Modi Government U-turn Likely on Land Bill as BJP Agrees to Restore UPA Law

New Delhi: In clear indications that the government may make a U-turn on the contentious land acquisition law, a Parliamentary committee today approved changes in the Modi government’s bill including on the consent clause, that will restore the UPA law.

The way for a possible climb down by the government was facilitated by BJP members moving amendments in the Joint Committee of Parliament seeking to bring back key provisions of UPA’s land law including on the consent clause and social impact assessment by dropping the changes brought by the Modi government in December last year and subsequently revalidated by Ordinance thrice.

Sources said all the 11 BJP members in the 30-member panel today moved amendments seeking withdrawal of the terminology “private entity”, which was “private company” in the 2013 law passed during the UPA regime.

Others in the Committee belong to Congress (5), Trinamool Congress (2), Janata Dal United, Samajwadi Party, BJD, Shiv Sena, NCP, BSP, TRS, LJP, CPI-M and TDP (all one each).

Trinamool Congress members Derek ‘O Brien and Kalyan Banerjee walked out of the meeting stating that the amendments were circulated this morning and they had little time to study them.

The government appears to have changed its strategy in view of the fact that assembly elections in the agrarian state of Bihar are due in a short time and the ruling party may be averse to being seen as “anti-farmer”, a charge Opposition had been making against the BJP.

Apart from Congress, which wanted restoration of the UPA’s 2013 Act, parties like the Left, SP, JDU, BSP, BJD were also opposing the amendments tooth and nail.

Faultlines in the NDA on the Land Bill were also visible with three of BJP’s allies – Shiv Sena, SAD and Swabhimani Paksha -red-flagging a number of provisions of the bill before the panel and seeking restoration of the consent and social impact assessment clauses.

Get Wired 3/8: File-Eating Termites, Biden in the Fray, Killer Floods, and More

Death penalty files eaten by termites?

The gallows. Credit: Wikimedia Commons

The gallows. Credit: Wikimedia Commons

Records of death penalty convicts who have been executed since independence have gone missing from many prisons. The National Law University in Delhi is conducting a first of its kind survey to evaluate the fairness of capital punishment jurisprudence especially in post independence India.

“Some prison authorities have written to us that either the records have been lost or destroyed by termites,” NLU director Anup Surendranath, who is heading the death penalty research project stated. The NLU is compiling data on all prisoners who have been executed since independence with the help of the central government.  The casual attitude towards death row convicts is reflected in the loss of the mercy pleas of Krishna Mochi and three others in the Krishna Mochi & Ors vs. Bihar case of 2001. Convicted by the TADA court, mercy pleas of the four have been lost by the Union home ministry. Their pleas were sent to the President in 2003, and a recent RTI response to Suhas Chakma of Asian Centre for Human Rights has revealed that the home ministry has no records available.

Wildlife board on a clearing spree

forestThe National Board for Wildlife has been on a clearing spree, giving the go ahead to 81 projects in their last three meetings. The Board, which is headed by the Union Minister for Environment and Forests Prakash Javadekar has met 4 times and taken up 280 projects. Though the bulk of its clearances came in its first meeting the three meetings this year have give rise to 81 more projects. Incidentally 50% of the clearances were passed in four BJP-ruled states. Out of the projects cleared in 2015, nine projects fall under ‘tiger reserves’ and 27 projects are close to wildlife sanctuaries. The cleared projects include proposal for establishment/expansion of coal-based power plants in Tamil Nadu (Tuticorin), Telangana (Khamman), Uttar Pradesh (Unchahar) and Madhya Pradesh (Budhni in Sehore district) besides a number of roads, railway, telecommunication and irrigation projects in different states.

Joe Biden to join presidential race

Vice President Joseph R. Biden Jr. and his associates have begun to actively explore a possible presidential campaign, which would upend the Democratic field and deliver a direct threat to Hillary Rodham Clinton, several people who have spoken to Mr. Biden or his closest advisers say.  One longtime Biden supporter said the vice president had been deeply moved by his son’s desire for him to run. Should the Vice President run, his path is unlikely to be easy as he will be running against the possibility of electing the USA’s first woman President.

Omar’s death causes Taliban leadership feud

Afghan_Taliban_mujaheddinThe brother of the late figurehead of the Afghan Taliban on Sunday joined a growing challenge to the extremist group’s newly appointed leader. Mullah Abdul Manan, the brother of the late Mullah Mohammad Omar, told Associated Press that new Taliban leader Mullah Akhtar Mohammad Mansoor was “selected” by a small clique of his own supporters. This allegation followed a similar allegation made by Omar’s son. With both men demanding a new vote, that could throw the leadership of the Taliban into greater disarray as it weighs whether to resume fledgling peace talks with the Afghan government or continue its bloody, nearly 14-year insurgency.

Delhi police gets hands on taser guns

The often accused of overuse of violence Delhi Police has now acquired Taser guns. The city police were in the process of procuring Taser guns that would help them nab suspects by incapacitating them, or stunning them, temporarily by administering electric shock, sources said. “When fired, this non-lethal weapon releases electro-magnetic pulse that will paralyze the central nervous system of the suspect, leaving the person in a fetal position on the ground for almost 15 seconds,” Rajesh Malik, special commissioner of police (provision and logistics), said.

BCCI clean up list could include veteran players

BCCISeeking to finally address the problematic issue of conflict of interest in Indian cricket, the BCCI recently wrote to all cricket associations to sign an undertaking on the matter, and plans to get the players to sign up too. On Sunday, it put a player agent accreditation system in place. Holding the associations to the undertaking, however, may be easier said than done, with several retired international cricketers likely to find it tough to continue in their BCCI posts

Paswan claims to be the leader of Dalits in Bihar

In an interview with Mint, Ram Villas Paswan claimed that he was the main leader of the dalits and mahadalits in Bihar. He further went on to say that PM Narendra Modi is the main leader for the backward classes in India. On the new alliance between Nitish Kumar and Lalu Prasad, he says that there is no common ground between the two. He further said that “for there to be a contest in Bihar there has to be a meeting of hearts between the opposition leaders, that isn’t there at all”.

Splurging on advertising against AAP ideology says Pankaj Pushkar

Accusing the AAP government of misleading the public and going against their mandate, the party’s own MLA Pankaj Pushkar raised questions about the outfit splurging public funds on advertisements. The AAP MLA brought to attention the fact that the party had only used 18 crore each to finance their campaigns in 2013 and 2015. The current amount being used for promotion according to the MLA is 520 crore which he says is completely unnecessary and contradictory to the party’s ideology.

