Begone, India's oppressive oldies!

The Economist has a vitriolic piece on how the old in India- that is, anybody who has crossed middle age- oppress the young. It calls them 'uncles'. The piece is worth quoting at length.

An 'uncle' is easily identified:

A dead giveaway is the phrase “let me tell you”. It is inevitably followed by a thesis on what really ails the country. Another hallmark is unsolicited advice, veering from career counselling (“only girls study literature”) to dietary prescriptions (“eat five soaked almonds to build immunity”). But the defining feature of the Indian uncle is his bottomless disdain for the youth of today: feckless phone-addled softies, the lot of them. They need discipline.

How true! Condescension, sanctimoniousness, a know-all air- these are the attributes of the Indian uncle. 

I would add one more giveaway: the constant use of the word 'values'. ("These youngsters don't have any values"). It doesn't occur to them to ask themselves what their own values are.

What they have produced, in pursuit of their so-called values, is a highly repressive culture:

Thus does the country produce such infantilising policies as Gujarat’s plan to require parental sign-off before adult couples can legally marry. Or Goa’s mandatory uniforms for adult students at its public colleges. Or Delhi, where adults can vote at 18 and marry at 21 but cannot enjoy a beer until they are 25.

Thus too are Indians subject to the pronouncements of learned higher-court judges, over 85% of whom are middle-aged men. The Calcutta High Court in 2023 advised young women to “control sexual urges” rather than “enjoy the sexual pleasure of hardly two minutes”. A judge in Karnataka observed that it would be “better for the nation” if social-media access was restricted until the age of 18—or even 21. And on May 15th the chief justice of the Supreme Court lamented that “There are youngsters like cockroaches, they don’t get any employment, they don’t have any place in profession”.

I often wonder whether India's lack of innovation, its mediocrity in most fields is the result of the spirits of the young being repressed all the time.

Then, they are forever exhorting the young to work hard, which is another way of saying 'don't enjoy your life too much'. And the young slog as nobody does in the developed world:

They go to school or university. They attend extra coaching classes. And when they get home they study some more. In May more than 2m candidates sat a national exam for around 130,000 medical-college seats. Nine days later the testing agency invalidated their efforts because papers had leaked. The same month 1.8m pupils received the results of class 12 exams—the single most important test in Indian schooling. Those, too, were full of errors. A parliamentary committee is investigating both fiascos. The uncles will grade the uncles.

The behaviour of uncles is not confined to family. It extends to the workplace. And, most regrettably, the same attitude permeates academia. 

In the name of instilling discipline, teachers draw up rules that would be regarded as crazy in the western world. They also expect unquestioning obedience and  constant 'sirring'. Savage punishment is meted out for even minor transgressions, such as copying in a five-mark quiz.

The young are growing into a relatively more prosperous and freer world than the ones the uncles themselves experienced. That gets to the uncles. There is nothing to the oppression the uncles practice other than malice and envy. 

More power to the young as they stand up to the uncles!

India's ambitious plans for its navy

I have said this before: very often, you have to look to western media for serious news about India.

FT has a fascinating story on how India's plans to beef up the navy to cope with China's expansion in the Indian ocean.

The statistics are impressive. About  66 per cent of the world's oil supply of 50 per cent of container traffic passes. An estimated 95 per cent of India's own trade happens via the Indian Ocean. For China, 95 per cent of its $6 trillion trade is sea borne and most of its passes through the Indian Ocean.

India wants a powerful navy that will safeguard its maritime interests and act as a powerful level in the event of tensions with China.

Thus far, India has fallen behind on plans for the navy:

Few things capture India’s sluggish modernisation of its navy better than its vacillating plan to build up its submarine fleet. In 1999 New Delhi laid out a blueprint for building 24 new submarines over 30 years, to add to its existing fleet.  But 25 years later, only six have been built, meaning India has less than half the planned number of new conventional submarines. It has two nuclear ballistic submarines, though two more are under construction, and last year it decided to build two nuclear attack submarines, and will lease one from Russia. Of the 17 conventional submarines, 11 are over 25 years old.   

It is now making up for lost time:

India has 55 ships under construction at an approximate cost of Rs1tn ($11bn). The navy has got the government’s nod to build another 64 and hopes to get a third aircraft carrier — the second to be built within the country — but has not got a green light from the government yet. 

There is now way India can match China's naval capability: China boasts of some 250 ships at the moment and is still building frantically.

India's naval strategy, the article indicates, hinges on a few key elements.

First, China can deploy only 35 per cent of its naval assets in the Indian Ocean, so India needs to have only 1 ship for every three that China has. Secondly, India will use airbases in Mauritius and Seychelles as a counterweight to China. Thirdly, India is fortifying its position in the Nicobar islands which is close to the Malacca Straits through which 80 per cent of China's sea traffic passes.

Experts are clear about one thing. The Indian navy will strictly defend Indian interest, it will not be drawn into the conflicts of others, such as a confrontation between China and the West over Taiwan.

Chandrababu Naidu's ambition for Andhra Pradesh: a "Quantum Valley"

I often wonder how some of the most striking news about India appears in the foreign press. An example is the report in the FT about AP CM Chandrababu Naidu's attempt to create a 'Quantum Valley' in his state: 

Naidu is seeking to build a tech park where developers and scientists can harness the nascent power of quantum computing for applications ranging from research to energy optimisation and manufacturing. 

“Indians are very strong in mathematics and very strong in English,” he said. “These two are a deadly combination for information technology.”

IBM, India’s Tata Consultancy Services and Larsen & Toubro are anchor investors for the Quantum Valley, where the US tech group is in discussions to build what it hopes would be India’s most powerful quantum computer.

