R.G. Kar: Five Lessons From an Urban Power Struggle

In the wake of neoliberal reforms and relentless urbanisation, crime and urban insecurity have joined to become an interlinked theme overwhelming the public mind.

I

After the ghastly rape and murder of a young female junior doctor in R.G. Kar Medical College and Hospital, Kolkata, on August 9 2024, the junior doctors of the city mobilised for justice. The city also erupted in fury and solidarity with the murdered doctor.

For the first week following the murder for about the next fifteen days, there was a spontaneous upsurge of emotion, grievance, fury, and a fervent desire for a new chapter in the collective life of the city which would be henceforth free of the maladies of the urban. The upsurge overwhelmed the city. Women “captured the night” of Kolkata, youth occupied roads and major junctions, and medical colleges were virtually non-functional with the entire community of junior doctors on strike. The condemnation by the city populace of the alleged negligence and incompetence of the government in preventing rape and murders of women was nearly universal.

Newspapers, established news channels, established political parties belonging to the opposition (initially included among the political activists on the roads were even cadres of the ruling populist party of West Bengal, the Trinamool Congress), do-gooders, militant feminists, and radicals for all seasons occupied the city. Holy declarations, pious wishes, determined proclamations, “hot” news produced each hour of the day with generously mixed dosages of unfounded information and specialists’ comments, and – not to be left behind – rumours in large measure, decided what was to be included and excluded from the “public sphere.”

The city had not witnessed such a mood in recent memory. 

This was the first phase of the “movement for justice.” Yet, no one knew exactly what this phrase and the rallying cry, “we demand justice” meant – legally, ethically, and politically.

To some it meant avenging the death of the murdered doctor by hanging the accused; for some it meant safety of working women; for some others improvement of the medical college and hospital environment; for still some others an end to a seemingly all-pervasive corruption in the administration; and for the determined Left and the Right parties, justice meant an immediate resignation of the chief minister and the populist government.

The phase also saw the build-up of a mix of “non-political” claims and “political” claims of the slogan for justice. Women protesters and some among the junior doctors claimed that their slogans and demands were not politically targeted against the ruling party or the government and they did not represent any political party. Left and the Right activists and leaders avowed that this was indeed a political mass movement against a government which survived on rape and murders of women, loot of money and wealth, hooliganism, and outright maladministration.

At the same time this second group said that they respected the desire of the masses to stay out of openly political claims. The ambiguity of the situation and the not unexpected ambivalence of the urban society towards “politics” helped the cry for justice to grow at a fast pace. It meant everything to everyone, or at least offered space to protesters of various kinds and dispositions to articulate their own ideas and prescriptions of justice.

The movement for justice was a classic case of “counter-conduct.” People, as if, wanted to say that they disagreed with the conduct of the government. By occupying the nights, streets, squares, coining new and innovative calls, and raising moral questions they had signalled their own ideas about conducting life.

Solidarity and the cry for justice spoke of their counter-conduct.      

A cardboard cutout of Durga at a TET protest in Kolkata. Photo: Joydeep Sarkar.

The ambivalence about the exact formulation of the demand for justice however gradually gave way to clarity from around August 25, and certainly from the first week of September, with the intervention of the Supreme Court. The second phase of the movement, crucial to lend teeth to the amorphous feelings and sentiments, had begun.

Demand for justice acquired a legal form. It had four components: (a) establishing culpability for the murder; (b) corruption of the R.G. Kar administration; (c) any possible link between rape, murder, and corruption; and (d) general lessons to be drawn in terms of legal redress of such situation in medical colleges and hospitals in the country.

Thereafter, whatever spontaneous outpouring of grief and sentiment may have followed on the street, the affective character of the movement was gradually superseded by the legal dimension of the demand for justice, and equally importantly the increasingly political character of the conflict between the urban middle classes and the lower classes of the society who suffered due to closure of public health facilities throughout the state. As if the conflict shaped and mirrored two parallel realities: aspiration and desire of the educated middle class of the city and the seeming “unconcern” of the outlying sections of urban society (and of course, the larger society beyond the urban, that is the mufossils, suburban towns, and big villages) to the issues animating the middle classes.   

By late August, the protesting doctors and, distinct from them, various other sections of youth claiming to be “independent”  had used their weaponry with telling effect – embarrassing the police, trying to “storm” the Nabanna, the administrative headquarter of the government, laying siege to the office of the health department, the Swasthya Bhavan, occupying the streets, coining new slogans, coming up regularly with new or revised charters of demand, engaging top notch lawyers in the Supreme Court, building network with the larger medical fraternity, capturing international attention, and mobilising the entire political and cultural brigades of the city – in sum, displacing the old pattern of politics with something that many imagined to be new politics – for a cleaner life, corruption-free society, and responsible government. The Left posed to be the natural contender for such a dream. But the Right was also determined not to be pushed behind. In any case, it appeared as a war between a moral populace and a thuggish populist party. Battle lines were now drawn clear.

A protest in the aftermath of the RG Kar brutality in Kolkata. Photo: X/@MinakshiMukher8

Yet, by the end of the first fortnight of September, the arsenal of the agitators and the political forces supporting them stood depleted. With the government firing not a single shot on the occupying forces, no case of lathi change except when there was an attempt to lay siege around Nabanna (August 27), the police force without fuss accepting insult by the young doctors in the form of being presented with the replica of a spine (September 3), and the political force of the populists by and large staying quiet and disciplined, the administration seemed to be recovering some of the lost ground. It stayed put, denied charges of complicity and corruption, but most importantly, took initiative for dialogue as a way out of the impasse (September 13). 

Meanwhile patients suffered, some hospital OPDs remained closed, and the parallel reality of the exclusive nature of the demands of the medical community in contrast to the latter’s loud claim of representing the society emerged as part of the undeclared social war. Gradually, the demand for justice for the murder of the young doctor lost prominence, safety and security of working women lost out totally in terms of public attention, and stoppage of health services for the poor patients was acknowledged only in a round-about way and that too when pressed for a response. 

Senior doctors, junior doctors, and legal fraternity – all focused on the righteous character of the junior doctors’ charter of demands. As doctors’ demands crystalised, clarity replaced ambiguity, and the political spirit eased out the social spirit, the battle reached a deadlock. The Supreme Court could not rescue the holy warriors, who now resorted to the last weapon left in their armoury. The fast unto death by a few representatives of junior doctors (from October 5) raised massive concern. Pressure on the medical community mounted, the government again offered a dialogue (October 19). Some demands were met. Hunger strike was withdrawn. Doctors went back to work. The third and the last phase ended in this predictable way. The city heaved a sigh of relief.    

Lesson one

It is important therefore to mark out carefully the phases of a movement, watch for the critical moments, and shape tactics accordingly. Patience is important. Though, acting on moments of conjuncture is equally necessary.            

II

Yet, we may ask, what ordained the pattern of mobilisation and its dynamics? Here class analysis is unavoidable. 

Protest in the wake of the rape and murder of a caregiver, a young lady doctor, in her workplace – a public health facility – was spontaneous and cut across social barriers. However, the protest was typically urban, which is to say that those who protested had possibly ignored similar violence against women of working classes, and the fact that the victim now was from a middle class educated family and was a doctor, a respected figure in society, had now shocked the middle classes. The general question of insecurity of working women crystallised around an “urban” figure. As indicated earlier, the murder signified all the misdeeds and calumny of the popular classes and the desire for a clean life where men and women could pursue their vocations without fear or a feeling of insecurity. The popular classes had experienced such violence on their bodies all through their histories. To them, it was a part of what we may call the daily violence on embodied lives. The regime of urban biopolitics opened up with its internal contradiction stemming from different meanings of violence in everyday life, and therefore the untold question: was this death exceptional? 

The consequential build-up of arguments meant a lot in terms of the class nature of the movement. In some sense, this was not a unique situation, for after all, classes have their respective utopias of a clean and virtuous life. The feature of this situation lay in the ambition of the articulate classes to ride on the wave of the movement to topple the government and capture power, and make society clean by getting rid of the popular classes. These popular classes by educated reasoning are involved in occupations like smuggling including cow smuggling, drawing rent-income from construction and other activities, living off chit funds, hawking, and peddling goods by occupying streets and pavements, and engaging in illegal sand mining, coal mining, tree felling, timber sale, unauthorised fisheries, and living off in the service sector by engaging in domestic work, unlicensed auto-rickshaw driving, waste disposal work, and the like. The educated class terms this as “parallel economy” and no longer thinks of this as “informal economy.” Thus, the black-market economy or the tax dodging economy is not a parallel economy anymore; or, we should not say that national debt operates in a country’s economy in the long run as a parallel economy; but these petty occupations make the “parallel economy.” (See for instance, Sekhar Mukhopadhyay, “Sankhya ki bole, kotota bole” [“What numbers tell and how far they tell”], Anandabazar Patrika, 25 October 2024).

Educated reasoning went further: There must be a correlation between incidence of rape and the extent of this parallel economy. Frustrated, unemployed, angry men rape women. If men are unemployed and still are not raping, then crime figures must be wrong. There were other variations of this sort of reasoning. Nobody said that this is exactly the way racist logic worked. If a member of the civic police force has raped a woman, then hospitals cannot have civic police as part of the protection force. In this way, a new criminal race was born in front of our eyes in the past two months. From the court to the medical fraternity to radical feminists to finally the left-liberal intelligentsia – all agreed that civic police cannot be entrusted with the duty of protecting public health facilities. No one said that we had given birth to a new underclass, a new race – the civic police or civic volunteers. The populists were universally damned. They had created a civic police force made up of lumpen youth. They had patronised rapists and murderers.  

