Map of Kashmir to Sinkiang 1944


History of Jammu & Kashmir

History of Jammu & Kashmir


Subroto Roy

First published in two parts in The Sunday Statesman, Oct 29 2006 and The Statesman Oct 30 2006, Editorial Page Special Article.

At the advent of Islam in distant Arabia, India and Kashmir in particular were being visited by Chinese Buddhist pilgrims during Harsha’s reign. The great “Master of Law” Hiuen Tsiang visited between 629-645 and spent 631-633 in Kashmir (“Kia-chi-mi-lo”), describing it to include Punjab, Kabul and Kandahar. Over the next dozen centuries, Buddhist, Hindu, Muslim, Sikh and again Hindu monarchs came to rule the 85 mile long 40 mile wide territory on the River Jhelum’s upper course known as Srinagar Valley, as well as its adjoining Jammu in the upper plains of the Punjab and “Little Tibet” consisting of Laddakh, Baltistan and Gilgit.

In 1344, a Persian adventurer from Swat or Khorasan by name of Amir or Mirza, who had “found his way into the Valley and in time gained great influence at the Raja’s court”, proclaimed himself Sultan Shamsuddin after the death of the last Hindu monarchs of medieval Kashmir. Twelve of his descendants formed the Shamiri dynasty including the notorious Sikander and the just and tolerant Zainulabidin. Sikander who ruled 1386-1410 “submitted himself” to the Uzbek Taimur the Lame when he approached Kashmir in 1398 “and thus saved the country from invasion”. Otherwise, “Sikander was a gloomy ferocious bigot, and his zeal in destroying temples and idols was so intense that he is remembered as the Idol-Breaker. He freely used the sword to propagate Islam and succeeded in forcing the bulk of the population to conform outwardly to the Muslim religion. Most of the Brahmins refused to apostatise, and many of them paid with their lives the penalty for their steadfastness. Many others were exiled, and only a few conformed.”

Zainulabidin who ruled 1417-1467 “was a man of very different type”. “He adopted the policy of universal toleration, recalled the exiled Brahmins, repealed the jizya or poll-tax on Hindus, and even permitted new temples to be built. He abstained from eating flesh, prohibited the slaughter of kine, and was justly venerated as a saint. He encouraged literature, painting and music, and caused many translations to be made of works composed in Sanskrit, Arabic and other languages.” During his “long and prosperous reign”, he “constructed canals and built many mosques; he was just and tolerant”.

The Shamiri dynasty ended in 1541 when “some fugitive chiefs of the two local factions of the Makri and the Chakk invited Mirza Haidar Dughlat, a relation of Babar, to invade Kashmir. The country was conquered and the Mirza held it (nominally in name of Humayan) till 1551, when he was killed in a skirmish. The line… was restored for a few years, until in 1559 a Chakk leader, Ghazi Shah, usurped the throne; and in the possession of his descendants it remained for nearly thirty years.” This dynasty marks the origins of Shia Islam in Srinagar though Shia influence in Gilgit, Baltistan and Laddakh was of longer standing. Constant dissensions weakened the Chakks, and in 1586, Akbar, then at Attock on the Indus, sent an army under Raja Bhagwan Das into Srinagar Valley and easily made it part of his Empire.

Shivaism and Islam both flourished, and Hindu ascetics and Sufi saints were revered by all. Far from Muslims and Hindus forming distinct nations, here they were genetically related kinsmen living in proximity in a small isolated area for centuries. Indeed Zainulabidin may have had a vast unspoken influence on the history of all India insofar as Akbar sought to attempt in his empire what Zainulabidin achieved in the Valley. Like Zainulabidin, Akbar’s governance of India had as its “constant aim” “to conciliate the Hindus and to repress Muslim bigotry” which in modern political parlance may be seen as the principle of secular governance ~ of conciliating the powerless (whether majority or minority) and repressing the bigotry of the powerful (whether minority or majority). Akbar had made the Valley the summer residence of the Mughals, and it was Jahangir, seeing the Valley for the first time, who apparently said the words agar behest baushad, hamee in hast, hamee in hast, hamee in hast: “if Heaven exists, it is here, it is here, it is here”. Yet like other isolated paradises (such as the idyllic islands of the Pacific Ocean) an accursed mental ether can accompany the magnificent beauty of people’s surroundings. As the historian put it: “The Kashmiris remained secure in their inaccessible Valley; but they were given up to internal weakness and discord, their political importance was gone…”

