Amartya Sen’s Development as Freedom: Ten Years Later

Amartya Sen’s Development as Freedom has been widely praised as a way forward for a more humane society since it was published a decade ago in 1999, the year after its author won the Bank of Sweden prize in economics (otherwise known as the Nobel Prize for economics). To many, it is the standard for ethical economics, so much so that one critic laments ‘until now the issue of ethics and economics, especially in the context of development, has been dominated by Amartya Sen, almost to the extent of being a one-man show with supporting acts’ (Fine, 2004). Kofi Annan says of Amartya Sen that ‘the world’s poor and dispossessed could have no more articulate or insightful a champion’. It has almost reached the point where criticizing Amartya Sen, like Mother Theresa, is out of bounds. In this critical assessment of Sen’s much lauded book, Denis O’Hearn considers its central thesis and impact on development.

The argument
Sen’s thesis is simple. Freedom is both the primary end and the principal means of development. Insofar as many of us have been critical of approaches to development that emphasize growth in Gross Domestic Product (GDP), rising personal incomes, industrialization, technological advance, or social modernization, we should be glad that such a distinguished economist is apparently tooting our horn. Yet there are deeply troubling elements in Sen’s basic assumptions about the nature of people and his lack of a feasible prescription for reaching his stated goals that make Development as Freedom not just misguided but even rather dangerous.
            Sen gives two reasons why freedom should be the primary element of development: first, the only acceptable evaluation of human progress is primarily and ultimately enhancement of freedom; second, the achievement of development is dependent on the free agency of people. Many people will agree with the first assertion, as long as the definition of freedom is wide enough to include freedom from material or spiritual want, which it does for Sen. The second assertion is more controversial within mainstream economics and popular discourse: the reason usually given by economists to cut back on public expenditures, including education, housing, healthcare and social welfare, is that poor economies cannot afford such expenditures and that development (in terms of economic growth) must happen first and only then can societies afford to look after the social welfare of their people (for a classic version of this ‘stage’ thesis, see Rostow, 1960). Sen breaks with this orthodoxy, providing evidence that high incomes do not necessarily lead to wellbeing (for instance, in terms of life expectancy), and arguing that welfare expenditures can be a spur to rather than a drain on economic growth, especially since they are labor-intensive and since labor is so cheap in poor countries. Thus, he argues against the ‘Lee Thesis’, named for President Lee Kuan Yew of Singapore, which states that denying political and civil rights is acceptable if it promotes economic development and the general wealth of the population (Sen, 1999:15). He rightly insists that we should approach political freedoms and civil rights not through the means of eventually achieving them (GDP growth) but as a direct good in their own right. Freedom is also good because it creates growth.
            Sen mentions five distinct freedoms: political freedoms, economic facilities, social opportunities, transparency guarantees, and protective security. Freedom, he says, is a principle determinant of individual initiative and social effectiveness; it is good primarily because it enhances the ability of individuals to help themselves, a property that Sen describes as the ‘agency aspecy’ of the individual (Sen, 1999:19). Thus, his definition of poverty is individual: it is the deprivation of basic capabilities, always defined as individual capabilities. Having stated the prerequisites of freedom and capability in individual terms, Sen never attempts to derive the social origins of ethics, or their historical or cultural specificity, or the ways in which some kinds of capability may be socially organized rather than just a sum of individual capacities. Social capabilities are derived from individual ones and, although Sen recognizes a need for social institutions, it is only to buttress individual freedoms that may be suppressed by imperfections of capitalism that arise from wrong-headed approaches to development. . In echoing the political economist Adam Smith, Sen sees social institutions as having a limited role as you cannot replace individual responsibility by social regulation: ‘there is no substitute for individual responsibility’ (Sen, 1999:283). Unemployment is bad because of its ‘far-reaching debilitating effects on individual freedom, initiative, and skills’ (ibid.:21).
            Sen thus asserts the positive role of the market and opposes regulations that impede the freedom of people to decide where to work, what to produce, and what to consume. In his argument for economic freedom, he oddly cites Marx, saying that his support for the end of bondage and use of terms such as ‘free labor’ meant that Marx was an advocate of capitalist freedoms. His conception of democracy is limited to pluralist or electoral democracy, without knowledge of critiques of the exercise of power within pluralism (Lukes, 1974) or conception of alternative models of democracy such as confederalism (see Bookchin, 1989).
            The center of Sen’s vision is what he calls a ‘capability approach’, where the basic concern of human development is ‘our capability to lead the kind of lives we have reason to value’, rather than the usual concentration on rising GDP, technical progress, or industrialization (Sen, 1999:285). His approach ‘inescapably focuses on the agency and judgment of individuals’ (ibid.:288) including their capability, responsibility, and opportunity. Raising human capability is good because it improves: the choices, wellbeing, and freedom of people; their role in influencing social change; and their role in influencing economic production.
            He painstakingly distinguishes human capability from human capital. Human capital is important, as it refers to the agency of people in augmenting production possibilities. Yet human capability is more important because it refers to the substantive freedom of people to lead the lives they have reason to value and to enhance the real choices they have. Education, for example, is crucial beyond its role in production; its most important role being that of increasing human capability and therefore choice. Again, Sen cites Adam Smith who links productive abilities to lifestyles to education and training, and presumes the improvability of each. While the popularity of the concept of human capital is for Sen ‘certainly an enriching move’, it needs supplementation by an approach that takes human capability as its central concern.
Another side to Sen?
The apparently progressive and humane aspects of Sen’s thesis are outweighed, fatally I believe, by several problems: individualism, microeconomic foundations to the exclusion of macroeconomics, localism, and lack of historical understanding.  For a supposedly progressive analysis, Sen’s sources of inspiration are rather strange. Most frequently quoted is Adam Smith, particularly on the subject of freedom to engage in exchange and transaction as a basic liberty but also in his defenses of the state’s limited role in certain aspects of general social welfare and his concern with ‘necessities’ and ‘conditions of living’. Also quoted as champions of freedom are: Aristotle, for his focus on ‘flourishing’ and ‘capacity’; Montesquieu and James Stuart, for their invocation of interest as a bulwark against despotism; and Friedrich Hayek, for championing liberties and freedoms as a foundation of economic progress. In the end, Sen is ultimately revealed as a champion of capitalism with good values such as transparency, where people can be trusted to do what they say they will do, and good behavioral ethics.
            It is unsurprising that Sen should invoke Hayek in such a positive light, for his economics while humane are almost entirely centred on the individual, and he usually cites freedom in the context of ‘individual freedom’, saying that the most important aspect of freedom is its ‘opportunity aspect…the extent to which people have the opportunity to achieve outcomes that they value and have reason to value’ (Sen, 1999:291). Essentially, then, Sen proposes that development is driven by capitalism laced with good values: transparency, where folks can be trusted to do what they say they will do, decent behavioral ethics, etc. (ibid.:262). Yet he provides no theory of where such ethics originate, apart from the apparent righteousness of arguments like his own about the superiority of being good and trustworthy. In capitalism, as we have been shown time and again, reasoned argument is simply not enough.
            His ‘entitlement’ and ‘capability’ approaches are individualistic in methodology, derived from microeconomics and generalized by adding problems of access to non-market-related entitlements. As Ben Fine (2004) says, Sen’s conception of development boils down to ‘what can I get from what I have, given the conditions for transforming one to the other?’ It is ‘profoundly neutral’ with respect both to underlying social relations and the historical specificity of unequal entitlements. His is a quite Eurocentric understanding of equity that goes back to Hobbes’ seventeenth century definition of equal insecurity and equal subordination to the market. Although Sen explains that his conception of ethics sprang from a racist murder of a Muslim that he witnessed in Bangladesh during his youth, it is surprising that his understanding of ethics and economic man is so resolutely Western. However, Fine suggests that this may be explained by his Cambridge economics training and by the degree to which economics as a discipline and way of thinking has colonized the other social sciences.      
            What is most surprising about Sen’s analysis, given his subject is development among the less wealthy regions of the world, is the absence of a theory of global capitalism. Indeed, he ignores problems of unequal trade, including disadvantageous international divisions of labor, the exercise of global power and the behavior of International Financial Institutions (IFIs).
            Sen’s lack of historical or global consideration is most apparent in his analysis of famine, which he provides as the major reason why freedom must accompany development. Economic security, he insists, derives from freedom. ‘It is not surprising’, he says, ‘that no famine has ever taken place in the history of the world in a functioning democracy’ (ibid.:16). Rather, famines tend to occur in one-party governments and military dictatorships and colonies ruled from elsewhere. Economic security is one of the ‘advantages of democratic pluralism’. Or, again, ‘a society that allows famines to occur when prevention is possible is unjust in a clearly significant way’. Societies need to identify ‘patent injustices’ (ibid.:287). This begs the question, what is a ‘society’? For Sen society simply appears to be the nation state, or state governments within a federal system, with no conception of how ‘patent injustices’ may arise because of and be reproduced by world-systemic processes and interrelations.
            Obviously Sen has either not read or simply decided to ignore the role of the West and global processes in causing famine. In his book, Victorian Holocausts, Mike Davis makes a compelling case that the third world was created by famine, which was a tool both invented and used by Western colonial powers to move people off of the land and enable the institution of private property and excessive rents. Thus, in his consistent effort to place all economic consequences in the hands of individuals (who have more or less capability), and their governments (which enable or not), Sen fails to consider that the best of pluralist parliaments face world economic processes and powers over which they have little or no control. The West has enjoyed pluralist democracy (which, by the way, is no utopia) in many cases because the rest of the world starved
Conclusion: Sen today?
It is not surprising that Amartya Sen’s work has received such universal acclaim, even by mainstream economists. Clearly his vision is a humane one. Yet because he remains on the safe ground of Western individualism and avoids critical analysis of major western states and institutions, his work is hardly threatening. It provides plenty of wiggle room for states and institutions that want to show ‘improvement’ in freedom, equality, life expectancy, education and capacity, and so on, without really questioning or much less changing their status quo.
There is a whole other part of the world that is not touched by Sen’s analysis of development and it is now going through one of its deepest crises. The basic developmental focus that has been with us since at least Aristotle, the development of possessive individualism where freedom is defined by security of property and the ability to trade it on markets, is extended into Sen’s conceptions of development. This individualistic world predominates today in the Washington Consensus, trade liberalization, and in agreements such as the General Agreement on Trade in Services (GATS) and Trade in Intellectual Property Rights (TRIPS). These policies aim to reinforce the impact of possessive individualism by extending the freedom of transnational corporations (TNCs) and rich investors to ‘engage in exchange and transaction’ throughout the world.
            In the name of liberalization, communities are broken down and they lose capacity and capability. Even those few of their members who manage to gain more education and skills or accumulate some capital through micro-financing find themselves constrained by the way that the market limits where they can sell their labor, to whom, for what price, and in how it is used. Meanwhile, speculators on the futures market use their greatly expanded rights of the past two decades to ‘engage in exchange and transaction’ in a way that has caused sharp increases in the price of food staples like lentils, wheat and rice, and severe housing instability. Countries such as India that try to regulate such speculation are subject to sanctions as the International Financial Institutions liberalize financial services under GATS (see for example Vander Stichele, 2008). Privatization of water, gas, and other basic resources under the guise of freedom to ‘engage in exchange and transaction’ mean that more people than ever are vulnerable to ill-health or death through the lack of these basic necessities.
            Increasingly, observers of global capitalism and privatisation conclude that we now require concepts of development that recognize and emphasize the collective rights of communities, women, and the poor to find alternative routes to ‘development as freedom’. In many places today, particularly in Latin America, there is a struggle not so much between Washington and the global South, but between emerging movements and progressive governments of different shades about whether and to what degree a livable world is really possible under the old rules of global liberalization.

