SwadeshiMarch - 2009 SWADESHI PATRIKA 1 Swadeshi PATRIKA EDITOR Ajay Bharti PRINTED AND PUBLISHED BY: Ishwardas Mahajan on behalf of Swadeshi Jagaran Samiti, 'Dharmakshetra', Sector-8,

March - 2009SWADESHI PATRIKA 1

SwadeshiPATRIKA

EDITORAjay Bharti

PRINTED AND PUBLISHED BY:Ishwardas Mahajan on behalf of Swadeshi Jagaran Samiti,

'Dharmakshetra', Sector-8, R.K. Puram, New Delhi-22,

EDITORIAL OFFICE'Dharmakshetra' Sector-8, Babu Genu Marg. R.K. Puram, N. D.-22

E-MAIL : [email protected]

CONTENTS

cover page

Vol-14, No. 3, Phalgun-Chaitra - 2066 March - 2009

COVER ARTICLE 4Budget speech was like an announcement beingmade during election public meetings with undueeulogization of the current government.

REPORT 6The exporting community of Tirupur faced a hugecrisis when the Rupee began to appreciate.Surprised and stunned exporters apppproached theSJM for guidance. MR VENKATESH reports how theywere bailed out.

OPINION 13The highest bravery awards must only be bestowedfor exceptional bravery and for no otherreason,cautions LT GEN VIJAY OBEROI.

CONFLICT 15Dr. Bharat Jhunjhunwala explains how conflictbetween the desires of a businessman and a monkis at the root of rampant consumerism.

DEBATE 18Creatively redef ined Swadeshi model ofdevelopment is required to benefit Bharat, and notjust India, says SH. L.K. ADVANI.

DEVELOPMENT 21Declining per capita production and availability offood grains, pulses and edible oils, despiteunprecedented growth experience It is an alarmingsignal for times to come counsels P. MURALIDHAR RAO

ECOLOGY 24Environmentally and productively sustainable cleanand equitable development can control and remedyphysical, economical and social problems thinksBANWAR DASS BITHU.

FDI 27UPA’s proposed policy on FDI, which seeks to allowthe backdoor entry of multinational giants like Wal-Mart into the retail sector in India, gravely prejudicesnational economic and social interests, warns SJM.

BOOK SCAN 29

LETTER 2

NEWS 32

WTO 36

DEVELOPMENT

SWADESHI PATRIKA March - 20092

Letters

Terror Threat to Economy

Swat Valley of Pakistan and its Talibanisation is thedominating news bulletins everyday everywhere. Threateningimages of Radicalised Jihadis and total surrender of thegovernment of Pakistan has on one side exposed the real natureof Pakistan and on the other demonstrated the danger to worldas a whole. Humanity has never been at such a grave risk inrecorded past.

India in particular is going to be the first and softest targetbecause of its proximity to the nursery of Terrorism. Threat toIndia is not mere political it is far more graver than perceived bythe people. Common people in India are totally misinformedand are hence underestimating the intensity of the danger.People in this country have been breast fed with the idea ofcentrality of economy in personal life. So they are busy in theireconomic upliftment. They fail to anticipate that Terrorism is firstof all going to hit the economic activity.

There will be no environment to concentrate on improvingthe economic health of individual or country. Loosing loved ones;business establishment and working hours, so important forwealth creation, will be a common feature in coming days ifthings continue to be as they are. Because of the fact that whenbombs explode and Terrorists exchange fire with security forcesno other activity is possible in area.

Inadequacy of Training of our security forces was exposedfully in Mumbai on 26/11. It is time people take charge of theirown security and train themselves in required measure. Eventhe government must seriously consider the idea of makingmilitary training compulsory for couple of the years for the youthof the nation.

- Girish Gupta, New Delhi

Quote-Unquote

A.R.Rehman knows nothing aboutghazals. Musicians like him just pick uptunes from the west.

Jagjit SinghGhazal singer

Those people who violate the rights ofsociety and have no respect for humanrights cannot be termed humans.

Arijit PasayatSupreme Court Judge

The days of Washington dragging itsheels are over. My administration will notdeny facts; we will be guided by them.

Barak ObamaUS President

I will never endorse tobacco or alcohol.Sachin Tendulkar

Cricketer

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EDITORIAL

March - 2009 SWADESHI PATRIKA 3

SwadeshiPATRIKAMarch - 2009

Achieving IndiaCongress party has wasted no time to claim the success of Slumdog Millionaire at Oscars as part

of UPA’s achievement. Party spokesman Abhishek Singhvi went several steps ahead and termedSlumdog Millionaire “a film of India, for India, by India” and talked about the “conducive atmospherewith emphasis on good governance contributing to an achieving India”. Party is claiming Indo-US nucleardeal, Chandrayaan and near 9% growth as some of its achievement. We understand and accept thefact that it is prerogative of political parties to chart their own manifestos to impress voters for thesupport in elections. Problem lies with perversion of facts and statement based on wild imaginations.Congress has every right to make” achieving India’ as its campaign theme, if it thinks that it can convincepeople about the transformation of India from what it was to what the party terms as ‘achieving India’. Itprobably has forgotten the ‘India Shining’ campaign of NDA and the subsequent result in polls held fiveyears earlier.

Problem with political establishment of this country is that they use their vision selectively to focuson the areas that suit them in immediate future. When NDA raised the shining India slogan, which theylater credited to media play they were responsible for the same miscalculation. The focus was on asmall section of Indian society. Upper layer of privileged few. Their success, achievements and rise wasprojected as the triumph, attainment and ascendance of India as a whole. Underprivileged anddisadvantageous section were hurt and felt humiliated. Their pain was more from the statement ofintent in which self proclaimed rulers expressed themselves in such a desolate way telling commonman that his problems were not their concern and Common man was not on its agenda. Congress ledUPA at that movement of time was able to make the most of this feeling and managed to rope in “AamAadmi” by providing him a viable alternative. Result was for every one to observe.

Success of slumdog Millionaire is a proud movement for every Indian, eventhough there are severalpeople who disagree with the projection of poverty and pessimistic portrayal of the country by an outsider.People also believe it to be British film n India. But congress party thinks otherwise and is repeating themistake of its predecessor by claiming it as the achievement of UPA. People are justified in asking therole UPA has played in success of the film. And if it was possible because of what party spokesmantermed as “conducive atmosphere with emphasis on good governance”, what about non performingareas of national life. Where was this ‘good governance’ when terrorists were hitting us everywhereincluding the financial capital of the country? Whose failure shall we count when it comes to lack ofintelligence accumulating mechanism to envisage the type of terror attacks we have been witnessing?Why limit it to terrorism only? Government has failed badly in predicting the financial crisis that hasruined economies across the world. There were sufficient indications available from early 2007 if notearlier, yet government was in denial mode.

Satyam fraud, the worst ever corporate scam shamed the country during this very so-called goodgovernance. Raju’s were cheating the nation for years, yet the government with all its resources includingmuch applauded regulators was not able to find anything messy in the companies run by Raju’s. It wasthe manipulated surrender of Ramalingam Raju that revealed the dark side of corporate affairs. So whyshall congress and UPA not take the credit for them also.

If we have a fresh look at the CMP issued immediately after the formation of UPA government andcompare it with the achievement after five years result will be self explanatory. Very important personsat responsible positions in the government have been accepting the fact that poverty reduction rate hasgone down. Surveys by official agencies have revealed about 46% of all children are underweight; 38%are stunted; 19% are wasted. Similarly calorie intake in both urban and rural India has declined by 4.9& 2.5 percent respectively. Farmer suicide has touched 182936 by December 2008. Employmentgeneration is almost eliminated and employers are laying off those already employed. Health care is inshambles. Under nourished children are increasing in numbers with every passing day. It is true withevery sector of the national life. If UPA still thinks it is achieving India we will have nothing to add andcomment.

People will once again realize the extent of disconnect to which rulers in this country are from theground reality. Those managing the affairs at present are from India for India by India. Bharat andBhartiyas are left out of the entire process. Bharat has become almost a colony of India and is beingexploited constantly. Accomplishments of Bharat which it makes possible inspite of Indians areremarkable. But the credit is being snatched and marketed as the achievements of India and nothing isbeing given in return. It is time Bharat asserts itself and ensures an equal and rightful place for itself.


COVER STORY

Interim Budget 2009-10 Empty,Disappointing & Miscalculative

Budget speech was like an announcement being made duringelection public meetings with undue eulogization of the current government.

It is a muchdisappointingbudget to be

produced by theUPA

Swadeshi Samvad

Interim Budget for the year2009-10 was tabled in the LokSabha by Sh Pranab Mukherjee

, the stand by Finance Minister on16th of February. It is the farewellbudget of UPA. While the Budgetproposals are surprising for somepeople, by and large it has been onexpected lines. Specific sectors, asusual, have shown disappointmenton one or the other count.

Those who expectedannouncements of some growthstimulating policy measures areclearly disillusioned. But a closelook reveals the confusionprevailing in the Congress ledruling combination. There is nodoubt that the interim budget wasprepared with an eye on theforthcoming general election. Nobody can deny the UPA or for thatmatter any party in office the rightto influence budget with their ownprogrammes. It is, in fact, theinability to take a definite directionthat is baffling the analysts.

Congress Party has attemptedto describe the absence of populistannouncements as a self imposedidealist restraint. Experienced oneslaugh it away. Knowing well thehistory of the party and its recordof fragmenting constitutionalinstitutions, they believe reasonsother than tradition or conventionfor the lack of any heroics in

proposals. While acknowledgingthat the Indian economy is facedwith significant challenges in thefinancial year ahead, the FinanceMinister stuck with theconventions of an interim budgetand did not announce any policyor policies that could triggerrecovery of the economy from thecurrent slowdown. Speculators are

of the view that it was under anintentional effort that ensured thedenied prospect and opportunityto Pranab Mukherjee to steal thepopularity show.

Eagerness to crown Yuvraj ofthe party it is believed, is forcinghigh command to take unusual wayto clear presumed impediments,both within and out side the party.The fear that any person morecapable and proficient whenallowed to become popular is anatural threat to dynastic aspirants.So, no sops in the interim Budget.People in general are of the viewthat it is a much disappointingbudget to be produced by the UPAgoverment before it goes to


COVER STORY

election in the coming months.Budget has not taken any concretestep to stimulate econoy. It only hastried to indicate intensions anddelayed the announcements for alater date.

Opposition parties also havecriticized the budget on almostexpected lines. “The InterimBudget documents confirm thatthe UPA Government has grosslyfailed to live up to the promises ithad made in the CommonMinimum Programme; that itsclaims in successive budgets havebeen, as we have been warning allalong, wholly fabricated; and thatit is guilty of grossly mismanagingboth the economy andgovernmental finances”, said BJP

As far as “education andhealth” is concerned, the UPA hadpromised to spend at least 6% ofGDP on education and 3% of theGDP on health. It even imposed acess of 2% on all taxes to collectrevenue for education. In fact, theoutlays are nowhere near thepromised levels. Moreover, themanner in which this money hasbeen spent has remained opaqueand apart from continuing with theSarva Shikshan Abiyan initiated bythe NDA Government, thisGovernment has done nothingfurther in this field.

Communist parties, who wereallies of the ruling coalition beforewithdrawing support last year, alsocriticized the budget.

Communist Party leaderGurudas Dasgupta said, “Ourstrongest criticism is that thegreatest problem of the countryhas not been referred to in thebudget at all. Not a single sentencehas been said about the job lossand the retrenchment. Two millionpeople have lost their jobs in lastthree months. Finance ministry ofthis country and a prominentpoli tician representing theCongress party does not recognizethe first human problem, that is,job loss.”

Communist party of India(Marxist) said the Congress partypresented its election manifesto,

which is far away from the reality.Senior CPI (M) leader Bindra

Karat said, “The Congress partywants to feed the rats in thecountry? People’s kitchens areempty because they have cut 73percent allocation for APL (offtake of subsidized grains peopleabove property line) for the states.So what are these claims? It is anelection manifesto and that alsovery far removed from the actualreality.”

Former Governor of ReserveBank of India (RBI) C. Rangarajansaid some more relief could havebeen given in the budget.

“They are going to be able tomaintain employment level only byenhancing the growth but there arespecific sectors where I said somerelief could have been made,”Rangarajan said.

Lalu Prasad Yadav ,UnionMinister for Railways, on the otherhand was very clear in his InterimRailway Budget for the first four

-:: Highlights of the Budget ::-

Fiscal deficit seen at 5.5 pct of GDP in 2009/10. Revenue deficit seen at 4 pct of GDP in 2009/10. Gross market borrowing seen at 3.62 trillion rupees in

2009/10. Total plan spending in 2009/10 seen at 9.53 trillion rupees.

