Friday, May 05, 2006

Indian Agriculture and its Unending Crisis


Sukumar Muralidharan
April 23, 2006

As a decade in the life of a nation, the 1990s could attract a variety of descriptions. For one thing, it was the decade of liberalisation, when India, after a seeming eternity of hesitation, finally decided to engage with the global economy. For another, it was when the Indian middle class, thwarted in its ambitions for generations, carried through its revolution of rising aspirations. And it was also a period of the unabashed celebration of the good life, when older notions of austerity and social responsibility, nurtured in the Gandhian strain of the Indian freedom struggle, were thrown overboard.

With all this, the 1990s could also be remembered as the decade when agriculture fell off the radar screen. Two points in time when the Indian economy was severely buffeted by weather adversities, capture the essence of this transition. In 1987, when the monsoon failed to an unprecedented degree, the economy as a whole went into recession. Agricultural output fell by over 2 percent and with industry and services also feeling the impact, the overall growth rate slumped. The next time around when the monsoon turned in a performance quite so disastrous was 2002. And yet, even as agricultural output shrank by as much as 7 percent, industry and services maintained their brisk rates of growth. The overall impact of the drought on the economy, at least in terms of growth rates, was relatively subdued.

Prior to the decade of globalisation, the financial press through the month of April seemingly had its priorities clear. With the winter crop of grain being harvested, attention would be focused on market arrivals in the mandis of Punjab, Haryana and western Uttar Pradesh, for pointers about the security of essential supplies over the year ahead.

Today, though, the concerns of the financial press are confined, as at any other time of the year, to the level of the stock market. Indeed, April 2006 was a historic month for the Indian stock markets, with the sensitive share price index on the Bombay Stock Exchange, the Sensex, touching 12,000, after a steep climb from the landmark level of 11,000 it had touched just days before. The new record meant that market capitalisation in Indian stocks was, for the first time, of the same magnitude as GDP. This was, in the estimation of the financial press, occasion for joyous celebration. It was state of the art economics, they pointed out, that market capitalisation should be at the same level as the country’s GDP. This was the story in the advanced capitalist economies and it would be the story in India too. Globalisation and the Indian middle class’s revolution of rising aspirations, had transformed the stock market, with its 40 million investors, into a higher national priority than agriculture, with its 600 million people. That was fair going if inherent values, as denominated in monetary terms, were to be considered. Even as the stock markets touched their unprecedented heights, agriculture, the sole source of livelihood for over 55 percent of the country, was plunging towards the 20 percent mark in terms of its contribution to India’s GDP.

As the rabi harvest for the current year gets underway, there is little reason to believe that the wheat crop will be any less than anticipated. Yet, even before procurement began, the Union Government had announced plans to import wheat from Australia for supplying the country’s southern markets. These markets could be more cheaply supplied with imported wheat, says the government. Farmers, needless to say, are unimpressed, and see in the import decision and especially its timing, an effort to cut back wheat procurement operations. The price at which imports have been contracted is much higher than the procurement price for Indian wheat. And if the background to this decision is kept in mind, which is the export of almost 20 million tonnes of wheat from the country’s overflowing granaries since 2002 – at a price below that reserved for the population below the poverty line – then the numerous anomalies in policy approaches to agriculture would become still clearer.

Matters would have been murky enough if they had ceased there. But a mere three weeks into the procurement season, the Government announced a decision to import an additional 3 million tonnes of wheat. When concluded, this would be the biggest food import contract since the Green Revolution, as it is called, supposedly established India as a country that had no cause to worry about food security any longer.

The rapid decline in agricultural fortunes would in most circumstances, except in cases of policy-induced myopia, be serious cause for worry. Through the decade of globalisation, the per capita availability of foodgrain showed a persistent decline for the first time since the 1960s. And this recent phase of agricultural decline has been more alarming since the earlier episode had identifiable climatic adversities that could be held responsible. And despite all the climatic fluctuations through the 1990s, it is nobody’s case that the erosion of Indian agricultural output has had anything to do with natural phenomena, or with unavoidable causes.

Indeed, manmade causes have more to do with the adversities that agriculture today faces. Since structural reforms began in the Indian economy, there has been a steep decline in the proportion of the central government’s budgetary outlays that go into agriculture. This has also been the case with industry, energy, and other sectors. But in certain sectors like industry – though uncertainly so in energy -- budgetary cutbacks could be made good by private initiatives. This in any case is a decided impossibility when it comes to agriculture. Indeed, gross capital formation in agriculture after a gradual decline over the years, began to fall rapidly in the 1990s. And most expert analysis is agreed on the fact that this decline is primarily on account of the fall in public investment in agriculture.

Through the 1990s, the reigning mantra of economic policy was that public investment in sectors where there was no alternative to the energetic economic leadership of the State, would not suffer. The burden of adjustment rather, would fall on unproductive public expenditures, like unmerited subsidies and the establishment costs of the vast government bureaucracy. But this political program for obvious reasons, has been impossible to carry through. Agricultural subsidies have if anything, only increased in the period of structural adjustment, to the extent that the reigning slogan now within official circles is that the priority should shift from unproductive subsidies to productive investments. But there are obviously politically influential farm lobbies that benefit from the subsidies paid out and any effort to ensure a transition to productive investments that benefit a larger cross-section of the agricultural population, would have to run the gauntlet of their resistance.

To take the component parts of food subsidies, there is first, the difference to reckon with, between the price at which the Food Corporation of India procures grain from the farmer during the harvest and the price at which it issues grain to the public distribution system. Then there is the cost of operations, stockholding and transportation that the FCI bears. For much of the 1990s, stock levels were far in excess of prescribed norms. Figures compiled in a recent study commissioned by the Ministry of Finance of the government of India, tell a compelling story. As of January 1, 2002, stocks of wheat and rice with the government and its agencies were over three times the prescribed level – in the case of wheat, almost four times. The volume has been drawn down in subsequent years, until now the seeming embarrassment of riches has been transformed into a deficit. But this has been achieved only by exporting grain at a price below that reserved for “below poverty line” (BPL) families in India. A part of the food subsidy, in other words, is going towards subsidising the consumption of Indian grain abroad.

The report on subsidies makes note of the phenomenon of rising food stocks coexisting with endemic hunger and “reported starvation deaths” in the country. It notes that the price reserved for BPL families, of both wheat and rice, has risen cumulatively by over 60 per cent since 1997-98, against an increase in the consumer price index of only 26 per cent. And despite this rapid increase in the issue price of foodgrain, the aggregate food subsidy burden has increased tenfold since 1990-91 – from a figure of Rs 2,450 crore to over Rs 25,000 crore.

The reasons are twofold: firstly, the costs of stockholding have increased enormously; and secondly, the procurement price paid to the farmer has multiplied several-fold. Increasingly, the food subsidy has lost its function of safeguarding food security and become a system of underwriting an unnecessary and wholly irrational accumulation of food stocks with official procurement agencies, and of keeping the politically voluble farm lobby quiescent, especially in the grain surplus areas.

The rapid increase in procurement prices has been partly justified as a necessary compensation for the sharp curtailment of the fertiliser subsidy, which has contributed to a steep escalation in the price paid by the farmer for this essential input. But the situation here still remains anomalous. According to a recent calculation, if import parity prices were to be used as the benchmark, only an average of about 56 per cent of the total fertiliser subsidy borne by the government is the farmers’ share. The rest is a subsidy for the fertiliser industry.

Official policy, in its reach towards the agricultural sector, is becoming increasingly limited. And the 1990s have also been a period when farmers were once again subject to a gradual but inexorable process of marginalisation. After the robust period of integration with the institutions of the mainstream economy, beginning with the nationalization of the country’s main banks in 1969, this was a serious setback for the millions dependent on agriculture for their livelihood.

Figures tabulated by the National Sample Survey Organisation, show that cultivator households till as late as 1971, were drawing at least 68 percent of their credit requirements from the non-institutional sector – in other words, the local mahajans and moneylenders who would charge extortionate rates and not hesitate to seize their land and other assets in case of a default on repayment, even one induced by severe climatic stress. The picture began to change from the time that the banks nationalization occurred, to the extent that by 1981, the share of the non-institutional sources in total agrarian credit had fallen to 36.8 percent. Over the next decade, the figure fell still more, to 30.6 percent. But once the philosophy of liberalization kicked in, the farm sector became a relatively low priority for profit-oriented financial institutions. In consequence, the share of the non-institutional sources of credit in total agricultural lending, had increased to 39 percent by 2002.

It is possible to make the case that the more accurate measure to use for assessing the adequacy of credit flows to agriculture would be to take these in proportion to GDP. With the share of agriculture in GDP having fallen progressively over the years, it should occasion no surprise that the flow of institutional credit to the sector too, should diminish. But this does not take into account the fact that 60 percent of the country still depends on agriculture for its livelihood. With the shrinking of its access to institutional sources of support – whether budgetary or through the credit system – the agrarian sector becomes more vulnerable to transient parameters, such as weather fluctuations, pest infestation, or natural disasters. The consequence has been a huge increase in agricultural indebtedness, which the most recent survey of the NSSO testifies to in an abstract sense, and the spate of suicides by debt-ridden farmers bears witness to in a rather more intimate and alarming way.

Iran, U.S. and the drumbeats of war

Iran, US and the drumbeats of war

Abstract: Iran’s claim that it has mastered the nuclear fuel cycle does not mean it is near assembling an atomic bomb, but this has not prevented scaremongers in the US from sounding the drumbeats of war. For a U.S. administration besieged by growing public scepticism about the war in Iraq, a renewed military adventure may well be an escape route. It could as well be a fatal error. .

