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TheIndian EXPRESS
www.indianexpress.com

l FRIDAY l AUGUST 9 l 2013

The Indian EXPRESS

BECAUSE THE TRUTH INVOLVES US ALL

OR the second time this year, the UPA appears to have betrayed its commitment to talks with Pakistan. In the last two days, Defence Minister A.K. Antony has embodied the contradictions within his party and government. His statement on the Pakistani ambush in which five Indian soldiers were killed pointedly referred to terrorists. With the opposition accusing him of shielding Pakistan, the minister has now called them specialist troops. While Antony may have been trying to ensure that emotions around this incident do not affect the dialogue with Pakistan, a project the prime minister is personally invested in, his subsequent retraction suggests that few in the party or government have the backbone to see it through. It seems easier to express theatrical horror and threaten dire consequences, than to separate the dialogue between nations from individual incidents on the LoC. Pakistans embattled PM, Nawaz Sharif, however, has underlined the necessity of a more forward-looking view. While expressing sadness at the events, he has focused on the need to strengthen existing political and military mechanisms to address such incidents and ensure that tensions do not swamp the dialogue. There are intermittent provocations on the border, but these have been considered matters for militaries to settle. They have not been

The government cracks under pressure again, putting dialogue with Pakistan at risk
made to impinge on the dialogue with Pakistan, the maintenance of which is in Indias own interest. There are many matters on which India expects the Nawaz Sharif government to act cooperation on 26/11, a clampdown on infiltration, greatertradingincentives.Pakistans civilian government is only one axis of authority, and the actions of its army and other factions cannot be fully controlled. But giving vent to aggression will only hurt at a juncture when the US withdrawal from Afghanistan is set to unleash a period of instability. While the ManmohanSinghgovernmentknowsthe importance of engaging Pakistan, the PMs gestures have been undercut by a nervous party, since Sharm el-Sheikh, and Singh himself has not shown the will to resist. This present bind is of the governmentsownmaking.InJanuary,after an incident of killing and mutilation at the border, opposition parties and sections of the media had recklessly raised the pitch. The government then broke with the convention that the bilateral dialogue was to be kept aloof from these events, with the PM himself saying that business as usual was untenable. Succumbing once may have been a mistake, but twice in a year shows a troubling lack of courage. It has been a sorry display of the incoherence within the government, and the fissures between party and government, on a matter of prime strategic interest.

All fall down

HE office of lokayukta is a work in progress, with the nature and extent of its powers varying greatly across the states. The experience of lokayuktas in different states is a working guide to finding a balance between instituting an effective anti-corruption watchdog and retaining enough safeguards to prevent the possibility of an unaccountable super-auditor. Therefore, most controversies have come with the collateral benefit of lessons in the evolution of the office. Not so the fracas over the appointment of the Gujarat lokayukta. It is of a different order. Justice R.A. Mehtas decision declining to assume office should soundthewarningbellforthelasting damage that can be wrought on institutions by excessive politicisation. Weeks after the Supreme Court turned down the Narendra Modi governments challenge to his appointment, Justice Mehta has said that the episode had denigrated the office and that the appointment had lost all grace and dignity. His objection, he wrote to the Gujarat governor and the chief justice of the high court, rotated on the message implicit in the governments legal

Justice R.A. Mehta holds out a sobering reminder of the creeping politicisation of institutions
challenge that since he was not perceived to be pro-government, he would be anti-government. For Modi, trying to gather momentum for his national campaign for the 2014 general elections on a platform of governance, Mehtas letter is an interrogating document. The tendency to slot every functionary as with us or against us is depressingly widely shared in the states and at the Centre, but Modi has been particularly prone to using it as a selfservingly polarising strategy. Recall his innuendo against the then chief election commissioner a decade ago. Mehtas letter demands of him a clear response. Mehtas reluctance to assume the office must also compel sober reflection. What are the consequences for India when partisan politics over key institutions and even junior administrative posts coarsens the discourse to the extent that qualified persons find themselves unable to function? What will it take to clear a middle groundinourpoliticsforparties to reach out to each other to sustain action on privileging due procedure to fireproof our institutions against political manipulation?