2009/10 gross budgetary support 2.85 trillion rupees. GDP growth seen at 7.1 pct in 08/09. Defence expenditure raised to Rs 1,41,703 crore. Last year’s plan expenditure was only Rs 73,600 crore, thereby

providing an increase of Rs 13,279 crore this year. Rural job schemes to get 301 billion rupees in 2009/10.

Rural health spending 120.7 billion rupees. Midday meals scheme for schools to cost 80 billion rupees. Urban renewal spending in 2009/10 at 118.4 billion rupees. Rural sanitation spending seen at 12 billion rupees for next

financial year.

-:: 2008/09 Data ::- 2008/09 fiscal deficit seen at 6 percent of GDP. 2008/09 to end with revenue deficit of 4.4 percent of GDP. 2008/09 revised estimate of spending 9.9 trillion rupees. 2008/09 revised estimate of extra non-plan spending 1.1

trillion rupees. 2008/09 revised estimate of tax collection 6.28 trillion rupees.

(Continued on page 26 )


How SJM saved Tirupurfrom Forex derivative losses

A s I understand fromTirupur, the bait was firstto ‘allow’ these exporters

to make easy money in the first fewtransactions entered by the bankswith the corporates. Invariablyexporters bet on small amountsand tasted success. Exporters,emboldened by such initial success,were further encouraged by banksto take bigger bets. And when theirbets went awry, exporters werestuck with massive losses. This isthe crux of the issue. What isinteresting to note here is that thesetransactions were not onlyundertaken by the foreign andprivate sector banks, bit also byvarious nationalised banks, whowere known for their prudence.But remember Gresham’s law –when the bad circulates with thegood, the bad drives out the good.

“Double one-touch options”are not from the latest Madonnaalbum. “Option legs” need notnecessarily be associated withMallika Sherawat. “Tokyo Cut” isnot the latest cricketing shotinvented by Kevin Peterson.“Knock In and Knock” out are notterms associated with boxing.

In fact, all these terms arefrom the arcane world of finance,notably Forex derivatives. Possibly,they could well be Greek and Latinto many readers even in downtownMumbai, the Mecca of high endfinance in India. But that is not soin distant Tirupur, a small town ininterior Tamil Nadu. And the priceTirupur has paid to understand

REPORT

The exporting community of Tirupur which was abeneficiary of the continuous depreciation of the Rupeefaced a huge crisis When the Rupee began to appreciaterapidly vis-à-vis the USD. Surprised, stunned and stumpedthe exporters of Tirupur were scouting for antidotes tothis financial Tsunami that hit them virtually from nowhere.

This was when the exporters of Tirupur approachedthe SJM for guidance. Understanding the official apathyand anticipating the lackadaisical approach of thegovernment and RBI on this matter, the SJM immediatelymoved the Parliamentary Committee on Finance.

The SJM was able to impress on the Hon’ble memberson the illegality of the contract and how and why thesecontracts could not be enforced in any court of law.Detailed report has been prepared by MR VENKATESH.

these terms and crucially theirdebilitating impact – an estimatedRs 400 crores as on date.

Tirupur – an introductionBut before I proceed to

explain the devastation caused by


Forex derivatives in Tirupur a briefintroduction about Tirupur itselfwould be in order. Tirupur is anextraordinary success story. Andlike all success stories aboutIndia, it has been held back as asecret by the establishment,media, intelligentsia and ofcourse academicians from ourown people. After all, aren’t wea nation of sceptics?

It is for these very reasonsand despite its remarkablesuccess, no B-school ormanagement institute hasundertaken an in-depth analysisof the success of Tirupur. Why,in fact many educationalinstitutions in the neighbouringCoimbatore did not know about itssuccess. And one of the primarycontributors for the success ofTirupur has been the existence,functioning and domination ofcastes – yes castes – which urbanIndian loves to hate, abuse andridicule.

When the World Bankconducted its study a few yearsback about Tirupur it came to aconclusion that this remarkablegrowth of Tirupur was due to thecoordinated efforts of theGounder community, many ofwhom were not even matriculates.It is often commented that theBumble bee as per the establishedlaws of Physics should never fly.Yet it flies. And the only possibleexplanation for this is that theBumble bee does not understandthe laws of Physics! For, should itunderstand Physics it too could beburdened by the laws of Physicsand explanations of physicists,never even attempt to fly.

Likewise the lack ofeducation in Tirupur was a blessingin disguise for it turned employees,

for want of clerical opportunities,into employers. And suchemployers, because of caste and

community affiliations turned theirfactories, not only to producegoods but also into an open airuniversity which would in turnendlessly produce entrepreneurs.This in brief is the remarkablestory of Tirupur.

Consider this -It is in this connection that

the World Bank commented “Since1985 Tirupur has become a hotbedof economic activ ity in theproduction of knitted garments.By the 1990s, with high growthrates of exports, Tirupur was aworld leader in the kni ttedgarments industry. The success ofthis industry is striking. This isparticularly so as the production ofknitted garments is capi tal-

intensive, and the state bankingmonopoly had been ineffective attargeting capital funds to efficiententrepreneurs, especially at the

levels necessary to sustainTirupur’s high growth rates.”

So what was behind thisstory of unprecedented growthand development of Tirupur?How was the capital, skill andtechnology available to people,who were as already pointedout, mere matriculates and inmany cases much less. It is herethat the World Bank analysisbecomes crucial. Pointing outto the emerging frontiers of

economies that are able to develop,regulate and sustain themselves, theWorld Bank suggests that the riseof Tirupur was because of itsability to manage its affairs by itself,raise capital from within andinspire others within thecommunity to becomeentrepreneurs.

It is here that Dr SharadChari’s meticulous research titledFraternal Capital: peasant-workers,self-made men and globalisation inprovincial India (StanfordUniversity Press), tracing the riseof most entrepreneurs of Tirupurwho belong to one community —Goundars – becomes instructive.Further, what is interesting is thathe points out that only two-thirdsof the entrepreneurs in Tirupur arematriculates or less, with only athird having been to college, andnone — yes none — professionallyqualified. This paradigm – lack ofeducation on one hand andcontinued entrepreneurial spirit onthe other – is central to his studyof how castes and community inIndia are able to arrangethemselves on their own, withoutany help from the government.

REPORT

Rise of Tirupurwas because of

its ability tomanage its

affairs by itself.


Likewise the World Bank’sconclusion was stunning and muchas it was forthright. It concludedthat “The needed capital was raisedwithin the Goundercommunity, a caste relegated tothe land-based activities, relyingon community and familynetwork. Those with capital inthe Gounder communitytransfer it to the others in thecommunity through long-established informal creditinstitutions and rotating savingsand credit associations. Thesenetworks were viewed as morereliable in transmittinginformation and enforcingcontracts than the banking andlegal systems that offered weakprotection of creditor rights”

It was a product ofliberalisation too

Tirupur was a product of itsown discipline as much as it was aproduct of the liberalisationprocess. It may be noted that therise of Tirupur coincided with thenew economic policies adopted bythe Indian government in the early1990’s. Crucially as the Rupee wassteeply devalued, Tirupur acquiredglobal competitiveness. It was itsfirst brush with the global marketswhich in turn had a positivesnowballing effect. Thanks to aliberalised regime, Tirupur quicklyacquired newer technologies,adopted modern managementtechniques and of course leanermanufacturing practices. In effect,it was a classical case inconvergence of the best practicesin the Far East and the West.

Remember al l this wasachieved by people who were notschooled in high-end managementinstitutes. Rather, they began to

employ the products of these veryinstitutes, Chartered Accountants,engineers and other professionals!

All this meant that the exports

from Tirupur grew from Rs 15crores in 1985 to close to Rs 12,000crores in 2007! The un-stated yetofficial policy of the RBI to keepthe Rupee weak to facilitate exportssince the 90’s helped Tirupur togrow from being a small dustytown into a bustling export centreof India. Put pithily, thecontinuous depreciation of theRupee Vis-à-vis the USD since theearly 90’s till mid-2001 in moreways than one propelled the rise ofTirupur.

As the Rupee depreciated toalmost 49 in early 2001, exportersof Tirupur virtually took out theexchange rate movements,importantly the Rupee appreciationout of their calculus. But linearityrarely works in life, much less ineconomics. Nevertheless, when the

Rupee began appreciating sincemid 2001 till early 2007 against theUS Dollar, it was so minimal andgradual that the exporters were

even then able to adjust to thisnew phenomenon withoutrecourse to any financial orForex experts.

Paradoxically, what was thepropelling force behind the riseof Tirupur, quickly turned intoits Achilles heel. When theRupee began to appreciaterapidly vis-à-vis the USD in thesecond quarter of 2007, [froma level of Rs 44 in January 2007it reached a peak of almost Rs

39 per USD in January 2008] theexporters of Tirupur faced a hugecrisis. This loss was twofold – onone hand it was erosion of profitsresulting in gargantuan losses.More importantly, it was erosionof competitiveness for which theexporters off Tirupur which leadto significant loss of opportunitiesand markets in the first place.

Thus, the exportingcommunity of Tirupur which wasa beneficiary of the continuousdepreciation of the Rupee wascompletely unprepared for this andwas perplexed at the sudden turnof events. Surprised, stunned andstumped the exporters of Tirupurwere scouting for antidotes to thisfinancial Tsunami that hit themvirtually from nowhere. This iswhere the story gets murkier.

Derivatives a weapon of massdestruction?

Before I proceed to deal withthe banks, their role and themanner in which they have luredthese exporters into exotic (or is iterotic) derivative contracts, itsdebilitating impact on the economyof Tirupur and various questions

REPORT

Exports fromTirupur grew

from Rs 15 croresin 1985 to close toRs 12,000 crores in

2007!


of law and violation of the RBIguidelines that it raises, anintroduction the world ofderivatives itself would be in order.Most economists begin byexplaining as to how a farmer whohas a wheat crop expected to beharvested in say April enters into acontract with a banker in Februaryor in March to deliver a fixedquantum for a pre-determinedprice. It is further argued byproponents of such outlandishideas that it is a win-win situationto both the farmer and the bankereven when the prices of wheat riseor falls! Do not get fooled by suchsimplistic arguments, naïveillustrations and crudeassumptions. The fact of thematter is that no farmer- repeat nofarmer – ever sells his wheat in thefutures markets. And even if hedoes no banker does buy it there.

Where is the question ofselling in futures markets whennormal banking channel is out ofbounds for three-fourths of ourfarmers? As per the EconomicSurvey published by the

Government of India, most of ourfarmers are even unaware of theMinimum Support Prices (MSPs).Yet they are supposed to sell theirproducts in the futures markets!Most of these proponents of thefutures markets in commodities donot even understand that many ofthe farmers are illiterates. Andthose who are literate do not havecomputers. And those who havecomputers do not have electricityto operate. Yet the standardassumption is that forward marketshelp farmers in “discoveringprices” for their produce.

In short, whether thesemarkets help our farmers or not,these are gambling indulged by

finance professionals, couched injargons, aided by technology andsanctified through an elaborateprocess of law. No wonder lessthan 2% of the trades in any ofthese derivative markets are settledthrough otherwise then by actualdelivery. Yet the standardexplanation has been than a bit ofspeculation helps in ensuringliquidity of the markets. Is it a caseof ninety-eight percent waggingtwo percent or is it the other wayaround? Either way, one fails tounderstand the underlying logicthat drives the purpose of theseinstitutions and instrumentsespecially in a country like India.

Whatever be it, it would besurprising to note that WarrenBuffet calls derivatives as Weaponsof Mass financial Destruction(WMD). Noted CharteredAccountant and eminentcolumnist, Gurumurthy, callsderivatives as IntercontinentalBallistic Missiles (ICBMs) after therecent spate of credit derivativesoriginating from the US hittingfinancial institutions across theAtlantic in Europe.

And this is not withoutreason. It is in this connectionreaders may recall that the Black-Scholes Model for determining thevalue of options was published inthe eighties. The net consequencewas that many financial institutionsinvolved with derivatives wereemploying mathematicians andphysicists to design ever moresophisticated financial instruments!And when economics marriesphysics with mathematics acting asthe priest, the results have oftenbeen a disaster.

What is further interesting tonote here is that Merton andScholes, were awarded the Nobel

REPORT

No farmer -repeat no farmer –

ever sells hiswheat in the

futures markets.


Prize in economics in 1997 fordeveloping a formula for thevaluation of stock options. Andwithin a year after Merton andScholes received the Nobel Prizefor their ‘pioneering work,’ theirfirm, Long Term CapitalManagement (LTCM), faced thedubious distinction of goingbelly up, merely because theycould not handle derivatives.Surely, it was far easier to devicea model and be awarded a NoblePrize rather than handle the samein real life. In fact, their firm hadto be rescued at a cost of USD 3.5billion by the US government as itwas feared that its collapse couldhave had a disastrous effect onfinancial institutions around theworld.

