swadeshi · 2 swadeshi patrika february - 2009 letters hurt sentiments swadeshipatrika is an...

February - 2009SWADESHI PATRIKA 1

SwadeshiPATRIKA

EDITORAjay Bharti

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

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

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

E-MAIL : [email protected]

CONTENTS

cover page

Vol-14, No. 2, Maag-Phalgun 2065 February - 2009

COVER ARTICLE 4We need to debate and perhaps comprehensivelyoverhaul the concept of corporate governance, urgesMR VENKATESH.

Make government’s audit compulsory for all bigprivate sector companies suggests DR. ASHWANIMAHAJAN. 7

INTERVIEW 9Free, frank and candid views articulated bySH. ARUN OJHA JI, National Convenor SJM inconversation with the Editor

ECONOMY 13The fiscal package announced by the governmentwill succeed only if the money reaches common manand not to the coffers of corporates and contractorssays DR. BHARAT JHUNJHUNWALA.

DEBATE 16It is matter of time when Capitalism collapses. Thequestion before us is that shall we wait till its collapse,or should we, on the other hand, hasten the process,asks SH. D G BOKERA.

PATENTS 22Indian Patent System is being abused for narrowcommercial advatnage, explains SH. B.K. KEAYLA.

SECURITY 25The soldier on ground is suffering pangs due to badequipment, inadequate pay and pathetic livingconditions, complains JASBIR SARAI.

BOOK REVIEW 28“The world beyond marx and market” is reviewedBy G. Raina.

SWADESHI SAMVAD 30LETTER 2NEWS 32WTO 36

SWADESHI PATRIKA February - 20092

Letters

HURT SENTIMENTS

Swadeshipatrika is an important tool of Swadeshi movement.Followers of Swadeshi are waiting for patrika for both information andinspiration. It is unbelievable to think that there will be any mistakes orlapses in publications like swadeshipatrika. It is with this backdropthat I am writing with a sense of disbelief that January issue of theswadeshipatrika has deeply hurt the sentiments of thousands ofactivists like me. Babu Ghenu the leading light of Swadeshi whosacrificed his life for the cause of Swadeshi was miss spelt as BabaGhenu. It is a grave mistake and we expect it will not be repeated.

I will however hasten to add that the issue in general wasinformative as well as attractive. Photograph on cover in particularwas a treat. The historic moment of transition in SJM has been recordedfor ever in the memory of those who were not able to witness it happenin Bangalore. Congratulations for the same.

Arvind SinghRajasthan

FOOD SECURITY

Kindly refer to the article Outsourcing Food Production byDr. Devinder Sharma in the latest issue of the Patrika. It is a veryserious issue and Dr. Sharma has in a lucid way tried to forewarn usabout the events that may unfold in front of us in our own life time.

Food security is a very serious challenge for a country like Indiathat not only has a huge population of its own to be taken care of but isalso vulnerable with the type of porous borders we are having on allsides.

I am afraid the fruits of our entrepreneurship and hard work will godown the drain with illegal influx of starving population from neighboringcountries. To add to the agony is the fact that our cultivable land isvanishing on account of its use for industrial and real estate purposes.I take it as a threat as serious as Jihadi terrorism, if not worst.

Jawahar DassSahibabad (UP)

Quote-Unquote

People today praise western music buthave forgotten the treasures hidden intheir country.

Pandit Hariprasad ChaurasiaRenowned Flute player

People have become sel f ish andmaterial ist ic,which has led to theeconomic slowdown.

HH.Dalai Lama

I want to tell Paris that I donot need theirshelter. That there isa place for me in avast country like India.

Taslima NasreenBangladeshi Author

Pakistan should seriously consider theevidence handed over by India on theMumbai attacks.

Nawaz SharifFormer Prime Minister, Pakistan.

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EDITORIAL

February - 2009 SWADESHI PATRIKA 3

SwadeshiPATRIKAFebruary - 2009

Lost TrustThere is nothing new about manipulations and irregularities in management of corporates

anywhere in the world including India. But the scale, brazenness and intensity of these shamefulactivities that is tending to be almost a regular news now, particularly after the so calledliberalization of world economy is astonishing. Satyam and Ramalinga Raju are latest and nearer-to-home names that have been added to a long list of fraudsters like WorldCom, Enron, Tyco,Madoff, so on and so forth. These are just few names that have cropped up in recent times inconnection with some of the most well-known corporate or shareholder frauds. But it no longeris about Satyam or any of these names. Implications of corporate deceit are far wider than beingpresumed and discussed. It is the credibility, the trust in government and its ability to administrate,that has been hit hard. Corporate governance, we are told, is ‘an internal system encompassingpolicies, processes and people, which serves the needs of shareholders and other stakeholders,by directing and controlling management activities with good business savvy, objectivity andintegrity.’ But that is the book not practice anymore. ‘Sound corporate governance is reliant onexternal marketplace commitment and legislation, plus a healthy board culture which safeguardspolicies and processes’, adds the book. None of these factors proved worth the paper they havebeen printed upon. The principal stakeholders in any corporation are the shareholders,management and the board of directors. Instead of taking care of their stakes all of them, atleast in the case of Satyam, seem to have been busy in misusing their positions to create assetsin different formations. Other stakeholders include customers, creditors (e.g., banks, bondholders), employees, suppliers, regulators, and the community at large are reduced to merespectators.. It was expected that being direct stakeholders everybody will play his/her roledispassionately and reliably. But that did not happen.

Satyam fraud has taken place at a time when we have been patting our backs for escapingthe devastating effects of global financial tsunami to large extent. The credit for the same isgiven to the sound regulatory mechanism. So one can only imagine that if a Satyam like fraud ispossible in well protected and abundantly secure environment what can we expect when marketsare further liberalized and de-regulated, as is being pursued by political class. Satyam is in facta wake up call for government as well as the Indian Inc. It is in their own interest that corporateleaders must come forward and lead the campaign to clear the mess. Denial will not resolve thecrisis. People at large do believe and not without reason that private business is driven by profitmotive at any cost. Making profit is not a crime. But it has to be legally and morally tenable.Corporate social responsibility is not just a on paper formality. It is a serious responsibility whichotherwise is going to come back to affect the business and profit itself. In that way it makes asound business sense. Similarly abiding by the rules of law can not be convenience. Respectinglaw has to be habit. History substantiates the fact that innovation, entreprenurship andadvancement in any field cannot be suppressed by laws and regulations. Genuine experimentationis infact better served by properly defined rules of the game.

Satyam sham is a wake up call for the government also. First, it is a clear and telling commenton the way things are being run. Not only does our economic intelligence gathering stand exposed,regulators like SEBI, auditors and independent directors have also lost the confidence of thepeople of this country. How it is possible for these institutions on which a resource poor countrylike India is spending a fortune, to fail in detecting the scam beforehand. People are justified inthinking that it is either incompetence or connivance. In either case it is the primary responsibilityof the government to come clean and restore the confidence in regulatory institutions. To eliminatethe possibilities of re-occurrence governments should not hesitate to further strengthen theregulatory apparatus. Government has to be a facilitator but that is not the only role it ought toplay. Its function as an arbitrator and authority to penalize wrong actions is as fundamental asthat of a catalyst. Present day rulers are incapable of performing the multiple tasks required ofthem. It is time to choose the right people for the right job. Will India make the right choice at thegiven opportunity?


COVER STORY

Corporate Governance?What a Joke!

The Satyam issue has brought out the soft underbelly of our corporategovernance model, exposing in the process the fragility of adopting importedideas. We need to debate and perhaps comprehensively overhaul the concept ofcorporate governance, urges MR Venkatesh.

Copyright, interestingly, isoften interpreted as a rightto copy by Indians. Let me

elaborate. Most Bollywood moviesare in effect Hol lywood hitsremade, with a mother or sistercharacter added to indigenise thesame. Scrape them a little, comparethem a bit or even give them acursory glance, and you wouldknow instantly what I mean.

This is not restricted to theworld of cinema. In fact, most ofour ‘well researched, extensivelydebated and heavi ly studied’reports of some of the high-powercommittees appointed by ourgovernment are not original works.Bluntly put, they are adopted, oradapted, from reports on the samesubject already published in othercountries, mostly Westerncountries.

By now one can safely arguethat there is a complete grammar,a well-defined code, for adoptingsuch committee reports in India.This practice of somehow willinglybecoming a carbon copy of othershas been our Achilles heel sinceIndependence. This has only beenaccentuated in the post-liberalisation era.

No wonder, in the past fifteenyears, for every report of the

government that has gone on toshape and de-shape the economicpolicy formulations of India onecan readily trace its origins to anauthentic source abroad. Thecapi tal adequacy norms, the

competition law and theaccounting standards belong to thisgenre.

The concept of ‘corporategovernance’ is one such idea.Consequently, while we proceededto ‘adopt’ the idea we failed tointernally debate the variousmodels that would be suitable tothe Indian business environment.Neither did we bother to observethe external debate world over onthe various models of corporategovernance.

Yet, this idea was celebrated asthe most original idea in ourreforms process by finance

Most of our ‘wellresearched, extensivelydebated and heavilystudied’ reports of someof the high-powercommittees appointed byour government are notoriginal works.


professionals, charteredaccountants and the companysecretaries. In the process we neverdebated its origins, potency orefficacy in the Indian context.Sadly, the very idea was marketedas ‘professional opportunities’ byvarious professional bodies.

It would thus be difficult evento point out three genuinedifferences between the committeereport that went on to prescribe thecode for corporate governance inIndia and the original report oncorporate governance in theUnited States — the CadburyReport.

The context to the issueThe latest imbroglio involving

one of India’s largest ITcompanies, Satyam ComputerServices, has virtually discreditedthe concept of corporategovernance.

Satyam, as it is widely reportedsought to invest into anothercompany involving a conflict ofinterest for its promoters. This inturn involved a change in thefundamental character of thecompany and util ization ofvirtually its entire cash balance.

Satyam was also being accusedby the World Bank for bribing itsemployees to get certain contractsawarded in the company’s favour.

While these are allegations atthis point in time, it may be noted,that the company had approachedsuitable independent professionalsto get the necessary clearancesunder the extant law of the land aswell as appoint independentdirectors. Ostensibly, the idea is to‘comply’ with the code ofcorporate governance on paper.

What is interesting to notehere is that as negative reports

about the company come out intothe open, let us not forget that itwon the prestigious GoldenPeacock Global Award forexcellence in CorporateGovernance.

The company was named thewinner by the World Council forCorporate Governance as recentlyas in September 2008!

That, in effect, is corporategovernance in practice for you!

Not the idea but the model isa problem

Naturally, the debate onceagain arises as to the very idea ofcorporate governance and themodel that is suitable for a countrylike India. The issue, let mereiterate, is not the idea per se but

the model that effectuates the idea.Professor Jayant Rama Verma

of IIM Bangalore had extensivelycommented on the unsuitability ofthe Western Code of CorporateGovernance in his well researchedpaper on the subject ti tled‘Corporate Governance in India -Disciplining the dominantshareholder’. This was way back in1997.

Pointing out to thefundamental f law in ourunderstanding of the concept ofcorporate governance in India bydrawing ‘heavily on the largeAnglo-American literature on thesubject,’ he argued that the issuesinvolving corporate governanceproblems in India are different,requiring different solutions.

According to him, thegovernance issue in the Anglo-Saxon world aims essentially atdisciplining the management whichhas ceased to be effectivelyaccountable to the owners. Incontrast, the problem in the Indiancorporate sector, he pointed out,is that of disciplining the dominant

COVER STORY

Satyam has

discredited the concept

of corporate

Governance.


shareholder and protecting theminority shareholders, as it isvindicated in the recent Satyamcase.