Consumer Protection Act : An Unequal Fight

Twenty-five years after the Consumer Protection Act was put in place as a uniquely beneficial social legislation offering “simple, speedy and inexpensive” redressal, all three characteristics seem to have disappeared. Amendments to the Act now being proposed will further erode consumers’ rights instead of addressing existing lacunae.
Sakuntala Narasimhan ( is a national award winning journalist and consumer activist.
Complaint no 1809/2012 before the Consumer Disputes Redressal Forum, Bangalore Urban District (Karnataka) typifies the multitude of problems that citizens face today, in seeking redress under the Consumer Protection Act. The complainant, aged 70, acquired a Sony digital camera costing Rs 5,417, in March 2012, and took it to Europe in May, to take pictures at a special international conference organised to mark her scientist husband’s 80th birthday. However, she

found that the narrow plastic strip cover of the battery compartment had got warped and would not close, so she could not use the camera. The chance to add photos to the family archives, of an international honour abroad, was lost. On her return to India in July, she asked Sony to replace the camera or refund the money. Sony refused, citing its “No refund, no replacement” warranty clause, and merely pressed the strip back to straighten it. She filed a complaint under the Consumer Protection Act, seeking replacement or refund, plus Rs 5,000 token compensation for loss and distress caused by being unable to use the camera at an important event. The district forum (popularly known as consumer court) dismissed her complaint in February 2013, on grounds that Sony’s warranty clause said “no replacement, no refund”, and that it would be “unfair to a manufacturer to claim replacement, if the defective part has been replaced.”

This was a manifestly flawed order, on several counts – first, the defective part (warped strip) had not been replaced, it had only been pressed down and straightened; and a thin 4 mm wide plastic strip that has to be opened repeatedly for charging the battery is bound to break at the point where it had got warped – the complainant had even produced a similar broken plastic strip from another gadget of the same brand bought by a friend. Secondly, the rulings of the National Consumer Disputes Redressal Commission (NCDRC), the apex body for consumer complaints are binding on all district fora around the country, and a list of 12 relevant NCDRC orders in similar cases was submitted by the complainant to the forum, which ignored them. The National Commission had ruled in December 1992 that, “If a complainant was denied the use of a product at a time when he needed it most it would amount to deficiency of service.”1The NCDRC has also clearly declared in several judgments that a manufacturer cannot draw up arbitrary warranty clauses that are unfair to the buyer. Section 14(1) of the Act gives powers to a consumer forum to order replacement of goods saying, “In spite of exclusionary clauses in the warranty aimed at restricting or excluding the liability of the seller”.2National award winning consumer activist Jehangir Gai says, “No manufacturer can formulate a warranty in a manner overriding the statutory provisions of the Act which entertain claims for replacement of faulty goods”. The forum ignored these guidelines. Thirdly, the law says a copy of the complaint should be sent to the opposite party within 21 days; in this case the Bangalore forum took two months to send a copy to Sony. The stipulations of the law got thrown out of the window. There was also the curious issue of the court demanding stamps worth Rs 45 and envelopes, for forwarding the complaint to Sony – the statute authorises no such collection towards postage (as confirmed by the legal cell of Consumer Education and Research Centre, Ahmedabad).3 Besides, only some complainants were asked to bring stamps (in complaint Nos 1735/2011, and 2118/2012 no stamps were demanded). Walter Vieira, chairman of Consumer Education and Research Society of Ahmedabad and M S Kamath of the Consumer Guidance Society of India at Mumbai both concede that “things have gone from bad to worse in the implementation of the Act”.
In Shambles
Passed in 1986, the Consumer Protection Act (CPA) was hailed worldwide as a very comprehensive legislation for ensuring justice to the common man. However, as the law completes a quarter century of functioning in 2014, activists around the country are wondering if the spirit of the Act lies in shambles. Before 1986, aggrieved citizens had to approach civil courts, where cases took years, and the procedures were intimidating, with lawyers, court fees, stamp paper, etc. The new law sought to provide, through a three-tier mechanism of quasi-judicial consumer courts at the district, state and national levels, speedy resolution of grievance (within 90 days) with no court fees, no need for lawyers, no stamp paper; just a simple complaint on plain paper listing the facts of the grievance was enough. Over the years, the 90-day limit got tossed aside. Cases now drag on for years (complaint No 498 of 2009 was still being heard at the end of 2012 at Bangalore, as was one from 2007; at Mumbai a complaint filed in 1992 went on for 14 years). Instead of being free, a fee (ranging from a minimum of Rs 100, plus bank charges for demand drafts) has to be paid now, following an amendment in 2003. Affidavits, “legal paper” and mandatory notarised submissions have complicated the procedures, where once, just three documents (the complaint, opposite party’s reply, and rejoinder) sufficed, since justice was to be “according to fairness and principles of natural justice, not according to the letter of the law”.4
Where once lawyers were not required (even barred unless the complainant opted to employ one; the Bar Council contested this rule, citing their “right to earn a living”) today consumer courts are overrun by lawyers in black coats who appropriate all the front seats introducing all the time-consuming technicalities that these fora were specifically meant to avoid. (Under the Act, “technicalities are not to be encouraged, and the only procedure to be followed is the principle of natural justice”.)5 This results in endless adjournments (which the court can refuse, but invariably grants). A case against the Maruti Company filed by a 76-year-old complainant went to 26 adjournments over 38 months. He died before getting redress. Under an amendment of 2003, the courts can award costs to the complainant for each adjournment, but most complainants are unaware of this provision, and the court does not advise them either. The amendment requires the reasons for each adjournment to be recorded. This rule is flouted too. Backlogs accumulate. Over 3.5 lakh complaints were pending at the last count. This is hardly “simple or speedy” or consumer friendly. Multinational companies can afford to employ lawyers to use legal jargon and protect the interests of the manufacturer, rather than ensure justice to aggrieved customers. Most complainants, on the other hand, cannot afford to employ a lawyer to fight for refund of a few thousand rupees after getting saddled with a malfunctioning appliance. It becomes an unequal fight between a professional lawyer and a lay consumer, even in a “consumer court” meant to offer justice without intimidation or expense.
The Sony case provides a typical example of how lawyers hijack proceedings with long-winded rejoinders. In response to the complaint, the lawyer’s submission to the court said, “The complaint is vexatious, baseless, and an abuse of the process of law, made to injure the interests and reputation of the opposite party (Sony) and should be dismissed… All the allegations and statements in the complaint are denied”, except that the battery compartment would not close (which Sony did not deny) so pictures could not be taken! Also, curiously, in spite of being a multinational Sony says in its warranty, “Not valid outside India”. In theory, this 70-year-old complainant could have gone on appeal at the state level, but one visit to the State Commission, where she could not even get into the courtroom because of the number of lawyers crowding into it, plus the prospect of another 10 or more visits, after spending more money on submitting five sets of photocopies of all documents adding up to 41 pages, including the 11-page order from the district forum, had her deciding to cut her losses and save her energy.
The Bengaluru forum cites a “funds crunch” for demanding stamps and envelopes. In that case why not display clear instructions on the board at the entrance, along with other instructions? “Because it is not compulsory”, says the staff. Seeking explanations from the State Commission is pointless as the instructions for collecting stamps came reportedly from the commission itself. A query sent to the NCDRC seeking clarification, in April 2013 brought neither a response nor even an acknowledgement.
Government’s Apathy
Having passed the law in 1986, the government did nothing thereafter. There were no appointments, no budget allocation, no infrastructure, until Common Cause, a non-governmental organisation (NGO) founded by H D Shourie, filed a public interest litigation before the Supreme Court in 1989. The apex court ordered the law to be activated within six weeks. Fearing contempt of court charges, the government set up consumer courts hurriedly, but with scant interest. For example, the district forum at Mumbai’s Nariman Point was housed in decrepit barracks next to a stinking toilet; some others had no proper clerical staff, no stenographer to dictate orders to (so orders reached the parties after four weeks whereas the limit for filing an appeal is 30 days). The district forum at Mysore was set up 10 km from the nearest bus stop. Consumers’ convenience was, apparently, not a priority.
Many of the 629 consumer courts around the country have positions vacant and cannot function as intended with a full bench of three adjudicators. The one at Goa had no president for a long time, so the president of the forum at Mumbai went over twice a month. In April 2013, the Karnataka High Court had to direct the state government to fill all 18 vacant posts (including presidents) in consumer courts at Kolar, Bidar, Hassan, Kodagu, Bengaluru, Shimoga and Yadgir, within two months. In Maharashtra, vacancies at consumer courts at Nagpur and Mumbai were not filled till a judicial petition was filed. One reason for posts remaining vacant is that the remuneration offered is not attractive enough for magistrates to agree to serve on the fora. Curiously enough, the proposed amendments of 2014 specify a salary for the commissioner to be appointed under the new Consumer Protection Authority on par with secretaries to the government (with five deputy commissioners drawing joint secretaries’ salaries). If raising the pay is an option, why create a fresh Consumer Protection Commission (as the amendment proposes) instead of making salaries more attractive for those serving on the existing three-tier mechanism? The amendment also suggests clubbing of adjacent district fora,6 and activists wonder how this could facilitate “speedy resolution” of complaints. The existing three-tier mechanism was well intentioned, but official apathy, not its design, has reduced its effectiveness.
Focus on Justice Lost
In the enthusiasm of the earlier years, some important landmark orders were handed out under the CPA. For example, courier companies used to restrict their liability in case of delay or loss, to just Rs 100, by printing a small declaration to this effect on the receipt. This was overruled by precedent setting orders awarding higher compensation in cases where the complainant was able to prove loss and deficiency of service. In complaint No 2302/96,7 the Bangalore forum awarded compensation for delay in delivering a packet, ruling that the “arbitrary clause (regarding liability) imposed on the buyer was unacceptable”. The then president of the Bangalore forum, Justice Ananthamurthy, even asked the lawyer representing a company, “Can you write anything you want, on your receipt?” That kind of focus on fair play and justice to the common man seems to have got lost over the years, despite periodic amendments to the Act to widen its ambit (to cover builders and lawyers, government services, and even Right to Information queries.)
Educational institutions mention on their receipts that fees once paid will not be refunded under any circumstances but the NCDRC has struck this down and students who withdraw without attending a single class have received refund orders under the CPA in several instances.
Dry cleaners’ receipts used to say their liability for any loss or damage was restricted to Rs 100, but this too has been challenged and adequate compensation ordered to be paid. In revision petition No 1328 (Tip Top Drycleaners vs Sunil Kumar) the NCDRC said in its order of 2003 that “conditions printed on a receipt do not constitute a binding contract”.
There was also the celebrated case of Ranganathan vs Standard Chartered Bank in which the bank hired thugs to recover arrears from the complainant despite his standing instructions for adjusting dues on his credit card, from the deposits maintained by him. The bank in its defence cited “computer problems”, but the Tamil Nadu State Commission not only ordered hefty compensation of Rs 20 lakh plus Rs 5,000 costs, but also condemned such “mafia mentality” in a multinational bank.8 These are, however, rare examples of recent orders that have strengthened consumers’ rights. Today, the degeneration in the functioning of most fora has sabotaged the spirit and promises of the Act.
Multiple Degeneration
Earlier, complainants used to receive intimation through postcards about dates fixed for a hearing. No such intimation is now sent. Even self-addressed reply cards sent with complaints are not mailed back. The registrar of each forum used to be authorised to sign as notary for affidavits required to be submitted, at no cost to the complainant. During the hearing of the complaint against Sony, the Bangalore forum did not even have a registrar. Finding a notary involved additional expense. Such steady degeneration of facilities and entitlements marks the working of most of the fora around the country. In spite of having computer facilities (unlike in the early years) the fora do not seem to keep abreast of precedent setting orders from around the country. Complainants are expected to cite orders to support their claims, which the average complainant cannot. Lawyers, with access to legal journals, have an unfair advantage, when they are engaged by manufacturers against complainants with grievances about faulty gadgets or deficiency in service which the consumer courts ignore. Justice Patnaik of the Orissa State Commission observed in a complaint by Arati Mohanty and Pramodnath Das that “the trader….cannot put a condition at the time of selling that under no circumstances will the money be refunded”.9 And yet, this gets disregarded as in the case of the ruling in favour of Sony’s restrictive warranty clause.
The union minister for consumer affairs had sent out a circular to all state chief secretaries in 1999, saying that the clause “goods once sold cannot be returned or exchanged” is unethical and to be forbidden (DO no II (II) 99-CPU/1647). Neither the states’ chief secretaries nor the union government have bothered to enforce this far-reaching order, and consumers continue to be at the receiving end of an exploitative relationship as buyers of goods and services, 15 years after such a directive from the highest authority. As one columnist put it, the slogan “Jago grahak, jago” (wake up, consumer, wake up), coined by the Ministry of Consumer Affairs, needs to be reworded, to awaken the department itself, if the gap between the intentions of the Act and its implementation is to be bridged.