The lessons from the fall ofLTCM cannot be dismissed by anyintell igent person or nation.Crucially, if Noble laureates havefailed in handling theseinstruments, what can be expectedof lesser mortals? Importantly, noone can master them, not eventheir inventors. It may be notedthat Enron — till then hailed as anaggressive user of many of theseexotic products — had madeextensive use of energy and creditderivatives. Subsequently, itsuffered huge losses and becameone of the largest American firmsto go bankrupt in history aftersystematica lly attempting toconceal huge losses. But in thisenti re melee, what has beenforgotten is the fundamentalcharacteristic of these contracts.What is trading in index numbersif not a wager? Instead of thederby it is now taking a bet on themovement of numbers? Is it notspeculation per se packaged insophisticated language, exotic

terms and backed by legislation,regulators and sanctified by thegovernment?

Banks promising to playSanta turn into villain

The weatherman whopredicts the weather is no differentfrom the parrot astrologer whopredicts your future who is nodifferent from the financial expertswho claims to have the necessaryexpertise to predict the gyrationsof currencies in the Forex market.And a confused exportercommunity in Tirupur, benumbedalready by the huge losses onaccount of the Rupee appreciation,lent itself to become a sacrificiallamb to the banks which professedto have the necessary expertise todeal with the extant situation. It isnot a ll . Bankers have evenwarranted to their clients, i .e.exporters in Tirupur that they

would not only prevent futureForex losses but in some caseshave assured these clients thatthey could even recoup pastlosses.

Like drug peddlersencouraging users of drug byproviding easy and cheap drugsto students, some of thesebanks have lured exporters toenter into what is popularlycalled ‘exotic derivativecontracts.’

As I understand fromTirupur, the bait was first to ‘allow’these exporters to make easymoney in the first few transactionsentered by the banks with thecorporates. Invariably exportersbet on small amounts and tastedsuccess. Exporters, emboldened bysuch initial success, were furtherencouraged by banks to take biggerbets. And when their bets wentawry, exporters were stuck withmassive losses. This is the crux ofthe issue. What is interesting tonote here is that these transactionswere not only undertaken by theforeign and private sector banks,but also by various nationalisedbanks, who were known for theirprudence. But rememberGresham’s law – when the badcirculates with the good, the baddrives out the good.

In the process experts opinethat these banks have violatedmany of the well-intentionedguidelines issues by the RBI onthese matters. In the process thebusiness community of Tirupurhas charged the bankers of mis-selling these products to them. Theissue now hinges on the suitabilityof these contracts to the exporters.After all, why should an exporterwho normally bills his exports inUSD, take a position in Japanese

REPORT

When the badcirculates with the

good, the baddrives out the

good.


Yen or the British Pound. It is notall. According to some of theexporters who have been at thereceiving end of these transactions:

Bankers have advisedexporters to buy diverse kinds ofForex derivative products rangingfrom forward contracts whichincluded intra-day speculation oncurrency movements to complexproducts which is difficult for eventhe best financial minds to fathom.These contracts, as they are notbacked with appropriateunderlying, violate the RBI policyon the extant issue.

When the exportersexpressed they inability tounderstand these complex financialproducts, these banks took uponthe role of financial advisors andrepeatedly assured the exportersthat they were experts in the fieldhaving sufficient experience inhandling these products. Thesebankers even suggested that theexporters could try out sampledeals on the basis of their adviceand thus convinced the exportersto enter into these transactions.Invariably these transactionsresulted in profits to the exporters.

The banks had thuspositioned themselves in afiduciary capacity vis-à-vis theseexporters purporting to offer riskmanagement and cost reductionservices. The exporters, afterhaving sampled the profits fromthese deals began trusting thebankers to the hilt. Naturally, theylapped up every subsequentsuggestion of the bankers withoutunderstanding the product beingoffered. It would be pertinent tonote that after g aining theconfidence of the exporters, thesebanks had pushed throughproducts with were grossly

inappropriate and unsuitable. Infact, these products exposed theexporters to unlimited risks insteadof mitigating risks as they wereoriginally intended in the first place.It may be noted that theseassurances of bankers were builton past history of currencymovements and no one could everwarrant on their movement.

In fact, most of thesefinancial products were marketednot by regular bankers but bybankers who had nothing to dowith the regular businesses of theseexporters

Being a strange andunfamiliar deal, the onus ofnecessarily and repeatedlyexplaining the complexities of thecontract as well as its suitabilitywould certainly rest squarely on thebank and to ensure that the clienthas understood the essence as wellas the associated risks in the dealbefore taking his acceptance as avalid one.

Further, the banks acted as an

advisor, in a fiduciary capacity aswell as a party to the transactionand as a beneficiary under it,thereby violating the commonlyaccepted banking and professionalethics.

Most of the exporters fromTirupur are Small and Mediumenterprises [SMEs]. The policy onwho could sell derivatives to SMEswas well captured by Ms ShyamalaGopinath, Dy Governor ReserveBank, at the Euromoney InauguralIndia Derivatives Summit, 2007,Mumbai on 24th October 2007when she stated “In order toensure that SMEs understand therisks of these products, only bankswith whom they have creditrelationship are allowed to offersuch facilities. These facilitiesshould also have some relationshipwith the turnover of the entity.”The bankers who sold thederivatives to the exporters ofTirupur totally acted contrary tothis declared policy and soldderivatives to exporters who werenot their clients at all. More, theturn over on derivatives exceededthe export turnover of the manyexporters by several times.

Further the Dy Governoradded “The critical importance of‘suitability’ and ‘appropriateness’policies within banks for derivativeproducts being offered tocustomers (users) have beenunderlined.” The banks alsoviolated this crucial prerequisite.

Given these scenario, theexporters of Tirupur hadcollectivised themselves asFOREX Derivative Consumers’Forum [FDCF] under the guidanceof Swadeshi Jagran Manch andapproached the RBI.

The FDCF demanded thatthe RBI immediately set up a high

REPORT

Bankers haveadvised exporters

to buy diversekinds of Forex

derivative products


power committee to investigate theentire class of derivative contractsthat were entered into by Bankswith various Indian exportersacross the country in completeviolation of the RBI circulars andsubmitted a petition with thefollowing prayer:

To instruct the bankers toarrive at an amicable solutionso as to save the industry

To instruct banks not to debitthe resultant loss in the regularaccount of a customer but tokeep it in a separate accountpending the outcome of suchinvestigation by the high powercommittee

To instruct the bankers not toclassify the account as NPAconsequent to non payment ofderivative losses debited to theexporters’ account

To request the RBI and keepthe proposed draft Guidelineson Off-balance sheet items ofbanks in abeyance because it istoo premature and the realgravity of the problem is notyet fully known. If one accountis classified as NPA, then all theaccounts of that exporter willautomatically become NPAthereby causing majordisturbance to the runningbusinesses resulting in closureand possible loss ofemployment to thousands ofemployees.

The essence of thisMemorandum submitted by FDCFon July 4th 2008 is that RBI shouldconstitute a Committee to receiveall relevant material from theexporters and to secure thematerials from the respective banks

both disclosed and undisclosed andto suggest / devise ways and meansto solve the dead lock in such amanner that the industrial activityin Tiruppur is not brought to agrinding halt on account of thederivative losses.

Exporters of Tirupur are notthe sole victims of Derivatives. Itis reliably learnt that many exportcentres in the country too has beendevastated by such financialinstruments. And in every case ithas virtually followed the Tirupurpattern.

Subsequently as RBI, perhapsgiven the magnitude of the issueand also the fact that manycorporates had gone to the courtson the same issue was in factdithering. Subsequently, when thethen Governor, Mr. Reddy,demitted office in September 2008,things again came to a standstill.

This was when the exportersof Tirupur approached the SJM forfurther guidance. Understanding

the official apathy and anticipatingthe lackadaisical approach of thegovernment and RBI on thismatter, the SJM immediatelymoved the ParliamentaryCommittee on Finance under thechairman ship of Shri AnanthKumar Ji. The Hon’ble committeewas gracious enough to provideearly hearing on the matter.

The entire matter wasrepresented in the Committee by ateam from SJM lead by Shri SGurumurthy in October 2008. Theentire presentation was marked bynumerous clarifications by theHon’ble members of thecommittee. This meeting wasattended also by the representativesof RBI as well as Finance Ministry.The SJM was able to impress onthe Hon’ble members on theillegality of the contract and howand why these contracts could notbe enforced in any courtof law.

Further, explaining the moraldimensions of the entire contract,the SJM team provided thenecessary arguments even for theRBI to come out with a circular inlate October 2008 virtuallyacceding to the prayers of theTirupur exporters. At this point intime, this circular of RBI virtuallyprovides a stay to banks fromcollecting the necessary losses fromall exporters, especially SMEs.

In effect, the SJM’s stand iscomprehensively vindicated in itsapproach in repeatedly warning thenation that the sophisticated globalfinancial architecture is not suitableto a country like India. Yet,successive government, notably theUPA government has chosen toignore the well-intended advice ofthe SJM at their own peril.

REPORT

SJM’s

stand is

comprehensively

vindicated


OPINION

Death is Humbling but; notSynonymous with Bravery

The highest bravery awards must only be bestowed for exceptional braveryand for no other reason. The sanctity and aura attached to these highest levelgallantry awards that the nation bestows on the bravest of the brave must notbe allowed to disappear even if some political leaders desire it for extraneousreasons, cautions LT GEN VIJAY OBEROI.

An unprecedented elevenAshoka Chakras werepresented by the

Rashtrapati on the 60th anniversaryof the Republic. That the numbersare exceptionally high may not bean issue, as bravery of the mostexceptional order cannot and mustnot be constrained by numbers.

However, the highest peace-time award must only be bestowedfor exceptional bravery and for noother reason. There is a questionmark on whether the awards thisyear were given only to theexceptionally brave.

In writing this piece I amaware that I am touching a sensitiveissue, especially as it is about thedeath of four highly regardedpolice officers. To that extent, I amguilty of being politically incorrect,but there are times when one hasto speak one’s mind, howeverunpalatable it may be. This is oneof those exceptional occasions. Myaim in doing so is not to denigratethe sacrifices made by theseofficers but to caution the nationalleadership not to succumb topolitical expediency whenconsidering such weighty issues asconferring of the highest braveryawards.

We Indians are highlyemotional when it comes to death,but emotions have no place whenit is a question of recognising-valour. The highest recognition forexceptional bravery is the awardof

Ashoka Chakra in peace time andthat of the Param Vir Chakra inthe face of the enemy during war.These are the only two awards thatare bestowed publ icly at theRepublic Day Parade and for goodreason, so that the bravery of theawardees is fully appreciated by theentire nation. All other awards, forbravery as well as for distinguishedservice, are presented by theRashtrapati on investiture paradesheld at Rashtrapati Bhavan.

In accordance with the officialwebsite, Ashoka Chakra is awardedfor most conspicuous bravery, orsome act of daring or pre-eminent*The writer is a former Vice Chief of Army Staff (VCOAS).

Hasty and irrationaldecisions taken bythe Government

devalue the awards,besides creatingembarrassment.


act of valour or self-sacrificeotherwise than in the face of theenemy. All ranks of the army, thenavy and the air force, members ofthe nursing services of the armedforces or of any of the reserveforces, the territorial army, militiaand of any other lawfullyconstituted forces are eligible toreceive this medal. Civilian citizensof either sex in all walks of life,other than members of policeforces and of recognised fireservices are also eligible.

Soon after the terrorist attackin Mumbai, where a number ofsenior police officers had lost theirlives within a few hours of theterrorist strike, an analyst hadtermed them “InnocentCasualties”. In amplification he hadstated that these three officers,along with a few policemen hadbeen surprised, waylaid andbutchered without getting a chanceto use their weapons. Perhaps theirlack of training did not permitthem to anticipate and react withoperational swiftness. Their dearones do deserve our deepsympathy and heartfeltcondolences, as well as care andcompassion, but do they meet thecriteria of “the most conspicuousbravery”? The same applies toanother police officer who wasunfortunately killed in an earlierincident in Delhi.

By all accounts, all four policeofficers were highly efficient,dedicated and exemplary officers.Their devotion to duty needs to berecognised and honoured, but thisis not the way of doing so. Thereis a vast difference betweengallantry awards and awards fordistinguished service. A largenumber of military personnel,especially from the army, lay down

their lives or lose limbs fightingterrorists in various parts of thecountry, nearly on a daily basis.Their sacrifices are for the country.Yet most of them do not qualifyfor earning gallantry awards, evenof a lesser category. Let me cite myown example. I lost my leg duringthe 1965 Indo-Pak War andbecame permanently disabled, butI did not get any award. Neitherdid I ever think that I should havebeen given one. The same is thecase with the large number ofsoldiers and officers who are killedor disabled in wars or warlikesituations. That is how it should be.