Sukumar Muralidharan
April 20, 2006

It is not known if Mahmud Ahmedinejad, the president of Iran, reads the western media. Nor is it clear that investigative reporters in the US ever speak to him. Yet, working independently, the Iranian president and Seymour Hersh – a journalist with established credentials in bringing to light the seamy underside of US military and intelligence operations – have managed to engineer a coincidence that could well have been scripted by the great dramatist in the sky. But if the intent was to stage a climactic battle between good and evil, there is just too much ambiguity surrounding the protagonists. Both US President George Bush and his Iranian counterpart, believe they have a call from heaven to do what is right. But only one has international law on his side. The other is floundering in a sea of domestic political adversities, while seeking to foist a new standard of law on the world.

On April 10, the New Yorker, that venerable magazine that has for decades been a celebration of the languid elegance of unhurried prose, posted on its website an article with a rather urgent tone.[i] Though Seymour Hersh has occasionally misdirected his reportorial ardour, his article on the operational planning for a military strike against Iran, was just too compelling to ignore – much like his work on the scandal of the Abu Ghraib prison in Iraq. Matters had gone well beyond the stage of contingency planning to minute operational details, Hersh reported. The US military, he continued, had quite possibly launched both land and air-based reconnaissance missions in Iranian territory. The options discussed and approved at the highest level of the Bush administration included the possible use of tactical nuclear weapons. With many of the facilities involved in Iran’s contentious nuclear programme located underground and protected by heavy concrete fortifications, there seemed no alternative to the use of these weapons of the apocalypse.

Hersh’s reportage provoked spasms of anxiety in strategic circles worldwide But the one person who seemed almost serenely unconcerned was Ahmedinejad. Barely two days after the Hersh article was put up for a global audience, the Iranian president announced, with appropriate fanfare, that the country’s dedicated scientists had established complete mastery over the nuclear fuel cycle. Speaking in a nationally televised speech, Ahmedinejad offered the friendly advice that the west should resign itself to the legitimate rights Iran enjoyed as a signatory to the nuclear Non-Proliferation Treaty (NPT). Iran was in a position to independently fuel its nuclear power reactors, he said, but it would ensure full compliance with NPT obligations and pay appropriate deference to the authority of the International Atomic Energy Agency (IAEA).

For an Indian audience inured to regular displays of nuclear nationalism, the tone of the Iranian president’s remarks must have sounded familiar. India’s Department of Atomic Energy (DAE) has proclaimed its complete mastery over the fuel cycles involving four different nuclear materials – natural uranium, enriched uranium, plutonium and thorium. In terms of the obeisance paid to dedicated scientific research and self-reliance, the Iranian president has been well within this paradigm. But being undoubtedly a man of some modesty, he has claimed mastery over only one nuclear fuel and deviated further from the Indian model in vowing compliance with the NPT and the authority of the IAEA.

Uranium Enrichment

Soon after Ahmedinejad’s announcement, Mohammad Saeedi, the deputy chairman of the Atomic Energy Organisation of Iran (AEOI) came out with the finer details of the Iranian nuclear programme. The achievement in scientific scale experiments had used 164 gas centrifuges for enriching natural uranium, in which the vital fissile isotope is present to the extent of a mere 0.7 per cent, up to the level of 3.5 percent This is roughly the required enrichment level of the fissile isotope for a light water reactor like the one that Iran is importing from Russia. The experiments were in accordance with the notification that Iran had issued to the IAEA late in March. That apart, Iran had also concurrently announced that it intended to put into operation a 3,000 machine cascade for enrichment purposes by the last quarter of 2006.

Saeedi explained that the Iranian authority ultimately planned to utilise the experience gained with the 164-machine cascade to scale up production to an industrial facility utilising 54,000 centrifuges. Working at levels of operational efficiency established in the laboratory experiment, the industrial facility would be able to produce adequate fuel for a 1,000 megawatt nuclear power reactor. The time horizon that Iran would require to build up this inventory, though, was not specified.

Scaremongers from the US lost little time in stoking the mood of public paranoia, which has been a fruitful venture since the September 11, 2001 attacks. With 54,000 centrifuges, Iran would be able to produce enough fuel for a nuclear bomb within 16 days, said Stephen Rademaker, US assistant secretary of state for international security and non-proliferation. When questioned about the alternative circumstance of 3,000 centrifuges -- now part of the official correspondence between Iran and the IAEA – the US official demonstrated his facility with numbers by revising the time-scale for an Iranian nuclear bomb to debut on the world stage, to 261 days. For obvious reasons, it was the 16-day scenario that gained greater traction in the US press.

Rademaker did not, of course, choose to look at certain more fundamental questions. Iran’s laboratory scale results with uranium enrichment are themselves rather tenuously established. Iran faces serious challenges in ironing out these problems and it is yet to contend with the enormous complications involved in going from the laboratory to the industrial scale. Apart from the fact that the material used in constructing centrifuges is rare and closely guarded, Iran is, by all expert assessments, yet to acquire the precision in machine building and process control required to enrich uranium on an industrial scale. If a reasonable time scale for acquiring these – and all other competences – were to be factored in, then Iran might be 10 years away from assembling a solitary nuclear explosive device.

Indian Experience

India’s DAE would be able to render some clarity to the public debate, if it were, like its Iranian counterpart, to operate in an environment of transparency. In the context of India’s recent nuclear deal with the US, non-proliferation advocacy groups in the west have begun to cast a rather sceptical eye on the country’s record of compliance with global norms. This has resulted in a renewed focus on a little known facet of the DAE’s activities. After successful tests with a 100 centrifuge cascade in its facility at the Bhabha Atomic Research Centre in Mumbai, the DAE has been engaged in constructing an industrial scale enrichment facility at Rattehalli near Mysore. Though commenced in the mid-1980s, the facility was publicly acknowledged by DAE officials only in 1992. In 1997, the DAE confirmed that the purpose of the Rattehalli plant was to produce uranium enriched to the 40 to 45 percent level, for a nuclear submarine project that has been underway since the 1970s. It denied that the unit was engaged in producing uranium enriched to the higher levels needed for a compact explosive device.

In March this year, the Institute for Science and International Security, a US research and advocacy group, published a paper that frontally questioned India’s supposedly impeccable record in non-proliferation. Aside from highlighting the questionable procurement processes used by the Rattehalli facility, through a number of front organisations, the study also called into question the inflated claims of self-reliance that the DAE has consistently made. These apart, the most significant finding of the paper was that the Rattehalli facility, after serious technical difficulties in the construction stages, had established a uranium enrichment capacity in the range of 5,000 separative work units (SWU) per year.[ii]

The SWU is a term of art that eludes the comprehension of most laypersons. But just by way of comparison, it is estimated that a facility with a capacity of 100,000 SWU would be just about adequate to fuel a 1,000 megawatt nuclear power reactor for a year. M.V. Ramana, a physicist and analyst of the Indian nuclear programme, has sought to piece together a coherent picture of the scope and the achievements of the Indian uranium enrichment program. Using all the material available in the public domain, he has proposed that the best estimate of India’s uranium enrichment capacity, as of 2004, would be around 4,800 SWU per year. However, there are a number of uncertainties surrounding this estimate and if all possible scenarios were to be constructed – including the possible use of highly enriched uranium as a “trigger” for the nuclear fusion device that India tested in May 1998 – then the enrichment capacity could be anywhere between 3,900 and 10,000 SWU per year.[iii] At the lower bound of this range, India could produce around 20 kg of uranium enriched to the weapons grade every year, just enough for a Hiroshima-scale nuclear weapon. The relative modesty of this achievement after a two-decades long effort, should offer an accurate perspective on how close the Iranian programme is to a weapon.

Iran and IAEA

What is indubitable though, is that if Iran were to embark upon the path of uranium enrichment for weapons purposes, it would be swiftly found out and put under appropriate sanctions. For all the disinformation that surrounds the issue, Iran is still obliged to submit to a regime of safeguards administered by the IAEA. A few days after Ahmedinejad’s announcement, in fact, the IAEA director-general Mohammad El Baradei, was in Teheran for talks with the Iranian government on “confidence-building measures”. At his last public appearance before leaving, El Baradei urged Iran to suspend uranium enrichment work as required by the UN security council. But he also observed that IAEA inspectors were, even as he spoke, continuing their verification activities in Iran.

With an objective, institutionalised process underway to verify whether Iran is 16 days or 10 years away from a nuclear bomb, it may seem rather odd that the US and its European allies should work themselves up into a frenzy over the supposed threat from that quarter. On March 29, the UN security council, after hours of futile debate on a possible resolution demanding that Iran comply with the demands of the west, finally settled upon the uneasy compromise of a “presidential statement” demanding that Iran establish the “full and sustained” suspension of enrichment-related activities, including those being carried out on an experimental basis. With a month being specified as the time available for compliance, the US is not far from its objective, of holding Iran in violation of the demands of the international community.

Expectedly, Ahmedinejad’s announcement was followed within hours, by the active advocacy of military action by the same group of right-wing zealots that set the agenda for Iraq. Though a diplomatic settlement was always preferable, military action against Iran had become almost inevitable, said a commentator in Rupert Murdoch’s The Weekly Standard. In fact, without the buttressing of a credible military threat, a diplomatic initiative would have little chance of success. Though the US could go it alone, it would be preferable to recruit a number of potential allies to the cause, including Saudi Arabia, Jordan, Egypt, the United Arab Emirates, Kuwait, Qatar, Turkey, Britain, France, and Germany. And the purpose of military strikes would be “first and foremost, to destroy or severely damage Iran's nuclear development and production facilities and put them out of commission for at least five years”. That apart, the US should aim to “destroy the Iranian air defence system, significantly damage its air force, naval forces, and Shahab-3 offensive missile forces”. The air campaign would target more than “1,500 aim points” across Iran, and among the weapons it would use would be the “new 28,000-pound bunker busters, 5,000-pound bunker penetrators, 2,000-pound bunker busters, 1,000-pound general purpose bombs, and 500-pound GP bombs”.[iv]

Whether the US will embark upon this broad-ranging and potentially catastrophic military campaign, depends upon a range of factors. It is now looking increasingly unlikely that the UN security council will fall in line behind the US demand for comprehensive economic sanctions on Iran. Russia for one, has strongly hinted that it is unwilling to go that far without positive proof of an Iranian nuclear weapons programme. This represents a radical rewriting of the rules in relation to those that the US used in the run-up to the invasion of Iraq. To avoid war in 2003, Iraq was required to prove an absence, or alternately, to disprove a presence. A basic familiarity with logic would show that this is an impossible task in every sense, compared to the other procedure of proving a presence, or disproving an absence. Proving an absence requires the examination of a virtual infinity of possibilities and situations. The proof of a presence though, is accomplished with just one instance.