Ethnic Militancy in Assam ,Whom to Blame?

The killing of over 70 adivasis in Assam by one faction of the Bodo militants is part of a pattern which has become normalised in Assam and its neighbouring states. This article places the present killings in the historical context of the rise of ethnic militancy and underlines, yet again, the futility of such acts.

H Srikanth ( teaches at the North Eastern Hill University, Shillong.
You are concerned about infiltrators and not your own people …they must go back, they are robbing the youths of India of their livelihood – Narendra Modi’s electoral speech in May 2014, referring to Assam Chief Minister, Tarun Gogoi and West Bengal Chief Minister, Mamata Banerjee.
What has happened is no small incident of militancy. This is a brazen act of terror and will be dealt with as an act of terror should be. There will be zero tolerance and operations will be intensified against those behind the bloodbath – Union Home Minister, Rajnath Singh’s address in Guwahati on 25 December, 2014 condemning the militant attack on adivasis.
In May 2014 more than 30 Bengali Muslims were gunned down by the Bodo militants in Bodoland Territorial Area District (BTAD). Six months after the incident, in December, the ultras targeted the adivasis, killing nearly 70 persons – including 21 women and 18 children dead, and forcing more than 70,000 people to take shelter in relief camps. Various political parties, students and youth organisations, and non-governmental organisations (NGOs) in the state criticised the deadly attacks on unarmed adivasis and demanded that the government take action against the Songbijit faction of the National Democratic Front of Bodoland (NDFB-S) indulging in terrorist activities.
Rise of Militancy
Militancy is not something new to northeast India, but the militants resorting to terrorist acts to achieve their political goals is indeed a recent phenomenon. The Nagas and the Mizos took to insurgency in 1950s and 1960s in pursuit of their demand for independent homelands. The 1970s saw the rise of militancy in the valley areas of Manipur and Assam. Till the 1970s militant groups leading the insurgencies in the north-eastern states mainly targeted the police, the army and the paramilitary forces, who were identified as representatives of the “colonial” Indian state. No doubt, non-indigenous peoples, living in the insurgency-prone areas, were subjected to illegal “taxation”, extortion and “curfews” by some militant groups, but large-scale killings, looting and forcible eviction of the migrant population were almost unknown till the 1980s.
The situation changed during the Assam agitation directed against the so-called foreigners in the period between 1979 and 1985. It was during this supposedly peaceful “Gandhian nationalist movement” that Assam witnessed the ghastly Nellie massacre in 1983, in which over 2,000 Bengali Muslims were killed. What was then considered a spontaneous outburst, or even an aberration, has, since the 1990s, become a regular feature of the politics of Assam and other north-eastern states. In the name of fighting for independence, ethnic integration or separate state status, different militant outfits have started attacking people belonging to other communities, killing unarmed civilians – including women and children, torching their houses and crops, and forcing tens of thousands of people to flee from their villages into refugee camps which change the demography of the region. Although almost all states in the North-East have experienced such acts of terrorism, Bodo militancy gets greater attention in national media, partly because of the frequency and intensity of the militant attacks.
Trajectory of Bodo Politics
The Bodos, one of the tribes inhabiting the plains of Assam, have been fighting for a separate state. It is true that the Bodos view the Bengali Muslim peasants and the adivasis, who were encouraged or forced to migrate to Assam during the colonial period, as encroachers of their ancestral land and other resources. What needs to be remembered is that the Bodo movement that took off in the 1960s was political and non-violent. In fact it was mainly directed against the Assam government. The Bodos then asserted their separate identity and opposed the official linguistic policy that aimed at an Assamisation of the state. That Bodo movement held the state government responsible for the neglect, economic underdevelopment and educational backwardness of the Bodos.
Yet during the Assam agitation (1979-85) the Bodos identified themselves with the Assamese, who invoked Assamese nationalism to fight against the “threat” of “illegal Bangladeshi settlers”. However, almost immediately after the Assam agitation, the Bodo leaders fell apart and began to reassert their separate identity by launching a militant political movement under the guidance of the All Bodo Students’ Union (ABSU) and the Bodo Peoples’ Action Committee (BPAC). While the Bodo leaders attributed the break to the “big-brother” attitude of the Assamese leadership, the latter alleged that Bodo militancy was encouraged and sponsored by the Congress government at the centre with the intention of countering the growth of the Asom Gana Parishad (AGP).
In 1993 ABSU-BPAC entered into a bipartite accord that resulted in the formation of the Bodoland Autonomous Council (BAC). But the limited powers granted to BAC did not satisfy the Bodo militants aspiring for a separate state. Their dissatisfaction facilitated the rise of armed militant outfits – the NDFB and the Bodo Liberation Tigers Force (BLTF). These militant groups virtually hijacked the political agenda of the Bodos and took to arms to achieve their political objectives. More than fighting against the government agencies, they started indulging in ethnic cleansing campaigns to achieve their goals. Their first violent assault in 1993-94 was directed against the Bengali Muslims. Later in 1996 and then in 1998 they targeted the adivasis – the descendants of tribals from east-central India brought to work in the tea estates during the 19th century – killing hundreds of people and displacing over two lakh adivasis from their villages.
However, Bengali Muslim peasants continued to be their prime targets. Despite the fact that the Bodos constitute only 30% of the population in the areas they claim to be their own, they demanded a separate state defined by their ethnic status. After a hard bargain, in 2003 the BLTF and the ABSU agreed to the formation of the Bodo Territorial Council (BTC), comprising the newly carved out territorial area districts of Kokhrajhar, Baksa, Udalguri and Chirang. The BLTF gave up arms and its leaders even contested and won the BTC elections. But the NDFB rejected the BTC formula and continued its militant activities in pursuit of its demand for a sovereign Bodoland. After the 2008 serial bomb blasts in Guwahati and other places in Assam, the NDFB encountered splits, first in 2008 and then in 2012. When Ranjan Diamary, who earlier headed the Bodo Security Force and then the NDFB for over two decades, agreed to hold talks with the centre, the breakaway faction led by I K Songbijit opposed the talks and started violent acts against the non-Bodos in the name of the Bodo nation.
The Oxygen Supply
Following the violent assaults on the adivasis in December 2014, state and central governments came under tremendous pressure to suppress the activities of NDFB-S. The union home minister flew to Guwahati and ordered intensification of anti-insurgency operations against the banned outfit. After the usual initial blame game, both state and central governments agreed to cooperate with each other. Several suggestions have been made to prevent the recurrence of such attacks. These include a revamp of its intelligence establishment, strengthening of police patrol and civil administration in sensitive villages, improvement in road connectivity and communication set-up in border villages, identification and arrest of those involved in violent crimes, seizure of illegal arms from militants and ex-militants, negotiations with neighbouring countries to step up offensive against the militants’ hideouts in there and ensuring effective coordination between the centre and state agencies while undertaking counter-insurgency operations.
To some extent such measures may help in reducing the intensity and frequency of militant attacks. But ethnic militancy is a multi-headed hydra which cannot be put down without striking at the sources that sustain and strengthen its presence.
Apart from operational difficulties, what comes in the way of tackling ethnic insurgents in north-east India is lack of political will. It is difficult to take a firm stand against ethnic militants, for most politicians and ruling parties need them for electoral gains. That there is no consistent anti-militant policy becomes clear when one takes a look at the utterances of national leaders. In May 2014 when the NDFB orchestrated riots, Narendra Modi, the then prime ministerial aspirant campaigning in Guwahati did not utter a word against the Bodo militants. Instead he made a wild allegation that rhinos are killed in Assam to make way for illegal Bangladeshi settlers. Taking cue from his speeches, many intellectuals wedded to the Sangh Parivar started writing blogs depicting all Bengali Muslims, even those settled in Assam before Independence, as Bangladeshis and holding them responsible for the ethnic clashes.
These people, however, started responding differently when the same militant group attacked the adivasis in December 2014. Such inconsistencies are the hallmarks of the state leaders as well. So much has been said and written about the link between politicians and militants in north-east India. The leaders’ response to militancy depends not so much on the nature of crimes committed, but on their political relations with the perpetrators or the victims of such crimes. Some political parties and associations in the North-East are ideologically and ethnically so close to certain militant outfits that it is inconceivable to think of any hard-line policy against the extremists. They may at best be critical of militant outfits of other communities, but tend to be soft towards “their own” militant outfits that claim to be fighting for their community interests.
Militants exercise considerable hold over local police and government officials too, particularly at the local levels. In May 2014 it was reported that 10 ex-militants who were employed as forest guards by the BTAD government were instrumental in killing several Bengali Muslims. In times of ethnic tensions, it is difficult for politicians, political parties, administrators, police and mass organisations, who are themselves under the influence of ethnic ideologies, to remain neutral and impartial. Sometimes pragmatic considerations to weaken the militant groups also compel the state and central governments to appease the militant leaders and overlook all the crimes committed against the civilians in the name of the greater good of the state.
No Conclusion
While pointing out the weaknesses of politicians and officials in combating ethnic militancy, one should not forget that ethnic militancy does not end by neutralising particular militant groups. As long as ethnic ideologies and identity politics continue to influence the minds and actions of people, there will always be someone waiting to take to ethnic militancy. The history of Bodo militancy shows that every time a militant outfit gives up arms, a new faction emerges from within to carry on militant activities. While criticising their violent and sectarian activities, one should not lose sight of the fact that ethnic thinking is fostered not only by ethnic militants, but also by governments, politicians, NGOs and intellectuals of different hues and colours.
Unable to offer solutions to the problems of poverty, unemployment, landlessness and underdevelopment in tribal areas, over the years many, including the mainstream leftist parties, have contributed to the illusion that all problems of native communities can be resolved by conceding political autonomy to them, or by granting scheduled tribe (ST) status to all communities claiming to be indigenous. Consequently, not only in Assam, but in other north-eastern states too different communities have began competing with one another seeking ST status and demanding autonomous districts or separate states for themselves. The radicals among them take to ethnic militancy to achieve the goals, without realising that, far from achieving their declared goals their activities only facilitate the rise of militant outfits in the communities they have started targeting.
Without an understanding of the dynamics of capitalist market economy and the divisive politics of the ruling classes in India, every community continues to see the others as its enemies and indulges in a zero-sum game where neither the communities claiming to be indigenous nor the communities branded as outsiders/illegal Bangladeshi settlers could live and progress in peace. It is only by involving all oppressed classes and communities of people in the region in alternative militant movements against underdevelopment and politics of divide and rule that one could think of putting an end to ethnic militancy. Unfortunately, it does not seem that politics in the region is yet ripe for that change.

