Wishing all the readers a very happy holiday season ahead and
a joyful New Year 2019. May all be kind, stay healthy, cultivate optimism and
serve Mother Nature. Amen!
The next post from my Diary would be on 2 January 2019
Some food for thought
"In every tyrant's heart there springs in the end this
poison, that he cannot trust a friend."
—Aeschylus (Greek Poet, 525BC-456BC)
Word for the day
Nebulous (adj)
Hazy, vague, indistinct, or confused
Salvation lies within
You have read the suggestions of the globally reputable experts
to remove the growth impediments of Indian economy (see
here).
Indubitably the effort is commendable and suggestions very
valuable. But as I noted yesterday, these suggestions seek to maintain and
somewhat improve the status quo. In that sense, these are incrementalist only.
Moreover, since the group of experts itself recognizes that the status quo is
not a pretty picture in itself, rather the conditions are pathetic in many
important areas, the approach may be lacking, in my view.
Believing that the present conditions are poor and challenging,
and the current approach and ecosystem has mostly failed in tackling the
problems afflicting the Indian socio-economic milieu, a zero based approach is
worth trying in my view.
In five decades of post Nehru period, there have been many
national movements which have attempted to redefine the India's social,
political and economic milieu.
Most notable of these movements are Naxalite movement of 1960's
spearheaded by Charu Mazumdar and Kanu Sanyal et. al.; Jaiprakash Narayn's
"Total Revolution" in 1970s, V. P. Singh's "Jan Morcha" in
late 1980's, and L. K. Advani's "Ram temple" movement in early
1990's.
Besides, many regional movements have also had notable impact on
the Socio-political order. Kanshiram's movement for social justice to the
bottom of the pyramid, viz., "Bahujan Samaj" is amongst the most prominent
ones.
Though most of these movements have had material influence on
our socio-political order, none of these movements could sustain to achieve a
potent revolution that could catalyze a complete break away from the
politically feudal, economically colonial and socially divisive legacy of
British Raj.
After five decades, the society continues to be deeply
divided on the lines of religion, caste, and community. Socio-economic
inequalities obdurately persist. Social and gender prejudices run deep into
citizens' mindset.
The political consequence is that the populace as a whole
still prefers to closely identify with religion, caste, community, region
rather than the Nation. Reflecting the divide, the elected representatives are
often seen pursuing parochial agenda; many a times at the expense of broader
national interests.
The economic consequence is that we have failed to devise
a "National" approach in economic planning and programming. A
fragmented approach in defining economic agenda, has often led to clash of
regional aspirations and misallocation of scarce national resources. Indian
Railways, various river water disputes, conspicuous regional growth imbalances
and wasteful "tax exempt industrial zones" are some classic examples.
I would like to present the following 5 point agenda, that will
challenge the status quo and seek to establish a sustainable growth model based
primarily on the Indian ethos, rather than typical post industrial revolution
western paradigm which is mostly materialistic, neo feudal, and phlegmatic.
1. Bring temple
to the core of economy
Religion has been a major force in core Indian ethos.
Traditionally it has been the influence of religion that has brought the
concepts of scientific inquisition, righteousness, moral rectitude, social
responsibility, environmental sustainability, debt management, HR management,
and just & fair taxation, etc. in the trade and commerce.
Post Independence the State has been over focusing on
micromanaging businesses and ignoring key social issues. This has weakened the
core fabric of Indian society, inasmuch as that taking pride in our rich
heritage has become synonym with bigotry for all - the so called
"nationalist" who takes pride, the so called "secularist"
who is too scared to take pride, and the so called "rationalist" who
find nothing to take pride in Indian heritage.
Consequently, places of worship have degenerated from
being center of learning & spiritual evolution to shelters for hatemonger,
fearmonger, power seeker, and wealth hoarder. Many of these promote
superstitions and block scientific inquiry to the detriment of society at
large.
In my view, if we want to make this century belong to India,
then Indian State—
(a) should leave
business completely to private enterprise;
(b) play a much larger
role in social awakening and create an enabling environment of mutual trust,
self motivation, and compassion;
(c) make the Temple
(of course including Mosques, Churches, Monasteries, Gurudwaras, Mutts,
Agiyaris, Derasars and others) play a larger evolutionary role in progress of
the society, rather than continuing to degenerate further and stay a stumbling
block in the path to socio-economic progress; (Taking their gold for managing
current account deficit is not sufficient!)
