Old Labours 21st century moment

The day the Labour Party died, read the alarmist headline on The Daily Telegraphs website, just
hours after Jeremy Corbyns victory was announced on Saturday.
The election of Jeremy Corbyn as leader of the Labour Party is a catastrophe, wrote a columnist
forThe Telegraph, a paper which has never showed much friendly interest in the British Left. A
catastrophe for the Labour Party. A catastrophe for our political system. A catastrophe for the
country, it added.
Andrew Whitehead
There are many such siren voices warning that the British Labour Partys dramatic, and emphatic,
lurch to the Left will consign it to electoral oblivion, and weaken democracy by depriving the country
of a credible and effective Opposition. Political commentators have been queuing up to insist that
two elections were decided over the weekend Jeremy Corbyns victory in turn means, they argue,
that the governing Centre-Right Conservatives are now certain of re-election the next time Britain
votes.
Of all the convulsions that have shocked Britains political system of late the success of an antiEurope, anti- immigration party in elections to the European Parliament; the resurgence of a radical
Scottish nationalism; the outright victory of David Camerons Conservatives in the May general
elections Jeremy Corbyns triumph is the most outlandish and unexpected one.
The Labour Party thought it would win the May election; instead, it got barely 30 per cent of the
national vote and so was consigned to another five years out of power. Labours Centre-Left leader
Ed Miliband promptly resigned, heralding the contest which reached its climax at the weekend.
A perpetual rebel
Many thought that a humbled Labour Party would head for the centre ground, and move back
towards the New Labour pragmatism associated with Tony Blair. In fact, the most Blairite of the
leadership candidates came last with less than 5 per cent of the vote, and the party has confounded
conventional political common sense by swinging sharply away from the political Centre.
Jeremy Corbyn is, in the words of The Economist, perhaps the most Left-wing MP in the House of
Commons. In more than 30 years in Parliament, he has been the perpetual rebel. He has never been
a Minister. He has never shown a great deal of personal ambition.
A touch of the ageing hippy
Yet, now this bearded, vegetarian, alcohol-abstaining socialist with a touch of the ageing hippy
about him is the leader of Her Majestys official Opposition. And he is 66 so Old Labour in
more ways than one.

Yet he won by a landslide, taking 60 per cent of the votes in a four-sided contest in which nearly halfa-million Labour Party members and registered supporters participated. It is probably the most
emphatic personal mandate any party leader has secured in modern British history.
If you imagine Mr. Corbyn to be a fiery, charismatic demagogue, think again. He is a none-tooimpressive orator, a personable but not a commanding personality. The qualities which have won
him the election are constancy of political principle some say his views have not changed on any
important issue since the 1970s and his personal humility and honesty.
When so many politicians are seen as unprincipled, too concerned about personal advancement, and
saying what they think is popular rather than what they believe, Mr. Corbyn is seen as the antipolitician politician. The man who says what he means.
As the Corbyn campaign gathered steam, thousands of young men and women, many of them deeply
disillusioned by party politics, rallied to his standard. The strength of his support carries a warning
to politicians of all parties they have lost the confidence and respect of a significant slice of the
country. The British political system is in some disrepair.
And of course on key issues opposing public spending cuts, protecting welfare benefits, keeping
out of other countries conflicts, renouncing nuclear weapons, welcoming refugees, demanding
action against social inequality Jeremy Corbyn and his supporters took a stand which was in
marked contrast to the equivocations of his rivals.
But where does Labour go from here? Jeremy Corbyns immediate problem is that he does not have
the support of the parliamentary Labour party. While three-fifth of party members and supporters
voted for him as leader, probably no more than one-tenth of the partys MPs backed him. Several
prominent figures in the party have already said they will not take a role in Mr. Corbyns shadow
Cabinet team.
Mr. Corbyn has suggested that he wants to reach out to all wings of the party. That is a wise move
not least because the hard Left has very few political figures of real talent and stature. But there is a
risk that the new leader will be cold-shouldered by many of the partys rising stars who feel deeply
uncomfortable about printing more money to ease austerity, abandoning Britains nuclear arsenal
and other of Mr. Corbyns key policy proposals.
Mainstream Labour figures are desperately worried that the party is heading to the Left when the
country is edging to the Right. A hard-Left leader may appeal to Labour party activists, but could well
terrify the floating voters who need to be won back from the Conservatives.
Mr. Corbyns victory will, nevertheless, shape Britain in coming years it is now less likely that
Britain will intervene militarily in Syria, and a little more likely (though still odds are against it) that
the country will pull out of the European Union (EU).
In his view of the world, Mr. Corbyn reflects the 1970s socialist distrust of American foreign policy
and support for movements of an anti-imperialist mindset. He was venomously criticised during the
leadership campaign for being sympathetic to Irish republicanism and to Hamas and Hizbollah in
West Asia.

