People's Democracy(Weekly Organ of the Communist Party of India (Marxist)
Urged To Intervene In Babri Masjid Demolition Case
following is the text of the Memorandum on September 25, 2002 to the President
of India by Pranab Mukherjee, MP; (Congress) Harkishan Singh Surjeet (General
Secretary, CPI-M);Deve Gowda (President, Janata Dal-S) Laloo Prasad Yadav
(President, Rashtriya Janata Dal) A B Bardhan(General Secretary, CPI)
Abani Roy, MP (RSP)Debabrata Biswas
Forward Bloc) Sitaram Yechury( (CPI-M)
the undersigned, seek your intervention on a matter of urgent public importance
which causes considerable concern and raises serious apprehension about the
subversion of rule of law and its application.
the demolition of the Babri Masjid at Ayodhya on 6th December 1992,
an FIR relating to Crime No. 198/92 under various sections of IPC was lodged in
the local Ram Janam Bhumi Police Station. A large number of persons including
the following accused persons were named in the FIR:
Shri Ashok Singhal, 2. Shri Giriraj Kishore; 3. Shri Lal Krishna Advani; 4. Shri
Murali Manohar Joshi; 5. Shri Vishnu Hari Dalmia; 6. Shri Vinay Katiyar; 7.
Sushree Uma Bharati; 8. Sadhvi Ritambara
case was originally entrusted to CBCID, Uttar Pradesh but subsequently
transferred to CBI in August 1993. The case was first heard in the Court of
Judicial Magistrate sitting at Rai Barailley but subsequently it was transferred
to the Special Court of Additional Chief Judicial Magistrate at Lucknow
constituted under a Notification dated 8th October, 1993. On 9th
September 1997, the Additional Session Judge passed an order for framing charges
against the accused persons as mentioned above.
the order for framing of charges, the accused persons filed Criminal Revision in
the High Court of Lucknow Bench. While deciding the case, Hon'ble Justice
Jagdish Bhalla on 12th February 2001, pointed out certain legal
infirmities in the Notification dated 8th October 1993, setting up
the Special Court and observed that the Special Court of Additional Chief
Judicial Magistrate, Lucknow did not have jurisdiction to try or inquire into
and commit to the Court of Session's case Crime No. 198 of 1992. However, in the
same judgement, the Court observed that the mistake committed by the State
Government in issuing Notification No. 5175/VII/Nyaya-II/739/87 dated 8th
October, 1993 is curable and is open to the State Government, if they so desire,
to rectify its mistake/illegality by issuing a fresh notification after
consultation with the High Court in accordance with the law. This view was
reiterated in Supreme Court's observation also.
the UP government under BJP and now the coalition government of BJP-BSP under
Km. Mayawati are not issuing fresh notification to rectify the mistake and
protecting some persons holding high offices in the Union Government.
are sorry at the blatant manner in which the UP Government has refused to take
cognizance of the Supreme Court directives to issue a fresh notification for
proceeding on the case. The issue of a fresh notification is necessary to remove
the legal infirmity as pointed out by the judgement of Justice Jagdish Bhalla of
Lucknow Bench of High Court. It appears due to political expediency of the
BJP-BSP led State Government in UP the process of administering justice and
upholding rule of law is being subverted by the refusal of State Government to
correct the technical lapse and send back the case in the courts. This cannot be
accepted and we, the undersigned, therefore, are seeking your intervention to
ensure that justice is administered without fear or favour.
With kind regards,
Designs Of US Imperialism
Harkishan Singh Surjeet
whole world condemned what happened on September 11 last year when thousands of
innocent lives were lost, but barely after two-three days, Bush picked up a
slogan of fighting against terrorists the world over. This campaign was not
confined to America alone. He began addressing in such a way as if he has
assumed the leadership of the whole world in the struggle against terrorism. He
visited various capitals in the world and met all important personalities
heading the governments there. Apart from European countries, he also visited
Russia, China and other countries to rally support for his slogan.
he launched an offensive against Afghanistan since Osama bin Laden was
responsible for the September 11 carnage. Although he unleashed such a brutal
offensive there that led to total destruction of Afghanistan; yet, Osama is not
found so far. He only managed in this process to install American armies in the
strategic places of Central Asia bordering Uzbekistan and Tajikstan. In this
situation, he came out with another slogan pointing that his target is not
confined to Osama alone, he is aiming at "axis of evils" which
includes Iraq, North Korea and Iran. It was natural, therefore, that various
governments the world over extended their support and sympathy to America on the
question of terrorism but when he extended the explanation of the "axis of
evil" doubts began arising what can be his real aim.
this campaign went on and he tried to rope in various countries to further his
own ambitions, but certain countries like Russia, China and European countries
except Great Britain began raising doubts of his mixing up fight against
terrorism with the "axis of evils" and when he openly came out that he
wants to target Iraq, various European countries began demarcating from him.
fact, Russia has come to an understanding with Iraq to oppose this effort of
America. Same is the case of Europe. In fact, a German minister had openly come
out that Bush is speaking the language like that of Hitler. His concentration on
targeting the "axis of evils" has created many doubts in the minds of
the people and the opposition is growing everywhere. Bush is not hesitating even
to create a situation of war to force other countries of the Third World to his
submission. He is targetting Iraq when Iraq has openly declared that Saddam is
prepared to abide by all the conditions laid down by the Security Council.
Saddam is also prepared to allow the inspectors to go there and see with their
own eyes whether he is violating any aspect of international peace. Iraq is not
a big country; it is a country of less than 20 million people abused by more
than a decade of sanctions already exhausted and tearful. If Saddam had the
weapons of mass destruction attributed to him and showed the slightest
disposition to use them against anyone --- let alone the West --- his country
would be wiped out of existence.
any kind of war is started on this issue against Iraq by the USA, the real aim
will be an assault upon the natural resources, the raw materials and riches, the
labour power required to feed the busy global economy. This was made clear by
Bush's absence from Johannesburg and his determination to subordinate everything
to the American economy. There is no surprise in this.
was after all the ill-health of the economy which robbed his father of the
second term. This is not going to happen to Bush, the son. Therefore, the
economy must be privileged above all else, no matter what the cost; even if this
means incursions into the lands of others to secure the life-blood of the US
economy. The necessity for the seizure of oilfields of world, particularly those
of Iraq, has become more clear now. All nations of the Third World must now
preserve the future fate of their resources --- the forests, minerals, oil,
diamonds, gold, water, fish, the labour of their people in factories and
mansions of the rich on plantations and agribusiness. That is what Bush and
Blair feel reluctant to tell. While making these observations, a renowned
British author says: "A war has been announced."
real thing is not something which is hidden by Saddam; it is the resources for
which America is fighting. In fact, after the demise of the Soviet Union and set
back to socialism in many countries, there is a big change in the correlation of
class forces the world over from a bi-polar world to uni-polar with America
imposing its hegemony everywhere. This new slogan to fight against terrorism is
a part of that strategy.
It is now apparent that Bush is gearing up for a pre-emptive strike against Iraq with a twin purpose - to eliminate Saddam and to gain control over Iraq's oil which would help US lessen its dependence on Saudi oil. Iraq, the second largest repository of proven oil reserves in the world with 115 billion barrels and upto 300 billion barrels of possible reserves, has a total of 9 blocks for further oil exploration averaging 10,000 sq kms and its operational costs are less than one dollar a barrel - the lowest oil producing cost in the world. As the world consumption of oil is rising far in excess of the replacement through new discoveries, the Middle East oil has assumed increasing importance for the US and a compulsion for Bush to overthrow the present Iraqi regime. But, the moot point is whether Bush would find support of other world powers, excepting the Great Britain, to translate his design into action. Even in Great Britain, fierce opposition is being voiced by many political and religious sections including the Church of England who are questioning the "priorities of American foreign policy." To sum up, it is the greed and lust of Bush to grab Iraq's oil, and in the process of the whole Middle East oil, that he has coined the slogan of eliminating "axis of evil". But the USA is not going to find it easy - the opposition to its plan in Europe, Third World including Arab countries, and reservations on the part of Russia and China will make it difficult for Bush to implement his plans. The democratic forces all the world must condemn the evil designs of US imperialism.
Backs Disruptive Forces In Tripura
Congress party is going ahead with its electoral alliance with the Indigenous
Nationalist Party of Tripura (INPT) in Tripura. This is a tie up fraught with
dangerous consequences for both the people of Tripura and national unity. The
character of the INPT as a political front for the banned extremist outfit, the
NLFT, was written about in the People’s Democracy (August 12-19, 2002).
The speech made by INPT President Bejoy Hrangkhawl at Geneva advocating
self-determination for the tribal people and an independent state of Tripura has
also been highlighted in these columns. The Congress national leadership was
asked how it can justify such an opportunist and harmful alliance with forces
who advocate separatism and promote terrorist activities. The answer has been
given through the joint rally organised by the Congress and the INPT at Agartala
on September 8. At this rally, the Congress leadership in Tripura and Mani
Shankar Aiyer, the AICC in charge for the state have sought to explain away the
written speech delivered by Hrangkhawl at Geneva justifying the terrorist
activities of the NLFT and the ATTF as a struggle for self-determination.
Hrangkhawl himself sought to deny his speech and proclaimed that he believed in
the Indian Constitution. One after the other, the Congress leaders sought to
dispel "the misunderstanding" caused by Hrangkhawl’s speech.
order to cover up his party’s untenable alliance with the INPT, Aiyar resorted
to the stereotyped anti-Marxist attacks of labeling the CPI(M) as pro-China and
anti-national. Aiyar, being a Johnny-come-lately, probably does not know that at
one time, the Congress government had locked up all the CPI(M) MLAs under MISA
in 1974 and yet was unable to thwart the growing influence of the Party.