Floods and landslides kill 75 in east India

Representational image. Credit: PTI

Representational image. Credit: PTI

At least 75 people have died and tens of thousands have had to take refuge in state-run relief camps after heavy rains caused floods and landslides in eastern India, government officials and aid groups said on Monday. Cyclone Komen, which struck the east coast on Friday, caused made major rivers overflow, inundating villages in parts of West Bengal, Odisha and Manipur states. The rains also caused a landslide in Manipur, killing 21 people. CM Mamta Banerjee said the release of water from over-full dams in the neighboring states of Jharkhand and Odisha had worsened the flooding in West Bengal, where at least 49 people have died.

China’s solution to dengue

China has set up the world’s largest mosquito factory to breed sterilized mosquitoes to tackle dengue. Located in Guangzhou’s Science City area, team leader Xi Zhiyong is in charge of releasing the produced mosquitoes to the Shazi Island every week to combat the fever. This was the first trial test in the field and has been proved to reduce the mosquito population by 90%.

The Government Does Not Want You Accessing Porn on the Internet Anymore

The DoT says it draws its authority to block sites from Section 79(3)(b) of the Information Technology Act 2000 and Article 19(2) of the Constitution, as the department claims the contents relate to questions of “morality, decency”.

No peeking! Credit: Tim Ellis

No peeking! Credit: Tim Ellis

A leaked document supposedly originating from the Department of Telecommunications lists 857 websites – most of them hosting pornographic content – that the country’s internet service providers (ISPs) have been asked to block. The document was made available by the Centre for Internet and Society, Bengaluru. Among the sites blocked are those which serve as gateways for torrent downloads.

The document, available here, concerns what Reddit users have been suspecting since Saturday (August 1), when they noticed various porn sites weren’t loading. In some cases, the screen went blank or was replaced by a message in the browser that the sites had been blocked following orders from the competent authorities. Yesterday, Mint reported that the full effect of the blockade would become visible on Monday (August 3). More alarmingly, The Times of India reported senior government officials as saying that the order was only a prelude “to the creation of a regular regulatory oversight”.

The DoT document says it draws its authority to block these sites from Section 79(3)(b) of the Information Technology Act 2000 and Article 19(2) of the Constitution, as the department claims the contents relate to questions of “morality, decency”. Oddly enough, Justice H.L. Dattu of the Supreme Court had disagreed last month with such a ban, asking, “How can you stop me from watching it within the four walls of my room?” He added that the ban would violate Article 21 of the Constitution.

The government’s intention to block pornographic sites – for shifting reasons – was first laid bare in September 2014. Then, the DoT had convened a meeting of officials from various ministries to discuss how a web filter – technology that controls what can be accessed on the web – could be implemented across networks within India. The convention was motivated by a PIL filed in April 2013 by an Indore-based lawyer named Kamlesh Vaswani. According to him, pornography was to blame for the increasingly visible incidence of rape in the country.

However, what started out in 2014 as official concern over pornography and rape has since morphed into fears about child pornography and now vague statements about threats to morality and decency, inviting speculation that these reasons have only been excuses. In fact, most of the 857 websites in the take-down order have nothing to do with child pornography. The state’s tendentious attitude in this matter is also reflected in its concurrent attempts to revive Section 66A, also of the IT Act, which has in the past allowed it to muzzle freedom of expression on the Internet.

Incompetence by ISPs in the past also resulted in them deploying a blanket filter – which simply blocks a site if it has certain trigger-words (like The Wire mentions ‘child pornpgraphy’ in this article). This was exemplified in early 2013 when ISPs, responding to a court order, didn’t block a single, allegedly offensive article on Outlook’s website but the entire site itself. If the list of 857 grows in the future, the threat of blanket filters becomes likelier, too.

In countries where strong filters are already in place, like the United Arab Emirates and Saudi Arabia, the governments are invested heavily in an oppressive system of controls – including the use of nationalised ISPs. In India, simple workarounds like the use of proxies and VPNs could bypass the blockades.

Did India Read Maldives Right?

Given the recent past, New Delhi could not have done much to erase the suspicions of the Maldives leadership. However, a visit by Prime Minister Modi might have helped ease them somewhat.

Maldives artificial beach. Credit: Hani Amir, CC 2.0

Maldives artificial beach. Credit: Hani Amir, CC 2.0

Notwithstanding promises made by the Maldives that the new land ownership law in the Indian Ocean archipelago nation isn’t aimed at helping China build a military base close to the Indian coast, New Delhi seems unsure, if not totally unconvinced on this score. That is probably one of the reasons why Foreign Secretary S. Jaishankar is in Male today. But these doubts also raise a more fundamental question: Has India been reading the Maldives correctly? Indeed, this question applies not just to the recent developments but to India’s policies since the inception of multi-party democracy in the country, where the facilitating role was played by its one-time British ‘Protector’ and the West – and not New Delhi, as one would want to believe.

Tempered by the post-independence history of regional equations in South Asia, India has traditionally been shy to state its position clearly on issues impacting domestic politics in individual nations. Though it has often conveyed its reservations and even displeasure whenever India’s security has been affected, New Delhi has seldom gone public about this.

This reluctance to speak has thrown up situations in which domestic players in its ‘traditional sphere of influence’ have tended to claim different things for and on behalf of India. In the post-Cold War era, for instance, self-styled ‘liberal’ parties in neighbourhood nations such as Nepal, Sri Lanka and the Maldives have presented themselves as Indian allies in what is essentially an effort to get India to further their own political prospects on their respective home fronts.

As a corollary, political ‘conservatives’ in the region like Khaleda Zia’s BNP and its Jamaat ally are reflexively seen as ‘anti-India’. While such a characterisation may not be wrong, it is important to recognise that the guiding factor is not ‘India’, nor ‘democracy’, but the tools available to political players in individual nations to settle local scores. If at all ‘democracy’ has a say in the matter, it is perfunctory and incidental.

Land ownership

The present Indian concern flows from the fast-tracked Maldivian law conferring ownership of islands with 70 per cent reclaimed land, and upwards of $1 billion in investments, on foreign entities. As if to address the anticipated concerns of India, and maybe the US, Maldivian President Abdulla Yameen has said the new measure was designed only to bring in specific mega-investment projects and did not pose any risk to the stability or security of the Indian Ocean.

More specifically, Yameen, after ratifying the fast-tracked Bill, stated that bilateral relations with nations do not have to be impacted by such changes to policies. The Miadhu said that President Yameen had also assured regional nations that the Indian Ocean will always remain a demilitarised zone. As long as the foreign policy of the nation did not change, there would be no cause for concern, locally or internationally, he said.

What President Yameen did not say was that the foreign policy of his nation has indeed changed since he took over in November 2013.

