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TheIndian EXPRESS
www.indianexpress.com

WEDNESDAY l SEPTEMBER 5 l 2012

The Indian EXPRESS

BECAUSE THE TRUTH INVOLVES US ALL

ESERVE Bank of India Governor D. Subbarao has laid out the governments difficult predicament. India is committed to the Basel III framework for bank capital regulation, he says. The framework requires adding Rs 5,00,000 crore to the capital of the Indian banks by March 2018. Of this, Rs 1,00,000 crore has to be government cash, to be put in the safe of the public sector banks, if the present level of its shareholding in the banks continues. This would require the finance ministry to sequester Rs 20,000 crore each year towards these banks. Since these are part of the Tier-I capital of the banks, the government cannot get away by issuing bonds with or without a lock-in period as an alternative to coughing up the cash. The alternatives, then, are clear. Either UPA 2 creates more havoc with the fisc by borrowing even more from the market each year to keep the banks liquid or it accepts the inevitable and agrees to reduce its shareholding below the threshold of 51 per cent in these banks. The decision is difficult and not only for this government even Yashwant Sinha, having announced the measure as finance minister in the NDA government, could not implement it. The alternative is to starve the economy by

RBI governor spells out the problem: government cant let banks grow without cutting its holding
refusing to let the banks grow. As the governor pointed out, India is trying not only to grow, it is also trying to make the process a more manufacturing-driven one. Since each one per cent rise in manufacturing-led GDP growth demands more bank credit than a serviceled one, the demand on the banks can only rise. It is impossible to believe that any government can afford to ignore these challenges. Four years after Lehman in September 2008, governments could point to the advantages for risk capital of a majority holding in banks, but that cannot be at the cost of the economys growth. Since June, when the RBI announced it had adopted the Basel III norms for the Indian banking sector in line with global trends, Subbarao has articulated his concerns at various fora. On Tuesday, he presented his most detailed analysis yet of the available options. As RBI governor, he can only go this far. An alternative to the government safeguarding its majority holding in public sector banks, is to provide additional shareholding rights to the government even when its stake in the banks slips below the majority limits. These alternatives must be assessed and decided upon soon and that means some tough decisions ahead.

Growth pangs

AMIL Nadu Chief Minister J. Jayalalithaa cracked down on fun and games with Sri Lankans after she discovered that Royal College Colombo had played football with a Chennai Customs team in Tamil Nadu. The next scheduled inter-school game was cancelled and she suspended the official who had permitted the game to take place in a state-run stadium. Meanwhile, Naam Tamizhar Iyakkam activists have raised the pitch on Sri Lankan students on a cultural exchange programme in Trichy. A couple of days ago, the Sri Lankan government issued a travel advisory to its citizens, warning them of the increasing number of instances of intimidation in Tamil Nadu. To prove how real the threat was, buses carrying a group of Sri Lankan tourists from the Velankanni shrine to the airport were attacked the next day. This is a highly regrettable turn of affairs. No matter how strongly felt, a political disagreement with a neighbouring nation should never flare into a rejection of their people, a severing of sporting ties and cultural connections. Rival political formations in Tamil Nadu have competed to condemn the Sri Lankan govern-

Her grandstanding on Sri Lanka cannot be allowed to drive away football teams, pilgrims
ments record, after its brutal civil war in 2009 against the LTTE. The AIADMK and DMK had earlier protested the Indian military training army personnel from Sri Lanka, a sentiment the Centre disregarded by simply shifting the training out of Tamil Nadu. Jayalalithaa had also demanded economic sanctions against Sri Lanka until it resettled the Tamils uprooted in the 2009 violence. And yet, it must be remembered that this question is not a narrow matter for Tamil Nadu India is deeply invested in a fair outcome. It has stakes in Sri Lanka honouring its commitments to reconciliation with institutional mechanisms that devolve power to the provinces and ethnic Tamils. Extracting accountability from Sri Lanka is a delicate diplomatic endeavour. India voted against Sri Lanka at the United Nations Human Rights Council, even as it extends assistance for rehabilitation and reconstruction. This strategic finessing may not suit sentiments in Tamil Nadu. It is important, however, to separate matters of high politics and foreign policy from informal peopleto-people contact. Tamil Nadus chief minister only appears meanspirited by taking on students, sportspersons and pilgrims.

