LETTERS

Issn 0012-9976
Ever since the rst issue in 1966, EPW has been Indias premier journal for comment on current affairs and research in the social sciences. It succeeded Economic Weekly (1949-1965), which was launched and shepherded by Sachin Chaudhuri, who was also the founder-editor of EPW. As editor for thirty-ve years (1969-2004) K rishna R aj gave EPW the reputation it now enjoys.

Nothing Like Gold

ou state that increasing the price of gold through a curb on import could induce households to shift to nancial savings. What makes you so sure that this will happen? At present the customs duty on gold is 10%. Smuggling is rampant. Note it was gold smuggling way back in the 1980s that led to the emergence of the Dawoods and their likes. Gold has two sides, a currency aspect as well as a commodity dimension. Gold yields interest on lending and is a medium of exchange, and hence, it is a currency. Gold is also amenable to value addition through jewellery, etc, and is thus a commodity. So gold is a perfect hybrid asset. The common man in India invests in gold as it has been a remarkable asset to hold. In Indian rupees, gold has yielded an average annual return of 11.3% between 1970 and 2010. During the same period, wholesale price indexbased ination on an annual basis was 7.2%. Thus gold has outperformed ination by a margin of 400 bps over 40 years. Lastly, in 34 out of those 40 years between 1970 and 2010, gold has outperformed ination. Thus, gold as an asset has been a consistent outperformer. That is the singular reason for investors to go for gold. Hence, your prescription is not based on facts and ground realities. Yes, import is a challenge. However, countries have dealt with it in many creative ways. Monetising gold, segregating investment demand, unlocking gold held with private households, temples and trusts are some of the ways in which one can reduce import without distorting the market.
G Srivatsava President, Foretell Business Solutions,
BANGALORE

editor

C Rammanohar Reddy
EXECUTIVE Editor

aniket Alam
Deputy Editor

Bernard DMello
Senior Assistant Editors

Lina Mathias Srinivasan ramani

copy editors

Prabha Pillai jyoti shetty

Assistant editor

P S Leela
editorial Assistants

lubna duggal ABHISHEK SHAW

production

u raghunathan s lesline corera suneethi nair

Circulation

Gauraang Pradhan Manager B S Sharma

Advertisement Manager

Kamal G Fanibanda
General Manager & Publisher

K Vijayakumar
editorial
edit@epw.in

Circulation
circulation@epw.in

Advertising
advertisement@epw.in

Economic and Political Weekly

320-321, A to Z Industrial Estate Ganpatrao Kadam Marg, Lower Parel Mumbai 400 013 Phone: (022) 4063 8282 FAX: (022) 2493 4515

EPW Research Foundation

EPW Research Foundation, established in 1993, conducts research on nancial and macro-economic issues in India.

Director

k kanagasabapathy
C 212, Akurli Industrial Estate Kandivali (East), Mumbai 400 101 Phones: (022) 2887 3038/41 Fax: (022) 2887 3038 epwrf@vsnl.com
Printed by K Vijayakumar at Modern Arts and Industries, 151, A-Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013 and published by him on behalf of Sameeksha Trust from 320-321, A-Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013. Editor: C Rammanohar Reddy.

Banks and Loan Waiver

he Comptroller and Auditor General (CAG) has exposed various irregularities in the 2008 loan waiver scheme. While both the Union government and the Reserve Bank of India (RBI) have been quite proper in their actions in
september 14, 2013

announcing the scheme and codifying the criteria for eligible farmers, the banks which implemented the waiver have committed blunders on a large scale. Immediately after the governments announcement in Parliament, the RBI sent a circular to all banks in the country with a clear denition and criteria for eligibility. For instance, a farmer cultivating land up to two hectares or ve acres would be eligible for a complete loan waiver and those cultivating above ve acres would be eligible for a partial waiver. There would be no limit on the amount of the loan to be waived. In the criteria the word cultivating was very important. The dictionary meaning of the word is to prepare land for crops. How much land should be under actual cultivation was mentioned in a document which had to be referred to for a decision on whether a farmer was eligible for a total or partial loan waiver. Banks prepared some hypothetical questions and sidetracked this criterion. For instance, one of the hypothetical questions was If a farmer owns land less than 2.5 acres and has taken 10 acres on lease, whether he should be treated as a small farmer or other farmer? In other words, is it landownership or the area of cultivation that needs to be reckoned? The answer was, The status is determined on the basis of the agricultural land that is in the possession of the farmer. This answer was made applicable to all farmers by calculating all their land in possession, instead of land under cultivation. Some farmers were therefore deprived relief of a total loan waiver. Who prepared these hypothetical questions and who answered them is still a mystery. In response to a Right to Information query the RBI has said that banks prepared the questions and RBI ofcials did not issue answers or clarications. This means that the main regulatory authority was not consulted about the said questions and answers which are termed extant clarications. Why should banks prepare the questions and get the answers without consulting the RBI? If the RBI is the main
vol xlviII no 37
EPW Economic & Political Weekly

