May 9, 1987

India Survey

The rich and powerful still display their names on the gateposts of Delhi's sprawling colonial bungalows and their private telephone numbers are still listed in the city directory. India's capital retains at least some of the hallmarks of what used to be the world's most open political society.

Yet today the city bristles with Sten guns. Some of the security measures are pure farce: like the armed guards who leap out of passenger cars at traffic lights to sweep the horizon with their automatics. Some are status symbols: like the police tents pitched outside the homes of prominent journalists. Some are deadly serious: like the seven or eight searches and identity checks for visitors to the prime minister's fortress-compound.

Indians must hope that the barn door has been bolted now that one prime minister has been gunned down in her own garden and her son-successor escaped another bullet merely because the would-be killer was even more bumbling than the security men. But the anger of the Sikhs in Punjab and the terrorism that feeds on it are, if anything, more potent today than on October 31, 1984 when two of her Sikh bodyguards murdered Indira Gandhi. Mr Rajiv Gandhi's failure to implement a peace agreement with the Sikhs is the greatest lost opportunity of his political career. It is not the only one.

Punjab casts its pall mainly in north India, where Sikhs and women dare not go out alone at night, and in airports, where passengers are subjected to vigorous body searches. In a recent national poll, only in the north did a majority identify Punjab as the main problem confronting India (southerners and easteners cited unemployment). A thousand miles souch of Delhi in Bangalore, the state's chief minister takes his daily constitutional unescorted. But for Mr Gandhi the walls have closed in. His teenaged children have been removed from school; his Italian wife is reported to be suffering serious strain. Amateur psychologists in Delhi cite erratic outbursts as evidence that the claustrophobic pressures of the gilded cage -- and a literal glass cage when he appears in public -- are telling on the young prime minister as well.

"He's all by himself; he's become withdrawn," observed an old friend. "He's thoroughly dissatisfied with the way things have gone but since he doesn't belong to the system, he doesn't know how to work in it."

This was Rajiv Gandhi in what now looks like a happier time: before defeats in two state elections and a by-election in a safe Congress party seat; and before his government was rocked by the resignation of its most popular minister, Mr Vishwanath Pratap Singh, whose crusades against corruption ran up against high-level cover-ups. The widening scandal at once deprived Mr Gandhi of his Mr Clean image and created a potential alternative in Mr V. P. Singh.

The most startling discovery for a longtime Delhi watcher visting post-Indira India for the first time is that decision-making is more narrowly based under Rajiv Gandhi than it was under his imperious mother; indeed young Mr Gandhi may be the world's most secluded democratic leader. Worrying parallels with the Ronald Reagan of Iragua are prompted by the picture of a well-intentioned leader who lays down a few simple political prescriptions and then relies for policy development and implementation on a small, politically inexperienced coterie. But Mr Gandhi is no greater communicator. And the Doon schoolmates, the corporate executives, the pilot, the actor and the young bureaucrats who surround him have failed to supply either the political savvy or the salesmanship to mobilise the country for change.

There are several explanations for Mr Gandhi's reclusiveness that have nothing to do either with security or a thirst for power: a distaste for the sycophancy of Congress politicians; a distrust of the leftish, oldish advisers who surrounded his mother; shyness, insecurity, the habits of a sheltered life. Then there is one attractively simple theory: that after 13 years of flying for Indian Airlines, Mr Gandhi continues to think like a pilot.

The choice of occupation itself is telling: few jobs involve less human contact. Closeted in his cockpit, a pilot works with one or two fellow professionals but is entirely cut off from the people whose lives depend on his skills and judgment. He issues commands in the confidence that all systems will respond; that if components malfunction, they will be replaced; and that every problem has a technical solution.

Rajiv Gandhi's trouble has been, first, that he lacks a detailed flight plan; and second, that neither politicians nor bureaucrats are responding to his course-changing orders. The result is that, as the aircraft of state runs into turbulence, its passengers have become increasingly concerned about the absence of a firm hand at the controls.

Will the real Rajiv Gandhi stand up?

India has the world's biggest concentration of democratic inertia. This is why it is less vulnerable than it seems either to splitting up or breaking down. That same inertia would probably make it impossible for anyone to drive India to perdition. And it guarantees that an Indian route to nirvana would be, like Indiana's own roads, narrow, potholed, and littered with over-turned juggernauts.

India's prime minister has more apparent power and less apparent opposition than any elected ruler anywhere. Still, as Mr Gandhi is discovering, this is not the same as an ability to make things happen. Rather it makes for excessive expectations, especially when the leader is the third in a family that has ruled India for 36 of its 40 independent years. Dynastic charisma is still alive in Delhi. So is a posthumous Indira cult: in Indira Gandhi International Airport, Indira Gandhi Cultural Center, Indira Gandhi Stadium and private objects of reverence such as the life-size wax replica of herself in the home of a member of parliament.

Nobody would deny that Mr Gandhi became prime minister of India simply because he was Indira's son. After being installed as party leader by bypassing due process, he went on to win the largest popular vote ever by adopting the lowest chauvinist appeals in his inherited carpetbag. But then he became his own man.

Under the slogan of taking India into the twenty-first century, he set out to apply a new emollient approach to the government's relations with the opposition, with business, and with India's neighbours. He signed peace agreements with one-time insurgents and stopped destablishing non-Congress state governments. He cut taxes and encouraged Indian industry to compete, computerise and look beyond its protected domestic market. He met the president of Pakistan and mediated in Sri Lanka's civil war. And he attempted to reinvigorate India's two great ruling institutions, the Congress party and the civil service.

Mr Gandhi's break with a mean-spirited past inspired a wave of euphoria that lasted about a year. Today most of his initiatives are stalled or stymied as a result of lack of foresight, lack of follow-through or failure of political will. Some of this can be written off to inexperience and the sheer immensity of the job. But the standards Mr Gandhi is violating are his own: he presented himself as the thoroughly modern manager, using corporate techniques and executives to rev up the creaky government machine. Now he is falling into a governing style which owes more to the Red Queen.

Every cabinet minister has been transferred at least once, with some ministries changing four times. There have been 16 hirings and firings of party general secretaries, 19 shifts of state party leaders and 15 changes of state chief ministers. Two-thirds of the highest-grade civil servants have been reposted. In one egregious episode the foreign secretary learned of his dismissal from his master's voice in front of the entire Delhi press corps. The prime minister's defenders explain that he is stuck with a limited talent pool of about 100 people and is simply putting them through efficiency tests. The result is a demoralised team in which nobody stays put long enough to get on top of the job and only selected insiders get access to the boss.

Mr Gandhi has found a few men of his own generation and wave-length, and has given them rope and responsibility. But at least three of the most effective ones have got entangled in that rope, including Mr V. P. Singh who was transferred from finance to defence a month before budget time, over the head of another erstwhile favourite. Theories about these falls from favour include a familial intolerance for competition and, now, an attempt to fend off inquiries into financial misdeeds.

Among the people who have been cut out of the loop is the president of India, who recently demonstrated his displeasure by refusing to sign a government bill and then wrote a letter, leaked to a newspaper, to complain about being bypassed. The president, Mr Zail Singh, is precisely the kind of old Congress warhorse and Indira loyalist whom Mr Gandhi keeps at a none-too-respectful distance. His treatment of the elderly Sikh has rebounded on Mr Gandhi.

One way the prime minister reaches beyond his restricted circle is by setting up commissions to bring in outside experts and to sidestep and galvanise the bureaucracy. A business executive who has watched him interrogate commission members says he demands data like a scientist and has "wile, guile and wisdom surpassing his mother's". He also has a hot temper and has been known to dress down senior civil servants in front of their subordinates. Although he seldom consults hardcore intellectuals, he has attended a few seminars and shown himself an attentive, if defensive, listener. Recently he revived the occasional morning durbar for favour-seeking strangers, including Congress MPs.