In the army, grant of gallantryawards is an elaborate process,where commanders at successivelevels give their recommendationsafter evaluating all facts. Eventually,a committee presided over by theVice Chief takes the final decision.During this process, theoperational staff briefs thecommittee about all facets of therelevant operations. It is only whenall members of the committee arefully satisfied that the award isapproved. In the case of higherlevel of awards, the cases also needthe Chief ’s approval and later thatof the Minister of Defence.

The trend of bestowing

gallantry awards merely becauseofficers had lost their lives interror-related incidents goes backto the death of two senior officersin Afghanistan in a terroristincident, who were awarded KirtiChakras, the second highestgallantry award not in the face ofthe enemy. The two, one a brigadierfrom the army and the other anofficer of the Foreign Service, losttheir lives as they were driving inwhen an explosive device wasexploded by terrorists at theembassy gate. Surely there was nobravery there. The governmentmust take all actions to help the

next of kin monetarily and forsubsequent rehabilitation, but itmust not be done by bestowinghigh level gallantry awards. Suchhasty and irrational decisions takenby the Government devalue theawards, besides creatingembarrassment.

My concern in this piece isthat if we persist in this type ofpopulous largesse, the sanctity andaura attached to these highest levelgallantry awards that the nationbestows on the bravest of thebrave would disappear. Surely, thenation does not want this, even ifsome political leaders desire it forextraneous reasons.

There is a vast

difference between

gallantry awards

and awards for

distinguished

service.

OPINION


Consumption is the base ofmodern economics. Thetheory of utility states that

increased consumption leads towelfare, happiness or, ineconomics’ jargon, ‘utility’. This isseen to be true. One eating icecream or traveling in a new car isseen to be happy. But opposite isalso seen. The poor are seensleeping blissfully on railwayplatforms. Such peaceful sleep israre for the rich. Or, a monkundertaking fast is seen happier

Dealing with harmfulconsumption?

than the rich man eating a sevencourse meal. Psycho-somaticdiseases like BP, asthma and skindisorders are mostly seen amongthe well-off. Thus, oftentimes highconsumption and low welfare gotogether. Conclusion is thatconsumption leads to welfare insome circumstances and not inothers.

The relationship ofconsumption and welfare appearsto be determined by one’s innerself or the unconscious. Man has

two levels of consciousness-theconscious or the mind, and theunconscious or the heart. Say, theheart’s desire of a monk is toundertake penance on the banks ofthe Ganga. He happens to comein contact with a hip youth. He alsodevelops the desire to dance in thedisco. He enjoys the lights and loudmusic of the disco too. But, in theprocess, his heart’s desire ofundertaking penance is suppressedand this desire continues tosmolder within. His consciousmind and unconscious heartbecome disjoint. In due course hedevelops psycho-somatic diseaseslike skin disorders etc.Consumption of the mind has thusprovided him with pleasure in theshort run but hit at his welfare inthe long run.

All religions espouse thisprinciple. Islam says one shouldfollow the will of Allah. Godshould here be seen as speakingthrough one’s heart. Hindus sayone should keep his senses incontrol and do the bidding of theAtman. Jain and Buddhistsgenerally negate the material world.Christianity promotes celibacy-which is opposite of consumption.

The rich are not happy withthis teaching of religion. If peoplefollow the religious teaching of

Consumption, the base of modern economics, does

not necessarily lead low welfare of masses.

DR BHARAT JHUNJHUNWALA

The relationshipof consumption

and welfareappears to bedetermined byone’s inner self

or theunconscious.

CONFLICT


abstaining from the disco andundertaking penance on the banksof the Ganga, then thebusinessman will not be able tomake profits from the disco andthe politician will not be able tomake money in giving license forthe same. The heart’s desire of thebusinessman is to earn lots and lotsof money. It is necessary thatpeople consume evermore for himto make these profits. The clerkshould work 12 hours and then usethe money to go to the disco. Thisprovides double profits to thebusinessman. First the clerk works12 hours and makes profits for thebusinessman and then he pays forthe disco. Such would not happenif he were to enjoy a walk alongthe banks of the Ganga instead.The businessman promotes aculture of consumption in orderto fulfill his heart’s desire ofmaking money. He converts rest ofthe society into a consumptionmachine. He makes advertisementsand TV programmes that ensurethat the heart’s desire of the clerkto walk on banks of the river issuppressed and he develops thedesire to go to the disco. The

businessman suppresses the heart’sdesires of others in order to fulfillthe desires of his own heart.

There exists a conf lictbetween the heart’s desires of thebusinessman and the monk. It isthe role of religion to resolve thisconflict. All religions have donethis by making rules of what thebusinessman may do what he maynot. For example, trade in alcoholis prohibited in almost all religions.The politicians and businessmendid not like this social role ofreligion. They, therefore, inventedthe idea that religion is a matter ofthe individual and has no socialbearings. The individual was setfree. The advertisements topromote consumption were madelegitimate because it was for thebusinessman to define his personalreligion. Thus we have before us asituation in which consumerismruns rampant, human beings are

morose and beset with manypsychosomatic diseases.

This situation has developedbecause established religions failedto combat the theory of ‘personalreligion’. The priests failed tocombat this ideology of thepoliticians and businessmen. Thepriest did so because he hadbecome disjoint with his own heart.He was drawn by the pleasures ofthe mind and was purchased by thepoliticians and businessmen. Hewas will ing to accept theiremployment in order to fulfill hisown desires of consumption. Thepriest could not oppose therunning of the disco because hewas employed by the disco ownerto undertake worship in the temple.He did not oppose the adharma ofthe politician and businessman ofpromoting consumption becausehe was himself engrossed in thatsame adharma. Rather the monkwas more interested in renting outthe premises of his ashram to adisco owner. Religion’s control onsociety has collapsed not becauseof social evils. Religion was madeto control this very social evil.Rather, religions control over

Established

religions failed

to combat the

theory of

‘personal

religion’.

The businessmanpromotes aculture of

consumption.

CONFLICT


society has collapsed because thepriests have failed to follow theirown dharma of connecting withtheir heart and controlling theirmind. One result of this is that thepoliticians create rift betweenreligions. Priests of variousreligions bicker with each otherbecause that helps them fulfill theirdesires of consumption.

Solution to this problem willbe obtained from internal cleansingof the religious priests. They willhave to connect with their hearts.Then they will spontaneouslyconnect with the priests of otherreligions just as two unknownpassengers wanting to travel by thesame train spontaneously becomefriends and assist each other incarrying their baggage. The main

problem is not conflict betweenreligions. The main problem is thatpriests of all rel igions havedisjointed with their own hearts.The inter-religious conflict ismerely an outcrop of this deepermalaise.

Creating goodwill andcooperation among religions isabsolutely necessary. But this willnot happen until the priests firstconnect with their own hearts, i.e.,undertake penance. Trying tocreate goodwill among religionswill fail to create good social orderjust as friendship between twothieves does not control thefts.

Indeed, friendship betweenpriests of different religions, whoare all engrossed in consumption,will make things worse. With

mutual conflict pervading theirdiscourse, they at least expose theconsumption of the other. Eventhis will stop. Cooperation betweenthe state and religion, orconstruction of a theocratic state,will likewise make things worse.The materialist politician andmaterialist priest will togetherwreck havoc on the society asChristian crusades, Hinducleansing of Buddhists and IslamicJihad have done.

The only solution is for thebest of society-priests andotherwise-to undertake penanceand connect with their inner self,their soul or their heart. Then theywill be able to oppose adharmicconsumption and also make truefriendship with other religions.

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Dedicated to Swadeshi Movement in all its dimensions; Battles threats to the economic sovereignty of the nation; and

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CONFLICT


The next parliamentaryelections are so close thatwe can almost hear their

footsteps. A hallmark of the futureis that it is uncertain. But there canbe no uncertainty about one aspectof the coming Lok Sabha elections.People’s will will prevail. And theworld will see that this greatcountry of 1.13 billion people anda zillion diversities has once againeffected peaceful transition ofpower through a grand celebrationof democracy.

In January 2008, the BSESensex had crossed the all-timepeak of 21,000. And somespeculators were predicting that theSensex would rise to 27,000 in thefirst half of 2008. It has now fallento below 10,000. This representserosion in the market value oflisted Indian companies to the tuneof Rs 40 lakh crore (Rs 40 trillion).

In recent years, many greed-driven financial instruments cameinto vogue. Such undependabledevices of the free marketeconomy cannot be the basis forbuilding a truly prosperous nation.They have caused meltdown of thefinancial system in America andother western economies.

The past decade hasdemonstrated that the growth thatunfettered capitalism producesusually culminates in a bubble.However, when the bubble bursts,the pain and havoc it causes hasuneven impact on differentsections of society.

Therefore, I am less worriedby the fact that the phenomenalfamily wealth of some of the

‘INDIA NEEDSA SWADESHI DEVELOPMENT MODEL’

— L. K. ADVANI

Sh.L K Advani, Bharatiya Janata Party’s prime ministerialcandidate and leader of the Opposition in Lok Sabha,addressed the 81st annual general meeting of FICCI onThursday February 12, 2009. In his speech, Advaniji madea strong case for Swadeshi, creatively redefined, as a modelof development to benefit Bharat, and not just India.Following are excerpts of his address.richest Indians has shrunk byseveral thousand crores. Whatworries me more is that India’s realeconomy is shrinking, labour-intensive employment down andwith it the modest incomes ofmillions upon millions of poor andmiddle-class Indians is shrinking.

But as someone who has beenconstantly moving around thecountry, I can tell you that the BPLpopulation of India has becomeFPBPL — Further Pushed BelowPoverty Line!

Millions of ordinary Indianshave lost their jobs due to the sharpdownturn in the economy, andmany more are experiencing the

torment of likely loss of livelihoodDevelopment historians

know that the Soviet modelinspired Nehru’s belief in thepubl ic sector occupying thecommanding heights of theeconomy. Throughout the ’50s,’60s, ’70s and ’80s, trueentrepreneurship in India wascurbed by the license-permit-quotaraj. The ones that did flourish, didso by state patronage or crony-capitalism.

This stunted India’s growthand necessitated the economicreforms of the early 1990s.However, in the past nearly twodecades, India has swung to the

DEBATE


other extreme by trying to imitatethe American model of free-market capitalism. As a result,agriculture, the informal sector andlabour-intensive manufacturingsectors of the economy, whichcreate maximum employment andself-employment opportunities,have suffered prolonged andsystemic neglect.

The shame of thousands offarmers committing suicide that weexperience today is a direct resultof the new imbalance created sinceliberalization and globalisation.The rich-poor and urban-ruraldivide has become wider than everbefore in the past two decades.This has g iven rise to manyundesirable consequences.Swadeshi, re-interpretedcreatively, is the answer

The Bharatiya Janata Partyis committed to addressing thisdangerous imbalance. Webelieve that the new as well asthe entrenched developmentalchallenges before India cannotbe met by carrying the influenceof either free-for-all capitalismor freedom-ki ll ingcommunism.

What India needs is a robust,self-confident Swadeshi(nationally-oriented) model ofdevelopment, which is rooted inthe ideals of democracy, equality,justice and integral humanprogress.

The concept of Swadeshishould neither be discredited asarchaic or outdated, norinterpreted by its proponents in anarrow sense. India has never clungto ideas and ideals that are stagnantand impervious to the needs ofchanging times.

The basic philosophy of all-round human development has

been enunciated by all our greatthinkers. Mahatma Gandhi did sowith deep ins ight and firmconviction in the 20th century.

My own ideological guru,Pandit Deendayal Upadhyaya,articulated this philosophypersuasively in his treatise, IntegralHumanism. He had warned us in the1960s that although the SovietUnion and China could not be themodel for India (for that is whatthe Leftists used to say those days),we should not think thatAmerican-style capitalism is themodel India should follow.

If I were asked what acreatively re-interpreted Swadeshiwould stand for, I would

enumerate the following fivepoints:

(1) Swadeshi means thatnational priorities must overridepolicies that have benefited only aminority and largely excluded themajority in the nation’s progress.

In other words, just as thecentre of gravity of the worldeconomy is shifted from the Westto Asia, the centre of gravity ofour national economy must shiftfrom ‘India’ to ‘Bharat’ — toagriculture, revitalization of ourvillages, small and mediumenterprises, and unorganized andinformal sector of the economy.

Bharat includes not only the

rural population but also the urbanpoor and middle-classes. Swadeshidoes not believe in an antagonisticrelationship between ‘India’ and‘Bharat’. The two areinterdependent and integral partsof our nation.

