The Case for Uniform Civil Code

The term Uniform Civil Code (‘the UCC’) denotes a small field of civil laws relating to marriage, succession, maintenance and adoption. However, given its intimate relationship between religious injunctions, practices and beliefs of communities, any discussion on streamlining these laws into a single codified secular legislation is fraught with risks and raucous contentions. Some see it as an imposition of majoritarian hegemony on the minority community (which currently follows its own personal laws) and others see it as an act of wanton destruction of traditional and religious identities. “Identities” which they say “were nurtured and preserved by the communities from time immemorial”.


This debate takes us to the question that goes into the heart of the matter. “Should traditional and religious practices howsoever controversial, regressive and archaic be accommodated at every cost or should the law makers strive to achieve the ambitious goal of our constitution being equality and fraternity for all?” It also takes us to the deeper question on nationhood itself i.e. “Should a national identity be a mere agglomeration of religious practices of various communities or can the nation have a distinct identity of its own which is secular, progressive and modern to which various communities make small sacrifices so that the nation’s constitutional mandate is achieved and a just and fair social order is established?”


Any answer to these questions is fraught with risks. The risk of status quo versus the risk of perceived state authoritarianism by members of the minority community. Some say it is for minority community to decide for itself what it really wants and uniform civil code must not be established. However, the framers of Indian Constitution were convinced that certain amount of modernization is required if the overarching goal of our constitution Equality and Fraternity for all especially to the women is to be achieved.


The Story of the Hindu Code Bills

Let’s consider for example another debate that happened in the late 1940s. The debate was on Hindu Code Bills. Jawaharlal Nehru, a popular mass leader was suddenly facing his deepest hour of crisis. His law minister Dr Ambedkar, had introduced the Hindu Code Bills in the Parliament. The Hindu Code Bills were arguably the most radical and the most egalitarian piece of legislation of its time. These set of legislations on marriage, succession and adoption sought to override the authority of various traditional practices and religious texts to bring radical social change in the society. For the first time the Hindu Code Bill sought to give the right of divorce to the Hindu Women.


Under Traditional Hindu law, marriage was a religious sacrament and by definition was an indissoluble union. Under the Hindu Code Bills, a woman would be free to divorce her husband at will and would suddenly become the master of her own destiny, the captain of her own fate. A radical social order was about to herald.

Dr Ambedkar had earlier observed “Political democracy without social democracy has no meaning” and in pursuit of this lofty ambition of gender equality, he decided to stake it all. These two great men (Nehru and Ambedkar) sought to irretrievably alter the social tapestry of a largely Hindu nation with a civilization that dated back to 5000 years.


However, this radical notion of equality did not go down well with many people. Large protests were held not only by the religious supremacist but also from the members of the congress party itself. Large rallies were held against the bills. Numerous organizations were formed. They lobbied to defeat the bills and massive amounts of literature were distributed stating that the Hindu Civilization was about to end forever. The critics argued that divorce by women was against Hinduism because to a Hindu the marriage is not a contract but a religious union. The protestors argued that if equal property rights were to be given to women, the Mitāk arā concept of a joint family would crumble and along with it would crumble the foundations of the Hindu society.


While the Hindu code bills was entirely defeated, Nehru in 1956 passed the Hindu Marriage Act and other legislations like Hindu Succession Act, thereby putting an end to the right of a Hindu man to have unlimited wives and also gave legal right of divorce and property rights to the Hindu Woman.


One may rightfully ask if the Hindu man can sacrifice the right to unlimited wives after 1955 and agree to share property with their wives in pursuit of a unified national identity and constitutional mandate, then perhaps the minority community can also consider accepting the Uniform Civil Code which ushers a new era of gender justice for women of the minority community.

And to those critics who claim that there would be large scale opposition to the code, it must be said that the minority community of today is far more participative in nation building exercise than was the Hindu community when Hindu Code Bills were to be passed.


Constitution and Gender Equality


The Constitution of India sought to give every man and woman of India equal human rights despite their living in a deeply patriarchal society. However to achieve this ambitious goal of our constitution, one must synchronize personal laws of major religions of the nation to create a common civil code for all Indian Citizens. It is with this intention, the makers added the clause in Article 44 of the Indian Constitution which states “the state shall endeavour to secure for the citizens a uniform civil code throughout the territory of India”


The Hon’ble Supreme Court has repeatedly emphasized the need of UCC to settle the ambiguity which has arisen due to the different interpretations of various personal laws. For example, there are at least six schools of jurisprudence among Muslims, four among Sunnis and two among Shias. The Indian Muslim Personal Law is a convoluted amalgam of self-contradicting principles from different schools, but most particularly the Hanafi branch of Sunni legal belief.

The confusion caused by differing interpretations necessitates a common law. On this the Supreme Court had remarked that the personal law of Hindus such as relating to marriage, succession and the like have all a sacramental origin, in the same manner as in the case of the Muslims or the Christians . The Hindus along with Sikhs, Buddhists and Jains have forsaken their sentiments in the cause of national unity and integration. It is only fair that the minority community also accept the same.

In the Muslim personal law, there is discrimination against the wife in three ways :

(1) A Muslim husband can get a divorce immediately without going to court by immediately pronouncing a triple Talaq, whereas the wife who seeks divorce has to go to court and file a petition which usually takes years to decide.

(2) The Muslim husband need not give any ground for divorce and he can divorce his wife merely because he has lost interest in her, whereas a Muslim wife has to plead some ground for divorce mentioned in section 2 of the Dissolution of Muslim Marriages Act, 1939, and she has to produce witnesses or documentary evidence in support of that ground, and prove it.

(3) A Muslim man can marry 4 wives, but a woman can, at a time, have only one husband. Today, polygamy is legally permitted to Muslim males. It may be noted that the Hindu male upto 1955 could have unlimited number of wives, whereas a woman could have only one husband. This law was altered by the Hindu Marriage Act, 1955, which provides for monogamy for both the sex.


Strategy for implementing the UCC

The most important question perhaps is how can we give effect to this constitutional mandate? One such strategy would be to have an ‘optional code’ meaning we frame a common code but make it optional for a period of time. Hence, instead of forcing one uniform law down the throats of people, we must give people a sufficient amount of time to appreciate the new law and when a substantial part of the masses accept it then it can be made compulsory. The second strategy would entail a gradual transformation to a more uniform law by ‘incremental changes’. This would require that uniformity be brought about by judicial decisions and simultaneous legislative amendments. The Supreme Court would first declare a law as unfair, unjust and unreasonable followed by an enactment of a more just and uniform law by the legislature. Therefore, there would be a gradual shift from diversified, unequal laws to a more unified comprehensive code a .k. a UCC.


The third and the most direct strategy would be to prepare a Draft UCC and open it for public and parliamentary scrutiny. One may note that these strategies are not mutually exclusive but should operate at tandem towards the same goal.


Let voices of the Moderates be heard

In his recent book ‘India’s Muslim Spring: Why is Nobody Talking about It?’ Author Hasan Suroor argues that since independence a “seismic” and “tectonic” shift has taken place in Indian Muslim community with an emergence of “liberal spring” among new generation Muslim. While, the elder generations of Muslim were “fundamentalist” and “emotional”, “intolerant” of freedom of speech, prioritized “cultural” and “identity” issues over substantive ones and had not so egalitarian view of women folk, the young Muslims in contrast are the opposite of their elders; they, are “tolerant”, “pragmatic”, “moderate”, “secular”, “cosmopolitan”, “optimistic” and “confident” and “forward-looking” as well as “nationalistic” despite their assertive Muslim identity. The popular narrative that Muslim community is represented by the orthodox needs to be challenged relegated to dustbins of history. The Shahi imam of Delhi, the Ulemas and moulanas with their fatwas are not representative of Indian Muslim of today just as the Hindu right does not represent the Hindu community. The new generation of Muslims is ready to rid the community of its insular and sectarian approach and they need to be directly consulted to usher a new era of UCC. And that will usher the desired change.

An American Ghost Story

An American Ghost Story:

Various Research show that medicine prices in the United States are among the highest in the world even when compared to other developed countries. To the bottom 20 percent of the American citizens, most medicines are simply un-affordable. To save money, the US. Customs estimates that at-least 10 million U.S. citizens bring in medications from abroad. An additional 2 million packages of pharmaceuticals arrive annually by international mail from countries like Thailand, India, and South Africa. The US Consumers are also shopping vigorously at low-cost online pharmacies in India, the UK, and other countries where they can save money up to 80 percent or more when compared to the prices in the United States. Perhaps not unconnected with the above is the fact that Big Pharma companies in the US make obscene levels of profits. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries in the US.


But then why does this phenomenon occur? Why doesn’t the US have price controls on medicines like other developed and developing nations? The answer is because the United States believes in capitalism. Since the days of Ronald Reagan, the US has ordained itself to become the high priest in the temple of capitalism. Its article of faith is that “Free Markets” would “automatically bring down prices” and will automatically lead to increased investment in pharmaceuticals industry and also encourage competitions and boost innovation.


However, as the American experience now clearly shows, Free-market policies followed by the US have miserably failed to keep the medicine prices low. Free capitalism as an arbiter of public health’s destiny has been disastrous failure and the national pharmaceutical policy followed the US over the decades had failed the test. Because the bottom 20 percent of the US population simply cannot afford the prescription drugs, the price controls are now seen as an essential part of every nation’s strategy if it wants to keep the prices of medicines low and to ensure access to medicine by its citizenry.


However, the US may be far from Price Controls on medicines, not only due to its ideological bent of mind, but also because the Big Pharma spends over $855 million on lobbying activities alone (more than any other industry in the USA) to protect its industry’s interest in the Congress.