Mr Gandhi evokes neither the adoration nor the hatred that his mother inspired. This is unsettling: even Indiraphobes look back to the good old days when the enemy was unmistakeable and larger than life. Still more disturbing for an elite accustomed to being no more than one acquaintance away from the seat of power is the sense of exclusion. For the first time in 40 years, government in India is the preserve of mostly faceless men taking decisions, not in the kitchen, as in Indira's day, but in a pantry with a revolving door. Who is making Punjab policy?, your correspondent asked a dozen people close to the issue. Answer: "Nobody knows." Perhaps because nobody is.

Show them you mean it, Rajiv

Historians may conclude that the alienation of one of India's most dynamic communities was a product of unstoppable forces: that if a small-town preacher named Jarnail Singh Bhindranwale had not whipped young Sikhs into a fundamentalist, secessionist frenzy in the early 1980s, someone else would have exploited the same frustrations with the same violent results; and that if Mrs Gandhi had not scuttled several settlements with moderate Sikh politicians, the forces of Sikh reason would anyway have failed to carry the day. By the same logic, the Indian army's assault on the terrorists' lair in the holiest of Sikh holy places, the Golden Temple, in June 1984 was unavoidable. And so on and on, through the assassination of Mrs Gandhi by Sikh bodyguards and the retaliatory massacre of thousands of Sikhs by enraged (and organised) Hindus.

It is equally plausible to argue that five years of mayhem and embitterment might have been avoided by tough policing and generous statemanship. This would have meant the Congress party resisting the temptation to use Sikh discontents for its own partisan advantage. (Bhindranwale was first picked up by Sanjay Gandhi to divide the Sikh Akali Dal party.) The answers to these ifs of history are not as theoretical as they sould because history is in danger of repeating itself.

When Rajiv Gandhi signed a peace accord with Sant Longowal in July 1985, he seemed to be acknowledging both that the Sikh sense of hurt was deep and that it was assuagable by political means. The accord committed the Indian government to fulfil several longstanding Sikh demands, starting with the transfer to Punjab of Chandigarh, the purpose-built capital now shared with Haryana. It was agreed that Punjab would resume self-rule after an election for a state assembly that September.

Longowal was killed by a Sikh militant a few weeks later. But Mr Gandhi ordered the Punjab elections to proceed. The result was an overwhelming endorsement of the accord in the form of a two-thirds turnout and the first-ever majority for the moderate Sikh Akali Dal party. At this point Mr Gandhi had the vision to see that the congress party's loss in Punjab was the country's gain. It was after Congress lost a second state election, in Assam in December 1985, following a second Gandhi accord with local opposition forces, that the price of peace-making began to look too high.

The transfer of Chandigarh to Punjab was due to take place on Republic Day, January 26 1986. It was cancelled at the eleventh hour. The immediate reason was the inability of a judge to find compensatory territory for Haryana. But behind this failure lay a pattern of sabotage by hardline politicians and bureaucrats, in Delhi and in Haryana, which continued until a second judge delivered another incomplete and unworkable judgment six months later.

The non-transfer of Chandigarh was a turning point. Only 63 people were killed in Punjab in 1985. The next year the toll was ten times greater, in spite of the appointment of a new police chief, reckoned to be as able and incorruptible as any in India. This year the killing rate is about six a day. Policing in Punjab continues to be so ineffective and so politicised that the police chief himself narrowly missed getting murdered in his own headquarters last autumn.

Blame the buffer
The prime minister would like the country to believe that if the war against terrorism in Punjab is not being won, the fault lies with the state's Sikh government. The Akalis have much to answer for: factional in-fighting; a failure to stop extremists seizing control of Sikh holy places; and a half-wooing, half-warring relationship with the militant "boys". This winter Akali divisions widened as a large radical faction backed militant chief priests in excommunicating the party leader, Mr Surjit Singh Barnala, and declaring itself the true Akali Dal. Mr Barnala survives in power only because of Congress party support. But that support does not extend to giving him what he needs most: the credibility that would come from fulfilling the Longowal accord.

What matters to Mr Gandhi more than peace or promises in Punjab these days is votes in next-door Haryana where a state election is due before June. He is calculating, just as his mother did in the spring of 1984, that concessions to the Sikhs can only hurt the Congress party whereas a Hindu backlash is the stuff of election victories. Holding Haryana has become all the more vital since Congress lost its last toehold in south India in the state elections in March.

Haryana is not only the key to the Hindu heartland; it is home to the most extreme Hindu chauvinist reactions against Punjab. Hindus throughout north India are wallowing in what has been called a majority's minority complex. Militant Hindu groups are invoking a conspiracy of anti-Hindu forces at home and abroad, which are posed as threats to the Indian nation but are actually excuses for reasserting upper-caste Hindu dominance over uppity Sikhs, Muslims and lower castes. The Congress party used to pose as the protector of minorities. Today it is riding the Hindu chauvinist wave to keep its party base in the north.

The ostensible reason that nothing has been done to implement the Punjab accord is that several of its provisions -- territorial exchange, water-sharing, for instance -- are still in the maw of technical commissions. Yet the ground-rules for these commissions have been progressively reinterpreted, most recently by Mr Gandhi himself, to end up in an unworkable Catch-22. Mr Gandhi concedes that he could slash through the semantic stalemate with another bold political stroke. He says he will not do so for two reasons: first, because, having cut the ground from under the Akali chief minister, he sees no Sikh of standing to do business with; and second, he asserts, because implementing the accord would no longer do any good.

Mr Gandhi is almost certainly right that no gesture from Delhi will deter committed terrorists. Their mission is to terrify Hindus into fleeing from Punjab and, by way of a Hindu backlash, to frighten Sikhs into seeking refuge there, thus creating a Sikh state, if not an independent Khalistan. The prime minister is also right that Sikh anger no longer centres on Chandigarh. But he is dangerously wrong in assuming that keeping a prime ministerial word has ceased to matter or that ordinary Sikh farmers would be as unresponsive to conciliation as the boys with guns.

There are ways to start healing the wounds of Punjab without hurting the interests of Haryana. The three most promising are: first, the release of some 360 people swept up in the golden Temple raid and incarcerated ever since in a Jodhpur jail. These detainees, who have never been charged with crimes, include women, pilgrims and employees of temple enterprises as well as a few militant leaders. Second, a pardon for the Sikh soldiers who deserted their units in the emotional aftermath of the Golden Temple raid and are still unrehabilitated. Third, the exemplary punishment of the organisers of the Delhi riots. The government recently released a long-delayed official report on the killings which indicted some low-level Congress party workers and the police. It has been denounced as a whitewash, because it exonerated cabinet ministers widely accused of directing the violence. Continuing inquiries could offer further opportunities for justice to be done.

Any of these moves might go some way toward placating the Sikhs. But undoing the damage of years will take years. This is because the roots of disaffection, particularly among Sikh youths, are economic as well as political. They have to do with a rise in aspirations and educational levels just when landholdings are contracting and traditional job opportunities in the army and police re narrowing. (A recent advertisement for 100 police jobs brought 15,000 applicants.) Terrorists find ready recruits among the educated, or half-educated, unemployed. Yet the police say that only a few hundred young people have become dedicated killers (and they are splintered into more rival factions than the Akali Dal).

Blame the foreign hand
The government cannot mention Punjab without invoking "the foreign hand". It claims to have solid evidence that large numbers of youngsters who fled across the border in 1984 have been given arms and training in Pakistan. Mr Gandhi contends that 90% of Punjab's terrorist problem would disappear if the Pakistani role were eliminated. The Punjab police chief describes Pakistan's involvement as "low level". There may be closer ties between the Sikh killers and drug dealers and smugglers who have always operated along the border with the connivance of officials on both sides. India and Pakistan are now talking about joint efforts to interdict this traffic, though the border itself is unsealable.

The Akali government is trying to win back some of the angry young men by using $ 3m in state money to start a network of private trucks and buses. "Give the boy a truck, the truck will attract a girl and then he will have a stake in life," says the Punjab finance minister, Mr Balwant Singh. Punjab has also asked for government support for business ventures which would produce jobs, energy and foreign exchange. Two years ago the prime minister promised Punjab a dam and a railway-coach factory. All these projects are still tied up in red tape. The will to cut through it is not there.