A question to Modi

NDIA-PAKISTAN relations are once again in the spotlight and for the usual reasons. The two states have perfected the art of using their soldiers, prisoners and fishermen as pawns for advancing the cause of nationalism. The recent escalation of tension concerns that problematic, arbitrary border called the Line of Control (LoC), which encapsulates everything that went wrong with the 1947 arrangements for post-colonial India. The killings in the Poonch sector and the reported deaths of civilians on the Pakistani side continue the trend set at the start of the year, when the reported beheading of Indian soldiers took place. The January 2013 incident was preceded by the death of a Pakistani soldier. The confrontation prompted Indian Prime Minister Manmohan Singh to make the remark that it cannot be business as usual with Pakistan. Later, in July, Pakistan claimed that one of its soldiers was killed in unprovoked firing, while another was seriously wounded. The reactions from India and Pakistan on the LoC killings are on expected lines and only speak of limited imagination on both sides. Pakistan has denied that its forces killed the Indian soldiers. The Indian defence minister made a statement that led to further uproar, that the alleged killers were terrorists wearing military uniforms. The facts of this case are still not clear and unfortunately will remain trapped in jingoistic interpretations. The timing of this incident could not have been worse. Pakistan has a new prime minister, who is firmly committed to peace with India and wants to move towards it at a historic speed, which Pakistani realists have advised him against. Sharif, however, is a determined man and wants his legacy to be formidable. Sadly, the Pakistan he governs after a hiatus of 16 years is a changed polity. Todays Pakistan faces an existentialist crisis, whereby the militant groups such as the Tehreek-e-Taliban Pakistan (TTP) ideologically aligned with al-Qaeda and the Afghan Taliban intend to decimate the state. In

Give Sharif a chance

Why Indias leadership needs to break with the past, reimagine Pakistan
RAZA RUMI
the first 50 days of Sharifs rule, there have been about 52 terrorist attacks, targeting civilians, minorities, security installations and tourists, among others. The government is struggling to frame a new security policy and take charge of the countrys foreign policy. But all of this is going to take time. Since the May 2013 elections, Sharif has outlined his India policy in no uncertain terms. Other than boosting trade and investment, he has also made it clear that he will not allow Pakistani soil to be used against other countries. The new policy is yet to be consolidated but the recent announcements on the resumption of a bilateral integrated dialogue were most encouraging. The expected meeting of Prime tured to fight an enemy and in Pakistans case, this has been India from the very start. Having said that, there have been subtle shifts in the militarys appraisal of threat perception and its leadership has made public statements that the extremists are a greater threat to Pakistans future. Given the Afghanistan situation and the anticipated spillover of the Nato pullout in 2014, Pakistans military would not risk contending with two fronts. Public opinion has also shifted in recent years, as surveys by Gallup Pakistan show that most Pakistanis back increased trade with India. Most importantly, the political elites, across the board, have a consensus on moving forward with the peace process.

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In 2003, both countries had agreed to a ceasefire at the LoC, which continues to hold, and has proved to be a workable model. The joint patrols and hotlines established were conceived as mechanisms to avoid clashes and the unnecessary deaths of soldiers. There is a critical need to devise new mechanisms, such as increased demilitarised zones across the LoC.
Ministers Sharif and Singh is due in September, on the sidelines of the annual UN meet. Once again, the peace process runs the risk of being jeopardised. To Pakistanis, the ploy of terrorists camouflaging themselves as security officials is familiar. In the recent past, several TTP attacks have been carried out in a similar fashion. Militants increasingly use military or police uniforms to bypass security checks. Further, the jihadi groups in Pakistan would be the net losers if the peace process with India continues. Much has been said in the Indian media about the Pakistan military not backing trade with India. Undoubtedly, the military is strucIn such a climate, the non-state actors, who have grown in size and strength over the years, are a threat to Pakistan as well as to regional stability. There is no question that Pakistan should take effective action against these groups, which can potentially bring the neighbours close to war. This must be avoided. India, for its part, has to show greater strategic empathy and take a long-term view of its Pakistan policy. Its current policy, cynics say, comprises a series of knee-jerk reactions and disparate voices from its various power centres, including the military. In 2003, both countries had agreed to a ceasefire at the LoC, which continues to hold, and in the