The Lies on Iraq

Iraq could never prove the absence of a weapons of mass destruction programme despite 12 years of inspections and enervating sanctions, because the US managed at every turn, to infiltrate the process of reporting to the U.N., convincing the disarmament teams – and in the final instance, coercing them – into falling in line. It failed conspicuously in March 2003, when El Baradei certified Iraq’s nuclear disarmament complete and dismissed the US effort to prove a presence – Iraq’s alleged effort to buy uranium from Niger and its import of aluminium tubes for an enrichment programme – as clumsy forgeries or crass misrepresentations.

That chapter in the march to war against Iraq has now come back to haunt the US administration. Recent disclosures in the US media indicate that President George Bush was, as early as October 2002, in possession of intelligence findings about the dubious provenance of the allegation that Iraq was seeking uranium from Niger. Yet he went ahead and used this as a plank on which to construct the case for war in his state of the union address in January 2003.

Other efforts to prove the presence of weapons of mass destruction in Iraq have also been discredited. On May 29, 2003, Bush declared that a number of mobile units found in Iraq were proven conclusively to be biological weapons laboratories. It is now evident that he had been informed two days prior to this announcement, that the mobile units in question were in fact, nothing more threatening than surveillance balloon launchers to support artillery units in battlefield situations.

Evidence is mounting that the war in Iraq, which has now entered the annals of military history as a disaster beyond imagination, was launched on a foundation of lies. The top echelons of the US military are known to be restive and no fewer than six retired generals from different wings of the US armed forces have recently called for the resignation of US defence secretary Donald Rumsfeld, as the debate over who lost Iraq becomes more rancorous. Some have indeed, gone so far as to say that they reflect the sentiments of senior officers still on active duty. If there is anything more dangerous for a putative democracy than civilian authority being challenged by the uniformed military, that can only be an executive that remains unfettered by any norms of accountability and believes it can deploy force in the pursuit of murky and unstated agendas in distant corners of the world But that ominously, is the situation that the US finds itself in today. And it just may be a conundrum that the Bush administration may try to shoot its way out of.


[i] Seymour Hersh, “The Iran Plans”, The New Yorker, April 17, 2006, posted on the web, April 8, 2006, and available at this writing at:
[ii] David Albright and Susan Basu, “India’s Gas Centrifuge Program: Stopping Illicit Procurement and the Leakage of Technical Centrifuge Know-how”, The Institute for Science and International Security, Washington DC, March 10, 2006; available at:
[iii] M.V. Ramana, “India’s Uranium Enrichment Program”, INESAP Information Bulletin, Number 25, December 2004, pp 71-4. Also available is a rather more technical analysis by the same author, “An Estimate of India’s Uranium Enrichment Capacity”, Science and Global Security, Number 12, 2004, pp 115-24
[iv] Thomas McInerney, “Target Iran”, The Weekly Standard, Volume 11, Issue 30, April 24, 2006; posted on the web early April and available at,

The Bush visit and India's burdens of partnership


Sukumar Muralidharan
March 21, 2006

Three days after touching down, U.S. President George Bush left Indian shores, leaving in his wake an aura of general contentment. From deep within his security envelope, Bush had little opportunity to see the seething rage on the Indian street. The constituencies he addressed were the middle and upper strata, anxious to secure a U.S. stamp of approval for India as a partner in global affairs. And for the Indian nuclear establishment and its peers in foreign policy, the agreements forged on the occasion marked the beginning of a new concord. After their unseemly squabbles in the weeks prior, the Bush visit marked a new mutual amity for them, as much as it represented a new beginning between India and the U.S.

India’s Department of Atomic Energy (DAE) had initially resisted the deal that involved a segregation of military and civilian nuclear facilities. For foreign policy ideologues though, complete autonomy in nuclear affairs was not too high a sacrifice for winning U.S. benediction in global councils. Above all, autonomy was not to be confused with autarky, since isolation was no virtue when nuclear fission was potentially a valuable energy source for a rapidly industrialising country and international cooperation, the key to opening these limitless vistas.

If the deal that was finally agreed on day two of the Bush visit, succeeded in calming these quarrels and anxieties, its international repercussions were something else. Stopping in Pakistan on his way back – though not with the same cavalier inattention to local sensibilities that his predecessor Bill Clinton showed in 2000 -- Bush rebuffed any possibility that Pakistan could claim a status akin to that granted India. Two weeks later, Pakistan’s Foreign Minister Khurshid Mahmud Kasuri warned darkly, that the whole Nuclear Non-Proliferation Treaty would “unravel” since it was “only a matter of time before other countries (began) to act the same way.” Since ministers in Pakistan invariably direct their most pointed barbs at India, it may seem axiomatic that Kasuri was referring to the negative example that India had set in terms of global nuclear non-proliferation norms. On closer reading though, his statement seems to bear equal reference to both the U.S. as the patron of this breakout from the NPT norms, and to India as the client.

Tightly bound up in an alliance with the U.S., Pakistan may not have very much latitude to deliver on this threat. Yet, it is striking that India’s new bonding with the U.S., has evoked deep suspicion in even liberal circles, not known to be traditional bastions of hostility. The Guardian in London, for one, commented editorially, that the nuclear agreement between India and the U.S. was “about breaking rules and expecting others to abide by them”. More picturesquely put, it was about “preaching temperance from the barstool”. Indians may well delight in the bargain they had driven, said the newspaper, but there were likely to be some “thoughtful smiles” in Iran and North Korea as the “wider implications” sank in.

In advance of the Bush visit, the New York Times commented that despite all the accompanying froth, the presidential passage to India was “built around a bad nuclear deal”. With the deal consummated, the “newspaper of record” commented rather acidly, that Bush was turning out to be Iran’s best friend. His adventure in Iraq, launched on flimsy and fabricated evidence, had only succeeded in transforming that country into a satellite of the Islamic Republic next door. And his deal with India sent “exactly the wrong message .. just days before Washington and its European allies” were scheduled to “refer Iran’s case to the United Nations Security Council for further action”. Iran’s hopes of thwarting a global consensus on restraining its nuclear program rested on “convincing the rest of the world that the West (was) guilty of a double standard on nuclear issues”, commented the New York Times. And in this respect, Bush “might as well have tied a pretty red bow around his India nuclear deal and mailed it as a gift to Tehran”.

The Economist was no less scathing, accusing Bush of favouring a friend rather than sticking to principle. Here he was, insisting in the International Atomic Energy Agency (IAEA), that Iran should “not be allowed to bend the anti-nuclear rules out of shape to further what are assumed to be its weapons ambitions”. At the same time, he was without the slightest hint of irony, proposing that India, already in possession of nuclear weapons, be allowed to do just that.

This enormous sense of effrontery, this belief that the world will do as it says rather than as it does, is not a new mood in the U.S. But it is certainly so in India. Consistency in standards of international conduct is a virtue valued only by the weak, who seek their security through agreed rules and norms. The powerful have no use for them, as anybody who has witnessed the U.S. attitude of indulgence and abetment towards Israel’s policy of conquest in West Asia would know. But the strong nevertheless are in need of justifying their double standards. Just as Israel’s unending atrocities on the Palestinians are justified by its divinely ordained title to the land and by the redress owed world Jewry for the suffering inflicted by the Nazi Holocaust, India’s great escape from the prison of the non-proliferation regime, stands in need of a rationalisation. An authoritative if not exhaustive justification, one that fortunately, does not venture into the theological realm, is provided by Ashley Tellis, an Indian born U.S. national who has been on the inside track of national security policy in Washington DC, and now serves on the staff of the Carnegie Endowment for International Peace.[1]

Tellis derives his first rationale from the principle of neoclassical economics, which holds that a public good can be secured only at a price. In a situation of collective action, the fulfilment of this object may be impeded by the conflicting agendas that motivate diverse agents. Absent the capacity to quash the recalcitrant elements, this would require a special subvention being made to those who have the least incentive in obtaining the public good. India in this reckoning is deserving of a special concession. The other two hold-outs in the context of the Nuclear Non-Proliferation Treaty (NPT) are Israel and Pakistan, both of which merit special consideration in U.S. aid allocations. India is an exception within the “three-nation problem” that confronts the NPT, gaining neither from access to nuclear fuel and technology, nor enjoying any exceptional benefit from U.S. aid.

This argument might have been halfway convincing if it did not conflict quite so flagrantly with the U.S. agenda on Iran. Successive inspections by the IAEA have found that the transgressions of the NPT by Iran, if any, are borderline in nature. Since the agency was granted access to suspect sites in Iran in early-2003, it has found little material evidence of a nuclear weapons program. The quantity of uranium that has been processed is nowhere near the requirement for a nuclear weapon, and the level of uranium enrichment achieved falls short even of what is needed for energy applications. To make the arduous transition from the 1.7 percent enrichment level achieved to the 95 percent required for one – merely one – nuclear bomb, would take Iran many years, even up to a decade.

Several rounds of inspection have been conducted by the IAEA and despite serious reservations about unwarranted intrusions into sovereign sites, cooperation from Iran has not been lacking. But this has not prevented the IAEA from demanding, first in September last year and then again in February, that Iran should go beyond the formal stipulations of the NPT, to adopt “transparency and confidence-building measures” that may be demanded at regular intervals.