An Indian Odyssey with the NPPA

In 1997, the government of India setup a regulatory body which it called “an Independent body of experts” to controls the prices of pharmaceutical drugs in India. The body was called the National Pharmaceutical Pricing Authority (NPPA). It was formally given powers to implement, control and enforce drug prices and also monitor drug shortages and take appropriate actions to rectify it. It advices the government on policies relating to drug pricing and monitors the data on export and import of drugs.


In 2013, the NPPA issued guidelines to have a uniform policy for price fixation under the Drug Price Control Order of 2013. The guidelines said that the NPPA would monitor “inter-brand price differences” between drugs of similar formulations on the basis of maximum retail price (MRP).


This was to be done to track companies selling the same formulations at super normal prices when compared to the Industry prices. In its analysis, the NPPA was dumbstruck and wanted to understand how considerable price differences in the market prevailed between different brands of the same drug formulation that were identical to each other in terms of active pharmaceutical ingredient, strength and dosage.


The NPPA then realized that the main reason for market failure in normalizing the prices of medicines in India is because in India, access to medicine, was largely prescription-driven and the patient had very little choice in this regard. In other words, the patient was buying medicines of ‘the brand’ the doctors were recommending despite the same formulations and the same dosage available at half the prices in another different brand or as a generic drug.


The NPPA then noted the huge inter-brand price differences in branded generics/ off-patent drugs. It further stated that given the significant role of pharmaceuticals in the realm of public health, the intervention of the government was mandated when exploitative pricing by pharmaceutical companies put a huge financial burden on the common man and on health care.


Therefore, the NPPA, in accordance with the powers conferred on it and in line with the newly framed guidelines, issued well-articulated and well-argued orders imposing price control on 108 drugs which outlined the need to fix prices in the face of market failures to ensure the affordability of medicines.


In July 2014 in a series of well-argued 50 orders, the NPPA put 108 drugs, mostly antidiabetics and cardio-vascular drugs, under price control. The NPPA’s focus on price control on anti-diabetes drugs was crucial and justified on the basis of very high incidence of diabetes in the country. According to International Diabetes Foundation Diabetes had moved from being “a rich man’s disease” and now affects all the segments of Indian population and that India is on the verge of becoming “the diabetes capital of the world” with around 61 million people affected by the disease and is expected to cross 100 million people by 2030. Given the scale of diabetes epidemic, the NPPA justified its price control orders.


On hearing the above, all hell broke loose in the Indian Pharma. The Indian pharma industry reacted very aggressively to these decision. Both Indian and multinationals raised concerns that “India’s investment image” had gone to the dogs and that the industry would have to shut down if the same trend continues. The Indian pharma lobbies also filed in the Delhi and Bombay High Courts, and prayed for a stay order which they were not granted as many Supreme Court judgments had earlier justified price controls on medicines in public interest


Modi’s Government rescues India’s Investment Image:

Given the relentless Industry demands, the Modi government decided to clip the wings of NPPA which was supposedly an expert body of regulators and withdrew their powers to pass such orders in the future. The decision of Modi government to withdraw the powers of the National Pharmaceutical Pricing Authority (‘NPPA’) to set price caps on drugs raises serious questions on the state’s commitment to the welfare of the poor. As a result, over 108 essential drugs will now lie outside the ambit of NPPA and its internal guidelines on regulation and control of drugs would cease to apply to them.


According to the government, the reasoning for withdrawal of powers of NPPA and clipping of its wings was because “it lacked legality”. Interestingly, the Modi government has found that NPPA was not legally competent to pass price control orders after over 17 years of its creation and immediately after it passed orders that would restrain pharma companies from making super normal profits.


The Future of NPPA:

Earlier, the NPPA had planned to put under price control on many more life-saving drugs like anti-asthmatics, anti-malarials, immunologicals etc. But with Modi clipping its wings, this is now impossible.

A state like India, which has a large number of poor people has a bounden duty to ensure that access to medicine remains within the means of the common man. Either the state must setup its own companies to manufacture drugs at affordable prices for its people or put price controls to the market prices. Since the former appears to be distant, it is critical that the NPPA is re-created as an independent statutory agency, made up of renowned experts from industry to fix prices of drugs, in a manner that helps the companies receive a reasonable return on their investment while simultaneously ensuring the larger objective that the right of access of the medicines continues to be affordable. If for financial reasons, poor citizens of India are unable to afford medicine, then the introspection lies on the conscience of the state.

Pakistan - The Siege within

The Recent media reports on border violations and unprovoked firing by the Pakistani army has to be examined from a much larger perspective of Pakistani army’s calibrated provocations to India. To start with, one must ask the question why does the Pakistani army keeps upping the Anti-India behavior along the international borders? Why do Pakistani politicians like Bilawal Bhutto keep rising ‘the Kashmiri pitch’ from time to time? What explains Mr. Pervez Musharraf’s anti-India rhetoric? Are these merely political statements with no substance or is there something deeper and sinister in the offing? Answering these questions requires an understanding of the fault lines, the multiple power centers and the oligarchy which runs the state of Pakistan. It also requires us to gain insights into insecurities of a periphery state and which is motivated more by ideology and less by pragmatism or rational behavior.


Understanding the Geo-Strategic Curse on Pakistan


The General and accepted narrative on India-Pakistan partition is that the two nations were partitioned by the British from the Indian subcontinent because Hindus and Muslims could not reconcile their differences and Hindu-Muslim riots continued unabated under the leadership of Muslim league. We are told that Jinnah, the leader of Muslims wanted a separate nation of Pakistan ‘to protect and preserve the future of Islam’ and where the Muslims would be provided with ample physical security and safety from hegemony of Hindus who constituted the majority of population in India. This is the accepted text book story of India’s partition and creation of Pakistan.


However, Narendra Singh Sarila in his book “The Shadow of the Great Game: The Untold Story of India’s Partition” presents an alternate account of India’s partition. He claims that Britishers during the 40s were looking to create a buffer zone in the Afghanistan-Pakistan borders ‘to prevent the expanse of the Russian Bear’ ie to halt the rising influence of erstwhile USSR whose powers reached its zenith and diktats ran as far as Afghanistan. Since the western powers during the cold wars wanted to contain rising power of USSR and to prevent it from accessing warm water ports in south Asia thereby prevent it from accessing the oil routes. They wanted to leave a bufferzone in the area, a zone which would be preferably under the control of the western powers.


Further, the Britishers feared about the USSR gaining control of the oil wells of the Middle East – the wells of power in 40s. Given Nehru’s idealism in foreign policy, his socialist slant towards USSR and his policy of Non-Alignment with any global powers including US and UK, it was unlikely that he would play the British game in the cold war to prevent rise of the USSR power and contain its influence in AF-PAK region. Once the British leaders realized that the Indian nationalists would not join them to play the Great Game against the Soviet Union, they settled for those willing to do so. In the process, they did not hesitate to use Islam as a political tool to fulfil their objectives. Therefore the author claims that they were more than amenable to the idea of partition where Pakistan a strong and permanent ally of the west could be created in the regions of North western Frontier Province between Afghanistan and India thereby maintaining strategic interests of the west in the region.


The Game of Balance of Power


The Geo strategic curse on Pakistan did not end there. The US administration led by Nixon-Kissinger was interested in Pakistan in 70s and 80s for two reasons. One, the US wanted to use Pakistan’s borders to supply arms and provide covert weapon training to help Afghani Mujahedeen who were fighting the soviet war. Pakistan, the permanent ally was to be used as a proxy to supply to enable the Afghani Talibans to win their battle for homeland. The US interest, of-course, was containing USSR and to win the cold war.


Two, the Pakistan was to be used as a bulwark against India who was siding with the USSR and would also enable ‘opening up’ of Communist China for Business which would bring benefits to US Businesses houses. Today the same geo-strategic curse is being played out in different form. Pakistan lends itself to be used as permanent ally as long as it gets foreign aid. It is permanent ally of the US in its war against terror and also a permanent ally of China to enable it to have strategic control over Indian Borders. The US provides billions of dollars to Pakistan to ensure that its ally remains a permanent ally which allows the US to use the sea ports and airports for various strategic reasons.


Large Foreign Aid causes states to underperform


Given the varied strategic interests of many permanent allies and global powers, which were at times contradictory and at times deeply intrusive in domestic politics of Pakistan, Pakistan failed to create its own democratic institutions and failed to invest in independent institutions which would create a strong civil administration or a democracy. It is in short as Foreign policy Magazine calls it “A Failed State”. Its constant dependence on foreign aid, has led to the state becoming complacent in its political or economic affairs.


Understanding Pakistani Army, the multiple power centers in Pakistan and the Insecurities of a Periphery State


The First thing to understand about the Pakistani army is that, the Army of Pakistan today is not controlled by the state. In other words, the civil administration of Mr Nawaz Shariff exercises as much control over the Pakistani Army as the president of India Mr Pranab Mukherjee has over the house of the Indian Parliament. It plays a nominal role with no real control and subserviently accepts the diktats or recommendations of the army chief.


But how did the Army come to become so powerful in a way that it has veto power over its own government all matters connected national security. To answer this question we must go back to December of 1971. In December of 1971, the Supreme Court of Pakistan on the request of President Zulfikar Ali Bhutto set up what was called the Hamoodur Rahman Commission which went into the reasons for causes of Pakistani army’s defeat in the 1971 Indo-Pakistan winter war which led to Pakistan losing half its territory and resulted in creation of Bangladesh. The defeat was arguably the worst defeat the nation had ever faced in its history where 93000 Pakistani soldiers surrendered after India entered the war at insistence of Mrs Gandhi. Mrs Gandhi’s interest of course was to prevent large scale humanitarian crisis on our eastern borders. While the Commission lay the whole blame for defeat on the shoulders of the Army and political aspirations and opportunism of Army officers, Pakistan also realized that political bickering and lust for office by politicians of West Pakistan had led to the crisis in the first place.


