ This is the fourth repo rate hike the Central Bank has made in the last one year, signalling caution in credit growth. As Reddy himself puts it in the statement that banks need to know that liquidity is not available on tap from the Central Bank and that they need to balance savings and investments.

Tightening of monetary policy on this front, however, has to be measured as housing sector is prime mover of the economy providing necessary employment and multiplier effect. What is more significant in the monetary policy is the slew of measures taken to move towards fuller float of rupee. After Prime Minister Manmohan Singh earlier this year asked Finance Ministry and Reserve Bank to work towards fuller capital account convertibility, the policy had taken the first major steps in this regard.

With focus on rate hikes and inflation, the efforts on capital account convertibility has somehow have not been paid that much attention. The policy has doubled the limit of individual dollar remittances from the present level of 25,000 dollars to 50,000 dollars annually. It has raised the external commercial borrowings and allowed foreign exchange earners to retain all their earnings in the foreign currency accounts.

Banks have also been permitted to borrow external funds from overseas branches. The RBI also proposed to raise the ceiling of FII investment in Government securities to 3.2 billion dollars in phase by March 2007 from the present level of two billion dollars. The overseas investment ceiling for mutual funds was raised to three billion dollars from the present level of two billion dollars. Pre-payment of External commercial borrowings up to 300 billion dollars has been allowed without prior RBI approval.

The slew of measures toward capital account convertibility would enable corporates borrow more from overseas markets. The monetary policy also provides for India Inc to take bigger loans from Indian banks to fund their overseas acquisitions. Indian firms have also been allowed to borrow an additional amount of 250 million dollars by way of ECB through the automatic route. This is over and above the existing limit of 500 million dollars under the automatic route in a financial year.

Corporates have also been allowed to pre-pay their foreign borrowings up to 300 million dollars from the present 200 million dollars. The monetary policy also provides two-year breather to smaller banks to implement the Basel-II prudential norms. They have got more time to gear up to meet stringent norms on capital standards set up by the Bank of International Settlements (BIS). It has apparently followed some of the Central Banks in the Asian region which have pushed back the deadline.

Originally the deadline was April one, 2007. Now foreign banks and those Indian banks which have an overseas presence would be required to adopt Basel-II norms by April one, 2008, while the other banks will have to conform to the norms by April one, 2009. Basel-II norms make it imperative for banks to provide additional capital on account of operational, market and credit risks. The amount varies from bank to bank. Giving the reasons for extending the deadline, Reddy said ‘‘with some banks implementing it, we will be able to capture the global experience while other banks will get to learn from the experience of these banks with overseas presence.’’

On movement towards fuller capital account convertibility, it has rightly adopted gradualism to ensure there is no flight of capital.

PTI Feature

Poll-eve political ferment in Bangladesh

By P Bhattacharya

Descent of poll season in Bangladesh means India has to brace up for shocks. Last time around, in 2001 the eastern neighbour had evicted at least 78,000 of its own citizens, fleeing mortal danger from Jaamat-e-Islami (JeI) Bangladesh Nationalist Party (BNP) activists seeking to ensure their opponent, Awami League loses its electoral bases. This number denotes only those who were in relief camps run by the likes of the BJP and the VHP, informed people say. Many others had crossed and had melded in the Indian population.

The BNP-JeI had also raised the demon of 'Indian hegemony,' to fan the flames of chauvinism so the results at the hustings could be in their favour. India had reacted with a conspiracy of silence. The National Democratic Alliance (NDA) Government wanted not to endanger its fledgling relationship with the Bangladesh Army-backed BNP and conversely, may have also thought reactions to the cross border atrocities would solidify anti-Muslim sentiments in the east. And the West Bengal Government refused to acknowledge the problem because it did not want people's hackles to be raised against a proximate neighbour.

No one raised the issue of growing Islamisation of Bangladesh. Result were reports about the rise in the next five years of such organisations like Harkat-ul Jehad-al-Islami (HUJI) and heightened influence of al Qaeda. The BNP chief, Begum Khaleda Zia's obvious fascination for collaborationist forces, including in the JeI, has provided Pakistan's infamous Inter Services Intelligence (ISI) and their understudy, Dhaka's own Directorate General of Foreign Intelligence (DGFI), a ready talent pool of operatives ideologically attuned with Islamism.

This time the situation may not be changed in any major way. Five years of BNP - JeI rule has created a wave of anti-incumbency. To counter that these parties may seek to raise the spectre of 2001, only more strongly this time as they otherwise have their backs to the wall. A split on 27 October in the ranks of the BNP has created a fresh centre of Zia-ur Rehman's ideology of 'Islamic roots of Bangladeshi nationalism' in the newly formed, Liberal Democratic Party (LDP). An inveterate resentment against Begum Zia's son, Mr Tareq Zia is providing to be a polarising factor in the country's politics.

Long time Bangladesh watchers say the obvious. The LDP will be joining hands with the 14-party alliance of the Awami League (AL) under the leadership of former Prime Minister, Sheikh Hasina Wajed. But all political realignments in the country's politics may not be complete yet. For the Islami Oikya Jote (a seven party group of Islamists) have just left the BNP-JeI alliance. They had positioned themselves as more hard-line than the JeI. Impact of their move is yet to be gauged, as the country lurched into unmitigated violence as Begum Zia sought to install a supportive member of the judiciary as the 'Chief Adviser' at the head of the caretaker Government. It was to take over after he ended her term in office.

Supporters of the AL-led alliance took to the streets seeking to reverse the decision. Finally, the President of the country had to step in appointing himself as the chief adviser. He was served with a four-day notice by the AL to prove his 'neutrality." Clearly, the road to the polls will not be smooth.

India will have to remain alert this time around so that there is no repetition of 2001. A massive attempt to drive people out of Bangladesh on account of their political allegiance cannot be accepted as a standard operating procedure of democratic political activity. On the other hand, New Delhi will have to be attentive to the fact that it does not appear to be taking partisan sides in the polls. For that would only fuel more charges India's influence in Bangladesh's politics.

In any case, those who believe that Sheikh Hasina Wajed will be a major improvement upon the record of the BNP-JeI alliance in terms of reducing Islamic influence in the country's politics need just to check her record in office last time around. She seldom took on the JeI attempts at infusing Islamist principles in rural Bangladesh. Some say that she was told by Islamist elements in party that she would lose electoral support if she was seen to be siding with the secularists.

That might have been the reason she failed to address any of the issues India wanted to engage her. Questions of trade, transit and trans-shipment remained unresolved. Bangladesh's inability to divorce chauvinism from commercially sensible decisions about supplying its natural gas to India has resulted in the former country's economy taking major hits. In the process Bangladesh economy got not a spin. This had an adverse impact on the entire polity vitiating the entire political atmosphere. If the Bangladesh is looking for pressure points on India, Dhaka's manoeuvring apparently back fired. In addition it has acquired a dubious distinction of a safe haven for Pakistan trained terrorist across the globe.

Yet, India's strategic interests are hinged on a successful democratic exercise of popular elections in Bangladesh. For a failed democratic experiment in the country could plunge entire region into turmoil. CNF



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