After the Mughals collapsed, Iran’s Turkish ruler Nadir Shah sacked Delhi in 1739 but the Iranian court fell in disarray upon his death. In 1747 a jirga of Pashtun tribes at Kandahar “broke normal tradition” and asked an old Punjabi holy man and shrine-keeper to choose between two leaders; this man placed young wheat in the hand of the 25 year old Ahmed Shah Saddozai of the Abdali tribe, and titled him “Durrani”. Five years later, Durrani took Kashmir and for the next 67 years the Valley was under Pashtun rule, a time of “unmitigated brutality and widespread distress”. Durrani himself “was wise, prudent and simple”, never declared himself king and wore no crown, instead keeping a stick of young wheat in his turban. Leaving India, he famously recited: “The Delhi throne is beautiful indeed, but does it compare with the mountains of Kandahar?”

Kashmir’s modern history begins with Ranjit Singh of the Sikhs who became a soldier at 12, and in 1799 at age 19 was made Lahore’s Governor by Kabul’s Zaman Shah. Three years later “he made himself master of Amritsar”, and in 1806 crossed the River Sutlej and took Ludhiana. He created a fine Sikh infantry and cavalry under former officers of Napoleon, and with 80,000 trained men and 500 guns took Multan and Peshawar, defeated the Pashtuns and overran Kashmir in 1819. The “cruel rule” of the Pashtuns ended “to the great relief of Kashmir’s inhabitants”.

The British Governor-General Minto (ancestor of the later Viceroy), seeing advantage in the Sikhs staying north of the Sutlej, sent Charles Metcalfe, “a clever young civilian”, to persuade the Khalsa; in 1809, Ranjit Singh and the British in the first Treaty of Amritsar agreed to establish “perpetual amity”: the British would “have no concern” north of the Sutlej and Ranjit Singh would keep only minor personnel south of it. In 1834 and 1838 Ranjit Singh was struck by paralysis and died in 1839, leaving no competent heir. The Sikh polity collapsed, “their power exploded, disappearing in fierce but fast flames”. It was “a period of storm and anarchy in which assassination was the rule” and the legitimate line of his son and grandson, Kharak Singh and Nao Nihal Singh was quickly extinguished. In 1845 the Queen Regent, mother of the five-year old Dalip Singh, agreed to the Khalsa ending the 1809 Treaty. After bitter battles that might have gone either way, the Khalsa lost at Sobraon on 10 February 1846, and accepted terms of surrender in the 9 March 1846 Treaty of Lahore. The kingdom had not long survived its founder: “created by the military and administrative genius of one man, it crumbled into powder when the spirit which gave it life was withdrawn; and the inheritance of the Khalsa passed into the hands of the English.”

Ranjit Singh’s influence on modern J&K was even greater through his having mentored the Rajput Gulab Singh Dogra (1792-1857) and his brothers Dhyan Singh and Suchet Singh. Jammu had been ruled by Ranjit Deo until 1780 when the Sikhs made it tributary to the Lahore Court. Gulab Singh, a great grand nephew of Ranjit Deo, had left home at age 17 in search of a soldierly fortune, and ended up in 1809 in Ranjit Singh’s army, just when Ranjit Singh had acquired for himself a free hand to expand his domains north of the River Sutlej.

Gulab Singh, an intrepid soldier, by 1820 had Jammu conferred upon him by Ranjit Singh with the title of Raja, while Bhimber, Chibal, Poonch and Ramnagar went to his brothers. Gulab Singh, “often unscrupulous and cruel, was a man of considerable ability and efficiency”; he “found his small kingdom a troublesome charge but after ten years of constant struggles he and his two brothers became masters of most of the country between Kashmir and the Punjab”, though Srinagar Valley itself remained under a separate Governor appointed by the Lahore Court. Gulab Singh extended Jammu’s rule from Rawalpindi, Bhimber, Rajouri, Bhadarwah and Kishtwar, across Laddakh and into Tibet. His General Zorawar Singh led six expeditions into Laddakh between 1834 and 1841 through Kishtwar, Padar and Zanskar. In May 1841, Zorawar left Leh with an army of 5000 Dogras and Laddakhis and advanced on Tibet. Defeating the Tibetans at Rudok and Tashigong, he reached Minsar near Lake Mansarovar from where he advanced to Taklakot (Purang), 15 miles from the borders of Nepal and Kumaon, and built a fort stopping for the winter. Lhasa sent large re-inforcements to meet him. Zorawar, deciding to take the offensive, was killed in the Battle of Toyu, on 11-12 December 1841 at 16,000 feet.