Photo: Pratik/Nagorik.net

The urban conflict that Kolkata witnessed was thus not one as the liberal-Left would have liked us to believe between on one hand an authoritarian, murderous, and corrupt government and on the other citizens in opposition rallying in defence of life, liberty, and values. It was also not a struggle waged jointly by feminists and a community of ethical practitioners like the doctors. It was and still is a social war among groups and classes – mostly conducted underground, but at times raising its head with a ferocity that takes the society by surprise. The social war is a civil war, where the middle classes and the popular classes are arraigned against each other. This is the new twist brought in by neoliberalism to the story of class struggle. The uneducated and uncultured populists will never be respected by the middle classes, in as much as the metropolis thinks, it is self-sufficient and has no need for small towns and the vast hinterland beyond. Yet the irony is that populists and the popular classes cannot do without the middle classes who have gained most from neoliberal investment in education and health of the society. The middle classes everywhere have contributed to the deterioration of the condition of the toiling classes. Yet the latter will have to co-exist with the former and try to reorient it, in the process reorienting itself.    

Lesson two

The urban is thus at once a transcendental as well as a class story. The cleavage between the middle classes and the working classes is deep. Any popular government will have to negotiate this rift towards strengthening the popular will that has been the basis of its existence.

III

Education and health bring the social question headlong in the story of the urban and complicate the struggle. At the same time, we must not be surprised that this new twist to urban struggle has once again materialised around what historians have termed as the “women’s question.” In country after country (Afghanistan in the wake of US withdrawal and Gaza in Palestine being the two recent instances), the most conflictive moment during any major transition in this neoliberal age has been marked by the “women’s question,” particularly by issues of their education and health. Women’s security and protection have crystallised around these two issues. It will not be an exaggeration to say that biopolitics in Southern countries is taking shape around the body of the woman. For the neoliberals, women’s emancipation is the war cry. Women must be freed from obscurantists. For the liberals, developing women’s condition and ability is the ethical goal of democracy. For the Left, it is an embarrassing situation, for they cannot oppose the neoliberal twist to the issue, while they know that this “emancipation” and “development” of women hardly touch the lives of women belonging to the popular classes.

The social and the political are thus the eternal jostling duo in the liberal annal. In this scenario, the old notion of “Left” and “Right” no longer makes sense. When we analyse the politics of our time, we have a natural tendency to copy and paste the political map of our past and place it onto our time which is a different time. It is a useful shortcut on certain occasions, but not always. What was “Left” fifty years ago is not so in face of new realities and new contradictions. The social is assuming a new form. It baffles the “Left.” The “Left” persists with old politics. It has no answer to new features. In this context we may remember how the social/political dynamics played out in the colonial past. Recall the social reform legislations in early and mid-nineteenth century in India over widow burning and widow remarriage. These and other reforms strengthened the social basis of colonial rule, and these hardly touched lives of peasant women, for in low caste societies these were not the major issues of life. When the nationalist leaders were speaking of “reforms” of a caste-bound society, Ambedkar the Dalit leader spoke of “annihilation of caste.” Who were the “Left” and the “Right” in those days? 

And today, how shall we relate the question of the popular classes with women’s safety, security, education, and health? This appears to be a non-question for the “Left.” Hence, their almost total failure to comprehend the social/political dialectic and integrate the dialectic in their transformative strategy is apparent.    

Also read: R.G. Kar: An MD Thesis I Could Submit, an MD Thesis She Could Not

On the other hand, the need to decolonise the security question is more urgent than ever. Efforts are on in many countries of the South to decolonise the security question and relocate it in the context of the post-colonial societies – their problems of underdevelopment, issues of basic rights such as of food, shelter, education, work, and health. The security question in the South is entangled with issues of life – life of the nation, people, and in particular lives of the vulnerable population groups in society, who face a generalised state of insecurity of life. To look at the question of security from the biopolitical angle is to disengage it from the colonial paradigm and to decolonise the security problematic.

Remember, the traditional approach to the security issue has been unable to reflect on the massive transformation in the last few decades, consequent to the impact of globalisation on countries of the South. It has thereby failed to achieve a deeper understanding of the insecurities and vulnerabilities of marginalised people and the emerging new underclasses of society. These insecurities require attention, analysis, and call for a proper approach that is suffused with a new approach to justice. The more the macro security of State, polity, and the big institutions has been reinforced, the more it has produced micro insecurities in society, leading to clashes, spread of homeland demands, conflicts over resources, public health disasters, and not the least – mob lynching in the wake of the spread of racial, religious, community, and caste hatred. They have also resulted in making women from the impoverished classes the permanent underclass who find it particularly difficult to get out of that condition. Probably this is the question of women’s security in a post-colonial world. The issue of security is now at the crossroads of rights, justice, and vulnerabilities. 

Protests in front of RG Kar by SFI, DYFI & AIDWA. Photo: File.

In the wake of neoliberal reforms and relentless urbanisation, crime and urban insecurity have joined to become an interlinked theme overwhelming the public mind. Crime has become synonymous with the growth of the city. Urban governance structure, increasingly shaped by global governance norms, is geared towards managing and pacifying claim-makings of urban population groups with tools of surveillance and coercion. The overriding aim of urban governance is to ensure conditions of reproduction, including reproduction of an unjust urban order characterised by a growing impoverished and criminalised underclass. Cities world over have had experiences of urban governance creating mayhem in the city in the name of abolishing crime. Rudy Giuliani, the mayor of New York City (1994-2001), was not only trying to free New York City of crime. That figure of a cleaner of crimes has been part of the contemporary history of many cities of the South. And, almost everywhere the assumption has been that immigrants are the root cause of crime, or, in general the underclasses. They are the scourge. Prostitution, drugs, trade in illicit goods, corruption, trafficking, gang warfare, and mafia activities… The crime line is straight. We are told, all that a city needs is a determined and ruthless cleaner who can order his/her forces to press triggers to save the city. On the other hand, everyday life of the lower classes in the city is marked by for instance lack of safety of female commuters in public transportation system, lack of drinking water, housing, fuel, even lack of minimum sanitation facilities, various consequences of repressive approach to street vending, and insecurity associated with street level economic activities resulting in two parallel figures of the policeman and the street vendor or the sex worker – each watching the other as the typical margin of a society marked by disorder, crime, and informality, yet constantly interacting with each other. The question of security emerges at this intersection of issues of daily life. Security cameras, civil guards, anticipatory arrests, creating a race of habitual offenders, and repressive techniques of surveillance and crowd control – these are marks of an urban biopower geared towards controlling the lives and bodies of the popular classes. Not unexpectedly, several of the demands of the doctors focused on the security technology, and thus the wrangling over the number of CCTVs to be installed.

Lesson three

Urban contentions congeal the dialectic of social and the political. Migration, new frontiers of work, new boundaries, new professional classes, new subaltern groups, and new insecurities of life define the urban. Any transformative strategy must build on these new realities and new contradictions. The insecure woman of the society is the congealed figure of these new realities and contradictions.

IV

For long, the urban form had been taken as an open, liberating form of human existence. Yet this is a near-mythical history, as every incident of insecurity has been used in urban history to kill that assumed openness. Thus, civic police – the new group of rapists and dangerous people – is to be thrown out of hospitals and other institutions. They cannot be entrusted with protecting the latter. Among others this is an indication of the city taking a camp form. Like the civic volunteer or the civic police, in cities across the world immigrants or suspected immigrants have been declared as illegals. Court-inspired as in the case of civic police or administration-ordered drives, verification campaigns, etc., transform the city to a camp or an assemblage of protected places, which are camp-like existences. The camp is a form of existence always on the margins of protection, detention, and illegality. The “camp form” symbolises the always temporary, precarious, and informal zones of a city. These zones create fractures in the political, spatial, and temporal relation between citizens as legal subjects and their proper representative rulers. The insecure medical college like the R.G. Kar represents the life condition of the confined and the differentially included in the urban world. Such a place is present, like an ulcer, with which the city as an organism will have to live. It cannot be surgically separated, because in that case the city will die. Hence is the question for city rulers, namely, how can these settlements be governed? Almost everywhere the urban response has been in the form of creating the demand and riding on the crest of such demand that the insecure place in the city must be turned into a camp, a protected and securitised place. 

The conjuncture of the effect of a specific time, occupation of the space, and imponderables of a physical domain created the insecure place of R.G. Kar Medical College and Hospital. In this way, a supposedly healthy district, which is to say, the place where people were nursed back to health, became morbid. As if, the physical existence of the subjects of this place must be morally purified to protect the city and the nation. The government cannot do it; the city will not trust the government; and power in these insecure places must be geographically localised to ensure the safety and purity of these contaminated places. Thus, doctors must be empowered to run the place and clean it. The government must agree to a situation of perpetual conjuncture of a geographical, physical, professional, and ethical milieu and must accept the autonomous existence of an urban populace insofar as the latter has a body and a soul, a physical and a moral existence. This is the neoliberal transformation of a city, where urban democracy will ensure urban peace. Perpetual peace will reign in the city only in this way. We shall have solved the problems of salvation, obedience, and a decriminalised human existence. Sacrifice of openness is the necessary cost towards a decriminalised world. In conventions held in solidarity with the protesting junior doctors, middle class speakers went on to denigrate public health institutions, and alleged that these institutions had completely broken down. One argued, rape in a red-light district is understandable, but in a medical college and hospital?

Middle classes spit on the same bowl from which they eat. Public institutions are unclean and insecure. They call for a big broomstick. This is the known path to privatisation of institutions and no wonder the middle class of Kolkata led the charge.    