troubled annals of our recent history, has proved to be a workable model. The agreement needs to be revised, given the loopholes that plague it. Firing at each other remains the crudest way of expressing nationalistic passions in this day and age. India complains of incursions into the state of Jammu and Kashmir, Pakistan denies it and soldiers die in vain. The joint patrols and hotlines established were conceived as mechanisms to avoid such clashes and the unnecessary deaths of soldiers. There is a critical need to devise new mechanisms, such as increased demilitarised zones across the LoC. Such eyeball-to-eyeball confrontation on the LoC once again underscores the necessity of dealing with the Kashmir issue and not treating it as the invisible elephant in the room. General Musharraf and Manmohan Singh had come close to agreeing on the famed four-point formula, which remains a wise 21st-century solution to a 20th-century imbroglio. India-Pakistan talks must proceed as planned. They would provide the best forum to raise the issue of bilateral disputes and confront the problem at hand. The tendency ofthetwostatestoinvolvethemedia before the diplomatic channels has emerged as a destabilising factor. Media freedoms and reporting are essential but the two countries must not allow TV anchors and reporters to frame and drive policy. There has to be a new start. Giving Sharif a chanceshouldbepartofIndiasnew Pakistan policy, of which stabilising and supporting Pakistans democracyshouldbethecentralplank.The transition from a bureaucratic model to a new way of imagining Pakistan would require some fresh thinkingandboldleadershipinIndia. Similarly, Pakistans new administration will have to take charge of the India policy if it wants to avoid known blunders and pushing the region into a nuclear conflict. Rumi is director of the Jinnah Institute, a Pakistani think tank, and author of Delhi by Heart: Impressions of a Pakistani Traveller (Harper Collins, 2013). Views are personal
express@expressindia.com

Letters to the

EDITOR

Stay calm

of five soldiers at the hands of Pakistanis. Whether they were terrorists and/ or from the army is immaterial. The BJPs demand of a boycott of talks with Pakistan is foolish. The political class must show maturity and restraint in handling the situation. Unfortunately, neither the BJP nor the Congress has. The Congresss flip-flops on the issue are embarrassing. The only solution is for the two counties to sit across the table and talk. India must take advantage of Nawaz Sharifs offer to talk on the side lines of the UN General Assembly meet in September, where our PM should bring this incident up. R.K. Kapoor Chandigarh
PAKISTANI agents breaching the LoC and killing five Indian soldiers is a heinous and daring act. We must take serious action. Pakistan is not worthy of our friendship anymore. First the mutilation of Indian soldiers in January and now this. We need to act now, before Pakistan tries this again. Harsh Shukla Ulhasnagar

I AM saddened by the deaths

Voice of reason

WITH the death of Air Com-

ARVIND VIRMANI

NDIA could be inching towards a surrogacy law, with the health ministry having pulled out and dusted the Assisted Reproductive Technologies (Regulation) Bill, the first version of which was drafted in 2008. The directorate general of health services now suggests that surrogacy should be an option available only to married, infertile couples of Indian origin. This leaves out foreigners, who account for 40 per cent of the surrogacy clientele, as well as gay or unmarried couples. The ministrys regulatory zeal appears misdirected, and shows traces of insularity and a starchy morality. Thereis,however,astrongcasefor regulation. Worth $2.3 billion, commercial surrogacy has reached the scale of an industry in India and draws thousands of foreigners every year,largelybecauseitisunregulated and cheaper than in other countries. States such as Gujarat, which has a proliferation of IVF and surrogacy clinics, boast of reproductive tou-