Imaginative plans for Punjab are offered up every day by unofficial mediating groups. One such scheme would sidestep the problem of compensation for Chandigarh and also generate economic activity by creating a new state capital for Punjab as well as for Haryana. The author of this plan argues that north-west India needs another urban centre to take the pressure off Delhi (the new colonies which have sprouted around Delhi in recent years already house as many people as six Chandigarhs). The cost of building the new city would have to be spent anyway, to accommodate the natural expansion of urban India.

Another way to avert a conflict with Haryana would be for Mr Gandhi to preempt the commission report on water-sharing, which is bound to be rejected by one side or the other, with a government offer to finance better water management in both states (Haryana and Punjab suffer from water-logging). The central government could also help induce India's most efficient farmers to stop adding to the country's wheat mountain and to diversify into more profitable crops.

But these are the strategies of armchair generals. For Mr Gandhi, the choices seem to have narrowed to letting the Akalis take the blame for the deterioration of security in Punjab or assuming direct control from Delhi by imposing presidential rule. The central government is already heavily involved in policing Punjab through two federal police forces. One strong argument against presidential rule is that it would change little on the ground. Sending the army into Punjab could make a military difference. But it could also amount to accepting the inevitability of another murderous 1984.

For the past five years politics has been the undoing of Punjab. It could yet be its remaking. This could happen if the leaders of every party, every community, every village, went out to mobilise the many and to isolate the few. It has ceased to matter who actually governs Punjab: an all-party coalition might be the least unworkable solution. Mr Rajiv Gandhi does not need a brains trust to figure out a new Punjab policy. All he needs is a chronology of the past few years and a sign on his desk saying: the re-run of history stops here.

Exchanging power for peace is usually a good deal

Rajiv Gandhi inherited an India with four resentful claimants to power in the states, three insurgencies and a few pockets of minor rebellion. Two years later, all four would-be state governments have been voted into office, all under leaders his mother had accused of treason. One insurgency is over, one is mostly tamed and the Punjab is bloodier than ever. The mini-rebellions splutter on. These are the initial results of Mr Gandhi's policy of peaceful coexistence.

As his mother's apprentice, Mr Gandhi found in Kashmir and Andhra Pradesh that destabilising popular governments can be counterproductive; in Punjab and Assam, he saw possibilities for regional parties to act as buffers between the centre and local extremists. Before the Punjab pact had time to go sour, he signed an accord with rebels in Assam. Last year he went on to do deals with another former insurgent and another regional party in Mizoram and Kashmir.

Of these concessions to state-level pluralism, the one that would seem to have the best chance of holding is his partnership with Dr Farooq Abdullah, who was returned to power in Kashmir in March. Dr Abdullah, another heir to a political dynasty, had been manoeuvred out of his chief ministership in 1984 when the local Congress party encouraged a faction of Dr Abdullah's party to break away. One of Mr Gandhi's first legislative acts in 1985 was to pass an ati-defection law, making this kind of mischief much more difficult. In return for his reinstatement, Dr Abdullah ceded some seats to the local Congress party and abdicated any role as the leading Muslim in a once-and-future opposition alliance.

The Assam deal is already shaky for the good reason that two of its clauses are fantastical: the promise that the central government will construct the Great Wall of Assam along the border with Bangladesh and the other, authorising the state to expel Bengali "foreigners" who arrived in the state after 1971, are both unenforceable and explosive. Nobody has worked out how citizenship is to be proved or disproved in the absence of written records. (Some 40 people have been kicked out so far.) And since Bengalis constitute half of the population, the potential for conflict over an issue which has already cost more than 2,000 lives is great indeed.

That the accord was programmed to destruct must always have been clear to the central government. Mr Gandhi recently explained that hundreds of miles of roads must be laid to the border before fence-building can begin. But the unworkability of their hard-won deal is just dawning on the militant students, who were elected to run Assam 16 months ago. The state government is now splintering, much like the Akali Dal, and the most extreme elements have spun off into secessionist opposition. Assam, like Punjab, may soon need a new deal.

The Mizoram pact passed its first test in February when Mr Laldenga, the leader of a 20-year-long tribal insurgency, was elected chief minister. He had been installed in office last summer, in return for disarming his troops. This caused some unhappiness in the displaced Congress party. He may now be causing further concern by demanding, shades of Assam, a ban on immigration by Bengalis and other outsiders. Mizoram is a remote, forested finger pointing into Bangladesh and Burma, where 90% of the people are Christian and the literacy rate is one of the highest in India. The rewarding of a former insurgent there has inspired some other local rebels to try harder.

There are echoes of Punjab and Assam in the murderous forays of Tripura tribal people whose aim is to drive local Bengails out of what was once a tribal domain (the state is now 70% Bengali). Tripura, like West Bengal where the Gurkhas are restive, is run by the Communist Party of India. The Marxists are distinctly discomfited at becoming the target of an underclass upsurge. They are resisting government offers to send in the army for fear it would merely alienate more of the tribal people and end up, as in Punjab, winning recruits for the rebels.

The Gurkhaland movement, in one of West Bengal's most prosperous districts, shows how governments can play into the hands of local demagogues. The would be ruler of Gurkhaland, Mr Subash Ghising, first raised a separatist banner in Darjeeling in 1980. But despite attention-getting stunts, including appeals to the King of Nepal and the United Nations, his cause took off only when Bengali police over-reacted to demonstations and he managed to insinuate his issue into pre-election joustsing between the congress and Marxist parties.

Both these rebellions would seem comic operatic if people were not getting killed and Mr Gandhi were not playing them for partisan advantage. Mr Ghising's demands have lurched between secession and statehood, and his targets between Delhi and Calcutta. The Bengal Marxists, while denouncing separatism, are offering the Gurkhas local autonomy; Mr Gandhi denounces the Marxists and their solution, but has nothing else to offer. These inconsistencies and the Gurkhas' own should be easier to resolve now that the West Bengal election is over with the Marxists winning a clear victory.

The north-east has long been a fertile field for insurgents with its mix of assertive Bengalis and assorted tribes, with ethnic cousins next door in Bangladesh, Burma and Nepal. Geography makes these movements peripheral, unlike Punjab; the Nagaland rebellion is still simmering, 40 years on. Mr Gandhi's peacemaking instinct in the region was right and should be extended to the Gurkhas of Darjeeling. But signing pacts is just a start. Monitoring and enforcing them is what makes for peace.

Why states want their own back

Accord diplomacy, as Mr Gandhi has practised it so far, is mainly crisis management (or mismanagement, as in Punjab). He has yet to follow his own logic to the point of accepting that stronger states might make for a stronger union. This would mean agreeing not to intervene in state governments, including those run by his own Congress party. And it would mean reversing or at least stopping India's relentless centralisation.

Every chief minister can reel off examples of how the centre has invaded the state domain. Agriculture is a state responsibility under the constitution, yet the agriculture ministry in Delhi now runs some 230 agricultural schemes. Industry is also a state subject, yet under an exception labelled "public interest" an estimated 90% of the output of organised industry has become subject to central control. Products vital to the public interest include razor blades, matchsticks, hurricane latterns and zip fasteners.

India's long and complex constitution provides exceptions for every rule which an interventionist central authority can exploit. Take the attempt by the Marxist government in West Bengal to distribute some 500,000 acres of land to landless peasants. Land reform is a state task as well as a stated commitment by all Indian political parties. In fact, West Bengal already had a land-reform law on its books, put there by a Congress government in 1973. But like most of India's land reform laws, this one was littered with loopholes. So the Marxists tightened it up by eliminating such invitations to evasion as the exemptions for orchards and fisheries (plant a tree or dig a pond in the middile of a field, and land ceilings do not apply).