Caste, Community and Crime

The violence against Pasmanda Muslims in Azizpur-Bahilwara in Muzaffarpur cannot be understood as an instance of conventional communal strife between Hindus and Muslims. This report from the ground indicates that different layers of caste, community, administrative and patronage networks have played a role in fostering the violence but also in containing it.
Mohammad Sajjad ( teaches history at Aligarh Muslim University, Aligarh.
On 18 January 2015, violence broke out in Azizpur-Bahilwara village near Saraiya in the district of Muzaffarpur, Bihar. Five people were reportedly killed and almost all the 56 Pasmanda Muslim households were looted and burnt. The immediate provocation was an alleged interfaith love affair: Was it a case of “Love-Jihad” in reverse, or a variant of

“honour killing”?

A Hindu (caste of Mallah, fishermen) boy named Bhartendu Sahni, 20, was reportedly in love with a girl from the Pasmanda Muslim community. Both of them were from the same village and studying in the L S College of Muzaffarpur. According to reports, Sahni went missing since 9 January 2015. A report was lodged against a Muslim man named Sadaqat, also known as Vicky Ansari, and his father Wasi Ahmad from the same village, with the Saraiya police. The local police was reported to have not acted on this report of kidnapping despite the fact that this issue did carry a very high degree of communal volatility and sensitivity.
It is alleged that Ansari and Ahmad were resisting the marriage of the girl to Bhartendu Sahni. However it is also true that Ahmad’s second wife is Hindu – belonging to the Kahaar caste (palanquin bearer). Wasi Ahmad works as a small-time advocate in the district court of Muzaffarpur, and supplements his income as a commission agent of the non-banking financial institution – Sahara. Saraiya, a fast-growing semi-urban centre in Muzaffarpur, is reportedly one of the lucrative branches of Sahara.
Just few months ago (in October-November 2014), ahead of the Chhath puja celebrations (an important Hindu festival of Bihar) there was acute communal tension between Hindu Mallahs and Pasmanda Muslims in Turkauliya village in the Saraiya-Paroo police station areas. The violence could be contained only in the first week of November 2014 with prompt administrative interventions, prolonged persuasions, as also with the initiatives of the local people for inter-community dialogues. The district magistrate of Muzaffarpur personally camped in Turkauliya and sat down with the local residents for comprehensive discussions on the whole dispute.
In this incident, a Pasmanda Muslim was alleged to have thrown a huge heap of human excreta into the irrigation canal in which the Chhath puja is performed every year since ages. This was allegedly done at the behest of a Muslim man in the village (a paan shop owner) who had some political aspirations. He represents this character in a rural society who often aspire to become a recognisable face among the local politicians and officials. From my personal knowledge, as an insider of Turkauliya, I do know how illegal arms were collected by the Muslims and Mallahs in and around Turkauliya in October-November 2014. However the local police feigned ignorance about all these developments.
Pre-planned Violence
On 18 January 2015, a farmer of Azizpur-Bahilwara, having gone to put fertiliser in his wheat-fields, saw that some dogs were digging to remove soil. Suddenly a human hand came in sight. It was close to the mosque of the village. The dead body was identified to be that of Bhartendu Sahni. On hearing this, a huge mob reportedly came out with a lot of crude as well as sophisticated weapons and also petrol cans. This suggested that there was some preparation on the ground for this level of violence which the local police seemed to be unaware of.
It was around 9 am that the dead body of Bhartendu Sahni was found. Around 12.30 pm, some 30 to 40 angry people of the village of the deceased came to the house of Wasi Ahmad and Sadaqat (Vicky) Ansari, but did not target the rest of the 55 Muslim houses of Azizpur. Vicky managed to run away and his family was spared by the mob.
About half an hour later, approximately 30-40 bikers came to Azizpur and indulged in rampant looting. Most of these faces were unknown to the villagers of Azizpur. They resorted to burning down the houses and throwing people into those flames to kill them. This looked like a pre-planned operation. This is testified by Sudha Verghese of the Bihar State Minorities Commission who visited Azizpur on 24 January as she found a pattern in setting the houses on fire. Significantly, the fugitive Muslims were sheltered by the Hindus of the neighbourhood. A local journalist Arun Srivastav has got videos of the attackers of the second and third phases. These videos are with the district administration.
While the attack was being carried out, the special superintendent of police (SSP), who was travelling near to the affected village, received calls from Muzaffarpur’s Bharatiya Janata Party (BJP) Member of Parliament (MP), Ajay Nishad, about the violence in Azizpur. Meanwhile, from Azizpur, Iqbal Ansari (sanitation inspector, municipal corporation, Muzaffarpur), the maternal uncle of Sadaqat (Vicky), and Nesaruddin (former deputy mayor, Muzaffarpur) kept calling the SSP and the district magistrate but the calls were either not being picked up or the officials were not paying any heed.
The local newsmen and other notables are of the opinion that the deputy superintendent of police (DSP), who has been suspended since, did not act after being informed of the violence. This was after the chowk was situated just 2 km from the village. It was at this chowk that the BJP Member of Legislative Assembly (MLA) of Paroo-Saraiya, Ashok Singh, had also arrived from Muzaffarpur leaving a BJP meeting midway.
Meanwhile, the villagers have asked that the role of Rampukar Sahni of Bajrang Dal (some say he is affiliated to the Rashtriya Janata Dal (RJD)) be investigated. They have also demanded that the video shot by the journalist Arun Srivastav should also be made use of for investigations in order to identify the violent and rapacious bikers.
Ironically, Azizpur-Bahilwara is adjacent to the native village and political base of Ashok Singh, BJP MLA of Paroo-Saraiya. There are reports alleging that the BJP MLA created some obstruction in letting the police reach the spot of violence. There are also reports that the girl’s brother Vicky is close to the BJP MLA Ashok Singh. Quite a lot of local people confided that the local BJP MLA, being the protector of the accused Vicky Ansari, could have forced the police to ignore the issue at its initial stages when Sahni was being targeted.
It has also been reported that Kamal Sahni, Bhartendu Sahni’s father, had gone to Ashok Singh appealing to him so that he would tell the police to search for Bhartendu and also arrest and interrogate Sadaqat (Vicky) Ansari. Singh first spoke to Wasi Ahmad and then to the police, and informed Sahni that Bhartendu was not alive. A few hours later, Kamal Sahni disovered his son’s dead body just 200 yards away from the house of Wasi and Vicky. How the BJP MLA knew about the death of Bhartendu even before the police remains a lingering question.
Almost every village in this area has criminals belonging to different castes and religious communities who straddle local public life, but since June 2013, when the Janata Dal (United)-BJP coalition broke, the Muslim criminals are acting in tandem with local BJP functionaries. This is to condolidate the electoral base of chief minister-aspirant Syed Shahnawaz Husain of the BJP. It is openly spoken about among local residents that these Muslim lumpens are on the payrolls of the BJP and its affiliates. After the recent Jharkhand elections, the Rashtriya Swayamsevak Sangh (RSS) camps have also become very active in rural, semi-urban and urban spaces of Bihar. They interact with, and indoctrinate, the deprived sections of the historically disadvantaged groups who aspire to social elevation and at least some degree of social respectability through these RSS camps. This is what I observed during my visit to the villages across Muzaffarpur, Samastipur, and Patna in the early weeks of January 2015.
A History of Communal Tension
Azizpur-Bahilwara is very near to the historic village of Vaishali, the birthplace of Lord Mahavir, and with deep historical associations to Lord Buddha too. It also has a popular shrine of the 15th century Sufi saint Shaikh Qazin Shuttari. Venerated by every religious and caste groups, the annual Urs (death anniversary) of this Sufi is a testimony of the syncretic traditions and religious harmony in this locality. There is also an annual fair called Bawana Mela.
It is also ironical that the L S College, where Bhartendu studied, was the outcome of strong Hindu-Muslim cooperation in a movement for modern education. This movement was launched in 1868 by Syed Imdad Ali (died on 8 August 1886, buried in Bhagalpur), the then subordinate judge of Muzaffarpur (Tirhut), and a friend of his counterpart in Aligarh, Sir Syed Ahmad.
Significantly, at least in the post-Independence period, Muzaffarpur has remained by and large free from communal violence. Only those parts of Muzaffarpur, which now constitute the districts of Sitamarhi and Sheohar, had seen a few major incidents of communal violence after 1947. Even in the late-colonial period, the only major communal violence of Muzaffarpur is the one in the village of Benibad (September 1946), and here too the immediate cause was inter-faith marriage. A Muslim of the village Benibad, Ali Hasan, working in Kolkata had married a Hindu girl of that city named Kalyani Dey, who was renamed Nur Jahan. This provoked the local people and a major violence broke out. The police could not control it as quickly because of the mechanical breakdown of the truck carrying a troupe of police.1
However, in recent years, more particularly, ever since the breakdown of coalition between the BJP and the Janata Dal (United) (JD(U)) in Bihar in June 2013, things have started changing for the worse very rapidly. India witnessed major communal tension and violence during the 1920s, 1940s, 1980s, and ever since then communal tension has been a sad reality of our lives besides caste-based oppression. Incidentally, these were the decades when growing affluence among the Muslims created middle classes, and thereby ensued competitions and rivalries in all walks of life – education, politics, share in power, trade and manufacturing, etc.
The Pasmanda Muslims of Azizpur-Bahilwara village have also achieved prosperity only recently. Their access to education may not have improved but their trade in tyre-tube repair and sales, and in motor-parts was becoming the envy of others. The rising status and prosperity of people with blue-collar jobs in west Asia was also fuelling aspirations for a share in the structures and processes of power, particularly in the panchayat elections. This was already becoming an irritant among other, more entrenched castes and communities.
It should also be remembered that in present-day Bihar villages migrations for livelihood have made male presence very minimal. The few who stay back often become part of the lumpen criminal-politician set who work as brokers of nationalised banks as well as touts at police stations and in the community development blocks from where the panchayat development funds and the funds for social welfare schemes flow. There are reports that ever since the Nitish Kumar-led administration launched a crackdown on this network, many of them have taken to another form of crime – sex-trade and trafficking.
The Mallah Caste
It is arguable that in today’s Muzaffarpur – comprising the Muzaffarpur and Vaishali Lok Sabha (parliamentary) seats – the Hindu Ati Pichhrha (extremely backward) caste of Mallah, carrying surnames of Nishad, Sahni, and sometimes Manjhi also, have become the “dominant caste”. They have replaced the Rajputs and Bhumihar-Brahmins, but also the Yadavas, Koeris, Kurmis too who had become dominant some decades ago.
Many times, Muzaffarpur has elected its parliamentarians from the community of Mallah, including the incumbent one from the BJP, Ajay Nishad, son of previous MP from Muzaffarpur, Captain Jainarayan Nishad. Before being elected MP, he had turned into an entrepreneur as one of the earliest dealers of cooking gas (LPG) in Muzaffarpur. In the Vaishali Lok Sabha constituency,2 the JD(U) candidate in 2014 was a Mallah. Unlike most of Bihar’s parliamentary seats, the JD(U) candidate from Vaishali had secured a very significant number of votes in May 2014. This vote share secured by the JD(U) may not be going down well with the BJP-Lok Janshakti Party (LJP) combine. This could be a possible reason why the Hindu Mallah-Muslim Pasmanda conflict is a growing reality of this locality.
This region also has a presence of Maoists and quite often press statements from local politicians would complain that most Maoists are Mallahs. In the 2010 assembly elections of Bihar, Paroo’s sitting BJP MLA, Ashok Singh, had to face the ire of the Mallahs for having made a statement in the press that most of the Maoists belonged to the community of Mallahs. Cutting across religious and caste-barriers, the local population would express a certain degree of scare about the Mallahs, about their community-solidarity and about “their proneness to violence and aggression”. This is a kind of stereotype about the Mallahs that is commonly found among the local population.
In this way, the Azizpur-Bahilwara violence may be said to not be an instance of inter-religious violence in a way we have understood it conventionally, as non-Mallah Hindus have not only stayed away but are also extending all possible help in protecting those affected and in organising relief measures. In fact, today the local people – Hindus and Muslims – vehemently react against media reports speaking in terms of conventional Hindu-Muslim violence.
Therefore, if at all there is any attempt by any communal organisation to create Hindu-Muslim polarisation or an attempt to create a communal wedge between the Ati Picchrha communities of Hindus and Muslims for the purposes of the forthcoming assembly elections in Bihar in October-November 2015, then it could possibly be seen as a gratifying silver line as both Hindus and Muslims stand united to get the culprits of Azizpur-Bahilwara booked.
The Saraiya police may have acted slowly but the state response to this violence has since then been very prompt. Reports suggest that quite a large number of the accused have been arrested including Vicky Ansari. However his father Wasi Ahmad is yet to be arrested. The common refrain among people across the religious divide is that Wasi is a gentleman, and the parents of Bhartendu happen to be long-standing close friends of Wasi. High-placed enquiries are underway, payment of compensation, and relief measures from the state are reported to be “satisfactory” in unprecedented ways.
Quite a large number of alleged offenders have been arrested within a short time after the police started acting on the case. Many police and other administrative personnel have been pulled up and taken to task, and further action against them seems to be in the offing. The DSP and the station house officer of Saraiya have reportedly been suspended.
The trust of the victims in the administration and in the local society has been restored so fast that all those affected have started coming back to their villages. The state has provided monetary help for purchasing utensils and kitchen-wares besides compensation to those injured and the survivors of the deceased ones. What is most striking is that cutting across religious lines, shall we say barriers, the whole locality is standing with the victims and coming forward with every kind of help and support.
Public opinion in the locality is displaying a genuine outrage against the whole incident. Even an ex-zamindar of Azizpur, Lalmohan Singh, who was also a psychology teacher in the local government degree college of Jaintpur (estate) and has been associated with the BJP as well, expressed his anger against the violence and loot, calling it “insanity”. His own servants, both Hindu and Muslim, protected many fugitive victims. One of his servants has been awarded Rs 51 lakh by the chief minister for his brave role in protecting Muslim victims.
This horrific episode of 18 January 2015 in Bihar’s Muzaffarpur is quite different from what happened in UP’s Muzaffarnagar in September 2013. Most importantly, in Muzaffarpur we probably do not have competitive efforts of politicians to polarise the two communities. The Akhilesh Yadav-led administration as well as the riot-mongers among our political formations need to learn a few lessons from this response of state and society towards the violence in Bihar’s Muzaffarpur.