A Laddakhi rebellion resulted against Jammu, aided now by the advancing Tibetans. A new army was sent under Hari Chand suppressing the rebellion and throwing back the Tibetans, leading to a peace treaty between Lhasa and Jammu signed on 17 September 1842: “We have agreed that we have no ill-feelings because of the past war. The two kings will henceforth remain friends forever. The relationship between Maharajah Gulab Singh of Kashmir and the Lama Guru of Lhasa (Dalai Lama) is now established. The Maharajah Sahib, with God (Kunchok) as his witness, promises to recognise ancient boundaries, which should be looked after by each side without resorting to warfare. When the descendants of the early kings, who fled from Laddakh to Tibet, now return they will not be stopped by Shri Maharajah. Trade between Laddakh and Tibet will continue as usual. Tibetan government traders coming into Laddakh will receive free transport and accommodations as before, and the Laddakhi envoy will, in turn, receive the same facilities in Lhasa. The Laddakhis take an oath before God (Kunchok) that they will not intrigue or create new troubles in Tibetan territory. We have agreed, with God as witness, that Shri Maharajah Sahib and the Lama Guru of Lhasa will live together as members of the same household.” The traditional boundary between Laddakh and Tibet “as recognised by both sides since olden times” was accepted by the envoys of Gulab Singh and the Dalai Lama.

An earlier 1684 treaty between Laddakh and Lhasa had said that while Laddakh would send tribute to Lhasa every three years, “the king of Laddakh reserves to himself the village of Minsar in Ngarees-khor-sum, that he may be independent there; and he sets aside its revenue for the purpose of meeting the expense involved in keeping up the sacrificial lights at Kangree (Kailas), and the Holy Lakes of Mansarovar and Rakas Tal”. The area around Minsar village near Lake Mansarovar, held by the rulers of Laddakh since 1583, was retained by Jammu in the 1842 peace-treaty, and its revenue was received by J&K State until 1948.

After Ranjit Singh’s death in 1839, Gulab Singh was alienated from the Lahore Court where the rise of his brothers and a nephew aroused enough Khalsa jealousy to see them assassinated in palace intrigues. While the Sikhs imploded, Gulab Singh had expanded his own dominion from Rawalpindi to Minsar ~ everywhere except Srinagar Valley itself. He had apparently advised the Sikhs not to attack the British in breach of the 1809 Treaty, and when they did so he had not joined them, though had he done so British power in North India might have been broken. The British were grateful for his neutrality and also his help in their first misbegotten adventure in Afghanistan. It was Gulab Singh who was now encouraged by both the British and the Sikhs to mediate between them, indeed “to take a leading part in arranging conditions of peace”, and he formally represented the Sikh regency in the negotiations. The 9 March 1846 Treaty of Lahore “set forth that the British Government having demanded in addition to a certain assignment of territory, a payment of a crore and a half of rupees, and the Sikh Government being unable to pay the whole”, Dalip Singh “should cede as equivalent to one crore the hill country belonging to the Punjab between the Beas and the Indus including Kashmir and the Hazara”.

For the British to occupy the whole of this mountainous territory was judged unwise on economic and military grounds; it was not feasible to occupy from a military standpoint and the area “with the exception of the small Valley of Kashmir” was “for the most part unproductive”. “On the other hand, the ceded tracts comprised the whole of the hereditary possessions of Gulab Singh, who, being eager to obtain an indefeasible title to them, came forward and offered to pay the war indemnity on condition that he was made the independent ruler of Jammu & Kashmir.

A separate treaty embodying this arrangement was thus concluded between the British and Gulab Singh at Amritsar on 16 March 1846.” Gulab Singh acknowledged the British Government’s supremacy, and in token of it agreed to present annually to the British Government “one horse, twelve shawl goats of approved breed and three pairs of Kashmir shawls. This arrangement was later altered; the annual presentation made by the Kashmir State was confined to two Kashmir shawls and three romals (handkerchiefs).” The Treaty of Amritsar “put Gulab Singh, as Maharaja, in possession of all the hill country between the Indus and the Ravi, including Kashmir, Jammu, Laddakh and Gilgit; but excluding Lahoul, Kulu and some areas including Chamba which for strategic purposes, it was considered advisable (by the British) to retain and for which a remission of Rs 25 lakhs was made from the crore demanded, leaving Rs 75 lakhs as the final amount to be paid by Gulab Singh.” The British retained Hazara which in 1918 was included into NWFP. Through an intrigue emanating from Prime Minister Lal Singh in Lahore, Imamuddin, the last Sikh-appointed Governor of Kashmir, sought to prevent Gulab Singh taking possession of the Valley in accordance with the Treaty’s terms. By December 1846 Gulab Singh had done so, though only with help of a British force which included 17,000 Sikh troops “who had been fighting in the campaign just concluded”. (Contemporary British opinion even predicted Sikhism like Buddhism “would become extinct in a short time if it were not kept alive by the esprit de corps of the Sikh regiments”.)

