From the Editor-in-Chief
OUR cover story may be unusual – defence of a public sector behemoth with a mixed track record – but it offers a critical and sharp insight into how lack of good governance – both by omission and commission – can hobble the larger interest of a nation. It is also a commentary on how economics comes full circle every now and then. In the Nehruvian era and then during Indira Gandhi’s rule, the public sector was unassailable. It was a sacred cow whose name you vilified in the press or in public utterances only at the peril of being branded a reactionary or anti-national.
Economist PC Mahalanobis deified an economic model of development and capital formation in underdeveloped countries by postulating that nationalized or public sector enterprises should rule the commanding heights of the economy. But, as the Soviet model of development, on which Mahalanobis had founded the Nehruvian economy – a trend that accelerated under Nehru’s daughter – began to crumble, India awakened into the dawn of liberalization in which the old shibboleths were unceremoniously jettisoned. Privatization and globalization, de-control and disinvestment, competition and entrepreneurship became the new magic watchwords as India hurtled headlong into policies applauded and egged on by the World Bank and the International Monetary Fund.
That was a heady period in which “world’s second fastest growing economy,” and “India Shining” became catch phrases for politicians and promoters of the new Indian dream that included a bulging, white goods-consuming middle class. Then followed the worldwide recession in which the US and European economies took a beating, their banking and financial systems crashed, and the unemployment lines grew longer and longer.
This crisis – which India mostly escaped because of its continued public spending and stricter regulation of banking and trading activities, stable agriculture, and a continuously growing domestic demand factor – nonetheless focused attention on “left of centre” economists like Nobel laureate Amartya Sen who emphasized that economic growth without inclusiveness and social growth was not economic growth at all but a mirage of numbers. He also emphasized the role of the public sector in boosting growth with justice and reducing disparities. This thinking spread rapidly in countries like the US and the UK where “nationalization” and massive government subsidies and spending, even at the risk of humongous monetary and fiscal deficits, were considered a more acceptable alternative to a full-fledged depression.
In India, the crisis forced a re-thinking on unbridled privatization of PSUs and blind disinvestment. This is not an argument supporting PSUs that are a drain on the public exchequer or a playground for babudom and political patronage. It is rather a case for seriously examining the social role the public sector can play –given the huge investment in it of the nation’s scarce resources – as well as for modernizing it and making it as profitable and efficient as the best of any American, Indian, or European private corporation.
That is why Naresh Minocha’s cover story on ONGC – the nation’s first oil explorationgiant – is an important learning experience. It details the great potential that a PSU like ONGC has for the public good and for catalysing a vibrant economy as well as the waste and mismanagement and deliberate manipulation by politicians and bureaucrats that are sacrificing its remarkable potential at the altar of vested interests.
OUR cover story may be unusual – defence of a public sector behemoth with a mixed track record – but it offers a critical and sharp insight into how lack of good governance – both by omission and commission – can hobble the larger interest of a nation. It is also a commentary on how economics comes full circle every now and then. In the Nehruvian era and then during Indira Gandhi’s rule, the public sector was unassailable. It was a sacred cow whose name you vilified in the press or in public utterances only at the peril of being branded a reactionary or anti-national.Economist PC Mahalanobis deified an economic model of development and capital formation in underdeveloped countries by postulating that nationalized or public sector enterprises should rule the commanding heights of the economy. But, as the Soviet model of development, on which Mahalanobis had founded the Nehruvian economy – a trend that accelerated under Nehru’s daughter – began to crumble, India awakened into the dawn of liberalization in which the old shibboleths were unceremoniously jettisoned. Privatization and globalization, de-control and disinvestment, competition and entrepreneurship became the new magic watchwords as India hurtled headlong into policies applauded and egged on by the World Bank and the International Monetary Fund.
That was a heady period in which “world’s second fastest growing economy,” and “India Shining” became catch phrases for politicians and promoters of the new Indian dream that included a bulging, white goods-consuming middle class. Then followed the worldwide recession in which the US and European economies took a beating, their banking and financial systems crashed, and the unemployment lines grew longer and longer.
This crisis – which India mostly escaped because of its continued public spending and stricter regulation of banking and trading activities, stable agriculture, and a continuously growing domestic demand factor – nonetheless focused attention on “left of centre” economists like Nobel laureate Amartya Sen who emphasized that economic growth without inclusiveness and social growth was not economic growth at all but a mirage of numbers. He also emphasized the role of the public sector in boosting growth with justice and reducing disparities. This thinking spread rapidly in countries like the US and the UK where “nationalization” and massive government subsidies and spending, even at the risk of humongous monetary and fiscal deficits, were considered a more acceptable alternative to a full-fledged depression.
In India, the crisis forced a re-thinking on unbridled privatization of PSUs and blind disinvestment. This is not an argument supporting PSUs that are a drain on the public exchequer or a playground for babudom and political patronage. It is rather a case for seriously examining the social role the public sector can play –given the huge investment in it of the nation’s scarce resources – as well as for modernizing it and making it as profitable and efficient as the best of any American, Indian, or European private corporation.
That is why Naresh Minocha’s cover story on ONGC – the nation’s first oil explorationgiant – is an important learning experience. It details the great potential that a PSU like ONGC has for the public good and for catalysing a vibrant economy as well as the waste and mismanagement and deliberate manipulation by politicians and bureaucrats that are sacrificing its remarkable potential at the altar of vested interests.