But when the state tried to enforce the reform, it ran up against article 31A of the constitution which requires presidential approval for laws affecting the acquisition of property. So West Bengal's bill lay on a Delhi desk for four years until it was rejected on the grounds that it would harm exports (the odd shrimp raised in the odd paddy pond). It took another year of negotiation before Mr Gandhi's government gave West Benagl the go-ahead to hand out some land.

This is a glaring example of how the centre uses constitutional contortions to erode or nullify state power. The motive in this case was to block a vote-winning enterprise by an opposition government, as well as to protect the economic interests of Congress party supporters. Karnataka's law reviving local government elections also had to wait for approval for nearly two years; there were no grounds for withholding it except to frustrate an opposition initiative and allay state Congress fears of an electoral debacle.

Mr Gandhi eventually removed these two roadblocks to state action (though not before a Karnataka minister threatened a hunger strike). But it is not clear whether he is ready to relinquish handy ways of keeping state governments to heel. Since ten out of 22 states are controlled by non-Congress parties (in the tenth, Kerals, a Congress-led coalition was defeated by a communist-led one in March) and since the opposition scarcely exists outside the states, the handling of centre-state relations is a major test of Mr Gandhi's tolerance of opposition. Just about the only thing a fissile opposition can agree on is that the states should have more power.

The opposition sees political bias behind every government file: chief ministers Mr Jyoti Basu in West Bengal and Mr Ramakrishna Hegde in Karnataka cite project after project, private as well as public, first proposed for their states, only to be refused a licence or persuaded to relocate elsewhere. Usually, they allege, the alternative site turns up in a Congress-run state. A Tata truck factory, which had already been allotted land in Karnatka and started training workers, was ordered to relocate the Uttar Pradesh, which happened to be the home state of the industry minister.

State leaders argue passionately for the right to do their own deals with industry. Bankers believe this might induce the kind of creative inter-state competition that revived the American South two decades ago. But the last thing businessmen want is to have to wind their way through 22 different sets of licensing systems. They prefer the central devil they know -- unless decentralisation means decontrol.

There are real questions about how states would handle additional fiscal power if they got it and whether they are making the most of power they already have. States are entitled to tax agricultural incomes (which represent a third of the national product). Yet because of political cowardice, this resource goes untapped. Timidity in the face of farmer power also accounts for ludicrously low charges for irrigation water and electricity. Public-sector enterprises administered by the states have been running at a net loss for the past ten years. The flip side of tne centre's financial power is the responsibility for bailing out big state spenders.

The Indian government's tax take is meant to be divided by an objective finance commission between centre and states according to an objective formula. But greater sums are often dispersed by the centre as discretionary grants. Mrs Gandhi used this discretion liberally and spinkled the country with foundation stones (Mr Hegde points bitterly to the 15-year-old marker in Karnataka for a steel plant that never came). Mr Gandhi has lately adopted the same practice, making imperial progressions around the country, dispensing bounties as he goes.

Many of these were pre-election bequests -- $ 320m to Kerala, $ 775m for West Bengal and for Kashmir, $ 300m for Haryana -- which turned out not to be new money at all but loans or grants previously allocated or even the state's own finance. Some of the prime ministerial gifts were conjured out of thin air where they may well remain. When challenged about the political pattern of his visits, Mr Gandhi insisted that he would do the same for every state. So much for planning and for federalism.

Redefinitions of Indian federalism have been the stuff of seminars for decades. One of India's ubiquitous commissions has been taking testimony on centre-state relations for over four years. The Congress party recently told the commission that the centre needs strengthening at the expense of the states. It will take another commission to ask whether even states are rational units of government power when six of India's would rank among the world's 15 most populous countries. Imagine a place the size of Japan which is not allowed to do an overseas deal or one bigger than Britain which has no right to run a radio station.

Why states want their own back for Indian industry, but the stays stay

Two sets of people reject the label "liberalisation" for what Mr Gandhi is trying to do with India's economy: his own inhouse economic advisers who are afraid of sounding anti-socialist and thus stirring up resistance; and critics who say a better description of what the government is doing would be half-hearted, ill-thoughtout tinkering.

The tinkering has consisted of rewriting the rules by which the Indian government regulates who makes how much of what and where. The object is to inject competitive vigour into an over-controlled, over-protected, over-priced market place. This system, which one economist calls "command capitalism", was originally intended to make India self-reliant, egalitarian and labour-intensive. It achieved the first at the expense of the other two. Another of Mr Gandhi's aims is to increase government revenues by removing incentives for tax evasion and corruption. (An official report estimated that "black" or untaxed money amounts to at least 20% of gross domestic product, with perhaps another 15% generated by smuggling.)

Impatience with India's slow growth is hardly new; attempts to speed it up through deregulation started in the 1970s. Mr Gandhi has gone farther, faster. He has lowered tax rates and import duties, lifted limits on industrial capacity and diversification, and taken some companies and industries out of the regulatory net altogether. But his government has yet to relinquish a single instrument of control. As one editor put it, "Rajiv's promising to open the tap, but he reserves the right to keep his hand on it and to turn it off."

So far no tap has been closed, nor has any been completely opened, though many have gone two turns forward and one turn back. Sometimes this is to rectify anomalies that should have been foreseen, such as higher tariffs on computer components for assembly in India than on whole computers imported from abroad. These rates have now been reversed but it remains cheaper to import a turnkey power plant at a 25% duty or a fertiliser plant duty-free than to buy the indigenous equivalent, whose costs include a 200% excise tax on copper and steel at more than twice the world price. Long-protected industries suddenly faced with what they regard as unfair competition are all lobbying hard for tariffs to go up again.

The trouble is that every case is handled onn an ad hoc basis because the government has yet to spell out the principle behind its departure from autarky. Are imports intended to be a cold bath for local industry and, if so, should anything be kept out? Or are they mainly to fill gaps in domestic production and therefore to be restricted to vital needs and the highest technology? A drug manufacturer, who has been happily pirating foreign products for years under India's seven-year patent limit (18 years is the international norm) and then exporting this technology to generic drugmakers abroad, is outraged that multinationals are now being allowed to sell those same products, under their seductive brand names, in India.

Even where quotas have been transformed into tariffs and where tariffs have been lowered, the hassle factor operates to keep imports down. More goods have been put under the heading of Open General Licence which technically means open to import but licence is the operative word. An importer still has to go through 16 separate procedures before he can get permission to buy. To allow businessmen to plan ahead, the government promised in April 1985 to keep trade policy constant for three years. In the following 18 months there were 193 modifications to the April rules.

In the resulting confusion, both bureaucrats and ministers tend to follow the safest path: which is to go on as before. But sometimes they actively sabotage edicts from above. Businessmen testify that "delicensing" may speed up the first stage of a new operation, but the total transaction time may be longer because officials, for whom regulation is a way of life (some 5-7% of a contract is typically skimmed off in corruption) are resisting the new policies by working to rule. And then there are the caveats and exceptions: of the 32 industries officially delicensed, more than half were already exempt and of the rest, some are reserved for small business and some can be set up only in "backward" areas.

Delicensing makes it easier for businesses to get started. What is as difficult as ever is going out of business in India, no matter how red the ink. The government has said it will no longer take over "sick" or insolvent units (of which there are some 90,000) though state governments still do. No sizeable factory is allowed to go bankrupt because of the loss of jobs. India's organised workers have lifetime job security. Mr Gandhi talks of silver handshakes as a cheaper way of bailing out failing business or buying out excess labour than carrying on making losses. But a policy permitting this to happen is not yet in place.

Because labour is bolshie, immovable and low on skills, it is relatively expensive compared with subsidised capital, which to the industrialist can be almost cost free. This is why Indian factories, with their infinite supply of labour, employ less than 1% of the population and are becoming increasingly capital-intensive. Since 1960 the amount of fixed capital per man-hour has increased in every area of manufacturing. There is no evidence that delicensing is designed to change this by encouraging the right kind of labour intensity or exploiting any other comparative advantage.