The companies have not said how much they will invest in the project. But Scott Crowder, IBM’s vice-president for quantum adoption, described it as “pretty solid”, adding that the US company planned to provide computing power while L&T would build the infrastructure and TCS would find users.

The government of Andhra Pradesh in December also signed a memorandum of understanding with Google to set up an artificial intelligence data centre in Visakhapatnam, known as Vizag. Google says the project is in its early stages.

Naidu is seeking to replicate what he achieved in Hyderabad which he succeeded in turning into an IT hub. The electoral impact, though, was not entirely favourable. Many saw it as favouring the educated elite at the expense of large numbers of relatively uneducated people. Naidu's party was ousted from power in the undivided state. Naidu, one hopes, has learnt his lessons  and will steer Quantum Valley accordingly.

Manmohan Singh as talent spotter

Among the many tributes that have been paid to Dr Manmohan Singh, this one focuses on his ability to spot and nurture talent.

Among the many bright people Singh brought into or promoted in government were: C Rangarajan, Y V Reddy, MS Ahluwallia, Rakesh Mohan, Shankar Acharya, Jairam Ramesh, Nitin Desai, Arvind Virmani, Bimal Jalan, Vijay Joshi, Raghuram Rajan and Urjit Patel. Building leaders for the future is one of the principal task of a leader. It can be said that Dr Singh performed this role in an exemplary manner.

There is also a rousing tribute from Martin Wolf in the FT:

Singh achieved what he did because he was a special man at a special time. Ultimately, however, technocrats only succeed if those with power trust them with it. India benefited from the fact that people with power were willing to trust him to use it well at critical moments. He, in turn, provided something that today’s populists increasingly despise: knowledge, wisdom and experience. He also knew the importance of brilliant colleagues. A recent paper from the Mercatus Center describes him as “India’s finest talent scout”. In some quarters today, all this would condemn him as an embodiment of the “deep state”. That is because these people lack belief in the ideal of public service. Singh did believe in it. He believed, too, in a thriving democracy. Indeed, he thought India could not survive without one. The economically dynamic India of today is his legacy. So, too, is his example of service to the cause of a prosperous India in harmony with the world.

Maharashtra government offers third option to employees- Revised Pension Scheme!

We had the New Pension Scheme (NPS) in operation since 2004. Before that, we had the Old Pension Scheme (OPS). The central government recently announced Unified Pension Scheme (UPS). The Maharashtra government was quick to announce its acceptance of UPS, giving employees a choice between UPS and NPS. It has since announced a third option, Revised Pension Plan (RPS)!

What's the difference? First, about UPS. Most people think that it's very similar to OPS except that employees have to contribute 10 per cent of their salary whereas OPS required no contribution. Former finance secretary Subhash Chandra Garg has highlighted an important difference. (I too had picked it up but I thought I was wrong). If Garg is wrong, please let me know. 

The UPS, Garg says, assures 50 per cent of the basic pay of the last 12 months of an employee. This will be indexed to inflation. The OPS assured 50 per cent of basic pay plus DA. So the pension amount is not quite the same.  (We do not know whether UPS will be revised with new Pay Commission recommendations as is the case with OPS). However, 50 per cent of basic pay would be an improvement on what most employees have been getting by way of cumulative amount through investment in NPS. 

Now, about RPS. The RPS offered by the Maharashtra government is 50 per cent of the last drawn salary (I presume, again it's the last drawn basic pay). Then, it's clearly superior to UPS? Not quite because the UPS also offers a lump sum amount which, I believe, the RPS does not. For those promoted towards the end, RPS may be better. For others, UPS would seem better.

Garg says it's only a matter of time before government employees begin to clamour for OPS. As the ranks of the government employees post 2004 grows, the clamour will become very difficult to resist. 

Prashant Kishor as Bihar CM?

Poll strategist Prashant Kishor has been giving his latest forecast on the general elections to various channels. He was on India Today yesterday.

The forecast that took my breath away yesterday was about PK himself. He revealed that his party, Jan Swaraj, would be contesting the Bihar assembly elections n 2025. PK is confident that he would win a majority. 

It's one thing to chalk out a winning strategy for an established political brand; quite another to win an election oneself. There is a world of difference, as we management types know, between being a good management consultant and being a successful CEO. This is one forecast that will be watched closely.

As for his forecasts for the general elections, the crucial ones are:

• BJP will get 303 seats (its tally in 2019) or more. BJP tally in North and West will be largely unaffected, will gain in East and South.
• Congress unlikely to add to its tally
• Jagan Reddy set to lose in AP assembly polls

Why is Mr Modi so popular with the electorate?

Prime Minister Narendra Modi took his party to a huge win in 2014 and repeated it in 2019. Going by most forecasts, he is set for a third consecutive win. Many have been puzzling over the amazing electoral success Mr Modi has had. Fund manager Ruchir Sharma provides his own explanation. He says Mr Modi has provided growth with relatively low inflation. For that reason, the electorate is willing to overlook things such as his alleged going after opposition parties on charges of corruption or the supposed curbing of civil liberties. The electorate has done a deal of the sort East Asian economies had done with their rulers earlier:

I think what we are seeing is a kind of tacit deal, in which swing voters accept a democratic recession under Modi, so long as he delivers economic progress. While the hardcore supporters of his Bharatiya Janata party were always going to stand by their leader and the party’s Hindutva ideology, Modi has significantly expanded its traditional base by offering a deal that appeals to an increasing number of young and new voters. This is reminiscent of east Asia after the second world war, when countries such as South Korea and Taiwan put together long runs of rapid growth with low inflation under autocratic leaders, who gave way to genuinely free elections only after their nations reached a middle-income level. Under Modi, India has witnessed relatively robust economic growth, with low and stable inflation — much like the early east Asian model. It also has enjoyed a booming stock market, the rollout of gleaming infrastructure projects and new digital platforms that facilitate the delivery of welfare benefits.