The British in 1846 may have been glad enough to allow Gulab Singh take independent charge of the new entity that came to be now known as the “State of Jammu & Kashmir”. Later, however. they and their American allies would grow keen to control or influence the region vis-à-vis their new interests against the Russian and Soviet Empires.

see also

A Brief History of Gilgit

My Seventy-One Articles, Notes Etc on Kashmir, Pakistan, & of course, India (plus my undelivered Lahore lectures)

Pakistan’s & India’s Illusions of Power (Psychosis vs Vanity)

The Greatest Pashtun: Khan Abdul Ghaffar Khan



First published in The Sunday Statesman Editorial Page Special Article, July 16 2006






Khan Abdul Ghaffar Khan (1890-1988) was without a doubt the greatest political genius the Pashtun people have yet produced.


Understanding the political economy of the Pashto/Pakhto speaking peoples, as well as the Tajik, Hazara, Uzbek, Turkmen and other inhabitants of Afghanistan, remains a top intellectual challenge for everyone including themselves. Afghans have hardly lived a peaceful decade since Genghiz Khan destroyed them avenging his grandson in the 13th Century.  Ghazni, Ghor, Peshawar etc. were launch-pads for attacks against the settled people of India’s fertile plains (most recently, the October 1947 attack on Kashmir Valley) while Herat saw wars by and against Iran.


Lyall, one of the architects of 19th Century British policy, thought Afghans “wretched”, “treacherous barbarians with whom it was an unfortunate necessity to have any dealings at all”… “I can only sympathise with the Afghan’s love for his country and his hatred against those who disturb him, although he has no scruple in disturbing others to the best of his savage ability”. Yet the British idea of Russian armies marching into India through Afghanistan was always a wild exaggeration, especially after joint boundary commissions demarcated the imperial spheres of influence. When the Russians did finally enter and occupy Afghanistan in 1978-79, they lived to regret it; and they arrived in independent India on passenger aircraft, were greeted as fraternal socialists selling weapons, and remain so today. Pakistan’s generals exaggerated the prospect of Russia seeking warm water ports, first to Nixon (as Vice President) then to Carter and Reagan, causing the Americans to happily supply weapons which the generals promptly turned against India.


Ghaffar Khan was and remains the only thoughtful figure in Pashtun history who invented a new, living political philosophy as a constructive force for his people’s peace and progress. Even though his ideology failed to take permanent root or survive among them, he commanded universal respect among all Pashtuns and Afghans and became “Badshah Khan” or “Bacha Khan” to them. Afghanistan’s civil war, in which the USSR was pit against the USA, Pakistan etc, stopped with a ceasefire in 1988 for his burial to take place in Jalalabad, with a funeral procession that was miles long.


Pashtun and other Afghan and Arab tribal people have become notorious today by their association with the dogmatism, intellectual insularity and retrograde ideology of Muslim extremism. Yet Osama bin Laden and his Taliban and other friends have been unable to make any moral argument for the cause of violence other than one built on revenge for perceived or misperceived injustices against Muslims. “Because you have done this and this to Muslim people, we are bound by the code of vengeance to do this to you” is just about the entire quantum of moral reasoning contained in Al-Qaida’s statements. “Revenge is a wild kind of justice” and circumstances can exist where injustice is so deep that only revenge suffices in rectification. The current case of the rape-murder of an Iraqi girl and her family by a group of renegade American soldiers may be one such, which explicitly led to the kidnap, torture and murder of some of the soldiers by Iraqis seeking vengeance. But justice too is a civilised kind of revenge, and the transition from a code of revenge to a code of justice is precisely the transition from tribal warfare to civilisation. In Western countries, it occurred recently enough when duelling with swords or pistols came to be banned, giving way to the law of torts.


Ghaffar Khan attempted to change the Pashtun code in this one fundamental and all-important direction by abolishing the right to revenge. In its place he brought the doctrine of non-violence. “I am going to give you such a weapon that the police and the army will not be able to stand against it. It is the weapon of the Prophet, but you are not aware of it. That weapon is patience and righteousness. No power on earth can stand against it.”Patience and righteousness are not political virtues that seem to find much mention in Islamic or Afghan folklore, and doubtless they arose in Ghaffar Khan’s thought and actions at least partly through his encounter with Christian altruism, first with Rev. Wigram his schoolmaster, and later in adult life with the Tolstoy-Thoreau doctrines applied along with Jain ahimsa by MK Gandhi in the movement for Indian independence.


