THE ECONOMIC WEEKLY January 9, 1965

Capital View The Hunt for 'Left' Communists Romesh Thapar HO persuaded the Home Minister, ral political posture. reminiscent of that brand of thinking W Gulzarilal Nanda, to launch his The reaction abroad is revealing. The of which we believed we had purged new-year's-eve police action against the opinion is widespread that the round­ ourselves. Whatever the aberrations 'left' communists? The moody Central up of the 'left' communists under communists in India still suffer from, Intelligence Bureau? The ambitious emergency powers reflects the casual it can no longer be denied that now R S S chief, Golwalkar? The uncertain interest Jawaharlal Nehru's heirs have in many ways they lead the battle Lai Bahadur Shastri? The so-called in democratic procedure. Some point within the communist movement for collective that is the Cabinet? Or the knowingly to the attempt being made independent expression. These signifi­ astrologers and soothsayers who are to entice foreign capital - into India. cant developments need to be more fast becoming the advisers to the 'sons Others show concern about the inte­ fully understood by non-communists. of the nation' on future political pros­ rest Shastri and Nanda appear to be Democratic functioning is Integral pects? These questions are being raised showing in winning over the Hindu to the unity and viability of a sub­ everywhere in the Capital. There is elements organised under the banner continental, multi-communal, federal embarrassment at all levels, even of the R S S. In other words, there is State like India which embraces many among normally conformist editors and little doubt that India's democratic apparently conflicting interests and pressmen, although there are those image is now being tarnished. culture patterns. A damaging compro­ specimens who would like to see the mise here or there could certainly total illegalisalion of communist acti­ An open trial, or the publication of create those authoritarian tendencies vity. conclusive and documented evidence could be tolerated. A 'white paper' is which generate regional revolts and We are obviously developing a dem­ 'promised', but this has not been re­ pose a challenge to the unity of the ocratic conscience, for there is a mark­ leased yet. Meanwhile, to maintain State. Nehru understood this though ed reluctance to accept Nanda's assu­ that emergency powers give the GOI he allowed himself to be pushed into rance that the GOI possesses consider­ the right to take this kind of action, extremist actions on occasions. But able evidence to prove that the 'left' is to make a mockery of our Parlia­ today the flouting of legal procedures communists planned subversion on a mentary Government. There are laws is becoming a habit. There is grave national scale and in the interests of to deal with the sort of threat that danger in this for the Centre. China. These elements are, after all, the Home Minister has said exists. For the moment, the swoop on the insignificant in their influence. And it Proper legal procedures would help communist 'leff is linked with next such evidence is available, why is it isolate the real culprits and break the month's elections in Kerala. Tomorrow, not made public? A proper trial is alleged conspiracy. Anything less will the conviction will spread that when demanded. Only then can such ele­ defeat the purposes which Nanda is Congress power is threatened, free and ments be isolated and fought. Nanda's presumably supposed to have in mind. fair elections are not possible. The incompetent approach only helps them The very general accusations against day after, a whole region will become emerge as fearless opponents of the the 'left' communists which Nanda responsive to slogans rooted in deter- Congress juggernaut. Hence, the very tried to spell out in the course oi a mined opposition to the Centre, to pertinent attempt to link the arrests talk over the AIR are similar to those slogans of revolt. The ouster of the with the forthcoming Kerala mid-term mentioned against a section of the CPI communists from power in Kerala in elections. at the time of the Chinese attack in 1959 almost wrecked the democratic The representatives of friendly NEFA. Much of this evidence is appa­ system in India. Then, fortunately, countries, including the communist rently based upon the demented pole­ good sense prevailed. But a repetition, countries, have been assured privately mics of individual adventurers who with variations, could prove to be the that the arrests do not in any way imagine that they can establish 'libe­ last straw. rated', Yenan-like bases contiguous to mark a shift in India's internal and There seems to be no logic in the Chinese territory along the Himalayas. external political alignments. The assu­ attitudes of the GOI. Opportunistic­ Can such lunatic outpourings be used rance is fatuous. If a proper trial is ally, the intrigues of Abdullah and against the entire communist 'left'? No not held, and if Nanda's ministry con­ company in Kashmir are tolerated even court would uphold such a case. Nanda tinues to sit tight on the evidence it to the extent of tying the hands of must, therefore, produce more plausible is supposed to possess, it will not be Sadiq. in the East, among the Nagas, evidence of conspiracy and subversion long before the 'right" communists are we are officially involved in a debate —and place it before the nation. compelled sharply to radicalise their with secessionists on the degree of recently-adopted programme in order When even psychopathic anti-com­ independence to be granted. Yet, on to prove to their close supporters that munists in the West are beginning to what appears to be the flimsiest of they are not the 'collaborators' and take note of the far-reaching changes evidence, Nanda is permitted to lock 1 'revisionists that they have been made taking place within the international up a whole section of the Indian Left out to be. Then, an attack on the communist movement, changes which on the plea that it is 'anti-national'. entire communist movement will be are bound ultimately to compel each These are the antics of a Government on Nanda's agenda, particularly if the communist party to think for itself, it which does not quite know what it is present economic crisis continues to would be the height of folly for poli­ doing—unless, of course, the astrologers mount. This kind of development tical leadership in India to assume and soothsayers have taken over the would certainly influence India's gene­ attitudes which are antiquated and reins. January 9, 1965 THE ECONOMIC WEEKLY

