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|December 15, 1998||
BJP's tragi-comedy of errors
It was a classic case of confusion worse confounded. And though all's well that ends well, the BJP-led coalition government's decision to introduce the Insurance Regulatory Authority Bill in Parliament was a tragi-comedy of errors. It was a marathon 10-day drama which proved that frenetic ideologues, who forget rationality, and nincompoop politicians, who fly to the media without doing their homework, can combine to create that sort of dangerous divides which can destroy any government in power.
The dramatis personnae of that recent Hindutva version passion play called "BJP Vs BJP" were, in the order of appearance, (i) Madan Lal Khurana, the parliamentary affairs minister, (ii) S Gurumurthy, the moving spirit behind the Swadeshi Jagran Manch, (iii) Dattopant Thengadi, president of the Bharatiya Mazdoor Sangh, labour wing of the BJP, (iv) some leaders of the Akhil Bharatiya Mazdoor Sangh, labour wing of the BJP, (iv) some leaders of the Akhil Bharatiya Vidhyarthi Parishad, student wing of the Sangh Parivar and (v) Kushabhau Thakre, the BJP president. Those who made fleeting but fuming appearances on the stage were firebrand Uma Bharti, the sanyasin who is said to have taken sanyas for the last two months from her office in the HRD ministry, and K R Malkani who shot off a vituperative article in The Times of India condemning the Vajpayee government's IRA Bill allowing foreign equity in the Indian insurance sector.
A bit role was also played by Yashwant Sinha, the finance minister. And the miracle at the end was provided by Vajpayee who is increasingly having to play BJP's deus ex machina.
It all began with the frisky Khurana. One fine morning he announced that the IRA Bill would not be introduced in the current Lok Sabha session; that same evening he reversed his stand. This was in keeping with the chaos he had caused months earlier over the matter of appointing Congressman P A Sangma as the Lok Sabha Speaker. But Khurana has merrily bumbled along since then, laughing his vacuous laugh, hanging around Vajpayee's dhoti suppliantly, and addressing the media in his irritating voice. He seems so fond of banter that once in the last session of the Lok Sabha he was giggling and putting his right hand on the left shoulder of young Vasundhara Raje Scindia sitting on his right -- all this before the Doordarshan cameras showing the "colourful" proceedings live. If, as is said, Khurana was Delhi's most popular chief minister, it is no surprise because, behaviour-wise, the two are "made for each other."
Now comes the serious bit: enter Gurumurthy, the SJM ideologue. He and Thengadi with some others conducted a dharna outside Parliament, protesting against the proposal of foreign equity in the insurance sector. Gurumurthy and some ABVP leaders were among those who later led the delegation to confront the country's finance minister with their Swadeshi platform. Thengadi and the ABVP will be dealt with later, after looking at Gurumurthy and his Swadeshi plank.
In the printed version of his speech in Madras on January 15, 1994, Gurumurthy had called "each nation largely living with and within its resources" as the "basic philosophy which is Swadeshi." However, he went on to add that Swadeshi is not just an economic theory like the Marxian economics; instead, he dubbed it as "a comprehensive principle which extends to integrate and link the civilisational, political and economic life of the country and its people. "He called it "superficial" comment to consider Swadeshi "merely an issue of goods produced in India versus imported goods or of goods produced by Indian companies as distinct from goods produced by multinationals." Conspicuously, he did not talk then of foreign capital.
However, the document Rebuilding The Nation produced by SJM last year, while reiterating the esoteric sweep of the above philosophy, did have one small para on "Capital." It says therein that "Foreign capital will not be acceptable if it does not satisfy national interests. The nation has to be freed from foreign dependence." So that was probably why Gurumurthy was opposing the IRA Bill; but why he thought 26 per cent equity from foreign insurance companies was against national interest was not told to us. He perhaps left it to another ideologue, Malkani, who apparently has The Times of India edit page open to him for a signed article. Of that, anon.
The objections of Dattopant Thengadi are also not known. In all probability, he was apprehensive that the thousands of Life Insurance Corporation and General Insurance Corporation employees would really have to work (and sweat) at their job to survive private sector competition. And the ABVP leaders perhaps feared that their students' "safe-job" prospects in public sector insurance sector would be jeopardised by the entry of the private enterprises.
Two asides here seem in order: Has Thengadi ever exhorted the BMS workers to work diligently, to avoid strikes at the slightest provocation? Has the ABVP leadership told its vast student membership to commit themselves to the achievement of excellence and leave politics to the elders?