Reportedly in the works even before he took over and released on 20 January 2014 – only a fortnight or so after his return from a maiden overseas visit to India – the new policy promised “to strive to make Maldivians proud by making the country a resilient nation – to increase opportunities for the economic advancement of Maldivians and to promote the national interests of the Maldives through innovative approaches.” The new policy also promised to “protect the Islamic identity of the Maldives and help to promote the values of Islam internationally” and “promote greater regional cooperation in South Asia”.

Going by the policy outline, the Yameen leadership’s tilt towards China seems to have been written into it – or, is it the other way round? Under Yameen’s rule, the Maldives has also been tilting back again towards Saudi Arabia for the endless funds only these two nations seem willing to provide.

Yet, on the aspect of the Maldives working to “promote greater regional co-operation”, the Yameen leadership seems to be  falling short in the eyes of India. During his New Year’s Day India visit in 2014, Yameen said his country “is looking to India’s leadership to resolve pressing regional issues”. If India had misread him, it was in his possibly implying that the shoe was on the other foot, that India needed to keep its house in order on bilateral issues in the neighbourhood.

‘No military base’

Chinese President Xi Jinping andMaldives President Yameen Abdul Gayoom in the Maldives, September 2014

Chinese President Xi Jinping andMaldives President Yameen Abdul Gayoom in the Maldives, September 2014

The Hindu has quoted the new Maldivian Vice-President Ahmed Adeeb as saying, “We don’t want to give any of our neighbours, including India, any cause for concern. We don’t want to be in a position when we become a threat to our neighbours.” Vice-President Adeeb rejected the Maldivian Opposition’s concerns about the militarisation of the islands. “We are looking at projects like Singapore’s Marina Bay Sands or Dubai’s Palm Islands. We are not looking at strategic projects.”

An interesting reaction to perceived Indian concerns has come from China. Though New Delhi has not officially reacted thus far to the Maldivian law and/or its intentions, the state-run People’s Daily said India’s apprehensions that Beijing could establish a military base in the Maldives were without ground. Taking off from where China’s Military White Paper had left matters in May, the newspaper quoted a senior military official as saying that China did not own any military base abroad, nor did it seek military expansion. The People’s Daily also referred to President Yameen’s statement in this regard.

A commentary in China Daily quoted Fu Xiaoqiang of the China Institute of Contemporary International Relations that Chinese investors and construction companies might benefit from the amendment, given China’s advanced technology in land reclamation. He stressed that the Indian media had long questioned China’s presence in the Indian Ocean. “They have to get used to it, as it will become normal with more and more Chinese enterprises going abroad,” he said.

Indian dilemma

Has India read Maldives and other Indian Ocean neighbours wrong? Is its current policy – of maintaining a stoic silence in public but fretting, if not fuming, inside – the right one? The Indian dilemma flows from New Delhi’s inability to adapt its foreign policy to changing times.

India has continued to retain the post-Independence foreign policy of ‘friendship with all’, but with the rider that ‘some friends are more equal than others’. After the Cold War, for example, India moved away from the erstwhile Moscow-centric orbit to a Washington-focussed foreign and security policy – justifiably, if not rightly, so. In keeping with the new dynamic, China has emerged as the ‘security threat’ to India in the immediate Indian Ocean neighbourhood.

In this  context, the American ‘String of Pearls’ theory –  which captured India’s imagination just as it was trying to adjust to the post-Cold War situation – keeps reappearing in the national strategic discourse. Even as India opened itself up to foreign investment and finance capital and is today busy wooing even Chinese FDI, the Indian strategic community  is not ready to give political and developmental space to smaller neighbours that are eternally in need of external financing and investment.

This is not to say India does not have strategic concerns vis-a-vis China in the Indian Ocean. For instance, neither the Rajapaksa leadership in Sri Lanka then, nor the Yameen presidency in Maldives now, nor Beijing, on its part, has explained to India the reasons behind Chinese submarines treading the waters of the Indian Ocean, closer to India than ever before. Otherwise, independent of the perception of the Indian strategic community, policymakers in New Delhi, starting with the political leadership, ought not to have any problem with smaller neighbours seeking Chinese development aid – even if this comes at high rates of interest.

Inherent inadequacies

It may be true, as the People’s Daily claimed, that China has the latest technology for land-reclamation and also the financial and human resources to invest on projects of the kind that President Yameen envisions. The fact also remains that his much-publicised SEZ project, for which again Parliament rushed through the relevant legislation, is yet to take off in the promised way, possibly owing to the inherent inadequacies of the Maldivian economy – like land, labour and market – all of which were obvious all along.

Adeeb, who remains in charge of the SEZ project, had once said Indian investors too were interested. However, the entire scheme is believed to have been conceived mainly with Chinese funds in mind. If land-reclamation were an inevitable part of the project, it was never ever mentioned.

In between, Yameen’s Maldives also signed off an island in the Laamu Atoll, for an exclusive Chinese tourism resort. During the regime of MDP President Mohammed Nasheed, the Chinese were known to have submitted a proposal to develop an entire atoll, to take China’s budget tourists’ figures to a million a year. The chances of the original project being revived in its entirety and in stages cannot be ruled out, but the Indian concern, if any, should be based not on the numbers but on the exclusivity of the arrangement.

In the immediate context of the fast-tracked Maldivian law and the Chinese claims to expertise in land-reclamation, it would seem that the script had possibly been written long ago, and both sides are playing their respective roles to the hilt. Rather than denying the Indian strategic community’s concerns, both the Maldives and China could assuage official Indian sentiments, if any, by clarifying the details of the projects that are now being considered.

However, the Chinese interest in the Maldives, Sri Lanka, or elsewhere along the ‘String of Pearls’, should not be considered in isolation – or as something aimed only at India’s immediate concerns and claims to big power status. It should also be considered in the context of the American military base of Diego Garcia, not far away, coming up for renewal when the 50-year-old British contract expires in 2016. If India has concerns on that score, again, it has said nothing in public. But then, the Indian strategic community too has been silent for reasons best known to it.

Yameen in control?

The haste with which the land-ownership Bill has been passed by Parliament within days of it being tabled has caused concerns even inside Maldives. None other than Yameen’s Progressive Party of Maldives (PPM) founder-chairman, Maumoon Abdul Gayoom, had expressed reservations about the Bill, which, he said, had raised common concerns over Maldivian sovereignty and security. Gayoom sought a public referendum on the issue.

However, the government has dismissed the concerns expressed by Gayoom, half-brother of President Yameen and Maldives’ longest-serving former President with 30 years in office. The question thus arises whether the PPM is heading for a split, and if the ageing Gayoom would lead it from the front, when his daughter, Dunya Maumoon, continues as Foreign Minister.

The PPM parliamentary voting pattern – none from the party voted against or abstained – even after Gayoom’s tweet on the land ownership bill, would show that Yameen is in control, at least for now. As far as the political Opposition is concerned, the Yameen leadership seems to have had a hand in Jumhooree Party (JP) founder-leader and business tycoon Gasim Ibrahim declaring his near-retirement from active politics after the government froze his bank accounts for non-payment of $90-million in revenue-dues.