(2) Similarly, it sees no conflictbetween the public sector andprivate sector. There is no place fordogmatism in favour of or againsteither, since both have to bestrengthened.

In view of the recent globalexperience, the public sector needsto be further strengthened in thefinancial system and in core sectorslike energy.

(3) Swadeshi is not antitheticalto cooperation with theinternational community, justas the concept of Swaraj wasnot.

Nevertheless, itscornerstone is national prideand the belief that the India ofour dreams has to be built onlyby our own genius, with ourown efforts, and principallywith our own natural andcapital resources. India’s

problems need Indian solutions.(4) Swadeshi wholeheartedly

embraces the knowledge andproducts of modern science andtechnology. It holds, however, thatour country should revive its ownrich and diverse knowledgetraditions and emerge as a majorcontributor to global scientific andtechnological progress, instead ofremaining mere consumers ofoutside knowledge.

(5) Swadeshi affirms thatbusiness and economy shouldserve as a means and not an end inthemselves, and the higherpossibilities of human progressshould not be sacrificed at the altar

India needsa robust,

self-confident Swadeshi

(nationally-oriented) model

of development.

DEBATE


of acquisitiveness, consumerismand environmental destruction.

The time has come to furtherenrich the meaning of Swadeshi byincorporating the learnings ofIndia and other countries in recentdecades, and especially taking intoaccount the fact that the world hasbecome smaller and nations havebecome more inter-dependentthan ever in history. I appeal to allthinking Indians to participate inthis endeavour.

Today the entire world isgroping for answers to the multi-dimensional crises facing humanity.The world rejected communismemphatically. Now the ravages ofunbridled capitalism have come tothe fore, forcing even America andother western countries to rethinktheir development philosophies.

The cover feature in thelatest issue of The Economistmagazine is on the theme: Theworld economy: The return of economicnationalism. In a way, the rest ofthe world is also turning‘Swadeshi’.

Clearly, there is an urgentneed in India to do course-correction. My party, if elected tooffice, wi ll do i t with thecooperation of the businesscommunity and all other sectionsof society.

Our agenda: GoodGovernance, Developmentand Security

Friends, my colleagues in theparty and the NDA are currentlyengaged in preparing our Agendaof Governance. The three pillarsof this agenda are GoodGovernance, Development andSecurity.

It will be our endeavor toreplace the pervasive mood of

despair with a strong sense ofoptimism. For this, we shall do soby doing what a government oughtto do: Govern. And govern well.

(1) The days of weak andcompromising leadership will beover. India demands strongleadership today. No more will theoffice of prime minister bedevalued, as has happened in thepast five years in which 7 RaceCourse Road has becomesubservient to 10 Janpath.

(2) We shall adopt anapproach of zero-tolerancetowards both terrorism andcorruption. Insti tutions ofgovernance will not be misused toprotect either one’s own or targetrivals, as has happened brazenly inthe past five years.

(3) You can expect the mostambitious push s inceIndependence in the rapiddevelopment of everyinfrastructure sector — power,energy, roads, railways, ports,airports, and rural and urbaninfrastructure. Shri Atalji’s dreamproject will be completed byensuring that that there is not asingle bad road anywhere in India,because every good road connectsevery Indian to a brighter future.

(4) The river-linking projectwill be taken up forimplementation in all feasible cases.

(5) The central objective ofeverything we will do in economyis creation of employment, more

employment and stil l moreemployment. Therefore, anyenterprise that creates employmentopportunities will receive priorityattention and incentives.

(6) I have already indicatedthat our approach to reforms isfundamentally different from thatof the Congress. We believe instructural reforms aimed at givingagriculture, small and mediumenterprises and the informal sectortheir rightful place in the futuregrowth strategy, and not in reformsthat are aimed at creating bubblesin stock markets and speculativeinvestments or making a handfulof Indians billionaires.

The present economic tumultonly underscores the imperativenot only for investment in the

infrastructure lifelines of theeconomy but also for checks andbalances that ultimately only thestate can and must provide.

7. I have repeatedly statedour collective vision should be tomake the 21st century India’scentury. This vision can berealized only by recognizing that

India’s most precious resource isits people, especially its childrenand youth.

This resource cannot beenriched and energized withoutbest-in-the-world quality ofeducation. We are committed to amassive enlargement in theopportunities for affordable andquality education for our youngpopulation.

It will be our endeavour to seethat every school in India hasInternet-enabled education, andfurther that the entire sum total ofthe world’s knowledge is availableto every child in India, in his or herown language, 24&7, free ofcharge.

It will beour endeavour to see thatevery school in India has

Internet-enablededucation.

DEBATE


Declining Villages in Shining IndiaDespite unprecedented growth experience per capita production andavailability of food grains, pulses and edible oils is declining. Figuresimply that poor have fewer claims on GDP growth of which the rich havetaken the bulk of the benefits. It is an alarming signal for times to comecounsels P. MURALIDHAR RAO.

It is the fact that India is oneof the fastest growingeconomies of the world.

Gross domestic product (GDP)grew at the rate of 9 percent duringthe year 2007-08.In the previoustwo years growth rate had been 9.4percent and 9.6 percentrespectively. Despite the fact thatthe world is facing deep recession,we may still achieve a growth rateof about 7 percent.Agriculture Lagging

Government pats its back forthe so-cal led unprecedentedgrowth experience. What doesGDP mean to an average person

living in this country? If we have alook at the composition of GDP,it includes agricultural productsincluding food grains, industrialproducts and services. On the onehand more of GDP should meanmore of wheat and rice, more ofcars and two wheelers and otherindustrial goods. It also meansmore of transport services,electricity, telecommunication etc.If we try to look into the factorsleading to increase in GDP, we findthat agriculture does not contributeto this growth experience. Whereasrate of growth of manufacturingand services had been above 10

percent per annum, agriculture waslagging behind with an averagegrowth of only 2.5 percent in thelast 5 years.

Industry is growing almostequal to the rate of growth ofGDP and growth of servicessurpass all limits and as such thecontribution of services sector to

GDP jumps from 45.80 percent in1997-98 to 54 percent in 2005-06,whereas gain of services is the lossof primary sector, contribution ofwhich dips from 26.50 percent to18 percent during the same period.Consequently, per capitaproduction of food grains, pulsesand edible oils show a decliningtrend. According to Economicsurvey 2007-08 availability of foodgrain per capita per day, which was458 grams in 2002, declined to 412grams in 2006 and pulses from35.4grams to only 32.5 grams duringthe same period. Per capitaavailability of edible oils declined

Farmer’s suicides ison increase, rate of

poverty reduction hasworsened, GiniCoefficient’ (a

measure of inequality)has escalated, so are

the levels ofundernourishment.

DEVELOPMENT


from 9.0 kilograms in 1999-00 toonly 7.2kg. in 2002-03 and afterthat government deemed it fit notto publish these figures in theEconomic Survey.Consequent Farmers’Suicides

Farmers’ suicides in thecountry since 1997 has nowtouched 1,82,936 by December2008.It seems there is no end tomiseries of the farmers .So calledprogressive states during the greenrevolution like Maharashtra,Andhra Pradesh, Karnataka andPunjab are some of the worstaffected states. Relief package ofrupees 5000 crores by the PrimeMinister could not mitigate theproblems of farming communityof Maharashtra. This state againhas crossed 4000 suicides mark forthe third time in 4 years accordingto National Crime Record Bureau.In al l 16,632 farmers havecommitted suicide in the countryin 2007.For the 6 years from 2002,the annual average of suicides hasincreased to 17,366.Poverty and Under Nutrition

Under these circumstanceshow can we imagine any betterposition for poor living in ruralareas? National Family HealthSurvey conducted by Ministry ofHealth and Family Welfare alsosupports the hypothesis that vastmajority of population is stillreeling under poverty. The surveysays that 46 percent of all childrenare underweight and 38 percent arestunted (too short for their age)and 19 percent are wasted (too thinfor their height). National FamilyHealth Survey conducted for threetimes in the past 15 years,concludes that some of theseindicators have actually worsenedover the years.

According to NationalSample Survey Organisation,nutritional intake of India isdeclining. NSSO says that during1993-94 and 2004-05 calorie intakein both rural and urban India hasdeclined by 4.9 and 2.5 percentrespectively. Protein intake in ruralareas is down by 5 percent. Morethan two-thirds of rural Indiansand 70 percent in urban Indians arereporting that they don’t get a fullintake of 2,700 kilo calories,defined to be a minimum norm.The percentage of peoplereporting that they don’t get twosquare meals a day is still relativelylarge. The levels ofundernourishment andmalnourishment continue to beshockingly high as per the NSSOdata.Jobless Growth

The paradox of gallopinggrowth and with deepeningpoverty in the country is explainedby the phenomenon of joblessgrowth. No doubt GDP is risingand rising at a fast pace, but notenough jobs are being created. This

Protein intake

in rural areas

is down by

5 percent.

DEVELOPMENT


has resulted in rising rate ofunemployment in the country bothin the rural and the urban areas. Wenote rate of unemployment, whichwas 7.3. percent in urban areas and7.2 percent in rural areas (males)in the year 1999-2000 as per 55thround of NSSO, which increasedto 7.5 percent and 8.0 percent inurban and rural areas respectively.Similar is the condition with regardto females where rate ofunemployment increasedfrom 9.4 percent and 7.0percent in 1999-2000 year asper 55th round of NSSO to11.6 percent and 8.7 percentin the years 2004-05 in theurban and rural areasrespectively. The rise injoblessness in the urbanareas should be taken as anextension of the ruraldisplacement. Employmentin the organized sectorshows a decline from 172lakhs to 164.52 lakhs. Muchhyped organized privatesector also shows only a marginalincrease from 84.32 lakhs to only84.52 lakh jobs during 2002 and2006. This clearly implies thatcasualisation of employment is onrise. Even the much-trumpetedNational Rural employmentGuarantee Programme could notproduce any desired results. ViceChairman of PlanningCommission has conceded this.

Poverty Reduction SlowingDown

We witnessed a high rate ofGDP growth in the post 1991period, which is claimed to be a bigargument in favour of economicreforms. But, even the most vocalsupporter of economic reformsMontek Singh Ahluwalia also

concedes that reforms have notresulted in desired level of povertyreduction and decline in poverty isless than what the government hadperceived. His confession issupported by the findings of NSS61st Round data, which clearlyspeaks out that in the post reformperiod the pace of povertyreduction has not only been muchlower than the official assessmentsmade after NSS. 55th Round, it is

also less than the actual pace ofreduction recorded during 1970’sand 1980’s. Thus, it is ample clearthat the high rate of growth ofGDP recorded in the post reformperiod has not made lives better forpoor in the same proportion.Rather, in the post reform periodinequalities have accentuated as

shown by higher ‘Gini Coefficient’(a measure of inequality), whichshows an increase in ‘GiniCoefficient’ from 28.6% in 1993-94 to 30.5% in 2004-05 for RuralIndia and an increase from 34.4%in 1993-94 to 37.6% in 2004-05 inUrban India. Most notable is thefact that it is a reversal of the trendseen in the previous decade (1983to 1993-94). These figures implythat poor have fewer claims on

growth and rich have taken thebulk of the benefits from theGDP growth. These figures arenot only true for all India, butare applicable for almost allstates except a few. If we goon riding this high growth- proreform phenomenon, it is analarming signal for times tocome.

Loan Waiver: No SolutionFor Distress InAgriculture

In the Union Budget2008-09, the government

announced a scheme of loanwaiver for the farmers. Withsubsequent extension of loanwaiver, a total of rupees 70,000thousand crores were allocated forthe purpose. But despite thisscheme, condition of agricultureand poor agriculturists is still notimproved. In fact this scheme isapplicable to loans dispersed by thebanks and other institutions only.Mostly poor farmers don’t haveaccess to such formal institutions.The government has so far notmade any effort to address theproblems of the farmers likeprovision of cheap credit,minimum support price for mostof the agricultured products andother agricultural inputs at costeffective prices.

Reforms havenot resultedin desired

level ofpoverty

reduction.

DEVELOPMENT


Promote Life Style Compatible to the Productive,Regenerative and Assimilative Capacity of the Nature

Unproductive and un-sustainabledevelopment needs to be assessed,examined, managed and reshaped forcontrol and remediation of physical,economic, social and internal non-material human peace problems, saysSH BANWAR DASS BITHU.

