atalji ki kavita

जो जितना ऊँचा, 

उतना एकाकी होता है, 

हर भार को स्वयं ढोता है, 

चेहरे पर मुस्कानें चिपका, 

मन ही मन रोता है। 

किन्तु इतने ऊँचे भी नहीं, 

कि पाँव तले दूब ही न जमे, 

कोई काँटा न चुभे, 

कोई कली न खिले। 

न वसंत हो, न पतझड़,
हो सिर्फ ऊँचाई का अंधड़,
मात्र अकेलेपन का सन्नाटा।

मेरे प्रभु! 

मुझे इतनी ऊँचाई कभी मत देना, 

ग़ैरों को गले न लगा सकूँ,
इतनी रुखाई कभी मत देना।

आओ फिर से दिया जलाएँ
भरी दुपहरी में अंधियारा
सूरज परछाई से हारा
अंतरतम का नेह निचोड़ें-
बुझी हुई बाती सुलगाएँ।
आओ फिर से दिया जलाएँ

हम पड़ाव को समझे मंज़िल
लक्ष्य हुआ आंखों से ओझल
वतर्मान के मोहजाल में-
आने वाला कल न भुलाएँ।
आओ फिर से दिया जलाएँ।

आहुति बाकी यज्ञ अधूरा
अपनों के विघ्नों ने घेरा
अंतिम जय का वज़्र बनाने-
नव दधीचि हड्डियां गलाएँ।
आओ फिर से दिया जलाएँ

क़दम मिला कर चलना होग

बाधाएँ आती हैं आएँ
घिरें प्रलय की घोर घटाएँ,
पावों के नीचे अंगारे,
सिर पर बरसें यदि ज्वालाएँ,
निज हाथों में हँसते-हँसते,
आग लगाकर जलना होगा।
क़दम मिलाकर चलना होगा।

हास्य-रूदन में, तूफ़ानों में,
अगर असंख्यक बलिदानों में,
उद्यानों में, वीरानों में,
अपमानों में, सम्मानों में,
उन्नत मस्तक, उभरा सीना,
पीड़ाओं में पलना होगा।
क़दम मिलाकर चलना होगा।

उजियारे में, अंधकार में,
कल कहार में, बीच धार में,
घोर घृणा में, पूत प्यार में,
क्षणिक जीत में, दीर्घ हार में,
जीवन के शत-शत आकर्षक,
अरमानों को ढलना होगा।
क़दम मिलाकर चलना होगा।

सम्मुख फैला अगर ध्येय पथ,
प्रगति चिरंतन कैसा इति अब,
सुस्मित हर्षित कैसा श्रम श्लथ,
असफल, सफल समान मनोरथ,
सब कुछ देकर कुछ न मांगते,
पावस बनकर ढ़लना होगा।
क़दम मिलाकर चलना होगा।

कुछ काँटों से सज्जित जीवन,
प्रखर प्यार से वंचित यौवन,
नीरवता से मुखरित मधुबन,
परहित अर्पित अपना तन-मन,
जीवन को शत-शत आहुति में,
जलना होगा, गलना होगा।
क़दम मिलाकर चलना होगा।




टूट सकते हैं मगर हम झुक नहीं सकते

सत्य का संघर्ष सत्ता से
न्याय लड़ता निरंकुशता से
अंधेरे ने दी चुनौती है
किरण अंतिम अस्त होती है

दीप निष्ठा का लिये निष्कंप
वज्र टूटे या उठे भूकंप
यह बराबर का नहीं है युद्ध
हम निहत्थे, शत्रु है सन्नद्ध
हर तरह के शस्त्र से है सज्ज
और पशुबल हो उठा निर्लज्ज

किन्तु फिर भी जूझने का प्रण
अंगद ने बढ़ाया चरण
प्राण-पण से करेंगे प्रतिकार
समर्पण की माँग अस्वीकार

दाँव पर सब कुछ लगा है, रुक नहीं सकते
टूट सकते हैं मगर हम झुक नहीं सकते

All you need to know about the Bharat Ratna

The highest civilian award is given in recognition of exceptional service, performance of the highest order in any field of human endeavour.