‘Modified’ Foreign Policy

Prime Minister Narendra Modi has invested much political capital in his foreign policy initiatives. Behind the spectacle of the pomp and show, the real test of foreign policy and strategy lies in coherence of design, finesse in execution, and efficacy of outcomes. The first of our new column on Strategic Affairs takes a preliminary stab at assessing whether New Delhi has been able to translate its desires into tangible outcomes.

Srinath Raghavan ( is Senior Fellow at the Centre for Policy Research, New Delhi.
During his eight months in power, Prime Minister Narendra Modi has expended considerable energy and time on foreign affairs. The prime ministerial stamp on the foreign policy of this government is unmistakable. And, this is not just because the foreign minister’s role has been circumscribed. Rather, every foreign trip and summit meeting has been an occasion to project the towering presence and sole leadership of the prime minister. Modi has been the object of adulation by overseas Indians: the curious epithet of “rock star” is routinely used to describe his impact abroad. His meetings with world leaders have been equally impressive events. To be sure, much of this owes to Modi’s ability to present a compelling narrative of his approach to this or that country – and do so in an effortless manner.
Yet, storylines and stage props can only get us so far in international politics. The real test of foreign policy and strategy lies in coherence of design, finesse in execution, and efficacy of outcomes. It is to these standards that any serious audit of foreign policy under the new government must be benchmarked. As the glitter around the United States’ president’s visit settles down and fades, it may be useful to take a preliminary stab at understanding the current trajectory of Indian foreign and strategic policy.
Policy on South Asia
Modi began on a strong and positive note. The decision to invite regional leaders for his swearing-in signalled his intent to accord high importance to south Asia in his foreign policy. His subsequent visits to Bhutan and Nepal underscored this point. Several months on, however, the government seems unable to translate this desire into tangible outcomes.
Perhaps the most substantive move so far has been on the land border agreement with Bangladesh. The bill on the agreement had been prepared under the previous government, but not introduced in Parliament owing to opposition from the Bharatiya Janata Party. The prime minister’s course correction on this is a welcome step – one that could impart some momentum to the relationship. Yet, the government is not very well-poised to deliver on other, more important issues such as an accord on the Teesta River waters: think only of the state of the relationship between the West Bengal government and the centre. Nor is it clear that the government has thought through its own stance in the event of an escalation of the political stalemate in Bangladesh. Indeed, the government seems prepared only to pluck the lowest hanging fruit on Bangladesh.
The relationship with Sri Lanka too has nosedived in the months since Modi’s swearing-in. The prime minister initially struck a rapport with Mahinda Rajapakse, another leader who liked to present himself as tough and decisive. Yet, the furore over the visit of a Chinese submarine to Colombo sent the relationship southward. India’s concerns were understandable, but the manner in which the episode was handled was ham-handed. The government’s grandstanding will have longer-term consequences – not least with public perception in Sri Lanka about India. The departure of Rajapakse provides yet another chance to remove needless apprehensions and set the relationship on an even keel. Then again, such a “reset” can only be the beginning. The key challenge lies in nudging the Sri Lankan government towards a genuinely accommodative stance on the minorities, especially Tamils. It remains to be seen if Modi has the inclination and ability to do so.
The gap between promise and performance has yawned wider with Pakistan. After a promising start with Nawaz Sharif’s visit to India, New Delhi has lapsed into its old assumption that talks should be seen as a reward for good behaviour by Pakistan. The decision to call off the foreign secretaries’ meeting last year was unnecessary. By so doing, the government conformed to the now familiar pattern of oscillation between high-level engagement and complete disengagement with Pakistan. Even a cursory glance at our record of dealing with Pakistan over the past decade and a half would suggest the bankruptcy of this approach. Yet, we persist with it by invoking the usual alibis of multiple power centres in Pakistan, and so on.
More problematic are the indications that the government’s approach to Pakistan might be still more regressive. Several key members, including the defence minister, have claimed that India will respond strongly to any provocation by Pakistan. The national security advisor (NSA) is on the record as saying that the government’s stance towards Pakistan has shifted from a defensive posture to a defensive-offensive posture. The latter, he has explained, means that India will, if necessary, take the fight to Pakistan. As the NSA colourfully puts it, “You can do one Mumbai and you may lose Balochistan”.1
The braggadocio of such pronouncements aside, the strategic assumptions underpinning this stance need to be unpacked. The NSA claims that the nuclear context does not impinge on this defensive-offensive posture. Pakistan cannot use its nuclear shield to protect itself against India’s responses in this mode. Apparently, nuclear weapons only come into play if India adopts a purely offensive posture. At one level, this is simply wishful thinking based on a misapprehension of how escalation occurs during crises. At another level though, it is clear that the NSA is expressing the government’s willingness to use tit-for-tat “unconventional” responses vis-à-vis Pakistan.
He may not be the first intelligence official to moot such ideas, but he is certainly the first NSA to publicly hint at such a response. Not only is the efficacy of such methods deeply dubious, the international opprobrium and reputational costs that they risk are considerable. It is worth recalling that after the Mumbai attacks of 2008 such ideas were floated only to be wisely struck down by the government. Then again, A J P Taylor may have been right: the only thing we learn from history is how to make new mistakes.
Policy on China
This seeming inability to think through the chain of strategic action and response could hobble the government’s policy towards China as well. Here too, after a good start, New Delhi seems unable to make real headway. Part of the problem is that the government has not managed to reconcile the competing pulls of the various strands of its China policy. On the one hand, Modi is acutely aware of the potential importance of China as an investor in India. At a time when fall in public and private investment presents the single-largest obstacle to economic revival, the attraction of foreign direct investment is undeniable. To Modi’s credit, he swiftly understood that China is one of the main sources of such investment, especially in infrastructure.
On the other hand, the security establishment continues to regard China as an implacable adversary. Chinese “incursions” are routinely held up as evidence of its intent to keep India off-balance. The stand-off in the Ladakh area during Xi Jinping’s visit has cast a long shadow. From New Delhi’s standpoint, it is tempting to assume that this is of a piece with China’s assertive behaviour on its maritime claims in East and South China seas.
The divergent impulses that spring from these strands have slowed down India-China relations. The government clings to conventional wisdom on this relationship: economic ties should be pursued with China to mitigate the strategic rivalry. Modi may find it more useful to stand this on its head: tackling some of the more thorny strategic questions may unlock the huge economic potential of India-China relations. After all, Modi is better positioned than any other leader in the past 25 years to achieve a breakthrough on the disputed boundary with China. By 2016, the government will have control of the Rajya Sabha too. So, pushing through a constitutional amendment should not be impossible. The 2005 framework agreement provides an excellent point of departure for a settlement – provided India as well as China evince seriousness of purpose.
Instead, the government seems keen on reviving the old talks on clarification of the Line of Actual Control (LAC). Past experience, however, clearly suggests that at best we can only agree to disagree on the LAC. There is simply no way of papering over these differences. Moreover, the Chinese have little interest in any exercise at LAC clarification – if only because it will impinge upon the boundary negotiations. It is best, therefore, to aim at a speedy settlement of the boundary dispute.
The timing may well be good because of China’s concerns about attempts by the US to rally its old allies in Asia and to insinuate itself in the maritime disputes. However, the lure of a tight strategic embrace with the US appears to be strong in New Delhi. It is argued that the previous government kept the US at arm’s-length and that this has to be reversed. A tough-minded assessment would show, however, that the US itself is in more than one mind about China. While there is talk of a “pivot” to Asia, the Obama administration understands that it needs China’s cooperation in tackling a range of global issues. The recent joint undertaking by the US and China on climate change underscores the problems that are posed for India by such “G2” solutions.
The simple fact is that the US is a global power while we remain a regional player – even if our definition of our neighbourhood has expanded to the east and west. It is futile to assume that our interests can converge with that of the US in all important areas. The challenge for Modi is to leverage American power to our purposes without assuming that the US will be the panacea for all our challenges.

Mobama’s China Spectre

New Delhi should refrain from being part of Washington’s plans to contain the rise of China.
Barack Obama took a break from the Secret Service protocol. He spent some two hours in the open, reviewing India’s 66th Republic Day parade, perhaps looking forward to the day when the largely Russian military hardware on display will have been replaced by artillery from his country’s military-industrial complex. It did keep the nation anxious, on edge and all keyed up for the president of the United States to feel comfortable with the breach of what his Secret Service

recommended – the presence of some 50,000 security personnel in the area and its immediate environs, a large battalion of snipers positioned all along the parade route, the declaration of a “no fly zone”, a joint manning of the air defences by Indian and US air force personnel, and, lest we forget, US military aircraft on standby on aircraft carriers in the Indian Ocean. Well, no doubt we are living in an epoch of naked imperialism.