Labours new leader is clever enough to know that he now needs to be a lot more careful about who
he calls his friend. But there may well be quite a few skeletons lurking in his political closet which his
rivals will delight in disinterring.
More retro than Syriza, Podemos
It is doubtful whether Jeremy Corbyns victory reflects a wider trend in the European Left. One of the
first messages of congratulations came from Syriza, the hard-Left governing party in Greece. But
while Syriza and its Spanish counterpart Podemos are the shock troops of a new Left youthful in
profile, iconoclastic by temperament, a break from old-style social democracy Mr. Corbyn is much
more retro. There is not a lot of evidence of new thinking on the Labour Left.
A greater international impact could well be in encouraging mavericks and outliers to believe that
they can capture high political ground. Those polar opposites of American politics, Donald Trump
and Bernie Sanders, are both likely to find encouragement in Mr. Corbyns success as they compete
respectively for the Republican and Democratic presidential nominations.
Could we see in a few years time Jeremy Corbyn becoming the most Left-wing Prime Minister in
British history? Even many of his supporters think that is unlikely. It is not simply that the electorate
may decide they dont want a hard-line socialist leading the country. Jeremy Corbyn hasnt really
shown a lot of hunger for the top job.
He will be in his seventies at the time of the next general election in 2020. Britain hasnt had a Prime
Minister that old since Winston Churchill more than sixty years ago. It is entirely possible that he
will see his main goal as shaking up the Labour Party, restoring its radical vigour, and making way
for a younger man or woman within two or three years.
But the last few extraordinary months and years in British politics have shown how unwise it is to
gaze into the soothsayers crystal ball. So lets just sit back and watch the drama unfold.

No thought for food

Can one persons religious freedom interfere with anothers food preferences? And what if the
freedom of one religious group is in conflict with that of another? The ban imposed in some States on
the sale of meat during the Jain communitys annual fasting period of Paryushan is problematic for
more than one reason, and militates against the food preferences of a majority of the people in the
States concerned. Not surprisingly, the order of the Mumbai Municipal Corporation requiring
slaughter houses and meat shops to remain closed for four days during the fasting period led to
public outrage, and the Bharatiya Janata Party came under attack from the Shiv Sena, its own ally in
Maharashtra, over the decision. When more States began announcing similar bans, the issue became
contentious and took on a communal colour. Indeed, the Shiv Sena warned the Jain community that
it risked being alienated from mainstream Indian society if it continued to insist on a ban on meat. In
Jammu and Kashmir, meanwhile, the High Court called for the strict implementation of a longforgotten law that prohibits the slaughter of cows, oxen and buffaloes. This fed into the political
unrest in the Muslim-majority State, with separatist leaders calling for a shutdown in protest. That
the States ruled by the BJP are the ones seeking to impose the ban on meat is not lost on anyone.

After Maharashtra, the States of Rajasthan, Gujarat, Chhattisgarh and Haryana followed suit, raising
the suspicion that the idea of a ban was meant to further the BJPs political agenda. In Maharashtra,
the government had already introduced a ban on beef; the bar on all meat varieties was therefore
seen as an extension of the same Hindutva agenda.
Although such a move is nothing new, the publicity given to the ban this time, and it being extended
from two days to four and eight days, resulted in much disquiet. Many sellers and consumers of meat
are not opposed to a ban on the sale for a day or two; usually the days preceding and following those
days would see an increase in sales and compensate for the day of the ban. But a bar for four
consecutive days, and the wide publicity given to it, raised fears that the implementation would be
strict and that those who did not conform might face prosecution. The stated rationale for the
prohibition which does not cover fish and eggs is to prevent slaughter during the period of
fasting. But that did not convince the Bombay High Court, which termed the move regressive and
absurd in a cosmopolitan city like Mumbai. By ordering a ban on meat for an extended period, the
BJP governments have revealed a fundamentalist streak, and thus risked a backlash from some of
their own core supporters.