To understand the issues thatdrive the idea of corporategovernance in the West, a briefreference to their arrangement isinevitable. Having successfullyworked over the decades toseparate ownership andmanagement, owners, (especially,institutional owners) realised thatthey are unable to exercise effectivecontrol over the management orthe board.

Capturing the entire issuerather succinctly, professor Vermapoints out, “. . . the managementbecomes self-perpetuating and thecomposition of the board itself islargely influenced by the likes anddislikes of the chief executiveofficer. Corporate governancereforms in the US and the UK havefocused on making the boardindependent of the CEO.”

Virtually concurring withprofessor Verma on this paradigm,Wikipedia too points out,“Perverse incentives have pervadedmany corporate boards in thedeveloped world, with boardmembers beholden to the chiefexecutive whose actions they areintended to oversee.” It is thispredicament that necessitated thevery idea of corporate governancewith independent directors in theWest.

In contrast, the issues in Indiaare entirely distinct — primarilydue to our overall social-economicconditions. Therefore the issue inIndian corporate governance is nota ‘conflict between managementand owners’ as elsewhere, but ‘aconflict between the dominantshareholders and the minority

shareholders’.And Professor Verma rightly

concludes, “The board cannot evenin theory resolve this conflict” andthat “some of the most glaringabuses of corporate governance inIndia have been defended on theprinciple of shareholderdemocracy since they have beensanctioned by resolutions of thegeneral body of shareholders.”

Need to re-thinkBy now it is increasingly

obvious that the very concept ofcorporate governance modelled onthe Western system is un-workablein a country like India. Little do werealise that such efforts are akin totaking a hair of an elephant,transplanting it on the head of abald man and making him look like

a bear.In the West, we are talking of

an ownerless, CEO-drivenparadigm. In India, it is still family-controlled, owner-drivenparadigm. CEOs do not mattermuch in the management of thecompany. Yet, we talk of astandard, global prescription todiverse situations.

Needless to emphasise, thesolution to these problems in Indialies not within the company, butoutside. This is precisely whathappened in the Satyam case.

The alleged infraction of lawarose despite independentdirectors and was stopped not bysuch directors but by forces outsidethe company.

It may be noted that the veryidea of independent directors is toensure commitment to values,ethical business conduct and aboutmaking a distinction betweenpersonal and corporate funds inthe management of a company.

Yet, most independentdirectors have become sidekicksfor the management, eying theircommission and fees, forgettingtheir very purpose of appointment.In the process, they implicitlytransform into dependentdirectors. The bi ll ion-rupeequestion remains: who will monitorthese independent directors andpenalize them?

One may recall that it was notlong ago that one of the Ambanibrothers made a 500-pagecomplaint about corporategovernance violations in acompany in which he himself wasa director. Subsequently, nothingwas heard about it.

Similarly, it is reliably learntthat even public sector units that

COVER STORY

Even publicsector units that failedto appoint independentdirectors and violatedsome of the code ofcorporate governance,were exonerated by theSecurities and ExchangeBoard of India underpressure from therespective ministries. (Continued page 8)


Satyam Computers has beenone of the major contributorto IT revolution is India. Till

now a company which had beenfourth largest Software Companyof India came to ground onJanuary 7, 2008 with its chairmanRamalinga Raju conceding that hehas systematically fudged theaccounts of the company. Cash

and bank balance as reflected in theaccounts, actually does not exist.According to a rough estimate totalfraud is to the tune of around 8000crores.

Keeping in view the interest ofthe investors, employees and the ITsector at large, governmentrecently reconstituted the board ofSatyam Computers, with a view tocontrol the damage. It has evendecided to give away a package torevitalize the company starving offunds to even pay the salary of its51000 employees.

When this fraud was broughtto light by Satyam’s chairmanhimself, the price of the sharetumbled by about 80 per cent in aday. In the international market,price of its ADR depreciated by 90per cent and its trading was

forbidden forthwith. Governmenthas even ordered an enquiry intothe affairs of 8 group companiesof Satyam. SEBI, Company LawBoard and Institute of CharteredAccountants of India have alsoinitiated their enquiries on theirown.. But this is a fact thatshareholders net worth has beeneroded by thousands of crores and

51000 of workers (or may be lessby 10,000) are at the verge of losingtheir livelihood, exchequer and theeconomy would he at a great loss.

ROLE OF AUDITORSBut real question is much

different and pertinent. Satyamfraud may be first of its kind inIndia, but not the first such fraudof the world, where fraud wasgiven effect by forging the booksof accounts. Enron an Americancompany did exactly the same. Inthat case auditors were named as

one of the main culprits. CEO ofthe company is serving 24 years ofimprisonment, but at the same timeauditing company ArthurAnderson has lost its existenceworld over after the incident. In thepresent scam auditing company isPrice Waterhouse Cooper. Expertsbelieve that the company could nothave done a fraud of this

magnitude without the connivanceof the auditors. Price WaterhouseCooper is also escaping to speakon the issue.

Fact is that when Satyam wasfudging its accounts in, the auditingcompany was certifying theseaccounts to be correct. Auditor isobliged to minutely inspect eachand every transaction of a firm andcertify the same to be correct andas per rules. These certi fiedaccount statements are then sentto the shareholders. Thus we cansay that fraud has not beencommitted by Ramalinga Rajualone, auditing company must alsohave been fully involved in thesame. It is worth noting that PriceWaterhouse Cooper, auditing firmof Global Trust Bank (USA) also,is facing legal proceeding in the

Satyam Fraud: Emerging IssuesLearning lesson from the present case

and to avoid repetition of such

incidents, there is a need to make

government’s audit compulsory for all

big private sector companies suggests

DR. ASHWANI MAHAJAN.

Pricewater housemust have beenfully involved

COVER STORY


case of not only certifying fudgedaccounts of the bank but alsogiving it a good rating.

ROLE OF SEBIConstituted under the Act of

Parliament, Security ExchangeBoard of India (SEBI) is aregulatory body of Indian shareand bond markets. It is expectedfrom SEBI that no company orbroker is allowed to act against theinterests of the shareholder. In factexistence of a regulator gives aconfidence amongst thestakeholders in that sector.Existence of SEBI naturally givesa confidence to the investors in theshare markets. But this regulatingagency has failed at variousoccasions. Thousands ofcompanies vanished eating awaylakhs of crores of rupees ofinvestors and SEBI could not doany thing. Sometimes tiny cases ofinsider trading by companies areinvestigated by SEBI, fraud oflakhs of crores of rupees getseasily escaped from its scanners.

Recently a company made InitialPublic Offer (IPO) and lakhs ofcrores of application money whichshould have gone to anindependent agency went into theaccounts of the company andSEBI could not even issue aclarification in this regard.

All or any informationregarding all transactions of acompany, issue of capital, sale-purchase of shares in ei theravailable with SEBI or it could beasked for by it. Then why SEBIcould not get a clue about such abig fraud. We should not concludethat fault lies with the officers ofSEBI. Perhaps constitution ofSEBI as provided by the Act of theParliament itself forbids SEBI toproactively act against defaulting

parties.Learning lesson from the

present case and to avoid repetitionof such incidents, there is a needto make government’s auditcompulsory for all big privatesector companies on lines ofpublic sector companies. We knowthat strict auditing of public sectorcompanies by Comptroller andAuditor General of India (CAG)has been reason why there hasnever been any big scam in publicsector companies.

Secondly there is a need toexamine the constitution andfunctioning of SEBI and makesuitable changes wherever neededto enable SEBI to meaningfullydischarge its duty as a regulator inthe stock market.

All multinational and Indianauditing companies which arefound to be indulged in fraud inany part of the world, should beplaced under the scanner and theiracts be investigated in India . Thisworld be a proactive step in theinterest of the nation at large.

failed to appoint independentdirectors and violated some of thecode of corporate governance,were exonerated by the Securitiesand Exchange Board of Indiaunder pressure from the respectiveministries.

So much for institutionalefficacy, especially when it involveslarge corporates and PSUs.

Nevertheless, there are enoughprovisions in the IndianCompanies Act to penalise errantdirectors. The problem is that mostof them are in the statute book,

rarely used and mostly misused orabused.

The solution, therefore, toensure proper corporategovernance is to make theseinstitutions and laws functional,not to merely adopt solutions of adifferent country and economyworked out in a different context.

With the very concept ofindependent directors fastbecoming a mockery, we need tothink of the alternatives. Forstarters, we need to strengthenexternal institutions — the

Registrar of Companies and theSebi, especially the former — todeal with such issues.

With a turf war raging betweenthe two on who should administercorporate governance, onewonders who will bell the cat?

The Satyam issue has suddenlybrought out the soft underbelly ofour corporate governance model,exposing in the process the fragilityof adopting imported ideas.Obviously, we need to debate andperhaps comprehensively overhaulthe concept of corporategovernance. The moot point iswhether we mentally prepared atleast now?

(Continued from page 6)

Corporate Governance . . .

There is a need toexamine the

constitution andfunctioning of

SEBI.

COVER STORY


Q. How do you explain the change inSJM at a time when it is becoming a forceful& legitimate national voice? How will thechange at top affect the working of SJM?

Arun Ojha ji: Swadeshi is an uninterruptedcurrent that can not and will not be thwarted bythe change in positions of individuals here andthere. Changes, in fact, bring encouragingconsequences when handled appropriately. Wein SJM have the methodology of takingdecisions collectively. We have jointly decidedthe course of direction of Swadeshi movementin accordance with the requirements of the timein past and will continue to do the same in futurealso. The change in responsibilities also is acollective decision. It, therefore will bring positiveimpact on the movement. New dimensions will beadded to make the movement more strong.

Q. What are these newdimensions that you think will beadded?

Arun Ojha ji: Economy has beenthe major area of focus of Swadeshimovement that will remain so in futurealso. But at the same time SJM willalso undertake efforts to generate astrong Swadeshi attitude in otherwalks of national life. Language,Cul ture and Value System forexample are the area’s that will attractour attention. Pace of the Researchand Documentation on various issuesrelated to the economy particularly the

Shree Arun Ojha visited Central Office of SJM for the first time after assumingresponsibility as the National convener of Swadeshi Jagaran Manch on 10th

of January 2009. He was in National Capital for a couple of days.Swadeshipatrika managed to have a chat with Sh. Arun ji on different issues.We reproduce free, frank and candid views articulated by Sh. Arun Ojha Jiin conversation with the Editor Ajay Bharti.

consequences of Globalisation on disadvantageoussections of the society like farmers, artisans, smalltime retailers, SSI’s and unorganized sector will beaccelerated and made an integral part of SwadeshiMovement.. These are the areas of our strength

which are sustaining economy,society, security and even economicgrowth. To comprehend the impact ofrapidly changing global economicsituation on these core sectors we willhave a regular and well organizedinstitutional mechanism. Securitythreats, both internal and external, tothe economy and infrastructure havenot been properly appreciated as yet.This will also be the focus area of ourfuture activity.

Q. What are the MajorChallenges that, in your opinion,

INTERVIEW

UPA has failed to fulfill itspromises: Arun Ojha


Swadeshi is facing at Present?Arun Ojha ji: The major challenge that

Swadeshi movement has been facing is the lack ofattention given to real and basic problems of thenation by successive governments and other majoragencies. Market has been given more thendeserved importance. Market, in fact, has becomethe most significant factor. It is becoming allencompassing. Everything is being consumed bymarket. Almost everything is being sacrificed at alterof the Market. So to attract the attention towardssocial reconstruction and shift the undue focus awayfrom market to other vital aspects of national life isnecessary.