This bickering cannot be afforded again. Pakistan now had a choice, its state had already been split into half. It would either modernize its army to prevent such recurrences or disappear into oblivion. Basically, the army was facing its moment of introspection and the state had been plagued by the deep insecurities of a periphery state. The Insecurity which is faced by state in its moment of existential crisis.


The Desire for Strong National Army led to army officers gaining large public support in Pakistan and came to be seen as patriots and protectors as against political class which was opportunists and power hungry. Basically the state and its citizenry had lost faith in its own political class. The State simply could not afford another Bangladesh and the citizenry craved for doing a Bangladesh on India for avenging what it calls its unnecessary intervention in what was its domestic affair in East Pakistan.


The Army with a State


Given the Army’s growing influence and large investments and judicious foreign aid by global powers, the army moved from strength to strength to arm itself to teeth and even became a nuclear power. In her book Military Inc, the pakistani author Ayesha Siddiqa shows how the military has gradually gained control of Pakistan’s political, social, and economic resources of the state. This power has transformed Pakistani society, where the armed forces have become an independent class.


The Pakistani Army officers control vast territories of land in the country and own and control corporations like Shaheen Group, Baharia Group and Fauzi foundation which has business interest to a tune of billions of dollars. The military is entrenched in the corporate sector and controls the country’s largest companies and large tracts of real estate. The Pakistan’s companies and its main assets are in the hands of a tiny minority of senior army officials. The assets of the army officers who run the largest companies in Pakistan exceed $20 billion. In other words, the army is politically, economically and socially an independent class which comprises the largest power centre in Pakistan.


This explains why we see border firings when Pakistani ministers are in peace talks with India in sharm al sheikh or why Pakistan first agrees to send director general of ISI after 26/11 attacks but later retracts or why the state has not been able to act against perpetrators of the 26/11 attack. Simply, put the civilian administration’s diktat’s end where the domain of the army begins.


Why Unprovoked Border Firings and Provocations?


In the book the ‘The Warrrior State’ by TV Paul, the researcher points out that the Pakistani Army is motivated more by ideology and less by Pragmatism or reason. Its officers crave to do a Bangladesh on India and are deeply patriotic. Pakistani army sees Kashmir as the last bastion where Bangladesh can be avenged. The army employs non-state actors under its security and even started three wars with India over Kashmir in 1947, 1965, and 1999 but failed to win any of them. Yet, it has successfully sustained a proxy war in Kashmir since 1989 using Islamist militants, some of whom have now turned their guns against the Pakistani state. Researcher Dr Christine Fair in her book “In Fighting to the End” after analyzing decades’ worth of the army’s own defense publications concludes that “from the army’s distorted view of history, it is victorious as long as it can resist India’s purported drive for regional hegemony as well as the territorial status quo. Simply put, acquiescence means defeat.”


In other words attacking India or provoking India into a war is in itself a victory because the status-quo is seen as an abysmal failure in the Pakistani Army. Researcher Dr Christine warns that the Pakistani Army will be “Fighting to the End” just as Hitler’s Germany did and would not surrender at any cost like the one in 1971 Bangladesh. Ideology and Honour today is far more important than the lives of Pakistani citizens or casualties as the army is not controlled by a representative body of the people like a legislature or a parliament.


The Researches further warns because the army is unlikely to abandon these preferences, the world must prepare for an ever more dangerous future Pakistan and a dangerous and autonomous Pakistani Army which unfettered by democratic leadership or diktats of civilian government could wreak havoc in pursuit of its own ideology and in pursuit of revenge.


So How Should India Respond?


Firstly India must understand that the Pakistani Army is not an Institution controlled by the State, it would be unfair to target civilian outposts in minor skirmishes across the border as civilians and the local government across the border has as little control over their army as we have over theirs.


Since Pakistani Army knows that the global powers would not allow two nuclear armed nations to enter into a war and India has ‘a no-first use policy’, the Pakistani army would try and take tactical advantage of this situation by entering into minor skirmishes and short firings and make a hasty retreat. The policy is basically ‘hit and run’ to make some quick gains and quick killings.


India can avoid this situation. India being a democracy and a responsible power cannot be expected to deal in the same manner and in the same language as an organ of the failed state does. Simply put India should not focus on Tit for tat. If it does so, it would be playing into the hands of an overzealous ideologue filled army which wants an all-out war with India.


India’s response must be cohesive, calibrated and must be to focus on its own security interest and to ensure peace in the region and to protect lives of its own citizens (especially those near the borders) and avoid collateral damage. It is not suggested that the Indian army must not fire back when its posts are attacked but India must focus on other solutions. India must deploy spy satellites and watch towers on the International border and increase border intelligence to incapacitate Pakistani army’s ability to attack and identify key areas where attacks are coming from. This data could also be submitted to the UN which adds credibility of Indian Army’s calibrated response. It must prevent the situation from going out of control and prevent escalation of aggression into a war. An all-out war may possibly ensure that the failed state disappears from the map but the process would be excruciatingly painful for people of the sub-continent.


What Binds Pakistan Today?


The only factor that Binds Pakistan with its divisive group of Pashtuns, Punjabis and sindhis is the hatred for Indian state. Religion as a binding factor of nation state was decisively defeated when Bangladesh was created. Language is not the binding force for Pakistan as Pashto, Punjabi, Baluchi and Urdu are hardly discernible to one another. Further the historical Shia-Sunni conflict in Pakistani community and the hegemony of sunni wahhabi Islam over other Islamic practices leaves a lot to be desired to call Pakistan a cohesive and peaceful society. Leave alone the fate of Hindus and Christians who suffer religious persecutions in Pakistan even Muslims are not spared there consider for example an estimated 2.3% of the population are Ahmadi Muslims, who are officially considered non-Muslims by virtue of a 1974 constitutional amendment and are treated as pariahs in the state.


Therefore the divisive self-imploding society of Pakistan needs a binding glue which can be used by politicians for their political gains and to make people rally behind them and consolidate their vote banks using an ecumenical solution.


The answer comes from the Anti-India rhetoric and the Kashmir rhetoric which drives passions in their populace. It appears young Bilawal Bhutto has learnt his ropes very quickly when he started the Kashmiri Pitch recently.

Land Wars

Recently, at SV Global Mills Limited (which is a Binny Group Company), the Promoter group led by M Ethurajan and his son E Shanmugam has wrestled control of the company from its veteran director Mr Natarajan who is another promoter of the Company. At the AGM, the shareholders recently rejected the resolution for re-appointment of Mr Natarajan as a director to the company’s board. Given that SV Global is a publicly listed company, this triggers the speculations that SEBI may step in and ask for Open Offer process to be implemented in accordance with SEBI Take Over code because control of the board has been effectively transferred. At the heart of the whole issue is land and properties owned by the company to a tune of Rs 2000 crores (which was earlier a part of Rs 6000 crore land bank held by the Binny Group).


When John Binny founded the Binny and Co in 1797 as a clearing and forwarding agency (which later ventured into textile business as Buckingham Mills in 1876 followed by the Carnatic Mills in 1881). He would have never imagined in his wildest dreams that the company he founded, would one day, be valued and fought over, not for the business of Yarn or textile, not for efficiency of logistics business he was proud of, but purely based on the real estate the company holds. Two Centuries later the Land Bank held by the Ex-BIFR Binny Group Companies exceeds well over 6000 crores.


The Binny Story – A short history


John Deaf Binny arrived in India in 1797 to work for the Nawab of Carnatic. He established Binny & Dennison (with Robert Dennison) in 1799. The firm with its headquarters on Armenian Street, was an agency house representing British interests in South India. During British India and after Independence, Binny Group was progressively formed over the years by amalgamation of various textile and allied companies like the Buckingham & Carnatic, The Banglore woollen, Cotton & Silk Mills, Madura, The Ganges Transport & Trading, Binny & Company and Binny’s Engineering works.


Since the Britishers had never modernised the mills, this led to its products becoming uncompetitive in the market due to reasons of Technological Obsolescence. Also there were huge floods which went on to further affect the company’s fortune. The mills closed since 1970s with no operations whatsoever. In the early 1980s, a Coimbatore based group wanted to operationalize the company but looking at the huge labour issues, the unrelenting attitudes of the unions, the debts which could not be re-structured they called it a day.


Later in the 1990s the Udayar group, entered the business. However, their interest was not in textile or logistics or engineering but primarily in the huge real estate bank the company held. The Udayar management too couldn’t do much as the operations were simply infeasible because of obsolete machinery, huge debt pile-up and most importantly various unrelenting labour issues and union problems. The Company was declared a sick unit by the Board for Industrial and Financial Reconstruction (BIFR) in 1993. It then came out of the purview of the BIFR by the order of the Madras High Court.


Demerger to settle the ownership issues


In the year 2012, the shareholders of Binny Group voted for a demerger to amicably settle ownership issues in the company. The goal was to distribute the company’s land bank amicably and in fair measure to promoters who were the large shareholders of the company. This would be done by splitting the company into 3 different companies (including the existing Binny company). The demerged businesses are called Binny, Binny Mills and SV Global.


As per the demerger scheme, S V Global Mill went to M Ethurajan and his son E Shanmugam, Binny Mills to V R Venkatachalam (son of late N P V Ramaswamy Udayar) and the existing Binny to M Nandagopal. The fourth promoter, S Natarajan, remained the common promoter with nearly 19% stake in all the entities. All four promoter groups together hold 75% while the rest 25 percent was held by general public. After the demerger, the promoters transferred shares to each other so that each promoter had majority control over the demerged companies. The promoters transferred shares in companies which he did not control in favour of the one who would be controlling it. Public shareholding in all the three demerged remained at 25% as usual.


The Present promoter feud at SV Global Mills


The present feud at SV Global Mills arises because the promoter group led by M Ethurajan and his son E Shanmugam, Binny Mills believe that they rightfully own the company based on the demerger scheme approved by the shareholders earlier which was done to settle the ownership issues. It is believed that the group wants to retain the entire control over the company. However, this does not seem to go down well with Mr Natarajan, a veteran promoter director who was also one of the original four promoters of Binny when the Udayar group took over the sick textile company in 1987.