The government is removing some of the unwarranted advantages given to the most over-fed part of an under-nourished economy, the public sector. About half of the public-sector plants are working at 75% of capacity and more than a fifth at less than 20% of capacity. A study comparing private- and public-sector operations in electric power, fertilisers, heavy engineering, hotels and banks has found private enterprises to be, on average, three times more productive and profitable than their public equivalents.

Policy-makers have not yet picked up one possible remedy: privatisation. But public monopolies in such areas as oil refining, power generation and telecommunications equipment have been opened to private competition. One visible result is that the latest touchtone telephone has become a standard item in middle class homes.

The other new status symbol, the sleek Maruti/Suzuki car, is a public-sector product that benefits from preferential taxation and pricing (though it still costs one and a half times a professor's salary). The Maruti company was started as a private venture by Mr Gandhi's late brother, Sanjay, and made money from dealerships but no cars until it was transformed into a public-sector memorial with the help of Japanese technology. Rajiv Gandhi is a car freak too (he has led security men an unmerry chase with his fast driving) but his special infatuation is with computers. Computerisation is being taken up by government-run railways, insurance companies and airlines, which means that queues in front of the one functioning computer terminal in Delhi's domestic airport are only slightly longer than before.

Hard sell
One test of the new economic policy will be whether other industries, with less technological sex appeal, can do what the electronics and motor industries have done, first seizing opportunities to expand and then finding a ready market (though the shake-out is already beginning among the 100 or so computer-makers and the still more numerous television manufacturers). Another test will be whether local products turn out to be good enough and cheap enough to sell enough abroad to offset rising imports and prevent a balance-of-payments crisis. The government is claiming a 17% increase in exports from April to October 1986 but independent analysts are unable to verify a real gain of more than 6%, which is about the same as the claimed increase in imports.

Exporting has never been a high priority or a natural talent in this continental country with its protected domestic market. The government has yet to make clear whether the prime purpose of exports is to dispose of surplus domestic production or to generate foreign exchange. And while its rhetoric proclaims exports to be a Good Thing, its market signals point in the opposite direction: deterrents in the form of tariffs on inputs remain higher than incentives in the form of export subsidies.

Marketing both at home and abroad is something Indian businessmen have to learn, but so do policy-makers. The missing link in economic policy, as in so many other areas, is the failure to sell it. Instead of advertising his new policy as a way of lowering prices and raising quality for the consumer, Mr Gandhi let tax cuts and delicensing get labelled as relief for the rich. This impression was confirmed by a simultaneous freeze in the anti-poverty budget. An uproar duly ensued and the government was forced to expand the anti-poverty programmes by half the next year. A similar thing happened last year when the government raised prices and then retreated in the face of protest.

"My fear is that they might have blown it because there's nothing so bad as starting out half-cock and giving reform a bad name," said one economist who supports decontrol. "Now everybody believes that a sufficiently powerful lobby can put reform into reverse." What may have been the most telling example of retreat under pressure was the removal of the finance minister a month before this year's budget. Mr V. P. Singh had made himself unpopular with businessmen because of his highly publicised pursuit of highly placed tax evaders. Now it seems his inquiries may have pointed in embarrassing directions, towards friends of the prime minister.

Businessmen say that the biggest change Mr Gandhi has brought about is in the economic climate. "For years we've been treated with suspicion," explained the chief executive of one of the country's biggest private-sector companies. "Today we are offered an honourable place in the mainstream of economic life." That stream is less sluggish than before, though there are not yet any telling measures of how much of today's respectable 6% industrial growth is due to liberalisation.

One observer predicts "a long slow adjustment process once the policy framework is in place, which it isn't yet". The conversation stopper is to ask economists and businessmen to name one Rajiv reform fully enunciated, fully implemented and producing results. Some cite tax policy. Most answer with a long pause.

Poverty is hard to count and harder to counter

A third of the world's poor live in India. And 40% of India's population lives below a minimal poverty line. These are rough reckonings from the World Bank. The Indian government points proudly to an 11% drop in poverty to 37% over five years and predicts further, steeper falls. In fact, the poverty rate is a zigzag thing: it has risen and fallen half a dozen times in the past 30 years, sometimes by as much as 50%, almost always as a function of farm output and prices. A sobering conclusion, reinforced by exhuming an extensive field survey by the British colonial government in 1988, is that the proportion of Indians who are underfed has stayed fairly constant at 40% for 100 years.

This does not mean that living standards have not improved over time. Indians no longer die of famine and no longer depend on foreign food handouts. Bad harvest years are not as bad as they used to be. Yet poverty persists because neither economic growth not targeted development spending has been big enough to help the truly poor. Another factor is that poverty is concentrated in the countryside and growth in the cities. Although the green revolution has created swathes of rural prosperity, real farm incomes have stagnated for 30 years while non-agricultural incomes have more than doubled. One poverty expert, who now works in the prime minister's office, has calculated that even if incomes were to grow at a speeded-up 1% a year, halving the poverty rate by trickledown alone would take 35 years.

Given Mr Gandhi's taste for quick results and given the seeming intractability of the problem, he has wisely avoided echoing his mother's populist rhetoric about eliminating poverty (garibi hatao). His planners, however, are still making wholly implausible predictions: that the poverty rate will fall to 26% by 1990 and 5% by the end of the century. Some of the poor are wished away by unwarranted assumptions about a drop in the population growth rate. (At the current 2.2% growth rate, India is breeding a new Australia every year.) For the rest, the plan counts on faster economic growth, mainly from a technology-led second green revolution, to do two-thirds of the job; a third is to be accomplished by redistribution.

For a poor country India spends generously on its worst off: the latest budget allocates $ 1.5 billion for anti-poverty programmes, 8% of government spending. Yet these projects, which consist of mass employment schemes and the distribution of income-producing assets such as buffaloes, serve only about 10m families, a small fraction of the poor. On one reckoning it would take some $ 5 billion a year to employ all the employable rural poor, and $ 10 billion a year, more than half of government spending, to lift all the poor above the poverty line.

Poverty has to be attacked mainly in the rural areas because that is where 80% of the poor live. They have stayed poor mainly because so many of them have stayed on the land. Two-thirds of Indians are dependent on agriculture today, virtually the same proportion as in 1950. Yet since that time agriculture's share of GNP has declined from 60% to 37%. The amount of arable land increased for a while but then hit its limit. The land crunch has turned 30% of the rural population into landless labourers; these are the poorest of the poor. At least another 30% are marginal farmers, with holdings smaller than two hectares.

The less poor drift across the poverty line in good years. They earn some income from land, can migrate to jobs and get some benefit from anti-poverty programmes and reserved-place schemes which rarely reach the hardcore. These groups are the source of some of today's violence as they try to push their way into the third-class railway carriage of India's market economy and are fiercely resisted by the people who got there first.

Agriculture will not be able to absorb everybody born on the land, especially if farm production increases at only 3% a year, as experts expect, rather than the 4% target of the government's plan. India's cities will have to swell and India's industry will have to create more jobs. But surplus labour will also have to be taken out of farming by expanding food-for-work schemes and by creating land armies to build roads and canals. Some of the existing job-creation projects such as Maharashtra's, which is financed by a small employment tax, are highly successful. Many others provide only temporary relief to the permanently poor.

When workers are paid in kind, the food comes from India's grain mountain, now more than 23m tons tall. This mountain is testimony to India's productive success and redistributive failure. The rural poor simply cannot afford to buy the grain their richer neighbours produce. And most of the subsidised food, apart from that paid out for work, goes to urban areas. It would take a major organizational effort to extend the network of fair-price grain shops throughout rural India. This may nonetheless be the most affordable, short-term way of relieving rural hunger. Longer-term solutions will depend on making agriculture more productive by developing new technologies and by taking them into new parts of the country.