“It is the weapon of the Prophet” was Ghaffar Khan making explicit he was and remained at all times the most devout of Muslims and none could say otherwise; “but you are not aware of it” was his new move to tell his people they had misled themselves by sacerdotalism and needed to read the Prophet’s life and message afresh. He once told M. K. Gandhi how he explained to amazed Punjabi Muslim Leaguers the precise evidence in favour of non-violence from the Prophet’s life in Mecca, leaving his audience speechless.


Today’s “Taliban” were named for their purported piety; Lashkar-e-Taiba even means “Army of the Pious”, the typical image being of pious studious youth seated memorising scriptures in a Pakistani madrassa, and later waving AK-47s in a moving truck. Ghaffar Khan’s Khudai Khidmatgar “Servants of God” were their polar opposite. Each of some 120,000 members of the order took a fierce oath to non-violence and renunciation: “I am a Servant of God, and as God needs no service, but serving his creation is serving him, I promise to serve humanity in the name of God; to refrain from violence and from taking revenge; to forgive those who oppress me or treat me with cruelty; to refrain from taking part in feuds and quarrels and from creating enmity; to treat every Pathan as my brother and friend; to refrain from antisocial customs and practices; to live a simple life, to practice virtue, and to refrain from evil; to practice good manners and good behaviour and not to lead a life of idleness… I will sacrifice my wealth, life, and comfort for the liberty of my nation and people… side with the oppressed against the oppressor… live in accordance with principles of nonviolence… serve all God’s creatures alike… my object shall be the attainment of the freedom of my country and my religion. … will never desire any reward whatever for my service. All my efforts shall be to please God, and not for any show or gain.”


In their founder’s words, the Khudai Khidmatgars were to be ready to lay down their own lives for their cause and never take any life doing so. They became far more forceful practitioners of non-violence than their Gandhian Indian counterparts in the struggle for political freedom from the British, and hundreds of them died in Peshawar under British brutality.


In 1893, Durand’s controversial boundary-line gave the British control over the three mountain passes between Afghanistan and India in exchange for raising the annual British subsidy to the Afghan Amir by 50% from Rs 8 lakhs to 12 lakhs. Today, the Durand Line roughly separates perhaps 10 million Pashtun comprising 40% of Afghanistan’s population from perhaps 8 million Pashtun who are Pakistani nationals (no one has exact figures as there has been no census). In the 1950s and 1960s, the Afghan Government backed by the USSR, on pretence that the Durand Line had not been freely accepted by Afghans, wished for a “Pakhtoonistan” under its sway.


Though jailed by the new and nervous Pakistanis, Ghaffar Khan was averse to any truck with the Afghan Government ~ he had not demanded erasing the Durand Line but had demanded a separate and distinct “Pashtunistan”. A mature self-confident federal Pakistan today would bifurcate itself vertically into one or two mountainous western provinces on one side, and two or three river valley eastern provinces on the other. The former could be named “East Pashtunistan” if the Baloch agreed, or East Pashtunistan and Baluchistan otherwise, and extend to the port of Gwadar, while the latter would remain Punjab, Sindh and “Northern Kashmir”.


Along with an Afghan “West Pashtunistan” and an Indian “Southern Kashmir”, a stable design of peaceful nation-states from Iran through Afghanistan and Pakistan to India would be then finally in place. Badshah Khan’s influence in death may yet become greater than his influence in life.


Transparency and Economic Policy-Making

Transparency and Economic Policy-Making

An address by Professor Subroto Roy to the Asia-Pacific Public Relations Conference, (panel on Transparency chaired by C. R. Irani) January 30 1998.

This talk is dedicated to the memory of my sister Suchandra Bhattacharjee (14.02.1943-10.01.1998).
1. I would like to talk about transparency and economic policy-making in our country. For something to be transparent is, in plain language, for it to be able to be openly seen through, for it to not to be opaque, obscure or muddy, for it to be clear to the naked eye or to the reasonable mind. A clear glass of water is a transparent glass of water. Similarly, an open and easily comprehensible set of economic policies is a transparent set of economic policies.

The philosopher Karl Popper wrote a famous book after the Second World War titled The Open Society and its Enemies. It contained a passionate defence of liberal institutions and democratic freedoms and a bitter attack on totalitarian doctrines of all kinds. It generated a lot of controversy, especially over its likely misreading of the best known work of political philosophy since the 4th Century BC, namely, Plato’s Republic .[1] I shall borrow Popper’s terms ‘open society’ and ‘closed society’ and will first try to make this a useful distinction for modern times, and then apply it to the process of economic policy-making in India today.

