Sunday, 25 November 2012

A Loss that is Still Haunting: 50 years of Indo China War

22nd November 1962, a day in history marked as the day when we lost to China, once and forever. Wars won by defeating armed forces are won for once, those won by defeating their morale are won forever. Somewhat similar happened in 1962, the way Chinese won and we lost is still a matter of great debate. In all, as per statistics released by ministry of defense, 1,383 soldiers lost their lives, 3,968 were taken prisoners while 1,696 are still missing.
Quantum of loss suggests that it was indeed a humiliating loss and with latest effrontery exhibited by China by way of showing Arunachal as its own territory, it is a high time to know what happened 50 years ago that changed our psyche towards China forever. Why we could not retaliate to China by showing two of its provinces as a part of India when it shows Arunachal Pradesh and Aksai Chin as its own territory? Why Chinese forces violate LAC (Line of Actual Control) 500 occasions in two years and our army remains a mute spectator? Answer to all these is a must for every Indian.  

Origin of conflict: The origin of conflict could be traced back to the year 1913~14 when British India negotiated its boarder with Tibet in series of negotiation with Tibetan leaders at Simla. Named after Chief British negotiator Sir Henry McMohan, the boarder line separates present Indian state of Arunachal Pradesh to Tibet. Representative of then Chinese republican government was also present during the negotiations but at the end of conference, they refused to sign the boarder agreement stating that Tibet was subordinate to china and was not a sovereign nation, hence it possessed no rights to negotiate boarder with British India. Both Tibet and British India ignored dissent made by Chinese authorities and went ahead with finalising McMohan line.
Soon after the famous Chinese Revolution of 1949 that led to formation of People's Republic of China,  Mao Zedong, leader of Chinese Communist Party (CCP), initiated actions to hammer decisions made by erstwhile Republican Government of China. Mao Zedong was extremely popular among peasants for his exemplary work on land reforms. The famous uprising by CCP first coined the word "Maoism". Policy followed by Mao may well be described by the most popular saying of Mao himself "power grows out of the barrel of a gun". Followers of Mao never recognized democratic process, a presumption so badly inculcated into their minds that it finally led to state organised massacre at Tiananmen Square on June 4th 1989. Thousands of pro democracy protesters were killed when People's Army of China stormed into the square with tanks to crack down the peaceful protest.

India China Relationship at the time of Indian Independence: Nehru was extremely impressed by Mao Zedong's idea of forming a socialist government, though he never actually subscribed to Mao's idea of attaining power through armed struggle. Socialism was the only thread that kept Nehru closer to Mao. Nehru never missed an opportunity to praise China for its pro people policies. Although Nehru's opinion about Mao went on shaky grounds when later invaded Tibet in October 1950. Doubt on Mao being a staunch follower of Maxism was on question, yet Nehru was helpless as India could never match China in any case. Nehru was also inspired by description of Mao, his adorable sister Vijayalaxmi Pandit presented to him, on her return from china in 1952. Mrs Pandit described Mao as a visionary leader and a great socialist, she even compared Mao to Mahatma Gandhi. Scared with threat posed by US, as it began to favour Pakistan, Nehru had no option but to sign series of agreements with china in 1954. In exchange to India's recognition of Tibet as a part of China, later agreed to went into an agreement with India, famously known as the Panchsheel. Both the countries agreed to follow policy of mutual non-aggression and mutual respect for each other's territorial integrity.