Congress party has once again, as in the past, decided to align with the
separatist forces who are out to disrupt the unity of the tribal and non-tribal
people of Tripura. The Congress has a long history of aligning on the one hand
with the Tripura separatist groups and on the other promoting the activities of
the Bengali chauvinists. In 1980, two years after the first Left Front
Government took office in Tripura, violent clashes took place between the tribal
and non-tribal extremists. Hundreds of people lost their lives in this
Kumar Hrangkhawl was instrumental in leading the tribal extremists who indulged
in the mass killings of innocent non-tribal people in 1980. The Indian
Express of June 20, 1980 stated that Hrangkhawl had "established
contacts with rebel Mizo leaders and arranged for training of about 100 tribal
volunteers in the outlawed Mizo National Front training camp at Rangamati in the
Chittagong Hill Tracts in Bangladesh. Rangkhal proclaimed himself as the Chief
of the Tripura Tribal National Front (TTNF) and commander in chief of the
Tripura Sena and declared `independent Tripura’ as a goal of his
organization." Hrangkhawl at that time was also a member of the TUJS
which later became an ally of the Congress.
Congress had played a dubious role during the building up of ethnic tensions. It
had, given its predominantly anti-tribal outlook encouraged the Amra Bengali
chauvinists who were spreading hatred against the tribal people. The Times of
India on June 26, 1980 had stated that the Congress "also needs to
examine its attitude and ask itself whether it should align itself with communal
and reactionary forces for the sake of a few votes……it has been known to
give support and encouragement to the Amra Bengali chauvinists….."
have quoted from the media reports of that time to show the role of Bijoy
Hrangkhawl and of the Congress party. Unfortunately, nothing much as changed
after two decades. The Congress under its president Sonia Gandhi is going the
same way as the Congress under Indira Gandhi. Hrangkhawl, after he formed the
TNV began terrorist attacks using camps in Bangladesh and the Congress party had
no qualms about using Hrangkhawl to create a violent situation to destabilize
the Left Front government during the 1988 elections. The five-year period of
semi-fascist terror followed under the Congress-TUJS regime. History is
repeating itself. Hrangkhawl is now heading an outfit which comprises all the
tribal separatist groups who have come together under the directive of the NLFT.
The NLFT has a gory record of killing hundreds of innocent people and extracting
ransom from those kidnapped. The Congress-INPT rally in Agartala is a
proclamation of the new version of this unholy combination between the Congress
and the tribal separatist groups.
September 14 Left Front rally in Agartala was a fitting and effective reply to
this display of harmful opportunism. The Left Front government rally showed the
deep bonds of solidarity which has been built up between the people, both tribal
and non-tribals. This was a rally, the like of which was not witnessed in
Agartala in the last two decades.
the meantime, the state government and the police are earnestly engaged in
combating the extremist attacks concentrated in the remote tribal areas. The
CPI(M) and GMP cadres continue to be targeted and attacked. (See accompanying
box for details.) There are 51 camps of the NLFT and the ATTF in the bordering
areas in Bangladesh from where murderous forays are made into the state. Tripura
is unique in that it has 856 kms of international border with Bangladesh. Yet,
the BJP-led government has withdrawn the Indian army from the state. The Indian
army continues to conduct operations in Assam against the ULFA. Yet in Tripura,
which is facing armed attacks from three sides of the border, the Centre refuses
to deploy the army. As the Left Front government has stated time and again, this
is not a problem which can be tackled only by the state police; it is the
responsibility of the center to man the borders. Yet, the BSF has only eight
battalions when at least 18 battalions are required to man the entire borders.
CPI(M) Central Committee has called for observance of September 30 as Tripura
Solidarity Day as a culmination of its 10-day countrywide campaign and movement.
All democratic forces must be mobilized to demand that the Centre send adequate
security forces to Tripura and deploy the Indian army there. This is essential
to safeguard the people of the state and national unity. Secondly, the campaign
will expose the nefarious game of the Congress in Tripura where it has allied
with the very forces who threaten the unity of the people and the country. The
Solidarity Day should convey a powerful message to the people and the Left Front
in Tripura that its struggle against the disruptive forces has the support of
all democratic and progressive forces.
CPI(M) and Mass Organisation Cadres
killed in August and September
Latiram Reang (close supporter of the Party)
Ramguna Reang (TYF unit president)
Sandairam Reang (TYF unit secretary)
Sumati Reang (GNS worker)
Para, Kanchanpur, North Tripura district and Chandipur, Kanchanpur, North
8 p.m. in the evening, he was forcibly lifted from his house by a group of
NLFT. Then at some distance, he was shot to death and left there.
same gang of extremists then rushed to the Chandipur village. They first
searched for Dantamani Reang, Chairman of the village. Not finding the
Chairman, they caught hold of his son Ramguna Reang and took him with
them. Then they stormed into the house of Sandairam Reang and caught him
also. At that time when Sumati Reang, mother of Sandairam, came out in
rescue for her son, she was gunned down there. Then the extremists dragged
both of them and shot them dead in a distant place.
Parendra Debbarma (Party LCM)
Khowai, West Tripura
was forcibly lifted away from his house by a group of NLFT extremist.
Taking not very far off from his house, he was left there shot dead.
Chintamani Chakma (GNS Worker)
Baghaicherra, Kanchanpur, North Tripura
she was working in Jhum field, she was killed by miscreants.
Janaram Reang (Party member, senior GMP worker)
Chandrajoy Reang (Party member, TYF worker)
Kanchanpur, North Tripura
5.30 of that fateful evening, a group of armed NLFT extremist raided the
village and asked all the villagers including the children to assemble in
a field encircled by the extremists. The villagers on gunpoint were
compelled to comply their order and gathered there. There they were asked
to fall in line. Then, from amongst the villagers the extremist separated
Janaram Reang and Chandrajoy Reang and shot them dead in public before the
villagers standing there. The killers warned the villagers that this will
be the fate of those whoever involved with communists.
Tarun Saha (Tripura Motor Shramik Union [TMSU] leader)
was kidnapped by the NLFT extremist on 7.1.2002. On the basis of the
confession of a recently arrested extremist, skeleton of Tarun Saha was
unearthed at Bishramganj, Bishalgarh, West Tripura on 5.9.2002.
are the number of Party members, mass organisation activists and Party
supporters killed by the extremists during last years. This includes Bimal Sinha,
Minister and Party state committee member, 8 GMP Central Committee members
including Ananda Roaja, Party state committee member and many other GMP, TYF and
TSU leading workers.
Of Gangrape To A School Teacher: Protest Against The Outrage
there was outrage and horror at the sentence meted out by the Meerwala Jatoi
council in Pakistan of revenge rape against a young woman for the alleged
offence of her younger brother at least it could be said that those responsible
were self proclaimed councils. But what of an elected sarpanch holding a
constitutional post delivering a sentence of gang rape and then continuing in
that post, protected by a conniving administration and government?
July 30,2002, in the village of Sankarikala, Lanji tehsil of Balaghat district
in the state of Madhya Pradesh in a most shocking incident that makes a mockery
of the panchayat raj system, an elected sarpanch Jiya Lal Patle, along with the
secretary of the panchayats Laxmi Lal Patle and the jan pad member Chetan
Ratangdale, sentenced a school teacher to 'gang rape' to 'punish' her for her
alleged 'sexual relationship' with a male colleague. This outrageous incident
came to light only last week, when the Jabalpur High Court issued notice to the
September 15, the All India Democratic Women's Association organized a big
protest demonstration in Jabalpur, attended by hundreds of women and men from
neighbouring villages, at the Zonal Commissioner's office and handed over a
memorandum to the Commissoner M.M.Upadhyay that included the demands to arrest
those concerned under charges of conspiracy to rape and attempt to rape,
immediate dismissal of the sarpanch and others under the relevant provisions of
the Panchayat Act.He assured those present including office bearers of the
organization, Brinda Karat, Sandhya Shaily and Anjana Kuraria that he would act
on the memorandum. On September 17 another demonstration was held at the block
level and a dharna is scheduled to be held also in Bhopal.
Devi is a 27 year old school teacher in a panchayat run school in the village of
Sankarikala, Lanji Tehsil, in the district of Balaghat, Madhya Pradesh. She has
been teaching in this school for the last six years and is popular among the
students. She is the only woman teacher among the seven teachers in the school.
Her crime is that she is young, articulate and attractive and has maintained a
distance from the other teachers. Last year she had to publicly upbraid one of
the male teachers for his highly objectionable sexist behaviour, lewd comments
made in front of her and sexist jokes. She suspects that he is also behind the
incident. The sarpanch claims that two children in her school informed him that
on July 24 they had seen her in a compromising position in the teacher's common
room with another teacher. The male teacher, Shri Joshi incidentally happens to
be oldest and most senior teacher in the school, nearing retirement.
Bhuvaneshwari knew nothing of this absurd charge. She took her classes as usual
on the 24 and the following days. It was only around the 28th when
the sarpanch issued a public notice through the beating of drums in the village
that a 'special' meeting was to be called on July 30 about her 'behaviour' that
she got to know about the charge. This was the second notice issued since the
first notice did not evoke any response from the village. On July 30 when she
got to the school, she found filthy slogans chalked on the village walls against
her. Two drunken men, whom she has named in her FIR, came to the school in the
morning and insisted that she go with them to the meeting. She complained to the
headmaster who got them removed from the premises. However, the headmaster
advised Bhuvaneshwari that since the school was under the jurisdiction of the
panchayat she should attend the meeting and that he would accompany her.
she reached the meeting there was a crowd of about 700 or so people including
children, teachers, parents and others mobilised by the sarpanch. As soon as she
arrived, there were catcalls, whistling, and filthy slogans against her. The
sarpanch called the children to give their statements. The first child, just
nine years old could barely speak and said that he had seen the two sitting
together. The second child, about 11 years or so, made what can only be called a
tutored statement. Unthinkable for a child his age, he gave a most detailed
description of what he said he had purportedly seen. At every sentence there
were whistles and catcalls. In fact the room where he described having seen
them, is a common room, accessible to everyone in the school. If the child is to
be believed, in the short tea break between classes, the two were having sexual
intercourse with the door open, with two of the windows open in full public
view. Bhuvaneshwari could hardly believe what was being said. She was paralysed
with humiliation and fear.
this brave woman stood her ground. She refuted all the allegations and said that
she spent time with the said teacher during her tea breaks because he was the
oldest, 'like my father' and she felt safe with him. She said that on the 24th
she was in the teachers room for the 10 minute tea break, speaking with him,
after which she took her classes as usual. He also made a similar statement. The
entire focus shifted not from the total lack of jurisdiction of the sarpanch to
hold such a meeting in the first place, but to whether or not such an incident
could have taken place. All through the statements, men were shouting that a
'woman like her deserved to be raped.' At the end of the meeting the Sarpanch
and others with him, declared her 'guilty' and sentenced her to gang rape and
even named the four men who were to carry out the sentence. They were drunk and
came towards her, molested her. Some in the meeting protested. Meanwhile her
husband who was in a neighbouring village heard about the meeting and rushed
there along with others from his village and brought her out of the meeting.
the first instance the police refused to register a report. The Collector, one
Dr Rajesh Rajori who she complained to also refused to act. Later an enquiry was
conducted by one Chari, the SDPO. He took statements from all those involved and
came to the conclusion that such an incident had occurred. But he charged the
sarpanch and others only under sections related to the use of obscene language
against a woman and the accused were immediately granted bail. On the other
hand, Bhuvaneswari was punished on a recommendation of the sarpanch and
transferred to a remote school and so was the other teacher Shri Joshi. In
despair, she filed a petition before the Jabalpur High Court. Currently, she is
being threatened and pressurised to withdraw her charges. The sarpanch's
supporters are sitting on a so-called hunger strike to demand her dismissal. It
is said in the village that the ex-MLA, a BJP leader of the area is backing the
agitation and that the sarpanch and his men are BJP supporters.
sarpanch and other elected members have no jurisdiction to hold such a meeting.