It must be noted that Mr Natarajan who holds 19 percent in the company and has been director of the Binny Group for the last 25 years. He is widely acclaimed for reviving the fortunes of the 200-hundred-year-old textile company and also credited to have taken the company out of the clutches of BIFR thereby unlocking the potential of the company’s real estate. To him the credit must go the solving of various management, legal and labour problems of the company which enabled the company to have been able to enter into ‘the demerger process’ in the first place.


If the company was still with BIFR, every decision by the shareholders or the board of the company required approval by the BIFR board, under the BIFR law, which in business terms made any deal simply unworkable.


Resolution Re-appointing Mr Natarajan is Defeated


The battle lines were drawn when recently, at the Annual General Meeting of the Company, the shareholders and promoter group led by Mr M Ethurajan and his son Mr E Shanmugam defeated the resolution for re-appointing Mr Natarajan as the director of the company which virtually ends any control that he can exercise over the company. All decisions of the company will be henceforth taken by the former promoter led group and its nominees.


While it is not for us to comment on the propriety of Mr Natarajan’s ouster, however if all the procedures of Companies Act 2013 have been duly followed and the majority of shareholders have decided to side with Mr M Ethurajan against his re-appointment, then in all fairness, that decision must be respected as it represents the democratic mandate of the majority shareholders of the company.


Under the extant Company law, the shareholders of a company, acting in a collective manner, have the right to appoint or remove whomsoever they please as the director of a company. However if procedures have been violated then Mr Natarajan can approach the Company Law board or National Company Law Tribunal as the case may be.


Will SEBI Take Over code kick in resulting ‘a public offer’?


Since SV Global is a public listed company, many company law experts believe that this ouster of

Mr Natarajan will kick in the SEBI Take over code aka SEBI (Acquisition of Shares and Take Over) Regulations 2011 which defines the term ‘control’ in a very broad sense. They believe that the ouster of Mr Nataran has resulted in transfer of board control from joint control by promoters to sole control of Udaya group. Also, if the SEBI (take over code) comes into play, the minority shareholders would gain as the valuation for share price would need to be done on market value which will increase manifolds due to increased market value of land the company now holds.


If SEBI take over code comes into play then Open offer will increase the share price substantially from the existing 371 crore of market capitalization to at-least 2000 crores which is based on market value of land held by the company.


However other experts also believe that the SEBI (Take over code) may not kick in as removal of director is provided as an exception in the SEBI (take over code) itself under Regulation 2(e) which reads “Provided that the director or officer of a target company shall not be considered to be in control over such target company, merely by the virtue of holding such position”. Therefore the other set of experts argue that since the director under the code is not considered as a person who is control of the target company, his removal cannot be equated to transfer of control or ‘a Take Over’


While these legal issues are for courts to solve, one feels that surely the Udaya group would have obtained legal opinion on this matter before proceeding with it as their move of removing

Mr Natarajan could potentially lead the company into SEBI’s legal jungle or long court room battles both of which starkly diminishes the Udaya group’s prospects of unlocking of real estate deals which lie ahead for the company.


How to solve the dead lock at SV Global?


Again, the whole issue is about the land and properties held by SV Global. Instead of a prolonged legal battle which may take years to solve, Udaya Group can sit with Mr Natarajan and identify lands which can be transferred to Mr Natarajan for his 19 percent stake in the company. The company can again be demerged into two new entities with the approval of court. Courts generally accord approvals unless creditors or any other stake holders raise objections. Thus the company can go in for another round of demerger and the two new demerged entity would be led by Udaya Group and Mr Natarajan separately both in their own forts as majority share holders. This way the group can solve its problem rather than enter into long legal battles which helps only their law firms.


Any other similar compromise is likely to happen. If compromise happens, in a year’s time we can hope to see ‘new gated premium real estate projects’ with swimming pools and jogging tracks on the Binny mills properties. Ofcourse the Tamil film industry that had been shooting various movies inside the Binny Mills would have to find another place.

Autumn of the Matriarch

The unseating and disqualification of a sitting Chief minister, by an unprecedented ruling of a special court, for massive political corruption, will go down in history to demonstrate the resilience and strength of the Indian legal system. While this is a historic judgement which sends a message of zero tolerance to those in power, many political observers believe that it would be wrong to write off the matriarch as both her public support and her control over the party remains ‘absolute and untrammelled’. Also, it would be wrong to see the recent conditional bail by the Supreme Court as an acquittal because a difficult legal battle lies ahead for the Matriarch. A legal battle which would make or break her future career in electoral politics.


Charles Dickens once remarked “It is the best of times, it is the worst of times. It is the spring of hope and it is the winter of despair.” While Dickens may have wanted to show the best and worst times can lie in unison while referring to English society, it is tempting to use the same analogy on the political career of Ms Jayalalithaa. Her best time and her worst time seem to co-exist now. It is her ‘spring of hope’ with unprecedented public control over the party affairs at the same time it is ‘the winter of despair’ as her electoral career has had a judiicial roadblock with years of incarceration ahead.


Disproportionate Wealth Case – The judgement that shook Tamilnadu


Let us look at the facts of the case which has altered the political landscape of Tamilnadu like few others before.


The criminal case against Ms Jayalalithaa was set in motion when Dr Subramanian Swamy, then President of Janata Dal, lodged a complaint before the Special Judge under Prevention of Corruption Act alleging that the former had wealth disproportionate to her known sources of income.


Hundreds of adjournments and over eighteen years later, and after exhausting all possible legal remedies under the law, Judge Michael D’Cunha of Bangalore Special Court found J Jayalalithaa guilty of corruption. The prosecution’s case was that she had acquired the wealth of Rs 66 crore during the check period 1991 to 1996 whilst she was the chief minister in office drawing Rs 1 as her official salary.


The Judge ruled that the prosecution had proved its case beyond reasonable doubt and sentenced her and others to four years of simple imprisonment under the Prevention of Corruption Act 1988 and also imposed a fine of Rs100 crore on her. All her illegally acquired assets were ordered to be attached by the court and recovery if any will be adjusted against her fine payable to the state.


The 18-year legal battle with various attempts by the accused to delay the judicial process came to a definite halt after the unprecedented verdict of Judge Michael D’Cunha.


How were Immovable properties acquired?


According to the court judgement, “the firms floated by them, amassed properties and pecuniary resources to the tune of Rs 66,64,73,573 during the check period from 1.7.1991 to 30.4.1996”. We have provided below the modus operandi in which Jayalalithaa and others obtained large tracts of land totalling up to 3000 acres and various other movable and immovable properties using shell companies and firms acting as her front
A series of shell companies and dummy firms were created by Jayalalithaa and others. As per the court records 32 firms and companies were created to acquire immovable assets
The only purpose of these shell companies and firms was to acquire movable and immovable assets for the accused
All these shell companies and firms were owned and controlled by the accused and others
Some of these companies and firms, in turn, entered into partnerships with other firms in which the accused and others were again partners.
These new partnerships were again used to acquire more immovable Assets
Bank transactions revealed that the money used for acquiring these properties
came from the accounts of Jaya Publications in which Ms Jayalalithaa was a partner.
The transactions were directly traced with the accused as the companies had no other source of income of their own


The judge wrote in the judgemet “Scrutiny of various bank accounts maintained in the names of A-1 to A-4 and in the names of the above firms disclosed huge credits in cash had been frequently made into various accounts which were not commensurate with the income of the individuals and of the Firms concerned. There were frequent transfers of amounts between one account to the others to facilitate illegal acquisition of assets”. Further he also wrote “The above documents establish that though the company was started in 1990, it did not commence any profit making activities”


Further he showed that the companies and firms were a sham and shell. The judge wrote “there were no business activities at all in respect of many of the above Firms, and in respect of others, the activities were more in the nature of acquiring assets like lands, machinery, building etc., which were not production oriented. No income-tax returns were filed by these Firms. No assessment for commercial tax has also been done with respect to the business of these Firms”


Jayalalithaa’s failed defence


The defence of Jayalalithaa was that she had no knowledge that the other accused were acquiring the assets and she had no connection with them. To this the judge responded “It could not be believed that being the Chief Minister of a State, she was unaware of the large-scale activities carried on by persons living in her own house’


The judge also dismissed the defence that the court needs to make a distinction between company and a private person as company is a separate person under law. To this the judge responded, “illegally amassed wealth, running to nearly 3000 acres of land, is parked in these shell companies obviously for the reason that this arrangement provides convenient leeway to enjoy and deal with the properties registered in the name of the companies and even dispose them of merely by passing a resolution.”


A last attempt at defence was also made by stating that the remittances received were from the sale of the newspaper and collections under Jaya Publications by name Dr Namadhu MGR. This was also dismissed by the judge as no evidence was provided to the court and the bank accounts were opened after the corruption cases were registered against the accused. This the court said was “an after thought”.


Efforts were also abound to fabricate documents to prove receipts of income to account for various assets that were purchased. The Judge observed “under mysterious circumstances as the auditors of A-1 and A-2 themselves had stated before the Income Tax authorities that the documents pertaining to the receipt of deposits by Namadhu MGR were lost in transit and therefore could not be produced, but surprisingly, during the examination of the defence witnesses, the accused have got summoned these documents from Income Tax Department which speaks in volume about the manner in which the accused have fabricated evidence in support of their false defence”


All in all the hard work of the vigilance department and meticulous efforts by the investigating agency and hard facts and pieces of evidence presented before the court outwitted some of the most arcane legal arguments put forth by the best legal minds in the land. Investigator Mr Nallamma Naidu conducted a thorough and scientific investigation. He meticulously collected the chalans and receipts from banks into which the accused and others had transferred money from various sources, including the business enterprises or shell companies in which they were partners.


