Defending the forces

It is unfortunate that the IAS lobby has been allowed to get away with its plan to lower the status of the armed forces relative to its own standing. The IAS has done this by changing the relative parity of armed forces personnel and is now claiming that this was always the case.

Unlike in our neighbouring countries where the military routinely exerts more control than the civilian government, in India, the armed forces have always bowed to civilian control. Trust is a very important part of that equation. What events of the past few months have done is to hurt that trust. It is unfortunate that the Navy chief had to try to persuade brother officers not to implement the government’s orders and that is why he was given a dressing down by the defence minister. But it is even more unfortunate that the government chose to act as a mute spectator when the forces’ were pointing out this injustice to them. The Group of Ministers who have been asked to look into the matter will surely do the right thing, but did things have to come to this pass?

Sanjay Singh, Gurgaon

Will it work?

This refers to the series of articles on the global financial crisis by Percy Mistry being carried in your newspaper. Mistry is right that there was no option but to organise this $700 billion plan and that few are paying attention to those that caused the problem — US President George Bush and then Fed chief Alan Greenspan. Greenspan was happy to have presided over the biggest bubble in US economic history and as long as things were doing well, no one questioned the magic. Mistry is also right in emphasising that all those “masters of the universe” who benefitted from the boom have eventually paid a huge financial price since their stock holdings are practically worthless today.

But the really big question is whether the bailout plan will work. Apart from the moral hazard question — who will decide what stocks are to be bought and the price at which the transaction will take place — there is the issue of trust. At the centre of the crisis is the fact that all banks were hiding the nature of their true net worth. So, as long as people know banks are hiding their true net worth, no one is going to trust the banks; investors, like SWFs who rushed to recapitalise banks like Citibank, will now want to keep away since they’ve realised they were taken for a ride earlier. Till this issue of trust is resolved, the wheels of western finance will continue to remain clogged.

S Sinha, Mumbai

OK, Tata

The Tata Motors pullout from Singur signals the end of West Bengal, and perhaps even east India, as an investment destination. If this is the fate of a project that was backed by the entire state government, one shudders to think of the fate of a project where the entire state machinery is not putting its weight behind it. Such projects, if they are large ones and involve takeover of large tracts of land, have no hope of ever getting cleared. While industrial projects like the Nano can still be relocated, though after a loss of a few hundred crore of rupees, the same does not apply to projects which are based on mineral resources. So, if the Orissa government is not able to get Posco the land it requires for its steel plant or the clearances it requires for mining of ore, the project is dead — it cannot, in return for some tax breaks, be shifted to either Gujarat or Uttaranchal Pradesh. Both the Centre and the states need to sit down together to find a solution to this vexed problem.

Pramod Jain, New Delhi

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