This sound more than a little glib. The UPA government produced simple average growth of 6.6 per cent in its second term on top of 7 per cent growth in its first term. These are both very healthy numbers, yet that could not save the government from defeat in 2014. The NDA government produced growth of 7.38 per cent in its first term, not vastly superior to what the UPA government produced in its second term. In its second term, however, it has produced growth of  4.5 per cent; evidently, that will suffice to get it elected.

It's not at all clear that the Modi government has won on the strength of economic growth alone. There are several other elements that must be factored in. The government has sought to redefine nationalism in very different terms through its projection of Hindutva; that appears to have resonated with large numbers of people, including young voters. It has been successful in reaching welfare benefits- food, cooking gas, health insurance etc- to large numbers of people. There is Mr Modi's personal charisma- he comes across as somebody who's incredibly hard-working and committed to the objective of making India a developed country by 2047.

Lastly, the electorate probably does not see the opposition as shining angels of the protection of civil liberties or tolerance of the opposition. The Indian state has never quite got out of the framework created by the British Raj to perpetuate its rule. No political party can really claim moral superiority on how the state treats its citizens. It is an important area crying out for future reform.

Resurrecting Netaji Bose

A hologram of Netaji Bose has been created at India Gate. A granite statue will replace it. The intention is to bring Bose into the mainstream narrative of the freedom struggle where he has thus far been a secondary figure. It is also in keeping with the attempt, under the present government, to convey that there was a great deal more to the freedom struggle than the Congress, Gandhi and Nehru.

Bose was president of the Indian National Congress for two terms. He resigned during his second term in 1939 when it became clear to him that Gandhi and other Congress leaders would not let him function as president. Gandhi had called the defeat of his candidate Pattabhi  Sitaramayya at Bose's hands "my defeat'. Thereafter, Gandhi's acolytes kept sniping at him and undermining him until his position became untenable. Gandhi and Bose differed on many issues, including the issue of how to deal with the British following the onset of WW2. Gandhi was initially inclined to provide support to the British; Bose was resolutely opposed to it. But, more fundamentally, Gandhi perceived in Bose a certain sympathy towards the revolutionary movement in India and did not take kindly to it.

Bose decided that it was in India's interest to align with the Fascist powers in order to oust the British- the underlying principle was 'enemy of my enemy is my friend'. He seemed to have overlooked the fact that, whatever the failings of the British, the Fascist powers could not be expected to create a better world. He also seemed to think he could persuade the Fascist powers to keep out of India after assisting him to get rid of the British by military means. In this, of course, he was being hopelessly naive. Those who believe that it is wrong to exalt Bose argue that his reading of history was flawed. 

Bose quit the Congress and founded the Forward Bloc. He was arrested by the British government in India. He escaped and made his way to Germany via Afghanistan and the Soviet Union. The Hitler regime put him up in an exclusive quarter of Berlin and gave him a generous allowance to run his activities. At one point in his stay, he got to meeting Adolf Hitler. The meeting did not go off well. Hitler made it clear to Bose that Germany was in no position to intervene militarily in India until it was done with the war in the East. Hitler had made some negative references to Indians- and he was of the view that British rule was good for India- in his book, Mein Kampf. Bose suggested he delete those references as the British would use these to drum sentiment against him. Hitler was not willing to oblige. 

Hitler seems to have decided he had little use for Bose's Indian National Army, at that time made up of Indian prisoners captured in North Africa. He decided to pass Bose on to the Japanese. Bose made his way to Japan in a German U-boat, transferring in mid-ocean to a Japanese submarine. The INA was strengthened after he landed in Japan with Indian soldiers captured in Singapore, Malaysia and elsewhere by the Japanese. The Japanese did not think highly of the INA as a military force and were not willing to give it a lead role in their campaign in Burma.

After the war, the INA soldiers were tried for treason. The trials did not proceed very far as Congress and the general public hailed them as heroes and independence was at hand. Following independence, the Indian army refused to take back the INA soldiers. Nehru had pleaded for their rehabilitation before independence but did not press the issue after he became PM. 

The INA did not make much of an impact militarily. But its creation did not give rise to fears in the British government of an insurrection on the part of armed forces in India. The naval mutiny of 1946 especially reinforced these fears and it was a contributory factor in expediting Britain's exit from India. This was, perhaps, an unintended consequence of the formation of the INA.

Bose was a charismatic leader with a terrific connect with the masses. He was above communal sentiment and his appeal was universal. He was courageous, selfless and utterly devoted to the cause of national regeneration. He had about him a certain nobility that one associates with blue blood at its best. Giving Bose a place of prominence in the story of Indian independence is well-merited, whatever the reservations about the particular means he used to further his cause.

It is also true that the mainstream narrative has been overly dominated by Congress, Gandhi and Nehru. It is good to have alternative figures and narratives emerge. There was the Congress and the non-violent struggle. There were also Congress rebels such as Bose, there was Ambedkar, the revolutionary movement and liberals, such as Gokhale and Srinivasa Sastri who believed that negotiation and constitutional methods would better serve India's interest. 

Let the story be told in full without glorifying any one side - and if that means raising new monuments to personalities such as Bose,  it is welcome. 

Unanswered questions on Mehta's exit from Ashoka University

Pratap Bhanu Mehta, professor at Ashoka University, resigned a week ago. He wrote in his letter that it had become "abundantly clear" to him after a meeting with the founders of the University that his continued association with it would become a "political liability". 