The Supreme court bench had earlier ruled “Be you ever so high, the law is above you,” The judgement of Judge Cunha handing down a fine of Rs 100 crores and a 4 year prison sentence demonstrated the veracity and power contained in the judgement of the Supreme Court.


Turning Point in the Trial


The turning point in the case came when the Supreme Court transferred it from a Special Court in Chennai to a Special Court in Bangalore on November 18, 2003. Anbazhagan of DMK had filed a petition before the Supreme Court seeking transfer of case out of the state. He stated in his petition that the police officers, who were under the control of the state government, could not be expected to prosecute the cases diligently against Jayalalithaa, who was the Chief Minister of the state. In the petition he said that after the AIADMK returned to power in May 2001, a new prosecutor was appointed in the case and most of the prosecution witnesses were recalled for cross-examinations and they turned hostile. Anbazhagan alleged that the public prosecutor did not object to the witnesses being recalled. Anbazhagan further alleged that the public prosecutor did not make any effort to declare them hostile. Therefore in substance it was impossible to convict the accused if the case was tried in the state. Allowing the petition, the Supreme Court noted:“The petitioner has made out a case that the public confidence in the fairness of the trial is being seriously undermined…. There is a strong indication that the process of justice is being subverted”. Once the trial was transferred out of Chennai to Special Court in Bangalore, the prosecuting agency was unstoppable in its path to conviction


Role played by DMK in the case


The role played by the DMK is equally remarkable. DMK pursued the case with zeal and fervour. Karunanidhi even wrote an eight-page series in the DMK organ, Murasoli, tracing the history of the case, including its vicissitudes. The DMK government had instructed the prosecutors to ensure that the investigating agency never overestimated the value of properties bought by Jayalalithaa and the other accused so that no mala fides could be attributed to the prosecution. This made the case strong.


Jayalalithaa is disqualified from contesting for 10 years


Under Section 8 of the Representation of the People Act, 1951, anyone who is convicted and sentenced to imprisonment under the Prevention of Corruption Act stands disqualified for six years from the date of his conviction along with the period of sentence of imprisonment. Therefore a total of 10 years has to pass before Jayalalithaa can stand for election. Accordingly, due to her conviction, Jayalalithaa now also stands disqualified as a member of the Tamil Nadu Assembly and therefore ceased to be the Chief Minister from the day on which her conviction was confirmed by the Special Court.


The assets of Jayalalithaa and others


Among the assets the accused acquired, the charge sheet said, were 1. palatial farmhouses and bungalows in and around Chennai, Neelangarai, Sirudavur and Paiyanoor; 2.agricultural land at Utthukottai and Tirunelveli; 3. Kodanadu Tea Estate in the Nilgiris; 4. industrial sheds in Chennai; 5. cash in bank accounts; 6. investments in financial firms; 7. diamond and gold jewellery; 8. a cache of wrist watches; 9. farmhouses in Hyderabad; 10. hundreds of saris and footwear. These were in Jayalalithaa’s name or in the names of the other accused or firms in which Jayalalithaa was a partner.


Tamilnadu – A Theatre of Absurd


On the day the conviction was announced, violence broke out across the state. AIADMK cadres set fire to some buses, stoned the windscreens of others, and forced shopkeepers to close their shops. Government buses stopped running and public and private transportation system came to a complete halt. Next the State of Tamilnadu witnessed a spectre of sycophancy and servitude, perhaps never before witnessed in its history. There were reports that over 100 people had committed suicide and others prayed to god and performed poojas that their mother should return back safe. Even the titular appointee Mr Panneerselvam took oath displaying deep loyalty with tears in his eyes and a sense of loss.


Rejection of bail by Karnataka High Court and Tears of Despair


The legal team manned by India’s top lawyer Ram Jethmalani appeared before the Karnataka High Court to seek bail for the accused. When the public prosecutor stated that he had no objection in granting bail to Jayalalithaa, there was celebration in the Air. Many news channels reported that Jayalalithaa was granted bail by the Karnataka High Court. However, the absurdity was revealed when the sudden celebration stopped. Someone read the bail order and proclaimed that Bail was denied. Here it is surprising to see how the public prosecutor representing the state stated that he had no objection in the Bail. Clearly, the forces in the background were working overtime. The Karnataka High Court by rejecting the bail again sent a strong message that corruption cases must be considered akin to Human Rights violation


Subsequent Conditional Bail by the Supreme Court on Medical Grounds


It is important that the grant of conditional bail by the Supreme Court on medical grounds and stay of sentencing for 2 months must not be seen as an exoneration or acquittal of Ms Jayalalithaa. Perhaps, there are two reasons why bails was generously considered in her case. One, the courts historically have shown lenience on granting bail to women and those who could demonstrate medical reasons for bail. Two, the bail is also a right of the accused under the constitution which has to be granted to the accused.


The Real question here is whether the Matriarch could influence witlessness and the proceedings of the case and change the case to her favour when it goes for an appeal. The possibility for this seems to be remote as Judge Cunha has not only given a strong judgement which stands on solid legal foundations but he has also taken efforts to meticulously write all evidences presented against her in the judgement itself. This is large part freezes the facts of the case and does not provide opportunity to tamper with evidence and appellate courts do not normally entertain new facts or new evidences to be brought before it and change of track by old witnesses which supported prosecution’s case. Also the jurisdiction of the case still lies in Bangalore and not in Chennai which means her party cadres and loyalists would have little control over the affairs of the case.


Lastly, the Supreme Court has also ruled that the case must be fast tracked and completed within three months and appeal papers has to be submitted in two months’ time by December 2014. Legal experts believe that it is unlikely that it would be achieved and the likely possibility is that an extension for completion may be applied in her case by the fast track court to the Supreme Court.


It must be noted that it is in Matriarch’s interest to get a favourable verdict and win the legal battle quickly so that she can stand for state assembly election of 2016 which is not very far. As of date the taint of conviction is still there which disqualifies her from contesting in the MLA/ MP election in the state.


The Future of ADMK and Jayalalithaa


Jayalalithaa’s journey has been a long one. She transformed herself from a starry eyed starlet of the tinsel town who set the silver screen ablaze with her oomph, charm and charisma to a consummate politician who ruled with unflinching streak of ruthlessness and a politician known for strategic political manoeuvres. She was the ‘the wronged women’ who stormed the corridors of power to acquire the political heirship of MGR landing finally a Convict No 7402 at Jail for getting on the wrong side of the law. Her career has seen such ups and downs which very few can ever claim parallel with. From being the first to act with skirt and sleeveless and shorts on the conservative Tamil cinema screens to perhaps the first to demolish the bastion of Dravidian Caste politics when she became the upper caste leader of a party formed to fight upper castes, in a state where her caste is minority and considered to be an oppressive one.


However, given her iron grip over the party and no second in line command it is believed that ADMK could face slow implosion from within if no leader takes charge in her absence. It is also unlikely that she would be able to wield power continuously for 10 years micromanaging the party from Jail. Further, her growing age and slow decline over the party’s affairs would lead to an untimely end to a person who in the height of her glory acquired public following no less than her prodigious mentor MGR himself.


Now if ADMK cadres do not throw up another leader, their decline and fall is imminent and the gainers would be the other Dravidian party despite their corrupt track record and deeply entrenched dynastic politics. While some believe that it is unlikely that BJP would be able to make headway in a state with which it has little connect others disagree and are banking on Modi Wave.


Anyway it is time for her to groom a core team and a leader who will look at affairs of her party in her absence. If she fails in this, the decline of ADMK is a foregone conclusion. Its time to act in party’s interest to stem its decline.


The story of the rise and fall of the mighty matriarch from dizzying heights of success is remarkable. However, it would be wrong to write any epitaph on Ms Jayalalithaa because her public support seems to rival even MGR. Again, if the political history is anything to go by, many leaders have risen from the ashes like the mythical phoenix.


Indian democracy never ceases to surprise. Perhaps it never will.

Rumble in the Palace

Rumble in the PalaceThe Arrest of the Registrar of Companies of Chennai, Mr Manuneethi Chozhan, by the CBI, on charges of corruption raises some very serious questions. If the Allegations of the CBI are true then the Registrar of Companies, a very senior officer of Indian Corporate Law Service, for illegal gratification, has acted as a pawn in a brewing corporate power struggle between a father (Dr Ramasamy) and his adopted son (Mr MAM Muthiah) to take over the reins of Chettinad Group.


The Chettinad Group:The Chettinad Group is a business conglomerate based in Chennai. The group has a finger in every pie. From companies that manufacture cement and silica to interests in construction, transport, power, coal, health care, plantations and textiles. The Family run empire also extends to education as well. The family established India’s first private university “the Annamalai University”. It was founded by the group’s founder Sir Raja Annamalai Chettiar. Today, the group is run by Raja Annamalai Chettiar’s son Dr Ramasamy and Dr Ramasamy’s adopted son Mr MAM Muthiah both of whom are chairman and Managing Director of the group respectively.


The Kings and Pawn in a corporate power gameAccording to information available in the public domain and the CBI, a rival group in the Chettinad company (one led by Mr M.A.M Muthiah) had allegedly planned to take control of the Chettinad Group of Companies from Dr Ramaswamy, the chairman of the group during the AGM of the Company. This was to be done by removing Dr Ramasamy from the post of chairmanship of the group. Apparently, Dr Ramaswamy had fallen out of favour with his adopted son Mr MAM Muthiah who, as the managing director of the group, has taken complete control. It is alleged that in order to make his control total and absolute, Mr Muthiah has proposed a resolution at the AGM to remove Ramaswamy from all positions of power in the Chettinad Group. This he claims in his interview to a newspaper “done in the interest of shareholders and the employees of the group” because Dr Ramasamy had “others interest to cater to” than the companies under his chairmanship.