A protest against the RG Kar incident. Photo: X/@cpimspeak

Lesson four

The desire we are speaking of here is universal. The same urban form that produces insecurity produces this desire also. Against this desire is the reality of conflicts in a city, which lives like a collection of atoms. City represents the fractured geography of human existence. The propertied, the professional communities, and cultured classes want a city secured from the hazards of precarious existences. But they need the public nature of a city to push their respective sectoral demands. Yet, that public nature must not be extended to the uncertain frontiers and outlying areas of the city. Given the predictable chorus of these groups in defence of their gated existences, as the political experiences of Kolkata in these two and half months showed, the challenge is: How can a politics of social transformation confront the various phantasmagoria that constitute the urban? How can such politics place the popular classes back to its original place as the “heart of the city”? What will be the new urban? Or, should we think of moving beyond the urban towards a politics of transformation of places?

V

As in Kolkata, populist forces run the administration in many cities such as Mumbai, Chennai, or Delhi, where populist administration represents the will of the popular classes consisting mostly of people working in informal economy, living in slums, shanty settlements, and irregular, insecure places of the city. These populist administrations have the stupendous task of managing the city in a new way. They try to turn the police into a “civil force” to be accepted by the lower classes, become accountable to the demands of the inhabitants of the “inner city,” transform the intolerable lives of the precariously surviving people into tolerable ones, indeed improve them, reach the lower classes access to education and public health, and make co-existence of the lower and middle classes possible in an urban form that will tolerate pluralities of urban life. It is easier said than done. With dreams competing in a combustible milieu, the city is often delirious. The administration must calm the frayed nerves, rising temper, and moderate class hatred that at times threatens to break apart the fragile existence called the city. It is doubly difficult because popular classes exist on the margins of legality. A substantial part of their survival practices consists of what a philosopher of the last century termed as “popular illegalism.” Populist government tolerates such “illegalism.” In a sense, the lives of the popular classes are marked by counter-conduct, counter to the prescribed norm of urban existence.

Also read: The R.G. Kar Protests Reveal a Political Vacuum

In such milieu, rape becomes to the urban citizenry a symbol of the illegal, deranged, dehumanised lower classes. Blacks, immigrants, seniors and toughs in camps, child care homes, and hospitals, and all others with no stable earning, become pervert races. They inhabit the “non-places” of a city. Think of the night of 14-15 August 2024, when a group of mostly slum dwellers attacked the R.G. Kar Medical College and Hospital, vandalised, and broke furniture and equipment in one part of the facility. Where did they come from? Who were they? To whom did they pay their allegiance? What was their motive? Whom did they want to scare? They emerged from the shadows and retreated to the shadows. Observers have various explanations of the incident depending on their political views. Yet the fact is that as mysteriously they vanished as they had arrived in the first place carrying various flags and slogans. Their anger against a shut-down place of care was evident. Such incidents will keep on happening under populist administrations as the lower classes will go delirious. The lower classes will remind you of Lukka, the character played by Nasiruddin Shah in Ravindra Dharmaraj’s Chakra (1981). 

Like Delirious Naples (2018), Kolkata reminds us of a city in a delirious state. The populist government because of its intrinsic formation cannot abolish illegality, yet cannot but represent the lower classes in city life. One hundred years ago Antonio Gramsci had thought that intellectuals of Naples under the leadership of the workers of the North will transform the “Southern” city hitherto exploited by Catholic Church, banks, and the propertied classes. The permanently ambivalent attitude of the lower classes of the city to education, morality, and order will be transformed. 

But today? The task is incredibly tougher with neoliberal transformation of the educated gentry and the emergence of a technologically empowered stratum of society. For any emancipative politics, respect for the lower classes will have to be the base from which reconstruction of social life can begin. It is not a pipe dream, for the non-spaces of a city are in effect spaces of reconstruction. In the post-Lefebvre age, space is no longer natural. It is produced. It has an unbreakable relation with sociability.  It is produced through the interlinkages of geography, built-in environment, life practices, symbols, and resistance. Many spaces in a city are non-spaces to the urban, but in their own histories they carry stories of survival and possibilities of self-transformation. 

Lesson five

Events in Kolkata in the last two and half months show that only an awareness of the paradoxical nature of the transformative agenda for a southern city can make radical urban politics possible in this neoliberal age. If the rape and murder of the young doctor can impart such awareness to radical activists, which many other rapes and murders failed to convey, we shall be able to say that society has honoured the murdered doctor in the fullest meaning of the phrase, “honouring the death.” Speaking of Delirious Naples, recall Pasolini who perhaps anticipating his own death had said, “It is only at our moment of death that our life, to that point undecipherable, ambiguous, suspended, acquires a meaning.”       

Ranabir Samaddar is Distinguished Chair, Calcutta Research Group.

The Paradox of India Mourning a Billionaire

The reverence for Tata after his death is rooted in a yearning for an era when aspirations felt innocent, before they became entangled with the anxieties of modern consumerism.

You can’t afford to be rich and nice unless you’re Ratan Tata. In today’s digitised world, you can get away with repugnant opulence, the disavowal of work-life balance, or even mass termination. People might repost a news clipping exposing your despicability, or carp on about how you’ve looted, displaced, and made the land that remains deliberately unliveable – but no one is going to buy any less of what you sell. There is just one caveat: your death will not be met with a woebegone public. You’re no Tata.

Tata’s death necessitated the moral court of the media landscape to seal any incriminating records. After all, what has he done, the still enamoured public might ask. He loves dogs, he does charity – Tata Trusts has already clarified they couldn’t care less about the write-off that might accompany this charity – and is all-in-all a sweet old man. How can you be mad at him, especially after his death?

After The Savala Vada, a satire news account on Instagram, posted a carousel of pastiche news headlines announcing Tata’s death, it was met with a flood of comments about how their choice of timing was ‘poor’. The (faux) headlines were squibs:

Humble Billionaire Passes Away in Country Where 60% Live Under ₹260 (sic) A Day”,

“Ratan Tata Passes Due To Natural Causes Unlike His Workers”, and

“National Icon, Billionaire, Genocide Enabler Dies”.

After a few days, the “editorial board” of The Savala Vada issued another missive. A chicanery, if you will: a statement that resembles the kind that companies like Tata’s are used to typing out after a disgruntled individual admonishes them. The statement launches into a series of allegations against Tata, linking his companies to everything from exploiting tribal lands and using child labour to collaborating with oppressive regimes, concluding with an insincere apology and a quote from Douglas Adams, a writer known for his humorous science fiction.

The Savala Vada’s target was uncritical hero worship, which has the penchant to lodge individuals like Ratan Tata onto a pedestal. The frenzied reaction to even suggesting that possibility is not only symptomatic of the fact that Tata has a brilliant PR team, who have clearly cultivated an atmosphere where dissent is rare, but also that his death is perhaps the perfect time for remonstration, as the increased attention on Tata now offers an opportunity for criticism to reach a wider audience. When most newspapers bundle up sentences for an editorial on how India has lost a visionary, it failed to account for a basic principle of journalism: nothing is one-sided. The question, then, should be what this tells us about Tata, and subsequently, what the reaction to his death signifies. More pressingly, what does it tell us about this country?

In the eyes of the fawning masses, Tata embodied two supposedly contradictory forces. One was the garb of a middle-class individual – humble, unassuming, marked by a genuine desire to improve things in the country. One could run into Tata anywhere and not notice him. He was just an ordinary man, an aam aadmi who even needed to borrow money for a phone call sometimes.  His mystique was his humility, which starkly contrasted with his unimaginable wealth and separation from the rough and tumble of ordinary life. The rich are supposed to be arrogant precisely because they are so distant from us. Tata, however, was one of us, and that was cause for both perplexity and admiration.

Perhaps this is not as big a contradiction as it seems. Just running through a list of things that Tata’s vast industrial machinery manufactured – from lorries to watches, salt to internet, steel and even educational and charitable institutions – Tata’s industries slip into and fill every crack in our third-world life, injecting a dose of reliability into our creaking infrastructure. He had to be ordinary so that he could inconspicuously insinuate himself into every aspect of our lives. At the same time, his image played a function more important than just normalisation: to limit aspiration. That is why Tata remained very different from our other billionaires. How could one aspire to be like Tata when he lived in a two-bedroom flat, wore ready-made clothes, and looked just like a regular uncle one runs into on the street? If one was middle-class in India – which is already to say that one was in the top 3% – that was already your life. What could be emulated were his stolidly middle-class virtues of humility, thrift, national interest, but not his desire, which, though perhaps unexpressed, in any case, was never manifest. What the middle-class Indian wanted to emulate was this lack of desire, this seemingly magnificent disinterestedness.

Death is a moment of reckoning. It is when someone dies that their existence is bombarded with the overwhelming recognition that they were important; Tata didn’t need death for that. Words like “humble”,“generous”, and “kind” chaperoned any news that spoke of him. He wasn’t thought of as a businessman, but an industrialist, and while the etymological difference is only a matter of scale, culturally, the distinction is less tenuous. Ambani is a businessman, and even though he is technically not part of the nouveau riche, he has the accoutrements of one: Antilla, a 27-storey skyscraper with a multi-level car parking facility that can accommodate around 168 cars, not to mention the grandiosity of the recent family wedding, replete with the assurance of never running out of wealth. Adani and Modi are a fraternity, so he also doesn’t get many brownie points with the liberal middle-class. Tata’s appearances alongside Modi are overlooked, as is the reason he’s able to donate so extensively to charity.

When faced with this reckoning, the middle-class Indian is stirred up. He then offers the only remaining counterpoint in his arsenal: the creation of jobs, the sustenance of an economy. Even if they might be unethical, shouldn’t we be thankful to these billionaires for that? These jobs allow us to buy things that make us who we are, insist these businesses, and the Indian middle class sings along.

Also read: Consumption Data Shows the Indian Middle-Class Is Shrinking

Post-liberalisation, the Indian consumer has become much more discerning and demanding, tricked into believing their carefully cultivated tastes are unique expressions of their personality, rather than the product of external forces. If you’ve ever stepped foot into a Zudio – a chain of fashion retail stores that is part of the Tata Group – you know how mind-bogglingly affordable those trending clothes are. The bargain basement’s ubiquity democratises fast fashion to the point of near-uniformity. At your next gathering, you’re almost guaranteed to spot a familiar face sporting the same outfit, a shared costume for our subtly dystopian present.