Act with firmness

In a country that has seen much outrage over cases of rape and has passed strict laws in the past few
years to check such crimes, it seems ironic that the Indian government must watch helplessly as a
diplomat who has been accused of brutalising two women is able to evade police action. The Saudi
Arabian official cannot even be taken in for questioning on the allegedly barbaric crimes he and some
of his family members participated in at their residence in New Delhi. While it would be unfair and
imprudent to pronounce him (and possibly others) guilty without going through due process of law,
the facts of the case, the outcome of medical examination procedures and eyewitness accounts have
led officials to admit thatprima facie there is evidence that the victims were repeatedly raped,
sodomised, and held captive at knife-point over months. Regardless of the gravity of the crime,
however, international diplomatic conventions must be followed, and unless the Saudi government
can be prevailed upon to waive the diplomats immunity, he will no doubt be on a flight to safety and
out of the reach of Indian authorities pretty soon. While Riyadh is unlikely to give up its diplomat,
waiving immunity has been done in exceptional cases in the past. In 1997, Georgia did so for its
deputy ambassador to the United States who was held guilty in a drunken driving accident that left
his 16-year-old co-passenger dead. Other countries have also waived immunity when the crimes
merited a full investigation. However, Saudi Arabia has always protected its diplomats, despite what
one official termed a disproportionately high number of cases involving Saudi officials in heinous
crimes. In the U.K. and the U.S., charges of enslaving women have been brought against Saudi
Arabian diplomats to no avail. There was particular anger in the U.K. in 2004 when a Saudi official
was accused of sexually assaulting an 11-year-old girl, but he too got away.
India must push the Saudi government for accountability. India has an added responsibility, given
that those involved are citizens of a third country and came here from earthquake-hit and
impoverished parts of Nepal seeking livelihood opportunities desperately. India will need to be
sensitive to Nepals concerns in the matter. If it fails to secure the Saudi governments cooperation,
New Delhi will still have several options to pursue the case at the bilateral level. Sustained pressure
may bear results given that Saudi Arabia expects to host Prime Minister Narendra Modi this year. At
the very least, if New Delhi shows its determination to pursue this case, that will serve as a deterrent

to any others who may seek to use their diplomatic status to claim immunity from the consequences
of their crimes.

The roots of Europes refugee crisis

Released in 2013, Elysium, a movie directed by Neill Blomkamp, was appreciated worldwide for
highlighting socio-political and class dimensions related to migration. In this science fiction, the rich
discard the poor on earth in 2154, and settle down in an advanced and sophisticated space station
called Elysium. Earth is depicted as having several problems: it has no healthcare facilities and
suffers from a high crime rate. As a result of this, its residents dream of entering Elysium one way or
the other. For them, going to Elysium is a way to end all their miseries. But it isnt such a simple task
the ruling class of Elysium is averse to the idea of sharing their prosperous space with the poor
beings from earth.
The situation in and around the borders of Europe remind us of this film. The international
community, for reasons beyond comprehension, opted to remain discreet about the European
refugee crisis, but in reality this is one of the biggest human tragedies in the making in this decade.
Statistics point in this direction. According to the International Organization for Migration (IOM),
more than 3,50,000 migrants and refugees have tried to cross the Mediterranean sea into Europe.
Almost 2,600 refugees have died in the Mediterranean Sea from January to August 2015 alone. Most
of them are from West Asia, particularly from the war-ravaged countries of Syria, Iraq and Libya;
many are also from the disturbed areas of Africa. According to the the IOM statistics, a substantial
number of refugees are also from Afghanistan and Pakistan, moving for reasons similar to their West
Asian counterparts Afghanistan is caught in an unending civil conflict and Pakistans socioeconomic condition is continuously deteriorating. This is what makes people flee their own countries
to other parts of the world, in search of peace, employment and stability.
Freedom from conflict
Europe is the most preferred destination for the people from these fragile regions as it is
economically prosperous, socially secure and has better immigration laws. In other words, Europe is
like Elysium. But this does not mean that this mass migration is only to explore the greener pastures
of Europe; it is also due to adverse circumstances in the home country that are not within the control
of the common people. Endless conflict has ruined the social, political and economical structures of
some countries in West Asia, making it impossible for people to have a secure livelihood. On the
other hand, faced with a situation of a heavy influx of refugees, Europe is unwilling to welcome
people into its territory. European countries are increasing security patrolling around the
Mediterranean Sea and in border areas, in order to check the infiltration of refugees. Due to this
increased surveillance, refugees are being pushed back, but sadly most of them cannot return to their
unsafe and war-torn countries. This situation of being neither here nor there is leading to a big
humanitarian crisis, demanding immediate international attention.
To find a solution, we also have to critically examine the role of the Euro-Atlantic powers because
they have been the main drivers of this present crisis. West Asia in the past was not like this; despite
illusive democracy, there was political stability and economic activities flowed quite smoothly. But
due to having an abundance of energy resources, West Asia was and is geo-economically extremely
relevant for the U.S. and its allies, most of them being the European powers. It is because of this that