Essentially, India is granted a special dispensation to join the global nuclear imperium as a country allowed to possess nuclear weapons, while Iran is required to submit to greater rigours than even the NPT dictates. This particular anomaly needs an explanation that goes beyond neoclassical economic theories, and to his credit, Tellis does make the effort.

Tellis argues that for one thing, by allowing India to join the non-proliferation regime as a state with an internationally recognised right to bear nuclear arms, the U.S. would be giving it an incentive to “scrupulously control its national capabilities”. This in turn would “choke off” the only real security threat emanating from India.

This assessment, which flatters India’s capacities and misrepresents its intentions, needs to be treated with some scepticism. In Tellis’ analysis though, it is only a brief preamble before the crux of the issue is approached. To bring India on board the counter-proliferation regime would be consistent, he argues, with the Bush administration’s “new policy of advancing India’s economic transformation and growth in national power”. Within this paradigm, attention needs to be focused on how India’s “military resources could be used collaboratively (with the U.S.) to advance the national interests of both countries”.

If there has ever been an instance in the annals of geopolitics, of one country seeking as a matter of declared policy, to enhance the power of another, it would be interesting to define the correspondences and divergences with the situation that the U.S. has adopted today in relation to India. In Tellis’ narration, the crucial point of transition came in early-2005, when the U.S. decided after months of deliberation and much secret confabulations, to clear the sale of an advanced fighter aircraft to Pakistan. The expected outburst of indignation from India was met with the assurance that the “hyphenated relationship” was at an end. No longer would the U.S. assess each policy decision towards one of the adversarial neighbours in terms of the other’s perception. Rather, the new game would explicitly recognise India’s pre-eminence in the region. Beyond this formal acknowledgment, the U.S. would take upon itself the mission of helping India achieve the status of a major world power in the 21st century.

Tellis argues that this would involve multiple benefits for the U.S. Among other things, it would ensure that India’s “nuclear weaponry and associated delivery systems would deter against the growing and utterly more capable nuclear forces Beijing is likely to possess by 2025”. And beyond the necessity of setting up a pivot around which the containment of China could be effected, India also would serve to lend a semblance of stability in a volatile neighbourhood. “The problems of regional order”, Tellis argues, “are unified by an overarching theme: the need to cope with state failure in almost every political entity on India’s periphery”.

Taking a broader view, Tellis concedes that the special exceptions made for India were likely to excite the jealousy of other aspiring regional powers. And in putting down these expectations, the U.S. needed to learn that consistency in standards was not a particular virtue. The need argues Tellis, is for a “proliferation of counter proliferation strategies”. Each country merited differential treatment, depending upon its “friendship toward and value to the U.S.”

These prescriptions are salutary in their healthy absence of principle. An India that is just a little excited in its self-awareness as an emerging world power, may well be seduced by this robust amorality. But there is a price to be paid for seeking this privileged position within the new global architecture of power. What that price would be is made amply evident in another product from the Carnegie Endowment. Though it predates Tellis’ work, the volume authored by George Perkovich and four associates from the Carnegie Endowment, was published in India at the same time. Its title, Universal Compliance, A Strategy for Nuclear Security, has the same breathless as Tellis’ work. But without being in any way picky, it could be pointed out that the title itself encapsulates a gigantic incongruity, since there are no formulae for security in the nuclear realm, only for relative degrees of insecurity.

Perkovich and his associates (referred to hereafter by the lead author’s name alone), expect in gross disregard of fact or reality, that the U.S. could credibly lead the new global strategic consensus by bringing into effect the commitment to disarmament that is enjoined on it by the NPT. They deserve the benefit of the doubt if only because their book was written before the NPT Review Conference of 2005, which ended in disastrous failure, primarily because the U.S. refused to countenance a final declaration which reaffirmed the “13 practical steps” towards universal disarmament that had been agreed five years prior. Those commitments, entered into by the Clinton administration at the preceding review conference, were deemed just too much of a sacrifice of national security interests by the cabal of hyper-nationalists surrounding Bush.

The 2005 Review Conference effectively put the faltering momentum of global disarmament in reverse gear. To be fair to him, Perkovich could have been hoping for a better outcome when he suggested that the U.S. should, following this event, “orchestrate a summit” involving all the recognised nuclear weapons states, to “clarify the commitments they will make to advance universal compliance with nuclear non-proliferation norms and rules”. Elsewhere, Perkovich points out that the very word “compliance” suggests an asymmetric distribution of rights and responsibilities, leaving far too much coercive power in the hands of a few and enjoining meek obedience upon the many. Though grounded in substantive features of the global architecture of power today, this attitude he argues, need not be either “ignored or indulged”.

Curiously though, Perkovich then proceeds to do just that: ignore the global sensitivities involved in compelling acquiescence to a U.S. scheme for nuclear non-proliferation. He also ignores a sustained track record of contrary behaviour by the U.S., which has seriously vitiated the climate for nuclear disarmament. Thus, the “13 practical steps” – in themselves a concession made by the nuclear weapons states to the growing impatience of the world community about the tardy progress of disarmament -- included the principle of “irreversibility” in arms reductions, and required that the U.S. and Russia, as the principal offenders in the nuclear realm, should preserve the Anti-Ballistic Missile (ABM) Treaty and hasten the entry into force of the Comprehensive Test Ban Treaty (CTBT). All three stipulations had been seriously mauled well before the 2005 Review Conference, and in all three cases, the most serious violations had come from the U.S.

To take just the principle of irreversibility, the Strategic Arms Reduction Talks (START) framework, allowed for a verifiable cutback in deployments of missiles by the two powers, though it was silent on the larger question of eliminating the nuclear warheads. Following a prolonged war of attrition by the right wing of the Republican party in the U.S., Bush transformed this process – with all its uncertainties on the dimension of warhead elimination – into a doubly uncertain one, with cuts in both delivery systems and warheads being potentially reversible. At the same time, he has repudiated the ABM Treaty, to accelerate research and development work on a technologically infeasible and financially profligate missile defence system, whose only enduring contribution would be to trigger an arms race in outer space. And he has shown little inclination to retrieve the CTBT from the legislative limbo into which it was cast by the Republican-controlled U.S. Senate in 1999.

All this makes for a rather flimsy moral platform from which to launch an ambitious agenda of “universal compliance”, more so since Perkovich’s blueprint involves an intrusive system of inspections, interdictions and interventions, organised and spearheaded by the U.S. It will involve cutting off access to the nuclear fuel cycle, rigorously inventorying all existing fissile material and placing it under tight custody, diminishing the role of nuclear weapons in national security strategies, and obtaining sanctions for tough action against violators.

With all this, Perkovich disfavours any disarmament initiative on the part of the U.S., arguing that the U.S. nuclear deterrent is an essential safeguard during the transition to a regime of “universal compliance”. He mildly criticises the current thinking in U.S. national security circles, which tilts towards using tactical nuclear weapons to “take out” enemy assets. His reservations on this score are derived not from ethical concerns, but from potential fallibilities of intelligence, as seen in the missile strike against a pharmaceutical factory in Sudan, and more catastrophically, in the invasion of Iraq.

Perkovich misses the point, so obvious from a non-U.S. perspective, that the threat of aggression, including through nuclear arms, is the worst form of incentive for reluctant nations to sign on to the non-proliferation regime. And when the aggressive instinct is unbridled, as by all accounts, it has with the Bush administration, then the environment is vitiated irretrievably. When forging a consensus however reluctant, becomes impossible, coercion remains the only recourse.

A few days after the Indian nuclear deal was solemnised, an arms control lobby in the U.S., which had always been deeply sceptical about its merits, put out a brief study seeking to debunk one of the platforms on which it had been constructed – India’s supposedly impeccable record in safeguarding sensitive technologies and meeting non-proliferation norms despite being outside the NPT orbit. Taking the instance of India’s uranium enrichment plant near Mysore, David Albright and Susan Basu, two prominent non-proliferation advocates, sought to paint a picture of clandestine procurement from abroad and consistent evasion of import controls by the DAE.

The account was of course, vigorously challenged in the decidedly DAE-friendly Indian media. But that is not perhaps the most interesting point about these exchanges. Rather, what is arresting is that Albright and Basu, sourcing their findings from a variety of published and unpublished accounts, construct a picture of gross under-performance by the DAE facility. Two decades after it was commenced, the project is far from producing enough enriched uranium to fuel a research reactor of fairly modest dimensions. It remains decades behind, in terms of meeting the Tarapur Atomic Power Station’s requirements and the more exacting needs of India’s nuclear submarine project and strategic arsenal.

Alibis of course could be found if needed, but those are of little concern in this context. What is relevant is that India’s modest achievements two decades into a uranium enrichment program should have provided it with quite a realistic picture of the technical constraints faced by Iran’s nuclear research. There was no reason in other words, why India should have bought into the grossly inflated assessment of the U.S., that Iran was menacingly close to acquiring adequate fissile material to assemble a weapon. That it did so is testimony to the fact that the strategic partnership with the U.S., involves not merely a sacrifice of principle, but a quite arrant disregard for facts.

The first down payment on the deal with the U.S. fell due rather rapidly. Within days of Bush’s Indian sojourn, the IAEA met in Vienna to debate the Iranian nuclear research program. Prime Minister Manmohan Singh had, just hours before, spoken to Russian President Vladimir Putin, seeking to ensure that the debate remained confined within the IAEA. He also upheld India’s belief that Iran should have access to the full range of nuclear technologies for peaceful purposes.

A last-minute Russian gambit failed, which would have transferred industrial scale uranium enrichment out of Iran, allowing that country only the limited option of laboratory scale experiments. Rudely flouting the assurance of the NPT that every member-state has the right to access nuclear technologies for peaceful purposes, the U.S. has repeatedly announced that Iran cannot be trusted with any stage of the nuclear fuel cycle. The most recent affirmations – from Vice President Dick Cheney and U.N. ambassador John Bolton -- came at the policy conference of the American-Israeli Political Action Committee (AIPAC), which devoted a substantial part of its three-day annual event to Iran.