Luxury goods like expensive watches, diamond rings, and fancy vacations in the Seychelles or Maldives are now aspirational realities, tangible signs of a desired lifestyle that transcends mere basic necessities, rather than far-off distant dreams. This transformation of the Indian consuming class has had incredible effects on the distribution of labour in the economy, with a vast and underpaid service class labouring invisibly to maintain the comfortable first world illusion of certain pockets of society. Yet that has also led to the percolation of aspiration downwards, even if the way up has been effectively blocked by a lack of means, leaving many scrambling to acquire status symbols through precarious debt and readily available “easy payment” schemes in a world engineered to fuel such desires.

When it was released, everyone wanted the 1983 Maruti Suzuki 800, but few wanted a 2009 TATA Nano. Tata products, once symbols of aspiration, now represent the budget option, the bottom of the barrel. The Nano, a poor man’s aspiration, and the rest of Tata’s offerings cater to a romanticised past, a simpler time of cheaper goods and uncomplicated desires. The reverence for Tata after his death is rooted in this nostalgia, a yearning for an era when aspirations felt innocent, before they became entangled with the anxieties of modern consumerism. It’s a wake-up call that makes this millennial generation realise that they have been moulded into desiring subjects who unfortunately can never realise their desires. It is this tension, which one can find reflected in the various reactions to his passing away. In the end, the loyalty to Tata wins out for the Indian middle-class, over all other considerations. That shouldn’t be surprising. After all, as the idiom goes, hum sab ne Tata ka namak khaya hai.

Diya Isha is an editor. 

Huzaifa Omair Siddiqi teaches English at Ashoka University.

 

Figuring Out What God Thinks of Me – With a Little Help From the PM and the CJI

We can’t all be special because then the concept would lose all meaning. But the Chief Justice of India and the Prime Minister have done us a favour by encouraging each of us to ask: ‘What if I am?’

Perhaps because my birthday is approaching or maybe because I’ve been influenced by the Prime Minister and Chief Justice of India, I have begun to wonder what God thinks of me. I know what my friends think and, sadly, my critics don’t hide what they feel. But does God like me? Does he think I talk too much? Does he frown or wince when I interrupt? Indeed, is he pleased with the product he’s created? I rather like what he’s crafted. But does he? Or is he dismayed by the end result?

Much like the Chief Justice, I’ve prayed for favours and God has granted them. In my teens and twenties I’d do a deal with him – what is politely referred to as a mannat. I’d offer to give up sweets or alcohol or, even, stop telling lies if, in return, he’d guarantee a first at Senior Cambridge or a college honour I desperately sought. To be safe, I’d wait for him to deliver first. When he did – and to my delight it wasn’t that infrequently – I’d meticulously keep my side of the bargain.

Was that a sign of God’s favour? I don’t know but I’d hate to hear it wasn’t. I wish I could ask the Chief Justice. I’m sure he’d know. After all, he’s been a beneficiary too.

Of one thing I’m sure, I’m definitely my parents’ child. Mummy produced me. But both of them thought of me as a gift from God. My sisters felt they made that a little too obvious! At school my teachers strived ceaselessly to eradicate the thought. I don’t think they succeeded. Now, does that mean there’s something unique about my birth? Could I be the result of a special delivery? Not a Caesarean section but something created by more ethereal hands?

This time I’d value the Prime Minister’s advice. I feel he’d have the answer. He believes he was chosen, therefore, he’d know for sure if that’s also true of me.

Meanwhile I stare deep into the mirror each morning when I brush my teeth. Sometimes I feel I can see in the reflection a sign that someone is looking back at me. Am I being delusional? Or am I seeing things others cannot? Those eyes that are observing me can’t be mine. That half smile seems to know something I don’t. What are they telling me? Are they laughing? Mocking? Or are they admiring? And applauding? Lost in these thoughts I can brush my teeth forever!

Here again, I’d value a chat with the Chief Justice and Prime Minister. They’re clearly men of another world. They must have had similar experiences. They’d know how to interpret mine.

Alas, I don’t know how to approach them. You can’t just knock on their door and ask if they’d spare a moment to tell you if you’re special. Yet if I did I’m sure they’d have the answer. As Mummy used to say, it takes a special person to recognize another

But the blame for my predicament is surely theirs. They were the first to tell the world they were special. They did so frankly, boldly and publicly. It planted in my head the idea that might also be true of me. Until they declared they were different to normal people it had never occurred to me I might be too.

In fact, have you asked yourself if this could also be true of you? Why would God only make two or three special people? What if there were more? And, if there are, how do you know you’re not one of them?

Of course, we can’t all be special because then the concept would lose all meaning. But the Chief Justice and Prime Minister have done us a favour by encouraging each of us to ask: what if I am? If they can be, why can’t you and I?

Karan Thapar is a veteran journalist and interviewer. For The Wire, he hosts the show The Interview

The Modi-Shah Game in Kashmir Is to Split Opposition Vote and Pave Way for BJP to Form Government

The only way for the NC-Congress alliance to ensure the government of Kashmir remains in Kashmiri hands is to approach every small party and candidate and assure them that, no matter who wins in the most seats in Kashmir, all of them will become a part of the next government.

Kashmir has one chance to win back the autonomy that it had enjoyed under Article 370 of the constitution. With the first phase of voting for the assembly polls over, it is apparent that its main political parties are throwing this chance away. The Bharatiya Janata Party strategists have known from the very beginning, that  they will not get a single seat in Kashmir, and that solid support for the party exists only in a part of Jammu. As a result, it does not have the faintest chance of winning an absolute majority of the Union Territory’s 90 assembly seats. Kashmiris therefore have a real chance – possibly their last – of winning back the autonomy they lost after Modi read down Article 370.

Narendra Modi and Amit Shah are fully aware of this. That is why, from the very beginning, their aim has been to break the Kashmiri vote into pieces, use the BJP’s almost guaranteed 25-seat block of seats in Jammu to emerge as the largest single party, and claim the right to form the government of Jammu and Kashmir. Once the BJP has secured that right, it will seduce, buy, or coerce a sufficient number of independents and smaller parties in Kashmir, using the Public Safety Act, the Unlawful Activities (Prevention) Act, the Prevention of Money Laundering Act and a host of ancillary laws, to seduce or compel  a sufficient number successful individuals and small parties to  join it, till it has a majority in the J&K assembly. 

If the BJP succeeds, it will have five full years to destroy Kashmiriyat – that unique, syncretic blend of Islam, Hinduism and Sikhism, that Sheikh Abdullah and the Maharaja had been determined to protect when they refused to accede to Pakistan but asked for the safeguards (eventually provided by Article 370 of the constitution) prior to signing the Instrument of Accession to India in 1947. 

When, realising their folly, Kashmiris begin to rebel against their subjugation once more, Delhi’s crushing response will reignite armed militancy in the valley and bring various ‘Lashkars’ sponsored by Pakistan back into J&K. Kashmir will then sink back once more into the hell in which it had existed from 1990 till former prime minister, the late Atal Bihari Vajpayee went to Srinagar in 2003, and held out a hand of reconciliation towards Pakistan, from that city.

The Kashmiri intelligentsia is fully aware of this, but has been made powerless to prevent it by the illiterate and irresponsible behaviour of Kashmir’s main parties, the Congress, and the National Conference. It should have been apparent to them from the moment the Supreme Court mandated a return to full statehood for Kashmir that if they wanted to protect J&K’s autonomy, they would have to fight the elections as a single coalition, with a single common platform – the release of all Kashmiris held without trial in jails all over India, and restoration of Kashmir’s cultural autonomy, i.e Kashmiriyat.

Also read: The NC and the Congress’s Hubris Has Put Them – and All of Kashmir – in a Risky Place

This required the NC and Congress to join hands with the People’s Democratic Party. Mehbooba Mufti, leader of the PDP, understood this from the very beginning but the Congress and the NC did not, and still have not understood the need for doing so. Indeed, the NC has continued to make her a major target of attack in Kashmir. 

As for the Congress, Rahul Gandhi’s preference for being in the United States to lecture the Indian diaspora for 10 crucial days from the September 7-16 – after paying a single visit to a single constituency to campaign for a single candidate in Kashmir – and his refusal to go back there while the BJP ensures, step by step, the fragmentation of the Kashmiri vote, speaks volumes for his political naiveté and lack of awareness of the role he needs to play. 

Neither of the Abdullahs has spoken out against the reign of terror that the BJP unleashed on Kashmir valley for four long months before it read down Article 370. Neither of them has protested against the prolonged imprisonment of every Kashmiri who has dared to speak out against the actions of the Delhi-imposed administration, during the president’s rule that followed.

Neither protested against the specious meaning that the Supreme Court attached to the word ‘temporary’ to vindicate the reading down of Article 370, when it had to have been was obvious to the judges that this referred only to the fact that it applied only to a part of the princely state of Kashmir that had acceded to India, and that the rest had still to be liberated from Pakistan’s illegal occupation.

It should have been apparent to them that the BJP, knowing that it could not win a single seat in Kashmir, would do its level best to split the Kashmiri vote into as many fragments as possible. It had already split the Peoples’ Conference by tempting, or coercing, assassinated leader Abdul Ghani Lone’s son Sajjad into joining them. It had also done this with businessman and former friend of Mufti Sayeed, Altaf Bukhari, by forcing him to choose between defection and jail.

Also read: Ahead of Polls, a Timeline of How Media Freedom Has Disappeared from Jammu and Kashmir

The pathetic performance of both Omar and Sajjad in the Baramulla Lok Sabha constituency – their combined vote did not even come close to that of Engineer Rashid – seems to have convinced the BJP’s strategists that releasing other Kashmiri radical leaders and allowing them to stand for election would split the Kashmiri vote into many more irreconcilable pieces, and severely dent the NC-Congress combine’s share of the vote.