Euro-Atlantic powers used coercive tools for prompting their narrow political-economic agendas in
this region after the end of the Cold War. As a result, Iraq is in ruins, even though it does not possess
any weapons of mass destruction. Libya was bombed by NATO in 2011 after getting sanctions
through the United Nations Security Council Resolution, 1973, and is currently a battleground for
different ethnic groups fighting to capture political power. There is enough evidence to prove that on
the pretext of supporting pro-democratic forces in Syria, western powers ended up helping the
radical groups, providing necessary fodder for the birth of the deadly Islamic State. Afghanistan, also
one of the known battlefields of the Cold War, was deserted by the West after the disintegration of
the Soviet Union. But it was revisited post-9/11 by the Euro-Atlantic powers to destroy Al-Qaedas
terror network. Yet, even after the death of Osama bin Laden, political instability continues in
Afghanistan, with the prospect of civil conflict ceasing in the near future seeming quite bleak.
Even if we ignore larger political economic questions of international relations, it will not be
inappropriate to blame western powers for the present crisis. Their irresponsible acts for achieving
narrow political objectives have destabilised West Asia, and now European countries cannot turn
their backs to the problems of the refugees. The sheer number of people escaping from disturbed
regions to Europe is massive, and pushing them back to their homeland will only aggravate the
situation. These refugees will be vulnerable to attacks by warring groups and we cannot strike out the
possibility of them even joining these groups for survival. The European Union has unveiled a
refugee quota plan to address the crisis, but is already facing opposition from eastern members, with,
for instance, the Czech Republics Prime Minister Bohuslav Sobotka stating that his country will not
be compelled in any manner to accept a quota and that such a system wont work. Thus, far more
coordination between the EU and the international community is essential to resolve the crisis.
In this regard, it is also crucial for the EU to involve the U.S. Similarly, the stable countries of West
Asia should be contacted to provide some respite to these refugees. Any negligence now will prove
costly not only for Europe but for many other countries of the world.

A new Tahrir moment?

Just as the wild furies of sectarianism threaten to tear apart West Asia, massive protests on a civic
basis took place in Baghdad and Beirut. In both cities, the populations rose up out of frustration over
a lack of basic services and corruption. During the hot summer, power cuts plagued Baghdad, even as
garbage piled up on the streets of Beirut. In both Iraq and Lebanon, leaders of various sectarian
groups lived comfortable lives in their gated zones. The gap between their lavish existence and the
privations suffered by ordinary people sent millions of Iraqis and Lebanese onto the streets. In
Baghdad, a banner celebrated the streets ethics, From Baghdad to Beirut Not Sunni, Not Shia.
Ours is a Civil State. This was wishful thinking, but it was nonetheless brought to life in the
demonstrations.
In both Iraq and Lebanon, the political elite acknowledged the frustrations of their public. They
could not merely send in their security forces. Few leaders sneered at the demands, even if they
snubbed the activists. The lack of civic services is a serious problem across West Asia. Extremist
organisations know this well. When Islamic State took Raqqa in 2013, one of the first things it did
was to secure garbage removal. Ideology is central, but it is meaningless if basic municipal services
are absent. Lebanons 1989 ceasefire after its civil war was built on the principle of mutual co-

existence of the various sects, whose leaders then divided the spoils of the country. Much the same
kind of sectarian constitution was created in Iraq during the U.S. occupation. Contracts for power
generation, garbage removal, and telecommunications delivery are parcelled out amongst the
warlords. Sectarian corruption is rooted in the system. It will not be easy to dislodge.

In both Iraq and Lebanon, the political elite

acknowledged the frustrations of their public.