Using the same platform, Daniel Gillerman, the Israeli ambassador to the U.S., engaged in a rhetorical flourish that could have been taken straight out of any political bigot’s notebook: “While it may be true -- and probably is -- that not all Muslims are terrorists, it also happens to be true that nearly all terrorists are Muslim”.

India has reason to worry about the company it is getting into. Addressing a carefully chosen audience in the picturesque environs of Delhi’s Purana Qila, Bush announced just before he left, that the U.S. and India are today “closer than ever before”. Indeed, there was no way that the two countries could shirk their common destiny of “leadership in the cause of democracy”. Should India buy into these rather quirky definitions – whether of “terrorism” or “democracy” -- it may well find itself a house divided against itself. And that would be a steep price to pay for the illusory security of nuclear deterrence.


[1] Ashley J. Tellis, India as a New Global Power, India Research Press, Delhi (under licence from the Carnegie Endowment for International Press, Washington DC), 2005, pp 121.

Media freedom, responsibility and regulation


March 2, 2006

To talk about the “media” today is to deal with multiple meanings. Variously perceived, the media (used here and elsewhere in this article, in the singular) is today a source of information and entertainment, as also the midwife of a union between the two. Increasingly again, it is serving for a growing number, as a forum of self-expression.

With several models available to study the modern media as a social reality, a self-serving myth continues to hold sway. The media in this portrayal is the institutional bearer of the social right to free speech. And global events in recent times have shown that the right to free speech is both contentious and elusive in its definition. The cartoon-caricatures of a revered historical figure, were in the perception of the Danish newspaper that recently published them, a mere articulation of its right to free speech. But for a major world community, this was an act of gross provocation, a manifestation of the licentiousness of western civilisation, which transformed free speech into a sanction to cause offence.

The problem is an old one for liberal democratic theory. When does one person’s right become an irksome intrusion into another person’s individual and social being? It is a dilemma that led to Isaiah Berlin’s celebrated elucidation of two notions of liberty: the positive and the negative. Positive liberty in his estimation involved the right of unbridled action with few social or institutional restraints. It also involved the potential for excess, for oppression of individuals in the name of some larger cause. Certain sections could in its name arrogate to themselves the right to decide what serves the cause of the larger social good, compelling others to acquiesce, often at the cost of their freedoms.

Positive and negative liberty
The consequences of positive liberty were for Berlin, too terrible to contemplate, which is why he advised that the concept be jettisoned as a basis of democratic liberalism. Far more manageable was “negative liberty”, which demarcated a zone of inalienable freedoms where the sovereignty of the individual could not be breached. Rather than defining an individual’s rights in terms of all that he could do, this notion confined itself to a range of actions where free will and choice could not be denied.

C.B. MacPherson, the Canadian political philosopher who has been a perceptive critic of Anglo-Saxon orthodoxy in the post-World War II years, pointed out in an important critique, that these notions are inherently flawed. They fail, for one thing, to take into account the possible constraints on individual conduct that skewed patterns of distribution of the means labour could impose. An individual who lacks the means to earn his subsistence would be obliged to put himself at the service of another, conferring on the latter, an “extractive power” over his labour capacities. And precisely because he is deprived of his freedom to choose how his faculties and abilities should be utilised, this individual is deprived of the opportunity to develop his talents and personality in the best manner possible.

To find a way out of this dilemma of modern political theory, MacPherson posed two alternative conceptions: of “counter-extractive” and “developmental” liberty. The former enables an individual to resist the extraction of his powers and capabilities by another, merely because he lacks the means to render his labour productive. The latter is a positive affirmation which goes beyond the preservation of individual sovereignty, to enable the exercise of freedoms for the development of the individual’s particular personality and genius.

How would these concepts bear up when imported into the domain of free speech? Counter-extractive liberty could be interpreted as the right of the individual to be free of manipulated images and information that vitiate his sovereign right to form an independent opinion. And developmental liberty would be the power to put forward a viewpoint before society and have it assessed for its intrinsic merit. The former involves fashioning an area of individual autonomy where the intrusive attentions of the media do not reach. The latter involves ensuring that every individual has access to the channels of information dissemination.

Interestingly, article 19 of the Universal Declaration of Human Rights conceives of precisely this kind of a radical investiture of rights in the individual. “Everyone has the right to freedom of opinion and expression,” it states, and “this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers”.

The compulsions of the real world impose the need on most national constitutions to abridge this absolute right. The Indian Constitution illustratively, speaks of article 19 freedoms as necessarily qualified by “reasonable restrictions”. The grounds for these restrictions, where it concerns free speech, are clearly spelt out: “the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence.”

In all the debates that have taken place about the media and its social role, freedom is necessarily balanced by a notion of responsibility. To maintain the uneasy balance between information as commerce and information as a basic human entitlement, reliance is placed not so much on curbing the pursuit of profit, but on ensuring the sustenance of media diversity. Commerce need not be antithetical to the right to information, provided there is a sufficient plurality of sources from which the public can draw. A liberal democracy allows for few institutional restraints on the functioning of the media, leaving the marketplace of ideas as the final arbiter. In matters that vitally involve the public interest, where there is a risk of social disorder or offence to good taste, decisions are left to the prudence and sense of social responsibility of the media.

Yet there are circumstances in which questions that seemed banished for all time, emerge with a fresh vigour. In 2003, the Standing Committee on Information Technology of the Indian Parliament, urged the Government to prescribe a “ratio for coverage of news contents and advertisements in newspapers”. This was necessary since, as the Committee observed, “a tendency is being noticed in the leading newspapers to provide more and more space for advertisements at the cost of news items”.

Price regulations and the right to free speech
The Government for its part responded with a plea of inability. Both a prescribed ratio for advertisement space in newspapers and a “price-page schedule” – a rule requiring newspapers to increase their selling price with the number of pages printed – had been under active consideration, said the Ministry of Information and Broadcasting. But these matters had not proceeded far “owing to legal and constitutional complexities”.[1]

It would be a misperception to believe that these outlandish policy options are the exclusive domain of politicians, since a “price-page schedule” to restrain fratricidal battles within the press, has been a part of the public debate on the Indian media. It proponents indeed, have included many with vital interests in the industry. The awareness that unlike in most other industries, price competition in the media could be antithetical to consumer interest is well developed, as also the belief that newspapers are an institution that require the controlling hand of public policy when self-discipline fails, as it inevitably must.[2]

Among independent India’s first exercises in enunciating a theory of the media in society, was the Press Commission appointed in 1952. Without undue fuss or ceremony, this body went to the core issue in newspaper economics: the relative proportion between circulation and advertisement revenue. And it underlined that this really was the crucial variable in determining how far the press remains an institution serving the public interest.[3]

The price-page schedule was the policy instrument through which the objective of media diversity was sought. In accordance with the powers conferred by a law adopted by the Parliament in 1956 the government in 1960 issued the Daily Newspapers (Price and Page) Order, an intrusive set of rules that sought to micro-manage every parameter of a newspaper’s functioning.[4]

In 1962, in the case of Sakal Newspapers versus the Union of India, the Supreme Court held the Price-Page Schedule violative of article 19 of the Indian Constitution. Handing down its ruling in the case, India’s highest court found that the order took away the freedom of the newspaper to charge whatever price it chose, constricted its ability to disseminate news and opinions, and cut into its commercial fortunes by limiting advertising space.

It was a curious and contrary case. The Supreme Court heard arguments on behalf of the Government, that the order in dispute, would “promote further the right of newspapers in general to exercise the freedom of speech and expression”, rather than the opposite. The space allocated to advertisements, the Government pointed out, varied between 46 and 59 percent of total printed area and these brought in “substantial revenue” which enabled the newspapers to be sold at “a price below the cost of production”. In consequence, “newspapers of long standing” which had “built up large and stable advertisement revenue” would be “in a more advantageous position” and could “squeeze out” newcomers, “with the result that they are able to destroy the freedom of expression of others”.[5]

India’s highest judicial body disregarded all these arguments, ruling that free speech as a right, applied to every citizen of the country “not merely to the matter he (sic) is entitled to circulate, but also to the volume of circulation”. By fixing a minimum price for the pages a newspaper is “entitled to publish”, the Government aimed not to ensure fairness for the buyers, but to curtail the circulation of some newspapers. And if the “area for advertisements is curtailed the price of the newspaper will be forced up. If that happens, the circulation will inevitably go down.”[6]

Free speech as commerce
Revisiting the issue, the Second Press Commission appointed in 1978, affirmed the fundamental importance of Article 19, but baulked at the judicial orthodoxy on the “price-page schedule”. Far from the scenario foreseen by the Supreme Court, the Commission concluded, the objectives of this regulatory device were to “advance freedom of speech and expression” through the “promotion of competition and prevention of monopoly”.

This rather ambivalent situation provides the context for grappling with another significant judicial intervention in interpreting the free speech right, which came in a case involving the publishers of The Times of India. At issue was a government notification, issued in a situation of acute newsprint scarcity, limiting allotment of the commodity to publishers in accordance with their reported consumption. Newspapers that published in excess of ten pages were required to bring down their daily offering to that number. They would not be permitted to reduce circulation to maintain or increase the number of pages. To provide a full day’s complement of news, publishers could rationalise their allocation of space between editorial and advertisement matter. Or they could maintain profitability by curtailing news coverage to accommodate advertisements.

