People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 38

September 29,2002


President Urged To Intervene In Babri Masjid Demolition Case

The 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)

WE, 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.

After 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:

1. 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

The 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.

Against 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.

However, 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.

We 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,

Yours sincerely


Evil Designs Of US Imperialism

Harkishan Singh Surjeet

THE 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.

Simultaneously, 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.

Subsequently, 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.

In 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.

If 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.

It 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."

The 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.

Congress Backs Disruptive Forces In Tripura

Prakash Karat

THE 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.

In 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.

The 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 chauvinist violence.



Bejoy 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.



The 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….."

We 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.

The 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.



In 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.

The 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


1. Latiram Reang (close supporter of the Party)

2. Ramguna Reang (TYF unit president)

3. Sandairam Reang (TYF unit secretary)

4. Sumati Reang (GNS worker)

Dashamani Para, Kanchanpur, North Tripura district and Chandipur, Kanchanpur, North Tripura

At 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.

The 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.


5. Parendra Debbarma (Party LCM)

Champahour, Khowai, West Tripura

He 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.


6. Chintamani Chakma (GNS Worker)

South Baghaicherra, Kanchanpur, North Tripura

While she was working in Jhum field, she was killed by miscreants.


7. Janaram Reang (Party member, senior GMP worker)

8. Chandrajoy Reang (Party member, TYF worker)

Bhandarima Kanchanpur, North Tripura

At 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.


9. Tarun Saha (Tripura Motor Shramik Union [TMSU] leader)

Sonamura, West Tripura

He 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.

Following 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.

1998                --          84

1999                --          102

2000                --          172

2001                --          80

2002                --          54


Total               --          492


Sentence Of Gangrape To A School Teacher: Protest Against The Outrage

Brinda Karat

IF 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?

On 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 authorities concerned.

On 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.



Bhuvaneswari 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.



When 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.



Yet 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.

In 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.



Issues that arise:

1.The 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.

2. 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 essential.

3. 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.

4.         Police personnel involved in protecting the accused should be punished. The present Collector also has to be punished for dereliction of duty.

5.         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

by the Sarpanch and others.

6.         Cancellation of the punishment transfer orders of Bhuvaneshwari and

Shri Joshi and reemployment in the same school.

7.         Immediate security protection to Bhuvaneswari as demanded by her.

With 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.

Bhuvaneswari's 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.


Breakthrough Against Saffronisation in JNU

Jyotirmoy Bhattacharya

IN 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.



The 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.

While 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.

When 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.

The 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).



On 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.



That 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 was vandalised.

While 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.



The 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 them.

Another 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.

Finally, 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 agitation.

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 and elsewhere.

Court Victory For Aidwa Activist And Scientific Temper


Isfaqur Rahman,


IT 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.

The 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.



A 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.

As 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).

On 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.

To 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.



On 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.

On 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.

On 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.

In 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.

Backward 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 (witch).

A 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.



In the case all together 14 persons were accused and put on trial in the Court of Session Judge, Goalpara, Assam.

Rejecting 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 offence".

In 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.

Transport Strike: Bihar Government Forced To Negotiate

Arun Kumar Mishra

THE 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.

Now 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?

The 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.

He 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.

The 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 strike.

The 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.

Power Crisis In Kerala

Aboo Backer

THE 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 month.

Thus 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 measure.


April 2002

May 2002

June 2002

July 2002

August 2002

Hydel projects








Diesel plant


(4.5 crores)

2,44,33,350 (7.5 crores)


(7.5 crores)


(7.5 crores)


(7.5 crores)


Diesel Plant


(4.5 crores)


(4.5 crores)


(4.5 crores)


(4.5 crores)


(4 crores)


Thermal plant






In 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 huge loss.

The 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.

Again, 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.

Kozhikode 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.

All 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.

The 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.

Decisions Kerala State Committee Decisions

AT 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.

The Party state secretariat members M A Baby (CC member) and E P Jayarajan, will function as secretaries of the Alappuzha and Thrissur district organising committees.

The 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.

The 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.

The 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 state committee.

Kespur Villagers Resist Trinamul-PWG Assault

B Prasant

THE 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.

Elsewhere 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.

A 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.

Initially 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.

In 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.

In 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.

Condemning 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.

Biswas 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.

In 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.

Iraqi Decision Slap For Bush, Blair

Nagen Das

IRAQI 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.

The 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.

But 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.

Infact 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.

At 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.

The world community would have to pressurise the US to give up its unjustified policy of aggression.

The 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.

Already 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.

"His 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.

London Mayor Ken Livingstone warned on Tuesday that war with Iraq could lose the city and could even produce a recession.


What 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.

The US, Britain and Russia are all permanent members of the United Nations Security Council wielding the power of veto.

The 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.

Meanwhile, 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.

He added that he would pass the letter on to the Security Council "and they will have to decide what they do next".

The 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".

An 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.

Annan paid "particular tribute" to all the states of the Arab League who played a "key role" in the Iraqi offer.

The 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 sanctions.



Power Board Invites Confrontation

THE 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 months.

Antony in the Dock

EADERS 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 bail.

These 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

N 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.

SFI Victory

FI 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.

Results 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 Globalisation".


Drought Relief Day Observed

N 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.

In 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.

Similar 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.

Reports 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 Vidyarthi.

The 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 processions.

All 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.


In 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.


Jammu &Kashmir

Two CPI(M) Workers Killed

HE 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.

Three CPI(M) workers have so far been killed in Anantnag district during the election campaign.


Rally For Drought Relief

ORKERS 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.

Addressing 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.

Castigating the BJP government for playing politics with drought, the rally called for a Food- For-Work programme immediately.

The 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:

1.      Investigation into the corruption cases concerning the BJP-led government, and prosecution of all those found guilty.

2.      Immediate relief measures in the drought-affected areas by the central government.

3.      Dismissal of the Narendra Modi government, and putting Gujarat under President's Rule.

4.      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.

5.      Provision of adequate security forces to Tripura by the centre to combat terrorist outfits. Unmasking the opportunist alliance of the Congress and the INPT.

6.      Firm opposition to the US plans of a militarily attack on Iraq by the Vajpayee government.


In 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

It 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.

It 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 areas, and

·         Increase in government spending on irrigation projects.




Women’s Organisations Support Teachers’ Agitation

OUR 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.

This 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.

To 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.

We 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.



THE 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 condemnable attack.

It 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?

Even 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.

The 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.

This 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.

Corporate Fraud Indian Style

THE 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.

Once 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.

Tata 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 Finance.



By 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.

Unfortunately, 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.

While 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.



The 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.

At 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.

However, 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.

The 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.



Having 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.

The 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.

While 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 regulatory compliance."



A 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 paid out.

The 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.

Clearly, 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.

Within 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.



It 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.

There 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 as well.

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.

Collapse of WorldCom: Following in Enron’s Footsteps

Prabir Purkayastha

WorldCom 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.

Briefly, 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.

WorldCom 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.



The 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.

The 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.

The 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.

The 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 cellular markets.

Today, 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.

If 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 scenario.



For 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.

It 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 harder.

Coupled 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.

The 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.