The unprecedented materialprogress achieved throughscientifically developed

human consumption and comfortgiving goods and services, diseasetreatment medicines and surgeryand sophisticated defense weaponsand armaments has immenselyimproved the quality of human lifeand national defense at the cost of

long term global physical,environmental and non-materiallosses. However, the slow butcertain devastating future losseshave prompted the planners anddevelopers to assess, examine,manage and reshape thedevelopment module to controlthe confronting evils of plunderingnature beyond its regenerative andassimilative capacity,environmental pol lution andfinancial and social crises.Therefore, it is time to awaken toface the formidable future crisesand manage and reshape thedevelopment before it is too late.

DevelopmentPeople have been blinded by

the dust caused by the fast moving

chariot of the development in thedeveloping countries. It is timenow to pause and think what thisdevelopment, for whom it is andhow long will it last? The presentday development dominantly aimsat maximization but not sustenanceof the production with inadequateattention to environmentalprotection and preservation andmaintenance of the regenerativeand assimilative capacity of Naturejust to glut human being providingthem with excessive consumergoods and physical comforts. Thepopulist hal f baked andunproductive development workswith inadequate attention to qualityand useful long term performanceare almost non-performing works.The inevitable result is slow but

irremediable losses of land, water,natural vegetation and finitemineral and oil wealth. In view ofthe environmental pollutioninduced global warming, climaticchanges, low, erratic and uncertainrainfall, shrinkage of river headglaciers and decreasing river flows,greater attention and emphasismust be laid on efficient rain water

harvesting, rainfall enhancingmeasures through forestation,organic cloud seeding and othernature friendly methods,preservation of land productivityand protection and preservation ofland, water and natural vegetationresources including natural forestsand plantations. The need of theday is to adopt compatible andsustainable development within theregenerative and assimilativecapacity of the nature fulfilling theneed but not the greed of thepeople ensuring good health,proper civic, medical andeducational facilities for all andsalubrious natural environmentwith adequate attention to selfsufficient rural development. Thefore most national requirements of

ECOLOGY

It is time tomanage andreshape the

developmentbefore it is

too late.


food self sufficiency throughdominantly organic farming andself sufficiency in defensearmaments are also to be providedthrough environment and peoplefriendly compatible measures.

UrbanizationThe centralized and

concentrated human consumptionand comfort giving hardwaredominated development leads tovery difficultly manageableurbanization with rural peoplemigrating to cities and big townsleaving behind the susta inedagricultural and pastoral livelihoodsand agriculture based cottageindustries for better work andemployment avenues in the cities.The inadequately managed citiessuffer from environmentalpollution and ground waterdepletion and contamination. Theflight of rural people to cities toavail of the centralized educational,medical and other civic andadministrative facilities tends tocause decrease in agricultural andlivestock production andconsequent evaporation ofnational food self sufficiency.Therefore, development of selfsufficient rural villages like Kibbutzin Israel, is more economical,sustainable and environment andpeople friendly than developmentof mega cities.

IndustrializationEnvironment friendly

industrialization generates goodemployment and wealth. But inmany cases environmentalpollution, ground and river watercontamination andindustrialization and urbanizationinduced social uprooting of therural poor result in severe human

health deterioration. The humancomforts and luxury goods andservices dominatedindustrialization causes long termsocio-economic problems anddeterioration of internal humanpeace. Apart from decreased foodproduction and social uprooting ofthe rural people, the global climaticchange induced decreasing rainfall,factory effluent contaminated andtoxic river flows and social andinternal non-material human peaceproblems cause drought, surfaceand ground water pollution,famine, human healthdeterioration, unemployment andsocial disintegration. Therefore,environment friendlyindustrialization dominantly foragriculture and agriculture based

industries, nature friendly light andsmall mechanized equipments,goods and services providingindustries and industries fornecessary national defenseequipments and armaments shouldbe adopted.

Credit SpreeThe spurt in unbridled start

of industrial and trading centersfollowed by increased productionof luxury and human comfortincreasing goods and services,inadequately ethical and intensivelyadvertised sale promotion onelectronic and print media andavailability of easy low interestbank loans cause un-satiable lustfor luxury and human comfortsgoods and services. The workingsystem and life style of largenumber of people muchdependent on increasedproduction of luxury and humancomfort giving goods and services,their intensified sale promotionadvertisements and availability ofeasy bank loans on demand createunabated public spending onluxurious and excessive humancomfort giving consumer goods

ECOLOGY

The inadequatelymanaged cities sufferfrom environmental

pollution and groundwater depletion and

contamination.


and services and financial crisiswhen demand decreases and bankloans are not paid back in time. Ifpeople are educated, publicspending is economized and everincreasing consumerism isminimized, excessive and pollutioncausing industrial production andconcomitant environmentalpollution can be controlled andsocial disintegration and financialcrises can be minimized. Theabundant bank loan andconsumerism heavy way of humanlife may not give much sought afterhappiness and peace of mind.Therefore, bank loan availabilityand public spending should be for

natural human necessities and safegaseous, liquid and. solid wastedisposal in consonance with whatNature can give and assimilate.

ConsumptionNotwithstanding the

necessity of human consumptionof goods and service aids forsurvival and good quality ofhuman life, over consumption andover accumulation of luxury andhuman comfort giving goods andservices lead to deterioration ofhuman health, long termdegradation of the natural assetsof land, water, forests, wide spreadenvironmental pollution, decreased

agricultural and livestockproduction, social disintegrationand uprooting of the rural people,exploitation of the people by theelite people and decreased internalnon-material peace of the humanbeing. Excessive use of consumergoods and comfort giving servicescan neither give good humanhealth nor peace of mind.Therefore, the un-satiable lust anddemand for aggressively publicizedand marketed luxury and humancomfort giving goods and servicesshould be curtailed compatible tothe productive, regenerative andassimilative capacity of thenature.

ECOLOGY

months of the financial year 2009-2010 presented on 13th February.with an eye on the upcoming LokSabha elections, he made manypopulist announcements.

Lalu announced 43 new trainsand an across-the-board two percent cut in fares of ordinary andAC class.

While making the Budgetspeech, Lalu said that the 43 newtrains will start in 2009-10.Fourteen trains have beenextended and frequency of 14others increased. He alsoannounced the introduction of abullet train between New Delhi andPatna.

He also announced reductionin the fares of ordinary passengertrains by Re one for fares upto Rs50 for journey above 10 km.

He a lso announced thatrailways are looking to increaseefficiency of passenger and goodswagons. “Passenger trains will have22 per cent more capacity,” saidLalu.

Interim budget underestimatesfiscal : CAG

The official auditing watchdog Comptroller and Auditor General(CAG) pulled up the government for understating fiscal and

revenue deficits for financial year 2007-08 in the interim budget.“These deficits (fiscal and revenue) have been understated in the UnionBudget presented on February 16, 2009,” said a CAG report on thegovernment’s accounts tabled in Parliament .Fiscal deficit, which is a shortfall of the government’s revenues overits expenditure, was shown as Rs 1,26,912 crore for 2007-08 in theinterim budget, while it should be Rs 1,64,962 crore, according toCAG.

Similarly, revenue deficit, which is the gap between currentexpenditure and current revenue, stood at Rs 52,569 crore for 2007-08 as per the interim budget, whereas, according to CAG it should beRs 85,435 crore.

As such there is an understatement of Rs 38,050 crore in Fiscaldeficit and Rs 32,866 crore in revenue deficit. CAG’s remarks cameeven as fiscal deficit of the Centre is projected to more than doubleto 6 per cent of GDP in the current fiscal against earlier projectionof 2.5 per cent. For the next financial year, fiscal deficit is projectedto stand at 5.5 per cent of GDP.

Interim Budget 2009-10 Empty(Continued from page 5)


The perils of the newForeign Direct Investment Policy

SJM will Resist Backdoor entry of multinational giantslike Wal-Mart into the retail sector in India, gravelyprejudices national economic and social interests.

The United ProgressiveAlliance government’sproposed policy on foreign

direct investment (FDI), whichseeks to allow the backdoor entryof multinational giants like Wal-Mart into the retail sector in India,gravely prejudices nationaleconomic and social interests.

The Commerce Minister’sadmission that the policy mayenable global retail giants to getinto multi-brand retail by investingin Indian companies shows howshamelessly the government isseeking to smuggle them into thecrumbling indigenous retail sector.This policy subterfuge by a lame-duck government that does nothave a clear majority in Parliament,just before the announcement ofnational elections, violates accepteddemocratic conventions andpolitical norms. It is also in breachof the Common MinimumProgramme that binds the UPAcoalition.

Since retail trade is not just abusiness but a communityundertaking in most parts of India,

the move carries a high risk ofcausing social unrest. It is intriguingwhy this measure is beingundertaken during a year the globalcapital flow is expected to be just20 per cent of last year’s and theWest particularly is short of capitaland is printing currency andborrowing money from allincluding India to sustainthemselves.

Traditional baseThe unorganised retail trade

in India represents the traditional,community-centric, low-cost andemployment-intense retailing thatincludes, but is not limited to,kirana shops, owner-run generalstores, paan-beedi shops,

convenience stores, and hand-cartand pavement vending. In thismodel a whole family works in oneshop and a whole community isengaged in the trade in a definedarea.

Social capitalIt is collectively almost an

unincorporated enterprise formedby relationship-based communitiesthat are now increasingly regardedas social capital. It is this model thathas enabled the Patel communityfrom Gujarat to leverage theirsocial capital to outmanoeuvreorganised corporate motels in theU.S. and Canada and turncorporate motels into community“Potels.” Most advocates of

Retail trade isnot just a

business but acommunity

undertaking inmost parts of

India.

FDI

“

”


corporate retailing and foreignretail firms in India seem to ignorethe critical contribution of thepresent model of retail trade to theIndian economy and society.

First, as its very structure andits reach from the main metros tothe remote hamlets testify, suchmulti-layer retailing is the mostdecentralised economic activity inIndia after agriculture. Second, itconstitutes almost 98 per cent ofthe total trade with an estimated12 million outlets. In contrast,organised trade accounts for just 2per cent.

Largest providerThird, it is the largest

employment provider afteragriculture, employing an estimated40 million people. In contrast, theworld’s largest retail chain, Wal-Mart, employs just five lakhpersons. Fourth, being self-employed, most of them areengaged in the trade along withtheir families, and so the work andlivelihood of some 120 millionpeople depend on this sector.

Fifth, the retail trade in Indiais run by community-centric socialcapital, not unrelated individualtraders. Sixth, consequently, it is anopen-air community B-school forreta il ing that continuouslygenerates, by sharing knowledgeand experience through relations,huge community-basedentrepreneurship.

Seventh, it contributes over14 per cent of India’s GDP, whilethe share of all companies in theBSE 500 Index put together issome 4 per cent. Eighth, theunorganised retail segment hasbeen growing at an average rate ofover 8 per cent a year for the lasteight years (1999-00 to 2006-07).

This is second only to theconstruction trade that grew at therate of some 10 per cent.

There is more. The retailingexperience of the non-Westernworld has not been factored in bythe policymakers. Japan hasintensely protected its retailing,which is also family andcommunity-led and social capital-driven. In contrast, countries suchas China, Malaysia and Thailand,which opened their retail sector toFDI only in the recent past, haveretracted and enacted new laws tocheck the prolific growth offoreign malls and hypermarkets tocontrol their ill-effects on theeconomy and employment.

Unwelcome moveIn sum, the new policy is an

attempt to replace throughcorporate-led retail the socialcapital-led retail in India, while inthe motel business in the U.S. thereverse has taken place with Patelsocial capi tal replacing thecorporates. The present Indianretail model is an efficient deliverymechanism for rural India wherethe corporate mechanism toocannot reach except through thetraditional model.

But if the social capital linkto retail trade is unsettled, the entiredistant and remote supply chainwill suffer over a period, disturbingthe social equilibrium and the

organic social links that haveevolved over the centuries. Beforethis ill-advised move fails (as it isbound to), it will lead to tectonicchanges and cause tremors andtsunamis in the social capital-ledretailing in India. It will displacemillions of people from theirplaces and jobs and undermine thegeneration of newentrepreneurship and disturb thesocial order.Slogan?

Lastly, it mocks at the UPA’sslogan of “inclusive growth” as theproposed FDI policy tends toreplace the OBC and minoritycommunities in the retail trade byforeign retail giants.

The Swadeshi Jagaran Manchurges the government to withdraw,in the larger national interest, thispernicious policy announcement.If it does not, the SJM will fightthis sinister measure tooth and nailand organise the communities thatare engaged in the retail trade toresist it. The SJM will take this issueto the people and ask them to voteagainst the ruling parties if theypersist with this measure.

SJM planThe SJM will approach the

Opposition parties, including theBJP and its NDA constituents, andthe CPI(M) and its third frontpartners, and ask them to give acommitment to the nation tooverturn this policy if they get theneeded authority from the peoplein the coming election. The SJMsees this as a test of the BJP’scommitment to nationalism andthe CPI (M)’s.