Hindi Chini Bhai Bhai: Nehru never paid attention to warnings given by Sir Girija Shankar Bajpai, former Secretary General of foreign ministry on expansionist aims of China. Towards end of the year 1954 Nehru visited China and experienced larger than anticipated reception. The whole hearted welcome made Nehru believe that China was no longer a threat to India. Chinese Premier Chou en-lai, in return visited India in the year 1956. 1956 was a peak in Sino Indian relationship, an era that gave raise to slogans like "Hindi Chini Bhai Bhai". But history was poised to follow a separate path in the same year.
Heart of controversy: During visit of Nehru to China in 1954, China assured that autonomy of Tibet would remain in tact and China would regard influence of God-King of Tibet, The Dalai Lama. China in fact was worried about poor accessibility of Lhasa with rest of China. The discontent shown by inhabitant of Tibet towards unpopular invasion by China was soon converting into vociferous opposition from every nook and corner of Tibet. Chinese were quick to respond, they planned for quick and easy accessibility of Lhasa with rest of China so that they can take Tibet into their better control. Chinese authorities planned for a road link from city of Shinkiang in Yarkand province of China to Tibetan capital Lhasa. Construction started at the end of 1956 and finished by October 1957. The Road was built across Ladakh, a part of Indian State of Jammu and Kashmir. Indian authorities could have never come to know about the road for next 3-4 years if china had not published a map in the July 1958 edition of its official magazine, "China Pictorial". The map showed Ladakh as a part of China.

Beginning of Acrimony: News of China having claimed Ladakh its own territory spread like a forest fire. In the meantime Khampa community of eastern Tibet launched an armed uprising against occupiers, the revolt met with an initial success and later brutally suppressed by Chinese forces. In retaliation, Chinese wanted to eliminate route of uprising. Chinese believed that with elimination of Tibetan god king, Dalai Lama, Khampas would never ever dare to voice their dissent. News reached Dalai Lama and in March 1959, he fled to India crossing McMohan line. Of-course, New Delhi agreed to provide political asylum to Dalai Lama, an action that could very easily be marked as a retaliatory step, in return to China's road controversy. The gulf between the 2 countries further widened with each communication Nehru had with Chinese premier Chu En-lai. Nehru tried his best to douse the fire through diplomatic route, but his honest attempts were vehemently rejected by his Chinese counterpart. Chou, in his replies to Nehru's letters, rejected existence of McMohan line in the east and supported map shown in China Pictorial by stating that Ladakh was always a part of China. As per Chou, McMohan line was a product of the British Policy of aggression against the Tibet region of China. The war of words continued along with minor to medium clashes of Indian and Chinese troops at the eastern sector.
in 2nd half of 1961, Nehru came under severe attack in parliament for his inability to deal with situation of Chinese occupation. He was terribly criticised by Jansangh Leader, Atal Bihari Vajpayee, Hem Barua of Praja Socialist Party and NG Ranga of Swatantra Party. Even, some of his own party leaders also started questioning Nehru's ability as a Prime Minister. Nehru faced opposition from his own party for the first time since demise of Vallabh Bhai Patel, the only minister in Nehru cabinet, who relentlessly voice his dissent over illogical moves made by Nehru in the past.
Nehru was known to be a emotional person, Chinese invasion into India shook him from inside. He was surrounded by sycophants, like Defense Minister, VK Krishna Menon, who never appraised Nehru about grim situation of Army, perhaps he himself was unaware of the situation. India's then chief of Army staff, Gen. KS Thimayya tried to make the defense minister aware of the antiquity of arms but in vain, India was still using .303 Enfield rifle, first used in WW1 in 1914.
By the 1st half of year 1962, clashes with Chinese army had become a common refrain. It was also clear by that time that India would not be able to protect its territory if a war was declared with china. China was hundredfold stronger than India in terms of manpower, equipments and aircraft. India had two options, either to get into some kind of deal with China and maintain status quo (a solution suggested by Chou En-lai) or seek political and military help from west before chalking out any aggressive military action against China. Patriotic sentiments had already taken over conscience and our political leaders rejected both the options. War was finally imposed on the nation.