The holding of such a meeting with the express agenda of discussing the 'immoral
behaviour of a teacher' regardless of what transpired at the meeting is itself
totally violative of the Panchayat Act. It is a clear case of misuse of a
constitutional post and attracts punitive action under the Panchayat Act.
The proceedings at the so-called meeting constitute crimes under relevant
sections of conspiracy to rape, attempt to rape, molestation, defamation, use of
obscene language against a woman. Some of these are non-bailable offences.
Therefore the arrest under these charges of the sarpanch and his cohorts is
On the basis of above, the sarpanch and his colleagues should be removed from
the elected posts under the relevant provisions (Sec. 40) of the Panchayat Act.
Police personnel involved in protecting the accused should be punished.
The present Collector also has to be punished for dereliction of duty.
Since the woman has been defamed, it is incumbent for the administration
including the Commissioner, to hold a meeting in the village in defence of
Bhuvaneshwari and to expose the crimes committed
the Sarpanch and others.
Cancellation of the punishment transfer orders of Bhuvaneshwari and
Joshi and reemployment in the same school.
Immediate security protection to Bhuvaneswari as demanded by her.
the help of social workers /educationists information has to be got from the
children as to what prompted their statements? The AIDWA has also information of
another shocking case from a neighbouring village where a young girl was
forcibly thrown out of her house by the panchayat accused of being pregnant. The
child actually had a tumour in her stomach that was later operated on. But the
panchayat has refused to let her back into the village. It is also reported that
in the last six months in the area there have been eight cases where young women
have been burnt to death. An AIDWA team will soon be going to the area to find
out more about these reports and to help organize local resistance.
experience also highlights problems faced by women employed in villages as
school teachers, health workers and so on under the exclusive jurisdiction of
the panchayats. In the name of accountability to the community, they are
vulnerable to all kinds of harassment and pressures from the panchayats,
including sexual harassment. In the absence of radical measures like land reform
to change unequal social equations based on class, caste and gender
inequalities, panchayats become instruments to legitimise the most retrograde
practices. This is more so in areas where there is an ascendancy of right wing
politics. There is thus a question mark on the view that the panchayat model in
itself is intrinsically democratic.
Against Saffronisation in JNU
what is perhaps one of the first decisive breakthroughs of the student movement
against saffronisation and privatisation, an eight-month long struggle of JNU
students has forced the university administration to agree to a review of the
university’s proposal to the UGC for the tenth Plan period. The original plan
prepared by the administration had included proposals whose implementation would
have meant a fundamental change in the character of JNU. On the one hand it
mooted a number of new centres which were evidently a cover for the infiltration
of RSS cadres and RSS propaganda in the university. The most important of these
was the ‘Centre for Human Consciousness’ — a discipline unheard of before
and whose actual content the administration could never explain satisfactorily.
Then there was the ‘Centre for Water Sciences’ which was supposed to study,
among other things, "water as an element of ritual purity". Such
obscurantist courses apart, the administration had also proposed a number of
short-term self-financing courses as well as the setting up of an `Office for
Resource Mobilisation’ meant to garner funds regardless of the academic
autonomy of the university.
Students’ Union had been leading a struggle demanding the withdrawal of these
proposals since January this year. It was only after a struggle which lasted two
semesters, in the course of which the Union had to adopt successivly more
intense forms of protest — including a four day long strike and a seven day
hunger strike by the Students’ Union president — that the administration has
finally relented by setting up a Committee to ‘finalise’ the tenth Plan
proposals before it is submitted to the UGC team which is likely to visit the
university soon. All proposals in the original document as well as any new
proposals will have to be supported by an academic proposal and will have to be
discussed in the democratic bodies of the schools before being placed before
this committee. This is a major achievement since it gives an opportunity to the
progressive sections of the academic community to reject the proposals of
saffronisation and privatisation.
the administration’s tenth Plan represents the most concrete effort so far to
privatise and saffronise JNU, it is not the first time that these policies have
been sought to be implemented in JNU. In 2001 an effort on the same lines had
been made on a smaller scale. A new School of Information Technology (SIT) had
been set up which started by offering self-financing diploma courses of
extremely poor academic quality. At the same time the administration came up
with a proposal for starting a ‘Centre for Human Consciousness and Yogic
Sciences’. There was widespread opposition by students and teachers to these
decisions and under this pressure the Academic Council decided to scrap the
‘Centre for Human Consciousness’ and set up an Advisory Committee on the SIT
which was to later decide on discontinuing short-term commercial courses in that
School. These were major victories for the student community and the
SFI-AISF’s combine’s struggles and campaigns on these issues saw it sweep
the JNUSU elections of 2001.
the university reopened in January this year, the university community was
shocked to find that a coterie within the administration had already formulated
and sent to the UGC a tenth plan proposal which not only included the rejected
‘Centre for Human Consciousness’ in a slightly different form, but also had
a plethora of other objectionable proposals. The JNU Teachers’ Association
almost immediately rejected the plan proposals in toto and students too in a
university general body meeting held on February 27 gave the Students’ Union a
mandate for this agitation. Looking back, the experience of this agitation
throws up a number of issues of political significance.
first of these concerns the response of the RSS. In 2001 the ABVP, which then
held the president’s post in the Union, had participated in the struggle
against self-financing courses while at the same time carrying out a campaign in
favour of the ‘Centre for Human Consciousness’. This participation in the
student movement, even though of a token nature, brought electoral benefits to
the ABVP in certain pockets. However these benefits were too limited to counter
the SFI-AISF’s sweep of those elections. Yet, as late as January 2001 the
ABVP’s official position was one of opposition to the tenth Plan, albeit on
the grounds that it had been undemocratically prepared. Following this line
however, the ABVP was not able to mobilise any significant sections of the
students in favour of the saffron courses and perhaps because of this there was
a drastic shift in the RSS-ABVP’s tactical line in the campus following Godhra
(incidentally the students’ UGBM had been held on the same day that the
horrific incidents of Godhra happened).
February 28, the day after Godhra, the ABVP brought out a highly provocative
march on the campus. Extremely communal slogans were raised, particularly
outside the houses of faculty members from the minority communities. Students
from the minority communities were also targeted. Such a blatant show of
communal frenzy had not been seen in JNU even in the dark days of 1992. From
then on, the ABVP was to pursue its communal agenda in a very direct and
aggressive manner. However, the RSS-ABVP’s plans for the campus suffered two
quick setbacks. Firstly, as news of the state-sponsored genocide in Gujarat
started coming in, there were massive mobilisations in JNU in favour of communal
harmony which were directed as much against the ABVP on campus as against the
RSS outside and the ABVP was forced to desist from its communal propaganda for
some time. Secondly, the appointment of a new Vice Chancellor for JNU had been
long delayed and there was suspicion that the HRD ministry was creating
intentional delay in forwarding the file to the President, perhaps hoping that
the new incumbent in Rashtrapati Bhavan would be more favourably inclined to
appointing a RSS-man as the JNU Vice Chancellor. However, with the publicity
given by the JNUSU to this issue and because of the representations made by it
to the President, the HRD Ministry was forced to act and a non-RSS person was
appointed the new Vice-Chancellor.
the ABVP had not changed its tactics because of these setbacks became clear on
the night of August 10. The JNU administration had — in complete violation of
all conventions and norms — allowed the RSS to hold its annual gurudakshina
programme within the administrative block of the university. Ashok Singhal had
been invited as the chief guest of this programme. Many students — including a
large number of SFI activists — had gathered at the venue to protest against
the administration’s decision as well as against the presence of Singhal. The
protest passed off peacefully but when the protesters were dispersing after the
programme had ended they were attacked by a mob coming out of the programme
venue. The mob was led by the ABVP’s campus leadership and included ABVP
activist as well as outsiders. The departing protesters were chased and students
who had formed a human chain to avoid any confrontation — including girls and
Union office-bearers — were beaten up and abused. The Students’ Union office
the ABVP has a record of violence even in JNU, organised violence on this scale
is unprecedented. While at one level this reflects frustration at the lack of
mass support, at another level it reflects the extent to which these fascistic
forces can go to further their agenda. It was only the conscious decision of the
democratic sections to observe restraint which prevented the atmosphere on
campus from degenerating into one of violence and counter-violence. This
campaign of terror and intimidation by the ABVP also has the support of a
section of the administration, particularly the chief proctor who has been
carrying out and extremely biased enquiry into the whole incident.
second significant aspect of this agitation was the remarkable level of
student-teacher unity which was achieved in its course. While JNU has a
tradition of such unity, this agitation saw many more sections of the teaching
community than usual come out in support of the students’ struggle. One reason
for this was the inability of the administration to make a credible academic
case for proposals like the ‘Centre for Human Consciousness’. The most it
could do was to list name of universities abroad which supposedly teach courses
with similar names. In fact no School or Centre in the university was willing to
own up responsibility for these courses. The ABVP too tried its best, at one
point coming out with a ludicrous pamphlet setting out a syllabus for ‘Human
Consciousness’ which included mumbo-jumbo like ‘psychedelic consciousness’
and ‘metaphorical brain’. On the other hand the JNUSU’s case was
strengthened by the UGC’s own Plan Profile document which classed ‘Human
Consciousness’ with meditation and ‘perfect health’ and claimed that the
purpose of studying the history of science was to preserve and promote jyotirvigyan.