Jayas low blow

OMPETITIVE politics within the legislature is threatening to undermine the space and legitimacy of executive authorities to implement social and economic policies in the country. The Congress-led UPA may have been weakened to a point where any observation by the CAG becomes a millstone around its neck, even if the CAG is seen as excessive in the way he interprets the alleged lapses by the government. The danger is that any newly elected government at the Centre will start with a disadvantage it must constantly bear in mind the CAGs new methodology of judging the role of the government in economic development. After all, maximising revenue from resource allocation need not, and indeed cannot, be the end objective of all government policies. This aspect of governance needs to be remembered even as the BJP publicly declares the sheer futility of the CAG report on coal being taken to the Public Accounts Committee (PAC), which is headed by an opposition leader. By doing so, the opposition is inadvertently investing the CAG with a moral righteousness that tends to show other institutions, like the PAC or even Parliament, in a poorer light. This may not be healthy in the long run. There is a larger politics at play that will come back to haunt any coalition government that is voted into power in 2014. If one carefully examines the prime ministers reply to the CAGs observations on various aspects of the coal allocation policy, it becomes clear that this is only the beginning of a long drawn out tussle between the statutory auditor and governments at the Centre and the states. The prime minister has politely indicated that the CAG has no business advising the Centre and the states on the pace of implementing new legislation that affects the powers enjoyed by the states in our current constitutional framework. It is evident that the states

Controller General
Investing CAG with a moral righteousness is not healthy, it could cramp policymaking
M.K. VENU
would be loath to give up their discretionary power to recommend private parties for coal allocation. The chief ministers of all states with coal and lignite reserves had opposed auction as a method of allocating coal blocks. The manner of future coal allocations will have to be resolved politically. There is no other way of doing it in coalition politics. The CAGs homilies in this regard have really little meaning. For instance, there is another highly contentious bill in Parliament that is taking a long time to fructify, simply because it has an impact on the power of the states One cant say how many zeroes the loss figures in land allocation would have. Logically, the CAG, which also has the mandate to audit state governments, can ask for a review of all such land allotments by the states. It may even appear morally and ethically right to do so. But would it be practically feasible to undo all such contracts, going back a decade? This is the question that needs to be thought through properly. It is true that governments rarely come up with optimal policy decisions. Such decisions emerge from political economy contexts

LETTER OF THE WEEK AWARD

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The prime minister has politely indicated that the CAG has no business advising the Centre and the states on the pace of implementing new legislation that affects the powers enjoyed by the states. The manner of future coal allocations will have to be resolved politically.
to allocate land for private purposes. The new land acquisition bill seeks to lay down norms for the acquisition of land for public and private purposes. Since land is a state subject, the state governments want freedom to decide on the details of how the market price should be determined when agriculture or urban land is earmarked for public or private sector projects. In the past decade or so, several lakh hectares of agricultural and urban land must have been allotted by chief ministers for industrial use. Following its current morally stringent line of inquiry, the CAG might wish to calculate the difference between the price at which land was doled out by the states over a period of time and the current market price, which may be several times the value of the original allotment. that may not necessarily pass the strictest of moral and ethical tests. Even if excessive and scathing in their observations on the way the political economy works, constitutional bodies like the CAG or the Supreme Court play an undeniably important role in bringing about lasting corrections in various institutions of governance. However, this must be seen as a gradual, even if somewhat painful, process of change. Importantly, this process should avoid major ruptures in the system of contracts and commitments that the state apparatus enters into with the domestic and global business community. There must be some continuity in the evolution of both capitalism and the institutions that regulate it. Institutions like the higher judiciary and the CAG must actually ensure that sharp corrections