Bharat Ratna, the country’s highest civilian award instituted in 1954, is given in recognition of exceptional service, performance of the highest order in any field of human endeavour. Any person without distinction of race, occupation, position or sex is eligible for this award.

The recommendations for Bharat Ratna are made by the Prime Minister to the President. The number of annual awards is restricted to a maximum of three in a particular year.

On conferment of the award, the recipient receives a Sanad (certificate) signed by the President and a medallion.

The award does not carry any monetary grant. The award cannot be used as a prefix or suffix to the recipient’s name.

However, should an award winner consider it necessary, he or she may use the following expression in their biodata or letterhead or visiting card etc. to indicate that he or she is a recipient of the award: ‘Awarded Bharat Ratna by the President’ or ‘Recipient of Bharat Ratna Award’.

Educationist Madan Mohan Malviya and former Prime Minister Atal Bihari Vajpayee are the 44th and 45th distinguished personalities who have been conferred with country’s highest civilian award.

Early this year, Sachin Tendulkar and C.N.R. Rao were given Bharat Ratna.

A list of Bharat Ratna recipients:

1) C. Rajagopalachari (1954)

2) Sarvepalli Radhakrishnan (1954)

3) C.V. Raman (1954)

4) Bhagwan Das (1955)

5) Mokshagundam Visvesvaraya (1955)

6) Jawaharlal Nehru (1955)

7) Govind Ballabh Pant (1957)

8) Dhondo Keshav Karve (1958)

9) Bidhan Chandra Roy (1961)

10) Purushottam Das Tandon (1961)

11) Rajendra Prasad (1962)

12) Zakir Hussain (1963)

13) Pandurang Vaman Kane (1963)

14) Lal Bahadur Shastri (1966)

15) Indira Gandhi (1971)

16) V.V. Giri (1975)

17) K Kamaraj (1976)

18) Mother Teresa (1980)

19) Acharya Vinoba Bhave (1983)

20) Khan Abdul Ghaffar Khan (1987)

21) M.G. Ramachandran (1988)

22) B.R. Ambedkar (1990)

23) Nelson Mandela (1990)

24) Rajiv Gandhi (1991)

25) Vallabhbhai Patel (1991)

26) Morarji Desai (1991)

27) Maulana Abul Kalam Azad (1992)

28) JRD Tata (1992)

29) Satyajit Ray (1992)

30) Gulzarilal Nanda (1997)

31) Aruna Asaf Ali (1997)

32) APJ Abdul Kalam (1997)

33) M.S. Subbulakshmi (1998)

34) Chidambaram Subramaniam (1998)

35) Jayaprakash Narayan (1999)

36) Amartya Sen (1999)

37) Gopinath Bordoloi (1999)

38) Pandit Ravi Shankar (1999)

39) Lata Mangeshkar 2001)

40) Ustad Bismillah Khan (2001)

41) Bhimsen Joshi (2009)

42) C.N.R Rao (2014)

43) Sachin Tendulkar (2014)

Bharat Ratna for Vajpayee, Madan Mohan Malaviya

The President's Office on Wednesday announced the Bharat Ratna award to Pandit Madan Mohan Malaviya (posthumously) and former Prime Minister Atal Bihari Vajpayee.

The announcement was made on the eve of Mr. Vajpayee's 90th birthday and the 153rd birth anniversary of Pandit Malviya.

The BJP has been demanding Bharat Ratna for Mr. Vajpayee for a long time; and BJP patriarch L.K. Advani has been at the forefront of seeking the highest civilian honour for the former Prime Minister.

Earlier, Mr. Advani had written a letter to the UPA Government to award the Bharat Ratna to the former Prime Minister. The request was however, overlooked by the UPA government, said sources. In 2013, the award was conferred to cricketer Sachin Tendulkar and scientist C.N.R Rao.