Ultimately it was the inability of the saffron courses to meet the established
criteria of academic enquiry which mobilised a large number of teachers against
significant aspect of this agitation was the role played by the positive demands
raised by the JNUSU in mobilising the student community. By raising issues like
appointment of mess staff (which has been stopped because of the UGC’s ban on
recruitment), scholarships for SC/ST students or the democratisation of the
library, the JNUSU was able to posit a vision for the university which provided
an alternative to the Administration’s vision.
it is interesting to note the just like it parent party, the NSUI on campus too
shied away from taking a clear stand against communalism. Not only did it not
participate in the struggle against the tenth Plan, it in fact teamed up with
the ABVP in campaigning against the SFI and JNUSU during the course of the
struggle against saffronisation and privatisation in JNU is hardly over. The
administration has till now only agreed to a review of the plan document and
only the united effort of the progressive sections of students and teachers can
ensure that the objectionable proposals do not find a place in the final
document. Moreover, as long as a communal government is there at the centre such
attacks will continue to occur. It is hoped that the success achieved in this
agitation will serve as a source of inspiration for the struggles ahead in JNU
Victory For Aidwa Activist And Scientific Temper
VICTORY AGAINST WITCH-HUNTERS
was a classic case of witch-hunting and an act of cruelty against women, quite
apart from being a blatant expression of obscurantism and superstition, nay, it
was a clear case of violation of women’s right to life where, as usual vested
interests played a major role. But it was also a victory of determined women who
stood up to be heard, and for the forces which stand for scientific temper.
recent verdict awarded in the Court of Sessions Judges, Goalpara, Assam is being
hailed by the women activists and progressive forces as well. Particularly, the
All India Democratic Women’s Association (AIDWA) and other forces that take up
their cudgels against all forms of superstition and all expressions of violence
against women have reasons to hail and rejoice. The verdict was awarded at a
time when the horrifying incidents of violence against women have been rising
alarmingly in the state.
couple of years ago, Subhadra, an AIDWA activist from a remote tribal village in
Goalpara district was branded as a witch. On the night of 25 August, 2000 she,
along with her husband, was dragged out of her house, harassed, tortured,
assaulted and finally driven away from her native village of Bhabanlpara,
Tilapara under Dudhnoi Police station of Goalpara district, charging her with
witchcraft, sorcery and wizardry.
a point of fact, Subhadra, the 45 year of old Bodo woman and mother of six
children with a formal education upto sixth standard only had always opposed all
forms of superstition and obscurantism. But after joining the AIDWA, she began
campaigning against gender discrimination and unproved mumbo jumbo practices
within her limitations. She was not a leader, but an activist of the democratic
women's movement and worked in a backward tribal village. Her husband Tarun
Basumatary is a local level worker of the CPI(M).
the night in question, while sleeping together with her husband, a few
villagers, led by one Mohan Doimary, came to house of Subhadra, and dragged her
out. Beaten mercilessly all the way, her right hand fractured, she suffered
other grievous injuries. The delirious crowd forced her to confess she was a
witch on threat of death. She was tortured in the presence of her husband and
one of her sons. The villagers who took her away believe that the only way the
‘evil spirit’ can be driven away is by eliminating the person. In all the
previous cases women branded as witches in the area have been killed.
date, the law-enforcing machinery has shown apathy and insensitivity to this
blood curdling superstition. The lackadaisical approach to the crime came in for
severe consideration and protest by the local unit of the AIDWA, and the
district CPI(M) leaders, too, mounted pressure.
September 12, Brinda Karat, general secretary of the AIDWA in Guwahati to attend
a state level women’s convention, went to Dudhnoi to address a women’s
protest gathering demanding immediate arrest of the culprits. She also led a
demonstration in front of the Dudhnoi police station for demanding action.
the following day, a press conference was held at Guwahati attended also by the
victim Subhadra Basumatary. Brinda Karat, along with the state AIDWA leadership,
addressed the media persons, narrating the shocking incident of witch-hunting.
Next day, all the major Guwahati-based dailies prominently front-paged the story
with some of the national dailies also prominently carrying the item.
September 16, a delegation of the AIDWA state committee met the then chief
minister Prafulla Kumar Mahanta to demand exemplary punishment to those
responsible for the crime.
the face of these mounting pressures and growing protests, the police was forced
to act, and it must be said that, though they started belatedly they acted
swiftly and sincerely. All the accused named in the FIR were arrested, and
charge-sheeted under Section 147/448/323/235/307 of the IPC.
elements with an axe to grind have for long been making full use of such bizarre
beliefs and superstitions particularly among the more backward sections of the
people supported by the local vested interests. A village quack for example, who
pretended and claimed herself to be a ‘Kabiraj’ has been mainly
responsible for a number of such deaths of a number of poor patients in the area
by her cruel and non-orthodox, sometimes fatal, lines of treatment. The presence
of evil spirit in the village was always made an excuse for her failures.
Subhadra had been one of those who had tried to sensitize the people against the
wrong medical treatments and harmful practices, which only brought wrath of the kabiraj
on her head who led the whisper-campaign branding Subhadra a daini
few of Subhadra’s relatives tried to use the opportunity of the incident, to
grab her small share of land, joined hands with the village quack and hatched a
conspiracy to eliminate her.
the case all together 14 persons were accused and put on trial in the Court of
Session Judge, Goalpara, Assam.
the denial plea, the Sessions Judge Kumar R N Dev observed, "I find that
all the accused persons assaulted Subhadra Basumatary mercilessly. They are all
nurturing a superstition that she is a witch. In our country, torturing innocent
persons for such superstition is not uncommon. The interest of society requires
deterrent punishment for the persons found guilty for such types of
the judgement delivered on September 3, Mohan Doimary and 13 others were held
guilty under Section 147/325 of the IPC and sentenced to rigorous imprisonment
for four years and six months and fined Rs 1000 each. If realised, the fines
were to be paid to Subhadra as compensation.
Strike: Bihar Government Forced To Negotiate
Arun Kumar Mishra
49-day old transporters strike come to an end on September 18 evening after
bipartite meeting between the representatives of Bihar Motor Transport
Federation and RJD president Laloo Prasad Yadav and ministers of Bihar
government. The government had to bow before the determined transporters and
transport workers who had been forced to wage struggle for such a long period
due to across the board massive hike in road and other taxes. The government was
adamant and was advancing the logic that as the finance bill has been passed by
the Legislative Assembly and hence there is no going back on this issue. The
government was forced to slash road tax by 50 per cent and the transporters also
agreed not to hike the passengers fare.
the question arises why the government remained insensitive to the sufferings of
common people of Bihar for one month and a half of transporters strike and what
forced the government to enter into the negotiation with the same Bihar Motor
Transport Federation whom it tried to destroy by all the tricks under it sleeve?
entire episode presents a different political scenario unfolding the Bihar.
Laloo Prasad Yadav was credited with the charisma of suppressing the movements
and agitations launched by the different sections of workers and employees.
Employees of different boards an corporations bore the brunt of the RJD leader
whenever they launched struggles. Either the movement was ignored or was forced
to withdrew. But the recent developments have completely shattered this myth
about Laloo Prasad Yadav. Before transporters strike he had to negotiate with
employees of Patna Corporation and later on the Bihar government had to
backtrack on the trifurcation issue of Bihar Electricity Board, to the imminent
threat of indefinite strike by the entire work force right from engineers to IV
grade employees of the Board. The grand success achieved by the transport
federation has exposed the weakning of Lallo Prasad Yadav who of late have been
behaving like an autocrat. In the last one month and 18 days of transporters
strike he employed all his tricks to break the ranks of the transporters. On the
very fifth day of strike he forced the auto-rickshaw and mini bus operators of
Patna to withdraw their strike and thus created an impression that the
transporters' strike had been withdrawn. No formal invitation was sent to the
representatives body i.e. Bihar Motor Transport Federation for negotiation.
tried to break the strikers ranks by entering into negotiation with the leader
of his own choice. Those who were not falling in line were harassed and
threatened with dire consequences. But he miserably failed in breaking the
morale of the striking transporters. Though the private transporters donot enjoy
the trust and support of the common men but this time round the transporters got
the sympathy of the common people as they felt that finally it is they who will
have to pay from their pockets. It is to be noted here that the Bihar government
which tried to break the transporters' agitation by plying State Road Transport
buses, came a cropper.
Left Parties particularly the CPI(M) from the very beginning, when the Bihar
government had announced the steep hike in road taxes had criticised the move
and fully supported the transporters' strike. When no settlement was in sight,
the CPI(M) took an initiative and mobilised the Left parties and staged a masive
dharna in Patna on September 12. Before that massive campaign in Patna and
different districts were launched to create public opinion which received a good
response. One of the district member of Begusarai and secretary of CITU state
committee Ganesh Shankar Singh was jailed in connection with the transporters
Left Parties also endorsed a call to march to Patna on September 20. Sensing the
mood of the strikers and the people at large Laloo Prasad Yadav had to climbdown
from his high pedastal to negotiate with the striking transporters albeit in the
name of the common people.