The New York Times (NYT) (26 January 2015) reported that the first 45 minutes of the first meeting that Obama had with the Indian Prime Minister Narendra Modi were dominated by just one issue, China. And, to their delight, Obama and his aides found that Modi’s assessment of China’s rise and its impact in the Asia-Pacific, and the Indian Ocean, seemed so close to that of their own. Modi was as concerned as Obama is about China’s influence in the region and of how to jointly (with the US) counter it. What resulted was the “US-India Joint Strategic Vision for the Asia-Pacific and the Indian Ocean”. This joint strategic vision statement said “Regional prosperity depends on security”, going on to “affirm the importance of safeguarding maritime security and ensuring freedom of navigation and over flight…, especially in the South China Sea” (our emphasis). The statement particularly calls attention to resolution of territorial and maritime disputes in accordance with the United Nations Convention on the Law of the Sea (UNCLS).
In this statement and in the “US-India Joint Statement – ‘Shared Effort; Progress for All’”, it is noteworthy that New Delhi parrots Washington’s positions on a number of issues. For instance, in the concern expressed over North Korea’s “nuclear and ballistic missile programmes, including its uranium enrichment activity” and on the “criticality of Iran taking steps to verifiably assure the international community [our emphasis] of the exclusively peaceful nature of its nuclear programme”. Prey, who is this so-called “international community” but Washington?
Of course, the US-India Joint Statement of 30 September 2014 that marked Prime Minister Modi’s first bilateral US-India summit also made explicit references to the South China Sea and all the rest of the issues just mentioned, as also the commitment to work more closely with other Asia-Pacific countries to advance India’s “Act East” policy and the US’s “rebalance to Asia” (better known as “Pivot to Asia”) strategy, all parroted in an American idiom. But what is new, if one were to give credence to what the NYT reported, is that Modi “suggested reviving … [the] loose security network involving the United States, India, Japan and Australia”, a Quadrilateral Security Dialogue that was established in 2007 but that an Australian Labour Party prime minister shortly thereafter withdrew his country from when Beijing objected.
The other instrument to advance the objective of containing the rise of China is the new “2015 Framework for the US-India Defence Relationship”, a top secret, 10-year agreement that will replace the 2005 Defence Framework pact that expires later this year. Already the US stages more joint military exercises with India’s armed forces than with the militaries of any other country, and these are going to be stepped up and made more intensive. More collaboration in maritime security and the upgrading of the Malabar naval exercises are on the cards, for the Indian navy has become the chief policeman of the Indian Ocean, which, of course, is part of the main transportation route for oil and other major inputs for the Chinese economy.
The US-India Defence Trade and Technology Initiative is going to get a big boost with the Pentagon establishing a “dedicated rapid reaction team” to move the various weapons projects in the pipeline forward, including those involving co-production and even co-development. If this succeeds, India’s military will become more and more dependent on the US military-industrial complex, displacing Russia, New Delhi’s long-standing collaborator in defence equipment and technology. India is already in the process of liberalising foreign direct investment policy with respect to defence production, this as part of its “Make in India” initiative.
In sum, Modi has committed India to cooperating with the US in the latter’s quest to contain the rise of China.

No Transparency in Nuclear Deal

We need to know if the Modi government has given hidden assurances to the US administration.
A week after Prime Minister Narendra Modi and United States (US) President Barack Obama announced they had reached a “breakthrough understanding” on the question of liability for American nuclear suppliers in the event of an accident in India, there is still no clarity on the nature of the deal that has been struck. Other than saying “the deal is

done”, the Indian foreign secretary (since replaced) provided no details. Another official spoke of an insurance pool to be established by the public sector General Insurance Corporation with assistance from the Government of India, which would indemnify operators and suppliers against damage claims following a nuclear incident. But how this pool will operate and how the attendant risk premia will be calculated and apportioned is not known.

American objections to the Civil Liability for Nuclear Damage Act (CLNDA), 2010, have centred on two provisions that open the possibility for US vendors to be held liable for accident claims. The overall scheme of the CLNDA is to hold the operator of a nuclear plant strictly liable for an accident regardless of whose fault the accident is. This liability is capped at Rs 1,500 crore. Section 17(b) of the Act gives the operator the right to recover whatever he pays out as no-fault liability from his supplier, if the accident for which strict liability was channelled to him had resulted from an act of the supplier or his employees, including the “supply of equipment or material with patent of latent defects or sub-standard services”. Obviously, exercising this “right of recourse” would require the operator proving his charge in a court of law.
If the channelling of no-fault liability to the operator is intended to ensure that victims receive immediate compensation without going to court, the quantum of this liability is capped at Rs 1,500 crore to compensate the operator for taking on the burden of an accident that others might have contributed to. But Parliament wanted to make it clear that the rights of the victims went beyond and were not compromised by the government’s unwillingness to compensate them for their loss and suffering. That is why Section 46 says the CLNDA will be “in addition to and not in derogation of other laws in force” (such as ordinary tort law against anyone the victims feel is responsible for an accident), and that payment of civil damages would not exempt the operator from other proceedings, such as the filing of a criminal case.
The US administration says Section 17(b) of CLNDA lies outside the scope of the Convention on Supplementary Compensation (CSC), which India agreed to ratify, a claim the Indian government has always disputed. The US has also echoed the views of its companies that Section 46 will expose them to potentially unlimited damages in the event of an accident. While the proposed insurance pool is what has led the US to drop its objections to Section 17(b), it seems the Modi government has committed itself to providing a written legal assurance to the US that Indian victims will not be allowed to sue American suppliers under Section 46 of the CLNDA. Part of the understandings reached between the two countries during Obama’s visit is that the US will henceforth consider the Indian liability law – which Indian officials insist will not be amended – as compliant with the CSC.
So how is the circle being squared? Since US suppliers always had the option of buying insurance cover from any provider, the attractiveness of the proposed Indian pool probably lies in the low premium that might be charged. The lower the premium, the greater the extent to which Section 17(b) loses its effectiveness. As for Section 46, it is not clear how a mere memorandum from the Attorney General of India can prevent courts from admitting tort claims in the event of an accident. Only the courts or Parliament can alter the meaning of written laws. Perhaps the Modi government has assured the US side that the CLNDA will eventually be amended once the Bharatiya Janata Party completes its “creeping acquisition” of the Rajya Sabha. Either way, it is essential that the prime minister make public all assurances given to the US, and that the insurance pool idea also be subject to proper public scrutiny to make sure the Indian taxpayer does not end up subsiding Westinghouse or General Electric for an accident caused by defective equipment.
Ever since the 1960s, the manufacturers of nuclear equipment have been exempted from accident liability worldwide. While an “infant industry” argument might have had plausibility back then, there is no justification today for nuclear suppliers to be subsidised in this manner. The Indian Nuclear Liability Act broke ground by attempting to force suppliers to internalise the risk of an accident, just as companies operating in other hazardous industries must do. This might well lead to higher projected tariffs for the electricity their reactors will produce but given the kind of expenses involved in the clean-up of an accident – the final bill for the Fukushima disaster stretches anywhere from $15 billion to $100 billion – it is best that policymakers be aware of the true cost of nuclear energy when planning for increased capacity.

Rajan warns against compromising India’s interest for FDI

Reserve Bank of India Governor Raghuram Rajan, on Monday, warned against compromising India’s interest for the sake of attracting foreign investment, and said the priority should be framing transparent policies as well as resolving contractual tax disputes quickly.

“The most stable form of financing, foreign direct investment (FDI) has the additional benefit of bringing in technology and methods. But India should not be railroaded into compromising its interests to attract FDI,” he said in a commentary posted on the website of Project Syndicate.
He, however, did not elaborate on what he thought could compromise India’s interest. Making a case for transparency in policies and resolution of ‘contractual’ disputes, especially over taxation, he said efforts to ensure this had already begun. India would run a current account deficit for the foreseeable future, which meant that it would need net foreign financing, he said.
Sustained growth in India required lifting people out of poverty, fuelling infrastructure investment and a rethink on economic policy approach, he said.
“If India is to succeed, it will have to deepen regional and domestic demand, strengthen its macroeconomic institutions, and join in the fight for an open global system. Diminished expectations abroad should not lead India to lower its ambitions,” Dr. Rajan said. Foreign inflows in the country rose by 22 per cent to $18.88 billion during the eight months of the current fiscal.
“India needs an open, competitive, vibrant system of international trade and finance,” he said.
Stating that responsibility for keeping global economy open may fall on emerging economies like India, Dr. Rajan said the government should press for quota and management reforms in multilateral institutions like the IMF.

Lost in plantation

Millions of growers and workers are in distress in Kerala, the plantation capital of India, as domestic and international prices of cash crops crash. The crisis exposes the peculiar nature of Kerala’s economy. With two-thirds of its cultivated area dedicated to eight cash crop plantations, it accounts for 46 per cent of the country’s plantation produce. This makes it more vulnerable to the vagaries of market than any other state in the country. 

M Suchitra analyses the challenges faced by the state in the backdrop of the current crisis