A Bharat Ratna for Pandit Malviya, a freedom fighter and the founder of the Benaras Hindu University was proposed by Prime Minister Narendra Modi during his election campaign. Justice Giridhar Malviya, the grandson of Pandit Malaviya was one of those who proposed the nomination of Mr. Modi from Varanasi parliamentary constituency. Mr. Vajpayee will be the seventh Prime Minister to receive the award, while Pandit Malviya will be the 12th person to be honoured posthumously.

Earlier recipients of the award include former Prime Ministers Jawaharlal Nehru, Indira Gandhi, Rajiv Gandhi, Morarji Desai, Lal Bahadur Shastri, along with first Governor General of free India C. Rajagopalachari, and former Deputy Prime Minister Sardar Vallabhbhai Patel.

Prime Minister Narendra Modi has expressed delight at the announcement. "Bharat Ratna being conferred on Pt. Madan Mohan Malaviya and Atal Bihari Vajpayee is a matter of great delight. Country's highest honour to these illustrious stalwarts is a fitting recognition of their service to the Nation. Pt. Madan Mohan Malaviya is remembered as a phenomenal scholar and freedom fighter who lit the spark of national consciousness among people. Atal ji means so much to everyone. A guide, inspiration and giant among giants. His contribution to India is invaluable," the Prime Minister said.

Give and trade

A few months ago at the WTO, India, along with a couple of other countries, had blocked the Trade Facilitation Agreement (TFA) because of its concern over the possibility of being challenged at the WTO over its minimum support prices, which the government equated with food security. Subsequent negotiations with the US have resulted in a formal WTO agreement allowing public stockpiling of foodgrains through MSPs without challenge from trading partners. This is a temporary fix that will remain in place until member countries are able to work out a permanent solution. At the general council of the WTO in November, representatives of member countries unanimously approved the public stockpiling agreement and the TFA. The next step for the implementation of these agreements is

ratification by each member country’s government.

The TFA aims to remove red tape in customs procedures in all 160 WTO member countries. Under this agreement, member countries will make an effort to reduce customs-related paperwork, provide more transparency in procedures, reduce clearance delays at ports, provide clearer and timely information about rules, tariffs and procedures through printed publications and the internet, institute a system of appealing customs decisions, and provide information to involved parties in case their goods are being detained at ports etc. For the implementation of these provisions in poorer countries, financial assistance will be provided, both through the WTO and the World Bank.

In today’s world, the production process of a good or service is highly fragmented, in that different tasks are performed in different locations across the world. Each task is located where it is cheapest to perform. This kind of a global production chain or network minimises the cost of production. However, it requires timely delivery of intermediate inputs from one part of the world to another. For example, radiators manufactured in Chennai have to reach Detroit on time to be attached to automobiles being assembled there. This fragmented nature of modern production makes the TFA even more important and valuable.

The TFA is also important since it is the first successful step in the WTO’s Doha Round of trade negotiations, started more than a decade ago. While the WTO has been active in dispute resolution, rule-making and bringing about optional agreements such as the one related to information technology products, the TFA is the first truly multilateral agreement after the General Agreement on Tariffs and Trade (GATT) was transformed into the WTO under the Uruguay Round. As a result of the TFA, to quote WTO director general Roberto Azevedo, the WTO’s negotiating work is “back on track”. In other words, WTO member countries can build on this success and start negotiating on agricultural protection andsubsidies as well as non-agricultural market access and other developing country issues. 

These issues arise mainly from their dissatisfaction with limited market access in agriculture, textiles and apparel in developed countries in return for their efforts in the area of intellectual property rights protection and large tariff reductions on manufacturing imports. While there are concerns that agricultural support remains quite high in developed countries, some commentators point out that this support has actually gone down substantially in recent years. This has been an important issue in WTO negotiations between developed and developing countries. In the pre-WTO era of the GATT, developing countries were granted tariff concessions without the need to reciprocate. These countries need to realise that they are now in a world where further negotiations will require an exchange of concessions or reciprocity. 

At the same time, developed countries also need to be aware that large developing countries such as Brazil, China and India can no longer be ignored or pushed around. Only if countries keep these new realities in mind can further progress be made in negotiations on issues initiated by the Doha Round. What are the next steps for India? It is easy to be tempted, because of the slow progress of WTO trade negotiations, to change course and ink preferential trade arrangements (PTAs) or regional trade agreements. 