Crisis In Kerala
crisis in Kerala power production is an artificially created one. It was to
implement the ADB dictates and to appease the ADB bosses that the government of
Kerala created this crisis. To create this crisis the government and the Kerala
State Electricity Board reduced production of electricity in Kozhikode and
Brahmapuram diesel power projects. Thus the government on the one hand reduced
the production of cheap electricity while it purchased costly thermal power from
Kayamkulam project and other generators. By this arrangement the government and
the KSEB incurred a loss of at least Rs 108 crore in the past financial year. If
the projects of Kozhikode and Brahmapuram directly under the board could produce
power to their full capacity we could have produced 12 crores units of power per
during the last five months at least 60 crores units could be produced while
only 12 crores units were produced by these projects by the inefficient handling
of the authorities. Thus the Board caused a loss of 48 crores units by this
the brackets are shown the capacities of the Kozhikode and Brahmapuram diesel
plants. This shows clearly how the Board caused a loss of production of cheap
power at low costs and purchases costly power from Kayamkulam thermal plant. The
cost of Kayamkulam power per unit is Rs.4.50 while diesel plants of Kozhikode
and Brahmapuram is only Rs.2.25. Thus per unit the Board incurs a loss of 2.25
rupees. For 48 crores of units the Board incurred a loss of 108 crores of
rupees. Had the capacity of the two diesel plants fully utilized the loss could
have been avoided. Inefficiency and lack of farsightedness have created such a
Board purchased from the Kayamkulam plant 13.97 crores units and 18.17 crores
units in April and May respectively. In June it was 15.04 crores, in July 13.72
crores and in August 17.02 crores units were purchased from the thermal plant.
From the Kasargod Power Corporation Limited the KSEB purchased 4.8 crores units
of power and from Kochi Bombay Suburban Electric Supply another 3.99 crores
units were purchased at high costs.
it was almost certain that rains in the monsoon would be scarce. With this
awareness at hand the KSEB utilized hydel power at the maximum in June and July.
The Board was not ready to depend on thermal plants or conserve water for future
to be used in dire circumstances.
plant has eight generators with a capacity of 16 Megawatts. Of them all the
seven generators could be worked full time with out any obstacle. And only four
were permitted at this plant.
this was done to appease the ADB to gradually implement their plan of
privatizing the power sector of Kerala. At last the Board pretends that wisdom
has dawned upon it. It is not so. The people’s wrath has caused a rethinking
on the part of the government and the Board. The Board has recommended to the
government to limit the production of hydel power to 110 lakhs units per day
while it is decided to increase the daily production at Kozhikode and
Brahmapuram diesel plants to 30 lakhs units.
LDF government had controlled the power generation at the hydel projects
according to the availability of rains. The present crisis is due to the
generation and consumption of power without considering the availability and
gauge of the rains. And this was deliberate on the part of the UDF government to
comply with the dictates of the ADB.
Kerala State Committee Decisions
its meeting on September 16 to 18 in Thiruvananthapuram the Kerala state
committee decided as part of fight against factionalism to dissolve the district
committees of Alappuzha and Thrissur, remove the state committee members V.
Kesavan, G. Sudhakaran and T. Sasidharan from the state committee censure state
committee member, C O Paulose, and to warn state committee members, P K
Chandranandan, K K Mamakutty and K P Aravindakshan. The dissolved committees
were reconstituted as organising retaining the present district secretariat
members and including certain previously excluded district leaders.
Party state secretariat members M A Baby (CC member) and E P Jayarajan, will
function as secretaries of the Alappuzha and Thrissur district organising
Political Organisational Report adopted at the 17th Congress had
stated that though there was overall improvement in the functioning of the
Kerala state committee, district committees and lower level committees, and a
process of unification was slowly gaining strength, factional tendencies had
occurred, particularly in two districts. It also noted that eligible comrades
were excluded in factionally held district conferences.
Review Report of the Kerala state committee, which was unanimously adopted at
the state conference in Kannur, had stated that blatant form of factional
division were evident at the district conferences of Alappuzha and Thrissur. The
Kerala state committee had appointed an Enquiry Commission headed by Central
Committee member, Paloli Muhammed Kutty, and comprising CC members P Karunakaran
and A Vijayaraghavan.
Enquiry Commission Report adopted unanimously by the state committee stated that
the district conferences in Alappuzha and Thrissur were marked by blatant
factionalism and the state committee members in those districts were responsible
for worsening of the situation. The reconstituted district organising committees
will work to unify the Party under the guidance of the state secretariat and
Villagers Resist Trinamul-PWG Assault
brave villagers of Kespur in Midnapore braved bullets and bombs to chase away
more than a hundred armed men who attempted to forcibly evict them from their
hearth and home late into the night of September 22.
in Midnapore, two CPI (M) workers, Bikash Roy and Ranjit Roy were shot and
wounded by PWG activists. The villagers of Pidakata later came out in their
thousands and chased the criminals away.
visit to the affected zone revealed how the miscreants had approached the
villages of Kespur from three directions, shouting slogans about the
"united struggle" of the Trinamul Congress and the People’s War
Group (PWG) against the CPI (M). The goons carried guns of various calibres and
started shooting and lobbing bombs as they approached the eastern, the northern
and the western sides of Kespur.
a large number of villagers retreated before the armed assault and moved away
towards the Arabari forest area. When they saw that the Trinamul-PWG men were
putting their hutments to the torch and mercilessly attacking those who could
not flee fast enough, the villagers regrouped and gave chase.
the męlée that followed the attackers started to run for their lives.
The villagers caught up with twenty-odd criminals and later handed them over to
the police. The police subsequently recovered a large arms cache from the goons
who were taken into custody. Among those caught by the villagers was Kabil
Mullick who is the sabhapati of a Trinamul Congress-run Panchayat.
the armed assault, two CPI (M) workers, Saif-ul Chaudhuri and Rezzak Ali were
seriously injured and the condition of the former continues to be very critical.
Several CPI (M) workers received bullet injuries. The villagers said that the
attackers came clad in black shirts and trousers and had their faced wrapped up
in swathes of cloth.
the attack, state secretary of the CPI (M) Anil Biswas and Left Front chairman,
Biman Basu condemned the assault organised by the Trinamul-PWG combine and said
that the event proved how the villagers were willing to brave bullets and bombs
to defend their hamlets even at the cost of death.
and Basu called upon the villagers of the Kespur-Garbeta area to remain vigilant
against all attempts to try to destabilise the economic development that the
area has seen since the coming to office of the Left Front government in 1977.
another related development, a single storied house at Garbeta was blown apart
when bombs that were being manufactured burst unexpectedly. In the ballast that
occurred, one person died with his body ripped apart beyond identification. Two
other seriously injured miscreants and notorious history sheeters in the pay of
protection of the Trinamul Congress, who were engaged in putting together bombs,
were later taken to a hospital nearby in a serious condition.
Decision Slap For Bush, Blair
government’s decision to allow the UN inspectors has come as a slap on the
face of US and Britain leaving them bewlidered. Iraqi deputy prime minister
Tariq Aziz said Baghdad's pledge to readmit weapons inspectors had removed any
justification for a US-led attack. Russia agreed, saying that the threat of war
had been averted and no further UN resolutions would be needed.
cloud of war has lifted a little at the United Nations and the UN weapons
inspection team is already planning the logistics of air-lifting its men and
machinery back into Iraq.
even now the reaction of America and Britain is of belligerence As mentioned in
the People’s Democracy earlier, George Bush and his trusted ally
British premier were hoping that Iraq would not allow the weapon inspectors and
they would get another chance to repeat the act of Afghanistan.
the British government is planning to make public a "dossier" on the
weapon preparations of Iraq, to show to the world the dangers of having Saddam
Hussain in office.
the United Nations in New York, Iraq's new offer is being seen by some as a
victory for diplomacy, but there is still a sense that things have to move fast
if war is to be averted.
world community would have to pressurise the US to give up its unjustified
policy of aggression.
Security Council had been expected to meet soon to look at Iraq's letter
offering unconditional access to the inspectors, but that meeting may now be
delayed until the end of the week because it's understood that Russia wants a
bilateral meeting first with the Americans in Washington. Now the British prime
minister Tony Blair will find it all the more difficult to push his "war
agenda" on Iraq.
the number of ruling Labour Party MPs opposed to the war is increasing steadily.
Labour MPs Tam Dalyell and Alice Mahon, leading backbench opponents of military
action against Iraq, said the Iraqi offer was a "litmus test" for US
president George Bush.
response will signal whether the US is acting through concern over weapons of
mass destruction or if it is intent on oil acquisition and regime change,"
said the MPs.
Mayor Ken Livingstone warned on Tuesday that war with Iraq could lose the city
and could even produce a recession.
ONE BILLION ADAMANT POUNDS
is shameful is that even after having been exposed the official US and British
reactions do not speak of peace. With US dismissing the offer as a "cynical
ploy". British government is speaking in the same voice, with foreign
secretary Jack Straw insisting a new UN resolution on Iraq is still necessary.
The US administration wants a resolution that will allow the use of force
against president Saddam Hussein if Iraq refuses to comply. Straw said the Iraqi
offer was "bound to be treated with a high degree of international
scepticism" "We shall continue to work with our international partners
for an effective resolution before the security council," the foreign
secretary said. But it is now becoming increasingly clear that US and Britain
would be isolated on this issue.
US, Britain and Russia are all permanent members of the United Nations Security
Council wielding the power of veto.
other two members are China, which welcomed the offer, and France, which said
the council "must hold Saddam Hussein to his word". Iraq has now made
it clear that the US is just interested in war. Deputy Premier Aziz said the US
was bent on war with Iraq, and that its true motive was hunger for Iraqi oil.
the official Iraqi News Agency (INA) is reporting that Saddam Hussein will send
a letter to the UN General Assembly in the next few days. UN Secretary-General
Kofi Annan received the unconditional Iraqi offer on Monday night, in a letter
from Iraqi foreign minister Naji Sabri. Iraq was ready to discuss the practical
arrangements for the return of inspectors, Annan said.
added that he would pass the letter on to the Security Council "and they
will have to decide what they do next".
UN secretary general said the inspectors in the UN Monitoring, Verification and
Inspection Commission (Unmovic), and their chairman Hans Blix were "ready
to continue their work".
Unmovic spokesman said they are working out practical issues with the Iraqis, at
talks in New York, before inspectors started moving in to Baghdad. "We are
ready to discuss practical measures, such as helicopters, hotels, the
installation of monitoring equipment and so on, which need to be put in
place," said Ewen Buchanan.
paid "particular tribute" to all the states of the Arab League who
played a "key role" in the Iraqi offer.