2. An open society is one in which the ordinary citizen has reasonably easy access to any and all information relating to the public or social interest — whether the information is directly available to the citizen himself or herself, or is indirectly available to his or her elected representatives like MP’s and MLA’s. Different citizens will respond to the same factual information in different ways, and conflict and debate about the common good will result. But that would be part of the democratic process.

The assessment that any public makes about the government of the day depends on both good and bad news about the fate of the country at any given time. In an open society, both good news and bad news is out there in the pubic domain — open to be assessed, debated, rejoiced over, or wept about. If we win a cricket match or send a woman into space we rejoice. If we lose a child in a manhole or a busload of children in a river, we weep. If some tremendous fraud on the public exchequer comes to be exposed, we are appalled. And so on.

It is the hallmark of an open society that its citizens are mature enough to cope with both the good and the bad news about their country that comes to be daily placed before them. Or, perhaps more accurately, the experience of having to handle both good and bad news daily about their world causes the citizens in an open society to undergo a process of social maturation in formulating their understanding of the common good as well as their responses to problems or crises that the community may come to face. They might be thereby thought of as improving their civic capacities, as becoming better-informed and more discerning voters and decision-makers, and so becoming better citizens of the country in which they live.

The opposite of an open society is a closed society — one in which a ruling political party or a self-styled elite or nomenclatura keep publicly important information to themselves, and do not allow the ordinary citizen easy or reasonably free access to it. The reason may be merely that they are intent on accumulating assets for themselves as quickly as they can while in office, or that they are afraid of public anger and want to save their own skins from demands for accountability. Or it may be that they have the impression that the public is better off kept in the dark — that only the elite nomenclatura is in position to use the information to serve the national interest.

In a closed society it is inevitable that bad news comes to be censored or suppressed by the nomenclatura, and so the good news gets exaggerated in significance. News of economic disasters, military defeats or domestic uprisings gets suppressed. News of victories or achievements or heroics gets exaggerated. If there are no real victories, achievements or heroics, fake ones have to be invented by government hacks — although the suppressed bad news tends to silently whisper all the way through the public consciousness in any case.

Such is the way of government propaganda in almost every country, even those that pride themselves on being free and democratic societies. Dostoevsky’s cardinal advice in Brothers Karamasov was: “Above all, never lie to yourself”. Yet people in power tend to become so adept at propaganda that they start to deceive themselves and forget what is true and what is false, or worse still, cannot remember how to distinguish between true and false in the first place. In an essay thirty years ago titled Truth and Politics, the American scholar Hannah Arendt put it like this:

“Insofar as man carries within himself a partner from whom he can never win release, he will be better off not to live with a murderer or a liar; or: since thought is the silent dialogue carried out between me and myself, I must be careful to keep the integrity of this partner intact, for otherwise I shall surely lose the capacity for thought altogether.”[2]

3. Closed societies may have been the rule and open societies the exception for most of human history. The good news at the end of the 20th Century is surely that since November 7 1989, when the Berlin Wall fell, the closed society has officially ceased to be a respectable form of human social organization. The age of mass access to television and telecommunications at the end of the 20th Century may be spelling the permanent end of totalitarianism and closed societies in general. The Berlin Wall was perhaps doomed to fall the first day East Germans were able to watch West German television programs.

Other than our large and powerful neighbour China, plus perhaps North Korea, Myanmar, and some Islamic countries, declared closed societies are becoming hard to find, and China remains in two minds whether to be open or closed. No longer is Russia or Romania or Albania or South Africa closed in the way each once was for many years. There may be all sorts of problems and confusions in these countries but they are or trying to become open societies.

Under the glare of TV cameras in the 21st Century, horrors like the Holocaust or the Gulag or even an atrocity like Jalianwalla Bag or the Mai Lai massacre will simply not be able to take place anywhere in the world. Such things are not going to happen, or if they do happen, it will be random terrorism and not systematic, large scale genocide of the sort the 20th Century has experienced. The good news is that somehow, through the growth of human ingenuity that we call technical progress, we may have made some moral progress as a species as well.

4. My hypothesis, then, is that while every country finds its place on a spectrum of openness and closedness with respect to its political institutions and availability of information, a broad and permanent drift has been taking place as the 20th Century comes to an end in the direction of openness.