However, it is important to remember that though many of these PTAs take the form of free trade agreements (FTAs), FTAs are not exactly free trade. An FTA among a subset of WTO countries is discriminatory and protectionist with respect to countries that are outside that agreement and also diverts imports of certain products away from such non-member countries, even when they might be the most efficient producers. Also, if India were to sign an FTA with a major developed country such as the US or a group of developed countries such as the EU, it would have limited power in such negotiations. This is in sharp contrast to negotiations at the WTO, where India has greater bargaining power due to opportunities to form coalitions with countries that have common interests. Moreover, as seen in the case of the Trans-Pacific Partnership, signing an FTA with developed countries comes with accepting very stringent intellectual property rights protections as well as labour and environmental standards, which a developing country cannot really afford - 

Choice to the farmer

The Indian fertiliser industry is in trouble because of the non-release of subsidy by the government, even as farmers are forced to buy both diammonium phosphate (DAP) and urea at a premium of 33 per cent in black markets across India. If the industry is in trouble, then farmers are the endangered species. Farmers’ fertiliser cooperatives like IFFCO are the only saving grace in this unholy mess. Expectedly, the industry is vehemently advocating the transfer of subsidy collection from the government to the farmers. We fundamentally agree with the industry and economists on the broader idea of targeted delivery of fertiliser subsidy directly to farmers in cash, but not for the reasons peddled. Nor would it be acceptable to farmers without a legal framework to first secure their rights.

One reason touted for the need of cash transfers for the fertiliser subsidy is so that the supposedly imbalanced use of fertilisers due to the overuse of urea (nitrogen) can be controlled. The idea of the NPK (nitrogen, phosphorus and potassium) use ratio of 4:2:1 for the whole country was formed in the 1950s, after fertiliser trials in seven states. Large variations in soil type and fertility across regions, districts and states make an optimum ratio for India irrelevant to any particular state. Ramesh Chand of the National Centre for Agricultural Economics and Policy Research (NCAP) has conclusively established that only six states (Andhra Pradesh, Assam, Bihar, Haryana, Jharkhand and Punjab) use excess nitrogen, while phosphorus is used in excess in five states (Andhra, Gujarat, Punjab, Tamil Nadu and Karnataka), even when we accept the normative ratio. Despite shortcomings, policy decisions and discussions continue to be based on the flawed NPK ratio. In fact, the deficiency of nitrogen is a more serious problem than the excess use of nitrogen and, as policy, we should encourage the use of phosphorus and potassium rather than curtail the use of nitrogen.