Iraqis said they had made the decision in order to remove any doubts that they
still possessed weapons of mass destruction. They also said that their decision
was a response to a speech from Annan in which he said the admission of
inspectors should be the first step leading to the eventual lifting of
FROM THE STATES
Power Board Invites Confrontation
Kerala State Electricity Board has demanded that the government order a doubling
of the existing of power cut timing to a full hour every day. The proposal it is
claimed will save the Board heavy losses in purchase of power. This proposal is
sure to affect the whole of industrial production, the domestic consumers, etc.
and as such will also become an issue of mass agitation. CPI(M) leaders had
earlier warned the government against any action of punishment of the people in
order to defeat the protest against the increase of power rates, will have
serious consequences. The Board had also demanded permission to increase the
deposit of consumers to the average of their power charges over the last three
Antony in the Dock
of the PDP and Sufia, wife of Madhani, the PDP leader now in jail in Combature,
today asserted at a press conference that the Congress(I)- led UDF had given
them specific promises of bail for Madani, for help during the last general
election. They said that A K Antony, the chief minister himself has given the
promise and now denying the promise, is simply a betrayal. Madani's wife Sufia
claimed that during election and after it, Antony had several times repeated the
promise of substantial help for the release of Madani from the jail. She
complained that the state government had now made matters worse as Madani could
not get bail from any of the courts. Madani members of the family will be
starting a satyagraha programme before the secretariat demanding his release on
revealing assertions of personal promises from leaders of the Congress(I) and
the Muslim League have fully exposed the informal alliance of the UDF with the
terrorist group of PDP, for electoral gains and the unprincipled alliances with
both the PDP, BJP and other communal, caste organisations.
FCI Marches at District Centres
September 20, CPI(M) district committees held massive marches to the various FCI
godowns in the state, as part of the national campaign of the Party. The
marchers sat in dharna before all the godowns. The strange situation of distress
of thousands of rural people in many of the states due to drought and the
central govt’s irresponsive policy of keeping thousands of tonnes of
foodgrains in the FCI godowns was mentioned by all the leaders. The food grains
are being allowed to decay at many north Indian godowns. The CPI(M) leaders
called on the people to join the coming two programmes of Anti-imperialist Day
on September 25, and Tripura Day on September 30.
and its front have gained substantial victory at the elections to the MG
University Union and to the Polytechnic Union. In the MG University election was
held on an organisational basis at 52 colleges and the SFI front won in 35
colleges. The KSU was able to win in only 13 colleges, with the SFI by itself
winning 25 college unions.
of election for 92 councillors were declared, out of which, the SFI front won
seventy Councillors. Results of elections at 36 polytechnics, gave 29 to the SFI,
three to the KSU and two to the AVBP. SFI won 30 out of 36 poly councillors
seats. In the polytechnics the KSU was in open alliance with AVBP, MSF. The main
slogan of the SFI at these elections was "Democratic Education Against
Drought Relief Day Observed
Bihar in various parts of the state, September 20 was observed as Flood and
Drought Relief Day; processions and dharnas took place in various areas.
Samastipur, hundreds of workers and rural folk joined in a procession from
Station Road and were joined by smaller processions as they marched into the
Central Ware Housing Corporation Food Godown, broke the main gate but were
prevented by police from going forward. Later a meeting was held addressed by
members of the state secretariat and the district.
reports were received from Darbanga and Bihar Sharief, Nalanda. In Vaishali it
was a demonstration outside the FCI office in Hajippur, In Madhubani, states
secretariat member Awadhesh Kumar led a demonstration of 300 people to the FCI
Jainagar where they broke open the lock of the godown, entered the campus and
held a meeting. State committee member and district secretary Rajendra Prasad
Singh led a 400-strong procession, led by Ganesh Shankar Singh (CITU) and other
Party leaders, broke open the FCI gate lock. In the process, they were arrested
by the administration. In Patna state secretariat member Chandi Prasad led a
massive dharna before Income Tax Office at Patna, along with Ras Bihari Singh,
state committee member and district secretary.
were also received of rallies in Khagaria, Bhagalpur, and Kishan Ganj district
headquarters. In Khatihar dharna was held while reports coming from Navada show
that there was a mass demonstration led by state secretary Ganesh Shankar
day was similarly observed with rallies of workers, peasants and toilers in
various parts of Jharkhand. While the DYFI, SFI, Janwadi Mahila Samity, Kisan
Sabha and the Joint Worker Employees Coordination Committee took out
the demonstrations called for massive Food-For-Work-Programmes, holding
immediate Panchayat elections, restoration of lands to tribals and the poor,
besides land reforms. Reports now available suggest that the programmes were
implemented successfully at Sahib Ganj, Pakur, Godda, Jamtara, Giridih, Dhanbad,
Bokaro, Ramgarh , Ranchi, Gumla and Jamshedpur. Similar programme are to be
implemented elsewhere on the 23 and on 24 September.
UP, starting from Lucknow where the police bandobast was defied in front of the
Vidhan Sabha, marches and processions took place. The procession demanded
drought relief, ending of American war mongering in Iraq and called upon
Vajpayee government to resign for corruption. There are reports of rallies and
demonstrations in the Azamgarh area where the power situation was also
highlight. The there are also report from Fatehpur where there was a dharna.
More reports are coming in.
Two CPI(M) Workers Killed
extremists have struck again in Kulgam constituency. On the night of September
20, an extremist gang went to the homes of Abdul Rehman Dar and Zahour Ahmed
Gani in village Okey and took them away. They picked up a third person also.
They were taken to a field and shot down. Both of them died while the third
person was seriously injured. Kulgam is the constituency from where Mohd. Yusuf
Tarigami, secretary of the state committee of CPI(M) is contesting the election.
CPI(M) workers have so far been killed in Anantnag district during the election
Rally For Drought Relief
from various areas in Delhi, from factory and field, including a large
contingent of women called by the Delhi State CPI(M) staged an angry
demonstration on September 20 in front of the Parliament Street Police Station
demanding immediate measures to provide relief to the starving millions.
the rally the state secretary Pushpinder Grewal as well as others pointed out
that that seven states have suffered losses totalling Rs 12,473 crore. As
against this, the total amount of relief dispensed by the central government
from the Calamity Relief Fund to all the 12 affected states amount to a pittance
of Rs 714 crore only.
the BJP government for playing politics with drought, the rally called for a
Food- For-Work programme immediately.
rally was the part of the country-wide campaign called for by the Central
Committee of the Party from 20 to 30 September, on the following six issues:
Investigation into the corruption cases concerning the
BJP-led government, and prosecution of all those found guilty.
Immediate relief measures in the drought-affected
areas by the central government.
Dismissal of the Narendra Modi government, and putting
Gujarat under President's Rule.
Protection of Jammu & Kashmir composite state
character and opposition to the demand by the RSS for its trifurcation. Free and
fair elections in the state.
Provision of adequate security forces to Tripura by
the centre to combat terrorist outfits. Unmasking the opportunist alliance of
the Congress and the INPT.
Firm opposition to the US plans of a militarily attack
on Iraq by the Vajpayee government.
Delhi a memo submitted to the Vajpayee government stated that out of 524
districts monitored by the agriculture ministry-320 were affected by drought, in
which the worst effected were the agricultural labourers
was pointed that dismantling of the public distribution system, as a consequence
of government policies, had further endangered food security in the country and
aggravated the plight of the drought affected people.
therefore called for intervention on war footing by the centre and suggested the
following programme for this purpose:
Increase in financial aid to the states for combating
drought; starting food for work schemes on a large scale,
Using the 6 crore tonnes of foodgrains lying in FCI
godowns for drought relief,
Immediate implementation of the BPL ration schemes,
Provision of potable water and fodder in the affected
Increase in government spending on irrigation
Women’s Organisations Support
major women’s organisations namely the All India Democratic Women’s
Association, National Federation of Indian Women, the Joint Women’s Programmes
and Guild of Services had expressed their deep concern at the continuing crisis
in Delhi University. After ending a week-long action oriented strike by teachers
and non-teaching employees of the university, teachers are sitting on relay
hunger strike and taking classes outside the classroom among other actions. As
teachers, as non-teaching employees in education institutions, as students, and
as parents of all these three sections we assert that education has a critical
role to play in the building of a gender-just society.
task cannot be accomplished by turning higher education into a mechanical
exercise of lecturing or learning by rote. In fact, the VC himself has admitted,
‘one hours' teaching is equal to three hours work in any other
profession’. Therefore, the time, space, and support staff to ensure an
education through extensive reading and writing by students, discussion and
questioning, the encouragement of independent thinking, and the building of
self-confidence in the younger generation, particularly girls, must be provided.
achieve this there must be regular and meaningful contact between students and
teachers. The latter, of whom a large bulk are women, should be able to fulfil
their professional responsibilities with dignity. Increasing the classroom hours
per teacher will lead to just the opposite. It will deprive students of a
variety of views, teaching styles, discussions and extra-classroom contact with
their teachers. Nor is it a solution to any attempts to ensure accountability on
the part of truant teachers, as is being suggested.
urge the authorities to resolve the workload issue in a manner which furthers
the aims of higher education and urge the teachers to institute mechanisms of
self-regulation and accountability.
anti-national terrorists have struck a deadly blow in Gujarat. As we go to
press, their AK-47s and grenades have reportedly claimed 33 innocent lives and
injured nearly a hundred people at the Akshardham temple complex of the
Swaminarayan sect in Gandhinagar. This is an outrageous and a thoroughly
is not a mere coincidence that this attack took place on the second polling day
in Jammu & Kashmir. According to reports, from the pockets of one of the
terrorists killed in the encounter with the security guards was found a piece of
paper on which written in Urdu were the words `tehrik-e-qusaf'. Roughly
translated, this means the movement for retribution. Is this the ghastly replay
of Narendra Modi's invocation of the Newton's third law (every action has an
equal and opposite reaction) to justify the State-sponsored communal genocide
following the dastardly Godhra carnage?
after the incendiary communal flames simmered down in Gujarat, Mr. Modi was
keeping alive tensions through his inflammatory public utterances. The communal
cauldron was, thus, kept boiling.
ghastly terrorist attacks in Gandhinagar, however, constitute yet another attack
on the secular foundations of India. Retributions, revenge etc can never be
condoned, on the contrary must be severely condemned and fought against.