S. Gurumurthy, all India jointconvener, Swadeshi JagaranManch, has issued the followingstatement.

FDI


BOOK SCAN

MARX AND MARKET EVALUATEDMajor difference between the Marxism and Market Capitalism, the seeminglyopposite thought processes is that while market relies on the State as the arbiterand regulator while handling the management of all material resources,communism relies on the socialist-state as the sole owner and allocator of allmaterial resources writes S GURUMURTHY.

The title “The World Beyond Marx and Market”rhymes easy. But it is not easy to speak or write onit. It is a complex and, in part, even an abstract,subject. Going straight into the heart of the topic,we should understand that it is partly historicaland partly futuristic. It prognosticates a world thatis not only “post-Marx” and but also “post-Market” as one understands today.

A caveat at the outset. This critique of Marx andMarket is essentially from the perspective of that partof the world – the non-Western world and particularly,its non-Anglo-Saxon part – which has not beenexperienced, understood or factored in by Karl Marxor his adherents or by Adam Smith or other freemarket thinkers. That part of the world has also notfully accepted either of the two socio-economicthought as conceived and prescribed by their respectiveprotagonists. Yet this critique is relevant for allconsidering that the historically ‘perfect’ Marxianthought has, in the 1990s, let down those who wereits loyal adherents and, now, the invisible, all-powerful,and all-knowing God of free Market seems to befailing those who had blindly believed in it.I. The Post-Marx World

Marxism stormed the West over hundred yearsago as part of the continuing and painful socio-religious, and socio-political and socio-economicmelting process within the Christendom. Like theconcentration of religious power in the hands of theCatholic Church had led to the Protestant movementwithin Christendom, with large industrialisationleading to the accumulation and concentration ofeconomic power in the hands of a few and exploitationof the large body of weak masses, the stage was setfor a protest movement within the materialist domain.

And that protest came form Karl Marx andthrough his interpretation of the material world basedon, and from within, the religious, philosophic andsocial constraints of Christendom. It is noteworthythat Karl Marx did not propose his thought as analternative to the emergence of the capitalist worldorder, but, as an eventual and final evolution out ofthe very process of capitalism. His material world viewwas based on historic evolutionary process theorisedby Marx in which the emergence of capitalism was anecessary context. His protest in the materialistdomain was very much like that of Martin Luther,who led the Protestant movement within Christianity,in the religious domain in Christendom. Luther alsodid not propose an alternative to the Christian faithbut only revolted to secure a different model forseeking Salvation within Christianity. Likewise KarlMarx had prognosticated the capitalist evolutionending, by the very process of historic evolution, inCommunist revolution within the same materialistparadigm as the one on which capitalism rested.

Title: THE WORLD BEYOND MARXAND MARKET”

Author: S.GurumurthyYear of Publication: December, 2008

Publishers:Swadeshi Jagaran Manch Tamil Nadu

G. RAINA


Karl Marx theorised this historic processoccurring through a dialectic model of resolving thecontradictions within capitalist order by a process ofsynthesis which Georg Wilhelm Friedrich Hegel, afellow German philosopher senior to Karl Marx, hadexpounded and articulated. Hegelian philosophy hadbecome fashionable in Germany during the formativeyears of Karl Marx. Even though the Marxian worldview was more a protest against, rather than analternative to, the materialist idea of capitalism, theadvent and progress of Communism brought aboutintense changes in the capitalist world view. With thecleverer capitalism in the economic domain and thehumane democracy in the political domain combiningto contain the vigour and rigour of Communism andmeet its demands, the Marxian protest considerablyweakened in the industrialising West.

And more. The inherent contradictions withinthe Communist philosophy and practice began toemerge and finally ensured its collapse. This was totallycontrary to theory of Marx that the inherentcontradictions within the capitalist order would bringabout its downfall. With the result, in less than acentury after its explosive advent in Russia andspreading out to China and elsewhere, Communismis today part of the museum and archive of historicalthoughts and systems. But how did this happen?

Marxists made Karl Marx, a prophet; his work,a holy text; and his philosophy, a religion

Many agree that the world now is post-Marx. Thisview gains force because many erstwhile Marxists havegiven up Marx and his thoughts. So, Marx is a historicevent that the world has passed by. But, like everyhistoric phenomenon that has impacted on the worldand changed its ideas and history, Marx too haspowerfully impacted on the world. He has particularlyimpacted on the market-driven capitalist world andcompelled it to present, if not acquire, a more human,and less exploitative, face. But, ironically, the Marxianthoughts, which are perceived to be humane, are alsoperceived to have made the communists more violentand less humane, if the experience of Marxism in thecommunist world were to be bear any witness. YetMarx, according to most observers, belongs to anirretrievable past. He is outdated; an antique figure,much like the statues of Lenin and Stalin.

In my view, Marx became outdated not so muchbecause of Marx himself as due to Marxists, who

turned Marx into a prophet and his work into a sacredtext; and credited textual inerrancy to his book andwords, like the sacred books of the Abrahamic Faiths.What the Marxists had failed to realise is that, howevergreat Karl Marx may be as a thinker, his work was notvalid for all times, and surely not for all cultures. Overtime, all works need updating and modification. ButMarxists made Marx a prophet, and his work a Bible,and turned Marxism into a religion. This was becauseMarxism was born in Judo-Christendom, containedJudo-Christian DNA and therefore, followed the Judo-Christian models.

See the effect. First, the text of Marx, like theholy texts in Judo-Christian religions, was consideredinerrant. Second, Marxists’ interpretation of Marx, likeJudo-Christian religious reviews, had to be inconformity with Marx, even if the conditions wereentirely different. So the need to conform to the text,regardless of the context, a characteristic of theAbrahamic Faiths, proved to be the undoing ofMarxism and Marxists. Third, the Marxists not onlybelieved that Marxism, like the Abrahamic Faiths, wasvalid for all times, they also believed that Marxismwas valid for all people of all religions, cultures andhistories. But evidently Marxism became the Judo-Christian religion on the material plank that hadcompleted its evolution right at birth.

The more efficient Market capitalism wonagainst the less efficient socialism in a warbetween materialist philosophies.

But the decline of Marxism has made the Market,that is market capitalism, the clear winner - even inthe minds of the ex-Marxists. Even the most hardenedof the communists, the Chinese Communist Party,began to speak of Socialist Market! So, free marketcapitalism seems to have emerged, as FrancisFukuyama would proclaim, as the victor today. Notonly as the victor now, but also, as he would furtheremphasise, as the eternal value, along with freedomof the individual and democracy, to form the verybasis of human life on this earth now – and for everhereafter! Today, the world swears by free market andfree market capitalism. Free market is seen as theengine of growth, development and distribution, andalso as the agency that brings about revolutionarychanges - changes that the earlier revolutions, aimedat social engineering, had failed to bring about. But,unlike Francis Fukuyama, who sees free market

BOOK SCAN


capitalism as the eternal value of the world, the presentdiscussion proposes to prognosticate free marketcapitalism as yet another passing phenomenon, likeMarxism.

But, is free market a passing phenomenon? Atthe outset I would say and expand later, that it is, andbound to be, a passing phenomenon, because freemarket is not viewed as just an instrument of tradeand commerce. It is viewed as an all-purpose agentthat substitutes formal contracts for all forms ofhuman relations – families, communities, neigh-bourhoods, and even the larger society, and nations.While market relies on the State as the arbiter andregulator while handling the management of allmaterial resources, communism relies on the socialist-state as the sole owner and allocator of all materialresources. But, in this regard, there is no differencebetween Marxism which has fallen by the way side,and free market capitalism, which is perceived to havefelled it. Marx and Market have many things incommon.

What are the factors, which are common to bothMarx and Market? Both aim at restructuring thesociety, replacing all traditional relations and bondsbetween the people by new “relationships” based oncontracts – “free” contracts in Free Market Capitalismand “enforced” contracts in totalitarian Communism.In both, the traditional institutions of family,community etc., of an organic social order, are largelyif not entirely undermined and rendered irrelevant.While market capitalism believes that this wouldhappen naturally by the very operation of the marketforces, communism would seek to expedite it throughrevolution. Communism seeks to work out a new formof social order that seeks to disregard and destroy alltraditional relations; it seeks to institute new“relations” based on common ownership of propertyand material resources vested in the socialist State.Market capitalism, on the other hand, seeks to workout new “relations” between individuals, based on legalcontracts that rest on, and also enforce, individualconnectivity and interface and their emotional relationsand property and business rights.

Free Market is the mechanism for exchangesbased on legal contracts. Here, the Market is not, asnormal dictionary meaning goes, just a place for trade.Nor is it just a platform for commerce. It becomesthe very basis of life, founded on contracts, indisregard of all other relations. The world today is

largely viewed as a market; it is the global market, globalfinance, global trade and global investment thatconstitute the ruling idioms. Even non-economicdimensions of life, like religion, are seen as driven bymarket. The main difference between Communismand free market Capitalism is that while the lattercelebrates individual ownership of property, theformer mandates social ownership. Otherwise,philosophically, there is no material difference betweenthe two seemingly opposites; both of them arefounded on Godless materialism and look uponhuman beings as just a bundle of desires and wants.

Why then did free market capitalism emergevictorious in the competition with Socialism? Simple.Free market capitalism was more efficient, as itharnessed the power of the individuals’ enterprise,initiative and the acquisitive motive to possess more,while socialism was less efficient because of thelimitations of collective effort. So, in the competitionbetween the two, the more efficient model ofmaterialism succeeded. In a socialist system no oneworked for the collective, as well as he would workfor himself in the capitalist system. In short, whilecapitalism could produce capitalists, communismfailed to produce communists!The builders of the Berlin wall, themselvesfelled it

If one looks back, till the day communismactually collapsed, there was no clue that it was due tocollapse as rapidly and as irretrievably as it did.Volumes have been written on why and howcommunism collapsed. How did a world that wasstanding on two poles, free market capitalism and thestate-led socialism, suddenly and overnight becomeunipolar – and how did the other pole, socialism, justvanish? And in fact, once I had discussed this subjectwith my friend Arun Shourie. He told me “Guru, Isaw all its (Communism’s) potentialities to collapse;but I never thought it would collapse so suddenly.” Iasked him “what was the potential for collapse thatyou perceived”. He said, “The intent of the Berlinwall betrayed its weakness. It was built to see thatnobody from East Germany crossed to the West, notthe other way round. And it was not built by the West,but by the East to keep their adherents in their owncountry. This showed the potentiality that it was tocollapse at the initiative of those who had built it.”Yes, it was those who built the Berlin Wall who felledit.

BOOK SCAN


National

Retail prices of essentialitems jump up to 40%

The government hasaccepted that the retail prices of23 essentia l items, includingonions, washing soaps, matchboxes and masur dal, rose by up to40% in the second half of 2008.

According to the data placedbefore Parliament, barring eightitems, including potato, wheat,gram dal and mustard oil, prices of23 commodities surged in therange of 1-40% during August-December 2008.

The maximum price rise wasseen in onion, which rose by 40%to Rs 218 from Rs 155.6 a 10 kgduring the period under review, theanalysis of the data showed.

Fast moving consumer itemslike match boxes rose by 13.94%to Rs 1.32 per 37 sticks, washingsoap by 15.47% to Rs 17 per piece,and soft coke by 2.23% to Rs 18.7per 500 gram.

The data on 31 essentialcommodities were provided byminister of state for consumeraffairs Taslimuddin in a writtenreply to the Rajya Sabha.

In food items, goat meat andfresh fish became costlier by 5.69%and 5.76%, respectively, whileprices of pulses like masur saw anincrease of 12.26%, arhar by

4.54%, moong by 1.56% and uradby 1.57%.

Tea prices saw a steep rise of9.97%, while milk also rose by3.78% to Rs 17.4 per litre in thesecond half of 2008, the datashowed.

The data has been compiledon retail price index numbers inrespect of 31 essentialcommodities collected from 78important industrial centres underConsumer Price Index Number forindustrial workers for August 2008and December 2008.

Former Union MinisterSukhram convicted in DAcase

Former UnionCommunications MinisterSukhram was convicted by a DelhiCourt for amassing Rs 4.25 croreof disproportionate assets thatincluded seizure of Rs 2.45 crorefrom his residence in New Delhi.

Special CBI Judge V KMaheshwari held the 82-year-oldpolitician from Himachal Pradeshguilty under various provisions ofthe Prevention of Corruption Act.

The quantum of sentenceagainst the former MP would bepronounced on 24th February. Themaximum sentence for theoffences he is convicted for is

seven years.The court said that Sukhram

acquired assets worth Rs 4.25 crorewhich were disproportionate to hisknown sources of his incomebetween 1991 to 1996.