In October 1972, the Supreme Court decided that the order was violative of the Constitution. The judgment in the case of Bennett Coleman and Company Ltd versus the Union of India is of historic significance, since it lays out a whole range of norms on the exercise of the right to free expression. Addressing the issue of the locus standi of the petitioners, the majority on the bench, with Justice A.N. Ray speaking, held that that the “individual rights of freedom of speech and expression of editors, directors and shareholders, are all expressed through their newspapers”.[7] A few pages on though, the majority opinion effectively widened the ambit of the right: “It is indisputable that by freedom of the press is meant the right of all citizens to speak, publish and express their views. The freedom of the press embodies the right of the people to read. The freedom of the press is not antithetical to the right of the people to speak and express”.[8]

Whichever way it was considered, the restriction on newsprint use by a newspaper meant a serious abridgment of free speech. If the volume of news disseminated was reduced, that in itself was a loss to the public. And if the space devoted to advertisements were to be curtailed, the newspaper would suffer serious financial losses, “weaken” and perhaps “crumble”.[9]

The rest of the judgment clung very closely to the liberal orthodoxy: that governmental regulation is an evil more invidious than the prospect of private monopolies. Called upon to address the latter issue, the majority on the bench concluded without unduly bothering themselves with facts, that “the press is not exposed to any mischief of monopolistic combination”. And even if it was otherwise, newsprint allocation could not be a feasible “measure to combat monopolies”.[10]

A significant dissent
Of special significance is the lone dissenting judgment delivered by Justice K.K. Mathew, which essentially reverses the perspective -- rather than blandly rule it out, the judge explicitly concedes the possibility of a conflict between the public interest and the profit motivations of the press. Using a “theory of the freedom of speech” that essentially views it in terms of twin entitlements -- to speak and to be informed – Justice Mathew observed in his dissent, that “the distribution of newsprint for maintenance of (newspaper) circulation at its highest possible level .. (would).. only advance and enrich that freedom”.[11] As a constitutional principle, “freedom of the press” was “no higher than the freedom of speech of a citizen”.[12] What was essential in the circumstances was to evolve “an affirmative theory underlying freedom of expression” and to attend to the “various conditions essential to maintaining a workable system”.[13] The problem at hand was of bringing “all ideas into the market (to) make the freedom of speech a live one having its roots in reality”. In pursuit of this ideal, it was necessary as a first step, to recognise “that the right of expression is somewhat thin if it can be exercised only on the sufferance of the managers of the leading newspapers”.

Freedom of expression in other words, also involved the right of access to media space. And this requirement would be met only through the “creation of new opportunities for expression or greater opportunities to small and medium dailies to reach a position of equality with the big ones”. This was as important, said Justice Mathew, “as the right to express ideas without fear of governmental restraint”.[14]

“Access” was one of the most crucial questions raised in the Justice Mathew’s dissent: access both of the public to the media environment and of the media organisation to the essential resources of its trade. Though the latter was the key issue before the bench, the dissenting judgment tied up this issue with the larger one of the public function of a newspaper and its socially enjoined duty to reflect the variety and diversity of the milieu it operated within.

An individual citizen’s access to the media, as a right, was the subject of the Supreme Court’s 1992 ruling in the case of Manubhai Shah vs Life Insurance Corporation of India. The Life Insurance Corporation (LIC) was obliged under the ruling, to publish an article highly critical of its functioning in a journal meant for its policy-holders, agents and the general public. The argument that the journal was an in-house publication to which the general public was not entitled access, was denied by the Supreme Court on a number of grounds. But LIC was in a sense, a soft target – a government-owned corporation for which publishing was a peripheral activity. The same issue in relation to the media has not quite been addressed with any degree of rigour.

Whose freedom: the advertiser or the public?
To revisit this entire sequence of rulings, it is clear in the light of India’s media experience through the 1990s, that the relationship between circulation and advertisement revenue is not quite as neat as the Supreme Court believed it. Advertisement revenue is dependent not merely on gross circulation, but more crucially, on audience demographics. When the Times of India proudly proclaimed that it had crossed the magical threshold of a million in circulation in 1996, it did not in the breathless ardour of this achievement, inform readers how its printing presses were sustaining this output, when every additional copy was being sold at a price rapidly plunging below production cost. The answer simply was that the TOI had assembled an adequate war chest from its conquest of the advertising market, to be able to ramp up its financially draining output and reach the demographic segments of the most intense interest to advertisers.

The situation was the exact converse of what the Supreme Court had considered in the Sakal case, not of a newspaper being forced to raise prices because it was deprived of advertisement space, but of a newspaper able to slash prices and drive out competition because it had managed to establish a pre-eminent position in the ad bazaar. Advertisers unlock the doors to circulation and vice versa – though the newspaper that delivers the high purchasing power demographic segments to the advertiser has the potential to earn profits beyond the reach of others.

In short, the advertiser is king and there is nothing he likes more than a “feel good” ambience. As far back as 1997, when the Indian media market was just beginning to see the new philosophy in action, without quite understanding its motive forces or intentions, an analyst in the respected professional forum, the Columbia Journalism Review was writing about the “ad/edit chemistry .. changing for the worse”. “Corporations and their ad agencies have clearly turned up the heat on editors and publishers”, he wrote, “and some magazines are capitulating, unwilling to risk even a single ad”. This was turning up the competitive pressure on other publications, making it “tougher for those who do fight to maintain the ad-edit wall”.[15]

The motivations of the advertisers were clear. A product tailored to highly refined tastes, would look distinctly drab when placed in an “editorial context” that referred to the seamy underside of the good life enjoyed by the few, that drew attention to a world where poverty and deprivation are rampant, and ill-health and disasters extract an enormous toll in human suffering. Specific cases of this enforcement role played by the advertiser were flagged. Colgate-Palmolive, the worldwide consumer goods giant for one, had circulated a policy statement that it would not allow ads in a “media context” containing “offensive” or “antisocial” content. Much like the praise of motherhood as an institution, this statement of intent would have been unexceptionable, if Colgate had chosen to define what it meant by each of these adjectives. But to leave the matter vague was the preferred resort, followed by the menacing information that the company had charged “its advertising agencies and their media buying services with the responsibility of pre-screening any questionable media content or context”.[16]

In the Indian situation, the Times of India (TOI) group, as the most successful print media organisation – which today is at the vanguard of rapid diversification into the audio-visual and online spaces – is living proof of the benefit of planning ahead to accommodate the advertiser. Beginning in the mid-1990s, the TOI began a shift of content towards fashion, lifestyle and entertainment that had its loyal readership thoroughly flummoxed. But even as many among the older audience cancelled their subscriptions in disgust, the newspaper succeeded in attracting new readers from unexplored demographic segments, like the youth and the high purchasing power strata. At the same time its advertising revenue exploded and it was able to sustain a price war in Delhi – perhaps the fastest growing newspaper market in India – that severely weakened the competition.

Pay your way: the right of access defined
In March 2003, the TOI announced a new initiative that was professedly, part of its effort to stay current with journalistic practices. For an enterprise as crass as charging a fee for favourable editorial coverage, the TOI managed to adopt a rather lofty idiom of expression. The “Medianet” initiative as it was called, was in the words of the TOI management, part of its “desire to drive the market, to constantly break new ground”. The deficiency of traditional news-gathering techniques was apparent especially in new areas of audience interest – such as “lifestyle, fashion, entertainment, events, product launches, social personalities and city happenings”. Public relations agencies had a much more sensitive feel of the social pulse in these areas, yet no feasible method of regulating the flow of news from this source had been devised.[17]

Subtlety aside, this was a reference to the pervasive journalistic practice of accepting and even actively soliciting, monetary and other forms of gratification for news and editorial coverage that might be of material benefit to particular individuals or entities. Through Medianet, the TOI was, in accord with established rules of market competition, seeking to curb this corruption of the trade by institutionalising it. Objectivity and integrity of editorial content would no longer be at risk from the susceptibility of individual journalists to material inducements. The organisation itself would bear that onus of vitiating news content in pursuit of its monetary aggrandisement.

Medianet is now business as usual in the TOI group. The wave of adverse notice that it generated has subsided and the bottomline of the company, endowed with greater lustre. Profit finally is the most effective solvent for all the ethics and principles that journalists may in their quixotic fashion, still choose to cling on to. And all the momentous debates which went upto the highest judicial forum in the land and generated subtle and often pathbreaking pronouncements on the right to free speech, the right of access to media space and time, and other matters of enormous public import, have finally been reduced to the single imperative of profit. The fundamental rights are a live and vital charter for those who can pay their way to it.

India is today one of the few markets in the world where newspaper readership is growing significantly. The Indian media market in turn, is expected to register among the world’s fastest growth rates over the next few years. There are several factors driving this expansion, among them the vast literacy deficit in the country, and the impulse that neo-literates have to flag their arrival as players in the public domain by becoming active consumers of information. But with the advertiser being king and “pay your way” being the key to access, the contribution that the media can make to the evolving character of the public discourse, remains uncertain at best. The shape of Indian democracy has been determined to an extent by the strata that have entered the terrain of active political contestation in increasing numbers over the last decade-and-a-half. Its future will be moulded in part by the new voices that will resound in the political battlegrounds over the next few years. In its present shape, the Indian media is equipped neither to give voice to these aspirations, nor to render the polyphony of emerging social classes into something approaching coherence. With little left by way of a contribution the public discourse, the Indian media as an institution, could well be rapidly receding in terms of social relevance. That does not mean of course, that its prospects for earning a profit are any the worse.

[1] Standing Committee on Information Technology, Thirteenth Lok Sabha, 63rd Report, Lok Sabha Secretariat, December 2003, pp 39-42.

[2] See for instance, the report datelined Mysore, April 4, 2005, in The Hindu, which quotes a “veteran journalist and Kannada activist Patil Puttappa” decrying the price war among newspapers. This was a “dangerous trend”, he said, which “could lead to the death of many newspapers, and in the ultimate analysis, the death of democracy”. It needed to be regulated through a mechanism that would fix the price of a newspaper on the basis of the number of pages it printed. Mooted and abandoned in the past, it needed to be revived, said Mr Putappa, “failing which many small newspapers would die”.

[3] Vanita Kohli, The Indian Media Business, Response Books, Delhi, 2003, pp 18-9.