A storm of criticism ensued. Eminent academics from all over the world condemned what they believed was pressure brought on Mehta to exit because of his forthright writings. Two days later, economist Arvind Subramanian resigned as Director of a centre at the university by way of expressing solidarity with Mehta. Students called for a two day strike starting March 22. They demanded the reinstatement of Mehta.

The Vice Chancellor, Malabika Sarkar, denied there had been external pressure on the university. However, the university's administration chose to issue a joint statement with Mehta and Subramanian which said there had been "lapses in institutional processes":

We acknowledge that there have been some lapses in institutional processes which we will work to rectify in consultation with all stakeholders. This will reaffirm our commitment to academic autonomy and freedom which have always been at the core of the Ashoka University ideals

The university also ensured that Mehta and Subramanian joined the administration in sounding a positive note:

 Pratap and Arvind would like to emphasize that Ashoka University is one of the most important projects in Indian higher education. They are sad to be leaving Ashoka, especially its outstanding students and faculty,” the statement said, adding that the two professors will remain “available for advice and consultation to the University in the future.

The Chancellor, Rudrangshu Mukherjee, then wrote a letter saying the founders had "never interfered with academic freedom". The Chairman of the board of trustees, Ashish Dhawan, wrote to students saying the founders "have always had the best interests of Ashoka at heart". Mehta, for his part, urged the students not to insist on his return:

The underlying circumstances that led to the resignation will not change for the foreseeable future, in my case, at any rate. So I must close this chapter. I urge you not to press on this matter. I know you will be disappointed. But if I may exercise one last bit of professorial discretion: your mission is larger than the fate of two Professors

Clearly, what is on is an exercise in damage limitation, with Mehta and Subramanian trying to help out.

One can understand the anxiety to protect the university's brand. However, it is important that the questions related to the episode are answered.

First, who were the founders who met Mehta and what exactly transpired at the meeting? It is important that Mehta shed light on this. I am also a little puzzled about the meeting. In his capacity as professor, Mehta reports to the Vice Chancellor and, perhaps, the Chancellor. If there were any concerns about his functioning, it should have been conveyed by the Vice Chancellor. It is not for the the founders or board members to interact directly with faculty in such matters.

Secondly, the statements by Sarkar and Mukherjee contradict what Mehta said in his resignation letter. If there was no external pressure and if founders had never interfered with academic freedom, then what led up to Mehta's resignation? All statements cannot be true.

Thirdly, Mehta stepped down as Vice Chancellor two years ago. There was speculation at the time that his stepping down from an administrative role had to do with his trenchant writings. Mehta needs to clarify whether this is true and, if so, why he chose to continue as a faculty member.

Lastly, one wonders what prompted Mehta and Subramanian to agree to a joint statement. Was any assurance given that the founders who had spoken to Mehta would not continue in an active role? What precisely were the "lapses in institutional processes" that are now sought to be rectified?

Both faculty and students must demand answers to these questions so that academic freedom at Ashoka University is insulated hereafter from the interference from the founders or the board.

Are simultaneous polls for centre and the states a good idea?

Don't miss the terrific two part article on the subject by former RBI Governor Y V Reddy (for once wielding his pen on a political subject). The first part's here and the second part here.

What are some of the arguments made for simultaneous polls. Here's a partial list:

i. The model code of conduct comes in the way of government enacting policies at election time and results in policy paralysis

ii. It's costly to have separate polls

iii. Economic growth suffers because of frequent elections


Reddy demolishes every one of these. If the model code of conduct is a problem, let's modify it suitably. Let governments go ahead and announce polls at election time but let the EC have a panel of independent experts pronounce on these for the benefit of the public.

Costly? Reddy shows that the government expenditure on elections is trivial..

Economic growth has had little to do with frequency of elections or rule by a government by a majority or a coalition government.

So why are the major political parties pushing for it? Data indicates simultaneous polls may work to the advantage of national parties and to the detriment of regional parties.

Simultaneous elections seems intuitively appealing. They provide stability for five years. But this could well come at the cost of greater accountability. It's not enough if the electorate expresses itself once in five years. Periodic voting in states provides valuable feedback to the government at the centre. Reddy quotes B R Ambedkar as saying that responsibility must be preferred to stability. He thinks simultaneous elections could spell the opposte: stability prevailing over responsibility.

Reddy points out that our greatest achievement is making the federal system work. The present proposal could undermine that achievement.

Gujarat polls: BJP win quite remarkable

Yes, the contest has been closer than in 2012. Nevertheless, the BJP's win in Gujarat is remarkable. It comes after 22 years of BJP rule and it happened inspite of the BJP's willingness to steer clear of  assured vote-catchers such as farm loan waiver and quotas for particular groups, both of which the Congress resorted to.

There were reasons for the electorate in Gujarat to be unhappy- farmers, MSMEs, youth and others are unhappy with economic conditions. Nevertheless, they did not think it necessary to disturb the status quo. Gujarat has seen economic progress and the absence of caste and communal strife for over 15 years now, and voters seem to have judged that it's not wise to disturb this state of affairs.

More in my BS column: Gujarat and BJP: why discontent did not spell defeat

Indian army's deployment in Kashmir

About a third of the Indian army - or nearly half a million men- is bogged down in Kashmir. The army sees this as helpful to keeping the forces combat ready. An article in EPW points out, however, that there are significant negatives to the army's deployment in Kashmir.

One, army excesses sully the army's name.

Two, the infantry gains in importance at the expense of other arms- witness the supercession by General Rawat of seniors with a distinguished record in other arms (although this may not be the only reason for the supercession).