The State must realize and accept that politicians and
bureaucrats are naturally and seriously handicapped insofar as their
understanding of business is concerned. They should just secure borders,
maintain law & order and promote social harmony. So far they have focused
on the former at the expense of the latter for the disastrous consequences. (read
more here)
Moreover, Indian people in general have been seen to be most
compliant, philanthropic, and honest while dealing within their own small local
communities. There is strong anecdotal evidence of numerous democratic
assemblies within various communities and localities. From my experience I know
for certain that most Indians not only feel comfortable working with the
members of their own community, but are usually most productive when operating
within the network of their “Own people”.
The regulatory framework therefore must take cognizance of
these local communities. The ecosystem should be designed in such a manner that
these communities are assigned the responsibility of self regulation of their
members in matter such as tax compliance, sustainability and environment
protection, financial discipline, women empowerment, disease prevention, etc.
2. Let our
children grow as Indian
A couple of years ago, the government of Maharashtra decided to
erect a colossal statue of the great Maratha King Chatrapati Shivaji off Mumbai
coast, broadly on lines of the Statute of Liberty off New York coast.
The effort to commemorate of one of the greatest sons of India
is commendable, but the proposed statute may not be a justice to his memory and
stature. It may be seen as yet another poor attempt at Americanization of
India.
This needs to be appreciated that the Statue of Liberty is deep
rooted in the American consciousness. Freedom of people, thoughts and ideas is
at the core of American State. The Statue came after the American State
enshrined the idea of liberty in its consciousness. The flame carrying lady
represents what USA stands for. It is widely considered both a reminder of core
values, and inspiration to many.
In India, outside the erstwhile Maratha kingdom, the knowledge
about the ideology and Vision of Chatrapati Shivaji is scant. The school history
books outside Maharashtra contain few short stories about his valor, but
nothing beyond that.
Unless, the students across the country are taught about the
great vision, struggle and contribution of the great king, in a manner that it
leaves an indelible imprint on their collective conscience, the proposed Statue
may just remain a tourist attraction.
Not only this, the same is in fact true about most great kings,
saints, religious leaders and literary genius. School students in Maharashtra
read little or nothing about history and legends of South, East or North India.
The same is true about most states. The students are taught only about the
respective regional personalities.
Students in Mumbai & Delhi could not even name all North
Eastern states. None of several 10th class Delhi students I spoke to were aware
about a region named Rohilkhand in India (located just 160kms from Delhi).
Students in UP, Punjab, Bihar, Rajasthan are mostly ignorant about Tukaram,
Thiruvalluvar, Subramanya Bharti, Eknath, and Chandidas.
To a person sitting in Mumbai, Bangaluru, Chennai or Hyderabad,
the state of Uttar Pradesh (UP) may not mean much more than – Taj Mahal,
Varanasi, Lucknow, Kebab, taxi drivers and construction labor. Very few
residents of the western and southern states appreciate that UP is as diverse
as India itself. Various regions of the state, i.e., Awadh, Brij, Rohillkhand,
Bundelkhand, Purvanchal, and Doab, have distinctly identifiable history, food,
dialect, customs, deities, and problems.
The consequence is that student grow up with mostly
misplaced sense of supremacy of their regional identities and culture vis-à-vis
other regional identities and cultures.
Under these circumstances, how could one expect people in
general to have a national approach to any issue! Politicians who emerge from
these people only, naturally have parochial viewpoint of most issues concerning
growth and development of the country.
3. Take factories
to farms
The mission of the government to double farm income by 2020 is
commendable. However, it may not be sufficient. The farm income must rise much
higher, led by superior productivity gains and higher realization.
The measures initiated so far, e.g., higher support prices,
cheaper credit, crop insurance, improved irrigation, cash fertilizer subsidy,
better market access (eNAM, roads etc.) have definitely improved the state of
agriculture in the country. But this improvement may not be sufficient. A lot
more needs to be done, rather urgently.
Firstly, the business of agriculture in the country needs to be
restructured; well, as a business.
A material part of the agriculture in India continues to be a
sustenance measure, not a business. It suffers from huge disguised
unemployment, underemployment and poor returns.
Secondly, the historical transition of farm workers to industry
during the developing stage of growth may not work in current Indian context.
The so called developed economies have transited the labor from
farm to factories, when industry and mining were still labor intensive and
global competition was not much. The productivity gains were immediate and
tangible.
It is no longer the case. The industry in India is already
capital intensive. Even traditional labor intensive industries like gems &
jewellery, textile, leather, mining and construction are becoming increasingly
automated to stay viable against the global competition. Emulating China model
may not work in India, as our political and economic model is entirely
different.