MDP’s former President Mohammed ‘Anni’ Nasheed had his court-ordered 13-year jail-term in the ‘Judge Abdulla abduction case’, converted into one of house-arrest, but the party has claimed that the government has not kept its word on freedom for their leader and 1400 other ‘political prisoners’ arrested for anti-Yameen street-protests/violence over the past months. Nasheed remains possibly the most popular Maldivian leader, but his chances of contesting the 2018 presidential polls hinge on the appeal court(s) clearing him of all charges in the ‘Abdulla case’ and/or President Yameen granting him clemency after amending the relevant laws, to reduce the three-year moratorium on prison-free persons contesting elections.

Cancelled Modi visit

From the Indian perspective, it is worth asking whether New Delhi provoked President Yameen, what with Prime Minister Narendra Modi scrubbing Maldives from his four-nation, Indian Ocean tour in March.

Yameen, like his predecessors, had made India his first overseas destination after assuming office, even after his camp had publicly stated that India was working against him in the 2013 presidential polls. The polls occurred when Prime Minister Manmohan Singh was in power in India, and under the shadow of the GMR row, which had strained bilateral relations when President Mohammed Waheed Hassan Manik was in power. On a rebound, Maldives paid up the $50 million that State Bank of India had loaned, but no one in Delhi seems to have asked how a cash-strapped nation could whip up such huge funds without effort and on schedule.

Yameen also visited New Delhi at the invitation of Prime Minister Modi for the latter’s inauguration in May 2014. His government was possibly seeking greater Indian acceptance – rather than legitimacy, which was theirs already – with Modi’s scheduled visit in March 2015, but the event got cancelled right after the arrest and fast-tracked trial and imprisonment of Nasheed for 13 years.

The Maldivian trial court pronounced its verdict on the day Modi landed in neighbouring Sri Lanka. It happened to be a Friday, a regular weekly holiday for the Maldivian government, including the courts. Yet, barring a stray statement on Nasheed being dragged into a Male court hall, India did not comment on the ‘internal affairs’ of the Maldives, despite being egged on by many in the international community, both overtly and covertly.

There is no denying the fact India has yet to draw up an all-weather neighbourhood policy applicable to all situations, starting with domestic political developments and changes in individual nations.

In the case of the Maldives,  Indian policymakers unthinkingly yielded to speculative reports about the possible increase in Islamic fundamentalism and consequent anti-India militancy emanating from that country when President Gayoom was in office. There had also been unconfirmed reports, fed possibly by the political opposition in that country at the time, about China getting a naval base in the Maldives – which proved wrong at the time.

During the Maldives democracy era, an impression got created that India favoured President Nasheed against his political opponents and nothing was done to erase that impression, which was again speculative at best. The GMR fiasco, in which the Government of India too did not do ‘due diligence’ at the highest levels, and the consequent use of street-power in Male to have the deal rescinded after President Nasheed’s controversial, none-too-unexpected exit, did not help matters.

Yes-and-No

If India’s concerns about China’s military engagement with Maldives were true, could Prime Minister Modi’s visit in March have helped? The answer is, Yes and No.

Ahead of Nasheed’s arrest and the revival of a long-pending case this year, his MDP had demanded Yameen give up the President’s job, without citing any valid reason or justification. Nasheed himself predicted his imprisonment – where he was proved right later – and asked India to help out in such a case.

Earlier, too, GMR’s identification with the Nasheed presidency (which was inevitable, just as the Chinese investment proposals now are indelibly linked to Yameen), and Nasheed’s unilateral decision to take ‘refuge’ in the Indian High Commission in Male to avoid honouring a local court summons in the ‘Abdulla abduction case’, had made his critics  look at India with a suspicion India didn’t deserve.

Given the recent past, New Delhi could not have done much to erase the suspicions of the  Maldives leadership. However, a visit by Prime Minister Modi might have helped ease them somewhat. Of course, it could have been embarrassing for all concerned if at the time, emotionally-surcharged MDP supporters had filled Male’s narrow streets and there were to be police action to remove them when an Indian leader was in town. India ‘s reaction to Nasheed’s fall on the court premises the day after his arrest may have added Indian insult to unsubstantiated Maldivian injury.

Yet, even a prime ministerial visit might not have been an answer to continuing Indian suspicions about the Maldives-China relationship under President Yameen. He has made two visits to China within a year, while last year saw the first ever Chinese presidential visit to the Maldives when Xi Jinping arrived in Male as part of a South Asian tour that took him to India and Sri Lanka too. The Maldives has also signed up for the Chinese ‘Maritime Silk Route’ (MSR). By visiting the Maldives, Modi could have erased some of the political suspicions of the Yameen leadership that relate to Maldivian domestic politics, but he would not have been able to convince Male to cancel developmental projects involving Chinese investment and participation. As India is realising in Sri Lanka, where a change of leadership has not led to the cancellation of the Colombo Port City project, its neighbours are unlikely to reduce China’s role in their economic plans.

N. Sathiya Moorthy is Director, Chennai Chapter of the Observer Research Foundation, the multi-disciplinary Indian public-policy think-tank, headquartered in New Delhi. Email: sathiyam54@gmail.com

Three Myths about Recapitalisation of Public Sector Banks

The ‘sin’ of public sector banks is that they lent heavily to infrastructure projects that never took off. The way forward is to provide for loan losses, infuse capital, fix their management and governance – and look to revive lending.

The ‘sin’ of public sector banks is that they lent heavily to infrastructure projects that never took off. The way forward is to provide for loan losses, infuse capital, fix their management and governance – and look to revive lending

Bank branch, Madurai. Credit: Patrik M. Loeff, CC 2.0

Bank branch, Madurai. Credit: Patrik M. Loeff, CC 2.0

The NDA government has made, perhaps, its first decisive move on the economy. Last week, the government announced a plan to infuse Rs 70,000 crore into public sector banks (PSBs) over the next four years. This one move, more than the plethora of ‘reform’ announcements we have had over the past year, promises to give a much-needed boost to growth and investment in the immediate future.

And yet it has been long in coming because the government bought into the myths that beset the issue of bank recapitalisation in India. It’s worth examining these myths if only because many of these are taken as self-evident truths in the discourse on economic policy.

Myth no 1: Capital infusion by government into PSBs represents a ‘bailout’ of these banks by the exchequer.