On learning of this proposed resolution, Dr Ramasamy had sought the illegal services of Dr Chozhan, the Registrar of Companies to reject the resolution approved by the shareholders for an illegal gratification. As per the CBI, Dr Chozhan had taken a bribe of Rs 10 lakhs for not approving the decision for removal of Dr Ramasamy at the AGM. The CBI had received a tip-off from an unnamed source about this illegal gratification and the CBI intercepted his vehicle and recovered Rs 10 lakh from his car. The arrest was made as Dr Chozhan was leaving Ramaswamy’s palatial residence in Chennai. The CBI also recovered Rs 20 lakh from Dr Chozhan’s residence and several incriminating documents after a search was made in the office of Chettinadu House and the chamber of Dr Chozhan.


Now, what caused the rift between the father and the son is not for us to comment or speculate. Perhaps the ambitions of youth and dreams and desire of seeking new pastures and greater heights for Chettinad group at a rapid pace did not gel well with the cautious yet sturdy administration of his able godfather. Consider for example that the resolution sought to be expunged by Dr Ramasamy by adopting illegal means was finally passed by the shareholders in the AGM and the shareholders also approved the group’s new investments in the new projects to a tune of over 3700 crores for the future which would otherwise not seen the light of the day under the old chairmanship.


Now, in all fairness, it is for shareholders to decide in a democratic manner who should hold offices at the helm of their company’s administration. If shareholders side with the glorious plans and youthful leadership of Mr Muthiah than with Dr Ramasamy, perhaps that is the right course of action for the company as the same represents collective democratic wisdom of the shareholders.

 

Another look at the murky episodeBut that’s not all. There is another way to look at this murky episode. Consider that the Registrar of Companies under the Companies Act 2013 is vested with large powers. His powers encompass plenary powers of administration, control and investigation of companies and passing of orders. For example the Registrar of companies is vested with powers to approve and reject forms filed under the companies act and even has power to strike out the names of delinquent companies. The Registrar of Companies for all practical reasons has the power to make or break a company. This is why the case must be scrutinised with extreme diligence.


Now, it is one thing for corporate lords to fight amongst themselves for power and control of their empire, but it is completely another for a senior class I officer of Indian Corporate Law Service to play the fiddle and use his office as an outpost of a corporate empire.


Is venality a revelation for a deeper rot within?Again consider the sheer levels of venality of the whole episode is a dangerous revelation. Consider for example that a very senior ICLS officer aka the Registrar of Companies, an officer at the helm of Company law takes bribe in his own car, at the house of a corporate lord, as though he was buying a soda from a departmental store or drawing money from a bank. The sheer venality is revealed with the fact that the officer did not even try to hide his intentions and veil his illegal gratification through a mediator or a third party or a complex web of receipts. This only reveals a deep rot in our system.


The venality of the whole episode casts a deep and a dark shadow which does not augur well for our corporate democracy and efficacy of company law as a whole. In future, genuine questions will be raised and rightly so on whether the action of the ICLS officers are free of corporate influence and are really taken in an unbiased manner? It is necessary that those at the helm of ICLS act with speed to redeem that faith again. At stake is the interest of shareholders (especially interests of the small shareholders) and the public at large.


Our RecommendationIt is recommended that the leadership at ICLS orders a thorough internal departmental investigation to ensure that various decisions taken by Mr Chozhan and the likes are re-examined for propriety and issue remedial orders as may be necessary. It’s also time that the leadership at the Indian Corporate Law service send a strong message to its officers that those at the helm and in charge of running the Companies act shall act only in public interest and follow scrupulously and conscientiously the rule book.

House of Cards

House of CardsIn a recent judgment, Justice Ramasubramanian of Madras High Court made scathing observations on Annamalai University and its deeply entrenched corruption that wantonly lasted for over 84 years. Last year, in 2013, the Tamilnadu Government had moved with speed to take full control of the university on grounds of mismanagement and financial irregularities by passing The Annamalai University Act 2013 to protect the interest of Students and Staffs. However, it appears that it will be long before order returns back to this historical citadel of learning, which in the height of its glory, was once considered as ‘the Nalanda of the South’.
Background


Annamalai University is one of Asia’s largest residential universities located in Chidambaram, Tamil Nadu, India. It was started in 1928 by Annamalai Chettiar, an educational visionary who later handed over the University with its attached land and properties to then then local government ie Madras presidency. Given the generosity of his large contribution and his desire to work for the university, the Madras Presidency passed an Act granting him and his heirs various special privileges, rights and unprecedented powers to govern and control the affairs of the university. This was unique because no government funded university has ever had its control vested to a private individual that too in a hereditary fashion. This historical citadel of learning, which in the height of its glory, was once considered as ‘the Nalanda of the South’.


Massive Corruption and MismanagementHowever, the University soon fell into a deep quagmire of corruption, mismanagement and massive financial irregularities. The Tamilnadu government records note that “The past experience indicates that the powers and privileges conferred on the founder have been grossly abused.”


The Recent Judgment of Madras High Court also notes that “money pumped in by the Government into Annamalai University was almost equivalent to the total amount of money invested in 12 Universities in the State” and it further observes that “all contracts awarded by the University in the past several decades went in favour of companies floated by the Founder’s family”. In other words, as per the court records, the heirs of Rajah Annamalai Chettiar who governed the University had converted the university into an extension of their own corporate fiefdom by abusing their privilege and misappropriation of funds granted by the University Grants Commission and the Government of Tamilnadu for over 85 years.


Further the extent of the loss to the exchequer (and by extension the public at large) is also revealed in para 30 of the same judgement. Justice Ramasubramanian of Madras High Court notes “The mind boggling statistics given by the Government of Tamil Nadu shows that what was originally conceived by the Founder to be a philanthropic venture, appears to have ultimately turned out to be a profitable commercial venture. The Government funds, whose monetary value as on date would work out to Rs 2300 Crores, had gone into the University”. Further the noting on government records indicate various anomalies like excess staffing, transfer of university funds and investment of funds for other purposes and ignoring statutory obligations etc.

 

Protests and Take over by Tamilnadu GovernmentGiven the financial state of the University, many rumors of mass retrenchment were under circulation. These led to various protests in the university campus by both the staff and the students alike. In a swift move, the Tamilnadu government passed the Annamalai University Act 2013 and took over the affairs of the university citing financial irregularities, mismanagement and to protect the interest of the students and the staff and their livelihood.


The Annamalai Story is also an Indictment of a Callous StateIf one observes deeply, the Annamalai Story is also an Indictment of a Callous State. It raises more questions than answers. Now, it is difficult to imagine how the founders and his heirs could perpetrate such massive financial irregularities to a tune of Rs 2300 crores without the active or passive aid of those in power. How is it that the government would keep pumping in funds into the university year after year and decade after decade to a tune of Rs 2300 Crores without auditing these funds for its utilization by the university? How is it that the mismanagement and financial irregularities could go on unabated for over 84 years with no information to the exchequer.


Again if one carefully looks at the facts of the case, the problem to the state government seems to be the protest by staff and students and the fear of backlash when massive retrenchment was announced by the university because of financial crisis it was facing. Suppose, hypothetically, there was no protests by the staff perhaps the hand of the state would not have moved to take over the affairs of the University despite massive corruption and mismanagement and it would be business as usual.


All in all, the facts of the Annamalai University presents a sordid and disturbing picture of collusive corruption with patronage from high places. A university is supposed to be a temple of learning but if it is not protected or nurtured from termites from within and outside, it will collapse like a house of cards.

Why Gandhi is called the father of the Nation?

Why Gandhi is called the Father of the Nation?


Perhaps the question of why Gandhi is called as the father of our nation was never adequately addressed to many. Merely categorizing Gandhi as one of the freedom fighters seems to do injustice to his vision his life and his ideals. To answer this question, we must dip into history, perhaps no other individual in the Indian History has shared the position as that of Gandhi. He was a leader revered and loathed in equal measure. While leaders like Mao of China or Stalin of Russia would hold an undisputed canonical and deity like status with their followers, Gandhi on the other hand, in India would be heavily criticized with bitterness and acrimony by a large section of the society any time in his history. His position was unique. Some saw his as a messiah of the poor, a prophet of interfaith harmony and others saw him as a Muslim stooge and a muslim supporter.


But perhaps what is more interesting is that he allowed himself to be criticised and actively encouraged dissent. He loved his detractors as much as his compatriots while still standing by his principles steadfastly.


Living his principles


For example his principles of loving ones enemy and leading a simple transparent life is revealed in his own actions.


Consider that all his travel plans were made public in advance, all his speeches would be published without any editing and would be open to scrutiny and dissent. He would always smile and welcome his detractors and those who dissented with him with compassion not malice. We note this when Gandhi went on recommend the name of Dr.Ambedkar as the nation’s first law minister to Nehru, this despite years of bitter criticism and personal attack on Gandhi for his failures on Caste front from Dr Ambedkar.


Consider another case. When Gandhi returned from the second round table conference. He was welcomed by black flags by supporters of bhagat singh who were shouting slogans against him. The reason was that his negotiations with England failed to get an acquittal for Bhagat singh who was charged for murder but had also caught public imagination due to fast in the jail. When protesters shouted “Gandhi down down and death to Gandhi” slogans, he accepted those slogans with equanimity and graciousness. He was offered black roses which he thankfully accepted.


Another episode which captures the attention is his behaviour when India achieved Independence. On 15th August 1947, there was celebration in the air. The congress leaders were busy with festivities for celebration of independence of the newly born nation. The leaders distributed sweets and party workers were busy with crackers. However there was one man who welcomed Indian Independence with a 24 hour fast. He sat sadly in his room and when he was asked to join celebration he replied “How can you hold celebrations when people are dying everywhere?”. He neither attended any function nor hoisted any flags nor took any sweets.


Gandhi was referring to famines that was struck India causing large deaths in August 1947 as well as the Hindu-Muslim riots that killed a large number of people due to partition. Independence to him was a sad proposition as it had come with an unacceptable price of partition.