PRIME Minister Manmohan Singh is yet again on a sermonizing spree with regard to corruption. His latest was on Civil Services Day: “Corruption is an impediment to faster growth, and hurts the poor most. It is a challenge that we must tackle boldly and we stand committed to doing so.” He added, “There is little public tolerance now for the prevailing state of affairs. People expect swift and exemplary action and rightly so” and “Our aim is to strengthen the legislative framework, revamp administrative practices and procedures and fast-track a systemic response to fighting corruption.”
THE movement initiated by Anna Hazare was a huge success, especially in roping in the urban middle class. In a democracy, it is the inalienable right of the citizens to voice their concerns and seek redressal of their grievances through their elected representatives. And if the latter do not pay heed to their problems and concerns, it is equally legitimate for them to raise their voice collectively. More often than not, such collective agitations fail to elicit a favourable response from those in authority. But there are rare instances when the rulers come down from their exalted perches and listen.
Therefore, though it is important to take the fight against corruption one step forward, the drafting committee has a limited task on hand. The notion that the Bill would be a panacea for all the ills of governance is far-fetched. We should attach only that much importance to it as deserved. 
IN the past five decades, the US administration has been confronted with the need to take momentous decisions on two occasions. The first was when President John Kennedy had to issue an ultimatum to the Soviet Union on the Cuban crisis. The second was more recent, when President Barack Obama faced the need to issue orders for a special team to carry out an operation to kill Osama bin Laden. Both these historic moments were fraught with the danger of an escalated conflict.
He was also laden with a superior Cabinet outside his government in the form of the National Advisory Council (NAC) under the chairmanship of Sonia Gandhi. It deprived him partially of authority on even the economic policy of the government because the NAC preferred the welfare state as the objective of governance. Its two schemes, job guarantees and food security for poor families, were to drain nearly one-fourth of the national income for consumption needs through provision of immediate and temporary relief from hunger instead of empowering the poor. It was a sure recipe to drive the economy towards bankruptcy. 
The most common speculation in Congress circles these days is that Rahul Gandhi will make a pitch for Delhi only after a successful showing in the coming Assembly polls in UP for which he has given a clarion call to his party workers – first from Banda last month and then from Noida and Varanasi this month. The Banda rally was thought to be so important that even Manmohan Singh went all the way to join Rahul. For the Noida show, Madhya Pradesh’s Digvijay Singh was his escort. Varanasi was a bigger affair. That was made the venue for a special session of the UPCC where Rahul was expected to unravel his “Vision UP”. Sonia Gandhi addressed the rally on the concluding day.
There are, however, many problems in the way of achieving this goal. First, the Congress in UP has no credible leader. Congressmen may claim to have many leaders but they are all without followers. Second, the Congress has been so long out of power in UP that its workers at the grassroots level have no fight left in them to win an election. Third, despite all the talk of reviving and rebuilding the party, neither the leaders at the top nor the workers at the grassroots have so far come out with any ideas on how to do that. The Congress’ winning social combination of Dalits and Muslims around the core support group of Brahmins was smashed by the rising backward peasant castes in the late 1960s under western UP’s Jat leader, Chaudhry Charan Singh. 
THE communist movement in India might have finally breathed its last on May 13, 2011, but an apparition by the name of the Communist Party of India (Marxist) will remain for some more time in the Indian political scenario. And its leaders will now have to live the hard part, the afterlife, for a communist party that has no capability of launching a radical movement is like a body without a soul.
Numerous smaller ones in Kerala, Andhra Pradesh, Bihar, Maharashtra, Bengal and other places shaped the future of the communists from the 1930s to the ’70s. Internal divisions in the undivided party occurred, and the splits weakened it. Yet, Bengal, Kerala and Tripura voted for it in elections. From the late 1970s, communist-ruled States became a common phenomenon. Even the Centre had communist Ministers during 1996-98, including a Home Minister of the country. Bengal made history of sorts by reposing its faith in legendary democratic ruler Jyoti Basu five times. 
From 2004 to 2008, the period when the Left supported a Congress government, the party backstabbed the glorious tradition of the communist movement. The leaders decided to confront the reality instead of blindly opposing it. That was what they principally decided in 2005 and later gave final shape to. It was a ploy to accept the changes around them. 
THE Panipat syndrome runs deep in the psyche of the Indian political class and its cronies. Even though India’s neighbourhood is packed with elements threatening to drop nasty garbage on our head, the defence procurement policy has no sense of alarm nor is there any urgency to build a modern military-industrial complex on our own.
But reduction in the number of aircraft due to retirement of obsolete aircraft, and air crash and attrition losses depleted the active force levels to 34 squadrons. Depletion to 32 squadrons took place following further phasing out of aircraft. If corrective measures are not taken immediately, the strength of active IAF squadrons may dip to 27 in the next five years. 
The RFP announcement in mid-2007 estimated the cost of 126 MMRCA at Rs 42,000 crore (about $10.24 billion or about $81.3 million per fighter). The 211-page document included clauses for initial purchase, transfer of technology, licensed production, and life-time maintenance support for the aircraft. Under the terms of purchase, the first 18 aircraft would come in fly away condition, while the remaining 108 would be manufactured under transfer of technology. Some reports added an option for an additional 63-64 aircraft on the same terms, bringing the potential total to 190 aircraft. 
NATIONS, like individuals, have multiple identities and may be seen in ways that are not flattering to their self-image. In the wake of the US transgressing Pakistani sovereignty, independence and territorial integrity to kill Osama bin Laden, there’s little sympathy for India’s western neighbour as a victim. The general view is that Pakistan not only had it coming, but was asking for it.