With this greater openness we should expect bad news not to come to be suppressed or good news not to come to be exaggerated in the old ways of propaganda. Instead we should expect more objectively accurate information to come about in the public domain — i.e., better quality and more reliable information, in other words, more truthful information. This in turn commensurately requires more candour and maturity on the part of citizens in discussions about the national or social interest. Closed society totalitarianism permitted the general masses to remain docile and unthinking while the nomenclatura make the decisions. Dostoevsky’s Grand Inquisitor said that is all that can be expected of the masses. Open society transparency and democracy defines the concept of an ordinary citizen and requires from that citizen individual rationality and individual responsibility. It is the requirement Pericles made of the Athenians:

“Here each individual is interested not only in his own affairs but in the affairs of the state as well; even those who are mostly occupied with their own business are extremely well-informed on general politics – this is a peculiarity of ours: we do not say that a man who takes no interest in politics is a man who minds his own business; we say that he has no business here at all.”[3]

5. All this being said, I am at last in a position to turn to economic policy in India today. I am sorry to have been so long-winded and pedantic but now I can state my main substantive point bluntly: in India today, there is almost zero transparency in the information needed for effective macroeconomic policy-making whether at the Union or State levels. To illustrate by some examples.

(A) Macroeconomic policy-making in any large country requires the presence of half a dozen or a dozen well-defined competing models produced by the government and private agencies, specifying plausible causal links between major economic variables, and made testable against time-series data of reasonably long duration. In India we seem to have almost none. The University Economics Departments are all owned by some government or other and can hardly speak out with any academic freedom. When the Ministry of Finance or RBI or Planning Commission, or the India teams of the World Bank or IMF, make their periodic statements they do not appear to be based on any such models or any such data-base. If any such models exist, these need to be published and placed in the public domain for thorough discussion as to their specification and their data. Otherwise, whatever is being predicted cannot be assessed as being very much more reliable than the predictions obtained from the Finance Minister’s astrologer or palmist. (NB: Horse-Manure is a polite word used in the American South for what elsewhere goes by the initials of B. S.). Furthermore, there is no follow-up or critical review to see whether what the Government said was going to happen a year ago has in fact happened, and if not, why not.

(B) The Constitution of India defines many States yet no one seems to be quite certain how many States really constitute the Union of India at any given time. We began with a dozen. Some 565 petty monarchs were successfully integrated into a unitary Republic of India, and for some years we had sixteen States. But today, do we really have 26 States? Is Delhi a State? UP with 150 million people would be the fifth or sixth largest country in the world on its own; is it really merely one State of India? Are 11 Small States de facto Union Territories in view of their heavy dependence on the Union? Suppose we agreed there are fifteen Major States of India based on sheer population size: namely, Andhra, Assam, Bihar, Gujarat, Haryana, Karnataka, Kerala, MP, Maharashtra, Orissa, Punjab, Rajasthan, Tamil Nadu, UP and West Bengal. These States account for 93% of the population of India. The average population of these 15 Major States is 58 million people each. That is the size of a major country like France or Britain. In other words, the 870 million people in India’s Major States are numerically 15 Frances or 15 Britains put together.

Yet no reliable, uniformly collected GDP figures exist for these 15 States. The RBI has the best data, and these are at least two years old, and the RBI will tell you without further explanation that the data across States are not comparable. If that is the case at State-level, I do not see how the national-level Gross Domestic Product can possibly be estimated with any meaningfulness at all.

(C) Then we hear about the Government Budget deficit as a percentage of GDP. Now any national government is able to pay for its activities only by taxation or borrowing or by using its monopoly over the domestic medium of exchange to print new money. In India today, universal money-illusion seems to prevail. It would not be widely recognised by citizens, journalists or policy-makers that, say, 100,000 Rupees nominally taxed at 10% under 20% inflation leaves less real disposable income than the same taxed at 20% with 5% inflation. This is in part because inflation figures are unknown or suspect. There is no reliable all-India or State-level consumer price index. The wholesale price index on the basis of which the Government of India makes its inflation statements, may not accurately reflect the actual decline in the purchasing power of money, as measured, say, by rises in prices of alternative stores of value like land. The index includes artificially low administered or subsidized prices for petroleum, cereals, and electricity. To the extent these prices may be expected to move towards international equilibrium prices, the index contains a strong element of deferred inflation. One urgent task for all macroeconomic research in India is construction of reliable price-data indices at both Union and State levels, or at a minimum, the testing for reliability by international standards of series currently produced by Government agencies.