A ‘bailout’ happens when a bank has failed. In regulatory terms, this means the bank’s capital adequacy – the ratio of capital to risk-weighted assets – falls below the regulatory norm. This norm is 8% as per the Basel standards. The RBI prefers to keep the norm one per cent above the Basel standards, that is, at 9%. Not a single PSB had capital adequacy below 9% in March, 2014 (the last date for which RBI website provides bank-wise figures). Indeed, except for four PSBs, all meet the higher capital adequacy requirement of 10.5% which Indian banks are expected to meet only in 2019.

If PSBs meet the capital adequacy requirement stipulated by the regulator, why do they need more capital? Well, that’s because banks cannot operate strictly at the minimum capital level stipulated by the regulator. If they were to do so, then even if a few loans go bad, they could fall below the capital requirement and won’t be able to continue lending.

Typically, banks find it prudent to operate at a capital level of around 5 percentage points above the minimum capital requirement. This gives them the freedom to take risks in lending. This would mean that banks would need a capital adequacy ratio of 14%. Some of this capital can come from the market but the government would also have to chip in if it is to retain majority ownership, which is the stated policy today.

Myth no. 2: Repeated infusion of capital by the government is ‘money down the drain’.

If a bank is highly profitable, it can manage enough capital from retained earnings and from the market. The government would not have to chip in. So repeated capital infusion by the government, critics say, is money down the drain. They ask: why should the government support the banks with taxpayer funds from time to time?

The question might as well be asked of governments all over the world. From time to time, economies suffer banking crises and governments have to infuse capital into privately owned banks. There have been nearly 100 episodes of banking crises in almost as many economies in the world since 1971. Governments spent an estimated 13% of GDP on the average to clean up their financial systems. In many economies, the cost has been upwards of 50% of GDP.

These fiscal costs are not the most accurate measure of the damage done to economies. The real damage is the loss to output that arises from a banking crisis. In 2011, the report of UK’s Vickers Commission estimated the median loss of output in a banking crisis at 63%. The Commission interpreted this to mean that an annual cost of 3% of GDP was worth incurring to prevent a 5% chance of a crisis that would mean a loss of output of 60%.

In other words, given the way banking systems are structured today, they are bound to impose fiscal costs. We can choose to incur the cost after a crisis – as has happened in economies around the world. Or, we can choose to incur a cost in order to prevent a crisis – as we have done successfully in India thus far. And here’s the punchline: the costs of recapitalisation incurred in India are, perhaps, the lowest in the world. In the 1990s, the cost incurred was around less than 2% of GDP. The costs in the 2000s would be around 1% of GDP.

This expenditure has not been money down the drain. Following the recapitalisation that happened in the 1990s, the value of government shareholding in PSBs appreciated through the 2000s. (To take the best case, State Bank of India, the value of a share issued at Rs 90 in the early 1990s is today Rs 2700). Unfortunately, we do not have a mechanism whereby the government can actively manage its portfolio of PSBs, selling off small portions of shares when prices are rising and realising gains that can then be ploughed back as capital infusion whenever required. If such a mechanism had been present, the government would not have had to use budgetary resources to recapitalise banks.

Bank recapitalisation would be money down the drain only if the performance of PSBs showed a declining trend over a long period of time. This is emphatically not the case. From 1993-94, when banking reforms commenced, there was an improving trend right up to 2011. Only thereafter has performance taken a beating, thanks to PSBs’ heavy exposure to infrastructure – which has been impacted by regulatory and other failures.

Myth no 3: Given our fiscal situation, government does not have the resources for bank recapitalisation

Newspaper headlines talk of a capital requirement of Rs 500,000 crore for PSBs over the next five years. This seems a daunting, or even impossible, task – until you grasp the fact that this is not the amount the government has to put it in.

The five year estimate (which itself rests on assumptions of weak profit growth in PSBs) translates into an annual requirement of Rs 100,000 crore. Of this, the equity requirement is roughly half, or Rs 50,000 crore. The remaining half can be raised by way of bonds. Of the requirement of equity, the government has to put in roughly half – or Rs 25,000 crore. This is not a small requirement but certainly not unmanageable.

In its first year in office, the government took the position that it would hand out capital to PSBs based on their performance. Only banks that were doing well would get capital; banks that were not doing well must fend for themselves and improve performance first before they qualify for capital. Following this approach, the government promised Rs 11,200 crore in the budget for 2014-15 and ended up infusing Rs 6990 crore. In the budget for 2015-16, it provided a sum of Rs 7940 crore. These amounts are woefully short of the annual requirement of around Rs 25,000 crore.

This is not the approach to take if we want banks and the economy to revive. Banks cannot raise capital from the market unless they improve their performance. Without capital from the government, banks cannot lend and hence they cannot improve their performance. And without an increase in lending, the economy cannot revive. Punishing banks for past sins is no way to revive the economy. That is why governments everywhere respond to a banking crisis by resolutely recapitalising banks.

In India, it is not even clear that, on the whole, PSBs have sinned. Their sin, if any, is that they funded private investment in infrastructure that underlay the India Shining period of 2004-08. Following the woes in infrastructure (and sectors such as mining and construction), banks have been saddled with large non-performing assets (NPAs). As a result, they are in no position to finance fresh investment. The way forward is to provide for loan losses, infuse capital, fix management and governance at PSBs – and look to revive lending. It is to the credit of the government that it has recognised its error and changed course.

T T Ram Mohan is a professor at IIM, Ahmedabad. Email: ttr@iimahd.ernet.in

Letters from South Hebron: The Struggle to Save Susya

We discover our conscience proper on the day when certain actions that are legal or indifferent or permitted by the police inspire in us an insuperable disgust

Demonstration of Israelis and Palestinians agains the demolition and transfer of Susya. Credit: Taayush

Demonstration of Israelis and Palestinians agains the demolition and transfer of Susya. Credit: Taayush

From early morning, when the air is still almost cool, until noon, when the sky is aflame, we work on the rock-and-dirt path to Bi’r al-‘Id. First you gather the medium-size rocks from the side of the road and the hill and arrange them in even rows; then you gather many bucketfuls of gravel and sand, scraped with rakes and picks from the caked surface of the soil, and pour this over the rocks; then you cover it all with earth carried in buckets from wherever you can find it. You split open the biggest boulders on the path with a pick-ax or heavy hammer. It took us three and a half hours to even out 15 meters or so of the path. It’s good work. As Yair says with a smile, it has a Zen-like quality, this endless filling of buckets and carrying them over the thorns and stones uphill. Besides, it’s something good to do during Ramadan, when everyone is fasting and there’s little activity of the shepherds and almost no agricultural work to be done.

It’s a long path to Bi’r al-‘Id, just barely passable today by vehicles except for the patches that we’ve upgraded like this over the last years. We calculate that if we work like this for another two hundred days or so, the whole length will be finished. By then, I say in gloomy jest, the Occupation will surely be over. Meanwhile, Bi’r al-‘Id exists, a miracle, a source of pride, for here, at this tiny point overlooking the desert under the shadow of the settlement of Mitzpeh Yair, we helped not only to stop the remorseless movement of expulsion but even to reverse it, for now.