[4] 63rd report of the Standing Committee on Information Technology in the Indian Parliament (Thirteenth Lok Sabha), pp 39-42.

[5] This and all other citations are from the Sakal Papers judgment delivered by the Supreme Court, as recorded in Supreme Court Recorder (SCR). Following standard citation procedure, this would be 1962 SCR (3) 842. The citations in this paragraph are from pages 847-8. The judgment is available on the web at the following address:

[6] Ibid, p 862.

[7] Bennett Coleman and Company Ltd versus the Union of India, 1973 SCR (2), p 759. The judgment is also available on the web at the following URL:

[8] Ibid, p 760.

[9] Ibid, p 761.

[10] Ibid.

[11] Ibid, p 764.

[12] Ibid, p 803.

[13] Ibid, p 805.

[14] Ibid, p 814.

[15] Russ Baker, “The Squeeze”, Columbia Journalism Review, September/October 1997. As illustration, the following case is cited: “A major advertiser recently approached all three newsweeklies - Time, Newsweek, and U.S. News - and told them it would be closely monitoring editorial content. So says a high newsweekly executive who was given the warning (but who would not name the advertiser). For the next quarter, the advertiser warned the magazines' publishing sides, it would keep track of how the company's industry was portrayed in news columns. At the end of that period, the advertiser would select one - and only one - of the magazines and award all of its newsweekly advertising to it.”

[16] Ibid.

[17] The entire concept note of Medianet is available on the web at:

RSS Demographics: "Hum do, hamaare satrah"

The bizarre demographics of paranoid Hindutva

Demography is destiny. People are mere abstractions, tiny fractions of the demographic aggregates that serve the larger causes of history.

In Sri Lanka, newly elected President Mahinda Rajapakse appoints a Prime Minister known to be a hardliner on the ethnic question, distinguished for a recent declaration that unfettered Sinhala procreation is a necessary weapon in the war against the minority Tamils.

In the U.S., Harvard political scientist Samuel Huntington – his “clash of civilisations” thesis looking rather jaded and worn -- turns his attention to the threats posed to the American identity by the changing demography of the southern U.S.

In Israel, the chastening realisation that Jews may soon be a minority in the land between the Jordan and the Mediterranean, provokes a hasty stampede out of Gaza, converting a land once held captive by soldiers and settlers into the world’s largest unsupervised prison.

And in India, the man who disavows a political role and yet commands enough authority to determine who should lead the country’s principal opposition party, exhorts every Hindu family to have at least three children. Anything less, he says, would be inadequate to beat back the threats to national identity posed by Muslim demographics.

Having set underway a tortured process of leadership change in the BJP, RSS chieftain K.S. Sudarshan evidently believes that a change in personnel is only part of the mission. A concern that goes far beyond the immediate task, to be accomplished before the year-end, is to lay down ideological parameters for the new BJP president. Demography is a key ingredient of this ideological core of the Hindutva project. And Sudarshan underlined that with his participation in the function marking the re-release of a book that has run the gauntlet of critical scrutiny, and come out distinctly the worse for it.

It is not known if the revised edition of "The Religious Demography of India", a book co-authored by two physicists and one metallurgist – none of them distinguished for his knowledge of the social sciences – is any less misconceived in its statistical procedures and any less rabid in its message than the first. Ashish Bose, one of India’s leading demographers, had in reviewing the initial offering, held that neither the methodology nor the interpretation of data stood up to scrutiny. And from this assessment, he proceeded to pose a key question, with careful understatement: “are scholars entitled to manipulate census statistics in the way these unknown scholars from an unknown institute have done?”

Manipulation of statistics is clearly the essence and the message was rather crudely summed up in Gujarat chief minister Narendra Modi’s brazen encouragement of cultural animosity against the Muslims, in his “hum paanch, hamaare pachees” sneer, delivered from an election campaign platform in 2002.

In Sudarshan’s rendition, the jibe directed at the religious minorities is converted into an exhortation to the majority. Hindus, he urged, should not be beguiled by official slogans such as “hum do, hamaare do” or its more conservative variants. Their patriotic duty was to ensure at least three children in every family, though any figure above that would be still better. Perhaps taking his cue from the book that he was releasing, the RSS chief proceeded to lay out the laws of numerical progression for families, based on various configurations of reproductive behaviour. A family with twelve children, he pointed out illustratively, would in 120 years, have engendered 1,200 descendants.

Sudarshan’s arithmetic is of a piece with that employed in the book he chose to sanctify with his presence. It is a methodology that yields the alarmist conclusion that by 2050, “Indian religionists” will be reduced to a minority in “India”. The definitions confound all commonsense, since “India” in this rendition is all of present-day India, Pakistan and Bangladesh. Sudarshan’s demographic war in this sense, goes far beyond the territorial frontiers of India.

The Arya Samaj leader Lal Munshi Ram, or Swami Shraddhanand as he later came to be addressed, had in the early years of the last century, raised the alarm that Hinduism was under siege, and could only be salvaged by performing the purificatory ritual of shuddhi on the entire Muslim population within the Indian subcontinent. But in the interests of ensuring a hospitable living space for the religious nationality, he insisted, the wild frontiers too needed to be tamed. Once the shuddhi of the Indian population was completed, the missionaries of the new nationalism needed to turn their attention to Afghanistan and perhaps even beyond.

In refurbishing these messages for the age of globalisation, Sudarshan, and the authors of Religious Demography, bear witness to the unlearnt lessons of history. Despite all the bloodshed and human suffering it has caused through its career, historical revanchism still retains sufficient appeal to demand that the social sciences submit to its demands. Heights of methodological absurdity are the inevitable outcome, not to mention rhetorical excesses that would make the worst demagoguery pale in comparison.

Reflections on the earthquake in Kashmir

A message from Kashmir to the governments on either side: get out of the way

Sukumar Muralidharan
October 24, 2005

The devastating earthquake in Kashmir confronted the two affected countries with a challenge they were clearly unequal to. The harsh Himalayan winter was imminent. And relief operations in both India and Pakistan had simply failed to mobilise the material resources to begin treating the injured and rehabilitating the homeless.

Pledges of assistance had come in with much fanfare from around the world. But when the sums were totalled, the money involved was derisory – two weeks after the disaster, aid pledges from all over the world totalled a mere $ 90 million, when conservative estimates by the U.N. put the requirement at just over $ 300 million. And the monetary magnitudes involved, in all their meagreness, were immediately of no substantive use. By the time they traversed the bureaucratic channels of aid disbursement, it was clear, the harsh Kashmiri winter would have been well advanced. And a natural disaster would have been transformed into a manmade catastrophe.

Disaster fatigue is a worrying reality of the global situation today. But even in a world that has become cynical about human suffering, the Kashmir disaster has challenged the humanitarian impulse to break free of the layers of political deadweight it is normally buried under. It is still delicately referred to as the South Asian, or the Pakistan, earthquake. To concede to it the title of the Kashmir earthquake would be to recognise that a region abandoned by the world has an identity and a set of interests uniquely its own. But given the legacy of the dispute between two neighbouring states over Kashmir, the questions are unavoidable. When governments are unable to deliver what they are obliged to, as part of the social contract that keeps them in authority, will they step aside and allow the people to do what they can? Or will they insist on their monopoly on wisdom, even when in default on their side of the bargain?

The Kashmir earthquake in short, offers governments on both sides a pretext. Donning the vestments of humanitarianism, they could renounce the rights they have assumed and allow the people of Kashmir to speak for themselves, not to mention, organise relief efforts on their own. If the synergies among the people artificially separated for decades by the Line of Control (LoC) were to be recruited to a humanitarian cause, the final effect could well be beneficial. Indeed, people power, when fused with a worthy humanitarian cause, could well absolve floundering governments of the burden of blame for failing to measure up.

General Pervez Musharraf, the Pakistani president and army chief has long spoken of the opportunities that he has uniquely enjoyed to “resolve” the Kashmir dispute “once and for all”. The Kashmir earthquake afforded him a renewed opportunity to revisit this familiar theme. But first he had to deflect the overtures from India, to relax the rigours of crossing the LoC for a humanitarian purpose. It did his confidence little good that the Indian proposal involved defence personnel traversing the border by both air and land, to offer their humanitarian services to the affected Pakistani population.

Early claims that Indian Army troops had crossed the LoC to deliver relief supplies were rudely refuted. And the initial effort by Indian Air Force transport planes to ferry across vitally needed equipment and stores were rebuffed. It was only after a prolonged process of negotiation and possibly the mediation of certain external powers, that the first Indian military planes were allowed to land on Pakistani territory.

About ten days after the disaster, Musharraf chose to make a dramatic offer to India which far surpassed anything that had been proposed from this side of the border. Kashmiris he said, should be freely allowed to cross the LoC in both directions, to partake in the grief on either side and to be part of the effort at its mitigation. He followed this up by reprising his familiar theme that the “dispute” could be resolved for all time by converting the tragedy of the Kashmir earthquake into an opportunity. The LoC which kept apart a people and made them victims of the rivalry between hostile States, in short, should be rendered irrelevant.

India reacted cautiously to this effort by the Pakistani general to steal the platform that it thought it had a unique claim over. Rather than address the Musharraf proposal directly, it proposed instead that telecommunication links across the LoC, shut down since 1990, be reopened. And while the two governments kept talking across each other, rather than engage in a purposeful mutual dialogue, militant groups on both sides of the LoC were stepping into the breach, knitting together civic solidarities, enabling people to deal with the adversities of nature without putting in jeopardy their inherent sense of self-esteem. In insisting that relief efforts should conform to the model of a patron-client relationship, governments on both sides of the LoC may well have conceded valuable ground to the militant groups. Politicking in the context of a natural disaster in other words, is always bad policy.