Tappers set off for extracting latex from rubber trees. About half a million workers depend on rubber plantations in Kerala for a livingTappers set off for extracting latex from rubber trees. About half a million workers depend on rubber plantations in Kerala for a living (Photographs: Ajeeb Komachi)
IN 2005, when almost all other crops were in severe crisis, driving farmers to commit suicide in Kerala, rubber growers in the state were counting profits. They were witnessing a price boom after six years of distress. The price of the most preferred and traded variety in India called ribbed, smoked rubber sheet (RSS-4 grade) jumped from Rs 39 a kilogram in 2003 to Rs 66 in 2005. The growers did not expect the price to stay high for long. However, it not only stayed but started galloping, touching Rs 240 in April 2011. It was an unprecedented peak in the history of rubber.
“I had never thought I would be able to get such a high price for rubber in my life,” says 44-year-old Robin Augustine, a resident of Kadanad village in the Pala region of Kottayam district. Kottayam and some of the neighbouring areas in southern Kerala, known as Central Travancore, constitute the most fertile rubber belt in the country. Augustine’s family has been growing rubber for three generations. “During the boom, I used to get a profit of Rs 2-3 lakh a year,” says Augustine, who has two hectares (ha) of plantation.
India's sheet rubber is mostly produced in the growers' backyardsIndia’s sheet rubber is mostly produced in the growers’ backyards (Photographs: Ajeeb Komachi)
Business in the Kottayam market, the biggest rubber trading centre in the country, was thriving. A spending spree was evident in Kottayam. New houses, luxury apartments, big shops, hotels and resorts mushroomed. Costly cars hit the road. Children were sent to expensive boarding schools. Land transactions went up even as land value skyrocketed.
Then came the crash. Since 2012 rubber prices started spiralling downwards. On December 18, 2014, the price of natural rubber (RSS-4 grade) in the Kottayam market was Rs 113, a five-year low (see ‘Rise and fall of rubber rate’ on p34). The global price of rubber (RSS-3 grade) at the Bangkok market stood at even lower, Rs 95.
Today, a cloud of uncertainty envelops Kottayam and other rubber-growing areas. A number of dealers have shut shop. Many small units making rubber-based products have closed down. “The cost of producing one kilogram of dry rubber comes to Rs 150-160. It is not profitable to produce rubber when price goes below this level,” says Binny Mathew, president of a rubber producers’ society in Kadanad, which has 300 small growers as its members.
imageSmall growers and farm labourers, who constitute a large segment of the state’s plantation workforce, are the hardest hit by the downturn. Just like Augustine there are over one million rubber growers in Kerala, the country’s rubber capital. Barring about 320 large growers with more than 10 ha of plantations, all others are small cultivators with a landholding less than 0.55 ha, as per official data. These plantations employ about half a million skilled labourers for tapping the milky fluid, called latex, and processing it into rubber sheets.
During the boom, the cost of everything from inputs to labourers went up, says Mathew. Tappers, who extract latex, were paid Rs 26 for tapping 100 trees in 1999. Now they charge Rs 150-200 in Kottayam. To tap a tree in monsoon, rain guards are fixed on its bark to prevent water drops from falling into the coconut shell in which latex collects. This costs about Rs 50 a tree. “I sent away all the four tappers I had for 25 years when rubber price fell below Rs 150 in January last year,” says Kurien Verghese, a rubber producer with 6.8 ha in Thodupuzha in the high ranges of Idukki district. In many places rubber trees are left untapped. Nor is there any enthusiasm for replanting aged plantations whose productivity has declined. Verghese says he was wise enough to invest in other businesses but a majority of rubber growers in his village are marginal farmers, who, he says, are in deep distress.
While small growers are in panic, big producers watch the price trend in anxiety. “Rubber tree is a perennial crop with a reproductive period of 30 years,” points out Mathew Mathew K, physician and planter at Kanjirappuzha in Palakkad district. “Investing in rubber is just like investing in a 30-year business. If it is an annual crop you can switch over to something else. But in the case of rubber it is not possible,” he says. Small wonder, “For Sale” boards have appeared in front of some rubber farms in the land-starved state.
Recession, crude oil prices and indiscriminate imports contribute to the price downturn
The immediate cause of this downturn was global economic recession. The transport sector alone accounts for about 70 per cent of the total rubber consumption in the world. With economic slowdown there is a corresponding decline in vehicles’ sales and, consequently, in demand for rubber.
“Along with this there was a fall in crude oil prices, weakening of the currencies of rubber-exporting Asian countries and speculation that Thailand would release half of the 220,000 tonnes of rubber it had procured at the start of the downswing,” points out Jom Jacob, deputy director (statistics and planning), Rubber Board, the only Central government agency entrusted with the responsibility of developing natural rubber. Thailand did release its stock, leading to excess supply in the market when consumption was low. This further depressed global prices.
Most tea gardens in Kerala are old. Growers are reluctant to replant the gardens both during price boom and price crashMost tea gardens in Kerala are old. Growers are reluctant to replant the gardens both during price boom and price crash
Another major factor was China, a big rubber consumer, which was decreasing its imports. Between 2003 and 2011, China was focused on infrastructure development—a period that coincides with the boom in rubber prices. However, since 2011 China has reduced its imports of natural rubber and started investing on a large scale in natural rubber production to become self-sufficient.
Indiscriminate imports by domestic consumers made it worse. After economic reforms and trade liberalisation in 1991, the government relaxed restrictions on the import of natural rubber. Anybody can import rubber by paying the import duty of 20 per cent or Rs 30 per kg, whichever is lower. Besides, under Advance Licensing Scheme duty-free import is allowed with a commitment to export finished goods within 18-24 months. Producers allege that imports by consumers, mainly tyre companies, were responsible for the sharp dip in domestic rubber price. “Whenever the global price goes below the domestic price, big tyre companies dump cheap, low-quality rubber in the Indian market,” points out VijayanRajes, president of the United Planters’ Association of Southern India (UPASI). “This is to pull down the prices in the domestic market.”
Of the total consumption of natural rubber in the country, tyre industry accounts for 65 per cent. Of this, about a half is consumed by a few big companies such as MRF, Apollo, CEAT, JK Tyres and Balkrishna, which are located outside Kerala.
The volume of imports registered a four-fold increase from 77,762 tonnes in 2008-09 to 360,273 tonnes in 2013-14. As C Vinayaraghavan, vice-president of the Association of Planters in Kerala, points out, imports are way beyond the shortfall in production. Where is the justification to import 0.22 million tonnes in 2012 when production was 0.91 million tonnes and consumption was 0.97 million tonnes, he asks. Considering the increasing volume of imports, the import duty should be raised to at least 40 per cent, demand producers’ associations.
Makers of rubber-based products give their own reasons for import. Rajiv Budhraja, secretary general of Automotive Tyre Manufacturers Association, New Delhi, says the supply is seasonal and depends on climate; small growers engage in poor processing practices and supply from them is inconsistent. Besides, according to him, the quality of sheet and block rubber produced in India does not match the requirement of the tyre sector, particularly for high-tech radial truck and bus tyres.
They also complain about lower import duties for finished rubber goods than that for natural rubber. For example, the import duty for finished tyres is 10 per cent, which is half of that for natural rubber. Import duty for other products is even lower.
The Kerala government responded to the crashing prices by offering to buy rubber at a slightly higher than market price and forgoing the purchase tax if the industry buys rubber at a minimum price of Rs 130 a kg. But both measures failed. Chief Minister Oommen Chandy and Minister of Finance K M Mani, are particularly worried because both hail from Kottayam and have large sections of rubber growers as their vote bank. They are leading jumbo teams of ministers to Delhi to ask the prime minister for urgent actions.
The crisis in the rubber sector is symptomatic of a bigger malaise afflicting Kerala’s farm economy.
Kerala’s shift from seasonal food crops to cash crops is a recent phenomenon
Today, Kerala is the only state in India, and probably the only region in the world, which is so much dependent on cash crops that are vulnerable to the vagaries of the market, points out Tharian George, joint director of the Rubber Research Institute of India based in Kottayam. The state Agriculture Department’s data shows that eight perennial cash crops—rubber, cardamom, tea, coffee, pepper, coconut, areca nut and cashew nut—account for 65 per cent of the state’s cultivated area, while food crops, such as paddy, tapioca and minor millets, are confined to just 12 per cent. At any time, the price of any one or more of these cash crops could tumble, pushing growers into deep social and financial crises.
Growing cash crops is not new for Kerala, but it was never so dependent on them.
The state has historically been tied to trade and export. The region’s unique coastal geography shaped this aspect of its economy, while its topography and climate encouraged a diverse mix of crops. The spice trade from the west coast can be traced back to as early as the 3rd millennium BC. By the late 1930s, the state was exporting coffee, rubber, tea, coir and coconut along with spices. At that time paddy dominated the state’s cultivated area. The present shift in the cropping pattern towards cash crops became evident only in the past four decades.
A major reason behind this shift was Central government policies introduced in the 1970s to promote cash crops. Rubber, being a commodity with strategic importance in defence, transport and health sectors enjoyed policy protection. Tea, cardamom and coffee were promoted as foreign exchange earners. Rubber Board, Tea Board, Coffee Board and Spices Board, which are under the Union Ministry of Commerce and Industry, undertook promotional activities to expand area under the crops. Kerala was told that the Centre would look after its food needs if the state grew cash crops. Policies were introduced to protect the crops from competition in the international market.
Take the rubber sector, for example. After 1970, the responsibility of imports was entrusted to the State Trading Corporation, a Central government agency. Rubber was imported in tandem with the domestic supply-and-demand gap and import duty was set as high as 75 per cent. The sector was protected from price fluctuations through measures such as fixing maximum and minimum prices, notifying buffer stock and procuring rubber at remunerative prices whenever prices fell. Rubber Board offered an incentive of Rs 19,500 per ha to growers. Homesteads with multi-crops and different types of trees changed into rubber plantations.
Land reform and trade liberalisation played a major role in the shift in cropping pattern
Around the 1970s, the state started implementing the Kerala Land Reforms Act of 1967. The Act put a ceiling of 6 ha on the land a person can own, but exempted plantations. This prompted many to convert their land to plantations. Many paddy farmers started growing coconut on their fields, which were later converted into rubber plantations.
State agriculture data shows since the 1970s, farmers’ withdrawal from rice cultivation has increased. In the last four decades, area under paddy has reduced by 76 per cent—from 875,000 ha in 1970 to 208,000 ha in 2012.
The crisis worsened with the introduction of the liberalisation policies in the 1990s. The initial few years after India’s entry into the World Trade Organization (WTO) in 1995 as a signatory to the World Trade Agreement, saw a phenomenal increase in export prices of many plantation crops. Leaders of the Kerala Congress, including the state’s present Finance Minister K M Mani, praised the Centre’s neoliberal polices. But the heat of the global competition was felt within a few years—rubber price started sliding for the first time in 1997 following large-scale import of cheap natural rubber. Other cash crops in which Kerala has a substantial stake, namely, tea, coffee, rubber and cardamom, also had to compete with low-cost imports.
Growers experimented with cash crops to reap windfall profits
Prompted by the falling profits from the traditional commodities, farmers increasingly turned to cultivation of exotic varieties, which have markets outside India. Vanilla, one of the costliest spices in the international market became the new favourite of Kerala farmers. In 2003, fresh vanilla beans fetched a mind-boggling Rs 4,000 per kg due to a slump in the global supply. A cyclone had destroyed vanilla farms in Madagascar, the world’s top exporter of the spice. That year, police stations in many parts of the state received unusual complaints of vanilla beans and even the entire plants being stolen. Many vanilla farmers pressed private security agents into service in their farms. As expected, the boom ended in three to four years when Madagascar recouped. The prices of vanilla beans in Kerala crashed to Rs 80.
By that time, rubber had recovered from the price slump and its price had started galloping. In 2005, rubber started spreading everywhere, even into the high ranges of Wayanad in the Western Ghats and low-lying areas of Alappuzha, a coastal district, where agro-climatic conditions are not suited for the tree. People cleared coconut plantations and paddy farms to grow rubber. Excellent extension services by the Rubber Board helped. Coconut, a major cash crop in the state, and tapioca, a tuber widely eaten in Kerala, lost much of their area to rubber. In 2010 alone coconut lost about 8,000 ha to rubber, the state agriculture department’s data shows. By 2011, rubber accounted for 45 per cent of Kerala’s agricultural GDP.
The good time continued till 2012-13, when the prices of commodities crashed again.
Just like rubber growers, cardamom farmers in Idukki are in severe distress. Price of cardamom that had jumped to Rs 1,600 a kg in 2010 crashed to Rs 450 within two years. By January 14 this year, the price had risen to a measly Rs 680 a kg. “Traders are importing low quality cardamom from Guatemala, mixing them with the high quality local variety, and selling in the domestic and global markets under the brand of Indian cardamom,” says K S Mathew, president, Cardamom Growers Association, Idukki. This brought bad name to Kerala cardamom, which has lost its traditional markets, including Saudi Arabia, the largest importer of the spice, he adds.
Coffee growers in Wayanad, a major coffee cultivating area in the state, are in deep distress over the declining price of the premium Robusta coffee and erratic rainfall during the harvesting season. The spot price of raw coffee in the district on January 3 was Rs 3,750 for a bag of 54 kg as against Rs 4,400 a month ago—a drop of nearly 15 per cent in a month. The price of coffee beans declined from Rs 145 a kg to Rs 128 during the period. This will seriously affect the coffee growers, about 70 per cent of whom are small cultivators with a landholding less than five hectares.
Small tea growers in Wayanad are also a worried lot. The spot price of green leaves on January 3 was Rs 8 a kg against Rs 13 in the corresponding period last year. As per Wayanad Small-Scale Tea Growers Association, 12,000 small growers depend on tea for their livelihood in this district. As there is no public sector tea processing factory, tea growers are forced to sell their produce to agents from Tamil Nadu for much lower prices.