Three, the need to contain China, given that a significant chunk of the army is tied up in Kashmir, has necessitated creation of fresh divisions. This, in turn, has led to revenue expenditure eating into capital expenditure and coming in the way of the army being able to implement its Cold Start doctrine- a quick, short war on the Western front- in retaliation for cross-border terrorism practised by Pakistan.

Four, the expansion of the office cadre has been fuelled mainly by recruits from UP, Uttarakhand and Haryana. This has implications for the overall composition of the army. The article also mentions that these are areas in which aggressive nationalism has wide acceptance and those joining the army would not be exempt from these influences. This could have implications for the army' s overall philosophy.

Army deployment in Kashmir, the author argues, has thus had a corrosive act on the army. But the big question which such analysts are not able to address suitably is: can we afford to pull the army out of Kashmir given that we have not been able to make much headway either with the people of Kashmir or with Pakistan?

Rhetoric over Uri attack

The sound and fury over the attack on the army camp in Uri is understandable. The loss of soldiers' lives has been heavy and tragic. But the rhetoric and the jingoism evident in the media make little sense. It's important to underline two key points.

First, as an editorial in today's Business Standard points out, there have been lapses on the part of the security forces. The infiltrators were able to cross the LOC and they were able to get into the camp quite easily. Among other things, it points to unsatisfactory vigil at the border. This is not just a matter of equipment or terrain, although these factors do count. BS makes the point that the border is porous because there's laxity on both sides. And the laxity is on account of the thriving drugs trade. Smugglers are able to move in and out because sections of the establishment make this  possible. And once you relax the vigil for smugglers, the jihadis get their opportunity. So it's no use simply pointing the accusing finger at the Pak army.

Secondly, all talk of retaliation is futile because the international community at large and especially the US will not take kindly to a military strike, as ambassador M K Bhadrakumar points out. The writ of the US runs across the world and the Indian establishment has cosied up to the US in recent years. The question of any major military action on India's part without US approval does not arise. And hostilities with nuclear Pakistan is the last thing the US wants today:

...despite the government's sustained public diplomacy to create an impression in domestic opinion that its foreign policies have burnished India's international standing and image and so on, in reality, India's actions -- especially any military moves -- will come under close scrutiny and be weighed in terms of international law and the United Nations Charter.
The bottom line is that the present ruling elites dare not think of crossing any 'red line' that Washington demarcates.
The US State Department, in a series of statements, has distanced Washington from the Indian positions with regard to the situation in the Kashmir valley, India-Pakistan tensions and Balochistan.
Conceivably, the Americans have cautioned our leadership already against making any precipitate military moves. The kind of brazen military adventures that many self-styled Indian defence analysts are espousing will not get Washington's approval.
As the Barack Obama administration tiptoes toward the lame-duck period, the last thing Washington wants as legacy is an India-Pakistan conflict.......

.....If the Americans do not want a war between India and Pakistan or any precipitate Indian military moves that violated international law, Modi cannot act otherwise.The umbilical cord that ties the Sangh Parivar and our ruling elites to the US establishment may be invisible, but remains robust.

So that's it- the rhetoric and sabre-rattling on our part will remain just that. The media pundits can rant as they much as they want. Perhaps the saner course for us is to simply put our house in order first.

Coal scam and HC Gupta

H C Gupta, the former coal secretary, has drawn enormous support from the IAS association, assorted bureaucrats and the media in connection with the many CBI cases he's facing. He's an upright man, everybody says, the last person to use his position to make money for himself. His is a case of how the Prevention of Corruption Act can be used to harass an honest, retired bureaucrat.

As this article in Scroll.in points out, the issue is not just whether Mr Gupta made money out of the allocations are not. The issue is whether he was party to a seriously flawed process, whether he abetted wrong decisions on the part of higher-ups:

From all accounts, Gupta is an honest and upright officer. But when the coal scam was underway, what was needed from him was more than personal incorruptibility. He needed to hold his responsibility to the country higher than what the functionaries in the Congress seemed to have been telling him to do....

....The Screening Committee that Gupta headed disregarded its own internal comparisons of all the applicants, as a Central Bureau of India official had pointed out. Subsequently, as we know, several of the files pertaining to the allocations went missing as well.
In other words, Gupta is not in the dock because he made recommendations that benefitted some companies. He is in the dock because he cannot explain why those companies were chosen. He cannot explain those decisions because he is not the one who made those decisions to begin with. Politicians, especially from the ruling Congress Party, influenced the allocations, this reporter was repeatedly told while covering the coal scam.

The charge against Mr Gupta, then, appears to be that he looked the other way. Bureaucrats are riled because that's precisely what many of them are required to do- in order to move up the ladder, if not to keep their jobs. It frightens them that something that's considered routine now in the bureaucracy- looking the other way- can bring retribution down the line.

And why single out bureaucrats? In PSUs, in private sector companies, indeed, in every organisation, safety, comfort and prosperity lie in looking the other way, not raising the voice of dissent. People know that wrongs are being perpetrated but they rationalise their silence by telling themselves that they are not profiting directly from questionable decisions. (They do profit indirectly because the reward for keeping silent is that you get your promotions and bonuses).

The amendment that bureaucrats want now in the law against corruption is that they can prosecuted only if they are shown to have derived a personal benefit. If they did not uphold or defend the public interest, that's fine. Politicians may well be inclined to oblige them because otherwise the basis of the neta-babu nexus gets broken. Without pliant bureaucrats who will not stand in their way, the netas cannot make hay.

It will be interesting to see how Mr Gupta's case plays out- and whether the amendment sought by the bureaucracy will be forthcoming.

