Early last year a group of Indian and Pakistan retired generals and strategic experts sat down for a war-gaming exercise in Washington. The question, predictably enough, was at what point during a conventional war, would the generals in Rawalpindi GDQ reach for the nuclear trigger.

In the event, the simulated war took on an unpredictable turn, which in some ways was more illuminating than the question of nuclear escalation, as columnist Ashok Malik writes in The Great Divide:India and Pakistan, a collection of essays by experts on both sides of the border.

The exercise begins with an Indian military strike on militant camps in Pakistani Kashmir, the most commonly envisaged scenario for the next India-Pakistan war.  But the Pakistan response defies conventional logic . They don't order a military push into Indian Punjab and Rajasthan, they don't even attack Bombay High, the most valuable Indian oil asset in the Arabian Sea, and well within striking distance of the Pakistani Air Force.

Instead PAF planes fly all way to Bangalore, deep in the Indian south, to attack the campus of Infosys, the much celebrated Indian IT company.

Strange choice of target ? By all military logic it would seem so. It's not like all of India would be crippled if  Infosys were attacked, they don;'t run Indian IT infrastructure. Even the company itself might not suffer lasting damage. Its data would probably be stored in locations elsehwere too, and it wouldn't take it long to rebuild the campus. Besides. the Pakistani planes would be almost certain to be shot down on their way back, if they managed to penetrate this far in on what seems like a suicide mission.

So why Bangalore, and Infosys? Malilk quotes a Pakistani participant as saying  they chose the target because it is an "iconic symbol" of India's IT prowess and economic surge.  The idea was to strike at India's economic growth and great power aspirations. A raid on the Infosys campus, visited by heads of states and corporate leaders, would underline the dangers of business in India and remind the world that for all its new-found success, it remained a nation of contradictions, and at heart, unstable.

Many people in the room were not convinced by the Pakistani choice.  It still seemed more like an academic exercise than anything rooted in military reality. But in the aftermath of the Mumbai attacks later that year, and in the light of renewed warnings this week by Israeli intelligence of another Mumbai-like attack coming in the next few weeks, it is clear that India's vulnerability appears to be in economic, rather than purely military, targets.

Indeed last year when tensions rose following the Mumbai attack and there was talk of an Indian military response, it was Pakistan's former chief of intelligence Hamid Gul who warned of  Pakistan hitting back where it would hurt the most.  India's so-called  Silicon Valley will go up in smoke, Gul is widely quoted to have told CNN, if the Indians sent troops  to the border.

{Photographs of the Mumbai skyline and Indian and Pakistani soldiers at Wagah]

There was a television ad some time back where a village leader played by Bollywood actor Abhishek Bachchan cutely decrees that feuding villagers would be known by their mobile numbers rather than names denoting caste or community.

It’s an idea that no longer seems far-fetched.

This week, the finance minister allocated 1200 million rupees to  the Unique Identification Authority of India, headed by former Infosys chief Nandan Nilekani.

The project provides a unique identity number, something like the U.S. social security number, to India’s billion-plus citizens.

It involves setting up a database with the identification details of citizens.

“It also uses an advanced technology like biometrics on a scale which has not been used anywhere in the world,” said Nilekani.

The biometric details will make identification foolproof.

Multi-purpose National Identity Cards have already been issued to a million citizens under a test scheme in some districts.

These will be combined with the unique identification number scheme.

Once implemented, the project is expected to help the government identify beneficiaries of various welfare schemes and help security agencies.

It will also link the database to the election commission and the income tax department.

“The Unique ID number, the number, not the card, is going to be the unifying attribute of all these cards. In other words, you may have four to five cards from different sources but all of them will have the same unique ID of yours that will act as a unifier,” Nilekani said.

However, there are misgivings about the project.

Tavleen Singh, writing for the Indian Express says the project may just add “to the massive infrastructure of our bureaucracy.”

“The BPL (below poverty line) folks that I know in Mumbai and Delhi do not have birth certificates, identity cards or any proof of nationality. Even if they did, they have no means of knowing how to access the benefits that accrue to them. Will a national identity card make their lives less difficult?”

“And, besides how will the card work in villages that do not have adequate supplies of electricity leave alone computers?” she asks.

Columnist Swaminathan Anklesaria Aiyar writes — “If the implementers have no interest in service delivery, can a smart card outsmart them?”

It’s an appealing idea to be able to put down a number instead of filling details in a form on one’s father, mother, locality and surname and be immediately slotted.

But having practically lived as a stateless citizen in my own country for a while (no voter id, no ration card, no permanent address, a bank account but on the office address) I am all for letting the state know that I exist, occasionally outside my office in my unofficial capacity as well.

But will everyone trust the government or the bureaucracy with all their details available at the click of a button?

Misuse of voters list to target communities during riots has been alleged. Data can leak.

Who for instance will or can have access to someone’s fingerprints on a biometric database?

In a situation where the government in general has less information about people than more, this question seems a forced one.

But with the first set of numbers to be issued by late 2010, this issue would need to be resolved.

Is Nilekani by uniting “databases in disconnected silos“, going to be our Harold Bluetooth, the eponymous Viking warrior after whose unifying efforts the  wireless technology is named, or a Big Brother?