Up-lifting deprived sections of the society andequitable development leading to reduction of gapbetween haves and have-nots, is another majorchallenge that needs to be confronted.

All the major political parties of the country aretreating fundamental national issues superficially.They pay lip service to glamorous issues and theirconcern is l imited to growth and economicdevelopment in a restricted sense.

In such a situation it is our responsibility to makepeople aware and cautionthem against impendingdangers. Also a strong unitedforce needs to be shaped, anauthority that will act as analternative power centre andcheck the anti people policiesof the government. It has tobe a non-electoral politicalmovement, strong enough to

induce the government, political parties andopinion makers to change their thinking. Stateneeds to be checked with this non-politicalsocietal force.

Q. How do you presume to do that?Arun Ojha ji: We have declared year

2009 as Public Awareness Year. Through outthe year SJM in collaboration with other likeminded people and organisations will contactand mobilize common man using all theavailable means of awareness campaigns.People will be organised to generate a strong,powerful and effective opinion to enforce the

change in the mindset of governments and politicalparties. People oriented policies will have to replacethe present policies pursued by government focusingon growth only. These anti people policies will haveto be changed. Thrust of the government policyplanning should be the overall good of the majoritypopulation and not privileged few. Swadeshi agendais being pursued by a vast cross section of peoplein varied manifestations on enormous scale. Wewill foster relationships by co-opting/assisting andcomplimenting these efforts at feasible levels toaccomplish the desired goal.

Q. It sounds like SJM is preparing to providea helping hand to one particular political partyin the general election year?

Arun Ojha ji:Our track record is witness to thefact that SJM does not make its policies keeping inmind one political party or the other. Our focus isthe common man of this great country. Those peopleand parties who pursue the policies benefitingcommon people will get our support. It, therefore, isthe policies and stand on issues that determines ourline of action and not persons or parties.

Q. Corporate governancehas become an importantissue after Satyam episode.How do you appreciate theredevelopments?

Arun Ojha ji: Corporateand big business sector is notbeing managed properly wasclear for a long time now.Internal irregularities and unfair

INTERVIEW

Regulatory

mechanism has not

been permitted to

evolve suitably.


trade practices have become almost integralpart of these corporates & MNC, more soafter the so called globalisation. Making profitat any cost, fairly-unfairly has become theonly adage. It is bare voraciousness thatguides the corporate operations. Regulatorymechanism has not been permitted to evolvesuitably. Regulatory System at present is veryfragi le and ineffectiv e. The latestdevelopments have not only incapacitatedthe image of these individual companies butIndia Inc is under scanner and that is notgood for a developing economy like India.There are forces out there looking for anyprospects to damage the economic status of India.Such episodes provide propaganda material tothem.

It is time to take remedial measures without anyfurther delay. Regulatory System needs to bestrengthened legally as well insti tutionally.Regulators also must be accountable & transparent.All these steps should be taken to restore the faithof people in the system. The faith right now isshaken. There is no or very little trust left.

Q. Does Government have no responsibility?Arun Ojha ji: Government off course is fully

responsible for Satyam l ike issues. It is thegovernment that has to ensure compliance of lawsof the land. It is also government that is responsiblefor the protection of common people who have beeninvesting in these companies. Government as acatalyst is duty bound to provide facilities forentrepreneurship, but it is equally responsible forprohibiting the abuse of these amenities. Presentgovernment has failed on all these accounts.

Q. What is the status of‘Swadeshi Movement’ andSJM as an organization atpresent and how do youintend to proceed further?

Arun Ojha ji: SJM, as isaccepted by even ouropponents, has emerged asa strong and legitimatenationalist voice in economicfield. It is not a mere anti-

WTO, protesting group. It has evolved as a seriousmobilization on all aspects of Indian economy.Though we are satisfied with the progress made sofar, at the same time we are not complacent. Werecognize that there is still a lot to be done. Twopronged strategy to strengthen the organisation andintensify agitation is the way forward. SJM units willbe constituted where they do not exist at present.New faces from amongst the active people in societywill be inducted. Even if a single person is affectedby any wrong policy of the government people willbe mobilized to resist such policies.

Swadeshi as an alternative economic thoughtprocess has also reached a stage where it is nomore ridiculed as a retrogative and anti innovationthinking. On the contrary people through out theworld have started taking note of the elementsSwadeshi was emphasizing al l these years.Swadeshi movement will have to widen itself tograduate into a position capable of providingsolutions to the global economy under threat atpresent. An environment to experiment without thefear of failure will be encouraged to achieve the

desired objective.

Q. How are you going toattract youth towards SJM?

Arun Ojha ji: SJM is ayouthful organisation full ofyoung and dynamic leaders atdifferent levels. Average ageof our members at nationallevel is below 50. That is thebest average for any forceful

INTERVIEW


and dynamic organisation like SJM. Because of thiswe are able to attract a lot of youngsters to Swadeshimovement. We also take up issues related toyounger generation particularly questions related toemployment and quality life with freedom to utilisetheir talent for the development of the nation.

We have decided to organise youthconferences focusing on the challenges they face.Cultural degenerate will be also important aspectof these conferences and these will be held atdistrict levels throughout the nation. Youngsterswill be given opportunity to understand thedif ference between modernization andwesternization. They will beencouraged to discus and comeup with solutions. Genext hasto realize that we ourselves haveto solve the problems faced bythis country preferably by ourown resources. Our interactionwith rest of the world must beon the basis of equality andmutual respect. We no more canallow others to exploit our countryto sustain their expensivelifestyles.

Q. Arun Ji, How do you evaluate 5 year ruleof UPA.

Arun Ojha ji : The Common MinimumProgramme (CMP) issued by the UPA government

appeared to disseminate the message thatthe government was serious about welfare offarmers, artisans, workers and weakersections of society. CMP made, “a solemnpledge to the people of our country: to providea government that is corruption-f ree,transparent and accountable at all times, toprovide an administration that is responsibleand responsive at all times”. SJM at that pointof time had welcomed it with the hope thatthe Government will translate the promisemade about constructing a new and uniqueframe work where agriculture, SSI,unorganised sector and generat ing

employment become central along with economicgrowth.

After five years it is clear to all that thegovernment has failed on all these accounts. Inplace of an ‘assured of a safe and viable livelihood’,people are losing the jobs they had. Trends of largescale dislocation from villages, pathetic conditionof rural as well as urban poor, farmer suicides andreducing availability of nutritional intake besidesthe widening gap between privileged few anddisadvantaged masses have further strengthenedover last five years. Again CMP had promised ‘toenhance the welfare and well-being of farmers,

farm labour and workers,particularly those in theunorganized sector and assurea secure future for their familiesin every respect’. Today when welook at the reports of theagencies of this very governmentwe find that none of thesepromises has been kept. The lifeof farmers and people dependenton agriculture has in factworsened. Suicides by farmers

of Maharashtra alone , the state ruled byUPA,crossed the 4,000-mark in 2007, for the thirdtime in four years, according to the National CrimeRecords Bureau (NCRB). It is the similar story inevery field. Five years of UPA have proved to bedismal and devastating for the country.

INTERVIEW

Swadeshi JagaranManch is a youthfulorganisation full ofyoung and dynamicleaders

Genext has to realize that we ourselves have to solve the problems facedby this country preferably by our own resources.


Getting the best outof the fiscal package

The Government has madea huge fiscal package to pullthe economy out of

recession. Increased demand fromGovernment-funded schemes willmake up for the decline in privatedemand. This policy is based onthe experience of America duringthe Great Depression of the 1930s.The American economy wasbuoyant during the twenties. Sharemarkets were in a bull run and theGovernment was following thepolicy of balanced budget. This isthe same advice given to us duringthe last 15 years of economicr e f o r m s - G o v e r n m e n texpenditures must be kept low sothat confidence of privateinvestors is secured and economycontinues to move along.

The events of 1929 did notlead to such a happy result,however. The share marketcollapsed suddenly and factoriesdowned their shutters. Economistsproposed two contrary solutions tothis crash. The mainstream advisedthe Government to hold on to thepolicy of balanced budget. Theysaid that lower prices will soongenerate new demand and theeconomy will revive. Thedeepening recession led to lesserrevenues for the AmericanGovernment which continued toreduce its expenditures in tandem.This policy led to furtherdeepening of the recession. Lowerprices in the market did not reviveprivate demand and reducedGovernment expenditures did nothelp. The recession continued toget worse as a result.

Famed economist JohnMaynard Keynes suggested anexactly opposite policy. Hereasoned that consumers werecaught in a psychology of fear and

were unwill ing to increasespending. In normal conditions theexpenditure of one personbecomes income of another. Theexpenditure on purchase ofpotatoes by the homemakerbecomes income for the farmer.Expenditure by the farmer forpurchase of seeds becomes incomefor the seed companies. Thisvirtuous circle of expenditure andincome has got broken becausepeople are not spending theirincome. The farmer is keeping his

income in steel safe and not buyingnew seed leading to less demandand recession. Keynes suggestedthat reduced Governmentexpenditures were only makingmatters worse. The Governmentmust instead increase expendituresby incurring fiscal deficit. Just asthe mechanic pours water into thepump to prime it, and then thepump lifts much larger amounts ofwater, similarly the Governmentmust ‘pump-prime’ the economyby jumpstarting the virtuous cycle

Free market has led to bad distribution ofincome and reduced demands in the market. Thefiscal package announced by the governmentwill succeed only if the money reaches commonman and not to the coffers of corporates andcontractors says Dr. Bharat Jhunjhunwala

ECONOMY


of expenditure and income.Keynes said that it was okay for theGovernment to balance its budgetin times of high growth. Theopposite policy must be followedin times of recession. PresidentTruman listened to Keynes’ advice.He undertook massive investmentsin the Interstate Highway system.At the same time a huge demandfor armaments was created thoughGovernment expenditures for theSecond World War. Economists aregenerally welcoming the fiscalstimulus packages being made bygovernments across the globe onthe basis of this happy experience.

This policy will not deliver forthe developed countries l ikeAmerica in present circumstancesin my reckoning. Instead it willpush them into deeper darkness.The basis of this policy is that forsome unknown reasons theconsumers have developed apsychology of fear and areunwilling to make expendituresdespite having the income. Theyare stacking their earned currencynotes in the safes instead of goingout and buying cars and TVs. Butthis is not the case in America atpresent. The American people arenot keeping their earning in thesafes, rather they have no earnings.Jobs of American workers arebeing lost to factories in China andBPO outfits in India. Americanpeople are being forced o live incardboard boxes or back seats oftheir cars. Increased expendituresin building of infrastructure likeairports will not bring about avirtuous cycle of expenditure andincome in this situation. Insteadthe expenditures will simply go

down like water in a dry well. Thereis no underlying demand in theeconomy which can be jumpstartedby such expenditures.

Question arises why a similarstimulus package was successful inpulling America out of recessionin the thirties? My understandingis that the Great Depression wasbroken not by the fiscal stimuluspackage advocated by Keynes butby the expenditures made by theU.S. Government towards theSecond World War. Mil itaryexpenditures went into anoverdrive in 1939. The fiscalstimulus package of 1937 onwardshad a limited role of covering thebad patch of two or three years.Its role was like the UPS that keepsthe computer going for a shortperiod of power outage. Thesemilitary expenditures made up forthe loss of demand, which, trulyspeaking, came from baddistribution of income. Thetwenties saw the play of unbridledfree market. Distribution ofincome became perverse. Ahandful of companies made hugeprofits while income of the massesremained stagnant. The correctsolution was to repair this baddistribution of income. This wasdone indirectly by increase in warexpenditures. It was like theAmerican people consuming warinstead of bread. The true story

ECONOMY

The Americanpeople are notkeeping theirearning in thesafes, rather theyhave no earnings.

