From the time President Nicolas Sarkozy declared in June 2009 that the burqa was “not welcome” in France, it has been clear that his government was serious about introducing a ban on the veil worn by some Muslim women and on another more severe garment called the niqab, which leaves only the eyes uncovered. The French government is now closer to this after the National Assembly approved legislation for it. It has to be passed by the Senate next, and a constitutional Council could yet void it. The proposed law is very much in line with France's inspiring secular traditions that keep religion strictly out of the public sphere, where the social contract is based exclusively on universal values enshrined in the country's laws. In April 2010, similar legislation was approved by the Belgian parliament's lower house, and a vote by the upper house is awaited later this year. Other European countries are also mulling a ban on the veil. But France, which passionately values a secular national identity over the ethnic or religious affiliations of its immigrants, has never shied away from forcing the pace on complex issues relating to religion and their place within the larger national identity. If this was first aimed at checking the influence of the Catholic church on public life, the spotlight is now on Islam. The proposed ban makes eminent sense through a feminist lens. The burqa (not to mention the niqab) is unquestionably an oppressive garment that seeks, as Mr. Sarkozy pointed out, to keep those who wear it imprisoned “behind a screen.” It is nowhere prescribed in the Koran but has been imposed on millions of women by sections of the clergy — all of them male — who have interpreted religious texts to suit their backward-looking religious or political agenda. That many Muslim women seem willing to embrace the veil these days as a symbol of their piety, modesty, and virtue, or as a political statement of their Muslim identity, is no indication of female agency. It speaks more of their successful co-option in a misogynist project that is the antithesis of liberté, égalité, fraternité — values that go back to the French Revolution and are the proclaimed national motto of France.
However, there is a serious downside to the move to ban the burqa and the niqab. In the post-9/11 atmosphere, such a law is likely to be viewed as an instrument to persecute and humiliate Muslims. It could lead to further radicalisation within the fold and inflame tensions between majority and minority populations in Europe. The reality is that only a small number of women in France's estimated five million Muslim population wear the veil. Fears that a ban could end up criminalising Muslims in European societies are not misplaced, given the Islamophobia in the west. The right-wing French government's unfavourable disposition towards immigrant populations does not help either. In March 2010, the Council of State, which will examine the proposed ban for its constitutionality, observed that a complete ban might, in fact, violate the French Constitution and the European Convention for the Protection of Human Rights and Conventional Freedoms. It seemed more comfortable with the idea of a limited ban rooted in reasons of security. But even if the Council strikes down the law, the intriguing social, philosophical, and political issues the burqa and the niqab raise will not go away. For literary guidance on what might happen if the tension between an uncompromisingly secular state and radical religious identity assertion — focussed in this case on the mysterious phenomenon of the “headscarf girls” committing suicide in Kars in Turkey during the early 1990s — is allowed to sharpen and grow, there is no better text than Orhan Pamuk's magnificent novel, Snow.
Sunday, July 18, 2010
Sunday, July 4, 2010
Alternative Policies Bring Amazing Achievements
THE government of the Left Democratic Front (LDF) in Kerala has now completed four years of its tenure with profuse achievements. During this period the government not only fulfilled most of the promises that the LDF made during the 2006 assembly elections; it in fact delivered more than what it had assured. The advantages are evident in all realms of governance. It includes the measures taken to strengthen the public distribution system (PDS) and curb price rise and also to arrest the farmers’ suicide which was very common during the UDF regime. The LDF government has extensively upped its intervention in the health sector, taken steps to strengthen the public sector units and the initiative to set up several industrial units. There have been qualitative changes in the school and higher education, with efforts to curb the commercialisation of education. Imaginative fiscal management and revenue accumulation and wide-ranging welfare pension schemes for disadvantaged sections are among other achievements during the last four years.