As I work, fried by sunlight, I think mostly of Susya, not far away. We know for sure that very soon, probably between the ‘Id festival at the end of Ramadan and the sitting of the Supreme Court on August 3rd with Susya on its agenda, the State of Israel will demolish at least some of the Susya homes. They have what they must consider a window of opportunity; the bulldozers are already sitting nearby. For years this demolition-cum-expulsion has been threatening to happen, for years we’ve managed to stall it by a fierce campaign with effective international pressure, but now, under the new government, we’ve reached the point of destruction, unless some of you can mobilize someone out there. We don’t yet know how many homes they will liquidate in the first round. Perhaps “only” a few. I am confident that Susya will somehow survive, but first there will be sorrow and horror, and the Israeli settlers in the settlement they, too, call Susya, stealing not only the land but also the name, will rub their hands in glee.

We discover our conscience proper on the day when certain actions that are legal or indifferent or permitted by the police inspire in us an insuperable disgust

There can be no doubt that we are awaiting a crime, a crime against humanity, a crime that undermines the integrity, if that is the right word, of this state, a crime against the conscience of every Israeli, whether they know it or not, whether they have a conscience or not. Here is what Vladimir Jankélévitch (a new hero of mine) has to say about that: “The moral conscience is not a particular thing in the mind like the colour blue, the association of ideas, or the love of women. The moral conscience does not exist. But we discover our conscience proper on the day when certain actions that are legal or indifferent or permitted by the police inspire in us an insuperable disgust”. Conscience, apparently, is mostly a potential capable of being activated, if we are lucky, under special, or maybe even ordinary, conditions—thus capable of becoming real. But for me, today, thinking of Susya, this goes well beyond disgust. My moral conscience, such as it is, seems to inhabit the pores of my skin and my ability to love. It comes from a site where the word “moral” has not yet been born, and only from that dark place does it reach toward my mind. I know next to nothing about morality, but like all other persons, I know about pain. As for the action in question, it is not merely permitted by the police but initiated and actively pursued by the government and abetted by the courts.

Susya is not some theoretical entity somewhere on a map that is itself an abstraction. Susya is the home of Nasser and his family, including his baby daughter; of the large Nawaja’ clan, many of whom we know well from years of visits and protests and summer camps and meals and celebrations and nights in the desert; of the wind turbines that Noam and Eldad put up years ago, and of the wells we have cleaned of their ancient silt; of several friendly and idiosyncratic donkeys and dogs, and of the olive trees we have harvested together with our friends; home to the winter winds and the summer sun and the special smell of the rocks and the thorns. Suppose the soldiers throw Nasser and his wife and children, including the baby, out of their home and mow it down with the bulldozer. The Nawaja’ family will live, they will of course rebuild, as they have before, but I, for one, I promise you, will never forgive.

States, I suppose, are routinely cruel to their citizens. In the case of Israel, the Jews are routinely cruel to Palestinians. For nearly five decades, the Occupation has poisoned us all with its lunatic bureaucracy, its violent settlers and soldiers, its delight in stealing land, its innate racism, its pervasive rule of terror. All this we know, it is nothing new. What is new is the scale of what they want to do to Susya, and after that—who knows to whom? It is hard to think about wickedness inflicted on millions, but it is not hard at all to imagine wickedness directed at a family I know and love.

So for me, waiting for the crime to happen, waiting to see the state torment and injure and violate my friends, driving them from their homes and their ancestors’ lands, driving them out with guns and patronizing words about what the state thinks is good for them, for me there is a question about what a decent human being can or must do in such a time and place, and what a decent person can and must say in words, because words matter, too. Perhaps some of you, my readers, know the answer.

July 11, 2015   Bi’r al-‘Id

David Shulman is an Indologist and an authority on the languages of India. A professor at the Hebrew University of Jerusalem, he is an activist in Ta’ayush, Arab-Jewish Partnership. His latest book is More Than Real: A History of the Imagination in South India

, published in April 2015


These notes aim to bear witness at what we, in Ta’ayush– Arab-Jewish Partnership–  see and experience week after week in the Occupied Territories, mostly in the south Hebron hills where we have long-standing ties with the Palestinian herders and farmers. They provide a fairly typical picture of life under the Occupation and of the efforts of Israeli-Palestinian peace groups to protest, to protect the innocent civilian population in the territories, and to keep alive hope for a peace that someday must come. The entries are personal and somewhat introspective, an attempt to make sense for myself of what I see.

Abdul Kalam’s Funeral, in Pictures

Abdul Kalam’s funeral march and last rites were attended by tens of thousands, transforming the placid town of Rameshwaram into the centre of a thrumming congregation over three days.

The funeral of former Indian President A.P.J. Abdul Kalam, who died on July 27 of a cardiac arrest in Shillong, was held on July 30 on the outskirts of Rameshwaram, his hometown. He received full military honours before he was laid to rest, as well as visits from Prime Minister Narendra Modi, the Chief Ministers of Kerala, Karnataka and Andhra Pradesh, senior leaders of regional as well as national parties, and tens of thousands of people. Photojournalist Shuchi Kapoor, who was in Rameshwaram during the events, documented them for The Wire.

Most shops on Dr. Abdul Kalam Street, where he had grown up, are named after him or named 'President'. © Shuchi Kapoor

Most shops on Dr. Abdul Kalam Street, where he had grown up, are named after him or named ‘President’. © Shuchi Kapoor

People start coming in to pay their respects at Kalam House from 5 am on the day of his body's arrival. Photo-ops took the event by storm. © Shuchi Kapoor

People start coming in to pay their respects at Kalam House from 5 am on the day of his body’s arrival. Photo-ops took the event by storm. © Shuchi Kapoor

People start gathering and crowding in front of Kalam House, where his brother lives, waiting to hear about the body's arrival. © Shuchi Kapoor

People start gathering and crowding in front of Kalam House, where his brother lives, waiting to hear about the body’s arrival. © Shuchi Kapoor

As the body of Abdul Kalam, ex-President of India, arrives at his childhood residence in Rameshwaram, the military band gets ready to pay its respects with the haunting 'Last Post'. © Shuchi Kapoor

As the body of Abdul Kalam, ex-President of India, arrives at his childhood residence in Rameshwaram, the military band gets ready to pay its respects with the haunting ‘Last Post’. © Shuchi Kapoor

Crowds start lining up at the ground where Kalam's body is to be brought for public viewing and for people to pay their respects to their much-loved President. © Shuchi Kapoor

Crowds start lining up at the ground where Kalam’s body is to be brought for public viewing and for people to pay their respects to their much-loved President. © Shuchi Kapoor