The recessionis due to fleeing

of foreigncapital and dueto contractionof our export

markets.”

“


of the American recession,therefore, was like this. The freemarket led to bad distribution ofincome and reduced demand in themarket. This lack of demand wasbroken by military expenditures.The fiscal stimulus package had asmall positive role towards thebeginning of the war. The fiscalpackage did not cure the maindisease of bad distribution ofincome and was not trulyresponsible for pulling Americaout of recession.

India ’s situation today isdifferent than America in thethirties or now. The recession inour country is not due to lack ofdomestic expenditures. There is nofear phobia among our consumers.The recession is due to fleeing of

foreign capital and due tocontraction of our export markets.This reduction of external demandcan surely be made up by increasein Government expendituresprovided the external demandbounces back in a short while. Thefisca l package made by theGovernment of India is like a UPSsystem that can run the computerfor a short while. A UPS cannotrun the computer for days.Similarly the fiscal stimulus packagecan generate demand in theeconomy for a short while.Fortunately, there is a good chancethat such a revival of foreigndemand will indeed take place. Oilexporting countries may investtheir petrodollars here. Americancompanies may undertake more

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outsourcing to India in their effortto lower their cost of production.Wages in India are near the globalminimum hence our products willcontinue to retain their competitiveedge. The fiscal packageannounced by the Government,therefore, stands on sound footing.But there is a need for caution. Thesuccess of the package will dependupon restarting the virtuous cycleof expenditure and income. Inother words the money shouldreach the common man. It will notdo to make more highways if thedemand from the common man isnot revived. Thus the Governmentwill do well to place more moneyin the hands of the common manthan in the hands of highwaycontractors.

ECONOMY


Need of Swadeshi CivilizationIt is matter of time when Capitalism collapses. The question before us is thatshall we wait till its collapse, or should we, on the other hand, hasten theprocess? Shall we not build up our blue print of economic development in theright earnest? We are fortunate to have an option of new economic model inthe form of Swadeshi. This benefit is not available to others. Many thinkersare expecting riots, civil wars, hunger, and increase in poverty and politicalchaos across the globe. They are also sure that the present attempts to savethe capitalist economic systems are not of permanent nature. This should makeus wise to move faster in our thought process and efforts in shaping a newSwadeshi civilization says SH. D G BOKARE. Swadeshi Patrika invites itsreaders to comment on the views expressed. If you think Swadeshi model isthe future model share your views with us. Even if you believe it is not so tellus why you think so. Let us debate the issue contribute in our way to theemerging economic model.

G lobal economic andfinancial crisis that wewitness today is not

unknown. It was expected by manyunbiased economists across theworld and more particularly fromIndia. Shri Dattopantji Thengadiand Dr. M G Bokare were moreemphatic in this regard.Economists from the developedcountries are now shocked by the

meltdown in their economies.However, they were quite awareabout internal contradictionswithin capitalism. They have beentelling half-truth about marketeconomy. Professors in the West,despite knowing the differencebetween competition andmonopoly, have been teaching thateconomies of the developedcountries are “free market

economies”. J.K. Galbraith hasdisclosed in The Industrial State thatmonopoly in capitalist world andbureaucracy in management informer USSR are not different.

The West has been eulogizingall the time that laissez faire has noalternative for smooth economicactivities. The state should notintervene in private sector’sactivities for making the economymost competitive and achievingcontinuous economic growth.They, however, have ignored theaspect of economic equality amongall the players of the economy.What we witness today in thedeveloped countries is that bighundreds of corporations,financial institutions and banks arestanding in a queue to beg financial‘bailout’ for their own survival.Many of them have been bundledout from the scene, as they neverworked for people’s welfare. Theywere allowed natural death by their

DEBATE


own governments. They insteadworked for themselves bycommitting huge frauds. Thegeneral Motors and other twoautomobile companies of the USAwere arrogantly saying that theimage of one of their companieswas representing the image of theUSA itself. Today they are pleadingthe Congress for help with abegging bowl.

History of capitalism hasblessed some people who are inminority when compared to theentire population of the world.This history, however, is taintedwith warfares, oppressions andinjustices, holocaust, racism,colonialism, slavery, exploitation ofall kind, economic equal ity,pollution of water, air, food andcultures, homelessness, poverty etc.When big corporations control ourfinances, media and legislators, ourfreedom, democracy and the well-preserved civilization will be onlyan illusion.

The USA model was marketedas the ideal capitalist model forothers to emulate for removingpoverty and achieve all roundprosperity. The USA and otherdeveloped countries have usedmany tactics and coercive forces ondeveloping economies for openingtheir economies and become a partof global world for sharing thegains of ‘free market’ economies.The bureaucrats as well as sometop political leaders in our nationalgovernment have been trained inthe West and as such nevercontested the so-called claims ofeconomists of the West. Ratherthey willingly surrendered to thiskind of pressure and joined themonopoly capitali st groups.Globalization has become an

iconic model of capitalisteconomics for our West-trainedeconomists and political leaders.

The present crises in thedeveloped economies haveexposed the economists from theWest and also our bureaucrats whohave been eulogizing the capitalisteconomic model all the years. Itwas known that the Westerneconomies were on the verge ofcollapse due to concentration ofeconomic powers in the hands offew speculators and gamblers.Stock market is the epitome of thismonopolistic capitalism. All effortsare being made to save the stockmarkets instead of main marketeconomies of these so-called‘developed’ countries. We are alsotrying to copy the same mindset.There is a definite shift from realeconomy to speculative economy

across the globe due to built-incontradiction of capitalism. AJapanese commentator says, “Howmuch speculative money is movingaround the world? According toMitsubishi UFJ Securities analysis,the size of the g lobal ‘realeconomy’ in which goods andservices are produced and traded,is estimated at $48.1 trillions. Onthe other hand, the size of theglobal ‘financial economy’ the totalamount of stocks, securities anddeposits add up to $151.8 trillions.The financial economy has thusswollen to more than thrice of realeconomy, g rowing especiallyrapidly during the past two decades.This is heading to an exploitativeand speculative civil ization.Unfortunately India has acceptedthis path since 1990-91.

Signs of col lapse of USeconomy were clearly seen rightfrom 1987 when stock markets ofAmerica and Europe collapsed inOctober that year. Coincidentally,a report of Treadway Commissionwas released in the same month onlarge scale fraudulent practicesadopted by the corporate sector ofthe USA. The name of the report

DEBATE

Actual impact ofthe present scam isyet not known to thebureaucrats andeconomists.


(Report of the NationalCommission on FraudulentFinancial Reporting) isenough to understand thegravity of the economicaffairs of that country. TheCommission was a privateinitiative and had James C.Treadway Jr. as itsChairman. We should nottherefore get surprisedabout the timing of theeconomic and financialcrises the capitalist world ispresently facing. Present attemptsby the US government to injectphenomenal public funds (taxes) toreestablish the security ofspeculative and fraudulent financialsystems gives enough indicationabout the scale of duplicity of theeconomists of that country. It isamusing indeed. This is being doneto save the capitalism from collapseat any cost. This way, profits areprivatized and losses are socialized!Russia and China too are in deeptrouble due to copying thismonopolistic capitalist economicmodel. They too will be sinkingalong with the West. China may callit market-socia lism, but it isnothing other than monopolisticcapitalism.

During post-1987, we haveseen many frauds and scams in thateconomy. Basically these includedotcom scams, corporate frauds,stock market manipulations,Enron scandal, siphoning ofworkers’ pension and welfarefunds, and the present sub-prime-mortgage scam runninginto trillions of dollars. Let usbe clear that the actual impactof the present scam is yet notknown to the bureaucrats andeconomists. Let us also be

clear that best of brains of othereconomies, more particularly fromdeveloping economies, havemigrated to the USA during thepast five decades. They werethinking that the USA was havenfor their own skills and benefits.They would get ample scope to usetheir skills and education. Also, thehighest number of Noble laureatesin economics and social sciencesis staying in that country. Despitethis, they could not save capitalism.

A few political leaders fromthe capitalist world have thecourage to accept the failure ofcapitalism, which is full of greedand exploitation. The President ofFrance and the present chairmanof European Union has recentlyaccepted the failure of cronycapitalism. He says, “The financialturmoil has highlighted the need tore-invent capitalism with a strong

dose of morality, as well asto put in place a betterregulatory system. Laissezfaire is finished. The allpowerful market thatalways been eulogized isfinished…. This systemthat allows the onesresponsible for a disaster toleave with a goldenparachute of havingincreased inequal ity,demoralized the middleclasses and market

speculation.” (emphasis is added).Let us be clear about the bad

effects of present day capitalism.To implement the present daycapitalist model based on growthof the real economy andunnecessary and extravagantconsumption attached to it hasbecome first time in the humanhistory a real threat for the futureof our human civilization and theplanet itself. The present daycapitalist model is designed toforbid the access to the world’snatural resources for the planet’smajority of population i.e. peopleof the South. Earlier, the peoplefrom emerging economies couldaccess to the world’s naturalresources without raising anyquestions on the consumption bythe rich countries. They werecontended with limitedrequirements for their decent

living. Today it is not so. Thepeople from the aff luentcountries representing hardlyfifteen percent of the world’spopulation have beenmonopolizing the use ofeighty-five percent of theworld’s natural resources forown consumption. They neverused to like people from South

DEBATE

There is a definite shiftfrom real economy tospeculative economyacross the globe


to share this exclusive useof natural resources. Theyhave developed arroganceof a kind. The USA hasdeveloped military powersover time to guard anexclusive use of theseresources. Any aspiringpersons or countries simplytrying to share the naturalresources, they weresummarily eliminated fromthis world. Iraq’s example isthe latest one to beremembered by us.

Marxian economy hascollapsed in early 1990s. It hadsome of the contradictions whatwe see in present day capitalism. Itwas nothing but the ‘statecapi talism’. Monopoly of alleconomic activities was centralizedin the state. On the other hand,capitalism has allowed by designmonopolies in few hand of privatepeople. Both systems have createdand eulogized classes of people.Rich, poor, industrial workers,capitalist, bureaucrats, farmers andfarm labourforce, etc. are somemajor divisions of population.Marx himself says, “Laws thatdivide people are unnatural. Whatis unnatural is immoral. What isimmoral is not immortal”. But hemiserably failed to practice his ownphilosophy. Marxism has collapseddue to this contradiction. Nowis the turn of capitalism tocollapse. Signals of collapse ofcapitalism are now clearlyvisible across the world Thecollapse is not going torestricted to developedcountries, but it would take thedeveloping countries like Indiaalong with.

At the time of importing

monopoly and exploitativecapitalism in to our country around1990s, there was quite a resistancefrom some of our experts againstthe very capitalistic economicmodel. This model was importedwithout taking the Parliament andthe people of this great countryinto confidence. Many expertswere instead arguing the case forSwadeshi economics. SwadeshiJagran Manch was established forpropagating the Swadeshi conceptof economic welfare of all. Thismodel was econ-friendly as well asnon-exploitative. The oppositionto Swadeshi model of economicswas coming from those whobelieved in and also taught to theirfollowers and students in collegesthe concept of western capitalism.Whatever from the West was goodenough for these ‘experts’. Thiswas the slave mentality. It is still

continuing among the so-called experts. Some of themalso sarcastically ca lledSwadeshi approach a‘reaction’ to the capitalismand Marxism. Some evenexpressed as ‘backwardsteps’ in the development.This was more prominentparticularly after the collapseof erstwhile USSR. Steadily,a large number of essayshave come to apprehend thatsomething bad is likely to

happen in the economic life of thepeople and their nation. They arenow keeping silence when the Westis facing a historical economiccrisis.