MOVES TO ARREST
FARMER SUICIDES
During the UDF regime farmer’s suicide was very common, including many episodes of suicide by whole families of farmers. In Wayanad district alone, more than 500 farmers committed suicide due to the mounting debt and devastation of crops. While media were filled up with the reports of sorrowful stories of farmers’ suicide day by day, the UDF government had a mere spectator’s role to play. Immediately after it assumed office, the LDF government intervened in the matter, set up a debt relief commission which was the first of its kind in the country and launched a debt relief scheme. The government took over the agricultural debts of the families of the farmers who had committed suicide. These measures instilled in them confidence and put a halt to farmers’ suicide in the state. While farmers’ suicides are continuing in some other parts of the country, not a single incident has been reported in Kerala after this intervention.
Also, the UDF policy to slash subsidy for agriculture sector had made the farmers abandon agriculture; consequently vast areas of agricultural land were lying fallow. Under LDF, farmers returned to agriculture and started cultivating paddy in 15000 hectares of such land. This amazing achievement came through duel forms of intervention, i.e. by encouraging agriculture through a variety of supporting programmes and by ensuring people’s involvement.
The PDS in Kerala had been ideal for the rest of the country. But it deteriorated severely due to the central government’s policy to slash food subsidy and the UDF’s insensitive stance. The LDF government allocated Rs 500 crore for giving rice and wheat at Rs 2 per kilo to 35 lakh families. Numerous outlets of the Civil Supplies Corporation and Consumer Fed were opened and essential commodities supplied at highly subsidised price. Compared to other states, the rate of price rise is significantly lesser in Kerala and the prices of many essential commodities are lower than in many of the producing states. This achievement was possible by intervention through thousands of outlets like the Maveli stores, government super markets and hyper markets, people’s bazaars, Triveni stores, Neeti stores, Neeti medical stores etc. in order to cover up the central government’s insensitive attitude towards the menace of price rise, its minister had to advise other states to learn from Kerala about the measures to curb price rise.
STRENGTHENING
THE PUBLIC SECTOR
Four years back, many public sector units (PSUs) and cottage industries were at the verge of closure. The UDF government was out to implement the neo-liberal policies and presided over privatisation or dismantling of the PSUs in the state. It made conscious efforts to create the perception that public sector is inefficient and burdens the society by incurring losses. During the UDF regime, out of 37 PSUs, 25 units were made non-profitable with a total liability of Rs 69.46 crore; consequently the UDF government decided to dismantle and sell out such loss-making (!) units.
Hoever, during the last four years, the LDF government’s consistent efforts have turned 32 such PSUs profitable with the rest five showing steady improvement. The balance sheet of the PSUs no longer shows losses; they have together made a profit of 239.75 crore. The government has opened the sick units and made efforts to modernise all the PSUs in the state. Diversification of cottage industries with innovative methods and intervention to strengthen small scale industries were widely appreciated. What is more, in the age of neo-liberal policies of dismantling the PSUs, the LDF government has initiated steps to set up eight new PSUs.
ALTERNATIVE POLICIES
IN EDUCATION & HEALTH
In the realm of education, alternative LDF policies have harvested significant achievements. The neo-liberal policies of the UDF government had deteriorated public education; it had also outrageously decided to close down 2000 schools in the state under the pretext that they were uneconomic. On the one hand, there was mushrooming of unaided schools and, on the other hand, government schools and aided schools became unattractive. Consequently, entire general education was at stake in the state. There were numerous government schools in the state which scored zero pass percentage in SSLC examinations. But the LDF government provided sufficient infrastructure facilities in schools and boldly reoriented the structure and content of school education by ensuring the involvement of the PTAs, local bodies etc. As a result, uneconomic schools are now not seen in the state. Government and aided schools including the zero pass schools are now showing about 90 per cent and above results in SSLC examinations. Earlier, very few students from government schools were able to get through the entrance test for professional courses; now more than 50 per cent of them get through these tests.
Declining excellence in higher education was a big challenge before the LDF government. It set up the State Higher Education Council and undertook several reforms in higher education on the basis of its recommendation. This brought about a qualitative change in higher education. While the UDF government pursued the policy of commercialisation of education, the LDF government, even after a court verdict in favour of education traders, took several successful steps to curb marketing and to ensure social justice in education. Its efforts, including the total reversal of UDF’s neo-liberal agenda in education, resulted in qualitative change in education.