Communalism of all varieties feed on each other, the casualty is always innocent
lives and the very unity and integrity of our country.
cannot be tolerated any longer. All Indian patriots will have to rise in unison
to defend our country's secular democratic foundations. This requires the
resolve to not fall prey to any sort of provocation that is designed to
intensify communal polarisation. In the meanwhile, internal security must be
beefed up to protect innocent lives and foil the terrorist designs.
Fraud Indian Style
Tata group was always considered to be an example of how even a more backward
industrial sector can include instances of excellence, good governance and
philanthropy. As a corollary, it has been argued, that even capitalism Indian
style is not characterised by systemic fraud. Instances of fraud merely show
that in all contexts there are cases of rogue traders, investors and
industrialists, who give the system a bad name. The task therefore is not to
question the efficiency and transparency of the market, but put in place
appropriate surveillance, monitoring and regulatory measures that encourage
better governance and management practices.
more, this view has been challenged by experience. This time by the Tatafin
controversy, which though more than a year old, is turning murkier by the day.
In the most recent round of the battle between the current top management of the
group and a small bunch of erstwhile trustworthy directors, Dilip Pendse has
gone on record to say that Ratan Tata was aware of violations of law and best
practice for which he is being made the scapegoat. It may be time therefore to
revisit the controversy.
Finance Ltd (TFL) was a non-bank finance company (NBFC) belonging to the Tata
stable. Even as recently as March 2000, Tata Finance was predominantly involved
in the hire purchase business, with financing of purchases of commercial
vehicles and cars accounting for more than 85 per cent of its business. This was
a natural outgrowth of the presence of the group in the automobile sector, and
close to a third of Telco’s sales were reportedly being financed by Tata
this time, however, the lure of quick profits that the financial sector seemed
to offer, had resulted in plans to convert Tata Finance into a financial
supermarket with interests in housing finance, foreign exchange transactions,
merchant banking, credit cards and retail banking. To that end it had tied up
with T D Waterhouse Inc, a securities firm, and American Express and created or
acquired a number of subsidiaries. These moves, under the leadership of Managing
Director D.R. Pendse were seen as the beginning of the refashioning of what was
already one of the largest NBFCs in the country into a universal bank in keeping
with worldwide trends.
Tata Finance’s newfound aggression put it on a path where it chose to violate
regulatory norms in search of size and quick profits. The path involved, among
other initiatives, the transfer of large sums of capital to subsidiary or
related companies such as Nishkalp Investment and Trading Company Ltd and
Inshahallah Investments Ltd (IIL). Of these the link with Nishkalp proved the
most damaging. Using funds borrowed from Tata Finance, Nishkalp made investments
in the stock markets. This seemed to have worked in the financial year
1999-2000, when Nishkalp made a profit because secondary markets were doing
well. But that profit turned into a large loss in 2000-01, when most of
Nishkalp’s trade proved to be loss-making.
the exact nature of Nishkalp’s investments is not known since it is a private
limited company, its impact on Tata Finance became clear when the latter’s
accounts for 2000-01 (financial year ending June), showed a loss of Rs. 395.6
crore as compared with a profit of 56.8 crore during 1999-2000. According to
reports, the net loss was on account of a one-time extraordinary provision of Rs
315 crore against transactions in the form of loans or investments in
affiliates. This was in addition to a provision of Rs 72 crore made towards
non-performing assets and diminution in the value of investments. The
extraordinary items and contingencies included provision for exposure to
Nishkalp of Rs 266.67 crore, a provision for exposure in associate companies of
Rs 44.04 crore and provision for estimated permanent diminution in the value of
long-term investments of Rs 24.97 crore.
problem is not just that TFL had burnt its fingers by engaging in immature
transactions that were in part violative of regulatory norms. The image of the
Tata group has also been tarnished by the facts that it tried: (i) to use the
company IIL, in which Tata Finance held a 48 per cent stake and its internal
auditors were directors, to trade in TFL shares with funds provided by TFL and
other Tata companies, in gross violation of SEBI guidelines; (ii) to hold a
couple of individuals from within its top management stable as individually
responsible for the actions of TFL, despite the firm’s direct connection with
Tata Sons, the apex holding company of the group, and (iii) to de-subsidiarise
Nishkalp in order to cover up the consequences of these actions from the
regulatory authorities and ordinary investors.
the end of March 2000, IIL had TFL internal auditors Dinesh Bahlk and Anu Bahl
as its directors. It held 23.57 lakh TFL shares valued at over Rs. 24 crore, and
was undertaking share investment activity with a paid up caital of Rs. 200 crore
plus funds obtained from various Tata companies. Despite this TFL did not
disclose, as required, its links with IIL or the latter’s financial position
in the public documents relating to the rights issue made at the end of March
2001. Clearly, Tata’s as a group were withholding information.
the effort to ‘nail’ Pendse, the then Managing Director for these and other
violations was rendered easy by evidence of insider trading in TFL shares. On
March 30, 2001, the eve of the opening of a Rs. 93-crore rights issue by TFL,
J.E. Talaulicar, the Chairman of Nishkalp and a director on the board of TFL,
offloaded one lakh shares of TFL owned by him and his family members at a price
of Rs. 69 per share, when the prevailing market price was Rs. 36 per share.
Since the subsequent declaration of losses by TFL saw a collapse in its share
values, Talaulicar was clearly using inside information to protect and make a
large profit on his investments. Talalulicar held that the transaction was
arranged for him by Pendse and reported the same to an internal committee of the
group set up in August 2001 to investigate the matter when this and other
transactions by TFL and its directors were being subjected to public scrutiny
and scrutiny by the regulatory authorities.
involvement of Pendse in this operation, which was reportedly not revealed to
the TFL board, provided grounds for the Tata management to argue that whatever
happened in TFL was the result of his actions, which were kept secret from the
rest of the board. Even if this improbable argument is accepted, Tata’s cannot
hide the fact that they initially tried to suppress the consequences of these
actions for TFL’s financials, by desubsidiarising Nishkalp. While shareholders
were suffering losses because of the collapse of TFL share prices as a result of
Nishkalp’s activities, Nishkalp ceased to be a subsidiary of TFL on June 30,
2001. The company had been acquired for Rs. 40 crore by Ewart Investments.
Interestingly, Ewart had been financed by Tata Finance to undertake the
acquisition! The point is that once Nishkalp ceased to be a subsidiary of TFL,
its financial position need not impinge on the accounts of TFL. The action,
which could not have occurred without the concurrence of the board of TFL, was
clearly aimed at clearing up the balance sheet of the company and concealing the
financial position of Nishkalp from TFL’s shareholders.
completed this operation, the top management of the Tata group chose to launch
its strategy of holding individuals like Pendse and Talaulicar responsible for
all the transactions of TFL. It had already appointed a team from A.F. Ferguson,
the reputed auditing and consulting firm, headed by senior partner Y.M. Kale to
conduct an investigation into TFL, ostensibly to identify how management systems
failed and work out remedial measures. It also sacked Pendse and lodged
complaints against him with the police and the Securities and Exchange Board of
India, alleging fraudulent transactions.
current round of the controversy relates to the response of the Tata management
to the Kale report. The report, a serious exercise running into 904 pages, not
merely finds Tata Finance’s corporate governance practices wanting, but
identifies other members of the board, besides Pendse, who could not have been
ignorant of the concerned transactions and specifically criticises some such as
then TFL Director Kishore Chaukar.
full details of the now-suppressed report are not available, a leak to the press
suggests that it identified several questionable transactions in the form of
intra-group investments that helped some companies of the Tata group such as
Tata Chemicals and Telco to book profits and declare dividends. According to
reports, the study suggested that the nature of a number of transactions
"raise doubts as to whether these were conducted to generate book profits
or merely facilitate regulatory compliance." In its view there was need to
ascertain whether under the erstwhile TFL management there was "a pattern
of using circular intra-group transactions, mostly to either book profits for
some of the companies in the group as and when required, or merely facilitate
few examples of such transactions are available from the press. The picture that
emerges is one where a large number of oddly titled firms, which fall within the
Tata group, undertake transactions aimed at allowing a particular firm to record
profits and pay-out dividends. Thus, a group company IECIL first accepts large
inter-corporate deposits from other group companies, for which it pays out
interest estimated at Rs. 0.68 crore. On March 31 2000, the money obtained
through these deposits is used to buy 13.3 lakh shares of Tata Finance Ltd for
Rs. 12.6 crore from Sheba Properties, a subsidiary of Telco. This allows Sheba
Properties to declare a profit, against which a dividend of Rs. 6.5 crore is
other set of transactions noted by the report was that when TFL reached
inter-corporate deposit limits and could not access further funds from group
companies through this route to finance its transactions, it would sell shares
to group companies through ‘ready-forward transactions’, where the company
sold shares today to access funds, only to buy back the shares at some later
date. Thus it appears that TFL and Nishkalp provided finance in the form of ICDs
to Inshahallah Investments Ltd. (IIL), which then bought shares of TFL. TFL (and
Nishkalp) earned interest income from these ICDs and TFL booked profits on the
sale of its shares.
since there were a large number of other companies such as Tata Chemicals and
Telco which benefited from TFL’s activities, it is difficult to sustain the
position that the Tata management was unaware of the activities of TFL. Based on
its examination of transactions of these kinds, the Ferguson team delivered its
indictment: "How could so many questionable transactions even be discussed,
let alone actually contracted or recorded, by senior officials of such reputed
companies, even on the assumption that someone wielding authority had proposed
these transactions? In other words, even if the suggestion to commit
irregularities had emanated from a few, how were these acquiesced to by so many?
