The thing about terrorist strikes is that they seem remote until they hit you. Their absence does not imply that terrorists are not active. Thus, it is all the more important that any country’s preparations to counter this menace be constant and be always a step ahead.
These are not empty threats. The global economy is barely out of the reach of a double-dip recession—it still may head that way. In India, its state of relations with Pakistan—cricket notwithstanding—always offer ample scope for terrorists to indulge in destabilization. There are other—and new—factors on the long list of threats, threats that can damage the country’s economy by affecting investment sentiment, which invariably takes a hit in the wake of such incidents.
Yet, even after the audacious and costly attacks such as the Mumbai 26/11 attacks, long-term initiatives to check the threat—the National Counterterrorism Centre (NCTC) and the National Intelligence Grid (Natgrid)—have not even moved beyond the conceptual debates. NCTC was expected to be functional by end-2010. That has not taken off. Similarly, Natgrid, an ambitious plan to link various databases (income tax, banking, telephone and others), is stuck in a bureaucratic maze. It is also considered, in political terms, a liability as privacy concerns—now organized almost as a lobby—are preventing its launch. One way out of this impasse would be to pass a privacy law that addresses these concerns while not diluting what is required for an efficient Natgrid. There is no sign of that.
Much of this has to do with bureaucratic turf battles (NCTC is certainly hostage to that) or plain inertia. These are the same qualities—if that is a right description for this state of affairs—that have caught the country napping in the past. While past attacks also inflicted damage—economic and human—this time the cost may be much higher.
If you start with a lower growth base, then the potential damage to investor confidence, while substantial, is not of the magnitude that is likely today with a much higher growth rate. If anything, today when the country is close to the cusp of 9% plus growth, investment—foreign and Indian—is key to attaining that target. Years ago, when the ingredients required to come even close to the 9% mark were absent, terrorist attacks—and there were many of them—did not hit us hard. That’s not the case anymore. So, the opportunity cost of business-as-usual are very significant. If overcoming bureaucratic inertia is a policy variable, our policymakers should rethink its costs.
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