The BJP coined this strategy only after witnessing the doubling of the number of votes cast in Baramulla, in comparison to 2014,  and the fact that virtually all of the increase went to Engineer Rashid. But even there, it hedged its bets by releasing Rashid only after the first round of nominations had been completed. By the time he came out of jail, Rashid was able to nominate only 12 candidates to fight the assembly elections, against the 18 assembly segments of the Baramulla Lok Sabha constituency where he had gained the largest number of votes.

This was a product of careful calculation. For if Rashid’s Awami Ittehad Party won all the 12, seats neither the Congress, nor the NC would  be able form a government without its support. But, recognising that incarceration has endowed political activists with the halo of martyrdom, the BJP’s strategists have decided to release more political dissidents from jail, in ones and twos from other  parties and religious affiliations to scatter the Kashmiri votes more widely and  prevent them from going to the Congress-NC alliance.

The only way for the Congress-NC alliance to ensure that the government of Kashmir remains in Kashmiri hands is to approach every small party and candidate and assure them, that no matter who wins in the most seats in Kashmir, all of them will become a part of the next government of the state.

This will not be as hard as it looks, for far more difficult reconciliations have taken place in other countries. The most striking was the Lebanese peace agreement signed in Doha in 2008. On that occasion, the Christian leader, Michel Aoun, parted company with his more die-hard co-religionists and the American-backed Lebanese Sunnis, and agreed to Hezbollah’s demand to make it a part of the Lebanese cabinet, in proportion to its vote. 

A similar, pre-election agreement between the three major parties, Rashid’s Awami Ittehad Party and the Jamaat-i-Islami would enable a stable government to be formed in Jammu and Kashmir once the results are in.

Prem Shankar Jha is a veteran journalist.

The Bengal Govt Claims Healthcare Has Been Hurt as Doctors Protest. This Rings Hollow

How can the mere absence of such trainee doctors create such havoc in the government healthcare system?

There has long been a trend of attributing catchy quotes to Mark Twain and this is just one of them: “There are three kinds of lies – lies, damned lies and statistics.”

Apparently Mark Twain himself attributed this one to the British Prime Minister Benjamin Disraeli.

No matter who said this first, the quote perfectly suits the arguments put forward by Senior Advocate Kapil Sibal on behalf of the Bengal government, during the recent court proceedings at the Supreme Court. In addition to being misleading, his statistics were wrong too.

What Sibal argued there, in essence, was that the cease-work by junior doctors in Bengal has created havoc in the state healthcare services. But how is that feasible? Out of hundreds of government healthcare centres – from health centres to rural hospitals and state general hospitals – only a few, approximately 26, are medical colleges and junior doctors (namely, interns, house-staff, post-graduate trainees, and senior residents) are posted in only those few medical colleges. In such institutions, junior doctors’ jobs, as trainees, is to assist the senior physicians in treating patients. So, how can the mere absence of such trainee doctors create such havoc in the government healthcare system?

Secondly, according to Sibal who represented the Bengal government, just because of this ongoing cease-work, six lakhs of poor patients were left unattended and untreated, approximately six and half lakhs of pathological tests were not done, more than 15,000 invasive cardiological procedures were postponed and so on. Where do these statistics come from?

Interestingly, the Bengal government said that more than 20 patients (23 or 24) died just because of this cease-work. Well, every death is unfortunate, but how did the government and Sibal confirm the reason behind these deaths?

As far as I know, the Bengal government did not submit any affidavit stating a list of names of the persons who died along with their causes of death. So we cannot check the veracity of this statement. A list of such names – provided , allegedly, by Swasthya Bhawan or the health department – were published in a newspaper which is closely linked with the ruling party. That list is startling. In that list of deaths caused by junior doctors, 40% of the patients had been in hospitals where junior doctors are not posted at all – let alone them ceasing work in protest. One death is marked as ‘died in an ambulance’. Is the implication therefore this, that junior doctors when working are meant to treat patients as their ambulance is in transit?

Now, a much simpler question arises. What were the Swasthya Bhavan authorities doing after having become aware of these deaths? As far as I know, Swasthya Bhavan authorities were in close connection with local authorities of all medical college hospitals during this period of cease-work. The hospitals had been confident that in spite of some problems due to shortage of manpower, services were largely running flawlessly. If that is true, and if so many persons died in spite of such assurances, then why did the Swasthya Bhavan authorities not issue show-cause notices to those medical college authorities – since such deaths reflect lack of service, even negligence? Were they simply counting the number of deaths so that they could submit an impressive number to the Supreme Court?

There was, however, one death that we all know of. That of the raped trainee doctor, while she was on duty at a government medical college. These lies and statistics are perhaps intended to hide this death.

The people of Bengal know the truth – and most of them are on the road demanding justice.

Bishan Basu is an oncologist in the West Bengal Health Services. Views are personal.

Who Is Afraid of a Caste Census?

Instead of building a robust ideology that can challenge Hindutva – a task they have failed to carry out – many liberals are busy delegitimising social justice politics. Rahul Gandhi has become a target of attack for them because of his insistence on the need for caste enumeration

On July 31, Pratap Bhanu Mehta, in his Indian Express column ‘Caste Questions to Rahul Gandhi,’ derided the Leader of the Opposition for demanding a caste census in parliament.

According to Mehta, “Invocation of caste becomes a substitute for serious thinking and will not serve the cause of social justice or healthy institutions.” He begins his article by laying out the unacceptable aspects of caste injustice and dehumanisation that continue even today but then bemoans Gandhi’s caste census demand for leading us to the “suffocating cul-de-sac of caste”.

This line of argument by privileged liberals in India is not a surprise. The liberal tradition in India suffers from a severe credibility crisis because of its inability to show an alternative to counter the Hindutva assault on constitutional institutions and democratic foundations. Instead of building a robust ideology that can challenge Hindutva – a task they have failed to carry out – many liberals are busy delegitimising social justice politics.

India under the Hindutva regime is experiencing a civil societal crisis in terms of communal and caste violence against Muslims, Christians, Dalits and Adivasis. The growing poverty and rising wealth inequality match caste marginality and economic disempowerment. The liberals helped bring us here but they don’t want to accept responsibility for having done so.

Also read: Why Congress Mustn’t Go Back on Rahul Gandhi’s Caste Census, Social Justice Promise

Who is afraid of a caste census?

Democracy as a political system recognises the value of individuals and their right to represent themselves in terms of political parties. Thus, counting heads is the fundamental ingredient of democracy. As numbers matter in democracies, they take up the exercise of a decennial census to count the numbers and to understand the demographic changes in terms of ethnic composition, gender ratio, age, health, distribution of wealth and other parameters. Of course, non-democracies are also interested in counting. In India, the British colonial state conducted the first decennial census not to democratise but to govern, rule and control the subject population.

Beginning in 1872, the British colonial state continued the exercise of the decennial census without interruption till 1931. The last caste-based enumeration was held for the 1931 census. After 1947,  the postcolonial Indian nation-state abandoned that practice. Since then, all speculation about the number of people in each caste is based on the 1931 census. By abandoning caste-based enumeration, the postcolonial state has created an illusion that caste does not matter.

The caste-privileged elites of the Hindu and non-Hindu religions conveniently took forward the state’s illusion. They denied the existence of caste in public life, and in private, they pretended to be above caste. In their public and private lives, of course, they hardly associated with the oppressed castes, except as their servants and manual labourers. The erasure of caste from public life also helped them protect their inherited caste privileges, as they did not need to self-reflect on their subjectivity.

File photo. B.P. Mandal submitting copies of the Mandal Commission report to Gyani Zail Singh, former President of India.

The liberal bubble that overlooked caste burst in 1989 with the implementation of the Mandal Commission report that granted reservations to Backward Castes, who were not represented in public educational and employment sectors until then. Implementation of Mandal brought out the vulgar contempt of the privileged castes towards the oppressed, as they used demeaning and dehumanising forms of protest, such as sweeping streets and polishing boots. These protests facilitated the consolidation of savarnas in urban India, which breathed a new lease of life into the Hindu right as it sought to overwhelm the social justice agenda with communal politics targeting Muslim minorities.

In facilitating communal polarisation and the spreading of contempt towards the social justice agenda, liberal intellectuals and the media, exclusively dominated by savarna elites, played an important role. By valourising Hindu right politics as principled opposition to the mainstream, they ridiculed oppressed caste politicians as boorish and corrupt. In this way, they demonised the social justice agenda as undeserving and worthless. By enabling Hindutva, they prevented any genuine discussion on caste-based oppression and exploitation. They claimed to be above caste – to be conscience keepers of the society. They defined the public and intellectual sphere as casteless, and their arguments coincided with Hindu right’s arguments.

In the last decade, liberals have been trying to suppress any discussion on caste and avoid census enumeration so that India’s  imagined Hindu majority can remain intact. They know that any data which sheds light on the actual number of people in each caste, when coupled with the educational and employment details and wealth distribution based on caste, would puncture majoritarian Hindu communal politics.

In this regard, Mehta’s stand is not especially different from that of other liberal elites who make meritocratic arguments against reservations. Mehta resigned from the National Knowledge Commission in 2006 as a protest against giving reservations to Backward Castes in premier institutions, saying there was a need protect the quality of these institutions.

Historically, elites have always feared numbers and facts as they reveal the pedestal of unearned privilege they stand on at the expense of the oppressed majority. Moreover, the numbers awaken the oppressed to ask questions about their share in education and employment and demand opportunities on par with the elites. The elites, whether liberal or radical, will always fear equality as they imagine the ground under their feet will vanish and their world will turn upside down. At the very least, the data will force  privileged elites to acknowledge their inherited caste privileges.