The LDF government had to undertake a huge task of rejuvenating the entire health sector in Kerala. The state had a widespread and successful public health system which was compared even with developed countries. But the UDF government devastated the health sector with its anti-people policies. Currently, however, the health sector scenario in Kerala has absolutely changed thanks to the firm effort and alternative policies the LDF government executed. Government hospitals and medical colleges have acquired a new face, with an end to private practice by government doctors and enhanced infrastructure in government hospitals. Unlike the UDF regime, sufficient doctors were appointed and proper arrangements made to ensure the availability of medicines. Many hospitals were upgraded and the entire health system was modernised.
WELFARE
MOVES
The Kerala model of decentralisation was widely appreciated and the People’s Plan campaign showed the people’s real participation in planning and execution. With the help of the rightwing media, reactionary forces unleashed blatant attacks against such initiatives in order to sabotage the People’s Plan. The UDF government was keen to kill the People’s Plan. Under the LDF government, the second phase of Peoples' Plan was started with emphasis on productive sectors, especially agriculture. A total housing plan (
The LDF government has initiated or strengthened several social welfare measures including welfare pension schemes and wide range welfare fund schemes for all workers, including those in the unorganised sectors. These have no comparison. The UDF government was reluctant to pay even the agricultural workers’ pension at a very meagre rate of Rs 110. The LDF government is not only distributing all such pensions regularly, including the arrears accumulated during the UDF government; it has also increased the pension amount to Rs 300.
In terms of law and order situation, Kerala ranks first. Last year national media like the CNN-IBN and
The LDF government lifted the ban on recruitment imposed by the UDF and directed various department heads to report vacancies from time to time to the PSC to ensure timely appointments in the government services.
In power sector, Kerala’s target is to ensure electricity for all and Palakkad district has become the first completely electrified district in the country.
In order to prevent illegal land encroachment, effective steps were taken. On the other hand, lakhs of landless poor including tribal people were given land.
Fiscal management in the state has attained new heights after introduction of innovate methods of resources mobilisation. Tax revenue has increased considerably with the sealing of the loopholes. Previous episodes of treasury ban have become an old story now. All dues are cleared in time and no developmental initiatives are stopped because of scarcity of resources. It is thus that the LDF government has been able to widen the scope of welfare schemes so extensively, and that too at a time of worldwide economic crisis! It is to be noted here that Kerala highly depends on remittances coming from the Gulf countries.
A MODEL
FOR OTHERS
The LDF government’s performance during the last four years is indeed a model of the Left alternative within the parameters of the limited powers in the era of globalisation and neo-liberalism. While the neo-liberal policies are harming the PSUs, public health, education, agriculture, food security and social welfare schemes by slashing subsidies, the LDF government in Kerala is executing alternative policies to ensure people’s welfare and to strengthen the state’s overall economic situation.
Oil Price Manoeuvres
IN a show of bravado, the prime minister Manmohan Singh has declared that the free pricing scheme announced recently for petrol would be applied to diesel as well. This makes clear that the policy on pricing of petroleum products had been decided and what occurred a few days back was a well- planned manoeuvre. Not having got an adequate traction from the Rangarajan Committee report on the pricing and taxation of petroleum products and not wanting to lose the opportunity of pushing ahead with petroleum price decontrol under a government not dependent on Left support, UPA II set up an expert group chaired by former Planning Commission member Kirit Parikh. The committee’s clear mandate was to examine the pricing policy for four sensitive petroleum products (petrol, diesel, PDS kerosene and domestic LPG) and recommend a viable and sustainable pricing strategy for these products. The composition of the committee suggested that it was expected to recommend wholesale liberalisation of the pricing of petroleum products. The expert group did not disappoint, and delivered its recommendations in a period of five months. What is surprising is that the government has decided to accept most of the committee’s recommendations and hike the prices of petrol, diesel, kerosene and LPG, opt for price decontrol for petrol immediately and announce that a similar transition would follow for diesel in the not too distant future.