It is quite clear from the eventstaking place across the world on theissue of capitali st economicsystems. This system was inpractice for over two hundred yearswhen the first industrial revolutionhad taken place. During this longperiod, capitalism has done moreirreparable damage to humanbeings and natural resources. Theplanet itself is now in danger ofsurvival. Water, air, ecology, humanhealth and cultural values havesuffered serious damages. All thisis happening due to greedy mindsof some people in the West whobelieve in material satisfaction. Bydamaging natural resources they

feel that they are the most‘developed’ people and theirnations. Their civilization hasno moral values, ethics, loveand concern for others who livealong with them in the sameworld. Those who do notbelieve in such materialisticpleasure but pursue the path ofspiritualism are being called‘backward’ or poor people.

DEBATE

Capitalism has donemore irreparable damageto human beings andnatural resources.


Now the question has come upbefore us whether we shouldcontinue such menace ofconsumerism and lose ourcivilization’s identity forever. I mustsay that this time around theWestern social leaders have realizedthat their civilization is in theprocess of demolition as they havereached the plateau of materialistichappiness. It may be difficult forus to change the attitude andobjective of these so ca lled‘developed’ people. But wecertainly can stay away from themby aggressively adopting our own

values and retaining our thousandsof years old Civilization.

Swadeshi civilization - anoption.

Swadeshi is a God-givenopportunity to freshly look atbetter economic model for thewelfare of large population not ofIndia but also of other nations. Ithas universal application formankind. India has distinctlydifferent economic, social andcultural issues as compared to theso-called developed nations. Ourissues are more complex in nature.

The complexity cannot be solvedby just importing a readymadepackage from the West. Ourculture and civilizational issues arequite different than those ofmaterialistic world. We stronglybelieved that after defeating theBritish in 1947, we would be ableto follow the path guided by seersand statesmen like Lord Buddha,Lord Mahaveera, Aurobindo,Vivekanand, Mahatma Gandhi etal. However, our western-influenced leaders had thwartedthis thought process. We believed

in the transition period theeconomic model brought in byPandit Nehru was good enough.This was relevant till Rajiv Gandhi’sdeath. We however wantedaltogether a new economic modelfor the welfare of our peoplesubsequent to this period.Swadeshi was found as analternative economic model. It hasdifferent civil izational values.Capitalists of our country had thepower to influence the politicaldecisions, and as such we had beenforced to adopt the exploitativeeconomic model of the West. The

present civilization of the West isirrelevant for those Indians whobelieve in strong cultural and moralvalues. There is definitely a needto change the Western model ofeconomics for the survival of thesociety in general.

Dr. M. G. Bokare, the NationalConvener of Swadeshi JagranManch, had pose some questionsfor our debate. He says, “Weshould possess the broadframework within which thefellows of Swadeshi ideologybelonging to different faiths will

move for study and action. Somequestions are illustrative in theframework:1. Should internationalization of

our life and living govern thenational values anddevelopment?

2. Is the ratio of our foreign tradeto national economy the indexof development of oureconomy?Such questions wil l be

answered by different people whoknow economics. The debate onSwadeshi has to attend to suchquestions.

DEBATE

Swadeshi is a

God-given

opportunity to

freshly look at

better economic

model.


Swadeshi movement has to bea civil isational change. Ourcivil ization promoted on theknowledge of Vedic books has tobe placed in the forum ofinternational discussions anddebates. Its superiority has to beargued. …. Globalization of ourcivilization has to be sustained by‘nationalization’ of the thoughts inIndia. Swadeshi ought to have itsown philosophical canvas. HenceVivekanand and Aurobindo againbecome relevant for organizing thework of studies and worldwidecommunication. This isinescapable conclusion to befollowed in a civilizational change.Swadeshi is not an ad-hoc activity.It has to connect the past with thefuture. In this process, many of ourpeople may experience a convulsivechange. The westernized mindsethas done great harm to India,especially her cultural values, herhistory and her store ofknowledge. We have to liberateourselves from some of theWesternized thoughts, which haveramified all corners of our mind.”

He further says, “Thisdiscussion leads to somefundamentals of Swadeshiphilosophy. They are as under:1. The sovereignty of our nation

shall not be compromised inany discussion ofglobalization.

2. The power of our militaryshould not be weakened.

3. Self-reliance of ourtechnological developmentshould not be compromised.

4. Poverty reductionprogrammes should not bediscarded in our efforts.

5. Actual employment, includingself-employment, in India

should not be thrown over-board.

6. By following the propositionsas detailed in my thesis ofHindu economics, we will beable to create a new civilizationand offering a welfare state forall our citizens. Its benefits canbe spread across the globe.

7. Ecology of economic activitiesmust be protected all the time.

8. Cultural va lues of thebrotherhood of Indian peopleincluding Muslims andChristians should not bedisturbed in our attempts to

develop our planning for a newcivilization.

9. Dangerous inroads to destroythe unity of India will not betolerated.

10. Righteous values of life in allreligions existing in Indiashould not be transformedinto vainglorious values of lifein the process of ourdevelopment.”Such values should be spelled

out in our approach. Eachguideline in favour of

internationalization should bescrutinized on the litmus testslisted above. He further said,“Globalization of Swadeshieconomic thoughts deduced fromour Vedic books should be on ouragenda in all countries. …All theseyears, we have studied Westernizedthoughts. Swadeshi thoughts nowshould also be placed in Westernforums, for their enlightenment”.

Capitalism is on its last journeyas said earlier. It is matter of timewhen it collapses. The questionbefore us: Shall we wait till itscollapse before we take our actionsfor implementation of Swadeshieconomics? Should we, on theother hand, hasten the process ofthe collapse of capitalism? Shall wenot develop our blue print ofeconomic development in the rightearnest? It is known to all that anew economic system needs longtime to become effective. We arefortunate to have an option of neweconomic model in the form ofSwadeshi economics. This benefitis not available to other countriesin the world. Many social thinkersare rather worried about the futureof mankind after the collapse ofthe capitalist economic systems.They are foreseeing anarchy andchaos in the world after suchcollapse. They are expecting riots,civil wars, hunger, and increase inpoverty and political chaos in manydeveloping as well as developedcountries. They are also sure thatthe present attempts to save thecapitalist economic systems are notof permanent cure, but only atime-gaining game. This shouldmake us wise to move faster in ourthought process and efforts inshaping a new Swadeshi civilizationin our country.

DEBATE

Swadeshiis not an ad-hoc

activity.


Indian Patent System is being abused for narrow commercial advatnage.Review of important stipulations post audit of patents granted andsafeguarding sanctity of system needed to bring discipline and sanctityin system, urges Sh. B.K. Keayla

The patent system, that has acquired a uniqueposition in the industrial economy, is beingmisused and abused for narrow commercial

advantages. In order to be patentable, the inventionought to meet strict criteria of novelty (previouslyunknown to the public), non-obviousness (containingsufficient innovativeness to merit protection) andindustrial applicability (usefulness). The strictinterpretation/application of the criteria forpatentability would mean that only ‘basic inventions’and ‘chemical and medical molecules’ should bepatented in the pharmaceuticals field and for otherindustrial sectors. The inventions should be really basicand unknown. Over a period in practice, the criterionfor patentability is tending to be diluted and is beingapplied in a liberal and flexible manner.

Patent holders enjoy exclusive rights and that toofor 20 years on the products, its production, using,

offering for sale, selling on importing and also similarrights on process patent. These kinds of rights shouldtherefore be allowed only on such products andprocesses which fully satisfy the strict criteria ofpatentability.

INDIAN PATENTS ACT 1970The Indian Patents Act 1970 that has been

brought in line with the provisions of the TRIPSAgreement has not done full justice in formulatingsome of the important and crucial Sections. The threeimportant stipulations of the ‘scope of patentability’which have remained unresolved so far are as follows:(i) Definition of patentable invention;(ii) Definition of patentable pharmaceutical

substance; and(iii) Patentability of micro-organism.

The above issues were debated in Parliament at

PATENTS

Patent system Abuse andNational Helath Policy Goals

The criterion

for

patentability is

tending to be

diluted

“

”


the time of enacting the final Patents (Amendment)Bill 2005. The senior Members of Parliamentcriticized the stipulations on these issues. The Ministerfor Commerce and Industry gave an assurance on thefloor of the House to refer the issues at (ii) and (iii)above to a Technical Expert Group for examination.The Ministry established a senior level Group headedby Dr R.A. Mashelkar, the then Director General ofCSIR.. The Group submitted its Report to thegovernment in December, 2006. However, the issuesdealt with in the Report by the Group were messedup and also the Report Technical expert group wasplagiarized from a paper supported by the MNCs.The report was severely criticized all over the countryby the stakeholders. Government has yet to announcetheir decision on these issues. The assurance givenon the floor of the Lok Sabha about 4 years ago isstill unfulfilled. Now it is understood that the Ministryof Commerce and Industry have requested again DrMashelkar to correct certain technical mistakes whichcrept up in the Report. No one can appreciate thisdecision of the Ministry from the public interest angle.Once the Group and its Chairman lost theircreditability, the Government should not haveapproached the same team to rectify the blunders. Theissues also must not be allowed to linger on.

In the meantime, the stipulations about thepatentability are being freely abused to the extent thattrivial/unusual patents are being issued by the PatentOffices. Some of the examples are as follows:

Frivolous Patents :(i) Patenting of a Cigarette comprising with a

tobacco rod. Patent No. 193777 granted toPhilip Morris Products INC. A US Companyon January 13, 2006.

(ii) Process for the preparation of novelcomposition useful for making Parontas (friedchapattis). Patent No. 195187 granted to CSIRa semi government organization on 7.3.2002.

(iii) Sanitary napkin, Patent No. 195410 granted toUNI-Charm Corporation on 11.4.2005.

(iv) Broom : Patent No. 195912 granted to JatinTarachand Gala on 29.7.2005.

(v) Process of Making Fried Masala Banana Chips,Patent No. 198069 granted to M. Veeresh onJuly 7, 2006.

(vi) Toilet Seat Cover, Patent No. 198000 grantedto Dr. P.I. Mohandas on 23.2.2007.

The above are the general type of so-calledinventions for which patents have been granted. Inthe recent past, even in the field of pharmaceuticalscertain companies have allegedly benefited from thecurrent scope of patentability and from the provisionsin the Section 3(d) of the Patents Act, 1970 andobtained the following questionable patents* :

Sl. Patent Holder Drug substance

No. No.(i) 204325 Pfizer Inc. Eletr iptan hydrobromide

monohydrate

(ii) 204343 Pfizer Inc. Polymorph of

azacyopentadecan

(iii) 201140 Pfizer Inc. Novel crystalline forms of

microlide antibiotic.

(iv) 202128 Schering Stable crystalline polymorph

Corp. of diffuropheny.

(v) 201649 Wyeth Novel succinate salt of O-

desmethylvenlafaxine.

(vi) 204126 Sun Pharma Piperzinyl derivatives.