Second, many economists have claimed that India would save money by shifting to cash transfers. I do not think so. In any case, the fertiliser policy should not be about saving money but about increasing prosperity and productivity. Over all, per hectare (ha) fertiliser use in India is much lower than in the rest of the world. For example, the consumption of nutrients in China in 2011 was reported to be 399.8 kg per ha of arable land, while in India it is 164.8 kg per ha. Similarly, yields vary. Presuming the second green revolution is successful, as farming gets more intensified, fertiliser consumption will increase. Once all farmers are registered for cash transfers, the quantum of subsidy outgo will also increase. Additionally, it is argued — unacceptably, in my opinion — that thousands of truckloads of fertilisers are smuggled out of the country annually in these times of increased vigil on the borders. As far as the diversion of fertilisers to other uses is concerned, it cannot happen without the active participation of the industry or their distributors. Can this be a reason for moving to cash transfers? Certainly not. It is for the vigilance authority to check who is involved in such diversion. Should India decide to shift to cash transfers of the fertiliser subsidy, retail prices of fertilisers will invariably be deregulated. Farmers are scared that in such a scenario, even as fertiliser prices continue to rise, the amount of cash transfer per farmer per hectare will not keep pace with the increasing cost of fertilisers, like the crop MSP that fails to fully factor in the cost of cultivation. In the absence of timely payment of the subsidy due to problems like inadequate budgetary provisions, resource-poor farmers will face cash-flow problems. The cost of fertiliser is approximately one-third the cost of production for major irrigated crops, and farmers will be forced to take expensive credit to purchase fertilisers. An administered formula will have to bear careful scrutiny before approval. Policy must be designed to include those at the bottom of the pyramid. At present, when tenants (estimated informal tenants are 20 per cent of the total number of farmers) purchase fertilisers, they benefit from the fertiliser subsidy. But should the government decide to transfer subsidy in the form of cash, millions of tenants will be denied their portion of fertiliser subsidy because their names are not registered in land records, or because they do not have bank accounts. The land records must first be ratified. Transferring funds to over 100 million identified farmers who are yet to be documented, and millions without bank accounts, will be a daunting task. Subsidy as a percentage of the GDP has been decreasing over many years in India. The fertiliser subsidy helps farmers grow crops at a lower cost, enabling consumers to pay a lower price for food. Although there are substantive reasons to shift to cash transfers, when farmers want to produce and use their own farmyard manure as fertiliser, they do not get incentives and are not reimbursed for the costs. Farmers are forced onto a path of over-dependence on chemical farming because only industrial fertilisers are subsidised. This is counterproductive, since ecological and economic sustainability is threatened. Farmers must have a choice. Additionally, cash transfers can allow for variable distribution of resources to achieve equitable growth, and could also be WTO compatible. Many preposterously claim that farmers will - be unable to decide well for themselves and will waste the cash received on liquor. Only with the farmer’s participation can a repeat of farm policy mistakes be avoided

The great Game Folio: Ocean Diplomacy

answer to the new maritime challenges that confront India. Multilateral diplomacy is an important but minor part of a new Indian Ocean strategy that New Delhi needs to develop. The core of such a strategy is about building India’s own naval strength and expanding its maritime partnerships with other countries through bilateral, trilateral and multilateral means.

In the past, when India saw itself as a weak, non-aligned state, Delhi believed the nation’s security dilemmas could be addressed through moralpolitik. This approach created severe problems for the nation’s security decision-makers. When China tested its first nuclear weapon in 1964, for example, India ran to the United Nations seeking a treaty that would abolish nuclear weapons.

Delhi contested the very idea of a power vacuum in the Indian Ocean and bet that the region could build a system of collective security. India asked the great powers not to acquire military bases in the region. It also told Washington and Moscow, “by the way, don’t even think of bringing your nuclear weapons into the Indian Ocean”.Instead, India got the non-proliferation treaty, which only prevented the spread of these weapons. Rather than build a nuclear arsenal, India spent the next three-and-a-half decades denouncing the NPT and proclaiming a commitment to nuclear disarmament. Similarly, India believed that the UN would provide answers to a historic shift in its maritime environment — the withdrawal of Great Britain from east of the Suez after nearly two centuries of dominance over the Indian Ocean. As America replaced Britain as the dominant naval power in the Indian Ocean and its rival Soviet Union sought to compete, Delhi backed Colombo’s proposal for a zone of peace in the Indian Ocean.

If Delhi’s strategic innocence in the 1960s was breathtaking, some of its neighbours, like Pakistan, thought India was being simply devious; they believed Delhi wanted great powers out of the Indian Ocean so that it could establish its own dominance. So much for the consequences of Indian idealism. Irrespective of their lip service for the zone of peace, most Indian Ocean states actively sought military support from one or the other external power to counter presumed threats from their neighbours. That world has 