Check your privilege

Indian elites, especially the caste privileged, are a strange species. They were one of the earliest colonised non-whites in the world to be assimilated into colonial institutions and trained in Western liberal ideas. They effectively used liberalism against colonialism but refused to see that the foundation of their privileged existence was built on caste-based exclusion and denials. Even after more than 70 years of independence, political and public life in India is the prerogative of caste-privileged elites who have monopolised intellectual spheres and media spaces in such a way that they made caste an anathema.

They act as gatekeepers and conscience keepers of the nation. If one watches mainstream media channel debates, privileged elites  sit across the tables and argue against each other. They aren’t even conscious that not a single person from the oppressed castes, who number around 70% of the population, is present at the table.

It was the same when Ambedkar was at the Round Table conferences. If he was not present as a Dalit and became a member of the constituent assembly and the drafting committee chairman, would the liberals of that era have championed the cause of the oppressed caste against their own privileges? Would they feel ethical suffocation at the unbearable suffering of most people? In the world of privileged people, the marginalised would not even figure in their blind spots.

Dr. Babasaheb Ambedkar delivering a speech. Photo: Wikimedia Commons

So, one Ambedkar was needed to bring the sufferings of Dalits to the centre stage of Indian national politics. Telugu has a proverb: “Unless you ask, even mother will not serve you food.” Similarly, justice is not a charity, and the caste census is necessary to build an inclusive society that responds to inequity and injustice.

Data is a basic requirement for any policy changes in this context. As a political theorist, Mehta should understand this. The absence of data helps the elites make spurious arguments to avoid accountability – which is what the present regime in India is doing.

 Is Rahul Gandhi a trailblazer of social justice politics?

It is heartening to see oppressed castes reach the altar of Indian democracy, i.e., parliament, and take centre stage in the mainstream. The heartlessness of the Hindu right regime for a decade has proved that the state had abandoned its responsibility to deliver justice, delegitimised the language of equity and normalised the savarna culture of arrogant entitlement. Caste-based humiliations haunt even the political elites from the oppressed castes.

For example, a temple was cleansed after a visit by Akhilesh Yadav, former chief minister of Uttar Pradesh and the president of the Samajwadi Party. The assault of Brahmanical elites is so complete that political parties and ordinary people feel powerless and voiceless. It is here that the courage with which Rahul Gandhi rose has the potential to make a difference in the lives of the marginalised.

While challenging Hindutva, he articulates the aspirations of the oppressed and marginalised sections. One might think of it as the cheap political use of identity. But isn’t it the responsibility of a leader of a political party to speak on behalf of the people? When all other parties surrender, his refusal to kowtow to Hindutva is a new hope for the nation. Mehta cannot recognise the revolutionary potential of caste data that can pulverize the mythical majority Hindutva has conjured up to serve the interest of a few Brahman-Bania elites.

Also read: Politics of Caste Census: How BJP and Mandal Parties View the Contentious Issue

Mehta says of Rahul Gandhi that there is something “deeply insincere about a savarna calling out the caste of individual civil servants or ministers to signal his own virtue on this score.” But there are many examples in India where people voluntarily gave up their privileges. They dedicated themselves to the cause of the marginalised. Among those legendary figures were P. Sundarayya, S.R. Sankaran, B.D. Sharma and many others. They are celebrated by the oppressed castes as their messiahs.

Rahul Gandhi succeeded in bringing the issue of the caste census to the political centre stage through his unwavering commitment to the cause of the oppressed, which will be a new beginning in democratic politics. He will undoubtedly become the trailblazer of the social justice movement in India as V.P. Singh did by the Mandal Commission.

It is important to remember that Rahul Gandhi is not alone in demanding a caste census. The formidable INDIA alliance with the Rashtriya Janata Dal, Samajwadi Party, Dravida Munnetra Kazhagam, and Viduthalai Chiruthaigal Katchi among its constituents signifies its larger ideological front. Moreover, Dalit leaders like Koppula Raju in Congress act as Gandhi’s conscience keepers.

Chinnaiah Jangam is an Associate Professor at Department of History in Carleton University, Canada. 

 

A Cancelled Football Match in Kolkata

The Bangals and the Ghotis wanted to come together under one banner. “We want justice”. 

I was barely in my teens, an aspiring cricketer, when my father took me to the Cooperage in Bombay, to watch a football match between Mohun Bagan and East Bengal. It is the greatest rivalry in all of the universe, he told me.

Today, in Kolkata, the football match is cancelled. This is because the rival clubs had sought to protest against the gangrape and murder of a young doctor at a city hospital.

This side and that side

In the late-1970s, my parents were film-makers. My father was a professor at the Film Institute in Poona before being transferred to Bombay. In Bombay he was with the Films Division.

In Poona, where he taught direction and my mother was a student many times over (Jaya Bhaduri and Shatrughan Sinha were contemporaries), I remember my Ma taking me by the hand to meet mukti-jodhhas from what was to be Bangladesh to the military hospital. The Poona Military Hospital was considered the best at that time. In particular, when I saw this soldier with his hands tied left and right and his legs tied left and right, I remember asking my Ma, “O paykhana ki kore korey” – how does he shit?

Baba was Ritwik Ghatak’s chief assistant director and the writer from his first film, Nagarik, right till Meghe Dhaka Tara. He is the man smoking away in the first shot in Nagarik. By the time of Komol Gandhar, he had left Calcutta and taken up the government job in Poona.

Ghatak and my Ma both graduated from Rajshahi University. My Ma’s family moved from Dinajpur to Calcutta and she graduated from Women’s Christian College, Calcutta University.

In that Cooperage encounter, I was told that the match between Mohun Bagan and East Bengal, between the Bangal (people from now Bangladesh) and the Ghoti (people originally in what is now West Bengal), between the iss paar and the uss paar, was a match of great significance. It is this match that has been cancelled. There is a tide that is rising up the Hooghly. 

In my paternal family, we are from the Calcutta that sold large tracts to the British, the Duttas of Hatkhola, the zamindars who expended gold to hold weddings for pets.

Back in Kolkata after decades across the world, I am the outsider looking in. The social unrest may have a mismatch with the electoral outcome. You should know that the distance from Kolkata to Dhaka is 372 kilometres. The distance from Delhi to Kolkata is 1400 kilometres.

The distance from my house to to Salt Lake Stadium is 26 kilometres. It is where the Bangals and the Ghotis wanted to come together under one banner. “We want justice”. 

Sujan Dutta is an independent journalist.

Buddhadeb Bhattacharjee Was the Last Time Bengal’s Young Had Hope

We did not always consign ourselves to spending adulthood in cities that were not our hometown so as to be able to earn a livelihood. Buddhadeb is emblematic of that time.

Every Thursday, Kolkata’s cultural arbiter The Telegraph ran a column in its children’s special Telekids where prominent adults would recount their childhood days. These would be short lengths of prose, transcribed from a verbal recounting. Singers, actors, politicians, statespeople, writers and businessmen would speak about formative experiences and advise young readers to stick to a moral and ambitious path.  

Communist Party of India (Marxist) leader and former Bengal chief minister Buddhadeb Bhattacharjee ended his column with an exhortation to children to “surf the net.”

The year was probably 2001, just after he had come back as chief minister of Bengal. The net was a peculiar concept then – it had been only five years that the Videsh Sanchar Nigam Limited had launched its services and it would be four years before India would even have a broadband policy. As a 10-year-old I had only heard of the worldwide web and considered it part of a scientific realm I would never really need to access. There was also the fact that the chief minister was asking us to indulge in what appeared clearly to be a form of extra-curricular fun. Surf the net? And not study? What a strange, forward-facing thought!

I have remembered this line often and, in my mind, it has become significant of a lore that surrounds Buddhadeb – the lore that he was the last time Bengal’s youth had reason to hope. A lot has deservedly been written about the former chief minister’s politics, his policies, and his disastrous hard-headedness when it came to bringing policies to fruition. But, at a time when Bengal slips past a shocking number of cities when it comes to jobs, opportunities and ability to retain its young, it is worthwhile to acknowledge the last time it felt otherwise.

For those outside Bengal, Kolkata is placed on a pedestal for its ideologies, for an overall secular drift, and for being old. Residents, however, know full well that it has slipped from the category of old to the category of a city in ruins. Its young – and this is true for Bengal – have left in large numbers for opportunities that the city just does not have. If you want to travel abroad, chances are you need to travel to another bigger Indian city first. It has not lost its culture, but it has lost a large number of people who can patronise it and offer its artistes a taste of the success they deserve. 

For many, the downward slide started with the Left Front, the state government of which Buddhadeb led for 11 years. But the government that followed and has ruled for 13 years has struggled to reverse it, pushing the city and the state into a deeper crisis, making it unlivable for newer generations. 

We did not always live in a state and country where it was difficult to respect politicians. We also did not always consign ourselves to spending adulthood in cities that were not our hometown so as to be able to earn a livelihood. Buddhadeb is emblematic of that time – a time when we had hope. As my colleague Sravasti Dasgupta put it, “I remember there was this absolute promise in the air that Buddhadeb will change Bengal.”

I do not think this is a sentiment worth discarding, no matter what followed, because if we cannot enthuse our young to hope, we have failed as a society.

Also read: Aboard the Karmabhumi Express, a Reporter Learns of the Dreams of Bengal’s Outbound Migrants

Buddhadeb had plans for a young Bengal. He wanted educated youth to work jobs befitting their quality and qualifications. One day, there was talk of Wipro landing in the state, while on another day there was talk of enticing the Salim Group of Indonesia, to say nothing of Tata’s Singur project. Kolkata’s own tech park, Sector V, came up to serve its growing crop of talented IT engineers.