Coconut is still not doing well despite 30 agencies working to promote coconut culture and helping farmers earn more from it. Even when all these agencies were working towards coconut development, coconut lost much of its area to rubber. The price remained very low at Rs 10 a kg for many years. Recently, it rose to Rs 30 a kg due to a reduction in production. As for the cashew sector, it has already started showing signs of an impending crisis. Last year India exported cashew nuts worth Rs 5,000 crore. This year, in the first quarter, production has reduced by 20 per cent and price has fallen by six per cent.
Growers in Kerala are now looking up to another crop: oil palm. Many paddy fields that have remained uncultivated for several years and coconut farms are being converted into oil palm farms in pockets of central Kerala. Promotional programmes initiated by Oil Palm Development Programme, sponsored by the Central and state governments, are acting as a catalyst to the new revolution on the farm front. Farmers are once again hopeful.
“If the rubber price remains low for long, we will cut the trees and plant oil palm,” says Kurien Verghese. Since most growers in Kerala have small landholdings, Verghese says growing oil palm individually will not be profitable. He plans to join other farmers to grow the crop as a group.
Plantations are the backbone of Kerala’s farm economy, but affect its ecology
Kerala’s plantations account for about 40 per cent of the area under plantation crops in the country (see ‘Kingdom of plantations’. Every year, they produce commodities worth about Rs 18,000 crore, says Vijayan Rajes of UPASI. This is 46 per cent of the value of the country’s total annual plantation produce.
According to Kerala Economic Review 2013, the average annual return per hectare of farmland in Kerala is Rs 97,200—this is three times the national average. Return from plantations of tea, coffee, rubber and cardamom is Rs 2.3 lakh per hectare. At least 1.2 million people—half of them women—depend on these plantations for a living. As R Hailey, former director of the state agriculture department, puts it, “Plantations are the engine of the farm economy in the state.” Any fluctuation in the production or price of these crops will have a big impact on the farm economy of the state as well as the country’s supply of commodities.
For instance, this small state shoulders the burden of supplying natural rubber to the nation. It accounts for 83 per cent of the country’s natural rubber production and 74 per cent of the area under rubber, according to the Rubber Board. Thanks to Kerala, India also achieved the number one status for productivity during 2006-2012, although its agro-climatic conditions are not best suited for rubber.
Cheap coconut from Sri Lanka flooded Keralan market after the Indian government signed the South-Asian Free Trade Agreement with Sri Lanka in 2006. The state's coconut sector is yet to recover from the shockCheap coconut from Sri Lanka flooded Keralan market after the Indian government signed the South-Asian Free Trade Agreement with Sri Lanka in 2006. The state’s coconut sector is yet to recover from the shock
India, with 77,400 tonnes of natural rubber production in 2013-14, was the fifth largest natural rubber producer. Unlike other major producers that grow rubber for export, India consumes a large portion of what it produces with a minimum of exports, and has become the second biggest consumer of natural rubber after China. Only 34 per cent of the rubber consumed in India is synthetic, produced from crude oil through a highly polluting process.
“Rubber is not just a cash crop, it is a strategically important commodity used in crucial sectors, including defence, transport, communication, energy, health and birth control,” points out James Jacob, director of the Rubber Research Institute of India in Kottayam. Over 50,000 products are made from rubber. According to Jacob, a direct correlation exists between economic growth and consumption of rubber in fast-growing countries such as India and China, unlike the highly developed countries where the two have stabilised. “The faster the GDP growth, the more the rubber consumption,” says Jacob.
The yield of famous Malabar pepper plantations has reduced drastically. Most of them are now aged and prone to infestationThe yield of famous Malabar pepper plantations has reduced drastically. Most of them are now aged and prone to infestation
Both price booms and price crashes of these cash crops are affecting good agriculture practices, Jacob points out. Most plantations in the state are now aged. Yet, replanting is taking place only in a small way. During the price boom, growers are reluctant to remove their plants, and during the price crash, they lose the enthusiasm to replant the old plantations.
In Idukki’s cardamom plantations banned pesticides such as endosulphan are used. Excessive use of pesticides, fungicides, weedicides and fertilisers has severely contaminated soil and water bodies, turning the high ranges into a toxic hot spot. Besides, decades of mono-cropping has reduced soil fertility and hence the yield. The productivity for rubber has declined from 1,931 kg per ha in 2011-12 to 1,907 kg per ha in 2012-13.
Long-gestation mono-crops have also affected the region’s rich biodiversity. “Planters often say they have created a green paradise in 70 per cent of the Western Ghats in Kerala,” says M K Prasad, ecologist expert on the Western Ghats. This means that natural forests have been cleared in 70 per cent of the Western Ghats for growing rubber, cardamom, tea and coffee. This has led to large-scale biodiversity loss.
The loss is the highest in rubber plantations, which do not allow any other plants to grow under them, says R K Dhiman, vice-chancellor of Dr Y S Parmar University of Horticulture and Forestry in Solan, Himachal Pradesh. Many important shrubs and herbs have disappeared from rubber plantation areas, says Dhiman. He suggests that rubber plantations should not be promoted in a biodiversity hotspot like Kerala. It should be allowed only on degraded land.
Anil Kumar, director, Community Agro-Biodiversity Centre (CABC), Kerala, cautions against latex-yielding plants like rubber. These plants have less number of stomata, responsible for transpiration, which leads to dry climate. Rubber plantation is also a breeding ground for mosquitoes, he says. CABC is working with farmers and trying to evolve a system where crop diversification get its due attention to conserve natural resources.
Jacob suggests that plantation crops should be integrated with local food crops, tree species and natural flora for better conservation of biodiversity. Maybe, Kerala should go back to its age-old practice of mixed farming, which proved beneficial for its surrounding ecology. The government should introduce a policy for sustainable promotion of plantations, he says.
Officials in Kerala say they cannot do much to improve the situation because rubber, tea, coffee and cardamom, being trade-oriented and earners of foreign exchange, are managed by commodity boards, and do not come under the state’s agriculture department. “The state cannot make major policies regarding these four crops,” says R Ajithkumar, director of the state’s agriculture department.
The planters are bitter about the fact that even though they contribute about Rs 20,000 crore a year to the state exchequer through plantation tax, building tax, sales tax, value added tax, property tax and professional tax, the state government is indifferent towards them. “Those owning big plantations, with an area more than 20 hectares, have to pay 50 per cent agriculture tax, which is one of the highest in the country. Yet the government does not do anything to protect our interests,” says Vinayaraghavan ruefully.
Centre-state cooperation, crop diversification and empowerment of workers hold the key
Any crisis in Kerala’s plantation sector affects the prospects of millions of growers, workers, manufacturers, consumers and the economy of the state and the country. Hence a complete revamping, restructuring and empowerment of the state’s farm sector is needed to enable its plantations to produce at a competitive cost and in an economically viable and environmentally sustainable manner. Experts say crying hoarse at the time of a price crash and rejoicing during booms will do no good. It’s time the government introduced comprehensive policies and time-bound programmes for short-term, mid-term and long-term actions to help growers tide over uncertainties of the market.
Price stabilisation measures like fixing maximum and minimum prices, creating buffer stocks, fiscal and export incentives and procurement will not be as effective as they were in the pre-trade liberalisation period, when the domestic market was protected from global competitions, point out Tharian George. “This was evident in 1997 during the first price crash of rubber following the economic reforms. The Centre had tried these measures to stabilise falling rubber prices. It had restricted rubber imports. But none of the measures served its purpose,” says George. The government once again tried these measures during the recent price slump in the rubber sector , but they failed.
Now, for the first time, the Centre plans to address the crisis that ails rubber. The Union commerce ministry appointed an expert committee in June 2014 to review the sector and draft a national policy. The committee, headed by Rajani Ranjan Rashmi, additional secretary (plantations), is holding talks with different stakeholders.
While it is true that major policies regarding rubber, cardamom, tea and coffee should be made in Delhi since they are governed by commodity boards under the commerce ministry, it’s time the state stepped in to empower its farm sector, instead of just leading delegates to Delhi.
“It has been 40 years since Kerala shifted to cash crops,” says K J Joseph, professor at the Centre for Development Studies, Thiruvananthapuram. “But the government never focussed on diversifying produce, let alone enhancing productivity or formulating mechanisms to sustain its production bases and tide over market fluctuations,” Joseph alleges. Since the market for Kerala’s produce is outside the state, the government needs to provide direct market linkage to growers and make produces competitive through processing and value addition, he suggests.
It should also introduce better management for each crop, says Thomas Isac, economist and former finance minister of the state. For this, Isac says, commodity boards have to take the state agriculture department into confidence while drafting policies and implementing programmes.
As Jacob points out, growers should be encouraged to increase yield, adopt multi-cropping and intercropping, and follow environment-friendly and sustainable practices, with added objectives of conserving soil, water and biodiversity. Maybe it can learn from Tripura whose climate is similar to that of Kerala. “Shifting agriculture had degraded Tripura’s land. We rejuvenated the land by following an agroforestry model, in which shade-loving crops like ginger, black pepper, lemon and orange are grown underneath trees,” says Dhiman.
Given the price volatility of commodities, diversification through value-added products in the commodity chain or moving out of the commodity business is the only way out, says K N Harilal, professor at the Centre for Development Studies. To achieve this, the commodity boards can encourage small growers to form societies and help them install processing facilities. Under Rubber Boards’ initiative, 2,500 producers’ societies have been formed in Kerala. Two hundred of them have received financial help from the Board to install processing facilities and are producing high quality rubber sheets.
Another way to support producers is to introduce a price insurance scheme, says C K George, Kochi-based international trade consultant who was with the Spices Board. The Centre and state should make it comprehensive by taking into account the commodity, cost of production, market price of the produce and the grower’s cost of living, he suggests.
Despite having a farm sector that is at the mercy of global trade forces, Kerala does not have a mechanism to inform cash crop growers about international market developments and caution them against possible fluctuations. The state’s WTO cell formed to advise the government on the impact of international trade agreements is not functioning for want of staff and other facilities. In such a scenario, growers blindly run after profits and face disasters.
The state should relook at its land reform and focus on welfare of plantation workers
“The state should relook at its land reform and focus on adding value to plantation crops,” says G Vijayaraghavan, member, Kerala State Planning Board. One thing is sure that the state would never reap the kind of returns it used to get from its rubber, tea, coffee or cardamom plantations, considering the rising cost of production and decreasing productivity. So the government must carry out an in-depth study on the present scenario and take required steps to empower its farm sector, he suggests.
Several rubber plantations are now up for sale in Kerala because they are no more profitableSeveral rubber plantations are now up for sale in Kerala because they are no more profitableBesides, acute shortage of labourers plagues large plantations, which require regular upkeep. Long-gestation plantations require a large number of workers for harvesting, spraying pesticides, weedicides and fertilisers and for other farm activities. Though Kerala plantations offer Rs 300 a day, the highest in the country, young generation of labourers is migrating to other sectors for more wages. For instance, they receive up to Rs 650 a day for working in agricultural farms, while the construction sector offers Rs 700-800 a day. Besides, the educated young generation of plantation workers are opting for other occupations.
Unlike in other states, large plantations in Kerala have to abide by the recommendations of Plantation Labour Committee (PLC), a tripartite committee with representatives from government, plantation industries and trade unions, to ensure welfare of farm workers. “But many plantations stop these welfare programmes, especially during price crash,” points of M P Joseph, adviser to the Kerala government holding the rank of additional chief secretary. He had chaired the PLC earlier.
Experts say overdependence on a large number of workers will not be good for the failure of plantations. In the wake of the acute labour shortage, planters must adopt advanced farm technologies to reduce their dependence on workers. “Simultaneously, planters should develop an efficient labour force by upgrading their skills and education and by providing them better facilities to make the sector more attractive,” says Vijayaraghavan.
Sulochana Nalapatt, who was a doctor in a Tata Tea plantation in Munnar for two decades, says care and welfare measures for workers have come down over the years. If the plantations wish to have a good future, they must develop a healthy labour force by taking good welfare measures and providing healthcare services for workers. Continuous use of chemicals to increase the production not only affects the health of soil but also the health of workers.
To top it all, the changing climate has not been beneficial to the plantations. According to Jacob, a rise of 1 degree Celsius reduces rubber yield by 10 per cent. Prolonged dry spells and excessive and untimely rains too adversely affect production. Kerala’s rubber production had drastically reduced in 2012 due to incessant rains. “There was excessive loss of leaf area in rubber holdings because of unusually prolonged monsoon led to an outbreak of Abnormal Leaf Fall Disease in 2013,” he says. Strategies should be developed for adapting to changing climate.
This is a must because trade liberalisation is the order of the day, and market uncertainties are here to stay.
With inputs from Jitendra

The Hindu E paper TUESDAY, FEBRUARY 3, 2015

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