People, coming in large numbers from various cities to view Kalam's body, had to be kept from crowding the roads. © Shuchi Kapoor

People, coming in large numbers from various cities to view Kalam’s body, had to be kept from crowding the roads. © Shuchi Kapoor

General Secretary Vaiko of the MDMK party arrives to pay his respects at the first public viewing of Kalam's body on the outskirts of Rameshwaram. © Shuchi Kapoor

General Secretary Vaiko of the MDMK party arrives to pay his respects at the first public viewing of Kalam’s body on the outskirts of Rameshwaram. © Shuchi Kapoor

The body of Kalam arrives for the public viewing at a ground on the outskirts of Rameshwaram, his hometown in Tamil Nadu. © Shuchi Kapoor

The body of Kalam arrives for the public viewing at a ground on the outskirts of Rameshwaram, his hometown in Tamil Nadu. © Shuchi Kapoor

People gather in large numbers and wait for hours in the scorching heat to get a glimpse of Kalam's body, which is due to arrive for a public viewing on the outskirts of Rameshwaram. © Shuchi Kapoor

People gather in large numbers and wait for hours in the scorching heat to get a glimpse of Kalam’s body, which is due to arrive for a public viewing on the outskirts of Rameshwaram. © Shuchi Kapoor

Excitement to see Kalam's body breaks all barriers and the crowd turns into a mob. © Shuchi Kapoor

Excitement to see Kalam’s body broke all barriers and the crowd turned into a mob. © Shuchi Kapoor

The mosque near Kalam's childhood residence in Rameshwaram is packed with people, friends and family, eagerly awaiting his body's arrival and for the last rites to begin. © Shuchi Kapoor

The mosque near Kalam’s childhood residence in Rameshwaram was packed with people, friends and family, eagerly awaiting his body’s arrival and for the last rites to begin. © Shuchi Kapoor

'Vande Mataram' and many patriotic slogans are blared and the Indian flag is hoisted outside the mosque as the people await the arrive of Kalam's body for the final rites. © Shuchi Kapoor

‘Vande Mataram’ and many patriotic slogans are blared and the Indian flag is hoisted outside the mosque as the people await the arrive of Kalam’s body for the final rites. © Shuchi Kapoor

The body of Abdul Kalam covered with the holy 'chaadar' (sheet) being taken from his residence to the nearby mosque for the last rites. © Shuchi Kapoor

The body of Abdul Kalam covered with the holy ‘chaadar’ (sheet) being taken from his residence to the nearby mosque for the last rites. © Shuchi Kapoor

Armed services personnel decorate the gun-carriage with flowers that will escort Kalam's body to the burial ground on the outskirts of the city. © Shuchi Kapoor

Armed services personnel decorate the gun-carriage with flowers that will escort Kalam’s body to the burial ground on the outskirts of the city. © Shuchi Kapoor

An uncontrollable mob rushing toward the burial spot immediately after Kalam's body was laid to rest. © Gayatri Nair

An uncontrollable mob rushing toward the burial spot immediately after Kalam’s body was laid to rest. © Gayatri Nair

Shuchi Kapoor is an independent photojournalist currently based in Chennai, whose work mainly focuses on humanitarian, women’s rights and socio-political issues in India.

Govt. Working on Restoring 66A of IT Act With Changes

The apex court had called section 66A of the IT Act “unconstitutional”, saying it has a “chilling effect” on freedom of speech and expression.

The government is working on restoring with “suitable modifications” the controversial section 66A of IT Act which provided for arrest of people for posting offensive content online and was struck down by the Supreme Court in March 2015.

The Ministry of Home Affairs has constituted a committee to examine the implications of the apex court judgement and “suggest restoring of 66A of Information Technology Act 2000 with suitable modifications and safeguards to make it fully compatible with constitutional provisions”, Telecom Minister Ravi Shankar Prasad informed Parliament today.

The committee has been mandated by MHA to suggest alternate legal measures so as to avoid the possible misuse of social media in the interest of National Security and maintenance of public order.

“Also, an Expert Committee under the Chairmanship of TK Vishwanathan, former Secretary, Law Commission and Secretary General Lok Sabha has been set up by MHA to study the Supreme Court judgement on section 66A of IT Act and recommend a road map with measures and amendments to the present laws for consideration of the Government,” Prasad said in a written reply to the Rajya Sabha.

The apex court had called section 66A of the IT Act “unconstitutional”, saying it has a “chilling effect” on freedom of speech and expression. Many people have been arrested for posting cartoons of politicians or criticising them when the act was in force.

The apex court held that the expressions used in section 66A of the Information and Technology Act, which had been used by various administrations against inconvenient posts in the cyber space, are “completely open-ended and undefined”.

The apex court had rejected appeal to strike down section 69A of IT Act that gives the government power to block websites or any information that can be accessed through any computer in the interest of sovereignty and integrity of India, defence of nation and so on.

Chimpanzees are Cultural Conformists

To determine if a species has culture, researchers look for any behaviour that cannot be explained by innate predisposition because of genes and opportunities provided by environment.

Animals do the most amazing things. Read about them here in this series by Janaki Lenin.

A chimpanzee. Credit: Kathelijne Koops.

A chimpanzee. Credit: Kathelijne Koops.

Chimpanzees have culture. There’s no doubt about it. By culture, biologists don’t mean primates sing and dance. They say an animal has culture if a particular activity is learned by all the members of a group.

To determine if a species has culture, researchers look for any behaviour that cannot be explained by innate predisposition because of genes and opportunities provided by environment. For instance, there are four subspecies of chimpanzees in different parts of Africa. Each may do things differently. There’s evidence of culture when different groups of the same subspecies consistently performed the same action distinctly.

Primatologists Lydia Luncz and her colleagues in Germany came up with a simple solution – compare the behaviour of neighbouring groups that live in the same habitat and are close enough to be genetically similar.

Researchers led by Kathelijn Koops of University of Zurich, Switzerland, and her colleagues from Germany and Japan used this method in Kalinzu forest, Uganda.

Typically, the primates dip a stick into the nest or trail, and wait for ants swarm over it. Then they use one of two techniques. One is to swipe a hand along the length of the tool and stuff the biting mass into their mouths. Another technique is to nibble the ants straight off the stick, like we would eat a measly skewered sheesh kebab.

Chimpanzees use sticks of different length. For example, they’d use longer sticks for more aggressive ants. In Guinea, chimps use long sticks to poke into nests and short sticks for ants of the same species running along trails.

Koops and her team compared the length of stick used by two neighbouring groups – called M and S – of eastern chimpanzees. Koops says the M group was named after the Musanga trees that were common in that group’s territory, and the S group was named after the area, Sunzu.