SURPRISING
MOVE
The move is especially surprising because persisting inflation is already a major cause for concern. The Wholesale Price Index (WPI) figures for May pointed to three worrying trends. First, for the fifth month running, the aggregate annual rate of inflation as reflected in the month-on-month increase in the WPI was near or well above double-digit levels. The figures for May put inflation at 10.2 per cent over the year. Second, the current inflation is particularly sharp in the case of some essential commodities, as a result of which the prices of food articles as a group have risen by 16.5 per cent and of food grain by close to 10 per cent. Finally, there are clear signs that what was largely inflation in food prices is now more generalised with fuel prices rising by 13 per cent and manufactured goods prices by 6-7 per cent.
The immediate and near-term impact of the oil price decisions would be an aggravation of these inflationary trends focused on essential commodities that currently burden the common man. Petroleum products are consumed in some measure by all. Given the fact that these products are universal intermediates, entering into the costs of production of a number of goods and services, the cascading effects of the price hike on the costs and prices of a range of commodities is likely to be significant. With prices of essentials already on the rise, the move threatens a return to the days when inflation was a major economic problem faced by the country. It follows, therefore, that this is the worst time for hikes in and the decontrol of the prices of petroleum products.
The government claims that this was unavoidable because of the “losses” being suffered by the oil marketing companies (OMCs). When the domestic prices of oil products are controlled but the price of imported oil is rising, oil marketing companies receive from the consumer less than what it costs them to acquire the products they distribute. This leads to what are termed “under-recoveries”, which would affect the accounts of the oil marketing companies (Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and IBP) that obtain their supplies of petrol and diesel from the refineries at prices that equal their import price inclusive of customs duty. According to estimates, if retail prices had not been raised, under-recoveries by the oil marketing companies would have exceeded Rs 70,000 crore in the current fiscal year. Since this is unsustainable, it is argued, the hike in prices and a shift out of a controlled pricing regime is unavoidable.
The government’s argument is by no means water-tight. While under-recoveries are a reality, they do not turn oil refining and marketing firms into loss-making enterprises, because those firms deliver a range of products and services, the prices of all of which are not controlled. If, for example, even if we consider the profit after taxes of the most important oil companies over the last ten years, they have remained positive in all years and quite substantially so in some. Under-recoveries are notional losses that only lower book profits relative to some benchmark. Thus, there is little danger that the industry would be bankrupted even if prices were kept at their earlier levels.
There is, of course, the question of fairness. Since there are many players involved in the industry there is no reason why under-recoveries should affect only the books of the oil marketing companies. The returns on net worth earned by the oil marketing companies are far more volatile and vulnerable than that garnered by the upstream oil companies (ONGC, OIL and GAIL). The burden should be shared by the latter, which receive prices that more than compensate for costs; by the central government which garners revenues in the form of customs duties and excise duties (besides dividends from the oil majors); and by the state governments which benefit from sales taxes. This requires, for example, the oil refineries to offer discounts when selling products to the OMCs and for the government to reduce the taxes it levies on oil products in order to absorb part of the under-recovery.
The controversial question as to how the burden should be shared was analysed by a committee headed by C Rangarajan appointed to examine the issue. The committee spent much of its energies on the different stages through which imported and domestic crude is converted into petroleum products supplied to the consumer, and the cost escalation that arises as the raw material passes through these stages. Through that analysis, it found that the upstream oil companies (or oil companies other than the oil marketing companies, such as ONGC, OIL and GAIL) had recorded profits to the tune of Rs 15,600 core in 2004-05 and Rs 14,600 crore in the first nine months of 2005-06. That the oil industry’s contribution to the central exchequer in terms of duties, taxes, royalty, dividends etc. rose from Rs 64,595 crore in 2002-03 to 77,692 crore in 2004-05. That the petroleum sector alone contributed around two-fifths of the total net excise revenues of the centre. That taking Delhi as an example, central and state taxes amounted to 38 and 17 per cent respectively of the retail price of petrol and 23 and 11 per cent respectively of diesel. And that the incidence of taxes as a proportion of the retail price in India was, higher than in the US, Canada, Pakistan, Nepal, Bangladesh and Sri Lanka, though they were lower than in many countries in Europe known for their higher average level of prices. In sum, the numbers suggested that there was an adequate buffer to shield domestic consumers from the effects of increases in international prices, so long as segments that can afford to take a cut in petroleum-related revenues because they have alternative sources of resource mobilisation are willing to accept such a reduction.