The unfolding of war: Indian Army was given the order of forward march at the eastern boarder. It was June 1962, Assam rifles had established a post at Dhola, a region where boarders of India, Tibet and Bhutan merges. It was enough provocation for China to establish its post at Thang La, some 2000 meters above Dhola. Chinese troops cautioned India through megaphone in Hindi, Hindi Chini Bhai Bhai, ye zameen hamara hai, tum wapas jao". The word of caution was taken as challenge by Indian armed forces. Post made by Assam Rifles at Dhola needed to be reinforced by Indian Army soldiers, Indian army jawans reached Namkha Chu  valley, a place near Dhola, on October 9th 1962. Army was exhausted after a long march to Namkha chu through mud, mountain and rains,army set up a post in the valley and waited for more troops, arms and ammunition to come. Chinese attacked on 10th of October, Army fought hard but without arms and reinforcement could not save the post. Indian Army was outnumbered and outgunned by China, it was indeed an impossible ask but our brave soldiers gave Chinese a tough fight and laid their lives protecting our motherland.
It seemed that humiliating defeat on hands of China at Namka Chu was not enough for our politicians, Nehru instructed Army to flush out enemy out of Indian soil once again. On this occasion China did not grant time to Indian Army to regroup and plan future course of action. On the night of 19/20 October 1962 China launched simultaneous attack on India from Aksai Chin in west and Tawang, Thang la in east. Attack took India by surprise, Army failed to offer decent resistance to Chinese People's army. China invaded further, as their modern mortars and medium machine guns were too advance in front of Indian .303 World War I rifles.
Within 4 days, China invaded further into Indian territory, 20 posts have fallen in NEFA (North East frontier Agency, Arunachal) and 5 in Ladakh. Tawang came into control of China. China was also having advantage over their Indian counterpart in high mountain battle as Chinese had been fighting with Khampa warriors in Tibet for past 4 years. On 24th October, China halted its forward march at Tawang and leaders of both India and China exchanged angry letters for next 15 days, both leaders tried to find out a solution once again through diplomatic routes. While diplomacy was getting failed, China was busy in utilising the brief recess to improve connectivity of their posts on Indian territories.
On 15th of November China, on the second occasion launch an offensive. China attacked Indian posts along McMohan line. On this occasion too, army could not offer a substantial resistance to Chinese aggression. When post Bomdi La (last post on mountains)fell, China gained access to Indian planes. Panic spread after the fall of Bomdi La had turned Tezpur city of Assam into a ghost city. City was vacated, City administration had burnt papers at Collectorate, local banks burnt currencies and fled to Guwahati.
2 days after, China declared unilateral cease fire. On 22nd of November 1962 Chinese armed forces moved to north of McMohan line, China had even vacated Tawang! While in west, it went to the position from where the hostilities had begun.

The Aftermath: Nobody knew what prompted China to vacate captured Indian territories in east. India's loss was insurmountable and irreparable, we could not gain anything out of this brutal war.The loss is still haunting our armed forces and the win is still serving as a confidence booster to Chinese.

The loss can be attributed to Nehru's short sightedness and his arrogance. Nehru turned down warnings of Patel when he warned Nehru of keeping a safe distance from expansionist China. USSR expansionist aim was not hidden to him, he was learned scholar himself, wonder how he could forget communist ideology that says "Promises are like pie-crusts, are meant to be broken". He assumed that China would follow its promise made during Panchsheel and respect India's territorial integrity. His decision of pushing country to war was taken more on emotional ground than on logical one. It is highly unlikely that 1962 would ever get repeated now, as India has advanced a lot since 1962, but the humiliating loss still captures larger chunk of our psyche when we talk of China.


Thursday, 15 November 2012

2G Auction Failure: Blessing in disguise?

Braking News: Governments' much hyped 2G spectrum auction crashed, government could fetch only Rs 9,400 Cr against estimated Rs 40,000 Cr from sale of second generation airwaves. Little over half of the 240 MHz spectrum available for sale were bought. Airwaves for CDMA could not be auctioned as it failed to attract any takers. Hopes of government further shattered when it could not even manage to mop up Rs 28,000 Cr through sale of spectrum in GSM band. Not a single operator bade for pan India spectrum, priced at 14,000 Cr for 5 MHz of airwaves. Now the chances of keeping fiscal deficit to below 5.3% of GDP has gone bleaker, or rather impossible to achieve, thanks to rising government spending, inefficient babus' and volatile market that is prohibiting government from going for stake sale in giant PSUs.

Amid all these gloom, the optimist in me see these recent developments as a major breakthrough.