Health ministrys zeal is misdirected, but responsible practices must become the norm for surrogacy
rism. But surrogacy in India is inevitablyattendedbyharrowingstories of exploitation. Surrogate mothers, mostly poor and illiterate, are often made to live in secrecy, crowded into closely guarded homes and allowed limited access to their families. Forced miscarriages and sex selection are rampant. Practices like egg harvesting are carried out with little regard for the donors life. In a countrywithhighmaternalmortalityrates and few reproductive rights, surrogate mothers are doubly vulnerable. India is one of the few countries that allow commercial surrogacy. Russia, Ukraine and certain states of the US are among the other global destinations. Though reproductive tourists are welcomed, most of these places have enacted laws to regulate surrogacy. California, for instance, requires that both the intended parents and the surrogate be represented by separate legal counsel. India must also adopt and enforce responsible, safe practices.

Baby steps

HAVE previously, in 2007, argued that India should have an asymmetric foreign exchange policy, whose central objective is to dampen the adverse effects of external capital flow volatility, while taking full advantage of low cost long-term debt and risk capital to accelerate growth. We have had the reverse policy since 2009, resulting in fast real appreciation when inflows surge and slower depreciation when inflows slow. This has the effect of slowing growth and increasing the probability of external crisis. The conventional wisdom in India is that a current account deficit (CAD) above 2.5 per cent of the GDP is a danger signal that requires urgent corrective action. Partly as a result of the global financial crises, the CAD jumped to 2.3 per cent in 2008-09 and to 2.8 per cent in 2009-10. Thereafter, it jumped to 4.2 per cent in 2011-12 and has remained high ever since. Between March, 2009, and March, 2013, the total external debt of the country went up by over 70 per cent, with short-term debt and external commercial borrowings (ECB) increasing even more rapidly (100 per cent and 90 per cent respectively). As a ratio to GDP, however, it has remained at about 20 per cent, indicating that its not the debt per se,

The challenge is to increase short-term rates, while keeping long-term rates low
but its structure thats the problem. On the one hand, monetary policy has forced domestic corporates to source funds from abroad, while government policy has made it easier for short term funds to flow into the country. Thus, compared to the inflow in 2007-08, the average annual inflow between 2009-10 and 201213 was 10 per cent lower for FDI and 30 per cent higher for FII. At the same time, the real effective exchange rate appreciated by an average 14 per cent between 2007-08 and 2009-10. This was still not fully corrected till 2006-07, to $ 78 bn in 2007-08, because of favourable forecasts of double-digit growth. The global financial crisis hit India around August, 2008, and lowered these flows back to $ 38 bn in 2008-09. With global monetary easing, these flows surged back to an average of $ 72 bn a year between 2009-10 and 2012-13. This level of inflow was unsustainable, because even a realistic assumption of a trend growth of 8- 8.5 per cent assumed that structural reforms would continue at the pace of the 1991 to 2003 period. In the absence of policy reforms, the crease domestic saving, take pressure off inflation, and allow an increase in government and private investment without putting pressure on the current account. Along with this fiscal correction, monetary policy must be eased to stimulate private investment (macro-pivot). Though the rupee should be allowed to depreciate in nominal terms to a level necessary for, and consistent with, a CAD of more than 2.5 per cent, an expectation spiral that results in the overshooting of the rupee-dollar exchange rate would not be desirable. Therefore, an interest rate pivot must be attempted along with the fiscal-macro pivot. That is, to try and raise short-term interest rates while lowering long-term rates, so as to minimise speculative financing while stimulating consumer durable purchases and corporate investment. Global experience shows that it is extremely difficult to engineer and sustain an interest pivot. In the meanwhile, the energies of the government must be directed towards removing administrative bottlenecks and policy constraints to corporate investment. The writer is former chief economic advisor, ministry of finance, and former executive director (for India), IMF
express@expressindia.com