 

Water crisis and the IPL

Read an excellent interview with Yogendra Yadav on the furore over the water crisis in Maharashtra and elsewhere and the question of moving IPL out of the state (since ordered by the High Court).

It's not that IPL is going to impact the water situation. It's just it seems rather extravagant in the face of a crisis:

I am in favour of shifting the matches. Not because I feel there is any relation to the IPL matches and the drought, not because the IPL is aggravating the drought, nor do I believe that shifting IPL matches from these grounds will alleviate the drought.
There is no direct relation, but there's a symbolic relation. The IPL is not a sport, but an extravaganza. It is a festival.
It is a tamasha and there is something obscene and vulgar about holding this kind of festivity in the middle of a drought.
And how would not holding the IPL matches help? It would help not in terms of litres of water and so on; all these arguments are silly. This entire controversy, this judgment and the petition has served one cause -- it has reminded this country that there is a severe drought.
Over 50 crore (500 million) Indians are currently suffering from a livelihood crisis, something to which the whole country had shut its eyes for the past six months.
The drought began in October 2015. We conducted our first Samvedna Yatra on October 2 and the whole country was ignoring the situation. If this IPL controversy wakes the country up to this reality, I cannot complain.

Yadav says the solutions to the water problem are all there in government documents:

Some of the most effective and routine things they should have done, about which everyone knows, is to repair canals, hand pumps and water supply channels and identify affected areas. These are routine matters about which every bureaucrat knows.
All this has been written in a Government of India document, Manual for Drought Management. It spells out the steps that need to be taken to avoid this (water crisis).
But, politically, a more difficult thing which they needed to do was to disallow growing sugarcane in drought-stricken areas. Sugarcane is one of the most water-guzzling crops. We gave this suggestion also.
Second, opening of new sugarcane and liquor factories could have been postponed by six months. Our third suggestion was to regulate water bottling plants, which take away some of the best potable water.
Moreover, diverting water for industrial purposes can't be a priority at a time when you have such a serious water crisis. We had suggested regulating this.

Bihar verdict: the bare numbers

The people of Bihar have spoken. So have the political pundits who pretend to be able to read their minds. And what do explanations do the pundits have for the verdict? The BJP's brand of intolerance and communal politics will not pay. The RSS chief did great damage with his comments on rethinking caste-based quotas. Nitish Kumar did a great job on the development front. The BJP top brass was arrogant in its dealings with local  leaders and this led the latter to switch off. Modi hurt the pride of the people of Bihar with his comments about the DNA of the Bihari. And so on.

Alas, the numbers tell a rather more prosaic story. Two is less than three but two plus two is greater than three. In the 2014 Lok Sabha polls and in the 2010 assembly polls, the JD (U) of Nitish Kumar and the RJD of Laloo Yadav went it alone. In 2015, they formed an alliance. The anti-BJP vote thus got consolidated and translated into a massive win for the Mahaghatbandhan (MGB).

Let's look at the numbers (taken from ET, Nov 9). In 2010, the NDA had a vote share of 23.3%. This rose to 34.1% in 2015, an increase of nearly 11 percentage points. In 2014, the NDA had polled 39.4% of the vote share, so, yes, relative to the peak of 2014, the NDA has seen a decline of around 5 percentage points. The MGB vote share declined from 43.8% in 2010 to 41.9% in 2015. In 2014, the vote share was almost the same as in 2010- 43.5%. Note that the MGB too lost vote share relative to 2014 albeit of only 1.6 percentage points.

A simple reading of the verdict would be:

• The MGB is more popular today than the NDA which was also the case in 2010
•  The NDA has become more popular in 2015 than it was in 2010 and the MGB less so.
•  Relative to 2014, both the NDA and the MGB are less popular; the decline in popularity of the NDA has been greater.
  

What about the individual members of the alliances?  The JD (U) vote share has fallen from 22.6% in 2010 to 16.8%, so Nitish Kumar is less popular today than he was five years. The RJD vote share is almost intact- 18.84%. and 18.5%. The BJP's vote share has soared by 16.5% in 2010 to 24.6% in 2015 (although there is a decline of 5 percentage points relative to 2014).

What inferences can we draw from these numbers? Well, the following:

• Arun Jaitley is right in saying that it was the political arithmetic that is primarily responsible for the BJP's defeat
• By having the largest vote share amongst all parties, the BJP has emerged as the leading party in Bihar
• But for Laloo Yadav retaining his popularity, the MGB may well have lost the election. So, it was not Nitish Kumar's development record but Yadav's caste base that helped the MGB romp home
• The decline in BJP vote share relative to 2014, to some extent, reflects the wearing off of the party's sheen in recent months. One can speculate about the factors that have caused this.
• The consolidation of the anti-BJP vote is absolutely crucial to the victory of the non-BJP parties. Any rift that emerges will damage the MGB's chances
• If the BJP is able to get back to its vote share of 2014- by showing better results on the economy, by playing the Hindutva card more adroitly, etc- its fortunes in Bihar will be very bright indeed.

In short, the BJP may have lost a battle but could still win the war. 

Raghuram Rajan on free markets and political freedom

Rajan's most recent speech on democracy, inclusion and prosperity has drawn attention for quite the wrong reason: the reference to Hitler and the perils of strong government. Since Modi was being likened by the Congress to Hitler in the run-up to the last elections, the reference is liable to be misconstrued and, indeed, the highlighting of this particular point in sections of the media appears mischevous.

It's the larger point in the speech that deserves highlighting, namely, that liberal democracies rest not just on three pillars- rule of long, strong government and political accountability- as Francis Fukuyama has said but also on a fourth one, free markets.