Embers of a post-sectarian world are not hard to find across West Asia. They are also found in the
Syrian refugee camps. Given the nature of the war in Syria, one would expect that the rancid wires of
sectarianism would tear apart the fragile sense of Syrian nationality. But this is not the case, as
survival is the main objective.
Nonetheless, sectarianism the cord that divides Sunni from Shia and from other minorities
remains. Arab nationalism of the 1950s and 1960s worked to overcome social divides and unite
people around the idea of the Arab. It was a powerful device that held sway for at least a generation.
But Arab nationalism threatened Saudi ideas of Islamic royalty, which was itself endangered by the
Islamic republicanism of Iran. These geopolitical tangles gave vitality to sectarian anxieties, which
had been otherwise dented by Arab nationalism. Tensions between Iran and Saudi Arabia are
mirrored in the rise of IS, whose hatred is much sharper against the Shia than against the West. No
wonder then that Saudi Arabias current war against Yemen which began in late March
continues undaunted, fully loaded with sectarian venom and U.S.-supplied weaponry. There is no
talk of a ceasefire there, despite the UNs plea that the country is already a humanitarian catastrophe.
Sectarian geopolitics fuels the Saudi jets in Yemen, as it also fires Riyadhs antipathy to a peace
agreement for Syria. Better, for the Saudis, to drag the Arab world bleeding through the ashes of its
capitals than to find a way to dial down the sectarianism.
The ashes of sectarianism
Last week, an ill-fated meeting in Doha hoped to find a way out of the volatility in Iraq. The U.S.
occupation had banned the Baath Party and prevented its people from entry into the state
bureaucracy. This was a gift to Irans proxy in Iraq, the largely Shia Islamic Dawa Party. Honed in
their Iranian and Syrian exile, the leadership of the Dawa Party saw the world through the lens of
sect and revenge. The banned Baath allowed Dawa and its allies to dominate Iraqi politics, now
marked by sectarianism thanks to the U.S.-foisted constitution of 2005. Remnants of the Baath,
which had helped IS come to power in Mosul last year, have now broken with their improbable allies.
The Qatari government invited the Muslim Brotherhood member of the Iraqi Parliament, Salim alJabbouri, to sit down with the illegal Baath leadership and discuss the formation of a new anti-IS
Sunni bloc.

The failure of the Doha conference says a great deal

about the decline of authority of Qatar in the region.
Initially backed by the Iraqi government, the meeting was then shunned by Baghdad. Old histories of
animosity between the Dawa and the Baath are not easy to overcome. They are saturated with

memories of torture. The best outcome of the Doha meeting would nonetheless be far from the civic
protests in Baghdad. It would merely be along the lines of sectarianism a new Sunni bloc to ally
with the Dawa Party against IS. The protestors in Baghdad are too suspicious of their government to
allow Prime Minister Haidar al-Abadi to throw the Dawa behind them. If he is to reclaim a kind of
Iraqi nationalism, he will have to do it through the logic of sectarianism. But that road is blocked by
the animosity against the Baath from both the Dawa and Iran. Neither is keen to allow the return of
their historic enemy.
The failure of the Doha conference says a great deal about the decline of authority of Qatar in the
region. Its foreign policy has floundered as that of Saudi Arabia has come to ascendency once more.
Saudi King Salman went to Washington during this Doha conference and during the intensification
of the Saudi-UAE bombing in Yemen. The main item of discussion was the Iran nuclear deal.
Washington is loath to criticise Saudi Arabia for its war in Yemen, which is seen by many as a gift to
Riyadh for its tacit support of the nuclear deal. King Salman has suggested to his confidants that
once his campaign in Yemen comes to a close, he will put more resources into Syria. But what would
those resources seek to do in Syria? Saudi Arabias proxy in Syria Jaish al-Islam is not as
audacious as IS but it is as ruthlessly sectarian. More Saudi involvement would not necessarily mean
a drawdown of violence. It could mean precisely the opposite. Saudi Arabia is hell-bent on the
overthrow of Bashar al-Assad, even if this means the annihilation of Syria.
The militarists alternative
If the mass demonstrations provide an alternative (and utopian) path out of sectarianism, older
forms of authority provide another roadmap. Saudi Arabia finances Egypts government led by Abd
al-Fattah al-Sisi, who nonetheless met with Russian President Vladimir Putin, an Assad ally, to
consider an anti-IS coalition. Sisi, a man of Egypts military, has sympathetic ties to Syrias military
both are children of the era of Arab nationalism. Fear of the rise of extremism unites them. It
confounds the Saudi attempt to keep its allies subservient. Neither Assad nor Sisi carries the promise
of Arab nationalism; they are tainted by the ghosts of Daraa and Rabaa. But what draws them
together is their antipathy to al-Qaeda and IS. This is the soldiers alternative to sectarianism. It is at
quite a distance from the mass demonstrations of Baghdad and Beirut, themselves a replica of
Cairos emblematic uprisings of 2011. In Cairos Manshiet Nasser or Beiruts Ouzai, slumlands of the
Global South, hopes vest not so much in the people want to bring down the regime as in the people
want to survive the wrath of the present. That more radical slogan of Tahrir Square came back to life
in Baghdad and Beirut, but it meant less. It registered hope against sectarianism and war. Today, in
West Asia, this is a radical idea.