How did these not arouse widespread consternation and why did they not rush to
report the goings on to the board of Tata Finance/Nishkalp Investments or even
higher?" In sum, there was little possibility that the rest of the groups
top management was ignorant of the developments in TFL.
days of its submission, the report is ‘rejected’ by the Tata management and
"withdrawn" by the auditing firm, which has commissioned a fresh
report based on the information collected. The leak soon makes clear that the
report was not received well because it implicates more than just Dr. Pendse
with knowledge of the suspect transactions. Soon thereafter, Y.M. Kale is
reported to have resigned his position as senior partner of Ferguson, ostensibly
on the grounds that he does not approve of the decision of the firm to withdraw
the report and rewrite it. But Ferguson itself declares that he had not resigned
but had been "sacked" since the firm had lost faith in him after
taking account of the "inaccuracies" in the report pointed out by TFL
Chairman Ishaat Hussain. Meanwhile, Pendse himself publicly declares that he has
been made a scapegoat by the group to clear itself of involvement in
transactions that he claimed the board was aware of and acquiesced in.
is not surprising that the whole episode has set off speculation in the media,
which is damaging not just because of the involvement of a Tata firm in the
suspect transactions but because the group’s management is seen to have
extracted a toll from a forthright auditor, to save its reputation. The fact
that the auditing firm involved is one of India’s leading auditors only
further undermines confidence in governance of what was considered the best
segment of India’s corporate sector. The audit firm went to the extent of
claiming that, since the Rs. 2.5 crore it earned from the Tata group was an
"insignificant amount" when compared to its gross annual fees, it
cannot be seen as having withdrawn the report and sacked Kale under pressure
from the Tata’s. In fact, the Tata’s took it upon themselves to declare that
Kale’s "cessation from his partnership", was "the result of a
decision that was unanimously taken by the partners following a detailed
internal enquiry." If the distance between the client and the auditor was
as much as it has been claimed to be, it would have been best to leave such
explanations to the audit firm.
are three conclusions that emerge from the limited information we have about
this episode, which is to do with the behaviour of even reputed buiness groups
or firms like Tata and Ferguson. First the fact that the business group consists
of a large number of companies, straddling different areas of economic activity,
implies that a number of ostensibly "arms length" transactions between
legally independent firms are actually part of the group as a single entity.
This has, to an extent, been always true of the corporate sector in India. But
liberalisation that has substantially diluted regulations imposed on the big
business groups has possibly increased such transactions substantially.
Secondly, the Tatafin episode reveals that, in the wake of liberalisation, which
includes financial liberalisation, these transactions include financial
transactions that allow core firms in the group and possibly the central
decision-making authority to book profits and earn high returns through
dividends. Those dividends may even serve to inflate prices of listed firms in
the market. Finally, even the best in the auditing business in India are not
independent of the clients they serve, as is indeed true elsewhere in the world
What bothers some is that even the Tata group, with its reputation for good management and its tendency to be in a business for the long run, has succumbed to the lure of lucre that the speculation promoted by financial liberalisation holds out. Clearly, this is the way liberalisation is refashioning Indian capital. Its influence is clearly strong enough to transform even the best. Unfortunately for the Tata group and fortunately for the rest of India, they lost out on their gamble. If not, the illusion that scams are not systemic but the result of bad practices by a few rogue businessmen would have still prevailed.
of WorldCom: Following in Enron’s Footsteps
has now replaced Enron as the largest corporate bankruptcy in the United States:
it was a 175 billion dollar company before its collapse and now impending
bankruptcy. Incidentally, WorldCom owns UUNET, the worldwide backbone for the
Internet. WorldCom’s fall is not just another company bankrupted by its greedy
CEO and management: WorldCom was vital cog in the much touted new economy.
Interestingly enough, both Enron and WorldCom were in the forefront of those who
wanted power and telecom infrastructure to be completely deregulated. It is
ironical that they have come a cropper in the new anything-goes-capitalism,
which they so dearly loved.
WorldCom’s history parallels Enron’s. Both rode the de-regulation bandwagon,
appeared to have made huge profits sending their stock sky high. Later, both
admitted to cooking their books and now their Chief Executives and Chief Finance
officers are facing criminal charges. Meanwhile, WorldCom has reported, in
instalments, its accounting fraud. Starting initially with $3.3 billion in
fictitious earnings, the figure went up to $7 billion and now stands at $9
billion. Meanwhile, its stock value has gone to zip and it is doubtful whether
it will be able to come out of its bankruptcy proceedings.
is important for another reason. It owns the second largest long distance
operator in the US, MCI, which it had acquired for a price of $37 billion. It is
now clear that the expected telecom earnings from long distance and Internet
business did not materialise leading to the exposure of their cooking the books.
If the projected earnings had materialised, they would have been able to show
enough real profits to offset the fictitious ones that they had booked earlier
and might have emerged unscathed. The failure of their projected revenue is what
finally sealed WorldCom’s fate.
failure of WorldCom and its revenue projection is a part of a much larger crisis
in world telecom. Telecom companies are reeling under an approximately 2
trillion dollars of debt and have lost in the last year 60% of their market
capitalisation. The WorldCom fiasco is a part of similar fiascos in other
telecom companies. In Europe, telecom companies had bid billions of dollars for
what is called the third generation licenses (3G licenses) based on again very
rosy picture of future earnings. The expected boom of wireless Internet, mobile
surfing, etc., a part of this 3G communication, did not materialise and all
these companies have been seeking bailouts from their governments. The failure
of WorldCom, on one hand is a part of American companies window dressing their
balance sheets with accounting tricks, on the other, WorldCom is also failure of
the so-called de-regulated telecom markets and its expected bonanza that
WorldCom was betting on.
world telecom market is changing its structure. Earlier, the global
multinational companies were interested primarily in selling their equipment. An
AT&T, ITT, etc., were interested in the global equipment markets and this
was the main thrust of imperialism. Today, the equipment market has ceded
primacy to the services market: the services market is roughly four times the
size of the equipment market in terms of revenue. In 2000, the global market for
telecom services was estimated to be $1 trillion as against about $250 billion
for the equipment market. This means a corresponding shift in the focus of
imperialism from equipment sales to now sale of services.
WTO regime must also be understood in this context. GATT was concerned with
trade of goods: this was its primary focus from inception. The transformation of
GATT into WTO is addition of a whole range of new items to the GATT list in
order to accommodate the new interests of imperial capital. We have already
chronicled in these columns and elsewhere the importance of intellectual
property and monopoly rent that capital is demanding through the WTO regime for
software, entertainment and pharmaceuticals. What has been perhaps not
sufficiently recognised is the importance of "trade in services" or
the GATS negotiations in the scheme of global capital.
trade in services or GATS is the mechanism by which global telecom majors are
opening up the markets of third world countries. The Telecom Agreement of 97,
signed in Singapore along with the IT Agreement was designed to extract
"market access:" commitments from all countries. As the chances of
companies from poor African or Asian countries to enter the US or such advanced
markets are slim, it effectively meant that it would allow US, European and
Japanese majors to enter telecom markets elsewhere. It is not that the global
telecom majors were looking for only the traditional telecom market of local and
long distance calls. They were also looking at the new emerging Internet and
the cellular market phones are more than landlines in about 90 countries.While
the bourgeoning cellular market has met or exceeded market predictions, the
Internet market proved to be far more illusory than expected. The hype of the
new economy had completely overlooked that finally goods and services have to be
tangible for it to have value. In their hurry for making stock market killings,
the market analysts touted the new economy stocks and took their stocks to
unprecedented levels. Finally, when the new economy stocks entered free fall in
the late 90’s, it caught the telecom companies who had made huge investments
expecting the new economy boom to continue over-extended. Company after company
found that its investments in satellite and fibre optic cabling was not borne
out by the increased demand. Iridium, set up with a lot of fan fare for
providing cheap worldwide cellular telephones though low level satellites
collapsed earlier. This might have been thought of as an isolated instance of
betting on a wrong technology. Now it is clear that it was the forerunner of a
much bigger crisis of the telecom sector.
the new economy failed the telecom sector, the existing plain old telephone
market and the cellular markets have been doing pretty well. The growth of these
sectors has been a healthy one, with the cellular sector showing a worldwide
boom. The huge loss of stock value of telecom companies in the midst of such
growth in their traditional business sticks out like a sore thumb in this
understanding the crisis of telecom in the midst of an unprecedented growth
spurt, we must look at the fundamental issues involved. The expectation of an
Internet boom led to their concentration of resources on the Internet business.
Some of the companies bet on a wireless Internet world, some bet on broadband
networks using fibre optic cabling and some others used the cable networks. The
feeding frenzy in the stock market for new economy stocks led to acquisition and
mergers by telecom companies of cable, entertainment, and Internet companies.
Once the dust settled down in the new economy business, it became clear that
telecom is still largely about people calling each other. Undoubtedly, Internet
is important and is going to be more and more important in the future, but it
will have to be paid for not by its revenue but from the revenue earned out of
existing telecom business. Those that believed that the new Internet business
would pay for the huge investments required for its infrastructure have to
realise that all new technological infrastructure has to be paid for by others.
Mostly, it is defence expenditure that powers new technologies. In this case it
is the existing telecom business that is subsidising the growth of the new
communications technologies such as Internet.
is here that de-regulation, expected to be favourable to the new entrants in
fact has proved fatal for them. An existing telecom operator already has an
infrastructure and can carry a lot more of traffic, even of the new digital
variety using its existing cable network and telecom switches. Its additional
expenditure to capture new business is small. For new entrants such as WorldCom,
they had to either lease the infrastructure or borrow huge amounts. In either
case, they were far less able to withstand a downturn in their income as their
outflows were fixed. Any failure of market boom was bound to hit them much
with this was the additional factor that de-regulation and the new economy hype
meant that the number of new entrants were much larger than what the market
could bear. This accentuated the crisis of the new players who were then
competing for a smaller and smaller part of the market while already having
invested or borrowed large amounts expecting a booming market.
fall of WorldCom has many lessons to offer. It is certainly a part of a much
larger crisis of American capitalism with its piratical accounting practices and
insider fraud. This makes the WorldCom a part of a series such as Tyco, Enron
and other major American companies that are currently undergoing fraud
investigations. On the other side, the failure of WorldCom is also the failure
of de-regulation in infrastructure areas such energy and telecom. Enron and
WorldCom were the "pioneers" of the market-knows-best school of
business in infrastructure. Their fall should sound warning bells to those
economists that have been propagating this philosophy. It is intriguing that
such an admission has not been forthcoming from the marketwallas. But then, such
a philosophy had very little to do with economics in any case. Advocating loot
of public infrastructure was the game, the rest is just window dressing. That is
why a Pramod Mahajan or an Arun Shourie is least bothered by the failure of
de-regulation. In their scheme, selling telecom companies such as VSNL, BSNL and
MTNL to "strategic" partners is about crony capitalism and not
economic theory. That is why the fall of WorldCom disturbs them so little.