1. You were wrong Mr. Comptroller and Auditor General: The scam that caught the entire nation in a frenzy for past 2 years, chiefly due to much hyped 1.76 Lakh Cr estimated loss to government exchequer, in-fact was a hoax. Loss estimated by CAG was based on simple mathematics, keeping aside even the slightest of business logic. As per CAG report, tabled in parliament, government could have earned Rs 1,76,000 Cr by way of auctioning the airwaves rather than selling it at a throwaway price on first come first serve basis. CAG actually bench-marked the price of 2G spectrum with that of 3G. The calculation was having a basic flaw. The price of 3G spectrum got jacked up due to the artificial scarcity created by offering only a thin layer of spectrum for sale. The recent failure of 2G spectrum affirms that the estimated loss of Rs 1.76 Lakh Cr to the government exchequer was a nothing but a miscalculation. Now the question is, how CAG could be so bad in mathematics. Fact is, CAG was outstandingly perfect in mathematics, an attribute that is a prerequisite for becoming a financial auditor. A financial auditors' job is to ensure that all the account books are in order, earnings and expenses are marked under correct heads and balance shown in books are true reflective of physical realities. Problem erupts when an auditor starts breaching its own boundaries and encroaches discretionary powers of policy makers'. Let it be very clear, an accountant cannot judge and find the intent of expenditure, they are not trained to do so. I would present to you an illustration related to my workplace but relevant to many similar places.

I work in M&S division of number 1 passenger car manufacturer of this country, we are supposed to organize mega events aiming at, building strong and long term relationship with customers, bringing the company closer to customers, enhancing brand equity of company and loyalty of customers, marketing of after sales services of dealerships, that would in turn enable our channel partners to earn more from after sales activities and would make them financially more capable of increasing reach and volume of our business and last but not the least, generating exchange and new car sales inquiries. The budget of these activities runs into crore of rupees. Out of long term, short term, tangible and intangible benefits listed above, only cost per inquiry generated can find its place onto books of account. Suppose we conducted 10 events of similar kind with an expense of Rs 50 Lakh, i.e. Rs 5 Laks/event. We were able to generate 2000 new car sales inquiries, cost per inquiry stands at Rs 2,500/-. If CAG had audited our books, it would have prepared its report somewhat similar to the one below:
"The cost per inquiry of Rs 2,500/- is too high, with conversion ratio fixed at 25%, cost per conversion is estimated as Rs 10,000/- which is equivalent to product margin. 2000 inquiries could have been generated by way of distributing 20,000 newspaper inserts that would cost the company 40,000 Rs. The estimated loss to company is Rs 49.6 Lacs!"
Sounding similar to CAG report on spectrum sale and coal block allocation? It is. Can the benefit of organizing mega events be matched with the distribution of newspaper inserts? Can a newspaper insert bring a company closer to its customers, can it fulfill even a single long term objectives?

2. Does that mean there was no 2G scam? Is A Raja innocent?: Yes, there were nothing like 2G scam, but wait, there was a scam, and it was crafted by then telecom minister Mr. A Raja. A Raja had manipulated First-Come-First-Serve policy to benefit few telecom operators. Unitech got nationwide airwaves through dubious FCFS policy and later sold the company to Telenor at a hefty premium. Unitech did not roll out its services alone even in a single circle neither had invested even a single penny in infrastructure. It had pan India spectrum worth Rs 1400 cr with it as an asset. The company was sold to Telenor for over Rs 6100 Cr. Unitech made a hefty profit of Rs 4,500 Cr. There was a scam and it was brought into notice of the nation undoubtedly by CAG, but the way scam was highlighted and suggestions were made before Public Accounts Committee was wrong. CAG interference to policy making could halt the reforms. CAG has been outstanding in scanning government books and must continue to do so, but it must refrain itself from suggesting parliament the correct methods of policy making. 

3. What is the take away?: I hope CAG will understand its limitation that it is a national auditor and not a national policy reviewer. Government could be able to justify its decision of allocating coal mines for captive use to private players as the recent developments made it clear that auction is not the only way of selling natural resources and there are other factors need to be taken into account.

Let us hope that government takes full advantage of this development and accelerate the pace of economic reforms.