There is great untapped potential in the 80% of India's arable land that has yet to experience the mix of high-yielding seeds plus plenty of water, fertiliser and pesticides that turned India from grain importer to surplus producer by the mid-1970s. If the Punjab-Haryana experience could be transferred to rise and coarse grains in the rain-fed area from eastern Uttar Pradesh across to Bihar and Orissa, and to the deserts of Rajasthan, agricultural production in these areas could more than triple. But there are financial and political reasons why it may not happen.

Rice-growers in the eastern states are seizing upon new seeds and fertilisers the way Punjabi wheat farmers did in the late 1960s. But water is a constraint: eastern rice fields require large-scale drainage, irrigation and flood-control works. These are well beyond the means of local farmers whose landholdings are much smaller than in Punjab and Haryana. The central government will have to move in with credit, technology and water-control schemes if there is to be a greening of India's east. Current plans endorse the goal but do not provide nearly enough money.

The rewards of a green revolution in the east would be more than a net addition to food production. A large proportion of the extra food would be consumed by the poor or near-poor: by marginal farmers and by landless labourers employed in agriculture or in building waterworks. The cost of such schemes could, in theory, be offset by reducing other farm supports which are rising faster than almost any other item in central and state budgets. The trouble is the burden would fall mainly on Punjab and Haryana; and now is not the time to shift resources away from those seething states.

Official and unofficial studies have found that subsidies of all kinds -- not only agricultural inputs but also food, education and medicine -- go disproportionately to the better off. Even in the anti-poverty programmes, some 15-20% of the beneficiaries are the non-deserving, not counting the money siphoned off in corruption.

So one priority for maximising the use of limited resources is to limit them to areas of chronic poverty. Another is to remove the rigidities of a planning system which decrees that identical anti-poverty schemes with identical staffing and subsidies shall go to every district in the country, regardless of need or conditions. This is centralisation gone mad.

Like welfare programmes everywhere, India's have a bad name. The Gandhi government is trying to clean them up and make them cost-effective. One way would be to put them in the control of elected local councils, as the state of Karnataka is doing this spring. District planners are bound to know better than Delhi which development schemes are fitted to local needs. And elected villagers are far better than bureaucrats at sniffing out corruption and identifying the deserving poor.

Deprivation is too deep and chronic in India for the best laid anti-poverty plans to stop hundreds of millions staying poor for a long, long time. What should be feasible sooner for a country that has grown a grain mountain is to stop the poor going hungry.

Thus step in where politicians have fled

Spare a tear for Indian democracy. Indians may despair over their rankings in international growth tables but one measure on which they come top of the world is mass participation in elections. Yet today, as the country searches for solutions for its multi-identity problem, some people are blaming too little democracy, in the form of over-centralisation, while others say it is the electoral process itself that is responsible for the epidemic of violence. This leads to three sorts of answers: damn the politicians and call in the army; change the electoral system; restore political mediating institutions, starting with the Congress party.

The first has negligible support except as a solution to Punjab, though Hindu chauvinists are making it semi-respectable. The second has become a trendy theme, especially among opposition politicians, but is almost certainly both a non-solution and a non-starter. The third is where India's best hopes lie for escaping from the present discontents. But this is yet another arena where Mr Gandhi's performance has fallen short of his promises.

Communal violence has always simmered just below the surface of Indian life. A cow's head thrown into a temple or a pig's tail waved before a mosque would set off a local whirlwind, leaving dozens dead. And politicians have always appealed to the lowest ethnic denominator, the so-called vote banks of Muslims or untouchables or Jat farmers, to put together winning coalitions. What has changed in recent years is that religious, caste and ethnic clases have become both more prevalent and more politicised. Last year 98 out of 500 districts in the country experienced communal violence, compared with 12 in 1960; there were 500 Hindu-Muslim riots, compared with 60 some 25 years ago. And these eruptions which used to be accidental, local and short-lived, are now seen as battles in a wider war.

Part of the story is that Indian voters have become more demanding and more conscious of their power to push their demands just as the system has become less capable of satisfying them. There is no better way of raising political consciousness than assisting in the defeat of governments: in the past 15 years Indian voters have turned out two central governments and more than 25 state governments; every state has now had a spell of opposition rule. Meanwhile the nature of politics has changed.

In the early 1970s, Mrs Gandhi put an end to the internal party elections that the Congress had been holding for 50 years. At the same time in most states, the elected village and district councils that had been operating for about a decade also stopped functioning. The result was that local party leaders lost their legitimacy and their patronage, and local communities lost their links to the power structure. The party channels which used to report on local grievances and deliver redress and largesse closed down.

The grassroots gap was filled partly by officials who became more arbitrary and more corrupt, partly by appointed party yes-men or intelligence agents. But nobody performed the conflict-resolving, consensus-building function of the old Congress. So newly aroused groups confronted one another to compete for scarce resources or simply for recognition of their separate, sub-national identities.

Enter Sanjay Gandhi who started inducting criminals and hooligans into the Congress party and adopting strong-arm methods of political persuasion. This did not stop either with the end of the Emergency in 1977 or with Sanjay's death in 1980. In 1984 some 150 members of the Uttar Pradesh state assembly were reported to have criminal records. Politicians in many states and many parties have suborned corrupt policemen, formed standing armies of thugs or imposed their will through rent-a-mobs.

Political fingerprints have been found in at least three recent outbreaks of "spontaneous" violence. A Muslim riot in Karnataka in December, ostensibly sparked off by a provocatively titled short story in a local newspaper, was whipped up by local Congress politicians to embarrass the state's opposition government. In 1985 when Gujarat was wracked by riots against a state plan to reserve more jobs and more university places for the so-called backward castes, some of the rioters were identified as Bombay hooligans who had been brought in for the fighting. In the anti-Sikh rampage following Mrs Gandhi's assassination, not only were the attacks organised by local Congress politicians; among the rioters were police cadets brought in from a Haryana training school.

Yet the communal picture is not all black. Indians often refuse to follow the siren call of manipulative politicians. One recent example was the attempt by a Muslim leader to organise a Muslim Boycott of Republic Day in protest against a court ruling over access to a mosque. Although Hindu indignation at this allegedly anti-patriotic act was greatly overplayed, only a minority of Muslims responded and in the end the boycott was called off.

Even villagers in the eyes of communal storms resist local hysteria. In Punjab, for example, it is rare for violence to be inflicted by neighbour on neighbour; often neighbour protects neighbour against the killers from outside. The same was true, with a few lurid exceptions, in the anti-Sikh riots in Delhi (though today Sikhs and Hindus there scarcely socialise anymore). Communal clashes tend to take place in and around cities where the social bonds are looser. Despite the cries of nation and sub-nation in danger, the let-live habit survies.

Come back, Congress
Still, the threat to democracy is real. Mr Gandhi needs to start saving it by purging Indian politics of criminality and communalism and by rebuilding the Congress party. The prime minister's own record on communalism is somewhat stained because of his failure to condemn the Delhi rioters, because of his Hindu chauvinist appeals in the 1984 election and because of his current flirtation with assertive Hinduism in the context of Punjab. He was also seen to be a weak defender of secularism (and pandering to Muslim voters) when he gave way to Muslim fundamentalists last year in a confrontation over Islamic marital law. One of his bright young Muslim ministers resigned in protest.

Yet nobody has been a fiercer scourge of the Congress party than Mr Gandhi. He made an excoriating speech at the Congress party centenary in Bombay just over a year ago and put a hard-headed conciliator, Mr Arjun Singh, into Congress headquarters to start rebuilding the party from the ground up. But less than a year later, he had given up his plan to hold party elections and had seen off his handpicked agent of reform. The suspicion was that the reformer was accumulating too much power. Mr Gandhi also removed the party's aged working president and gathered in the resignations of all the central party secretaries. When asked about party reorganisation at a recent press conference, Mr. Gandhi defined it as the dismissal of the two top men.

Mr Gandhi seems to have been outfoxed by local party bosses who feared losing their bases and their livelihoods. They organised followers to flood party offices both with membership applications and with complaints about bogus members. When more than 150,000 such letters landed in Delhi from Rajasthan alone, and similar numbers from other states, the election plan was buried under the avalanche. Mr Gandhi then settled for recruiting new party workers in his own young technocratic mould. He had them vetted by the intelligence bureau and sent the likeliest candidates in batches of a few hundred on training courses in Delhi.