take place even as this continuity is not disturbed. In some ways, this has also happened in recent years. It is evident that big business today is far more wary of the consequences of tweaking the system than it was five to seven years ago. However, if constitutional bodies like the Supreme Court and the CAG start prescribing policy on a routine basis then the continuity and balance in governance structures are seriously affected. Of course, you could theoretically take the view, like Team Anna does, that the continuity provided by the constitutional framework must be shaken and disrupted. One is not sure whether that sentiment is shared by many. In this regard, the chief justice of the Supreme Court, S.H. Kapadia, brought some fresh perspective to what is seen by some as the judiciary encroaching on the governments domain. While broadly concluding that various constitutional bodies must stay within their remit, Justice Kapadia said the judiciary must not venture to answer questions that it cannot. He implied that the questions to be addressed by the executive or the legislature must be left to them. Otherwise there would be chaos to contend with. Kapadias warning is quite timely and the CAG may want to heed the chief justices nuanced formulation. Kapadia explained the tension between the higher judiciary and the executive as flowing from two distinctive moralities. One morality flows from established principles of jurisprudence. The other one, practiced by the executive, is a utilitarian morality. Of course, this utilitarian morality flows from the nature of the political economy, which itself is a complex interplay of many factors. In a sense, it wont always adhere to the CAGs moral standards either. But then that is a reality one has to live with until our utilitarian polity is permeated by greater moral content over time. The writer is managing editor, The Financial Express,
mk.venu@expressindia.com

EDITOR
APROPOS The return journey (IE, September 3), people from Assam have started trickling back to Bangalore, reassured by the Karnataka governments response to the crisis. They have been promised that they will get their jobs back, with no cuts in their salary for the period that they were away. Encouraging them to return quickly, the state government has assured them that their safety and security will be seen to. The governments response is commendable. However, it should still be on high alert. Mischiefmakers and rumour-mongers cannot be allowed to cause such an exodus again. Other states should also draw lessons from this episode. Satwant Kaur Mahilpur

Letters to the

Reverse gear

MUKUL MUDGAL
HE recent judgment on Ajmal Kasab has brought to light a wholesome but unsung aspect of cases in the Supreme Court and the high courts the practice of appointing an amicus curiae. In simple language, amicus curiae means friend of the court. Whenever the court finds that an indigent litigant is unable or unwilling to represent his case, and it is one where representation is essential, a willing and capable lawyer, whose ability is known to the court, is requested to represent the cause. The lawyer so appointed represents the cause not in the expectation of remuneration but as public service. In several major judgments on prison reform, terrorism, environment, mentally deficient litigants, freedom of the media, unauthorised occupation of government premises and unauthorised constructions, decisions have been based on the able assistance provided by the amicus. In fact, it is considered a great honour professionally to be appointed amicus curiae, as it is a tacit recognition by the court of the lawyers ability and integrity. In many high-profile PILs, the courts have appointed an amicus curiae, not only to assist them in formulating a viewpoint but also to make inquiries and reports. This has led to the public perception that the amicus is a neutral lawyer, a kind of third

As in the Kasab case, the amicus curiae embodies the ideal of impartiality
voice. This is the modern amicus curiae. There is another kind of amicus curiae, appointed in cases that are not PILs, where important questions of law are involved and both parties are represented but the court still wants a senior lawyer to assist it. However, the traditional amicus curiae is one who is asked to represent the accused in a criminal appeal, either when he sends his appeal to court through jail or when he does not engage his own lawyer to defend him in an appeal by the state. Such an amicus is nothing but a defence lawyer, although as a court-appointed lawyer, greater standards of obpanel. Instead, it asked a senior counsel to represent him. Significantly, most lawyers would forgo paid briefs to appear as amicus curiae. Indeed, this is the level of commitment that the courts expect, and, in most cases, get from the amicus. It is also customary for the courts to acknowledge the contribution made by the amicus in judgments. An amicus is extremely essential in cases where the personal liberty of the accused is involved. These cases can be divided broadly into two categories. The first category includes cases where the accused is too poor to prosecution, that is, the government lawyer. This would ensure that the constitutional guarantee is not illusory. Cases in the second category are those where the accused declines to represent himself in court or is incapable of doing so. However, the fairness of the Indian legal system is demonstrated by the fact that even those accused in cases of terrorism such as Kasab, who sent a jail petition and did not have a lawyer, and members of the LTTE, who refused to represent themselves in court were provided capable counsel. The legal fraternity should be proud of the outstanding standards set by the prosecution lawyer, Gopal Subramaniam, who charged a token amount of Re 1 in the 26/11 case, and by Raju Ramachandran, who took no fee for appearing as amicus curiae in the Supreme Court, even though both invested much time and effort in the case. The Kasab case illustrates a glorious tradition of impartiality inherent in the Indian judicial system. Having received considerable international media coverage, because some of the victims were foreign nationals, the case will also help enhance Indias image in the global forum. The writer is a former chief justice of the Punjab and Haryana High Court
express@expressindia.com