The politics of poverty and inequality -- An article from July 2005


Sukumar Muralidharan
July 2005

The discovery of the poor as a political resource is perhaps an abiding contribution that Indira Gandhi has made to Indian democracy. Her invocation in 1971 of the slogan of “Garibi Hatao”, was a moment when electoral politics in India, which had sunk into a low-level equilibrium of recrimination and strategic stasis, acquired a new energy.

The discovery of the transformative potential of the poor remained incomplete. Indira Gandhi was eager to recruit them to her political cause but disinclined to undertake the kind of radical redistribution that would make a significant dent on poverty. Her anti-poverty programmes were financed out of a burgeoning budget deficit. And with the agricultural economy then being in a state of stagnation, the increase in purchasing power in the hands of the poor was not matched by a growth in the availability of their items of staple consumption. The consequence was an inflationary spiral, considerably aggravated by speculative hoarding by private trade. When international oil prices exploded late in 1973, inflation in India acquired crisis proportions, compelling first, a rapid scaling down of the ambition with which “Garibi Hatao” was being pursued, and then, under the Emergency regime, an actual reversal of course.

It is yet unclear what lessons, if any, have been taken on board from this experience. The Employment Guarantee Act that both houses of Parliament recently passed, has since been signed into law by the President. Early indications from Prime Minister Manmohan Singh and Finance Minister P. Chidambaram, are that the outlays necessary to operationalise the law will be found from existing heads of expenditure, by reclassifying the allocations already committed for subsidies, rural development and employment generation programmes. This would politically be a hazardous course, to withdraw benefits and entitlements from certain regions and social sections in order to guarantee employment in 200 of the country’s more impoverished districts.

Failing a significant additional effort at taxation, which would in effect reverse the course of fiscal policy followed over the last decade-and-a-half, the prognoses is for an unrelenting rise in the budget deficit over the next few years. There is a viewpoint that this need not necessarily engender inflationary pressure as in past years, for a variety of reasons. Unlike the early-1970s, buffer stocks of food with the government and its agencies, are now a veritable embarrassment of riches. Far in excess of prescribed norms, their carrying costs have become a major burden on the public exchequer. If the rise in purchasing power among the poor were to lead to a depletion of these stocks, the net effect would be not an increase in the budget deficit, but quite conceivably, a decrease.

As with food, so also in several others sectors catering to the consumption demands of the poor, there is substantial excess capacity available in the economy. Rising demand for these items of consumption could easily be met by merely ramping up production, without the slightest risk of inflation.

If the growth experience of the 1990s and beyond were to be considered, there would be ample reason to be cautious about these arguments. The enormous accretion to food stocks has happened in spite of a steep decline in the growth rate of agriculture in the 1990s. The excess of supply in other words, has been achieved only by suppressing the demand for food amongst the poor. This has also been key to understanding the low-inflation experience of the last decade or so.

A further complication is likely to arise in the labour market once the employment guarantee kicks in. A vast sea of unemployed workers has been an assurance for agricultural capitalists that wage rates will remain low. But with the working population likely to enjoy fresh livelihood options once the employment guarantee comes into effect, wage rates paid by larger farmers who hire in labour, are likely to rise. This is likely in turn, to engender a demand from their side for higher support prices, creating its own dynamic in terms of the budget deficit, the issue prices of food, and the inflationary process.

Indications are strong that no serious dent can be made on poverty today, without an effort at the redistribution of income and wealth. It was a fundamental premise of the decade-and-a-half of globalisation, that growth will on its own, create a momentum down the scale of income and wealth, enabling increasing numbers of the working population to migrate out of poverty. That premise is now increasingly recognised as deeply flawed. Final confirmation came from the World Bank, one among the two principal missionaries of globalisation, in its recent World Development Report, which was evocatively titled, “Equity and Development”. Its message was summed up by chief economist Francois Bourguignon, with an appropriate economy of words: “Equity is complementary to the pursuit of long-term prosperity. Greater equity is doubly good for poverty reduction. It tends to favour sustained overall development, and it delivers increased opportunities to the poorest groups in a society”.

There is a hint of revisionism about the World Bank’s recognition that the high growth rates registered in India and China have not quite been as salutary for the removal of poverty as earlier assumed. The picture of global inequalities may have been somewhat mitigated, it argues, but “the best available estimates suggest that inequality in India has been rising, but with no solid assessment of by how much”.

This undoubtedly represents a rather late awakening for the World Bank. It has for long been argued by economists who have chosen to look at the evidence with some rigour, that the growth processes of the last decade and more, have been profoundly unequal in their implications. Personal consumption has undoubtedly been increasing in the two countries – China and India – that are today identified as canonical instances of growth driving a rapid decline in poverty. But rising consumption cannot be assumed to be an index of diminishing poverty. It could indeed, be merely an indication that inequality is increasing.

The evidence that global inequality increased during the 1990s is now considered fairly compelling. Globalisation, in fact, has been a polarising process, increasing the gaps between industrialised and developing countries on one side, while sharply widening the disparities within classes in each of these countries. This issue, which has been little considered in the last quarter century, is now recognised as an integral part of the battle against world poverty. As the economist Robert Wade put it in 2001: “Many analysts apparently take it for granted that global inequality is falling. Others think it sufficient to focus on poverty, and ignore inequality as such. Both these views need to be challenged. New evidence suggests that global inequality is worsening rapidly. There are good reasons to worry about that trend, quite apart from what it implies about the extent of world poverty”.

An innovation that Wade makes is to classify the urban and rural parts of China and India separately in estimating trends in economic inequality. Though his study covers only a limited number of years ending in 1993, the trends it highlights have undoubtedly persisted since. The reasons for growing income inequality that he identifies are several:
faster economic growth in the advanced countries of the Organisation for Economic Cooperation and Development (OECD);
faster population growth in the developing countries;
slow growth of output in rural China, rural India and Africa; and
rapidly widening output and income differences between urban China on the one hand, and rural China and rural India on the other.

The economists Thomas Piketty and Emmanuel Saez, in introducing their pioneering work on income inequality in the U.S., mention in passing, as a curiosity, that few studies since Simon Kuznets’ work in 1953, have really been concerned with this issue. There have clearly been some ideological barriers to research on economic inequality in recent times. And the reasons though not part of the focus of the Piketty-Saez study, are inferentially established by its conclusions:
a sharp increase in the share of the top 10 percent of the U.S. population in total income, has been a feature of U.S. growth processes since the early-1980s.
The trend indeed, begins to accelerate in the mid-1980s and gains further momentum in the mid-1990s.

A similar increase in the share of the top one percent of the U.S. population is also evident. Indeed, if 42 percent was the share of the top 10 percent in the national income, the top one percent alone accounted for 14.5 percent in 1998. And even though the Piketty-Saez study does not cover this period, it is a reasonable conjecture that the degree of inequality should have increased with the sweeping tax cuts that were among George Bush’s first policy initiatives since assuming the U.S. Presidency in 2001.

The U.S. experience, as Piketty and Saez indicate, has been rather different from that of France, which witnessed a relatively more equal distribution of income through the 1990s and beyond.

A similar estimation of income inequality using individual income tax returns data for developing countries is impossible, since tax administrations in these countries typically cover no more than a minute fraction of the population. A recent study attempted the much more modest exercise of computing income inequalities within the top one percent (or top percentile) of the Indian population using income tax returns data. The results though perhaps not definitive, are nevertheless important signposts to what could have been happening to Indian society under a regime of globalisation.

The study reveals a rapid increase in top income share since 1980-81, an increase that indeed, is sustained through the decade of the 1980s and picks up fresh momentum in the 1990s, with perhaps fewer fluctuations. A striking feature of income distribution in the 1980s was the relentless increase in the share of the top 0.01 percent of the population in total income. From 0.40 percent in 1980-81, the figure increases to 0.64 percent in 1990-91, before finishing the decade at 1.57 percent.

The “gradual liberalisation of the Indian economy”, the authors conclude, “did make it possible for the rich (the top 1 percent) to substantially increase their share of total income”. However, the 1980s and the 1990s were significantly different, in that in the former decade, “the gains were shared by everyone in the top percentile”, while in the latter, “it was only those in the top 0.1 percent who made big gains”. “This suggests the possibility”, the authors surmise, “that the ultra-rich were able to corner most of the income gains in the 1990s because they alone were in a position to sell what the world markets wanted”.

The claim that poverty has diminished is not inconsistent with the picture of growing inequality. The figures that have been officially adopted by the Government of India though, are considered rather infirm, overstating by a large degree, the extent to which poverty may have fallen. It is now the official orthodoxy in India that between 1993-94 and 1999-2000, when the 50th and 55th rounds of the National Sample Survey on consumption expenditure were conducted, the number of people living in poverty declined by the order of 60 million, with the poverty rate itself falling to 26 per cent. Apart from the fact that this narrative is inconsistent with the larger picture – of falling agricultural growth rates, growing “casualisation” of employment, and declining per capita availability of basic subsistence goods – there is strong reason to believe that it is a statistical illusion, engendered by a change in survey methodology in the 55th round. Indeed, the economist Abhijit Sen, now a member of the Planning Commission, has concluded after a careful reevaluation of the survey data, that the second half of the 1990s and beyond, may have been a period when progress was halted or perhaps even reversed, in India’s battle against poverty.

The economist Angus Deaton has observed, that the economic reforms introduced in India in the 1990s have remained controversial, as have “their effect on poverty”. This debate is not unique to India, says Deaton: “The worldwide controversy about globalisation and its effects on poverty and inequality has followed much the same lines as the internal debate in India”. Because India “accounts for about 20 percent of the global count of those living on less than $1 a person per day”, what happens in India “is not only a reflection of the worldwide trend, but is one of its major determinants”. With the Employment Guarantee Act, the Manmohan Singh government now has an opportunity to decisively influence the global debate and chart a new path out of the poverty trap. Whether it will succeed in discarding the old nostrums about growth being an adequate antidote for poverty, and break out of the stifling straitjacket of fiscal conservatism, remains to be seen.