Moreover, the skill and training requirement for modern industry
do not allow a straight farm to factory transition. So the options get limited
to unskilled construction sector jobs and building industry around farms where
the skill of the farmers could be suitable employed.
While MNREGA and ambitious rural road program is taking care of
unskilled construction jobs, there is little effort to take factories to farms.
The ambitious Make in India program mostly aims to substitute
imports. We are trying to compete with manufacturing powerhouses like China,
Vietnam, Taiwan, etc. This defies the basic principle of making economic
decisions.
Whereas, what we need is to promote the export traditional
Indian stuff which is our strength.
My suggestion would be that the government should acquire
all farm holdings below the viable size and consolidate these into large sized
farms. The respective land owners and/or and landless farmers tilling the
acquired land should be employed at minimum wages plus a share in profit. The
money for this venture should be raised by selling most of the industrial
undertakings in the public sector, as their purpose of being in public sector
has already been served.
For the larger farm holdings, the government should
encourage the farmers to partner with the food processing industry on cooperative
model. The factories must be taken to farms.
4. Change the
political paradigm
The present political structure of the country is not very
conducive for a higher trajectory of economic growth and development either in
terms of popular parameters or in terms of quintessential Indian ethos.
A study of the history of Indian politics would suggest that
unlike western democracies only an abysmal minority of Indian voters are
strongly committed to a political or socio-economic ideology.
The political discourse in India is usually dominated by
contemporary issues and personalities. The economic issues raised during
elections are mostly confined to the slogan of poverty alleviation. In recent
times corruption has also become a popular electioneering slogan.
Perhaps, no political party seems to have taken issues of
poverty alleviation or corruption seriously. Therefore no one has bothered even
to outline a conceptual or ideological framework for solving these problems.
Ideologically, the Congress Party abandoned the most acceptable
and perhaps most suitable Gandhian Socialism in favor of Nehruvian Socialism
that was a poorly mixed concoction of Leninist central planning (central
ownership and management of resources and businesses) and British colonial
legacy (discretionary patronage to the faithful and loyal).
The model was certainly at cross-purpose with the constitutional
federal structure. Poverty, poor governance and corruption were natural
off-springs of this system.
BJP (earlier Jan Sangh) started with Deen Dayal Updhaya's
Integral Humanism. However, in 1990s it adopted Gandhian Socialism (which is
not too far moved from the Integral Humanism) as the principal doctrine.
The present leadership has presented a concoction of Integral
Humanism and Laissez-faire model used by some developed economies principally
USA.
Politically leadership preaches "Human Being" as the
fulcrum of policy making. Whereas the executive is more focused on
"Business", "Markets" and "Macroeconomics" as
central themes. The conflict is for everyone to see. The consequence is that we
seem to be moving in no direction.
The people at the left end of the spectrum exercised significant
sway on the bottom of the pyramid in Indian society since independence. They
controlled most of labor unions. Though divided between Marx, Lenin and Mao
they still were the preferred choice of landless, oppressed and intelligentsia.
There was a time when being poor, intelligent (economist, thinker, poet) or
rebellious meant being communist.
The things however began to change in late 1980s post
dismantling of USSR and the German wall. The Lenin and Marx were relegated to
the history lessons. The economic reforms initiated in China under Deng
Xiaoping's supremacy, further pushed back the traditional Marxists.
Insofar as the Lohiaites (socialist parties occupying the left
of the center space in Indian politics) are concerned, they deserted both Lohia
and his ideologue Gandhi as soon as they came into power. Degenerated into motley
feudals, they mostly have no commitment to any economic idea and mostly follow
the Congress Party's status quoits agenda.
The rise of Aam Aadmi Party (AAP) from a massively popular
anti-corruption civil society movement 5years back had given hope and raised
expectations of people. This party had no ideological baggage and promised to
address the problems as they exist, without any legacy concerns. This party has
also degenerated into a motley group of egotists, having no commitment to their
raison d'être.
In my view, a continuation of the current state of quandary with
respect to economic growth model is a major hindrance in our path to higher
growth orbit.
I strongly believe that the inherent austerity,
industriousness and enterprising skills of the Indian populace are sufficient
to provide escape velocity for moving the Indian economy into higher orbit.
Limiting the role of government to developing and
maintaining the institutional framework relating to law & order,
sovereignty, external security & relations, municipal functions,
inter-state relations and facilitating trade & commerce, may improve
economic conditions much faster than otherwise.