A friend and lawyer

THIS refers to the article Nitish surely PM material: BJPs Sushil Kumar Modi (IE, September 3). Bihars deputy chief minister has held up Chief Minister Nitish Kumar as the NDAs possible prime ministerial candidate for the polls of 2014, sidelining Gujarat CM Narendra Modi. Many believe the NDA will field Narendra Modi as its next prime ministerial candidate. Meanwhile, there is speculation that the Congress trying to woo Nitish Kumar into joining the UPA. If the Bihar CM succumbs, the BJP will have no choice but to pick Narendra Modi as its prime ministerial candidate. A. Rufus DSouza Pune

In the race

FREEZE FRAME

Most lawyers would forgo paid briefs to appear as amicus curiae. Indeed, this is the level of commitment that the courts expect and, in most cases, get.
jectivity and fairness are expected of him. The Supreme Court and the high courts maintain panels of lawyers who are assigned amicus work in criminal appeals. For many young lawyers, it is a matter of prestige to be empanelled. There will, of course, always be the possibility of lawyers clamouring to be appointed as amicus in high profile cases because of the publicity that can be generated. Perhaps because of its international significance, in the Kasab case, the Supreme Court decided not to make an appointment from its regular amicus appoint a lawyer to defend him, particularly in the trial courts. The Supreme Court has mandated that legal aid, that is, a lawyer representing a poor accused, is a must in criminal cases. But legal aid authorities are hampered by the lack of funds to pay such lawyers. Given that payment for legal aid is negligible and the accused is in jail, the quality of representation suffers. Yet the provision of legal aid is a constitutional guarantee, the failure to do so could vitiate the trial. It is essential that the legal aid lawyer is paid the same fees as the lawyer representing the

CONTROVERSIES over films with Sikh characters have often cropped up in recent years, Ajay Devgn starrer Son of Sardaar being the latest (Son of Sardaar does not hurt sentiments: Ajay Devgn, IE, August 30). It is surprising that directors and producers succumb to stereotypes when portraying certain communities. In the information age, it is not difficult to find out enough about such communities to portray them with authenticity. Some believe the controversies only mean more publicity for the films. Satinderpal Singh Fatehgarh Sahib

Knowledge deficit

No rite of passage

THIS refers to A depleted debate (IE, September 4). It is indeed sad that the three bills mentioned in the editorial were passed in Parliament without any debate. Debate brings out the loopholes in the bills and throws up ways to fix them. The bills that were passed might have had shortcomings that were not addressed. The parliamentary standstill has brought things to this pass. The coal row has put everything else on the backburner. Bal Govind Noida APROPOS India triumph as young guns show they belong (IE, September 4), the old guard of Indian cricket is invaluable, but perhaps it is time for them to hand over the torch. Mahendra Singh Dhoni, Virat Kohli, Cheteshwar Pujara and Ravichandran Ashwin have proved their mettle in the recent series against New Zealand. M.C. Joshi Lucknow

HERE is one overriding task for President Obama and the Democrats at the convention in Charlotte this week: to give substance to the vision of a second Obama term... Embedded in this convention mission are numerous tasks. One is defending the achievements of the first term. Despite the difficulty of answering the are-you-better-off question in the midst of a sluggish recovery, Obama needs to explain how his actions eased the economic crisis and took on long-standing challenges such as extending health-care coverage to

The Obama vision

PRINTLINE
millions of uninsured Americans. At the same time, Obama must explain why he was unable to fulfil his promise to overcome the broken politics in Washington. Many Republicans were determined from the start to derail his agenda and prevent his reelection. Yet an implacable opposition is hardly the whole story. At key moments of his presidency, Obama ducked the duty to lead in forging bipartisan solutions to the nations biggest problems. From a leader in The Washington Post

Make way