Our unhealthy - political slate is and the R S S approve of Nanda's been mobilised full time for the past underlined by the heavy silence of the action. So do the Swatantra bigwigs. several weeks!) will face these issues so-called leftists in the Congress Party, If there had been genuine institutions squarely or rest content with rubber- the inhibitions of the communists in support of democratic processes, in stamping the meanderings of the GOI. who do not approve of their erstwhile defence of dissent, it would not have Congressmen should have enough time comrades and the quiet retreat of been possible to lock up people with­ to face these issues—for, Gulzanlal those accustomed to chattering about out trial. Nanda has even cancelled the sche­ freedom and liberty. Only a few en­ It remains to be seen whether the duled meeting of the Congress Socia­ lightened voices are heard demanding Durgapur Session of the Congress list Forum. But, alas, who will lead that no one be condemned until proved Party (for which the entire resources them in the debate? Peripheralism guilty. The militants of the Jan Saugh of the West Bengal Government have breeds political pipsqueaks. Weekly Notes

Official Farewell Under Rule 11, the Committee that support the indefinite continuance of may be appointed to report on the en­ the managing agency system. The so- HE Government of India has forcement of Section 324 can have the called substitute of management, by T adopted the right and fair pro­ powers of a commission of inquiry. It secretaries and treasurers is and should cedure in appointing a Committee to can "examine such representatives of be deemed as no different from man­ inquire into the desirability of abolish­ the management, investors and other aging agents. ing the managing agency system. This interests concerned with the working is the procedure laid down under of the units engaged in the industry There is one problem which though Section 324 read with Rule 11 of the or business concerned as the Com­ only procedural requires immediate Companies Act. Earlier, the Govern­ mittee may in its discretion select for attention. That is the question of the ment's apparent intention was to act the purpose". The Rule requires the guarantees which banks and most fin­ under Section 326, under which the Committee to make specific inquiries ancial institutions require from man­ Government can reject applications for in regard to aging agents (or failing them, one or approval of managing agency agree­ (a) the importance of the industry two directors) for loans to managed ments on the ground that the pro­ or business to the national economy; companies even when the loans are posed managing agent is not a fit and (b) the number of companies en­ fully secured (by mortgage, pledge or proper person. The use of Section 326, gaged in the industry or business and hypothecation) against good and con­ which was meant to deal with indi­ their financial and managerial perfor­ ventional collateral. In concrete terms, vidual cases of delinquency, to abolish mance; these guarantees are meaningless for a system of management in certain (c) the capital structure and form they can never be honoured in event established industries would have been of management of such companies; of default. ICIC1 has never insisted on a clear abuse of statutory and adminis­ (d) the capital structure of the such guarantees while the Industrial trative powers. managing agencies and the extent of Finance Corporation announced its their interest in managerial compa­ intention to give up the insistence The five-member committee headed nies; only in 1964; SFC's and banks are by I G Patel consists wholly of offi­ (e) the total remuneration received still slaves of the old tradition. Severe cials; in fact, three of the live are by managing agents acting as such or transitional difficulties would be created from the Finance Ministry. Consider­ in other capacities; in the industrial credit structure with ing the views which the Finance Min­ (f) the extent to which managing the phased abolition of the managing ister has already expressed, it can be agents have been responsible for the agency system if adequate arrange­ taken for granted that the Committee promotion, development and finance of ments are not worked out in advance. will recommend abolition of the man­ managed companies; and Banks must be directed in the near aging agency system in certain indus­ (g) whether in the light of various future not to insist on such guaran­ tries and businesses. The question then considerations, other forms of manage­ tees and the state-owned banking sys­ is which industries and businesses will ment could be of greater advantage to tem (ie, the State Bank of India and be closed to managing agents—and the shareholders and the general public. its subsidiaries) must set the example when. A large number of managing on its own. agency agreements, it is known, are The report of the committee may or due to come up for approval this year may not be published. Data on all As for other transitional problems, but the exact number is not disclosed. these matters, except (g) which is after private managements will have to do The first appointments of managing all a matter of conjecture, are already some fresh thinking on the creation of agents under the Companies Act 1956 available with Government. The test a rational and efficient system of man­ took place in 1960 but how many of of the Governments earnestness, there­ agement. In fact as distinct from law, them were for five years is not known; fore, is the speed with which the the abolition of managing agents will the Company Law Administration has Committee reports back. No useful not make a drastic change in the sys­ never published the "maturity pattern" purpose would be served by asking for tem of top management but it would of approved agreements even though memoranda and oral evidence. The imply fixation and assignation of indi­ their number does not exceed 1,500 question has been debated so long vidual responsibility and more work and all the necessary data are in its (with so little facts, though) that no­ by less prestigious and younger boards possession. thing new can be uncovered now to of directors. 48