Rajan sees competition in the market place as the counterpart of competition in politics. The two tend to support each other. However, he points out, there is a difference. In politics, every citizen has one vote. In the marketplace, the richer guy has more votes than the poorer guy. He then poses the question: why would voters not use the power of their votes to disenfranchise the rich? Because they see the owners of property or resources as spreading prosperity and benefiting the voters. Also, they don't mind richness as they long as they see a certain fairness about the acquisition of wealth. As long as these two conditions are met, voters will tolerate free markets and a measure of
inequality.

Well, well, the conclusions appear rather sweeping. It's not as if voters can disenfranchise the rich if they wanted to. The people who get voted in do support with the money power of the rich behind them. They are beholden as much to the rich as to the voters. And their natural affinity is towards the rich rather than the voters.

As for the fairness of the process, we do know that upward mobility has fallen in the US. And, we have one book (The son also rises) that claims that mobility has changed very little in the west over hundreds of years. In India, upward mobility has been made possible more by the political process rather than the markets. By grabbing political power, the backward classes and the scheduled castes have been able to advance. They have also advanced through government jobs. Markets and enterprise haven't contributed as much.

There isn't much fairness or legitimacy to the system we have. Political accountability has largely meant substituting one set of crooks supported by businessmen with another set of crooks supported by businessmen. The victory of Aap in the Delhi polls shows that people are still looking for a fix to the crooked political and economic system we have. A Nandan Nilekani emerging on the landscape doesn't mean much of a change in the Indian system. Inequality is more of an issue, perhaps, in Indian than in the US where it has emerged as an important issue.

In the long term, genuine democracy or political freedom does not seem compatible with deep inequality. How to get the political system to address such inequality will remain the fundamental challenge in the years to come.

When management gurus dissect politics....

How can we tell whether a political leader such as Narendra Modi will succeed? Three management experts, including Ram Charan, attempt an answer in a business journal. I can't say I was bowled over by their analysis.

The authors say we should look for five signals, on all of which Modi scores. Let me take up two in detail

i. How deep is the politician's insight into public interest? Modi's interest is very deep, the authors say, because of his own background of poverty. Well, Manmohan Singh too came from a poor family in a very backward village. He could, perhaps, claim that he understood the poor as well as the elite and was thus well placed to negotiate his way through the elite on behalf of the poor.In India (unlike in the US), we have hordes of politicians who have come up from the grassroots. Lalu Yadav and Mayawati, for instance. But they have not proved to be transformative leaders in the sense of bringing about an improvement in the lives of the class of people they once belonged to.

ii. Can the leader get things done? Modi has a record as a doer in Gujarat, the authors point out. But Gujarat was one of the best performing states even before Modi became Chief Minister (although, to his credit, Modi was able to maintain that record). India's growth rate has improved since the nineties and through the noughties under a succession of governments and leaders. Not all were headed by doers. However, starting with Narasimha Rao, we managed to put in place policies that paid off. So, yes, it helps to be good at execution but the role of policy must not be understated.

The authors mention other factors that favour Modi: his business mind-set, his ability to engage senior government officials, the broad support he enjoys. It's hard to disagree on these. But none of these by themselves or even put together ensure results.  Both Indira Gandhi and Rajiv Gandhi had broad support but both saw how quickly this could dissipate. A "businesss mind-set" can be a negative if it means being pro-business at the expense of welfarist considerations.

Modi's strengths are his ability to connect with the masses, formidable administrative experience, a a capacity to think out of the box. deep study and reflection, boundless energy and a genuine passion to make a difference at the national level. This combination bodes well for any leader. We don't need management experts to tell us that.

Hindi Chini Bye Bye?

The Chinese president came, saw but could not conquer. Much of the bonhomie that PM Modi exuded in Ahmedabad seemed to evaporate once the hard reality of the standoff on the borders began to sink in- and for the PM the timing must have been particularly galling.

Xi Jinping was, no doubt, hoping that he would get India to open up to Chinese investment in a big way, providing China with a useful means of diversifying away from Japan and East Asia, without having to address the border issue. It didn't quite work out. There is talk of $20 bn of Chinese investment happening but there is reason to be sceptical.

One should not be surprised at the outcome. Negotiations can yield a fair outcome only if it happens between equals or between a powerful entity and a less powerful one who is seen as a partner. Neither condition is fulfilled in India's case. China and India remain rivals on the Asia stage so far as India is concerned. China sees the rivalry as settled in its favour given that the Chinese economy is today five times India's and China is far more powerful militarily.

The only meaningful resolution that is possible on the border issue is that India accepts China's claims on the western border (Aksai Chin) while China concedes India's claims in the east (Arunachal Pradesh). This was the deal that Chou-en-Lai offered Nehru but it was rejected by the latter. Today, China is perhaps even warier about Tibet and hence about the status of Arunachal Pradesh which borders it. (Mao had famously said that the issue in the 1962 war was not so much the border as Tibet- he thought India was upto mischief under American instigation).

So, the "talks" on the border are bound to drag on until the gap between India and China is narrowed. This means India's growth rate must overtake China's and it must stay that way for, say, five years. India's economy is bound to accelerate and China's is bound to slow down. The cross-over point is probably three to four years away, which would place it at 2017/18. Five years from then would be 2022/23. It is in the decade 2020-30 that we can expect a resolution of the border issue- provided things don't blow up in our face before that. Going by most projections, this is the decade in which India finally begins to come into its own. The rivalry between India and China will intensify in the coming years no matter that the economic relationship deepens.