Falling interest rates: a concern for depositors

Readers responses to our article on the subject published last week (see Financial Scene Monday,
September 7 Dont ignore depositors) have predictably been large. That is quite understandable
given that falling interest rates on bank deposits raises livelihood concerns for those having no other
means to support them. Even for those who do not face an immediate threat such as those who are
in employment now falling deposit interest rates is still a concern.
Retirement is for everyone sooner or later. There would, no doubt, be very many challenges such as
those relating to emotional and physical. But a financial crunch post-retirement is something to
dread about. It will have ramifications on all aspects of retired life.

Viewed in any way, senior citizens are having a raw deal. In their productive years they did not have
the wherewithal to buy a house. Housing schemes and such other easy credit options were not
available to them. Now in their later years the door is shut for nearly all of them; their advancing
years being held against them. It is, of course, unlikely that a majority of those retiring can afford
even the relatively small margin money needed to buy even a small apartment. This is because there
would be several claims to the retirement corpus. Buying a house property being one of them.
Arranging a marriage in the family is a capital expenditure. No wonder in the institution I worked
before, HR counselling for the retirees would focus on these. More than just advice, enlightened
institutions facilitated home loans. The objective is to facilitate a soft landing on retirement.
This column does not aim to deal with superannuation and retirement. Its objective is to discuss the
implication of falling bank interest rates on the welfare of senior citizens. In the process we shall
discuss the points raised by our readers.
At the outset, we are amazed at the quality of responses. Almost all readers are aware of the context
in which the current debate over falling deposit rates is being held. The nuances of a repo rate
(interest rate) cut by the RBI and its impact on lending and deposit rates are appreciated.
But the key question is why when everyone roots for a rate cut to facilitate easier lending rates, there
is not even a whimper of support for those who want at least the status quo in deposit rates?
The clamour for lower lending rates is led by powerful lobbies, chambers of commerce and the like
with not a little support from the government. That lower interest is all that we need to revive the
economy, is a myth that dies hard. For the government, it is a way of passing on the buck and
avoiding tough reforms. Yet, the pressure mounts on the Reserve Bank of India before every
scheduled policy statement and very often in between.
Meantime, depositors take a back seat. The other day the head of a leading private bank was being
interviewed on a television channel on what made him take the lead in cutting base rate. Pointing out
that rate fixation by individual banks is a function of cost of funds and how they view demand and
supply of credit in the near future, he predicted a fall in deposit rates. There is not even one word
about depositors without whose support the bank would not have made such impressive strides.
Unlike bank borrowers, depositors have very little choice to go anywhere else. Bank borrowers have a
range of non-bank options, the capital market and external borrowings being two of them. Efforts to
persuade bank depositors to invest in the stock market are fraught with risk and many such schemes
such as the Rajiv Gandhi Equity Savings Scheme for first time investors flopped miserably. The very
recent move by the EPFO (Employee provident fund organisation) to park a portion of retirement
corpus in stock market instruments have had an inauspicious start with the extreme volatility that
prevails on the exchanges.
Why do scams originate?
For the category of bank depositors who depend solely on interest, there is very little choice except to
continue with the banking system. With returns getting squeezed there will be a temptation to be a
little adventurous. This has had tragic results as repeated scams, Saradha et al show.

On its part, the government has made feeble attempts to give more choice. These include inflation
proofing and recently gold bonds. These are for niche groups. For a majority of depositors a better
deal from the government and banks is what is needed. We hope to discuss some of these options in
future columns.
Meanwhile, a very perceptive reader Balakrishnan has questioned the ability of nationalised banks to
return public deposits, the question being asked in the context of meagre deposit insurance and high
level of NPAs which threaten to overwhelm the banking system.
Do banks, especially nationalised banks, run the risk of default? My answer would be a categorical
no. More than balance sheet strengths, government ownership has helped banks.
No government will let scheduled commercial banks go under forced merger, takeover by a stronger
bank. These are possible and have happened.