Looking back today, the measure of transparency in governance that marked Buddhadeb’s time in power is a bygone marvel, as are his ability to apologise and open himself up to criticism. In his uncharacteristically straightforward memoir Phirey Dekha (‘looking back’), he wrote of what he was thinking once he assumed power. In comparison to today’s mass allocations to projects, without delineation of exactly where how much money is going and why, Buddha’s plans were precise, and displayed his own intrinsic understanding of what ailed Bengal. In November 2009, for instance, he wrote to then Union minister Jairam Ramesh, highlighting exactly why cultivating the Bt variety of brinjal is not a good idea for Bengal’s farmers because it will hike output without offering a clear path of what to do with the excess brinjal. Elsewhere, in candour that finds no home in present time, he notes how a delegation of women who came to him asked him if he would have been able to subsist on Rs 2,000 a month. He also observes, sheepishly, that women’s self-help groups came up by themselves, and that his government did not need to do much about it. Because we did not know better, we took this devotion to governance and candour for granted. 

We do not know what Bengal would have been had Nandigram and Singur’s industrialisation plans worked out. Perhaps the state would have suffered less from unemployment and the drain of youth. There are reports of villagers in those areas saying they regret opposing the move. This is a good time to admit that Buddhadeb’s own party was partly responsible for Bengal’s factory closures and industrial downslide – a wrong he had perhaps tried to reverse but which his successor Mamata Banerjee administration continued and deepened. Bengal has not been able to kickstart its economic revival.

Key elements of what Kolkata is and continues to be are thanks to the late chief minister’s vision – the cinema house of Nandan which hosts the Kolkata Film Festival, the refurbished colonial theatre houses Star and Minerva, a polished Jorashanko Thakur Bari where Rabindranath Tagore grew up, and so on. Buddhadeb devised a plan to plant saplings on each death anniversary of Tagore’s – it was a brand of quiet culture which Bengal deserved, got, and then, forgot. 

It is difficult not to miss a time when elected representatives acted like they owed their position to the common man – with a certain gravity that reflected respect for the citizen. That former prime minister Dr Manmohan Singh and Buddhadeb got along so well is an example of this. It was a world that perhaps did not foresee the Union government withholding crores of MGNREGS funds to Bengal, which it alleges was corrupt in using it.

Buddhadeb’s passing signals the end of a Bengal which could be worth its young. As Shramik Trains and Karmabhumi Expresses carry its young away, we mourn our own hope in the promise of our home state. In Phirey Dekha, Buddhadeb writes of a time when US diplomat Henry Kissinger arrived to meet him – to the accompaniment of very little press attention. He writes: “While talking he said, ‘The world is changing, only communists aren’t’. I said that the opposite is true. ‘Communists are changing. It is America that is holding on to the power machinery that controls its administration.”

Those were the days leaders held their own. 

Lessons of Political Arrogance from Dhaka Need to be Heeded in New Delhi

It is the historic conceit of every autocrat to think they would be able to bring unprecedented prosperity and peace in their land if only they shut down the nagging voices from civil society and the carping critics in the Opposition. Sheikh Hasina is not the first and will not be the last ruler to fall in this illusional trap.

It could just be a coincidence. Barely 24 hours before Bangladeshi Prime Minister Sheikh Hasina was compelled to flee Dhaka, India’s home minister was making a statement of Prime Minister Narendra Modi’s inescapable durability beyond 2029. Just as Sheikh Hasina had come to entertain notions of indispensability, the prime minister’s right-hand man appears to have convinced himself – and probably his boss – that India is doomed without Modi at the helm.

On Sunday, Amit Shah was telling an audience in Chandigarh: “The Opposition may try and make as much noise as it wants to. Let me make it clear that in 2029, it is again PM Modi who is coming to power.” Such undiluted arrogance. Such a sense of entitlement.

Of course, the Union Home Minister’s primary purpose to signal to all the democratic and constitutional stake-holders not to take too seriously the rebuff the electorate has administered to the Modi regime in the Lok Sabha elections two months ago. Of course, with an invigorated Opposition making its presence felt in Parliament, the Modi coterie has every reason to feel worried that many in the judiciary and bureaucracy may not be all that enthusiastic about implementing their agenda of vengeance. Of course, the Modi establishment cannot be unaware that murmurs of unease and defiance within the BJP, starting from Lucknow, are gathering a critical mass.

Sheikh Hasina was also recently “elected” under an arrangement that lacked credibility. The opposition parties had boycotted the poll process. There was no pretence of any free and fair vote. In our own country, there were many voices who felt that given the Modi regime’s stranglehold over the Election Commission, the anti-BJP parties should stay away contesting the 2024 Lok Sabha poll. It was the Supreme Court’s verdict on electoral bonds that persuaded the cynics to have some faith in the overall constitutional scheme of things. Even then, the Election Commission of India failed to earn the unqualified respect of all.

And, this precisely is the obligation of the Opposition – to put on notice every stake-holder, from the President of India to the Chief Justice to the Speaker of the Lok Sabha to the Chairman of the Rajya Sabha to every governor, that if democratic voices of dissent are not allowed to be raised, then the only noise that prevails is the crowd in the street. What happened in Dhaka should sober up the Modi-Shah groupies.

In an interview to the Indian Express (August 5, 2024) Nobel laureate Muhammad Yunus had observed of the Sheikh Hasina government: “The government is a lie-making factory, continuously lying and lying and lying, and they just start believing in their own lies.” A familiar strain in every elected autocracy.

A similar weakness has marked the Modi government’s approach to fact and figures. It rejects all international reports and opinions; it even dismisses international standards and yardsticks of democratic health. Civil society and its critiques are dismissed as the handiwork of those who want to create instability and/or bring a bad name to Mother India. Refusing to heed the voters’ admonitory slap across their face, Modi’s commissars are now trying to throttle all independent voices in digital platforms. It can only be hoped that the Modi government’s overreach will have to pass the test of judicial scrutiny.

The past ten years have made it abundantly clear that the Narendra Modi project has had no answers to the problems and complexities of national governance. Apart from self- praise and self-promotion, Modi’s decade long tenure in government is one of inefficiency, insensitivity and incapacity because it was premised on the fallacious and arrogant assumption that one honest, incorruptible helmsman could fix the “broken” system.

After 10 years India remains as, if not more, corrupt a place it was before 2014; in 10 years, it has become more unfair, more unequal and more undemocratic a place. In Bangladesh, every good impulse, every healthy tradition, every admirable protocol, every vital institution had been suborned in the interest of the glory and power of one individual. We have come very close to flirting with the Bangladesh model. The self-corruption of the establishment has eaten into the Modi sarkar’s pretensions.

The Bangladesh events make it imperative to remind ourselves that irrespective of whatever Home Minister Amit Shah asserts, democracies do not elect kings or emperors. Democracies choose prime ministers and presidents, all drawing legitimacy and authority from the Constitution.  A democratic government is an accountable government. The BJP and RSS will make a terrible mistake if they think that they can get away with misusing constitutional processes to suborn institutional arrangements anchored in democratic accountability.

It is the historic conceit of every autocrat to think they would be able to bring unprecedented prosperity and peace in their land if only they shut down the nagging voices from civil society and the carping critics in the Opposition. Sheikh Hasina is not the first and will not be the last ruler to fall in this illusional trap. Every ruler commits this folly, only to find either the army or angry mobs storming the presidential palace.

No one can be confident that the Amit Shahs and the JP Naddas of our world, who traffic in political arrogance, have the wisdom and sagacity to draw appropriate lessons from Sheikh Hasina’s flawed model of personal rule. But one can be confident that India’s constitutional institutions will regain their vitality and assert themselves against the Modi regime’s uncured waywardness. The Dhaka denouement need not be replicated in New Delhi.

 

 

RBI’s Extraterritorial Influence on the Rupee Market

The emergence of the offshore non-deliverable forward market in the rupee has made it more challenging for the RBI to maintain exchange rate stability.

Maintaining stability of the exchange rate is among the most important goals of the Reserve Bank of India (RBI). On a de-jure basis, India moved towards a market-determined exchange rate system in 1993. Yet the de-facto reality is that the RBI regularly and actively intervenes in the foreign exchange (FX) markets. The official position of the RBI is that FX interventions are made to curb excessive volatility of the exchange rate and maintain orderly conditions in the market. This task however has become progressively more challenging for the Central Bank owing to the steady rise of the offshore non-deliverable forward (NDF) market in the rupee (INR).

An NDF contract is similar to a regular forward currency contract (which sets a fixed foreign currency exchange rate for a transaction at a future date), with the main difference that an NDF does not require physical exchange of the underlying currency. Instead, it allows the counterparties to settle profit or loss in a convertible currency like the US dollar. Hence, the moniker “non-deliverable”.

The INR-NDF market has grown substantially in size over the years. It has emerged as the second largest NDF market globally in terms of average daily turnover. In fact, the INR-NDF market is almost thrice as large as the onshore deliverable forward market. This has led to concerns in the RBI that the offshore market is playing an increasingly important role in determining the value of the rupee and hence may hamper the ability of the Central Bank to maintain exchange rate stability. This has been of concern especially because the offshore market is beyond the RBI’s legal jurisdiction.

It seems that the RBI may have finally found a way to influence this offshore market. The Central Bank recently released a draft direction proposing to allow offshore electronic trading platforms (ETPs) to register with it. If this regulatory strategy works, it could help establish the RBI’s extraterritorial reach over the offshore market in an unprecedented manner, and other emerging-market (EM) central banks could also follow suit. 

Background

After World War II, the Bretton Woods Conference of 1944 led to a fixed exchange rate system under which all countries’ currencies were fixed, but adjustable, to US dollar. This system came to an end in 1971, and the world’s major currencies moved towards floating exchange rate regimes. On the other hand, emerging economies like India, gradually shifted to ‘managed floating’ regimes over the next couple of decades, wherein their central banks would intervene in the FX markets to maintain currency stability.