When it comes to climate change, the environment and other weighty issues, what could the leaders of the world's biggest democracy possibly learn from the rural Indians who cobble together rickety cars out of scrap metal and old bits of wood?

One of India's best known businessmen says the improvised vehicles that carry crops and passengers along dusty village roads show how local people are often the best innovators, coming up with cheap and effective answers to tough problems.

Nandan Nilekani, co-founder of the technology company Infosys, thinks politicians would do well to remember the decentralized philosophy behind the "jugaad". Mechanics with little money and poor access to cheap parts use whatever is at hand to build them: water pumps replace normal engines; wooden blocks stand in for brakes and old planks of wood provide the floor.

"This 'car' is a brilliant improvisation, nailed together from whatever parts rural mechanics can get their hands on," Nilekani writes in a new book about the future of the world's second most populous country, "Imagining India". "Effective, innovative policies will depend on harnessing this ability of people at the local level to take charge and innovate.

"Our environment and energy solutions will have to rope in our tribal and village communities to be truly effective. I believe such approaches are uniquely suited to India, with its untapped pool of local, entrepreneurial and innovative talent."

Nilekani, often called the "Bill Gates of Bangalore", says India has come a long way since the historic days of 1947 when Britain's colonial rule ended. However, it must move further away from centralisation if it is to harness its economic potential.

While Nehru's "paternal, socialist state" that promised public sector wealth creation made sense at the time, few Indians believe in his policies now, Nilekani argues.

It is time, he says, for the country to move even further away from the old idea of "Mother India" looking after its one billion "children".

His book sets out a vision of a more equal and prosperous India where the state views the population as "human capital, not as a liability".

The new India would value entrepreneurs, improve its schools and universities, embrace globalisation and technology and build new infrastructure.  It would also accept English as a "language of aspiration" rather than a colonial relic.

The markets will play a crucial role in changing society, but politicians and the public sector must also do their bit, Nilekani says. Political parties have for too long exploited class, religion, caste or regional differences to make short-term gains at the expense of long-term planning, he adds.

"If you want to go beyond the politics of division to the politics of aspiration it will take some time because you will need a larger middle class," he told Reuters in an interview in London. "Markets and entrepreneurship are very important. They drive innovation, job creation. It is how people's standard of living goes up."

If India adopts the right measures it could see faster economic growth than China within a few years, helped by a huge pool of young working people, he adds.

"India is now going to have its demographic dividend in the next 30 years. China had its demographic dividend over the last 30 years," he told Reuters. "Being the only young country in an ageing world gives India some very special opportunities."

With polls suggesting that no party will secure an outright majority in this month's elections, Nilekani warns that future could be rocky.

"This election is momentous because there is no clear winner, no party that has a clear advantage," he says. "There is a risk of having instability."

However, like the humble "jugaad", the sheer scale of the election process and the effort that has gone into getting 700 million people to vote, is an immense source of pride for Nilekani.

"It is an extraordinarily uplifting moment," he says.

Joke 1
Joe Blogger had a cheque returned last week. They said it was due to “Insufficient Funds.” Now, Joe’s not sure if they meant his account or the bank’s?

Joke 2
There are two sides to a bank’s balance sheet - the left side and the right side. On the left side, there is nothing right, and on the right side, there is nothing left!

My cell phone has been bombarded with forwarded jokes like the ones above ever since the global financial crisis started. At least some people have their sense of humour intact despite the troubled times. Some might even thank God for such small mercies.

The BSE Sensex which has been hurtling down in a merciless downward spiral for the past 8 months has seen a Monday morning surge. The index is up more than 7 pct on assurances from finance minister P Chidambaram that the government was working on more measures to improve liquidity.

But will liquidity revive the markets and restore confidence?

For its part, India’s top private sector lender ICICI has unleashed an unprecedented information drive (on TV, by email and SMS) to assure depositors that all is well with the bank.

Over the past months, the world which went flat so that business could go where it’s done best might have actually shrunk. Pundits and punters talking about the Great Depression of the 1930s as if it was a Friday movie release that was not well-received.

Money which made the world go round seems to have suddenly done a vanishing act and we’re searching for answers.

The Reserve Bank of India’s (RBI) CRR cut is expected to infuse Rs 60,000 crores into the markets. This money can ease pressure on businesses which some newspapers reports said were forced to borrow from private lenders at 35-40 pct to sustain or complete existing projects, especially in the real estate sector.

Realty stocks like DLF which launched promoters like KP Singh into the global rich list have foundered badly.

But the contagion did not stop at just the real estate scrips. Bellwether IT firms like Infosys and TCS have been hammered along with banking stocks like ICICI which fell prey to a world-wide market aversion to the financial sector.

All this despite a general consensus among market analysts and economists that India remain comparatively insulated because of its strong fundamentals and less dependency on exports.

Monday’s rally has raised a number of questions, more so for the retail investor many of whom got singed badly.

Has the bottom been found finally?

Is this the right time to buy battered stocks and build your portfolio?

Can someone actually time this market?

We would love to get some answers. If you don’t have them, even jokes will do. I know it’s too late to laugh our way to the banks. But a smile can help, even in such days of despair.