The military issue for India is how to counter a vastly more powerful neighbour which has the advantage of geography in the North (since China is positioned at a higher level in Tibet)? The Economist has an interesting article on how India's strategic thinkers see the Andaman islands as a useful counter:

Hawks in Delhi who are suspicious of Chinese long-term aims say bluntly that India and its friends will acquire some sway over China only once the Andamans are treated as a “chokepoint”, a place to disrupt Chinese trade in the event of any future confrontation. Four-fifths of Chinese oil imports go through the strait. Chinese naval strategists warn of Indian designs to drop an “iron curtain” there.

Accordingly, there has been a steady build-up of naval and other capabilities centred on the islands:

An air base that opened two years ago in Campbell Bay, Great Nicobar, has taken Indian military aircraft 300km closer than before to the Malacca Strait. Other airstrips are reportedly being built or lengthened to handle big aircraft, including the Hercules transport plane. Airfields for helicopters will follow. The navy wants to deploy drones to track passing ships. New coastguard stations serve a similar purpose. Regular naval exercises with neighbours are interspersed with big international training manoeuvres hosted in the Andamans and named “Millan”. The most recent involved 17 navies in a disaster-relief exercise meant to mark a decade after the 2004 Asian tsunami.

This makes sense because among the three arms of the defence forces, the navy is the one arm in respect of which India comes close to Chinese capability especially in respect of capability to operate in the Indian Ocean.India's build-up in the Indian Ocean will be welcomed by Japan and others in East Asia. Go round the Malacca Straits and you enter the South China Sea. A book review in the Economist highlights the extent of Chinese assertiveness in the South China Sea: China is laying claim to a stretch of rock and coral 1500 kms away from China's coast and just 107 kms from Malaysia's:

The Chinese nine-dash line is claimed also by Taiwan, as the descendant of the “Republic of China” whose mapmakers produced it. It sweeps through the “exclusive economic zones” asserted under UNCLOS by Brunei, Indonesia, Malaysia, the Philippines and Vietnam. The Philippines is challenging its legal validity. But even if it wins, UNCLOS cannot adjudicate on sovereignty over islands, rocks or shoals. And China will ignore it anyway.

America's famed 'pivot' towards Asia is dictated by this display of Chinese assertiveness and the need to counter it. Japan and East Asia are not quite equal to the task. The US may be stretched in undertaking this exercise alone. That's where India and Indian naval strength come in. The US has an interest in bolstering India so that it can be a more useful partner to itself. PM Modi must see this more clearly after the Chinese president's visit. The strategic partnership between India and the US, started by Vajpayee and continued by Manmohan Singh, will be carried forward by Modi although the last years of the Obama regime may not see the proper fructification of it. 

Raghuram Rajan on venal politicians

RBI Governor Raghuram Rajan's Lalit Doshi memorial lecture last week created a bit of a stir. Rajan chose to lash out against crony capitalism and the venal Indian politician:

Even as our democracy and our economy have become more vibrant, an important issue in the recent election was whether we had substituted the crony socialism of the past with crony capitalism, where the rich and the influential are alleged to have received land, natural resources and spectrum in return for payoffs to venal politicians. By killing transparency and competition, crony capitalism is harmful to free enterprise, opportunity, and economic growth. And by substituting special interests for the public interest, it is harmful to democratic expression. If there is some truth to these perceptions of crony capitalism, a natural question is why people tolerate it. Why do they vote for the venal politician who perpetuates it?

Rajan then proceeds to answer his question:

Our provision of public goods is unfortunately biased against access by the poor. In a number of states, ration shops do not supply what is due, even if one has a ration card – and too many amongst the poor do not have a ration card or a BPL card; Teachers do not show up at schools to teach; The police do not register crimes, or encroachments, especially if committed by the rich and powerful; Public hospitals are not adequately staffed and ostensibly free medicines are not available at the dispensary; …I can go on, but you know the all-too-familiar picture.

This is where the crooked but savvy politician fits in. While the poor do not have the money to “purchase” public services that are their right, they have a vote that the politician wants. The politician does a little bit to make life a little more tolerable for his poor constituents – a government job here, an FIR registered there, a land right honoured somewhere else. For this, he gets the gratitude of his voters, and more important, their vote.

What Rajan says is, of course, true. Go to the office of any municipal corporator, MLA and MP and you will see people queuing up for all sorts of favours. The politician dispenses these to win their goodwill. But this is not the only reason that the venal politician gets the vote. The venal politician delivers in other ways as well, by ensuring that various development measures happen in his constituency, whether new investment by the government or private sector, new schools, hospitals etc. The politician is often drawn from the oppressed classes and so the politician has a natural empathy with his constituents. Of course, he enriches himself but, in the process, he does his bit for his people as well. In other words, the venal politician is not as bad as Rajan makes him out to be.

Moreover, the politician is not the only venal character in the system. Businessmen, corporate professionals, lawyers, doctors, accountants- virtually all groups that constitute the upper classes- are venal in their own way. The voter sees the politician at least as being responsive to their needs- and that's because of the greatness of parliamentary democracy- in a way in which other groups are not. The rest can only look after themselves.

Rajan goes on to argue that the voter's dependence on the politician for favours is what keeps the politician from reforming the system, from ensuring better delivery of services: he has a vested interest in poor delivery so that he can then play saviour. That is why, Rajan argues, that direct benefit transfer linked to financial inclusion is so important.Then, the poor have the cash with which they can buy services from the private sector, they do not have to depend entirely on the public sector and the venal politician.

This is true only up to a point: there is only so much cash that the poor can get. There will still be a need to access public sector services, such as healthcare (the private provision of which cannot be bought with the cash given to the poor). It is also worth making another point: the focus on cash transfer and financial inclusion is being driven by the very venal politician on whom Rajan takes aim.

There are many ills in our polity and we need to address crony capitalism. It's a bad idea, however, to start off by condemning the political class.