Prophet of Peace in the Hindu Muslim Riot of 1947


It was september 1947, the Hindu-muslim riots had reached their zenith in Punjab and Calcutta killing thousands of Hindus and Muslims. Gandhi immediately reached calcutta and announced that he would fast unto death to stop the Riots.


“But how can you fast against Goondas?” His friends and followers asked. “I am just doing my bit he replied I cannot allow this conflagration to spread”. “But what if you die” they asked. He replied “I cannot witness this bloodshed. Atleast If I die I wouldn’t be there to see this mayhem. I would have done my bit”. Then he started to fast. Initially no one seem to care. The riots went on unabated. His kidneys began to fail. Gandhi was losing weight very fast. The sugar levels were dropping. The doctors after failing to persuade him to break his fast issued a statement that Gandhi was on a road to suicide and was dying. The fast continued for days. Death of Gandhi was almost certain. Now the leaders of Hindu Mahasabha (old Rss) and the leaders of the muslim league came to visit him together. They asked him to end his fast. The goondas of Hindu and muslim parties came and laid down all their weapons before him and gave him reassurance that they would not indulge in violence. They hugged each other publicly and called to stop all violence against Hindus and muslims.


On coming to know that the violence had suddenly stopped due to Gandhi’s fast. The British press which had called him “a Naked fakir of India” was in praises for his fast, Lord Mount Batten remarked “one man had put an end to bloodshed through a fasting which 50,000 armed soldiers in Punjab and Calcutta could not achieve with guns and weapons in quelling the riots. One man was more effective than 50,000 British and Indian troops”. Gandhi had successfully appealed to the moral conscience of both Hindus and Muslims in ways like none other had done before. After the riots subsided Gandhi would travel 116 miles on foot travelling village to village to spread the words of communal harmony, begging the hindu and muslim communities to give up the feeling of revenge and start afresh their lives in brotherhood.


Gandhi’s Practical & Ecumenical Hinduism


Another interesting facet of Gandhi’s life is that his Hindu faith was more practical and result oriented than a mere belief. Interestingly Gandhi never visited any temples and conducted large hindu Poojas and ceremonies. He saw faith as a means of bringing salvation to the poor and the sick. An interesting incident brings out his unique Hindu faith which was less faith and more love for the poor and the weak. When someone tried to justify untouchability as sanctioned by Hindu scriptures he replied “If I discover that the Bhagvad gita, the upanishads, smritis clearly showed divine authority for untouchability then nothing on earth would hold me to Hinduism. I should overthrow it overboard as I should overthrow a rotten apple”.

Another instance is even more interesting. Nehru was wished by Kasturba Gandhi in Hindi while boarding a train back to Delhi. She said “Ishwar aapke saath rahe” ie Let god be with you. Nehru a staunch Atheist lashed out at Kasturba that there was no God and that God is imaginary idea quoting holocausts and other evils as evidence. Kasturba was shocked and devastated and turned to Gandhi for help. Gandhi replies Ye ishwar se hum sab se adhik nikat hain “Nehru is closer to god than all of us”. He was referring to Nehru’s work on communal harmony and secularism in building Hindu-Muslim unity.


A Civilization cannot be built on imperialism


When Gandhi landed for the second round table conference in London, an English reporter asked Gandhi what he thought of the Western Civilization. He replied immediately “I think it would be a great idea”. The western media was baffled at his response. This historic sentence pulled the rugged under the feet of Britishers because Gandhi had refused to recognize an empire of the west as a civilization. An empire built on exploitation and subjection of other poor and weak nations surely cannot be called a civilization he perhaps thought.


Espousing Environmentalism


Gandhi foresaw threat to environment by Industrialization and consequent destruction of natural habitats and depletion of forest reserves far ahead of other thinkers. He therefore wanted people to balance the hunger for modernization and industrialization by adopting a balanced life style encompassing environmental friendly atavistic ways of life.


He once wondered loudly that “the economic imperialism of a single tiny island (England) is today keeping the world in chains. If the entire nation of 300 million took to similar economic exploitation then it would strip the world bare like locusts”. Gandhi’s fear was that the mad rush for resource exploitation could lead to anarchy, chaos, enslavement of the local populace if demand of the Industrial production are not met.


We have largely seen this to have come true in many African countries like Libya, Sierra leone and Nigeria where global demand of natural resources like Oil, gold, diamonds, coal etc has led to serious conflicts in the nation. The natural resource has not only failed to benefit the local population and uplift it from poverty but has also lead to crony capitalism, mad rush for ruthless dictatorship and killings by rival mafias to the point that the researchers now call the natural resource as “Resource Curse” which becomes a threat to the population of a place.


An inspiring life for all eternity


His life would go on to arise a moral consciousness and ethical conscience like none other before, all over the world. The idea of non-violence will go on to inspire many like Aung sung suu kyi and Martin Luther king to adopt non-violence as a political tool of dissent in their struggle for freedom and Independence. Perhaps the best quote that sums up the life of Gandhi was by Albert Einstein who said “Generations to come would scarcely believe that a man as such of flesh and blood ever walked on this earth”. Ramachandra Guha sums up Gandhi’s life in his own style calling him “the conscience of humanity”

How to Build a Nation? The Singapore story

As curtains fall over the life of Lee Kuan Yew, he will go down in history as the only leader in who is known to have brought a nation from third-world to first-world status in a single generation.


Harry Lee Kuan Yew was a formidable personality who tended to leave lasting impression on every one he met. His legacy is described best in the quintessential binary. You can love him or hate him but never ignore him. He was a leader loved and loathed in equal measure. To some he was a dictator, an autocrat who ruled by edicts and one who muzzled out Individual freedom and human rights under the garb of progress and development. To many others he was the messiah, a hero, an outstanding statesman who led a fledgling and flailing nation into the arms of progress and wealth. To most Singaporeans, Lee and Singapore are words that are synonymous with each other. Without Lee they believed that Singapore was an impossible idea and not an inevitable nation.


The Rise of Singapore

It is interesting to note that Singapore was never destined to become a developed nation, much less a first world city state nation which would be patronized by many multi-national companies of the world. Singapore lacked land space as it was a tiny island. It had no palm oil to export like its neighbours Indonesia and Malaysia and no other mineral or natural resources what can be used to earn export money. However during three decades in which Lee held office, Singapore grew from an underdeveloped nation into one of the most developed nations in world. The economy was fondly called Asia’s tiger for its strength, resilience and power.


Strong work ethics and discipline

So how did Lee achieve the impossible? Lee often stated that Singapore’s only wealth are its people and their strong work ethic. Strong work ethics and discipline is one of core legacy of Lee Kuan Yew. He worked with a team of outstanding civil servants. He punished his bureaucrats who did not perform and rewarded those who did. There was no slack in his team. Researcher Gary Roden calls his style of governance “Scientism”, an idealization of cold, impartial logic as the operating principle of governance. In other words, Lee operated to realize ruthless efficiency in matters of governance irrespective of the consequences.


Standing vehemently behind the experts

Lee was known to stand firmly like a rock behind advice of experts. Albert Winsemius was a Dutch economist who advised the government of Singapore during the days Lee’s rule. Winsemius’s economic policy was controversial because it went against the dominant thinking of the contemporary economists of his time. The contemporary way for a developing nation to grow was to use Import substitution Industrialization policy which was heavily promoted by the World Bank and for which World Bank granted loans to nations like Singapore. However the problem with Singapore was that its small 2 million population was insufficient to provide the necessary domestic demand for such a model to function. So going against the dominant thinking of his time, Lee stood firmly behind the wisdom of winsemius to promote Export Oriented Industrialization, and creation of a service economy as a new model of growth. Asian nations like Japan and China would soon find this model of Export Oriented Industrialization enticing and follow suit.


Taking Professionalism and Education seriously

Perhaps the core of Lee’s legacy is to have created a society that has extra-ordinarily high regard for education and professionalism. At a time when many nations were skeptical of allowing foreign talent into their nations and were fearful that it may jeopardize the local job market, Lee welcomed foreign talent with open hands. At a time when multi-national companies were feared for their capacity of destroying the local business, Lee provided tax breaks to them and allowed setting up of their bases in Singapore.


Seizing Innovative opportunities for growth

In 1968, an innovative opportunity for growth came along Lee’s way. His team of economic experts advised him that Singapore could establish itself as a financial center by taking advantage of gap between closure of San Francisco and the opening of the Zurich stock exchanges half a days later. Their plan was that Singapore could establish itself as a 24 hour money and banking market and connect Europe with the United States. But this bold plan needed both investment and skillsets to work and meant importing foreign talent as well as driving cultural change in its own people. This was 1968 when Singapore’s existence itself was under doubt due to political and economic reasons. However execution was Lee’s specialty and he went ahead with the plan and the rest is history.


Democracy, freedom and Human rights

One of the central charge against Lee was that he never valued democracy, freedom and Human rights and was complicit in violating many of them. For example, the press in Singapore has no freedom, the private lives of people were regulated in so far as they were caned for drawing graffiti on walls or fined for eating chewing gums. Lee firmly believed that cultural change was an essential part of progress. In his own words he described it as follows “I am often accused of interfering in the private lives of citizens. Yes, if I did not, had I not done that, we wouldn’t be here today. And I say without the slightest remorse, that we wouldn’t be here, we would not have made economic progress, if we had not intervened on very personal matters – who your neighbor is, how you live, the noise you make, how you spit, or what language you use. We decide what is right. Never mind what the people think”

And to others who said that Singapore interfered in lives of people and was a nanny state to which Lee replied “If Singapore is a nanny state, then I am proud to have fostered one”. Lee also believed that press freedom is not absolute he said “Freedom of the press, freedom of the news media, must be subordinated to the overriding needs of the integrity of Singapore, and to the primacy of purpose of an elected government”


Is Lee a hero or a villain?