The researchers found the sticks used by the M-group were on average 16 cm. longer than the S-group. Since these chimps were used to people, the researchers were able to watch them fishing for ants. The primates used a clever technique of ant-catching, to avoid being bitten by the formidable soldiers of the ant colony. The chimps hung suspended from an overhanging tree when sticking a long twig into the ant nest. Perhaps, fishing while hanging from trees required longer sticks to reach deep into the nest. What’s more, the length of the ant-fishing stick has remained constant since 1997.

The other S-group was shy and researchers could not observe them at dinner. They could only measure the length of the sticks they found lying near ant nests in that group’s territory. These chimps used shorter sticks to fish for the same species of ants. In fact, they were far shorter than sticks made by other chimp groups.

The researchers say it’s possible this group nibbles ants directly from the stick. None of the nests that the S-group raided had a tree nearby, so it’s unlikely they dangled from one while poking the nest. The researchers speculate that there may be differences in the ant nests in the territories of the two groups. Perhaps the ant nests were not deep or the ants were not aggressive enough.

Kathelijne Koops told The Wire,One possible criticism [of the study] could be that the data for S-group are relatively limited and the difference in tool length could potentially reflect a different prey preference in this community. However, even if S-group differs in army ant species preference, this would still mean that there is a cultural difference between the two communities, because prey availabilities are identical.”

In chimp society, there is little social interaction between neighbouring groups. There is no scope for one group to learn from its neighbours. On reaching sexual maturity, the boys stay home, while the girls leave to join other groups. No matter what their natal group did, once these immigrants join a new group, they imitate and adopt the group’s behaviour. Eventually, there’s no difference in ant-fishing techniques between females and males of the same group. This is the clincher in the evidence of culture.

Evidence of culture from Kalinzu is not new, as primatologists have already established chimp culture in the Ivory Coast in 2012. Lydia Luncz and her colleagues from the Max Planck Institute of Evolutionary Anthropology, Germany, studied three neighbouring groups of western chimpanzees. Those chimps differed on 27 different activities such as how they used tools, what they ate, how they hunted, and how they interacted with one another.

So what is special about this study?

Luncz told The Wire, “Finding such sophisticated cultural diversity in another subspecies of chimpanzees, besides the western chimpanzee, means that this ability of creating and maintaining differences between neighbours already existed before the split of chimpanzee subspecies. If this behaviour is found to be universal in all chimpanzee communities, the likelihood increases that it was already shared with our last common ancestor about 5 to 7 million years ago.”

Not all eastern chimpanzees use sticks or eat ants. Thibaud Gruber, from the University of Neuchâtel, Switzerland, told The Wire, “These findings in Uganda, where I also work, make me wonder why our Budongo chimps, a few hundred kilometres away, are so limited in their own tool set. They do not display any ant-fishing, or stick use, for that matter. One hypothesis is that the Budongo communities lost stick use for an ecological reason. Our chimps do not feed on ants at all, and on hardly any termites. Ants are just not part of their diet. Actually, in this respect, Kalinzu is unique in Uganda.”

Kalinzu is unique for another reason too. Koops says, “Our study is the first to find a difference in tool manufacturing between neighbouring groups.”

The paper, ‘Cultural differences in ant-dipping tool length between neighbouring chimpanzee communities at Kalinzu, Uganda‘, was published in Scientific Reports on July 22.

Janaki Lenin is the author of My Husband and Other Animals. She lives in a forest with snake-man Rom Whitaker and tweets at @janakilenin.

The Congress Quells Dissidence in Assam, With a Little Help from the BJP

Sharp divisions within the BJP may affect its chances in the elections next year

File photo of Assam Congress leader Himanta Kumar Sarma. Credit: PTI

File photo of Assam Congress leader Himanta Biswa Sarma. Credit: PTI

The dissidence in the Assam Congress finally seems to have been quelled, and the BJP can take much of the credit for that. What the Congress netas in Assam and New Delhi couldn’t do for the past three years, the BJP did effortlessly last fortnight – that of steeling the resolve of Assam Congress master strategist Himanta Biswa Sarma to remain in the party and engage in efforts at repairing the damage ahead of the 2016 Assembly polls.

Before the recent turn of events, Sarma, who is Chief Minister Tarun Gogoi’s bête noire in the Assam Congress, was rumoured to have been at the BJP’s doorstep, about to enter the party. That he did not do so is because some BJP netas from Assam and Delhi worked overtime to sabotage his impending inductionh. A printed booklet charging him with being the ‘main accused’ in the Louis Berger water project bribery case in the Guwahati Metropolitan Development Authority (GMDA) surfaced around the time the rumours of his defection were floating around. So what if the US Federal Bureau of Investigation or the US Justice Department documents do not talk of any Assam ‘minister’ receiving kickbacks; for the BJP, this did not matter.

Sarma, of course, had never confirmed he was in talks with the BJP leaders in a possible bid to join the party, or that he was even engaging in discussions with the AGP leadership, toying with the idea of being part of a new regional force. What cannot be denied, however, is that he has been openly opposing the leadership of Chief Minister Gogoi, a fact that made several party MLAs rally around him and give an impression that he was the key dissident leader working to emerge as an alternative to Gogoi. That the Congress high-command let him be and refused to take any action against him in the past three years only goes to indicate he was someone the party was not willing to dispense with because of his influence and ability to be useful in difficult situations.

Like any ambitious young leader with potential, Sarma may have got frustrated at his or his lobby’s inability to effect a leadership change in the state and at the near-blind support the AICC lent to Gogoi. That is why it is likely he was tempted to try his luck elsewhere.

BJP divided

Authoritative sources within the BJP say that influential sections in the party were keen to have him in the party fold ahead of next year’s elections. Those BJP leaders who wanted Himanta to join the party even apparently lobbied for him. But there was another section within the BJP which didn’t want him, and it is obviously this group which may have taken the lead in giving an instant verdict against him in the Louis Berger case. They could actually have been apprehensive of the Congressman’s potential to hijack the saffron party’s leadership position in the state.

If the BJP decision to hit out at Sarma in the kickback case helped end the long-standing dissidence within the Assam Congress, it has also widened the divide within the state BJP. This divide is over the question of local leadership and can damage its prospects in 2016, something more astute party workers are aware of.

That Sonia Gandhi agreed to meet Sarma within 48 hours of the BJP news conference in Delhi where the party levelled its kickback charges against him goes to indicate the Congress is keen on sending out an all-is-well message. It also suggests Himanta may have finally decided that the Congress is his best bet after all. By sending out a message that Sarma is a man in demand within the party, the Congress high-command hopes he and his rivals will now bury the hatchet and go all out to ensure a Congress win in next year’s assembly elections.

Wasbir Hussain is a political commentator and Executive Director, Centre for Development and Peace Studies, Guwahati