(vii) 204151 Glaxo Substituted oxazoles and

thiazoles

(viii) 204158 Astra Imidazo pyridine derivatives

Zeneca

*Source : Mint – 10.12.2008

Thus in addition to the three issues of ‘scope ofpatentability’ referred to earlier, there is also a need tore-examine the ambiguity arising from the formulation

PATENTS

The Report of Technical expertgroup was plagiarized from a papersupported by the MNCs.


of Section 3 (d).The situation which is emerging from the grant

of questionable patents will soon result in a joke ofour patent system where the subject matter whichaught to be protected by the ‘Trade Marks Law’ orthe ‘process patents’ are being protectedby product patents to perpetuatemonopoly. The patent system is thusbeing misused for commercialadvantages inflicting serious impact onthe National Health Policy goals andUniversal Declaration of the HumanRights due to charging of enormouslyhigh prices on such trivial protectedproducts. Patents Law has to have co-relation with the National Health Policy in the nationalinterest.NEED FOR PERIODICAL POST AUDITOF PATENTS GRANTED :

The grant of trivial/questionable patents will leadto criticism when the public interest becomespronounced. Some kind of check is called for. Thereis a study by an important USA Institution whichreveals as to how the patent system is being misusedin that country. The National Institute of Health CareManagement Research and Educational Foundationin their Report (2002) on “Changing Patterns ofPharmaceutical Innovation” points out that :

“Drug manufacturers patent a wide range ofinventions connected with incremental modificationsof their products, including minor features such asinert ingredients, and the form, color, and scoring oftables”.

Similar reporting has also been done by theFederal Trade Commission of USA in 2003 whichalso revealed the shortcomings of the system ingranting questionable patents.

The above reporting in USA suggests thatperiodical studies of patenting are important to ensurethat misuse of the system is controlled. In India alsothere is not only a need to be exceptionally careful inproviding specific subject matter which should bepermitted for patentability to deal with the phenomenaof trivial patents as highlighted, but also that thereshould be a system of periodical review of patentstipulations and post audit of patents granted. Thiswill help to refine and discipline our patent system at

least in the initial decade.CONCLUSION AND SAFEGUARDINGTHE SANCTITY OF PATENT SYSTEM :

All developing countries including India are facinghealth crisis on a massive scale.Improving accessibility and affordabilities of medicines particularly forreversing the trend of high mortality andmorbidity from tropical diseases is amajor challenge. There is a strong needto discipline/limit the scope of patentablesubject matter in our country. Otherwisewe will face similar situation as in USAand China where presently lakhs of

patents are being filed annually. Such protectedmedicines seriously affect the affordability in the poorcountries. The US Federal Trade Commission in itsReport of 2003 pointed out as to how the flood ofpatent applications are responsible for poor qualityor questionable patents being granted in USA evenwhen they have over 3000 patent examiners. Such achaos would be totally unmanageable for the patentoffices in our country. Flood of patents would resultin high cost economy and sufferings for theailing people which a welfare/democratic state canill-afford. Government has invested several croresof rupees in creating a modern patent infrastructureand institution. Another important fact is that majorityof the patents are being obtained by the MNCs.Economic Times of January 7, 2009 has reported that“a total of 35,218 patent applications were filed, 6040from domestic and 29,178 from foreign applicants inthe last fiscal”. Has the Government undertaken sucha huge economic burden to protect frivolous/questionable and foreign patents ? Filing andexamination of patent claims, facing of patentsopposition, facing of cases in the courts, protectingof infringement of patents and controlling of theprices and availability particularly of the pharmaprotected products involves a huge economic burden.A serious consideration is needed by the Governmentto review the patentability in our country and also dothe post auditing of patents granted to bring indiscipline and sanctity in the system. We shouldpractice only a patent system which is not abused inany way and that it really stipulates the objectives ofpublic health in the country.

PATENTS

Patents Lawhas to have

co-relation withthe NationalHealth Policy


SECURITY

Nation must provide beforeSoldier is compelled to Demand

There is no point in having mammoth establishments like the Ministryof Defence supported by headquarters of the three services sitting onprime land in new Delhi while the soldier on ground is suffering pangsdue to bad equipment, inadequate pay and pathetic living conditions,complains JASBIR SARAI*

The country has justculminated the joyouscelebrations of its 60 th

Republic Day. The tradition ofholding the Republic Day Paradeevery year has been subject to a lotof debate and articulation over theyears. There is a strong lobby thatadvocates abrogation of thetradition since it involves an

avoidable expenditure apart fromcausing inconvenience to thegeneral public. In order tounderstand the need for continuingwith this tradition it is necessaryto dwell on the reasons for holdingit in the first place. The Parade isheld so that the President, asSupreme Commander, gets anopportunity to review the Armed

Forces under his/her commandand be reassured about the abilityof these forces to defend theNation. The forces in turn reiteratetheir loyal ty to the electedgovernment of the Republic andtheir Supreme Commander. Whiledoing so the might of the nation

is also exhibited to the world, thenational heroes are awarded andhomage is paid to the martyrs.

In essence the wholeceremony is all about generating afeeling of nationalism. The mostmoving part is the honour that thegrateful Nation bestows upon itsgallant soldiers who have wonlaurels with their feats of bravery

Defence is tooserious a matter to

be subject togovernmentaldithering and

procrastination

*The author is a Chandigarh based security and defence expert and analyst.


SECURITY

and in some cases have sacrificedtheir lives to uphold the nationalspirit. This year all personnel wholost their l ives ki l led in thehorrendous terrorist attack atMumbai on November, 26, wereawarded with the Ashok Chakra,the highest award for gallantry inoperations other than War. ElevenAshok Chakra’s have been awardedto our brave soldiers from theArmy, the Para Military Forces andthe Police.

Undoubtedly the feats of thebrave soldiers were deserving ofthe award but a true spirit ofnationalism demands that thesacrifice of all sons of India bemeasured in equal terms. Toelaborate, the Nation must neverforget that apart from these bravemartyrs there are many in this yearand before who have made similarsacrifices for the country. 70 bravesoldiers of the Indian Army have

embraced martyrdom in 2008. TheWar Memorial in the Udhampurbased Northern Command aloneholds the names of 10,000 plusmartyrs. The pain that is being feltby the families of these fallenheroes is as great as the pain beingfelt by say the father of MajorSandeep Unnikrishnan, the NSGofficer who died fighting terroristsin Mumbai.

I have two simple questions;would young Sandeep’s father havereceived same attention if his son

had been awarded the AshokChakra while fighting militancy inKashmir. My second question; isthe loss suffered by Rattan Tatadue to the action in the Taj MahalHotel at Mumbai any greater thanthe loss suffered by a poor man inKashmir whose house has beenbought down due to an encounterwith militants and who, unlikeRattan Tata, does not have themeans to ever reconstruct thesame.

The Nation should be moresober, understated, reticent andequitable while showing its respectfor those who have taken uponthemselves the mantle of security.Moreover, consciousness of theircontribution to the national causehas to be ongoing rather than eventand ceremony based. Every Indianshould exhibit this feeling fromwithin and all actions required touphold the respect, morale and

The governmentshould not be

allowed to hide itsinadequacies

behind a veil of aself proclaimedneed for secrecy.


SECURITY

fighting capability of the soldiersshould form part of the nationalcause. Ceremonies and theatricsshould not be allowed to replacereal time respect for the Indiansoldier.

Even as the heroes are beingfelicitated the Armed Forces areembroiled in a debilitating andhumiliating bureaucratic spat overthe award of the sixth paycommission. This apart, thedefence procurement procedureshave been made so complex thatthe forces are reeling under thepressure of being badly /underequipped. The matter is furtheraggravated by knee jerk measuresthat are adopted as reactions toincidents of security breaches asand when they occur. The NSGcan requisition an aircraft at will butonly after India has suffered thehumiliation of the 26/11 incident.Guided Missiles are purchased offthe shelf only when a military faceoff with a foreign power becomeseminent. A national andgovernmental attitude of thisnature does nothing to build themorale of the soldier or give himconfidence about his relationshipwith the State; it leads to avoidablecynicism amongst those who needto maintain a high threshold ofideology, whereby, all the affectionshowered by the nation getsnegated.

Defence is too serious a matterto be subject to governmentaldithering and procrastination. Theleaders must be firm and decisivein all matters related to security anddecisions must be well consideredand above all timely. There is no

scope for bureaucratic red tape insuch matters. If the governmentfeels that it can motivate itsnationals to sacrifice their lives fora salary of Rs 1000/ per month byall means give no more; If we feelthat we can do without advancedweaponry then the governmentshould call upon the youth to jointhe national Armed Forces andfight with bows and arrows. It isnot for the soldier to demand, it isfor the Nation to provide. Thereis no point in having mammothestablishments like the Ministry ofDefence supported byHeadquarters of the three services

sitting on prime land in New Delhiwhile the soldier on ground issuffering pangs due to badequipment, inadequate pay andpathetic living conditions.

The issue of accountabilityand the transparency is also ofprime importance in mattersrelating to defence and security?Timely decisions with the publickept in the information loop areof utmost importance. Thegovernment should not be allowedto hide its inadequacies behind aveil of a self proclaimed need forsecrecy. Furthermore, if the forcesfeel that they are not ready for warthey should come out openly withtheir apprehensions. In fact,Defence policy should form partof the election manifesto of allpolitical parties and the generalpublic should debate the same asis done in the US.. If we are truenationals then we need to gobeyond mere ceremonies and behonest with our soldiers, failingwhich, the chances are bright thaton one crucial day the soldier willfail us.

Defence procurement

procedures have been

made so complex that

the forces are reeling

under the pressure of

being badly /under

equipped.


The real-estate crisis thatexploded in America andengulfed mortgages,

rendering debtors unable to paytheir loans has already developedinto worst ever internationalfinancial crisis. It has rightly beentermed as a financial tsunami.

Banks, non bank financialinsti tutions, services andmanufacturing sector is not theonly casualty of the globalmeltdown. Worst is the fact that thebelief that capitalism was the bestof all possible systems, withapparent confirmation beingsupplied by the fall of the SovietUnion is shattered. This worst everfinancial crisis that has stunned theentire world has shaken the veryfoundation of Market Capitalism.

People, economists, politiciansand administrators world over arediscussing the future of economicorder in voyage for about threecenturies; unsure of the directionthey must take. There are plenty ofpeople who believe that Capitalismhas now taken the plunge andheaded for where it belongs- theabyss. Capitalism is reinventingitself, argue others. So what is the

reality? Who better is a personother than Sh S. Gurumurthy, thecelebrated CA and corporateconsultant to explain the emergingscenario in a simple uncomplicatedmanner? And this is what exactlyhe has done for us in his latestbook, “”THE WORLDBEYOND MARX ANDMARKET”.

“This critique of Marx andMarket is essentially from theperspective of that part of theworld – the non-Western worldand particularly, its non-Anglo-Saxon part – which has not beenexperienced, understood orfactored in by Karl Marx or hisadherents or by Adam Smith orother free market thinkers,” writesthe author.

Sh. S. Gurumurthy, we know,is an ardent observer of economicorder and has been a leadingactivist against the Globalisation.He has not only mastered hissubject but has evolved a distinctivestyle of expressing the difficultsubject in an easy to understand

manner. This is visible clearly in thebook under review. Even a lay manwill feel, while reading the book,that he is acquainted with thesubject adequately.

Those of us who are not sofamiliar with the convictions of theauthor will appreciate the clarity ofthoughts and adore his style ofgoing straight into the heart of thetopic. We should understand, saysGurumurthy ‘that it is partlyhistorical and partly futuristic. Itprognosticates a world that is notonly “post-Marx” and but also“post-Market.”

