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Mainstream, Vol XLVI No 44

Beyond Politics

Editorial

Saturday 25 October 2008, by SC

While the global financial crisis continues unabated despite fire-fighting by major players on the international scene, the IMF has slashed growth projections for the world economy with a sombre warning: “It is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s.”

Although spared for the present the extreme consequences of the crisis, India too is feeling the heat—FIIs are pulling out and the Sensex lost 2000 points in one week, the rupee’s exchange rate is under considerable pressure and at one point last week it plunged to Rs 49.30 against the dollar before recording marginal improvement, forex reserves have declined by $ 11.36 billion since August-end and, above all, the markets are facing severe credit crunch and a kind of liquidity crisis seldom witnessed in the past. In the circumstances the RBI has cut the CRR by 1.50 percentage points, a step expected help release Rs 60,000 crores.

At the same time it cannot be denied that whereas banks in the developed world, despite huge rescue packages, have failed to win back the investors’ confidence, the Indian banking system, primarily based on public sector banks, has been able to effectively withsatnd the crisis till date, and as underscored editorially in The Hindu, Public ownership of banks has proved to be a decisive factor in retaining the confidence of savers.

This is noteworthy. Also significant is the return to the role of the state. As cogently pointed out in an article in The Times of India,
...the state has stepped in when the capitalist caravan has tottered. This is precisely what is happening now. The world is convulsed by a crisis that the market alone cannot rectify. If indeed the market were such a fine self-regulating creature, we would not be here today... For better or for worse, the government is looked upon as the lender-and-fixer of last resort. This is not to argue for massive or permanent state intervention in the market but to recognise the symbiotic relationship between the two.
...In the market of ideas, the stock of the state is still secure. (“State stays invested” by Sindhu Manjesh, TOI,
October 16, 2008)

On the domestic political front the Mayawati-Sonia theatrics relating to UP apart, the meeting of the National Integration Council on October 13 found the politicians speaking on predictable lines—the BJP CMs assailing the Centre’s ‘soft’ approach on and ‘indifference’ to the menace of terror, and the Congress’ partners in the UPA, notably Laloo Prasad and Ramvilas Paswan as well as Amar Singh, vociferously demanding the banning of Bajrang Dal in the wake of its depredations in Orissa and Karnataka in particular. The attacks on Christians resorted to by the Hindu extremist fringe following the killings of VHP leader Swami Lakshmananda Saraswati and his associates in Orissa’s Kandhamal are of serious nature as the atrocities persist to this day notwith-standing the strong denunciations of such acts across the globe. There is also no doubt that the governments of these two States (Orissa and Karnataka) had been initially reluctant to take appropriate measures to protect the minorities. In the prevailing scenario invoking Article 35 assumes legitimate importance. This is a matter which must engage the attention of every concerned citizen without any political axe to grind—politics should not be allowed to vitiate the atmosphere in such matters.

As regards terror, concrete steps must be evolved to combat the terrorists without stereotyping a particular community as happened in the Capital’s Jamia Nagar during and following the encounter on September 19. The National Security Advisor has justified the police action but his contention carries little conviction among residents of the area—a transparent manifestation of the poor credibility of the organs of state power among large sections of the public. The anguish of the minorities has also been eloquently underlined in the painful observation of such a veteran Congress leader as Mohsina Kidwai on her ‘Muslim identity’.

Unfortunately the NIC meet could not address this complex problem in its entirety as it was hostage to the acrobatics of the politicians. What is more, the human angle in such targedies was by and large missing. This needs to be rectified at the earliest in the interest of secular democracy that we must defend and uphold with all our strength at this juncture.

October 16 S.C.

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