So how would History judge Mr Lee? Is Lee a hero or a villain? Leaders are often made in complex molds. They have both their failings and successes. Their success and failures do not define them. The right way to look at their picture is with all shades of grey rather than exclusively in black or white. Lee Kuan Yew is a colossal figure in modern Asian history. Whether he is regarded as a hero or villain will ultimately depend on the values the future generation holds when they sit in judgment. The bread vs freedom debate will now continue more vociferously than ever and whether it is fair to lose one in pursuit of another will continue to haunt us without any answer.

Lee produced prosperity but at a cost of leaving behind a sterile and soulless society that has little respect for ordinary human values let alone human rights. It is run by a professional class that reaps financial rewards for the populace but the question remains whether this is enough?

India Needs a Cement Regulator

Despite the Competition commission’s indictment last year for cartelization and imposition of penalties, In the last two years, the price per bag of cement continues to shoot up. The prices have gone up from around Rs 250 to Rs 380- Rs400 per bag. This contributes substantially to inflation in the construction industry.


The Story So Far – Cartelization in Cement Industry


Last year the competition commission imposed a penalty of over Rs 6000 crores on the major cement companies. In its investigation it found that these companies fix prices in advance and decide each other’s production capacities after mutual discussions. The Companies also monitor production and distribution of cement in each other’s plant by deploying personnel there. If that was not enough they also bifurcate sales territories amongst themselves to ensure maximum profitability is attained and any form of competition is eliminated in bud. These are facts recorded in the order of Competition Commission of India based on which a hefty fine was imposed by the commission. The Commission also found that twelve cement companies have about 80% of the total production capacity in India. These companies also have varying levels of shareholdings in each other making inter-firm competition a myth. In fact the world’s leading cement companies Holcim of Switzerland and Lafarge of France are merging to gather to form a single entity which is also said to have an adverse effect on competition in India. However, despite the hefty penalties and legal wrangle with the fair trade regulator, little has changed on the ground and prices of cement continue to rise.


Cement has no known substitute so far

It is well known that Cement is a key input material in the Construction Industry which has virtually has no known substitute on date. Various innovative researches into alternative input materials have not yielded any results. Research and Technological solutions though promising have not shown any results on being able to replace cement so far. Therefore the only solution as on date is to regulate the cement industry for the healthy growth of Construction industry and Infrastructure in India. If the state fails in this enterprise then inflation in construction industry is imminent.


Monitoring the cement prices and preventing cartelization is essential

1.The First step in Regulating the Cement Industry is to setup an Independent body of expert called the Cement regulator who monitors the prices of cement on a continuous basis. Even a recent report by parliamentary standing committee has recommended that an Independent Regulator is needed to control the cartelization of cement industries in India.


2.The Regulator must have powers to fix ceiling limit of prices for cement after collating costing data and analyzing the numbers. The Regulator should also allow for a generous return of capital for the cement companies so that profitability of the industry is maintained. Fixing prices would act like upper circuit breaker beyond which companies cannot sell their cement bags. Contrary to the apprehension of free marketers, such price controls already exists in small goods in the form of Maximum retail price under the MRP Act.


3.The Regulator must have power to call information from companies regarding production, pricing, dispatch and marketing of Cement. The Regulator must intervene if he notices a sudden drop in the production level or notices a parallel pricing arrangement or parallel dispatch arrangement in the cement industry.


4.The Cement Regulator must issue from time to time a number of regulations, orders and directives to deal with various issues in the Cement Industry like quality of cement, safety and other issues dealing with governance. The Regulator can also provide the required direction and vision for the evolution of the Indian Cement market to a more open and competitive market.


5.For grievances that the cement companies may have against the orders, directives and decisions of the Cement Regulator, an appellate authority can be setup which may be called Cement Settlement Appellate Tribunal (CSAT) where the aggrieved party can contest the claim of the Regulator.


6.The CSAT can pass orders either in favor of the cement companies or on the side of the Regulator based on the merits of the each casse. Basically, the CSAT will take over the adjudicatory and disputes resolution functions of the lower courts thereby reducing the burden on the lower courts in the country. This will provide efficient and quick dispute resolution mechanism for grievances of the Cement companies may have against the cement regulator.


Concluding thoughts

For healthy growth of Construction Industry in India, it is necessary that the state must make efforts to Regulate, control and monitor the prices of Cement and provide direction to the Cement Industry. We need to move to from the Open market Regime of cement Industry to a more regulated setup which works for the benefit of all the stake holders.

Scourge of Nature

As Nepal slowly recuperates and hobbles back to life after 2 massive earthquakes that ripped the city apart, a soul searching needs to be done by policy makers and Indian think-tanks on the most important question “How prepared is India for such natural disasters?”


Prelude:


Nepal is one of the most beautiful places on earth with breath-taking beauty. Nature has been more than bountiful in gifting this landscaped nation with scenic splendour and awe-inspiring views. Standing at an elevation of 1400 metres in a bowl shaped valley, Kathmandu the capital city is one of the top tourist destinations in Asia. In fact the city was ranked first in Asia in a popular travel website.


Disaster Strikes

Geologists and experts had warned for decades that Nepal was vulnerable to a deadly earthquake due to its massive urbanization, its fault lines in its geology and the nature of its architecture (there were a few earthquake proof buildings). At 11:56 NST on 25th of April, a colossal disaster strikes. An earthquake with a magnitude of 8.1 rips the city apart instantaneously killing more than 8,000 people and injuring more than 19,000 others. It was arguably the worst natural disaster to strike Nepal since 1934. The country is suddenly flattened by this colossal disaster. The earthquake is so strong that it triggers a massive avalanche on Mount Everest and Langtang valley making it the deadliest day even on the mountain. Hundreds go missing again. Their fate is unknown. Those who survived are made homeless and helpless for basic utilities like food and water. The quake is so strong that it levels entire villages in the upper hills and mountainous regions of 14 of Nepal’s 75 districts.


Aftershocks of the disaster

While the disaster may be over, its aftershocks continue. Continued aftershocks occurs throughout Nepal in short intervals. A second massive earthquake occurs on 12 May 2015 with a magnitude of 7.3. Again more than 125 people were killed and more than 2,500 were injured by this aftershock


Economic Impact of the disaster

Nepal is a developing nation with fledgling agricultural sector. Their yield per hectare and agricultural output is already low. Now, the earthquake occurred after the winter harvest was in. Therefore this years’ agricultural output will not be affected much. But if the villages are not ready to farm when the monsoon arrives in a few months, the all-important rice harvest will suffer and will have negative impact on the economy. The Services sector forms up to 52 percent of gross domestic product (GDP) of Nepal. As all nations evacuate their citizens from the disaster prone region, the tourism sector comes to abrupt halt. Most hotel bookings will be cancelled. It is estimated that tourism sector which employs an estimated half a million people will come to a complete halt and will take years to recover. Further the damages to the UNESCO world heritage sites and important religious and tourist places will do lasting damage to this already embattled nation. Lastly losses to insurance companies and the disaster’s pernicious effect on the banking sector is yet to be fully analysed. However the economic skies appear to be gloomy and dark for Nepal.


International Relief Efforts

Several nations across the world have come to the aid of Nepal. India has contributed abundant of supplies like over 200 tons of water, Hundreds of tons of food and dry rations, 10 tons of blankets, a reverse osmosis (RO) plant and 345 tons of relief material like dry food and essential medicines. Also several organisations have been opening accounts and collecting public relief funds. These funds will be transferred to the Prime Minister’s Disaster Relief Fund to finally reach to the aid of Nepal. Only time will tell whether Relief efforts by both nations and citizens volunteer groups were adequate and a lasting political impact, or whether it was a blip in the collective consciousness in a crisis.


What comes out of this disaster is the abysmal level of Nepal’s preparation for the disaster despite knowing that it was sitting on a high earthquake prone zone. It is as though a whole nation was caught unawares and unprepared for a calamity that was unexpected. Nepal’s history shows that during the time of its deepest despair and gloom, the civil society rises to show the way. If this strong society can look beyond the rubble, rebuild the society, cleanse its politics, and fix its governance then a sunlit path of progress lies in the future. Nepal has a long journey ahead.


Is India Prepared for such disaster?

India is sitting on the same fault line that runs across Nepal and the mountainous regions of Himalayas across the Kathmandu valley. However the level of preparation of Disaster response team of India is perhaps little better than Nepal.


While one must grant credit for developing an elite agency called the National Disaster Management Authority (NDMA) whose primary purpose is to coordinate the response to natural or man-made disasters and for capacity-building in disaster prone areas, it must also be noted that the level of preparedness for a disaster at Nepal’s scale is woefully inadequate.


Here is a wish list what India needs to do

1.India needs to make a 24/7 emergency operational call centre. In any disaster, people should be able to inform the authorities and so that concerned agencies are immediately alerted. The present call centre is insufficient to meet a large scale crisis.


2. India needs to invest in Earthquake proofing technologies to make cost of constructing earthquake resistant buildings cheaper and affordable. Subsidies may be granted for those in high risk areas and taxes on the use of this technology can be eliminated. If affordability can be attained due to economies of scale or subsidies then building code can be suitably amended to make large buildings and housing societies in very high risk areas to comply with the norms


3.It is known that mobile phones don’t work during earthquakes and natural disaster as the mobile towers are destroyed. In such cases satellite based TETRA communication networks are to be expanded to all the high risk areas. If needed, satellite can be leased from other nations for such communication purposes


4.Many parts of India are heavily populated and density of population is also very high. Those cities that sit on fault zones must be monitored diligently for shocks and signals of earthquakes. Cities like Delhi are prone to earthquakes so training must be provided in schools and colleges on how to save oneself when a disaster strikes


5.Global best practices on deployment of rescue and rehabilitation teams and its preparedness must be nurtured and developed.