Summarizing briefly importantaspects of the historic journey ofboth communism and capitalismthe author tells us that ‘Marxismstormed the West over hundredyears ago as a part of thecontinuing and painful socio-religious and socio-political andsocio-economic melting processwithin the Christendom.’ “Theinherent contradictions within thecommunist philosophy andpractice”, he adds “began toemerge and finally ensured itscollapse.”

While talking about free

BOOK REVIEW

AN INTEGRAL MECHANISM IS THE FUTURE: GURUMURTHY

Title: THE WORLD BEYOND MARX AND MARKET”

Author: S.Gurumurthy

Year of Publication: December,2008

Publishers: Swadeshi Jagaran Manch Tamil Nadu

G. RAINA


market capitalism, the learnedauthor opines, “the very notion offree market model, the Anglo-Saxon free market capitalism basedon individualism as the core andglobalisation as drive now seems tobe a thing of past, after thefinancial meltdown hit the US.”

Gurumurthy in this very usefuland very valuable book explainsthat “communism and capitalismare not opposites; they are foundedon the same materialist philosophyand thought. Both look at theworld as exclusively materialist.And, both implicitly and explicitlyrejected the idea of God anddivinity. Both had concluded thathuman beings were just a bundleof wants and desires and the onlyquestion was how to fulfil suchwants and desires.

He does not stop at criticalanalyses of these thoughts butmoves forward to suggest thesolution. Based on the historicexperience of India and endorsedby eminent people from variedbackgrounds the author concludesthat ‘It has now become evidentthat not the contract –based lifemodel and style that is common tofree market capitalism andcommunism, but relation-basedmarket model, which will be thesustainable socio-economic andpolitical model for the world.’

Sh. Gurumurthy thus explainsthe transmutation capitalism hasundergone over a period of time ,‘With knowledge economy andsophisticated digital money andderivatives replacing hard assets,co-opting more and more peopleinto the category of capitalistswithout capi tal throughentrepreneurship, the character ofthe capitalism and the class enemyKarl Marx had set as the target of

revolution has undergone ametamorphosis.’

By making a socio-economiccomparison of the US in 1929-30(the years of great depression) andthe US now, the book THEWORLD BEYOND MARXAND MARKET brings out howthe US society and the UShouseholds were stronger then andweaker now. Gurumurthy believesand rightly so that Anglo-Saxonfree market capitalism has robbedthe people, and enriched thecorporates. He hits the nail on ishead when he writes, “Culturaldegeneration underminesinterdependence, leads to state-dependence; and an over burdenedState nationalises the families and

privatises itself !”Given the experience of the

last century and particularly the lastcouple of decades, and morecritically the last couple of years,what the world needs is an integralmechanism which allows the non-formal institutions – the family, thecommunity and other informalmechanism of the society – theirlegitimate role. It means that thereshould be adequate space for non-formal social order within andalong with the formal state, its rulesand instrumentalities. So we needa market which will function alongwith, and not undermine ordestroy, non-formal institutionsand conventions. So, the onlymarket system which will besustainable is that which showsdeference to non-formal normsand harmonizes with the societythat incubates and sustains thosenorms, concludes the writer.

It is a very useful book notonly for the followers of theSwadeshi but all the seriousstudents of economics particularlythose who want to understandcauses of the present crisis andcontribute to the evolution offuture global economic structuraldesign.

BOOK REVIEW

Sh. Gurumurthy

explains the

transmutation

capitalism has

undergone over a

period of time


OBAMA IS THE PRESIDENT OFUNITED STATES OF AMERICA

Barak Hussein Obama is the44 th president of USA.Born on August 4, 1961,

the 47 year old current president isthe first African American to holdthe office. He was sworn in asPresident on January 20, 2009 inan impressive but simple inauguralceremony attended by unusuallylarge crowd in chilling cold. Obamais a graduate of ColumbiaUniversity and Harvard LawSchool, where he was the firstAfrican-American president of theHarvard Law Review.

The inaugural ceremony wasthe finale of an unbelievable riseof a person from a humble anddisadvantageous background. In avery short span of time, he rosefrom a little-known ‘some-one’ tothe nation’s highest office. Hiselection campaign was incredibleand he succeeded in persuadingAmericans that he is the personwho will deliver.

Obama announced his

candidacy on February 10, 2007 infront of the Old State Capitolbuilding in Springfield, Illinois-thestate where he was a law maker.The choice of the announcementsite was symbolic because it wasalso where Abraham Lincolndelivered his historic “HouseDivided” speech in 1858. Duringboth the primary process and thegeneral election, Obama’scampaign set numerousfundraising records, particularly inthe quantity of small donations.

In his inaugural addressimmediately after taking oath,

Barak Obama accepted candidlythat USA was in the midst of crisis.He said, “Our nation is at war,against a far-reaching network ofviolence and hatred. Our economyis badly weakened, a consequenceof greed and irresponsibility on thepart of some, but also ourcollective failure to make hardchoices and prepare the nation fora new age. Homes have been lost;jobs shed; businesses shuttered.Our health care is too costly; ourschools fail too many; and each daybrings further evidence that theways we use energy strengthen ouradversaries and threaten ourplanet.”

Terming all these challengesreal, serious and many Barakasserted that “they will be met.” Ina forceful appeal to fellowAmericans Obama asked them to‘begin again the work of remakingAmerica’. Greatness is never given.It must be earned, he addedfurther.

SWADESHI SAMVAD

“Greatness isnever given. It

must beearned :Obama”


Regarding the economy andthe recent turmoil including therole of regulators, presidentObama was of the view that thepower of the market ‘to generatewealth and expand freedom isunmatched, but this crisis hasreminded us that without awatchful eye, the market can spinout of control - and that a nationcannot prosper long when it favorsonly the prosperous. The successof our economy has alwaysdepended not just on the size ofour Gross Domestic Product, buton the reach of our prosperity; onour ability to extend opportunityto every willing heart - not out ofcharity, but because it is the surestroute to our common good.’

Addressing the Muslim worldhe sought a new way forward,based on mutual interest andmutual respect. But took a dig at“those leaders around the globewho seek to sow conflict, or blametheir society’s ills on the West -know that your people will judgeyou on what you can build, notwhat you destroy.

Conditional non-military aid toPakistan: US

The new ObamaAdministration cautioned Pakistanthat it would be held accountablefor the security in the borderregions of Afghanistan and that itsperformance in the fight againstterrorism would be linked to thefinancial aid to them.

“Obama and Biden willincrease non-mili tary aid toPakistan and hold themaccountable for security in theborder region with Afghanistan,”the White House said in its foreignpolicy agenda document releasedsoon after Obama occupied theOval office.

Biden, a known expert onAfghanistan and Pakistan, then inthe capacity as the Chairman of thepowerful Senate Foreign RelationsCommittee, had introducedlegislation in the US Senate in thisregard.

Co-authored jointly by theRepublican Senator, RichardLugar, the legislation proposes totriple non-military aid to Pakistanin the next five years. Thelegislation authorises USD 7.5billion over five years in aid thatcan be used for developmentpurposes, such as building schools,roads and clinics.

Doubtful optimism in IndiaBarack Obama, widely hailed

as a harbinger of change hasgenerated optimism in India also.But there are some doubts thatrefuse to go. His inclination todraw a link between the situationon Pak-Afghan border and the

J&K dispute between India andPakistan and relate terrorism withresolution of Kashmir issue hasstrengthened long existingsuspicions about role of USAunder new administration.

There are other issues also likeCTBT, NPT and the stand takenby Obama on out sourcing duringelection campaign. Whetherrealism dawns on him while inoffice is to be seen.

These may be some irritantsbut overall there is optimism asIndia understands the limitationsof USA also. In the emerging worldscenario it may be possible for newadministration to avoid facingsome hard facts in the hope ofwinning over the trust of someenraged adversaries but ultimatelytruth has to be faced. The fact isthat Islamic terrorism is themanifestation of global resurgenceof religious fundamentalism whichis not Kashmir-centric. Even ifKashmir and Palestine are handedover to Islamic Jihadis terrorismwill continue to haunt the civilizedworld. It is basically a case ofmisplaced belief in self righteousstand taken by these ‘soldiers ofAllah which is a globalphenomenon ,be that Chechnya,Xinjiang or even Europe.

SWADESHI SAMVAD

The fact is that Islamicterrorism is themanifestation of globalresurgence of religiousfundamentalism which isnot Kashmir-centric.


National

ICAI against auditingwork to KPMG

The chartered accountantregulator, ICAI, has written to thenewly appointed Satyam Boardthat KPMG cannot do auditingand accounting work of theHyderabad-based IT company .

“We have written to Satyamboard that KPMG cannot beappointed auditor for Saytam asthey are not our members.” ICAIPresident Ved Jain said reportersin New Delhi .When pointed outthat KPMG would be doing arestatement of financial accounts;Jain said this is an assurance servicethat also involves accounting andauditing. When asked whether theBSR and associates, Indian arm ofKPMG can do the auditing ofSatyam, he said KPMG cannot beinvolved in auditing directly orindirectly.

Satyam’s new board hasmandated KPMG and Deloitte torestate the company’s financialstatements. However, ICAI saidKMPG cannot audit Satyam’sbooks, even as the global auditorsaid it does not require to registerwith the regulator to restate the ITfirm’s accounts.

“KPMG is not allowed topractice in India... they are notregistered with us,” Jain said.

Govt, RBI unveilstimulus measures

The government on Friday, 2nd

January; announced a freshstimulus to reverse the economicslowdown, taking its total revenueloss to Rs 40,000 crore, throughhigher public spending and easiercredi t especial ly for exports,housing and small industries.

Simultaneously, RBI slashedkey policy rates and ratios to pumpin an additional Rs 20,000 croreinto the banking system, whilegovernment asked PSU banks to

increase credit targets to ensuremaximum fund disbursals at theleast cost, particularly wheninflation is ebbing.

Signalling a shift in focus frominflation management to growth,the package — the second in amonth — is part of a processinitiated by the government andRBI in October in the face ofcrumbling financial system andrecessionary pressure in theWest.

The RBI had during the periodreleased over Rs 3,20,000 crore intothe banking system to usher in alow interest regime in the economy,as prices of fuel, metals and agricommodities plunged easinginflationary pressure.

The India InfrastructureFinance Company Ltd will accessan additional Rs 30,000 crore bytax-free bonds to finance projectsworth Rs 75,000 crore over thenext 18 months.

The IIFCL bonds would beissued soon for raising first trancheof funds.

Oldest impact structurein India discovered

One of the oldest impactstructures in the world, created byan asteroid of the size of about onekm in diameter about 2,500 millionyears ago, has been discovered byan Indian geologist in MadhyaPradesh’s Shivpuri district.

The newly discovered Dhalastructure, second in India afterLonar, has been named after thevillage near which it wasdiscovered. It is the eroded

remnant of the an impact structurewith an estimated present daydiameter of 11-km, the largest inAsia . Till date not a singleconfirmed impact structure hasbeen reported from Japan andChina.

It i s the only confirmedstructure discovered by an Indianin the subcontinent and Far EastAsia. Until now, Lonar in


National

Maharashtra was the onlyconfirmed structure but it wasdiscovered by a British Scientistand confirmed by the Americans.Dhala impact structure spreadsover 64 square km of area.

There are only 175 knownsuch structures in the world andmost are located in North America,Australia and Eurasia. Lonar andDhala are the confirmed structuresin Asia.