Now to Malkani's signed article in which he argued that the LIC and GIC were working well enough but if competition was thought necessary, Indian private enterprises ought to be adequate for the purpose, and foreign insurance companies will not bring in foreign investment while some really big ones like the American Insurance Group will undercut losses for years till LIC and GIC are wiped out and then raise its own premium rates, exploit its monopolistic position to bleed customers and repatriate thousands of crores of rupees in foreign exchange as profits. Malkani also added, for good measure, that "foreignisation" was contrary to the BJP manifesto as well as against the coalition government's National Agenda For Governance.
That last was also contained in just one paragraph of Kushabhau Thakre's interview which becomes a sensation in the press. Speaking to The Week, he said, "The BJP manifesto has provision that insurance should not be opened to foreign companies. It is also there in the national agenda." As though to deliver the knock-out blow, he further said, "The finance minister gave a specific assurance to Parliament that there will be no foreign equity in insurance."
All the above three deliveries of Thakre are "chucked" and therefore illegitimate. They are factually incorrect. The three stunning sixers by Madame Sonia Gandhi in the recent assembly poll had perhaps bemused the brahmachari who even otherwise on television, tends to wear a lost look akin to the common man's in R K Laxman's cartoons.
Take the BJP manifesto first. Para numbered 5 on page 12 of that document says, "The Government will ensure that a climate of competition is created in the insurance sector -- if need be, by involving Indian private sector in the insurance business." Neither in that paragraph or anywhere else in the 55 pages that constitute the BJP Election Manifesto 1998 is it mentioned that insurance business will be denied to foreign companies as imagined by Thakre. Rather, note the manifesto's use above of the phrase "involving Indian private sector;" if the Indian private sector involves a foreign company (as stipulated in the IRA Bill), would it violate the BJP manifesto? Not at all.
Indeed, see some other contents of the BJP manifesto. It states (on page 17) that 'the Government will... allow Indian joint ventures with foreign companies in oil exploration and extraction."It concedes (on page 10) that foreign capital is "crucial to some sectors like infrastructure" and avows (on page 12) that for the purpose of investing in infrastructure, "the Government will access the long-term debt market in Insurance and Pension Funds." Pertinent in this context is that, according to the Rakesh Mohan committee on infrastructural development, opening up the insurance market will create a market for long-term debt instrument.
Moreover, the BJP manifesto talks of the need for introducing a social security net for the un-incorporated sector and believes that Indian private sector companies can provide this (page 15). Can exclusively Indian companies, unsupported by foreign capital, provide the desired security to that sector which, going by BJP's manifesto (page 14), accounts for 40 per cent of India's GDP? And who is to provide the massive funds for the manifesto's intention (page 25) to start a nationwide crop and animal husbandry insurance scheme to all farmers?
As for foreign capital in the insurance sector being opposed even in the coalition government's national agenda, Thakre forgot the fine print there too. While the 8-page "National Agenda For Governance" document does talk of qiving "a strong Swadeshi thrust' to the national economy (page 1), it does not actually bar foreign capital in insurance. In fact, on page 4, para numbered 6, it commits the government to "encourage Foreign Direct Investment in core areas so that it usefully supplements the national efforts..."
Then there's Thakre's recollection about the finance minister's alleged specific assurance against foreign equity in insurance. Reference to parliamentary proceedings and/or video tapes will confirm that the finance minister had been evasive about the issue, thus subtly giving the amber signal for foreign equity.
Yashwant Sinha's rallying role in the IRA drama was in stating towards the end of it all that allowing foreign capital in the insurance sector would speed up the overall flow of foreign investment so direly needed for putting resources in the huge infrastructural requirements. The Rakesh Mohan Committee had estimated these requirements at around Rs 4,00,000 crores over five years; a State Bank of India study released this June put the requirement at Rs 359,500 crores in the next five years -- Rs 71,900 crores a year over and above the existing total capital expenditure of Rs 57,865 crores slated in the national Budget for 1998-99.
And the finance minister the other day reportedly put the infrastructure requirement at US $ 25 billion a year which comes to Rs 106,250 crores a year -- a little more than what LIC's "Life Fund" is today, after 42 years of its working! What's more, Sinha must have put the fear of gods in Swadeshi souls when he reportedly told them that there's no way that that kind of money could be mobilised internally.
The concluding marvel of the IRA miracle-play was, of course, enacted by the prime minister. At the decisive meeting of the BJP's parliamentary group, he veered away from his earlier plea of having faith in him, of trusting him; instead, his message was "there was no need for 'isms' and dogma in economic policy, no place for ideological rigidity."
The tragi-comedy of it all is the existence of that very message in the BJP's Election Manifesto 1998. On page 9, the last sentence of the first paragraph says "What this nation needs now is a practical approach that is devoid of dogma and is guided wholly by considerations of national interest and what is appropriate for us. "Messrs Gurumurthy, Malkani, Thakre & Co should carve that message in their minds in bold letters.
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