MOVE FAVOURING
PRIVATE COMPANIES
Thus, if at all there is an argument for price deregulation, it can only be that it is for some wrong reason to expect the oil companies and the government to bear the burden of the irrational fluctuations in the global prices of oil. That argument too is difficult to justify. When the industry was wholly in the public sector, the prices of oil products were treated as one set of instruments in the tax-cum-subsidy regime of the government. Any losses suffered by the industry or any shortfall in funds required for investment as a result of price regulation were to be met from resources mobilised through progressive taxes rather than from regressive price increases. The government should have adopted a similar approach in the current situation and focused on rules that can and have been devised.
It needs to be noted here that oil prices have not been held constant in recent history. Rather, the average annual increase in prices over the last two decades indicate that the increase (16.5 per cent) has been much higher in the case of retail prices of petrol, for example, than in the wholesale price index for all commodities (9.3 per cent). The common person has indeed borne some of the burden of volatile oil prices. What the government is arguing now is that the burden of irrational shifts in the international prices of oil should largely be borne by the consumer, even if the burden sharing involved is extremely regressive. In what seems an afterthought, the government has declared in its recent pricing policy announcement that it reserves the right to intervene in the market to protect consumers if prices rise to levels too high or price movements are excessively volatile. Nobody can or has taken that right from the government. It is the government that is giving it up, and exposing the common person to the volatility in international prices that has no rational basis.
The question remains as to why the government is choosing this policy direction. Ideological commitment may be playing a role. But, more importantly, the government’s move seems intended to favour the private companies that have been allowed to enter and expand in this sector. Private companies will treat any shortfall in profits as a “loss” and demand price adjustments. The government seems inclined to oblige.
SURPRISING
MOVE
The move is especially surprising because persisting inflation is already a major cause for concern. The Wholesale Price Index (WPI) figures for May pointed to three worrying trends. First, for the fifth month running, the aggregate annual rate of inflation as reflected in the month-on-month increase in the WPI was near or well above double-digit levels. The figures for May put inflation at 10.2 per cent over the year. Second, the current inflation is particularly sharp in the case of some essential commodities, as a result of which the prices of food articles as a group have risen by 16.5 per cent and of food grain by close to 10 per cent. Finally, there are clear signs that what was largely inflation in food prices is now more generalised with fuel prices rising by 13 per cent and manufactured goods prices by 6-7 per cent.
The immediate and near-term impact of the oil price decisions would be an aggravation of these inflationary trends focused on essential commodities that currently burden the common man. Petroleum products are consumed in some measure by all. Given the fact that these products are universal intermediates, entering into the costs of production of a number of goods and services, the cascading effects of the price hike on the costs and prices of a range of commodities is likely to be significant. With prices of essentials already on the rise, the move threatens a return to the days when inflation was a major economic problem faced by the country. It follows, therefore, that this is the worst time for hikes in and the decontrol of the prices of petroleum products.
The government claims that this was unavoidable because of the “losses” being suffered by the oil marketing companies (OMCs). When the domestic prices of oil products are controlled but the price of imported oil is rising, oil marketing companies receive from the consumer less than what it costs them to acquire the products they distribute. This leads to what are termed “under-recoveries”, which would affect the accounts of the oil marketing companies (Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and IBP) that obtain their supplies of petrol and diesel from the refineries at prices that equal their import price inclusive of customs duty. According to estimates, if retail prices had not been raised, under-recoveries by the oil marketing companies would have exceeded Rs 70,000 crore in the current fiscal year. Since this is unsustainable, it is argued, the hike in prices and a shift out of a controlled pricing regime is unavoidable.