LETTERS

regulatory authority, why did it remain silent when farmers were informed about the banks attempt to change the main criterion and avoid giving relief to farmers? Why was the then nance minister, who was approached by the aggrieved farmers, silent? Why did he not ask both the banks and the RBI about the alleged change in the criteria? These are the questions which should now be answered by scrapping the said hypothetical questions and answers or extant clarications and reviewing all cases again in response to the CAGs nding that eligible farmers were deprived of relief. The RBI has already asked the banks to review all cases qualitatively in order to set matters right. If there are cases in which more than the eligible relief was given, the excess amount should be recovered. Similarly, if less than due relief was given and the amount was recovered by coercive method or court action, then that amount has to be repaid to the concerned farmers. But this is possible only if the reviewing process is carried out by an independent authority or committee and not by the banks. Asking banks which have sidetracked the criteria to review the cases they have decided is like asking the accused to be judges and review their own decisions. Under these circumstances the real relief to farmers and correction of the CAGs objection is possible only if an independent committee is appointed either by the RBI or union government urgently so as to go through all cases in the banks records and set matters right.
Prabhakar Kulkarni
Kolhapur

Silencing Democratic Voices

he Coordination of Democratic Rights Organisations (CDRO) strongly condemn the arrest of Prashant Rahi and Hem Mishra, accusing them of Naxal links. Though the exact date of Hem Mishras arrest is yet to be ascertained, he was most probably picked up by the police around 15 August. Prashant Rahi, on the other hand, was arrested on 2 September. The allegation against both of them is that they were carrying
Economic & Political Weekly EPW

some documents/literature. Both have been charged under the notorious Unlawful Activities (Prevention) Act (UAPA) and are serving a long period of police remand without being provided a lawyer. Hem Mishra had been active with a student organisation in Uttarakhand before coming to Delhi, when he obtained admission at the Jawaharlal Nehru University. In the year 2007-08, a number of activists involved in organising youth and the rural poor in Uttarakhand were arrested on the allegation of Maoist links. So potent was the terror unleashed, that few would dare to question the allegations or meet the arrested persons for fear of being implicated. Hem Mishra, handicapped in one hand, was the person who visited all the arrested in jail and helped them get legal support. One of the arrested at that time was Prashant Rahi. Prashant Rahi (52 years) worked as a journalist in Uttarakhand. He was also passionately involved with a host of protest movements ranging from issues of forest dwellers, and of rural labour, to displacement by the Tehri Dam. Arrested in December 2007, alleged to be a senior Maoist leader, Rahi was kept in solitary connement through most of his threeyear eight-month stay in jail. Once released on bail, he took upon himself to visit those imprisoned as Naxalites all over the country and to help them obtain access to a lawyer. To this end, he was regularly travelling across the country collecting details of cases and reaching the same to lawyers. There is no real allegation of any crime against both Hem Mishra and Prashant Rahi. This is evident from the fact that both have been charged solely on the basis of the UAPA. For it is this law that makes normal social and political activity a crime, solely on the whims and fancies of the police. Banning of political organisations

and converting any association with such outts and their opinions into a crime is what opens the gates to the law becoming an instrument of injustice. In addition, the illegal, yet reasonably settled, practice of the police of not registering a panchnama at the time of the detention makes it difcult to ascertain the exact date, time and place of arrest. Such unlawful detention leaves much scope for abuse. It is ironical, in cases where UAPA is applied, that in the name of larger security concerns, courts have been less critical of the blatant violations of procedure. Thus while the alleged crime as well as the circumstances of the arrest remain suspect, a vilication campaign has been mounted by the police, one that masquerades as information in the newspapers. No doubt, this has become the preferred method to silence those working for basic civil liberties and implementation of fundamental rights. Another favourite practice of the police has been to foist new cases against the accused, especially under the UAPA and its previous incarnations, when the accused are either released on bail or else when acquittal in the existing cases is at hand. This has been done ad nauseam to frustrate the bail or acquittal orders of the court and has not yet found serious criticism from the judiciary. In the case against Prashant Rahi too, no incriminating evidence has been found against him and he would be acquitted soon. We therefore demand the immediate dropping of all charges under the UAPA and the release of those arrested.
Kranthi Chetanya, Paramjeet Singh, Parmindar Singh, Phulendro Konsam, Tapas Chakraborty Coordinators, Coordination of Democratic Rights Organisations

Web Exclusives
The following articles have been uploaded in the past week in the Web Exclusives section of the EPW website. They have not been published in the print edition. (1) The Bizarre Proposal for Humanitarian Military Intervention in Syria Srinivas Burra
(2) Can the G20 Summit 2013 Deliver? Mazher Hussain

Articles posted before 7 September 2013 remain available in the Web Exclusives section.

september 14, 2013

vol xlviII no 37

LETTERS

Subscription Rates
(Revised rates effective January 1, 2013)
Web Edition/Digital Archives
Print + Digital Archives 1,200

Print Edition For India

Rates for Six Months (in Rs)
Category Individuals Print (Plus free web access to issues of previous two years) 875