MMTC aborts SEZ JVwith Maytas

Government-owned MMTChas decided to drop its jointventure SEZ plan with the twoMaytas firms promoted by BRamalinga Raju’s family aftersurfacing of the multi-billionSatyam fraud.

Though the decision to pullout of the Rs 8,603-crore multi-services SEZ project in TamilNadu has been taken by theMMTC brass, the formal approvalfor aborting the plan is expectedon January 16 from the MMTCboard.

“We have sought the board’sapproval not to go ahead with theplan,” MMTC Chairman andManaging Director Sanjiv Batrasaid.

The company had soughtshareholders’ approval throughpostal bal lot for an equityinvestment of Rs 85.85 crore inthe joint venture SEZ with MaytasProperties and Maytas Infra.

The minority shareholderswere given time up to January 30for giving their response.

However, the outcome of theballot would make no difference toMMTC’s decision to abandon theJV with the tainted Hyderabadfirms since the government ownsover 99 per cent of the tradingmajor.

The USD five-billion PSU hadproposed to pick up to five per centequity stake in the JV.

The 8,603-crore SEZ was tohave an equity component of Rs1,717 crore and debt of Rs 3,495crore. The balance was to befinanced through lease rentals andpre-sales.

Daughter of domestichelp secures admission

in UK college

From a tenement inKanjurmarg, adjusting sleepinghours to study and watching hersingle mother work over 12 hoursa day as a

domestic help to make endsmeet, 21-year-old Varlaxmi Pillaihas overcome many an obstacle tosecure herself admission in a UKcollege.

“It was difficult at times whileI was growing up. My fatherexpired when I was five-years-oldand my mother had to bring upmy brother and me,” Varlaxmisaid. Her mother Shanta initiallyworked in a small biscuit factorybut to supplement the family’s

income doubled up as a domestichelp as well, she said.

“However, she always wantedboth my brother and me to studyand encouraged us,” Varlaxmi, whowill be doing her Master’s inInternational Business andManagement, said. Studying athome, a one room tenement insuburban Kanjurmarg, was nevereasy for Varlaxmi who had toadjust her study timings in orderto accommodate other membersof her family and f luctuatingelectricity supply.

“Electricity was a problemsince whenever I wanted to studywe would not have power. Also, Ihad the habit of studying late into

the night which was inconvenientfor others so I would sometimesget up early and study outside thehouse,” she said. Sleepingsometimes at 1 am and waking at 4am to study, Varlaxmi, on certainoccasions, spent the entire daystudying in the college library.

“I had to study when there wasno sound of television and otherdistractions. But I was always clearon what I wanted and I knew Iwould do whatever it took,”Varlaxmi said. Among her mainsources of motivation she cites areher mother, travel author MeherMoos and her college principalDr Indu Shahani.


International

Britain may shut doorsto foreign workers

Britain is planning to banadvertising jobs overseas due toeconomic meltdown, a processwhich could hit Indianprofessionals aspiring foremployment opportunities in UK.

The government is mulling anidea to ensure that existing jobs goto British workers. The employersare being forced to notify vacanciesin employment agencies withinBritain to priori tise localcandidates. Indians form thelargest group of foreignprofessionals working in Britain.

Every day, thousands of jobsare being cut across the sectors inBritain. Official figures suggest thatunemployment figure is reachingthe 2 million mark, for the firsttime since the mid-1990s.

Jacqui Smith, the homesecretary, has announced plans toforce thousands of nurs ing,primary teaching, hotelmanagement and other ‘skilledmigrant’ jobs to be advertised inemployment agencies such asJobcentre Plus.

Smith said “When it comes toimmigration, in difficult economictimes, I believe we need a toughsystem that offers British workersthe first crack of the whip for jobshere.”

Loan sharksintimidating womenLoan sharks in Birmingham

are forcing vulnerable women intohaving sex with them to pay offdebts as more people find itdifficult to make ends meet due tojob losses and credit crunch.

According to Birmingham’sStop Loan Sharks project, somewomen, particularly s inglemothers, are contacting them for

help and advice to deal with theirinability to make loan repayments.

Other borrowers of the illegalloans are reportedly beaten up orthreatened with violence, whilesome loan sharks hold people toransom by keeping their bankcards, Post Office books or eventurn to their friends or relatives topay the debt.

A spokeswoman for thegovernment-funded Stop LoanSharks project, said: “Loan sharksprey on the most vulnerablemembers of society and are oftenengaged in a wider web of illegalor dangerous activity.

“We have unearthed crimesincluding k idnapping,counterfeiting, assault, wounding,blackmail and sexual intimidation.They work within a community,often starting out as a ‘friend’,

offering to help with someone infinancial trouble, and thenbecoming aggressive when thatperson can’t pay.

Carbon cost ofGoogling revealedThe research found a google

search produced 7g of carbondioxide. Two search requests onthe internet website Googleproduce as much carbon dioxideas boiling a kettle, according to aHarvard University academic. USphysicist Alex Wissner-Gross hasconducted research into theenvironmental impact of“googling”.

Environmental physicists areworried about the environmentalimpact of information technology.A recent study estimated the globalIT sector generated as muchgreenhouse gas as the world’s

airlines put together. Mr Wissner-Gross’s study found a typicalGoogle search on a desktopcomputer produces about 7g(0.25oz) of carbon dioxide.

The Harvard academic arguesthat these carbon emissions stemfrom the electricity used by thecomputer terminal and by thepower consumed by the large datacentres operated by Google aroundthe world.


International

World Bank bans Wipro,Megasoft, SatyamEven before the dust settled

on the controversy involvingSatyam’s debarment, the WorldBank revealed that action has beentaken against a total of five entitiesin India, including WiproTechnologies, and an individual.

The action was initiatedagainst these entities and individualas they were found to have“violated the fraud and corruptionprovisions of the ProcurementGuidelines or the ConsultantGuidelines,” besides offeringimproper benefits to Bank staff.

Megasoft became the thirdIndian software vendor to haveattracted the Bank’s ire, whileNestor Pharmaceuticals and GapInternational were non-IT entities.An individual Surendra Singh wasbarred from doing business withthe Bank for violating guidelines.

While Wipro was barred forfour years beginning June 2007 for

“providing improper benefits toBank staff ”, Megasoft barred foran identical period beginningDecember 2007 for “participatingin a joint venture with Bank staffwhile also conducting businesswith the Bank.”

In a statement, the World Banksaid that it decided to “make public

the names of all the companies thathave been debarred from receivingdirect contracts from the Bankgroup under i ts corporateprocurement programme.

“This change was made in theinterest of fairness andtransparency... From now on theBank group would publicly listnames of companies debarredfrom its corporate procurement.”

Need to design a newglobal system

U.S. exporting recession to theworld, says Stiglitz Every successfuleconomy is a market economy

Nobel laureate Joseph Stiglitz

at the 10th D.T. Lakdawalamemorial lecture on ‘Crises Todayand the Future of Capitalism,’ inNew Delhi on Saturday.

Nobel laureate Joseph Stiglitzhas urged India and China to usethe G-20 forum to press for achange in the global financialarchitecture that has been sodisastrous for the world.

Describing the developedworld’s decision to consult the G-20 as a positive outcome of theglobal meltdown, he was of theview that the two countries shouldalso speak for the 152 countrieswhich were not invited to the

meeting.Delivering the 10th D. T.

Lakdawala memorial lecture on‘Crises Today and the Future ofCapitalism,’ the noted economistsaid the problem – essentially a U.S.export – had to be tackled globally.India and China, he added, had notsuffered much from the meltdownbecause they did not liberalise theircapital and financial marketsdespite U.S. nudging the twocountries in this direction “just sothat you could experience what wedid!”

Making out a case for a globalregulatory authority, he said therewas a need to design a new globalsystem to develop immunity or atleast limit the consequences offailure. Failure was contagious inthe present brand of globalisationas a result of which the U.S. wasexporting its recession to the restof the world.

While there was recognition ofthe importance of a coordinatedglobal fiscal and monetaryresponse, he said the requiredreforms went deeper, and includedcreating a new global reservesystem and a new global financialregulatory authority. And heunderlined that globalisation had toensure the maximum good for themaximum numbers and not justthe privileged few who got richerunder the existing regime.

Holding forth for nearly twohours, the former chief economistof the World Bank carried theaudience along right through;punctuating his lecture – organisedby Institute of Social Sciences –with digs g alore at the U.S.,particularly the Bushadministration and its response tothe crisis.


WTO

New database on RTA’s launchedThe WTO has launched a new database on

regional trade agreements (RTAs). This contains allthe relevant documentation received by the WTOfollowing notification by a WTO member that an RTAhas been established.

The database, which is one of the requirementsof the General Council’s Transparency Decision onRTAs, contains all the notifications, links to thecontent of the relevant RTAs, legal provisions andinformation on the WTO’s assessments of the RTAs.

India to drag EU to WTOThe tussle between Indian generic drug industry

and western innovative pharmaceutical firms is set toget stronger as India is considering dragging theEuropean Union to WTO on the issue.

India’s $12-billion pharmaceutical industry, gets40% of its revenue from exports ofgeneric drugs across the world, of whicha large part goes to the EU and the USmarkets. However, it constantly comesunder fire from large pharma companiesin these region in the name of patentinfringement.

“It is a very concerted move by MNCsto disrupt the growth of Indian genericindustry,”commerce secretary Gopal Pillai said.

Underscoring the need for unity of thedeveloping nations on the issue he said, “we may haveto take the issue to the WTO and challenge it...wewould be seeking consultation with the EU.”

Under the WTO rules, before a country takesanother member to the Dispute Settlement Panel itgets into the process of “consultations”. If theconsultations do not yield into a resolution of theissues, the WTO Dispute Settlement Panel starts theproceedings.

USA hauls EU toWTO over poultry ban

The outgoing administration of U.S. PresidentGeorge W. Bush stepped up a last-minute trade assaulton the European Union on Friday, filing a new caseat the World Trade Organization over an EU ban onAmerican poultry.

A day after escalating a 13-year beef dispute withBrussels, Washington said it had run out of patiencewith European restrictions on imports of poultrytreated with anti-bacterial chemicals and that it hadno choice but to bring the dispute to the WTO.

“The poultry treatments at issue have been widelyand safely used in the United States for many years,”said Susan Schwab, Bush’s outgoing U.S. traderepresentative. “The EU’s own scientists haverepeatedly found these treatments not only to be safe,but effective.”

Schwab said the U.S. — the world’s largest poultryproducer — has tried to resolve the dispute throughdialogue over 11 years. But the EU has failed to offer“any legitimate, science-based reason for continuingto block our poultry,” she said.

The four “pathogen-reduction treatments” in thedispute are chlorine dioxide, acidified sodium chloride,trisodium phosphate and peroxyacids. Each has been

approved for poultry processing by theU.S. Food and Drug Administration andthe U.S. Department of Agriculture, butthe EU has blocked poultry carcassesprocessed with such treatments since1997.

Setback for China incar parts case

‘WTO has circulated the Appellate Body reportin the case brought by the European Union (EU), USand Canada against China’s taxes on imported carparts, thereby corroborating China’s contravention oftrade law in the car parts case.

The Appellate Body confirms the WTO panelwhich decided in July 2008 that the Middle Kingdombreached its WTO obligations by fostering a systemof registration and taxation of imported car parts thatpatently promoted the use of domestic componentsover imported car parts.

In the system Under this system, carmanufacturers in China have to fork out an additionaltax over and above the normal customs duty slappedon imported auto parts, when they do not use asufficient quantity of parts made in China.

The system so challenged by trade majors againstChina is part of China’s “New Automobile Policy”which was adopted in 2004.

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