Retaining Amaravati as an ancient town

India is on the cusp of a paradigm shift in the way its much-neglected heritage is to be conserved.
The drought in funding has almost been broken with the launching of two new schemes by the
Central Government: HRIDAY, focussing on heritage cities and PRASAD, enhancing pilgrimage
destinations.
Amareswar Galla
Added to this, if the Smart City initiatives can locate culture as an integral fourth pillar, along with
social, economic and environmental sustainability, then we will genuinely leapfrog into the 21st
Century practice of sustainable heritage development. However, it requires appropriate capacity
building to facilitate transformation.
As a potential demonstration project, the ancient town of Amaravati in Andhra Pradesh offers a
triangulation of possibilities. HRIDAY and PRASAD schemes are coupled with the announcement by
Chief Minister Chandrababu Naidu to name the new capital of the State as Amaravati. Juxtaposition
of the old with the new could salvage the much-neglected heritage town from oblivion. But this is a
double-edged sword. The investment in infrastructure will come as a breath of fresh air and the
planned capital city offers prospects of better access and increased weekend visits to the ancient
town. But real estate speculation and enhanced recreational spectrum need to be regulated to
minimise negative impacts. At stake is the complexity of heritage, both tangible and intangible.
There are several factors that could help minimise the negative impacts. A local governance
mechanism could ensure community cultural leadership and deliver benefits to the primary
stakeholders. There are layers of history in Amaravati , often reduced to minimal details like dates,
kings and dynasties, with focus on only in-situ heritage relics. In short, the layers of significance of
the so-called Megalithic times of some 2600 years ago until now need to be shown, creating a
contemporary understanding among both locals and outsiders, developing educational programmes
and promoting experiential tourism.
All tourism is cultural. Even that which is natural is culturally perceived. The dichotomy of natural
and cultural is a colonial legacy. In this context, heritage tourism is different as it uses non-

renewable resources, both cultural and natural. Therefore, it requires responsible tourism
development and must go beyond simple site visits to enable experiential visitation. The focus is no
longer on the typical tourist. It is on visitors.
Visitors could be residents from the neighbourhood or the hinterland; school children and higher
education students seeking a learning outcome; or domestic or international visitors paying for an
Amaravati experience. An understanding of the demographics and psychographics of such target
groups will assist the development of relevant experiences. Historical contextualisation of the
heritage resources, informed by rigorous scholarship, openness to multiple interpretations of all
forms of heritage and facilitating a plurality of visitor understandings, are essential for creating
meaningful experiences in the revitalisation of Amaravati.
There are lessons to be learnt from other Asian countries that have demonstrated their own methods
of safeguarding their diverse heritage against the backdrop of rapid economic growth. Hoi, an
ancient town in central Vietnam, for example, is protected by the very people whose ancestors built
the houses there in the 18th and 19th Centuries. The district of Hoi An [known in the ancient times
as Faifo] was also called Amaravati between the 7th and 12th Centuries during the years of the
Champa kingdom. The Homeowners Association in Hoi An ensures responsible and relevant
infrastructure development. The Hoi An case study is exemplary for bringing together culture, health
and well-being where valuing heritage informs all walks of life.
Coming from Amaravati and having worked in Hoi An Ancient Town, I advocate grounded and
locally developed pathways for the Amaravati ancient town, informed by new approaches on all
fronts with a sustainable developmental action Plan. The organic historical linkages and
relationships between the Ancient Town and the surrounding stakeholder communities and villages
need to be taken up as a priority.
Investment of resources must assist conservation. The old ginning mill, historic houses in the Pujari
street, Zamindars house and other buildings from the past 200 years in Amaravati ancient town are
in need of urgent protection. New attractions need to be developed in the hinterland. Environmental
impacts need to be monitored with an increase in tourist visits and business activities.
Amaravati, the ancient Dhanyakataka, once the flourishing capital centre in the formation of
Andhradesa, may yet again become the heartthrob of the lower River Krishna Valley. A local
Amaravati Heritage Society could ensure civil society engagement and benefit-sharing. An Amaravati
Ecomuseum, an open air spatial approach to all forms of heritage, including the ancient town and its
hinterland, will ensure sustainable growth.

State FinMin panel to discuss model GST law

As part of the preparatory work for GST introduction, the Empowered Committee of State Finance
Ministers will meet on Tuesday to discuss the draft of the model GST legislation that can be used by
States.
This is even as uncertainty looms over Parliament passage of the most critical Constitutional
Amendment Bill to usher in dual GST regime in the country.

Besides, the passage of Constitutional Amendment Bill by Parliament, the States will also be required
to pass laws for ushering in State Goods and Services Tax (SGST) under this dual tax system.
Indications are that the model legislation for SGST will be discussed at the meeting on Tuesday.
The States will also be required to adopt an integrated GST law that would cover GST framework on
inter-State transfer of goods and services. The Centre is also required to enact a law on central GST.
The Modi-led Government has already indicated that it is willing to advance Parliament session (the
Winter Session) if a consensus on GST is reached.
With no signs of support coming from main Opposition Congress, the Government had recently
dropped plans for calling a special session of Parliament for passage of the GST Bill.
Not reconvening the monsoon session and instead deciding to prorogue both Houses was seen as a
setback for GST introduction. There is also a view in certain quarters that the April 1, 2016 deadline
will be missed.