The full content of the EPW and the entire archives are also available to those who do not wish to subscribe to the print edition.
Category India (in Rs) Number of Concurrent Users Up to Five Six to 10 More than 10 Individuals Single User 2,500 4,000 6,000 1,000 More than 10 Single User 50 20 SAARC (in US $) Number of Concurrent Users Rest of the World (in US $) Number of Concurrent Users Up to Five Six to 10 More than 10 Single User 200 320 410 40

Rates for One Year (in Rs)

Category Print (Plus free web access to issues of previous two years) 3,000 1,650 1,325 825 Print + Digital Archives (According to Number of Concurrent Users) Up to 5 5,000 6 to 10 6,000 More than 10 Single User 7,500 1,975 1,550 975 Print + Digital Archives Single User 5,600 4,400

Institutions

Institutions Individuals Teachers/Researchers Students

Rates for Three Years (in Rs)

Category Individuals Teachers/Researchers Print (Plus free web access to issues of previous two years) 4,600 3,600

Types of Web Access to the Digital Archives

Individual subscribers can access the site by a username and a password, while institutional subscribers get access by specifying IP ranges. To know more about online access to the archives and how to access the archives send us an email at circulation@epw.in and we will be pleased to explain the process.

Concessional rates are restricted to students, teachers and researchers in India. To subscribe at concessional rates, please submit proof of eligibility from an institution. Print Edition: All subscribers to the print edition can download from the web, without making any extra payment, articles published in the previous two calendar years. Print plus Digital Archives: Subscriber receives the print copy and has access to the entire archives on the EPW web site.

How to Subscribe:
Payment can be made by either sending a demand draft/cheque in favour of Economic and Political Weekly or by making online payment with a credit card/net banking on our secure site at www.epw.in. (For Inland subscriptions if making payment by cheque, please add Rs 35 to cheques drawn on banks outside Mumbai, when collection is not at par).

Print Edition For SAARC and Rest of the World (Air Mail)
Airmail Subscription for One Year (in US $)
Print (Plus free web access to issues of previous two years) Institutions SAARC Rest of the World Individuals SAARC Rest of the World 140 250 110 170 Print + Digital Archives (According to Number of Concurrent Users) Up to 5 300 6 to 10 400 More than 10 Single User 160 500 120 200

Address for communication:

Economic & Political Weekly

320-321, A to Z Industrial Estate Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013, India

Notes for Contributors

Contributors are requested to follow EPW's style sheet while preparing their articles. The style sheet is posted on EPW's website at http://www.epw.in/terms-policy/style-sheet.html. It will help immensely for faster processing and error-free editing if writers follow the recommended style sheet, especially with regard to citation and preparation of the bibliography. decision on whether the paper for the Special Article section is accepted for publication. Articles accepted for publication can take up to six to eight months from date of acceptance to appear in the EPW. Papers with immediate relevance for policy would be considered for early publication. Please note that this is a matter of editorial judgment.

General Guidelines
Writers are requested to provide full details for correspondence: postal address, day-time phone numbers and email address. EPW requests writers not to send revised versions based on stylistic changes/additions, deletions of references, minor changes, etc, as this poses challenges in processing. Revised versions will not be processed. When there are major developments in the field of study after the first submission, authors can send a revised version.

Special Articles
welcomes original research papers in any of the social sciences. Articles must be no more than 8,000 words, including notes and references. Longer articles will not be processed. Contributions should be sent preferably by email. Special articles should be accompanied by an abstract of a maximum of 150-200 words. Papers should not have been simultaneously submitted for publication to another journal or newspaper. If the paper has appeared earlier in a different version, we would appreciate a copy of this along with the submitted paper. Graphs and charts need to be prepared in MS Office (Word/Excel) and not in jpeg or other formats. Receipt of articles will be immediately acknowledged by email. Every effort is taken to complete early processing of the papers we receive. However, we receive 70 articles every week and adequate time has to be provided for internal reading and external refereeing. It can therefore take up to four months for a final
EPW

Commentary
EPW

invites short contributions to the Commentary section on topical social, economic and political developments. These should ideally be between 1,000 and 2,500 words. A decision on Commentary-length articles will be communicated within 6-8 weeks, or earlier.

Copyright
EPW posts all published articles on its website and may reproduce them on CDs. EPW also posts all published articles on select databases. Copyright of all articles published in the Journal belongs to the author or to the organisation where the author is employed as determined by the authors terms of employment.

Keywords
Authors are requested to list six to eight keywords for their articles.

Book Reviews
EPW

sends out books for review. It does not normally accept unsolicited reviews. However, all reviews that are received are read with interest and unsolicited review on occasion is considered for publication.

Permission for Reproduction

No published article or part thereof should be reproduced in any form without prior permission of the author(s). A soft/hard copy of the author(s)s approval should be sent to EPW. Address for communication:

Discussion
encourages researchers to comment on articles published in EPW. Submissions should be 800 to 1,600 words.
EPW

Letters
Readers of EPW are encouraged to comment (300 words) on published articles. All letters should have the writers full name and postal address.
september 14, 2013

Economic & Political Weekly

320-321, A to Z Industrial Estate Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013, India Email: edit@epw.in, epw.mumbai@gmail.com
vol xlviII no 37
EPW Economic & Political Weekly