The Financial Times has launched FT.com India, a dedicated online section on India, and Engaging India, a weekly online column analysing the issues, trends and forces behind the business and politics shaping India and its impact on the world. Engaging India will appear every Thursday morning exclusively on FT.com India and is written by Jo Johnson, the Financial Times’ South Asia bureau chief, and the FT’s correspondents in India.
All eyes in New Delhi will turn once more to the Supreme Court on Friday. At stake is nothing less than the future of Indian retailing, a subject of no small importance to foreign players waiting to be allowed entry into a $200bn sector, and the liveability of the capital.
In recent weeks, Delhi has been rocked by violence as traders, fearing for their livelihoods, have protested against the forcible closure of commercial operations illegally established in residential areas. Four people have so far died in riots in the capital, prompting the central government to seek a compromise in the form of an ad hoc “regularisation” programme that would permit mixed use of around 2,200 hitherto purely residential streets. Meanwhile, the demolition and sealing drive has been suspended due to a lack of a police officers, but is due to resume on Saturday.
So far, the Supreme Court has shown little willingness to deviate from its robust stand: a law is a law is a law. Its aversion to regularisation – seen as a moral hazard that encourages further lawbreaking – has put it on a collision course with the government.
If the court holds to its guns, and demands that the demolition and sealing up of illegal commercial premises continues, the government will have a choice. Either it will have to introduce legislation that will effectively sanction the existing free-for-all in the streets of the capital and thereby do away with the last vestiges of credibility left in the planning system. Or else, it will have to accept that official connivance in wholly unplanned and unregulated urbanisation must stop. The future of Indian cities depends on the maturity of its response.
For investors, a move to enforce planning laws in city-centres would benefit mall operators and the real estate investment funds behind them. Many of these operators appear to have misjudged the speed at which the government will open up the retail sector to foreign direct investment and find themselves with a combination of empty floor space and lower-than-expected rental yields.
Naturally, the suspicion on the street, encouraged by the Bharatiya Janata Party, which sees itself as the natural party of small-shopkeepers, is of collusion between judges pushing for enforcement of planning laws and part-foreign owned mall operators.
If this conflict intensifies, it will will do nothing to improve the already slim chances of a further relaxation of rules regarding foreign direct investment, currently limited to 51 per cent stakes in single brand outlets such as Reebok or Adidas.
MUSINGS BY MUSHARRAF
New Delhi is as unimpressed by the Pervez Musharraf book tour as Washington. The ghost-written autobiography sparked controversy even before its launch, when the Pakistani president told CBS news that former US deputy secretary of state Richard Armitage had threatened to bomb Pakistan “back to the Stone Age” if it failed to help Washington avenge al-Qaeda’s September 11, 2001 attacks. President George W. Bush said he was “taken aback” by the claim, which State Department officials feel was unhelpful for Pakistan’s relations with Washington.
In New Delhi, Musharraf’s pleasure in recollecting that India “actually ran short of coffins” - so heavy were its losses in the two countries’ 1999 skirmish at Kargil - has gone down badly at a time when New Delhi and Islamabad are supposedly reviving peace talks disrupted by the Mumbai bombings.
The Indian army, a force for conservatism in the peace process, has been especially irritated by Musharraf’s claim that its officers invented “fake encounters” with Pakistan and regaled their commanders with tales of gallantry.
As India has the largest film industry in the world and is rightly famous for making highly romanticised and unrealistic movies, Musharraf explained, it came as no surprise to him when the Pakistani intelligence services, “their amusement turning to hilarity”, found that these “fake encounters” had become the basis for military honours.
Jaswant Singh, foreign minister in the BJP-led government at the time of Kargil, called Musharraf’s version of events “incredible.”
”Quite often, when you occupy high office, the distinction between fiction and fact, gets obliterated. This is fictional,” Singh said huffily.
Musharraf’s love of practical jokes is nonetheless endearing. In his book, he fondly remembers his Uncle Haider, a great womaniser, taking him and his friends to the park, where they spot a man as “bald as a golf ball” sitting on a bench, his oiled pate “shining like a mirror and inviting trouble”.
Haider offers Rs5 to any boy who will slap the shimmering dome, but finding no takers, does so himself, crying: “Bashir, there you are. I’ve been searching for you.” Uncle Haider apologises profusely to the stunned man, who moves away to a neighbouring bench.
After promising Rs10 to anyone who dares repeat the trick, Musharraf’s idol again does so himself, this time even harder. “O Bashir, there you are…I just saw a man who looks exactly like you and smacked him on the head,” Haider cries as the victim’s mouth gapes in disbelief.
“We were appalled,” Musharraf remembers. “To get away with it once was a miracle. To get away with it twice was asking for serious trouble.”
More and more today, India feels like the man on the bench.