Land acquisition: No State has complained about

compensation
Compensation has been a critical issue, besides social impact assessment in the entire land
acquisition debate. Arvind Panagariya, Vice-Chairman, NITI Aayog, spoke to BusinessLine on raising
the issue of Land Act 2013 with States in this context and that of acquiring rural and urban land
parcels. Edited excerpts:
Compensation has been another critical issue, besides social impact assessment. Have
you, in the recent meeting with the States, dealt with this? If yes, how far were the
States willing to accommodate? Does the Land Act of 2013 set a floor on
compensation? (Maharashtra reportedly had decided to give four times more
compensation than the land as per the ready reckoner rate for acquiring land in urban
areas, while land owners in rural areas would get five times more.)
To my knowledge, no State has complained about the compensation in the 2013 Act as being
excessive. As you mention, some States have chosen to go farther.
What are the key differences in land acquisitions being done in rural areas versus
urban areas? Is the issue of leasing being treated differently?
Land leasing and land purchase transactions are fundamentally different from land acquisition. The
former requires consent while the latter generally does not. The 2013 Act in India is in fact unique in
introducing consent requirement for land acquisition for PPP and private projects regardless of the
public good that they may do. Differences between rural and urban areas in the 2013 Act relate to
compensation.
Do you think extending the benefits of the Land Act to 13 other laws pertaining to
railways, highways, and other such projects through an executive order will be
acceptable to the opponents of amendments?

What the executive order does is to apply the compensation and rehabilitation and resettlement
(R&R) provisions of the 2013 Act to the 13 laws. There is no disagreement on this matter including
among the opponents of the Ordinance.
When Niti Aayog was constituted it was announced that it will work on the concept of
giving more powers to States. Do you think the recent developments on Land Law are
in line with this?
In the interest of speed, the government had sought to amend the law Centrally instead of one State
at a time. But the Opposition parties have scuttled the process and so the alternative track of
amendments by States must be pursued. Fortuitously, this alternative turns out to be in conformity
of the Prime Ministers emphasis on cooperative, competitive federalism.

India to nix tariffs for 42.5% of items traded with China

under mega pact
ndia and China have agreed to remove import duties on close to half the goods traded between them
under the proposed Regional Comprehensive Economic Partnership (RCEP) pact, a development
that is likely to give the domestic industry sleepless nights.
The RCEP countries which include the 10-member Asean bloc, India, Japan, China, South Korea,
New Zealand and Australia reached a breakthrough on the initial offers for eliminating tariffs on
goods at a meeting of trade ministers in Kuala Lumpur late last month.
India and China have agreed to remove duties on 42.5 per cent of traded items in the initial offers,
an industry representative who attended a recent stakeholder meeting in New Delhi
toldBusinessLine. We are nervous as no sector would want zero duty access for Chinese goods. But a
pragmatic approach needs to be taken as we will also gain duty-free access into China, the industry
representative added.
Indias trade deficit with China crossed $40 billion last fiscal and is about a third of the total.
Detailed offers on items to be opened up will be made by the RCEP members in Busan, South Korea,
in October which will be followed by requests for improvement, subsequent revised offers, and their
finalisation, a Commerce Ministry official said.
Stakeholder consultations
The Commerce and Industry Ministry has started stakeholder consultations with industry
representatives to identify goods where duties can be eliminated and those that need to be protected.
There will be more such meetings in Mumbai, Kolkata and other cities. The elimination of duties will
be carried out over a 10-year period. RCEP members hope to conclude the negotiations by the end of
the year, which could lead to the creation of the largest free trade bloc, accounting for 45 per cent of
the world population and a GDP of over $21 trillion.
New Delhi has offered to open its markets widest for the Asean, by agreeing to eliminate tariffs on 80
per cent of items, and this will be reciprocated by all the members of the bloc. As India has already
committed to removing tariffs on 74 per cent items in the bilateral FTA (free trade agreement) signed
with the Asean, the additional commitment under RCEP is not substantial.

For Japan and South Korea, India has offered to open 65 per cent of items, which is lower than what
it has already committed under its existing bilateral FTAs with the countries, but may include slightly
different items as both countries have to be given the same offer under RCEP. The two have agreed
to reduce tariffs on 80 per cent of goods from India.
India has offered Australia and New Zealand neither has an FTA with India duty elimination on
42.5 per cent items. New Zealand and Australia have, in turn, offered to reduce tariffs on 62.5 per
cent and 80 per cent of items from India, respectively.
The RCEP will also open up markets for services and investments, the initial offers for which have
also been exchanged, and include chapters in moving ahead together in areas such as government
procurement and e-commerce.