His biggest coup has been to win back a group of Congress dissidents led by Mr Sharad Pawar, an able young ex-chief minister of Maharashtra, who will probably replace the present elderly incumbent in time. Mr Pawar has been touring the state trying to resolve factional splits and also organising flood relief, to remind people that Congress can still deliver the goods. Mr Pawar is a catch -- he modestly points out he had the second largest parliamentary majority in the 1984 election after Mr Gandhi -- and brought 81 state assemblymen and four members of parliament with him back to the Congress fold. But there are no other such sizeable factions waiting to be won.

Apart from his anti-defection bill, Mr Gandhi has shown no interest in reforming other political ills such as corruption. Running for parliament costs at least 1m rupees ( $ 78,000); the legal ceiling is 60,000 rupees. So no politician can be financially straight. Mr Gandhi won a Mr Clean reputation simply by keeping party fund-raising out of sight. Indian businessmen have been wondering out loud why the usual party collectors have not been to their doors. The answer, confirmed by recent revelations, is that over the past several years large sums have been skimmed off defence contracts. Non-resident Indians have been selected as the next lot of inconspicuous donors.

The Gandhi plan for rebuilding the Congress party is no more coherent than any of his other policies. The prime minister will not want to risk offending his party colleagues until after the presidential election this summer. This vote, in state assemblies and parliament, would be an opportunity for resentful Congressmen to send a message to an inattentive party leader. Up to now, four things have bound the party to Mr Gandhi: his dynastic charisma; his deep purse; the anti-defection law which prevents any group smaller than a third of the party from splintering off without losing its seats; and the absence of an alternative.

When Mr Pranab Mukherjee, an ex-finance minister who was dumped by Mr Gandhi, started a new Indira-loyalist party in January, he attracted only a motley crew of malcontents. But Mr Gandhi's hold on the Congress could evaporate quickly if the party starts viewing him as a loser. The congress has now lost every state election it has fought under Mr Gandhi, except in Kashmir where Congress was merely a junior partner. The loss of Kerala in March, after some vigorous personal campaigning by the prime minister, was a bad blow. This is why he has been taking such risks in Punjab to prove himself a winner in Haryana this spring.

A Congress victory in Haryana would be good for the country if it allows Mr Gandhi to give the Sikhs their due in Punjab and to get down to reorganising the Congress. His brother Sanjay proved it was possible to reshape a party in a hurry through thuggery. Rajiv would have to do it in a different way. Two years of frustration have shown him why he needs his own instrument of power. Two more years will tell whether he has the will to forge one.

Or how India can stand taller

Irresistible forces and immovable objects confront an Indian prime minister at every domestic turn. Foreign policy would seem to be the one sphere where a touch from the top can make a difference. In some ways it has. Mr Gandhi's less abrasive style has percolated through the system and soothed diplomatic tempers from Washington to Bangledesh. But he has made his own job harder by suing the foreign ministry as a short-stay hostel: of three foreign ministers in the past year, only the present incumbent has any clout and his sole claim to international experience is a knowledge of Swedish. Mr Gandhi first offended the foreign ministry by setting up a high-level advisory group, then offended the advisers by dissolving it. Foreign service officers are still bitter at the public sacking of their chief in January.

The turnover of ministers has meant that foreign policy has mostly remained the province of professionals, though Mr Gandhi has more than once caught them off guard with ad hoc policy-making of his own. For example, on a trip to West Bengal last autumn he declared that India's border with China was non-negotiable. This raised questions not only about what India and China have been talking about for years but also about who talks to whom in Delhi.

Mr Gandhi's aims, when he started out as his own foreign minister, were far less radical than his designs for economic change. They were similar to those of the Janata government interregnum in his mother's reign: to be more conciliatory with India's neighbours and to improve relations with the United States without loosening India's ties to the Soviet Union. Two years later, India's foreign relations are much as he found them: as volatile as ever with the United States, as frustrating as ever with Sri Lanka and as fraught as ever with Pakistan.

India and Pakistan are locked in a hostile clinch that has more to do with chronic distrust than with current disputes. But there is never any shortage of grievances. India's begin with Pakistan's nuclear programme and its recently confirmed capacity to enrich uranium to bomb grade; they include Pakistan's refusal to rule out foreign military bases on its territory (Americans are said to be monitoring Soviet communications from Pakistan), to expand bilateral trade, or to stop importing top weaponry from the United States. The latest cause for Indian alarm is a Pakistani request for the AWACS airborne warning system.

In the past year another irritant has zoomed to the top: Pakistan's alleged arming and training of Sikh terrorists. It is impossible to verify how much aid Pakistan actually provides to the Sikhs and how official the involvement is. The short answers are probably not much and not very -- but plainly more than India can tolerate. The increase in Sikh violence in early 1986 was a major reason that a peach process, started in December 1985 by Mr Gandhi and Pakistan's President Zia ul Haq, soon went off the rails.

When President Zia and Mr Gandhi next met in February this year, it was in the wake of a huge and senseless border confrontation. Some 340,000 troops were moved up to front lines in a state of high alert in January as both sides over-reacted to over-sized military exercises imprudently held near areas of internal unrest (Pakistan's Sind, India's Punjab). This mutual foolishness, which was staged partly for domestic consumption, seems to have induced a return to rationality. The two leaders agreed to carry on withdrawing troops and to revive their on-again off-again peace process.

Perhaps the best hope of easing Indo-Pakistan tensions is a change in their international context. Mr Mikhail Gorbachev indicated how things might be moving when he went to Delhi in November. His visit was advertised as a love-fest (and like a lover, Rajiv took no notetaker along for his ten intimate hours with Mikhail). But the Soviet leader disconcerted his hosts by telling them that while Russia would remain India's most reliable ally, it would no longer spring automatically to India's support in its quarrels with Pakistan and China. He urged India to follow his own lead and seek ways of mending these long-broken fences.

India would get a further prod in this direction if Mr Gorbachev manages to find a way out of Afghanistan. Although Mr Gandhi professes to be keen on an Afghan settlement, it is not clear that India would end up feeling more secure if Islamic fundamentalists took part in running Afghanistan and if Pakistan were freed of the double burden of 3m Afghan refugees and 100,000 Soviet troops on its western frontier. What could change all calculations is if an Afghan settlement were to open the way for the two superpowers to bring India and Pakistan together, as the Russians briefly did at Tashkent 20 years ago. The vital ingredients would be a verifiable shutdown of nuclear weapons programmes and limits on the influx of conventional arms.

At the moment India is apoplectic at the prospect of America selling AWACS or even the less advanced Hawkeye surveillance system to Pakistan. The fact that the American secretary of defence, Mr Casper Weinberger, neglected to mention such a possibility during a visit to Delhi reinforced Indian notions of perfidious America. But Mr Gandhi takes a more practical view of the United States: he sees it as India's best source of advanced technology. The clearance of a supercomputer sale and some 60 other high-tech licences provide an incentive to keep lines open and tempers down.

Where another dose of Rajivian realism is badly needed is in India's 25-year stand-off with China. Ever since China's 1962 invasion shattered Nehru's illusions of peaceful coexistence across the Himalayas, India has dug itself into a trench of wounded pride. But now that the Russians are making concessions in their own border dispute with China, India has lost a psychological buttress for its own refusal to accept a compromise based on the present line of control. Mr Gandhi's remark about the border being non-negotiable, uttered in the wake of the latest minor border incident, was a mistake that needs to be put right.

Few people in India are concerned about the China disconnection -- which is why no government has done much about fixing it. Apart from Pakistan, which is a national obsession, the one foreign policy issue with political resonance at home is the civil war between Tamils and Sinhalese in Sri Lanka. India is involved whilly-nilly because 50m people in the state of Tamil Nadu identify with their fellow Tamils across the narrow Palk Strait and because some 100,000 Tamils from Sri Lanka have sought refuge there and a smaller number guerrillas have used it as a training base.