Maritime China

Doval’s invocation of the zone of peace proposal is widely seen as an Indian counter to China’s growing naval presence in the Indian Ocean. Delhi has noted with concern the recent dockingof Chinese naval submarines in Colombo and watched warily as the Chinese navy matched India’s fresh water diplomacy in the Maldives. India’s rhetoric about keeping extra-regional powers out of the Indian Ocean was directed at America in the 1970s and 1980s. As India has expanded its interaction with the US military since the early 1990s, some of that rhetoric had taken a backseat. As China eyes the Indian Ocean, Delhi is playing the old song again. But that little ditty is not going to limit China’s rising naval profile in the Indian Ocean. After it first showed up in the Indian Ocean three decades ago, the Chinese navy is here to stay. Like all great powers before, Beijing is bound to establish a permanent military presence in the Indian Ocean. The question is not “if” but “when”. Indian Response To cope with the rise of China and the changing power balance in the Indian Ocean, Delhi needs to look beyond the outdated zone of peace proposal. India’s ocean diplomacy needs a strong domestic foundation, built on more rapid naval modernisation, the expansion of civilian maritime infrastructure, development of island territories, capacity to undertake projects in other countries across the littoral and more vigorous naval assistance to other countries. On the political front, India needs much better political relations with its maritime neighbours like Sri Lanka and the Maldives, which are playing the China card as an insurance against hostile Indian policies. Delhi also needs stronger partnerships with other island states, like Seychelles and Mauritius, which are being wooed by China with great vigour today. India needs to deepen its military security cooperation in the Indian Ocean with the US and France and initiate a maritime security dialogue with China. On the foundation of these unilateral and bilateral initiatives, India can expand its maritime multilateralism through such initiatives as the Indian Ocean Rim Association and the Indian Ocean Naval Symposium. For all this, Delhi needs the civilian leadership — both political and bureaucratic — in the defence ministry to wake up to the new imperatives of maritime strategy and naval diplomacy. - 

Basel III norms cannot end social banking

Nationalized banks in India are being sought to be privatized on the basis of an argument, originally advanced by P. Chidambaram and more recently by Arun Jaitley, that without it India cannot meet the Basel III "norms". The argument goes as follows.

The Basel III agreement has set " norms" with regard inter alia to the size of the equity base that banks in all the signatory countries must meet, for ensuring their sound financial health; fulfilling these " norms" requires an increase in the size of the equity base of the nationalized banks in India, for which the government does not have the budgetary resources; hence it must tap private capital by reducing the share of government equity and increasing that of private equity.

Neither of the two finance ministers, to be sure, has yet argued for reducing the government to a minority share- holder in nationalized banks, so that calling such equity dilution " privatization" may be objected to by some; but one cannot pretend that with the private equity share at 49 per cent, the nationalized banks can ignore private attempts to influence their behaviour.

Even if the ownership of this 49 per cent is widely dispersed, it still makes nationalized banks vulnerable to private pressures. Such dilution in short does amount to de facto privatization. The ministers' argument, however, is a completely spurious one.

Whether India should be following Basel III "norms" at all is itself a debatable point. Bank nationalization in India was meant to serve a social purpose: to reach bank credit to peasants, petty producers and small capitalists who had been excluded from it earlier, and it is precisely because of this widening of the reach of bank credit that the country could break out of the stagnation that foodgrain production had entered into by the mid- 1960s (even if the abysmal output levels of 1965- 66 and 1966- 67 which produced the Bihar famine are ignored).

This purpose is at loggerheads with the Basel III "norms", which, if strictly adhered to, would exclude many of these borrowers, even though lending to them is safer than to the big capitalists who use it for speculative purposes, that is, for participating in stock market or property market "bubbles". This fact, resoundingly demonstrated by the 2008 financial crisis, when, ironically, the nationalized banks in India were lauded for not having got into "toxic" assets as private banks all over the world had done, is hardly likely to be appreciated by a meeting of conventional bankers in Basel who prescribe such "norms". It follows that a government committed to social banking cannot be bound by Basel III "norms". The fact that the government wants even the nationalized banks to follow these " norms" is because it has opened the economy to the vortex of globalized financial flows; and when that happens, you cannot ignore the demands of the Basel financial elite, even if they go against your social purpose . But let us leave aside this point, and assume that Basel III "norms" with regard to the equity of the nationalized banks have simply got to be met. Even so, the argument of the finance ministers is a spurious one, because it assumes that the government needs to pay for the additional equity of the nationalized banks from budgetary sources; there is absolutely no reason why it should do so.

Whatever the additional amount that needs to be provided by the government for meeting the enhanced equity base required by the Basel III "norms" can simply be borrowed from the Reserve Bank of India.