The former Minister was notpresent in the court to hear theverdict as he was appearing inanother criminal case pending inthe Rohini District Court and hiscounsel pleaded before the specialCBI judge for exemption frompersonal appearance.

Plea to withdrawcotton export sopThe Southern India Mills’

Association (SIMA) has appealedto the Union Government towithdraw the five per cent incentiveannounced for export of rawcotton. The Centre has announcedfive per cent duty credit scrip forraw cotton exports with effect

from April 1, 2008 to July 1, 2009.The benefit has been grantedunder the Special Agriculture andVillage Industries Scheme (GramUdyog Yojana).

Association chairman K. V.Srinivasan has said in a release thatthe export incentive for cotton wasa blow to the domestic textileindustry. Under this scheme,cotton exporters were entitled for


National

duty credit scrip equivalent to fiveper cent freight on board (f.o.b.)value of exports.

The Government hadincreased the minimum supportprice by nearly 45 per cent forcotton this year. The domestictextile industry suffered additionalcosts towards transport and Statelevies too. The Government wasencouraging export of raw cottonand not value added products, hesaid.

DoT for amending TRAIboard selection criteria

With just under two monthsremaining for the current telecom

regulator’s tenure to expire, theDepartment of Telecom hasproposed to amend the criteria forselecting the Chairperson and themembers of the TelecomRegulatory Authority of India.

The DoT is also preparing acomprehensive proposal for theUnion Cabinet seeking approvalfor more operational freedom forTRAI. The regulator had earliersuggested various measures toimprove its own working. Thisincluded extending theChairperson’s tenure from three tofive years and giving powers toimpose penalty on operatorsviolating its orders.

While the DoT is planning totake operational issues of theregulator to the Cabinet, it hastabled a TRAI (amendment) Bill2008 in Parliament for the purposeof changing the eligibility criteria.

The DoT has suggested anamendment in the TRAI Act 1997to allow non-Government expertsto apply for the posts. At present,only those Government officialswho have held the post ofAdditional Secretary or Secretaryor any equivalent post in theCentral or State Government for aperiod of three years are eligible.

RBI tightens norms foronline credit card use

The Reserve Bank of Indiahas asked banks to provideadditional information tocustomers on the usage of cardsfrom August 1 this year in a bid toenhance security in online creditand debit card transactions. Thecentral bank has asked banks for

providing additional informationfor ‘card not present’ transactionsto customers. ‘Card not present’transactions are deals where neitherthe card nor its holder are presentat the point of sale — i.e. use ofcards in internet transactions. Itsaid there should be a system ofproviding for additional

authentication/validation based oninformation not visible on thecards for all online ‘card notpresent’ transactions, except IVRtransactions. The RBI has alsoasked banks to give online alertsto customers.

Navy chief warns ofnuke attack from sea

Indian Navy chief AdmiralSureesh Mehta has warned of apotential nuclear threat from thesea route. Nuclear weapons may besmuggled into India in a cargocontainer, said Admiral Mehta. Thestatement comes after sourcesrevealed that the Taliban have plansto attack western cultural centresin Indian cities. However, nospecific intelligence inputs on thenature of the threat, the specifictarget, the timing or the group havebeen received.

Prof. Aggarwal BreaksFast, Govt Blinks

Revolutionary environ-mentalist and Prof. D.D. Aggarwalbroke his fast after governmentaccepted to halt the 600MW hydroelectrical project.

Prof. Aggarwal was onindefinite hunger strike on theissue. A lot of people includingSwadeshi Jagaran Manch hadpledged their support to the notedenvironmentalist. Government ina letter to Professor has promisedto halt the project forth with.


International

Obama signsstimulus package

US President Barack Obamasigned into law the USD 787 billioneconomic stimulus package, whichaccording to him would rejuvenatethe American economy and createas many as three to four millionjobs in the next two years.

The stimulus bill was passedby the US Congress House ofRepresentative and Senate.

Obama cautioned Americansnot to immediately expect miracleswith the passage of the bill, as theUS has a long way to go in revivingits economy.

Terming it as the sweepingeconomic recovery package in theUS history, Obama said: “Whatmakes this recovery plan soimportant is not just that it willcreate or save three and a halfmillion jobs over the next twoyears.

It’s that we are puttingAmericans to work doing the workthat America needs done in criticalareas that have been neglected fortoo long work that will bring realand lasting change for generationsto come.”

The money would be used tonot only save and create three tofour million jobs, but also wouldresult in mega investment into

modern infrastructure projects,funding projects which would helpthe US become energyindependent, education and pushmore funding into scientificresearch.

Middle-class families will gettax cuts and the most vulnerablewill get the largest increase inassistance, in decades, he said.

GM seeks up aid,to cut jobs

General Motors Corp,presenting a dire outlook for thefuture, said it may need USD 30billion in total govt financing toweather the economic downturnand would cut 47,000 jobsworldwide and shutter five moreUS factories in a massiverestructuring plan.

The automaker is alreadysurviving on USD 13.4 billion infederal loans and said in a plansubmitted to the US TreasuryDepartment that it would seek an

additional USD 16.6 billion ifeconomic conditions worsen, butit could achieve profitability in twoyears and fully repay its loans by2017.

The US automaker presentedits turnaround plan to the Obamaadministration as it worked to winconcessions from the United Auto

Workers union and bondholders todramatically resize the company.

Unemployed couldsurge by 23 million: ILO

The number of people out ofwork in Asia could surge by 23.3million this year as the globalfinancial crisis continues to batterthe region’s economies, accordingto a study.

The crisis could also forcerural-to-urban migration to slowdown, with many facing theprospect of returning to lowpaying agricultura l sector asfactories and firms slash jobs, theInternational Labour Organization(ILO) report said.

“A dramatic increase inworking poverty of more than 140million people by 2009 is projectedunder this scenario, representingregression of the Asia and Pacific

region to a working poverty rate of2004,” the study said.

“These projections are notjust numbers, they carry with thema real risk that children may beforced to withdraw from school inorder to work and support theirfamilies,” it said.

It said the region’s robustgrowth in the past was not matchedby “broad-based gains in realwages,” leading to sharpinequalities in many countries.


International

“The substantial growthslowdown taking place is likely tolead to stagnant or falling realwages, with the potential forincreased incidences of wagerelated disputes,” the study said.

Cost of protecting Japangovt debt hits record high

The cost of protectingJapanese government debt againstdefault has risen sharply as politicaluncertainty and worries about thenation’s fiscal position grew afterdata highlighted the depth ofrecession in the world’s second-biggest economy.

Five-year credit default swapson Japanese sovereign debtclimbed to a record 130 basispoints, equivalent to a cost of$130,000 a year to protect $10million of debt, traders said. Therate is triple the level of 43 basispoints traded in late January.”Therecession is very deep, anduncertainty about the politicalsituation may continue to supportthis widening trend,” a fundmanager at a Japanese assetmanagement firm said.But traderssay the market is quite illiquid anddominated by foreign investorssuch as hedge funds.

Japan’s public borrowingamounts to nearly 800 trillion yen($8,679 billion), about 1.5 times its

GDP. Japan’s economy shrank 3.3per cent in the final three monthsof 2008, its worst quarterlycontraction since the 1970s,dragged down by a reliance onexports and by soft domesticdemand.

Food prices mayincrease 30-35% in next

ten years: UNA top UN agency has warned

food prices may increase upto 30-35 per cent within the next tenyears, forcing those living inextreme poverty to spend 90 percent of their income on it, if major

changes are not made in foodproduction and processing system.

A new report, released by theUN Environment Programme(UNEP), has noted that changingthe ways in which food isproduced, handled and disposedof across the globe - from farm tostore and from fridge to landfill -can both feed the world’s risingpopulation and help theenvironmental services.

The report also underscoresthe fact that over one-third of theworld’s cereal harvest is being usedas animal feed and by 2050 the ratiowill rise to 50 per cent. “Continuingto feed cereals to growing numbersof livestock will aggravate poverty

and environmental degradation,”UNEP warned.

Among the key points in itsplan, the report suggests thatrecycling food wastes anddeploying new technologies, aimedat producing biofuels, to producesugars from discards like straw andnutshells could be a keyenvironment-friendly alternative toincreased use of cereals forlivestock.

US tycoon’s$8 bn fraud

Sir Allen is a US businessmanand a cricket promoter Texanbillionaire and cricket promoter SirAllen Stanford has been chargedover a $8bn (£5.6bn) investmentfraud, US financial regulators say.The Securities and ExchangeCommission said the financier hadorchestrated “a fraudulent, multi-billion dollar investment scheme”.The SEC said the fraud was “basedon false promises and fabricatedhistorical return data”.

English cricket bosses havepulled out of sponsorship talkswith Sir Allen.

The charges against Sir Allen,three of his companies and twoexecutives of those companiesfollowed a raid by US marshals onthe Houston, Texas, offices ofStanford Financial Group.

A US judge has frozen theassets of Sir Allen and the otherdefendants as well as those of theStanford Group, its Antigua-basedsubsidiary Stanford InternationalBank (SIB) and another subsidiary,investment advisor StanfordCapital Management. A receiverhas been appointed to “preserveassets for investors” , theSEC said.


WTO

Trade liberalization andglobal financial crisis

Since its previous Trade Policy Review, Japan hasintroduced measures aimed at further liberalizing itstrade and investment regimes. Japan has notintroduced new trade measures to protect its marketsince the onset of the global financial crisis inSeptember 2008. Indeed, it has subscribed tocommitments taken at the highest political level inthe context of the G-20, APEC and the summitmeeting between Japan, China and Korea to refrainover the next 12 months from raising new barriers totrade and investment, imposing new exportrestrictions, or implementing WTO inconsistentmeasures to stimulate exports, according to a WTOSecretariat report on the trade policies and practicesof Japan.

Trade Policy Reviews are an exercise, mandatedin the WTO agreements, in which member countries’trade and related policies are examined andevaluated at regular intervals. Significantdevelopments that may have an impact onthe global trading system are alsomonitored. For each review, twodocuments are prepared: a policystatement by the government of themember under review, and a detailedreport written independently by the WTOSecretariat. These two documents are then discussedby the WTO’s full membership in the Trade PolicyReview Body (TPRB). These documents and theproceedings of the TPRB’s meetings are publishedshortly afterwards.

Farm talks consultationsChairperson Crawford Falconer told members

on 12 February 2009 that he has started consultingvarious coalitions and individual delegations, and willcontinue over the next few weeks in order to find outwhat issues members want to discuss. If a clear agendaof i ssues develops then he would proposereconvening “Room E” negotiations among about30 representative delegations, he said. He wasspeaking in the first agriculture negotiations meetingof the full membership since the new year and sincehe circulated his latest version of the draft“modalities” on 6 December. The meeting lasted 15minutes and no delegate spoke. This was an informal

agriculture negotiations meeting of the fullmembership, officially an “Informal Open-EndedSpecial Session” of the Agriculture Committee.

WTO again strikes downUS practice of “zeroing”

The Appellate Body of the World TradeOrganization on 4 February handed down anotherruling — again holding that the United States had actedinconsistently with its obligations under the GATT1994 and the Anti-Dumping Agreement in itscontinued application of the “zeroing” methodologyin calculating dumping margins in periodic reviewsof certain specified anti-dumping measures that it hasmaintained against the European Communities.

In a ruling handed down last year, and adoptedby the Dispute Settlement Body in April, the AppellateBody had reversed a panel ruling (in a dispute raisedby Mexico against the US on anti-dumping duties on

stainless steel imports) that in effectallowed, “zeroing” in some instances.

“India will not diluteits stand at WTO”

India has said it would remain firmat the World Trade Organisation (WTO)with regard to protection for the Indianfarmers and continue to safeguard its

domestic economy notwithstanding internationalobligations.

“There is no dilution in our stand at the WTO,which has been seeking a global deal for the last sevenyears. The last major talks for resolving the deadlockon the Doha round for an international trade deal inJuly and December ended without success as India inparticular insisted that the level of protection for theIndian farmers could not be diluted at any cost,” hesaid, in reply to a question and during supplementarieson foreign trade during question hour in the LokSabha.

Against the backdrop of the global economicmeltdown, Mr. Ramesh said the government wasmaking effective use of the anti-dumping measuresto protect the interests of the domestic industry. “Weare effectively using anti-dumping measures and othersafeguards for protecting the interests of the domesticindustry,” he said and cited imposing safeguard dutyon chemicals.

Documents

SwadeshiMarch - 2009 SWADESHI PATRIKA 1 Swadeshi PATRIKA EDITOR Ajay Bharti PRINTED AND PUBLISHED BY: Ishwardas Mahajan on behalf of Swadeshi Jagaran Samiti, 'Dharmakshetra', Sector-8,