Title: Prostrating at
the FII altar
Author: Olga Tellis
Publication: The Observer
of Business and Politics
Date: April 11, 2000
IT is interesting to
watch how the alleged match-fixing by the Indian bookies in collaboration
with South Africa's cricket captain Hansie Cronje is developing. And maybe
one would like to take a bet that the world and its Indian chamchas in
politics, business and the media will soon say that if India continues
to treat foreign cricket teams in this manner then foreign teams will have
to rethink about coming to play on Indian soil!
This is the standard
threat held out against our beloved country ever since the pernicious doctrine
of globalisation was adopted in 1991-92.
Just last week some foreign
institutional investors (FIIs) and their Indian cronies brought India's
finance minister to his knees as they were upset that the income tax authorities
were looking into a few instances of what they maintained was 'gross abuse'
of the double taxation avoidance treaty between India and Mauritius.
At least two foreign
funds decided to quit the country against this move. So finance minister
Yashwant Sinha decided to summon the I-T officer concerned and asked him
to withdraw the action taken by the department. The finance minister has
the authority to do this, but does he not owe the country an explanation
as to whether this step was right or wrong? Does this mean that what the
I-T officers did was wrong? And if they were not wrong, does it mean that
the finance minister is going to condone wrong- doing and misuse of a treaty
by unauthorised persons?
The point one wants to
make here is how long are we going to kowtow to foreigners and their investments
in such a slavish manner. At what cost do we need these investments?
Where is India's sovereignty
if anyone from across the seas can hold out a threat even when we are only
implementing the laws of our land? I am only an ordinary citizen but I
would like to take up issue with the Prime Minister who, the other day,
lambasted those accusing him and his government of selling the country.
Our policies are being dictated by the IMF and the World Bank. We are being
threatened every now and then and we submit humbly to these threats. I
agree that we have been resisting signing of the CTBT and for that kudos
to Vajpayee. But in the most sensitive areas like food security, small
and medium scale industries, imports, action against errant foreign banks
and others, the government abdicates its sovereignty to please the so-called
$ cronies.
For instance, when one
section of the population said that Enron's power would be unaffordable
there was another which said that nothing could be done about it because
power was needed and they came when no one wanted to come. Or so we were
told. Then everyone said that Enron should be asked to bring down costs
for the second phase of the Dabhol Power plant. The Sharad Pawar Congress
and the Sonia Congress had in their election speeches, said that they would
take a second look at Phase II of Dabhol. But five months have passed since
they came to power and there has been no word on this.
On the contrary, Pawar's
brother-in- law Dr Padamsingh Patil who is also the minister for energy
told the Maharashtra assembly last week that the Enron power was being
used only during peak periods. When asked why they were not using Dabhol
power, Dr Patil said that it was not feasible to use Dabhol power when
demand is lean, as it was more expensive than power generated by MSEB.
This is very ironical, because we were told that once the Dabhol power
came on stream the state's present power demand would be met. However,
there is load-shedding in the state twice and sometimes thrice a week.
Enron is a base-load power station and we have to pay for power whether
we use it or not. This was the agreement made with Enron when Pawar was
the chief minister of Maharashtra.
So now we have this state-of-the-art
white elephant because the Maharashtra State Electricity Board cannot afford
to pay its charges which, according to MSEB chairman Asoke Basak, were
Rs 4.77 per unit in February as against MSEB's tariff of Rs 1.37 per unit.
The crisis can be temporarily resolved if the Maharashtra Electricity Regulatory
Commission permits MSEB to hike tariff rates as it has proposed, in order
to boost its revenues by around Rs 2,000 crores per year. But MSEB also
admits that this is only a temporary reprieve because Dabhol's monthly
bill is around Rs 160 crores to Rs 180 crores.
Even if the Maharashtra
government collects its arrears totalling Rs 4,000 crores it will still
not be in a position to pay Enron's bills, but there is nothing it can
do to make this power and gas giant to bring down costs as they are paranoid
about sending so- called wrong signals to foreign investors. There is no
attempt on the part of either the Centre or the state, where Pawar's party
holds the energy portfolio, to get the state a better deal without giving
Enron more facilities that it is asking for.
Are all these instances,
and countless more, not enough indication that India had abdicated her
sovereignty to the West? One has always held a firm belief that globalisation
is nothing more than new colonialism in a different garb. And it is a shame
that in the 21 st century, Independent India should succumb to this. The
Prime Minister's rhetoric fools no one but himself.
Malaysia was one of the
first countries to experience the true taste of globalisation. The entire
economic system can be destroyed once you allow free play which is what
the purveyors of globalisation want.
In this context it was
disappointing to read the top executive of a leading financial institution
reportedly telling students of a management institute that globalisation
is the best thing that could have happened to India. It has given opportunities
to the highly skilled and knowledge-based human resources of the country
to emerge in a big way and turn the country into a new power house of the
world, she said. One fails to see how globalisation has helped. Liberalisation
of the economy may have helped.
But more than this, India
has always been a power house of knowledge-based human resources since
the fifties and the sixties when first our maids and nurses with their
human skills and then our doctors, engineers and IIT graduates with their
education and skills went out to power hospitals, health centres and manufacturing
complexes of the world. So there is nothing new when the computer savvy
individuals are being tapped by the world which has a shortage of computer
trained people.
Unless those who guide
India's destiny have a pride in the country and its people our country
cannot be sovereign when its decision-making is influenced so significantly
by the greed and selfishness of purveyors of globalisation.
We were told that the
objective of globalisation was to increase economic prosperity and not
bleed the country. One judges measures by their results and what we see
is very different from what we are experiencing.
How, for instance, does
one justify loss of revenue that the I-T department will experience from
having to withdraw proceedings initiated against those FIIs allegedly abusing
the double tax avoidance treaty with Mauritius?
If the whole game is
to be economic prosperity for a few individuals then what is the whole
objective of globalisation? It also indicates the inability of the government
to enforce any kind of law or rule within the Indian state.
We seem to be holding
ourselves to ransom from cricket to taxation and it is all so visible.
If this is so where is
the need for having a government to maintain a regulatory system and an
orderly society if it cannot perform its task for which it is elected at
great cost (Rs 800 crores) by the people of India? Why do we need a government
if it cannot implement its basic laws?
One cannot solely blame
foreign investors who come here for profit and profit at any cost.
The FIIs are here to
seek profit and the rate of profit is quite high as capital seeks its way
all over the world and goes where it can feed on most. It is estimated
that $1.5 trillion seeks its way all over the world daily. There is an
unquenchable fire in its belly. The turnover of this money is more than
the commodity trade of the world.
So naturally they would
like to have ideal conditions to operate in, one better than the other
and they will set up tax havens and want laws to be bent for them. But
should an elected government mortgage the future of the people to their
insatiable greed?