Even under Mrs Gandhi, India tried to mediate between the Tamils and the Sinhalese. Her son brought a more generous spirit to the job. He has been faulted for putting too much trust in the slippery Sinhalese president, Mr Jayawardene, for giving insufficient backing to the non-militant Tamils, and for failing to acknowledge the parallels between India's support for Tamil rebels and Pakistan's for the Sikhs. But India is a double hostage: to uncontrollable Tamils and to unreliable Sinhalese. India's leverage over the Tamil extremists was lost last year when their leaders returned from Tamil Nadu to Jaffna. Then last month prospects plummeted after Tamil terrorists massacred over 100 Sinhalese bus passengers and murdered more than 100 people in a Colombo bus station. Mr Gandhi does not now have political energy to spare and mediation may anyway be fruitless for some time. But Sri Lanka can be left to fester only at India's peril.

Strains with Pakistan and Sri Lanka have inevitably distracted top-level attention from other regional issues. The first two summit meetings of the new-born South Asian Association for Regional Cooperation (SAARC) served mainly as occasions for crisis-defusing bilateral talks. As this year's chairman of SAARC, Mr Gandhi has a licence to play the role that India has always assumed, as the dominant power in South Asia. But he has wider ambitions.

Like his mother and his grandfather, Mr Gandhi has a taste for strutting the moral stage. He has put India in the forefront of the non-aligned, disarmament and anti-apartheid movements. (Disarmament does not apply at home; in the past two years, Mr Gandhi has increased his defence budget substantially.) Besides grumbling about the cost of foreign junkets, Indians point out that moral posturing is not the substance of power.

India's influence does not measure up either to its pretensions or its potential. This is because it has been wedged into diplomatic rigidity by its reliance on the Russians as a counterforce to its two local enemies, Pakistan and China. Mr Gorbachev's talk about reorganising Asian security should prompt India to do some pre-emptive rearranging on its own. If India were to neutralise the threats on its two borders, it would free itself for equal dealings with both superpowers and be far more formidable than it is today. India should be choosing its own place in the world, not waiting to be assigned one after Mr Gorbachev visits Peking.

Disillusion has a flip side

Many millions of Indians have never had it so good. Television sets and electric mixers are becoming standard items in urban homes and aerials are sprouting even in remote villages. Scooters and motorcycles clog the roads; a recent market survey found that nearly a third of Delhi residents own a vehicle. The banquet rooms of five-star hotels were booked solid for the winter wedding season; non-bridal saris for these occasions can cost $ 2,000. At a more modest traditionally arranged Brahmin wedding in a rented tent (with chandeliers), the arrival of the groom on an elephant was recorded by two video cameras. Among the guests was a maker of satellite dishes who hopes to sell 5,000 of them on the domestic market in the next few years.

The number of Indians participating in this consumer boom is estimated at some 100m. Most live in the cities though another 200m farmers and merchants in towns and villages also have a stake in India's growing market economy. These people should be a natural constituency for the modernising message of Mr Gandhi. Like him they are nationalistic, materialistic, impatient for results. But as always in India, the reality is more complicated: part of this expanding middle class is expressing its impatience by joining Hindu revivalist groups or regional secessionist movements, others by stamping on the claims of lower castes for a larger share of the pie. And some -- politicians, bureaucrats, businessmen and trade unionists -- are busy resisting anything that threatens the old order that has served them well.

One product that is consumed by a large part of this group, despite India's 60% illiteracy, is the printed word. Newspapers and magazines are a dynamic growth industry, crammed with advertisements for the good life. Where else in the world do only 15m speakers of a non-native language, English, support nearly two dozen news and business magazines (half of which have started in the past five years) plus a dozen major newspapers (three new, another starting up, several expanding)? And there has been a similar, even larger explosion in the vernacular media. Indian newspapers sometimes lend themselves to government manipulation and are subject to pressures from official advertisers and suppliers of newsprint. They are not given to investigative reporting. But, apart from state-controlled broadcasting, India's press ranks as free and outspoken, and in recent months it has been speaking out freely, even ferociously, about Mr Gandhi.

India's heightened worries about its leader are of two sorts: that Mr Rajiv Gandhi does not have the capacity to govern; and that Indian democracy itself is in danger because of its over-dependence on a fallible, vulnerable ruler. Today's disillusion is partly a reaction to excessive expectations: too many people projected too many hopes onto an attractive young political neophyte. Dampening these down now is no bad thing. It could be positively healthy if it goads Mr Gandhi into changing his advisers and his working style; and if it gets other politicians in Congress and the opposition to stop playing dead.

Indians, like political junkies everywhere, think of political alternatives in terms of personalities. The absence of towering figures prompts despair. But it has also set off a search for new electoral forms. No idea is too foreign or too farfetched, from compulsory and electronic voting to government-funded elections to a party-list system. Several opposition politicians are advocating a directly elected presidency -- the same plan they denounced as a proto-dictatorship when it was first mooted under Mrs Gandhi. Now that they see this may be the only way of getting a non-Congress chief executive into office, they have changed the rationale: a presidential election, like the other proposed reforms, becomes a means of lifting voters' sights above narrow sectional interests. What its proponents have not figured out is how an elected ruler can govern without a party. This is something Mr Gandhi needs to be thinking about too.

Almost nobody believes that a viable national opposition can be constructed from above, short of a catalytic calamity or a split in the Congress party -- though the most impressive opposition politician, Mr Ramakrishna Hegde of Karnataka, may be about to try to create one. Other opposition figures talk of binding the regional parties together in a national coalition, but this is equally unlikely because the interests of these single-state units are still too parochial or mutually conflicting. So the best option for the opposition seems to be burrowing away in its bases in the states, to underpin existing opposition governments and to prepare for forming new ones after the next round of state elections in 1988.

Fertile roots
It may well be that the pattern of Indian politics for years to come will be pluralism at the state level and a single-party system at the centre. This need not mean condemning the opposition to a fringe role. States in India have the potential, even within India's constricting constitution, to be testing grounds for social and political innovation. One of the most promising experiments, which is already operating on the ground in several states, is a revival of grassroots government through elected district and sub-district councils (or panchayats).

The point of the panchayats is to give local people control over local development planning and spending. One by-product, as the West Bengal Marxists have shown, is that parties can use local elections and patronage to dig themselves in right down to the village level. This is a game that all parties can play, so there is no reason for the Gandhi government to be leery of it. In the summer of 1985 Mr Gandhi sent a message to chief ministers endorsing panchayat elections. Now he seems to be having second thoughts.

Another role for the panchayats is to serve as a vast training school for future political activists. As one panchayat booster put it after the local elections in Karnataka in January: "Out of 57,000 elected representatives, there have to be at least five potential prime ministers." India must have enough potential prime ministers to run the entire democratic world, if potential is measured by skill and experience at political accommodation. India's is clearly the world's most complicated social mechanism, with more grinding gears and more friction points than even its 1,400 languages would imply. The fact that it has functioned relatively smoothly and non-violently for so long speaks far louder for the cohesiveness of the country than the outbreaks of communal ugliness that are claiming the headlines today

It is all too easy to come away from India with the sense that everything is going wrong because so many Indians will tell you it is. Indians are a vibrant, voluble, hospitable people who combine nationalistic pride with lacerating self-criticism. The things that have gone wrong over the decades are mostly due to the over-centralisation and over-regulation that have strangled Indian initiative at every turn. Some of these things are now being put partly right.

Anything that imposes unresponsive uniformity on a country of India's size and diversity is bound to fail. Yet, as a sophisticated economic and political entity, India requires integrating institutions. One of these is the Congress party. Another has been the Nehru family. Mr. Rajiv Gandhi's countrymen need convincing that whether he succeeds or fails, Indian democracy will get through its mid-life crisis. At 40, it is mature enough to do without a dynast.