An interest rate pivot

modore (retd) Jasjit Singh, the security and strategic affairs community has lost one of its most honest voices of reason. Listening to talking heads on foreign policy, one strongly feels the absence of Singh and the legendary K. Subrahmanyam, who passed away two years ago. While both were part of the establishment at the Institute of Defence Studies and Analyses, both were always questioning the establishment, and themselves too. I recall, with pride, when as an official of the Embassy of India in Sweden, I accompanied Singh to the Stockholm International Peace Research Institute in 1998 and had the privilege of listening to him. C.R. Bain Kolkata

The capital inflows needed to have been recognised as being temporary, and managed by limiting their surge and ensuring a real depreciation of the rupee.
2012-13 (-11.9 per cent), with negative effects, as expected, on the balance of goods and services. The net effect of this policy stance is summarised in the net international investment position of the country, which worsened from -$ 207 billion in March, 2011, to -$ 307.3 bn in March, 2013, a deterioration of 50 per cent in two years. This implies the probability of external crisis has increased substantially. The time pattern of capital flows may have confused analysts. The surge in capital inflows occurred in 2007-08, with private inflows doubling from $ 37 bn in growth rate declined sharply in 2011-12. The capital inflows needed to be recognised as being temporary, and managed by limiting their surge and ensuring a real depreciation of the rupee. Given the deterioration in macroeconomic fundamentals and the consumer price index inflation, our choices are heavily circumscribed. Even though it is difficult to relate the deterioration of the external balance to the deterioration in the fiscal and revenue deficits, there is no other solution but to reduce the growth rate of government consumption and transfer expenditures. This will in-

Common heritage

WE WERE dismayed by the

WORDLY WISE
Will Durant

To say nothing, especially when speaking, is half the art of diplomacy.

F PRESIDENT Obamas decision to cancel a summit meeting with Russian President Vladimir Putin signalled a refusal to engage with Russia on matters of mutual interest, wed be concerned... But it appears that the presidents refusal to hold talks with Putin in Moscow next month doesnt in fact constitute a rupture in conversations between the two countries, which will continue at other levels. Its better viewed as a clear but calibrated expression of displeasure over the Russian governments granting of asylum to Edward Snowden and its growing hostility to political dissent, civil rights and the activities on Russian soil of international human-rights groups. Russia also oppresses its gay and lesbian citizens. Last week, the countrys sports minister said it would

Putin offering Snowden asylum is a sore point in US-Russia relations

enforce a new law against propaganda of nontraditional sexual relations, including gay pride demonstrations, during the 2014 Winter Olympics in Sochi. In announcing that Obama wouldnt engage in talks with Putin, the White House cited a lack of progress in negotiations on a variety of issues. But Obama may have offered a truer explanation of his decision to snub Putin in an interview with Jay Leno on Tuesday. There are times when they slip back into Cold War thinking and Cold War mentality, Obama said. What I continually say to them and to President Putin [is] Thats the past. From a leader in the Los Angeles Times

Presidential snub

PRINTLINE

news that the National Commission for Minorities wants the government to allow the offering of prayers in mosques that are under the protection of the Archaeological Survey of India and where no namaz has been offered for decades (Minorities panel wants monuments re-opened to namaz, ASI worried, IE, August 5). This has dangerous implications. There are several instances where the original features of protected monuments have been tampered with after they were opened up for namaz. If this proposal is pushed through, it is bound to snowball into other religious groups demanding similar concessions; how will the government then stop Hindus from demanding the right of worship in, for example, the Kandariya Mahadev temple at Khajuraho? What will stop the demand for religion-based appointment of ASI staff at these sites? Further, what of sites where primary religious ownership is difficult to establish such as the Bhoj Shala in Dhar? In the interest of communal harmony and our common heritage, such a demand must not be granted. B.M. Pande, K.K. Muhammed Delhi