5. Make growth
inclusive and sustainable
A key economic reform would be to earnestly hand over the
ownership of natural resources to “the public”, instead of few ministers
controlling the resources. The trusteeship of all the natural resources may be
vested in the local body of people. The local people should determine how these
resources should be exploited. Industry based on these resources if developed
on co-operative model with equitable ownership of (i) local people (ii)
financial investors and (iii) technical experts who would manage the business,
the growth could be fast, equitable, and sustainable.
In summer of 2013, the tribal villages of Niyamgiri in Odisha,
unanimously rejected the proposal of Orissa Mining Corporation (OMC) and
Vedanta group to mine bauxite from Niyamgiri hills and forests under the Forest
Rights Act of 2006. The decision was widely hailed as historic.
Two years later, similar situation emerged in the forests of
Chhattisgarh. As many as 17 gram sabhas, falling under Hasdeo-Arand coalfield,
passed a resolution opposing the re-allotment of coal mines and have written to
higher authorities seeking dialogue on the issue.
The protagonists of faster economic development dismissed the
protests as yet another mischief of foreign funded NGOs who are allegedly paid
to stop India from becoming an economic super power!
The pragmatic are asking , what is the fun in faster development
if it is not sustainable?
The austere and humanitarian Gandhians say the goal (faster
economic growth to eliminate poverty) is important, and means are equally
important.
Amongst the recent examples, the following two are most
noteworthy—
The most cited welfare measure of the incumbent government is
implementation of Ujjawala Scheme, under which the government has proposed to
provide subsidy to 8cr BPL families for acquiring a LPG connection. At present
the beneficiary families are required to get refill of LPG cylinders as per the
norms applicable to all other LPG users, i.e., 12 refills per year at
subsidized rates and more refills at market driven rates. As per recent claims,
more than 4cr families have already availed benefit under this scheme.
I must admit that this scheme may definitely benefit the target
households and prove to be a great help. But when we juxtapose the scheme to
the history of fuel subsidies in the country, it appears a blunder.
Once introduced, it almost took 50yrs to remove the kerosene
subsidy, and it was possible only once enough electricity generation started
and cooking gas availability got materially augmented. In the meantime kerosene
and transportation fuel subsidies constrained the fiscal position of the
country materially for many years.
Now consider this. 8cr intended beneficiary household means at
least 16-20cr voters under influence. To put this in political perspective,
please note that in 2014 Lok Sabha elections the incumbent BJP was polled a
total of 17,16,57,549 votes (won 282 seats) and principal opposition party
Congress was polled a total of 10,69,38,242 votes (won 44 seats). BSP at third
place got 2,29,46,182 votes and won no seat.
With this political dynamics, ignoring this huge block of
16-20cr voters would be very difficult for any political party. It is only a
matter of time, when some political party will promise free 12 refills per year
to the beneficiaries of Ujjawala scheme and put a fiscal burden of close to
Rs1trn on the nation.
This eventuality could have been easily prevented, if the scheme
was implemented through a legislation to be passed by Lok Sabha as a money
bill, clearly providing that it is one time subsidy of Rs1600 and no further
subsidy could be provided under the scheme by any government. The government
has obviously not learned anything from history.
Another blunderers populist announcement relates to a major road
project in the Garhwal Himalaya. The project aims to connect the four sacred
temples in upper reaches through a wider road network. The stated objective of
the project is to make it more convenient and safer for the pilgrims to visit
these sacred temples and develop the tourism infrastructure in the state.
As a frequent visitor to the region, I can vouch that the
ecology of the region is already facing serious threats. The Kedarnath tragedy
of 2013 is just an illustration of the disasters we are going to face rather
frequently. Worst the
This widening of roads will not only cause cutting of numerous
trees, but also result in massive increase in vehicular traffic and number of
pilgrims visiting the region. Rise in pollution & garbage, pressure on
infrastructure, massive construction of room capacities and other conveniences
will thoroughly destroy the sanctity of the place itself; and kill the sacred
rivers that originate from there.
If I am minister today, I will completely ban private vehicles
in 100km radius of these sacred temples. Allow only disable and senior citizens
to travel by public buses to the temples. Develop the traditional pedestrian
route to the temples. Provide tented accommodation with bio-toilets along the
way. Ration the number of pilgrims visiting these temples, and make it
compulsory for all pilgrims to plant one tree each and pay for their
maintenance for one year.
Read with the following
May also read the following
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