In an increasingly globalised world where investors, traders and other market participants regularly conduct transactions in multiple currencies, fluctuations in exchange rates expose them to currency risks – that is, they experience financial gains or losses depending on fluctuations in exchange rates. To protect themselves from such risks, they use financial instruments called currency derivatives such as currency forwards. Currency derivatives are contracts in which a specified amount of a particular currency pair is traded on a specified date in the future. These instruments help hedge their currency exposures and also help FX market participants take speculative positions in multiple currencies.

For participants undertaking transactions in EM currencies such as the rupee, there are additional layers of complication. The financial markets in these economies are underdeveloped and currency derivatives may not be available. And even if these financial products are available, foreign investors’ access to these derivative markets is limited. This is because EM policymakers occasionally impose capital controls to limit the flow of foreign money moving in and out of their economies.

Access to Indian financial markets is even more difficult than most other EMs because India is the only emerging economy, other than China, that continues to have in place a complex and elaborate framework of capital controls, despite liberalisation reforms undertaken more than three decades ago.3 Hence, despite the existence of an onshore INR forward market, capital controls and other institutional constraints such as high transaction costs, complex tax regime, etc., impede the ability of foreign participants to take positions on this market.

As a result, over the years an offshore INR-NDF market has developed at various international locations such as Singapore, Hong Kong, London, Dubai, and New York. This offshore market allows participants to avoid the stringent capital-account restrictions of India and take positions on the rupee. Given that the NDF does not require physical exchange of the underlying currency, it is ideal for hedging risks arising from currencies such as the rupee, which are not freely convertible due to capital controls.

Apart from INR, South Korean won, Brazilian real, Chinese renminbi and New Taiwan dollar also have sizable offshore NDF markets. The NDF contracts in rupees are bilaterally settled in the US dollar and are traded in the over-the-counter (OTC) market. India accounts for close to 20% of the global trade in NDFs. According to the Bank of International Settlements (BIS) Triennial Survey, 2019, the NDF volumes for the USD-INR currency pair reported a staggering three-fold increase, from around US$16.4 billion in 2016 to US$50 billion in 2019. 

Domestic impact of offshore NDF market

Over the years, the linkages between the NDF market and the onshore financial markets have drawn considerable policy attention. In India’s case, there is evidence that the NDF market exerts influence on the value as well the volatility of the INR-USD exchange rate. Especially in times of heightened uncertainty and stress (such as the taper tantrum episode of 2013-14 or the 2018 emerging market crisis when the rupee depreciated substantially), the price volatility in the NDF market tends to spill over to the domestic market.

In response to this, the RBI set up the Task Force on Offshore Rupee Markets in July 2019, under the chairmanship of ex-Deputy Governor Usha Thorat, for a deeper understanding of the factors causing the sharp growth of the NDF market and to identify measures to reverse the trend. Based on the recommendations of this committee, the RBI allowed all Indian banks having an IFSC (International Financial Services Centre) Banking Unit to participate in the NDF market from June 2020 onwards. This would arguably give the RBI greater control over the NDF market.

However, in October 2022, the RBI reversed its stance and informally restricted banks from building additional positions on the NDF. This was done presumably to manage the rupee, which was rapidly depreciating against the US dollar in response to the aggressive interest rate hikes by the US Federal Reserve. In December 2022, RBI lifted these restrictions only to bring them back in August 2023 when the rupee began depreciating again. By April 2024, banks were once again allowed to take positions on the NDF market, but by then, according to news reports, banks were no longer interested due to the uncertainty arising from the RBI’s policy flip-flops.

It seems that the RBI has now proposed the latest regulations on offshore ETPs, in an attempt to once again encourage Indian banks to take positions on the NDF market.

Regulations for ETPs

One of the crucial learnings from the 2008 Global Financial Crisis was that the OTC derivatives market needs to become more transparent. This had prompted the G20 group of countries to come to an agreement in 2009 that all standardised OTC derivatives should be traded on ETPs. Since then, ETPs have been encouraged globally.

In October 2018, the RBI issued its first ETP directions providing detailed eligibility criteria, technology requirements and reporting standards for ETPs executing transactions in financial instruments regulated by the Central Bank. Thirteen ETPs run by five operators have since been authorised under these directions. On 8 February 2024, the RBI’s statement on developmental and regulatory policies highlighted some new developments in this space:

Over the last few years, there has been increased integration of the onshore forex market with offshore markets, notable developments in the technology landscape and an increase in product diversity. Market makers have also made requests to access offshore ETPs offering permitted Indian Rupee (INR) products. In view of these developments, it has been decided to review the regulatory framework for ETPs. The revised regulatory framework will be issued separately for public feedback.”

On 29 April 2024, RBI released a draft Master Direction on ETP for public feedback. This draft adds a new concept, namely, ‘offshore ETP’. Such an ETP is operated from outside India by an operator incorporated outside India. Operators of offshore ETPs need to apply for registration with RBI only if they are desirous of providing resident Indians access to their platform for transactions with non-residents in eligible derivative instruments involving rupee or rupee interest rate, as permitted by RBI under the Foreign Exchange Management Act (FEMA). This implies that, effectively, only registered offshore ETPs can allow residents to transact with non-residents in INR-NDF contracts, albeit on the assumption that residents (other than banks) are also prima facie permitted to enter into such transactions on a cross-border basis.

Legality of extraterritorial operation

A unique feature of RBI’s proposed regulation on offshore ETPs is its extraterritorial nature, that is, its effect beyond the territory of India. It may be worthwhile to note here that Article 245(2) of the Indian Constitution categorically states:

“No law made by Parliament shall be deemed to be invalid on the ground that it would have extraterritorial operation.”

The RBI Act, 1934 is a parliamentary legislation. Section 45W of this legislation empowers RBI to give directions to any agency dealing in derivatives as long as the same is in public interest or to regulate the financial system of the country to its advantage. The definition of ‘derivative’ includes an instrument, to be settled at a future date, whose value is derived from change in interest rate, foreign exchange rate, etc.

The RBI proposes to issue the new directions for registration of offshore ETPs under this provision. However, section 1(2) of the RBI Act, 1934 explicitly states that the RBI Act “extends to the whole of India”, thus potentially implying that it does not extend beyond India. The legal implications of this particular provision on RBI’s proposed directions on offshore ETPs merit a brief discussion.

A similar provision exists in section 1(2) of the SEBI Act, 1992. The Supreme Court in SEBI vs. Pan Asia Advisors, however, upheld SEBI’s powers to initiate proceedings even when the underlying acts or transactions took place outside India as long as they have an effect on the interest of investors in India. This legal position is supported by the constitution bench decision in GVK Industries Ltd. vs. Income Tax Officer, which held that the parliament is empowered to make laws with respect to extraterritorial aspects or causes that may have an impact on or nexus with India.

The underlying legal principle is often referred to as the “effects doctrine”. Following the same doctrine, it could be argued that the proposed RBI directions requiring registration of offshore ETPs are within the scope of the RBI Act, 1934 since such offshore ETPs are envisaged to permit Indian residents to enter into INR-NDF contracts offshore. This in turn will have an effect on the INR-USD exchange rate and consequently, the RBI’s attempt to stabilise the exchange rate. Therefore, the extraterritorial operation of RBI’s proposed intervention could be legally justified under Indian laws.

Potential impact

Offshore ETPs as well as the RBI are likely to benefit from this new regulation. Offshore ETP operators interested in the INR-NDF market have strong commercial reasons to apply for an RBI registration under this proposed direction. This is because Indian banks and other Indian entities can potentially become important players in the INR-NDF market. Till date, their participation in the NDF market was limited due to the lack of a comprehensive regulatory framework. The RBI is clearly trying to fix this lacuna. Hence this should make offshore ETP operators keen to offer their NDF products to Indian banks, which are all major potential clients in this space.

From the RBI’s side, the more offshore ETP operators register with the Central Bank, the more leverage RBI will have on the NDF market. RBI is likely to exert its extraterritorial influence on this market by modulating Indian banks’ access. This will effectively enhance the RBI’s influence over the INR exchange rate in the NDF markets.

For this strategy to yield results, RBI has to be cautious that its regulatory approach is predictable and consistent. If it arbitrarily keeps cutting out Indian banks’ access to this market, like it did over the last few years, these banks will once again stop building positions on the offshore NDF market. That would ultimately limit their influence in this market, which in turn would also limit RBI’s own extraterritorial influence.

Conclusion

A large offshore INR-NDF market has developed over the years largely owing to capital controls imposed by the RBI on onshore currency and financial markets. Yet the existence of this offshore market has made it more challenging for the RBI to manage the INR-USD exchange rate. The RBI has been trying to get a hold on the NDF market, albeit with little success. So now, in order to deal with the problems created largely by its own capital controls, and given its objective of exchange rate management, the RBI has issued directions to register offshore ETPs. This latest attempt may be more successful than the previous ones at getting a foot in the door because the commercial incentives of offshore ETPs are aligned with the RBI’s objectives – to increase the participation of domestic Indian banks in the NDF market.

If this strategy works, other EM central banks may follow suit. How this may impact the NDF market in the long run is difficult to predict at this point in time. At an extreme, extraterritorial application of rigid local laws of EMs with capital controls may end up shifting the focus of the NDF market from registered ETPs to unregistered ETPs. EM policymakers such as in India should instead take proactive steps to liberalise their onshore currency derivative markets, if they want to curb the influence of the NDF market on exchange rates.

Pratik Datta is Associate Director (Research) at Shardul Amarchand Mangaldas & Co, a leading Indian law firm. Dr. Rajeswari Sengupta is an Associate Professor of Economics at the Indira Gandhi Institute of Development Research (IGIDR) in Mumbai, India.

This article was originally published by Ideas for India