Without reliable macroeconomic information being spread widely through a reasonably well-informed electorate, the Government of India has been able to wash away fiscal budget constraints by monetization and inflation without significant response from voters. The routine method of meeting deficits has become “the use of the printing press to manufacture legal tender paper money”, either directly by paying Government creditors “with new paper money specially printed for the purpose” or indirectly by paying creditors “out of loans to itself from the Central Bank”, issuing paper money to that amount. Every Budget of the Government of India, including the most recent ones of 1996 and 1997, comes to be attended by detailed Press discussion with regard to the minutae of changes in tax rates or tax-collection — yet the enormous phenomena of the automatic monetization of the Government’s deficit is ill-understood and effectively ignored. Historically, a policy of monetization started with the British Government in India during the Second World War, with a more than five-fold increase in money supply occurring between 1939 and 1945. Inflation rates never seen in India before or since were the result (Charts 0000), attended by the Great Famine of 1942/43. Though these were brought down after succession of C. D. Deshmukh as Governor of the Reserve Bank, the policy of automatic monetization did not cease and continues until the present day. Inflation “sooner or later destroys the confidence, not only of businessmen, but of the whole community, in the future value of the currency. Then comes the stage known as “the flight from the currency.” Had the Rupee been convertible during the Bretton Woods period, depreciation would have signalled and helped to adjust for disequilibrium. But exchange-controls imposed during the War were enlarged by the new Governments of India and Pakistan after the British departure to exclude convertible Sterling Area currencies as well. With the Rupee no longer convertible, internal monetization of deficits could continue without commensurate exchange-rate depreciation.

The Reserve Bank was originally supposed to be a monetary authority independent of the Government’s fiscal compulsions. It has been prevented from developing into anything more than a department of the Ministry of Finance, and as such, has become the captive creditor of the Government. The RBI in turn has utilized its supervisory role over banking to hold captive creditors, especially nationalized banks whose liabilities account for 90% of commercial bank deposits in the country. Also captive are nationalized insurance companies and pension funds. Government debt instruments show on the asset side of these balance-sheets. To the extent these may not have been held had banks been allowed to act in the interests of proper management of depositors’ liabilities and share-capital according to normal principles, these are pseudo-assets worth small fractions of their nominal values. Chart 0000 shows that in the last five years the average term structure of Government debt has been shortening rapidly, suggesting the Government is finding it increasingly difficult to find creditors, and portending higher interest rates.

General recognition of these business facts, as may be expected to come about with increasing transparency, would be a recipe for a crisis of confidence in the banking and financial system if appropriate policies were not in place beforehand.

(D) As two last examples, I offer two charts. The first shows the domestic interest burden of the Government of India growing at an alarming rate, even after it has been deflated to real terms. The second tries to show India’s foreign assets and liabilities together – we always come to know what is happening to the RBI’s reserve levels, what is less known or less understood is the structure of foreign liabilities being accumulated by the country. Very roughly speaking, in terms that everyone can understand, every man, woman and child in India today owes something like 100 US dollars to the outside world. The Ministry of Finance will tell you that this is not to be worried about because it is long-term debt and not short-term debt. Even if we take them at their word, interest payments still have to be paid on long-term debt, say at 3% per annum. That means for the stock of debt merely to be financed, every man, woman and child in India must be earning $3 every year in foreign exchange via the sale of real goods and services abroad. I.e., something like $3 billion must be newly earned every year in foreign exchange merely to finance the existing stock of debt. Quite clearly, that is not happening and it would stretch the imagination to see how it can be made to happen.

In sum, then, India, blessed with democratic political traditions which we had to take from the British against their will — remember Tilak, “Freedom is my birthright, and I shall have it” — may still be stuck with a closed society mentality when it comes to the all-important issue of economic policy. There is simply an absence in Indian public discourse of vigourous discussion of economic models and facts, whether at Union or State levels. A friendly foreign ambassador pointedly observed an absence in India of political philosophy. It may be more accurate to say that without adequate experience of a normal agenda of government being seen to be practised, widespread ignorance regarding fiscal and monetary causalities and inexperience of the technology of governance remains in the Indian electorate, as well as among public decision-makers at all levels. Our politicians seem to spend an inordinate amount of their time either garlanding one another with flowers or garlanding statues and photographs of the glorious dead. It is high time they stopped to think about the living and the future.

[1] Renford Bambrough (ed.) Plato, Popper and Politics: Some Contributions to a Modern Controversy, 1967.

[2] Philosophy, Politics and Society, 2nd Series, Peter Laslett & W. G. Runciman (eds.), 1967.

[3] Thucydides, History of the Pelopennesian War, II.40.