The government’s argument is by no means water-tight. While under-recoveries are a reality, they do not turn oil refining and marketing firms into loss-making enterprises, because those firms deliver a range of products and services, the prices of all of which are not controlled. If, for example, even if we consider the profit after taxes of the most important oil companies over the last ten years, they have remained positive in all years and quite substantially so in some. Under-recoveries are notional losses that only lower book profits relative to some benchmark. Thus, there is little danger that the industry would be bankrupted even if prices were kept at their earlier levels.
There is, of course, the question of fairness. Since there are many players involved in the industry there is no reason why under-recoveries should affect only the books of the oil marketing companies. The returns on net worth earned by the oil marketing companies are far more volatile and vulnerable than that garnered by the upstream oil companies (ONGC, OIL and GAIL). The burden should be shared by the latter, which receive prices that more than compensate for costs; by the central government which garners revenues in the form of customs duties and excise duties (besides dividends from the oil majors); and by the state governments which benefit from sales taxes. This requires, for example, the oil refineries to offer discounts when selling products to the OMCs and for the government to reduce the taxes it levies on oil products in order to absorb part of the under-recovery.
The controversial question as to how the burden should be shared was analysed by a committee headed by C Rangarajan appointed to examine the issue. The committee spent much of its energies on the different stages through which imported and domestic crude is converted into petroleum products supplied to the consumer, and the cost escalation that arises as the raw material passes through these stages. Through that analysis, it found that the upstream oil companies (or oil companies other than the oil marketing companies, such as ONGC, OIL and GAIL) had recorded profits to the tune of Rs 15,600 core in 2004-05 and Rs 14,600 crore in the first nine months of 2005-06. That the oil industry’s contribution to the central exchequer in terms of duties, taxes, royalty, dividends etc. rose from Rs 64,595 crore in 2002-03 to 77,692 crore in 2004-05. That the petroleum sector alone contributed around two-fifths of the total net excise revenues of the centre. That taking Delhi as an example, central and state taxes amounted to 38 and 17 per cent respectively of the retail price of petrol and 23 and 11 per cent respectively of diesel. And that the incidence of taxes as a proportion of the retail price in India was, higher than in the US, Canada, Pakistan, Nepal, Bangladesh and Sri Lanka, though they were lower than in many countries in Europe known for their higher average level of prices. In sum, the numbers suggested that there was an adequate buffer to shield domestic consumers from the effects of increases in international prices, so long as segments that can afford to take a cut in petroleum-related revenues because they have alternative sources of resource mobilisation are willing to accept such a reduction.
MOVE FAVOURING
PRIVATE COMPANIES
Thus, if at all there is an argument for price deregulation, it can only be that it is for some wrong reason to expect the oil companies and the government to bear the burden of the irrational fluctuations in the global prices of oil. That argument too is difficult to justify. When the industry was wholly in the public sector, the prices of oil products were treated as one set of instruments in the tax-cum-subsidy regime of the government. Any losses suffered by the industry or any shortfall in funds required for investment as a result of price regulation were to be met from resources mobilised through progressive taxes rather than from regressive price increases. The government should have adopted a similar approach in the current situation and focused on rules that can and have been devised.
It needs to be noted here that oil prices have not been held constant in recent history. Rather, the average annual increase in prices over the last two decades indicate that the increase (16.5 per cent) has been much higher in the case of retail prices of petrol, for example, than in the wholesale price index for all commodities (9.3 per cent). The common person has indeed borne some of the burden of volatile oil prices. What the government is arguing now is that the burden of irrational shifts in the international prices of oil should largely be borne by the consumer, even if the burden sharing involved is extremely regressive. In what seems an afterthought, the government has declared in its recent pricing policy announcement that it reserves the right to intervene in the market to protect consumers if prices rise to levels too high or price movements are excessively volatile. Nobody can or has taken that right from the government. It is the government that is giving it up, and exposing the common person to the volatility in international prices that has no rational basis.
The question remains as to why the government is choosing this policy direction. Ideological commitment may be playing a role. But, more importantly, the government’s move seems intended to favour the private companies that have been allowed to enter and expand in this sector. Private companies will treat any shortfall in profits as a “loss” and demand price adjustments. The government seems inclined to oblige.
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