Suppose for simplicity that Rs 100 has to be provided and that the government borrows this amount from the RBI and gives it to the banks as equity capital. If the banks in turn simply hold this amount with the RBI itself, then all that would have happened is a mere book transaction on the part of the RBI, with absolutely zero effects on the real economy . Technically, such borrowing from the RBI constitutes " deficit financing", but in this case, since no funds would get into the economy at all, there is no question of there being any effects whatsoever, let alone any harmful effects, of such " deficit financing" on the economy.

Of course, if the banks' equity base goes up by Rs 100 and they hold all of it in the form of cash with the RBI, then the banks' cash reserve ratio, which is the ratio of their cash- holding to total assets, would have increased (since both the total assets and the cash component of it would have increased by the same amount). But there is absolutely nothing that forbids banks from holding cash reserves in excess of what is statutorily required. There is no problem relating to interest payments either, since the entire arrangement is between the government, the nationalized banks, and the RBI (whose profits accrue to the government anyway).

In short, the provision of additional equity for nationalized banks is a complete non- issue. And the reason for its being a non- issue is simply that with nationalized banks, the government is committed to protecting them anyway, precisely by virtue of being their owner. No Basel III "norm" in terms of equity base is actually necessary for them, for they already enjoy the protection of the sovereign government that owns them. Fulfilling this equity "norm" which is unnecessary can therefore take the form of a mere book transaction, which is no more than just a ritual.

The government's borrowing from the RBI to increase the equity base of the nationalized banks will, on paper no doubt, raise the fiscal deficit, and hence contravene the Fiscal Responsibility and Budgetary Management Act that puts a ceiling on the fiscal deficit. But, as already suggested, it would have absolutely no effects on the economy.

To drag in the FRBM Act to thwart this obvious way of enhancing the equity base of the nationalized banks, through a mere book transaction, would therefore be sheer folly. It may be argued that even though we know that such a book transaction will not have any real economic effects, the foreign investors may get frightened if the fiscal deficit, because of this titular component, exceeds the provision of the FRBM Act. To this, however, one can only say, first, that the foreign investors are not so stupid as not to see the titular nature of this fiscal deficit; and, second, that if they still get put off by it, then one should not allow their stupidity or invidiousness, whichever way one interprets their intransigence, to alter a basic parameter of policy in the country, which is to promote social banking through the nationalized banks.

There is indeed an instructive precedent here. When the financial crisis hit the United States of America upon the collapse of the housing bubble, the Barack Obama administration had made a provision of $ 13 trillion for supporting the American financial system. The US does not have any equivalent of an FRBM Act; but, even so, nobody was concerned about this amount being set aside, because the administration was not being actually called upon to spend this amount. It was in the form of guarantees, or pledges of support, on the part of the administration, should the need arise, which is exactly what the Union government's enhanced equity support to banks would amount to, according to the conception I have put forward.

It follows that the entire argument about the need to privatize nationalized banks because of the paucity of fiscal resources to enhance their equity base is a totally spurious one, since no such fiscal resources are needed. But this is so obvious a point that one cannot imagine it’s not having struck the finance ministry mandarins. The fact that they still advance this argument, therefore, needs an explanation.

And the real explanation is that there has been immense pressure from international financial organizations and the US administration upon India for privatizing its public sector banks. Indeed several US treasury officials from Lawrence Summers to Timothy Geithner have met our finance ministry mandarins in New Delhi to persuade them to privatize at least the State Bank of India, if not the whole set of public sector banks.

And our mandarins, notwithstanding their own predilection in favour of such privatization, which arises from their own penchant for neo- liberal " reforms", have been held back by the immense political opposition it would generate within the country, including from within the ruling political formations.

Given this stalemate, passing off privatization, and that too of a " soft" kind that does not actually entail making the government a minority share- holder, as being absolutely necessary for " technical" reasons having to do with Basel III is a subterfuge resorted to by our mandarins. It is an utterly disingenuous exercise, which, for that very reason at least, must not be allowed to succeed.