Monday, March 10, 2014

Utopia: The economic solution-II


Thought for the day

“We are what our thoughts have made us; so take care about what you think. Words are secondary. Thoughts live; they travel far.”

-          Swami Vivekananda (India, 1863-1902)

Word for the day

Cognizant (adj)

Aware (usually followed by of).

(Source: Dictionary.com)

Teaser for the day

Smearing ink and hurling shoes - are these methods of registering protest (a) violent; (b) non-violent or (c) neo Gandhian?

Note that giving a ride on donkey - face smeared with black paint and garland of footwear is still the most popular method of social castigation in Indian folklore.

Utopia: The economic solution-II


Trust your people

In my view, the most valuable resource for India is her people. In not implementing the recommendation of Balwant Rai Mehta committee (1957) on local self governance, our political system has been unable to develop an environment of mutual trust and transparency and thus failed the people of India. Despite, Narasimha Rao government ensuring 73rd constitutional amendment in 1992, the political establishment has obdurately refused to share power with the local bodies and common people.

As per NCAER 2008 Devolution of Power Index – only a handful of States have done meaningful devolution of power to Panchayati Raj Institutions - Madhya Pradesh, West Bengal, Tamil Nadu and Kerala being the notable one.

A series of irregularities that have come to light in past two decades suggest that lack of transparency in government functioning and substantial discretionary powers enjoyed by elected representative in appointments, procurement, resource allocation etc. are the primary reasons for governance deficit.

In my Utopian (though not out of the realm of possibilities) view, the following should be done:

(a)   The ownership of public resources should be earnestly handed over to “the public”. Instead of few feudal ministers controlling the resources, the trusteeship of all the natural resources should be vested in the local council. The local people should determine how these resources should be exploited. Industry based on these resources should be developed on co-operative model with equitable ownership of local people.

(b)   Urbanization (provision of adequate civic amenities and connectivity) and industrialization should be managed at town/village level instead of further promoting India-Bharat divide. 7,00,000 urbanized villages would be much more productive than 700 cities with inadequate infrastructure.

(c)   Local councils should be empowered to decide appropriate taxation structure and incentive formulae to achieve the objective of social, economic and gender equalities, sustainability and development.

For example, each local council shall determine which are the minority communities, or socially and economically backward classes in that locality and extend reservation accordingly. Similarly, each local council shall determine the development priorities and allocate resources accordingly. Given the diversified demographic, ecological and socio-economic profile, efficient policies for energy, education, employment, industrial development, ecology conservation etc could be worked out only at the local level.

(d)   The role of the National Council should be restricted to managing national defence, foreign relations, Trans District Rivers, dispute resolution, and developing model rules and regulation that may be adopted by local and district councils with appropriate modifications.

…to continue

Readers can send their views, comments, criticism to the author at vijaygaba.investrekk@gmail.com

Earlier in this series:







Friday, March 7, 2014

Utopia: The economic solution

Thought for the day
“History shows that where ethics and economics come in conflict, victory is always with economics. Vested interests have never been known to have willingly divested themselves unless there was sufficient force to compel them.”
-          B. R. Ambedkar (Indian, 1891-1956)
Word for the day
Cockalorum (n)
A self-important little man.
(Source: Dictionary.com)
Teaser for the day
If we go by the opinion polls – presently Congress is the only party in “no loss” situation.
Should Rahul Gandhi use this “advantage” or “let it go”?


Utopia: The economic solution

In my view, the sustainable solution for India’s economic problems could be found only by looking within. Borrowing from the thoughts of Mahatma Gandhi, economics needs to follow ethics and not the vice versa. The primary consideration needs to be “man” and not “money”.
To achieve this means Gandhi advocated trusteeship, decentralization of economic activities, labor intensive technology and priority to weaker sections. Many criticize Gandhian economic ideas based on altruism, self reliance, and non-violence as an impractical alternative to free market economics. I believe this criticism is unfair and suffers from parochialism.
I believe borrowing blindly from the western economic models would not work in Indian context. The Indian model will have to be quintessentially Indian. It has to effectively tackle the problems of class conflict, unemployment and poverty while attempting to preserve the lifestyle and values of rural Indians, which are eroding fast with unmindful urbanization, industrialisation and modernisation.
A self-reliant, free, just and progressive society is integral to the idea of Swaraj. Self-reliance in no way violates the need for technological advancement in the areas like healthcare, communication, etc. It just wants the scale to tilt in favor of ethics and ecology conservation if a conflict arises. Self-reliance also does infringe the idea of free market. It just promotes a non-violent and non-exploitive trade and commerce.
For those who find Gandhi completely irrelevant in the current context, it is pertinent to note that “the literature survey of Gandhian economic ideas gives similar conclusions. 258 thinkers, who have reviewed his economic ideas, have been taken into consideration. Among them, London group of Professionals and The Club of Rome are considered as individual thinkers. Even the opinion of 53 noble prize winners is also considered in this literature survey. 96% of these thinkers admire his economic thoughts. They consider his ideas practical, useful and relevant in the present world.
A growth model for economic development is shown on the basis of Gandhi economic thoughts. This model is applicable to developing economies and India. His ideas are helpful for backward and developing economies in the world. His ideas are also useful for solving problems in capitalist economies. This proves Gandhi as a unique and practical economist of the world”. (see here for more details)
In short, the economic model of India, in my opinion, should be based on the following three principles:
(a)   It should develop an environment of equality and mutual trust through decentralization.
(b)   It should focus on the strengths on Indian economy rather than overemphasizing the weaknesses.
(c)   It should focus on enable of population rather than merely providing for them.
…to continue next week
Readers can send their views, comments, criticism to the author at vijaygaba.investrekk@gmail.com
Earlier in this series:

Thursday, March 6, 2014

Utopia: The economic problem-III

Thought for the day
“The happiness of society is the end of government.”
-          John Adams (American, 1735-1826)
Word for the day
Hoodwink (v)
To deceive or trick.
(Source: Dictionary.com)
Teaser for the day
Should we do away with the “session” system of the Parliament?


Utopia: The economic problem-III

In my view, the root of the economic problems of India could be easily traced to the continuation of the exploitive colonial economic model post independence. We have consistently failed in exploiting our strengths and allowed outflow of precious resources both natural and human.
Even after 66years of independence from British rule, India continues to be mostly an exporter of raw material and cheap labor and importer of technology and end products. Though in recent past we have excelled in a few areas like automobile, pharma and space research, still most of our industry is built around arbitrage opportunities available in terms of natural resources and abundance of cheap labor.
Consequently, a strong structural base for the Indian economy is yet to evolve. We have not been particularly successful in the areas such as technological advancement, productivity gains, innovation and localization and mostly continue to be an economy largely dependent on labor & resource arbitrage and trading.
In my view, we have focused too much on our weaknesses and tried hard to overcome by importing technology, energy, intellectual property, capital and consumption patterns. As S. Gurumrthy recently highlighted in one of his writings, the primary cause of structural imbalance in trade account appears to be humongous capital goods import in past 10yrs rather than gold or oil import as widely believed.
In particular the following five “mistakes” have created many structural problems for Indian economy:
(a)   “Feudal ownership” of resources in the garb of “public ownership” has led to criminal waste, misuse and misappropriation of natural and financial resources.
(b)   Neglect of sustainability concerns in developing industry has led to concentration of economic power and therefore political power. Besides, the accelerated environmental degradation has caused serious damage to the ecology.
(c)   Lack of a holistic education and training policy has created serious demographic distortions. Serious gender inequalities have crept in the system due to largely male focused system (though things have changed in past couple of decade but still far from the desired level). On one hand we have a huge pool of unemployed youth, while on the other hand entire industry is facing shortage of skilled workers.
(d)   The colonial mindset has destroyed the traditional knowledge and skills. Lord McCauley still successfully rules the education system, making India a perennial importer of technology and other intellectual property.
(e)   A faulty approach to urbanization has created immense inequalities. The famous India and Bharat divide is now part of folklore in international studies. Instead of providing civic amenities to the quintessential Indian village that was center of traditional industry, the industrial policy has caused destruction of rural economies causing large scale migration.
Readers can send their views, comments, criticism to the author at vijaygaba.investrekk@gmail.com
Earlier in this series:

Wednesday, March 5, 2014

Utopia: The economic problem

Thought for the day
“The rich will do anything for the poor but get off their backs.”
-          Karl Marx (German, 1818-1883)
Word for the day
Caveat (n)
A warning or caution; admonition.
(Source: Dictionary.com)
 

Utopia: The economic problem

It was a beautiful afternoon. Spring had just handed the baton out to summer. Farmers fresh from celebrating their harvest were preparing the fields for sowing the next crop. Everything seemed perfect.
A young man was lying idle under a banyan tree when a wise man passed by. He wondered why such a young man is wasting precious time when everyone else is working in the fields.
He approached the young man and queried “why are you sitting idle?” The young man countered with an assuring grin on his face “what am I supposed to do?” “Do not waste time. Go, find yourself some productive work”, the wise man suggested. “Why should I do that?” the young man asked nonchalantly. Taken aback a little, the wise man continued “you could earn some money, buy means of comfort and luxury, feel comfortable, be happy, and rest peacefully”. “That is exactly what I was doing before you came here”, the young man answered exasperatedly and dozed off again.
The aforesaid is an old bedtime story. Various people derive different moral from it. My conclusion is that each individual or group of individuals have different social, psychological and physical needs and therefore respond differently to similar economic conditions.
For some money beyond a point becomes a passion. For some other, it completely ceases to be a motivator beyond the same point. Yet for some other it becomes a negative stimulus beyond the very same point.
From my various interactions during “Discover India” trip last summer, I found that most Indians, due to a variety of religious, social, cultural, historical, traditional, behavioral and/or economic reasons are akin to the young man in our story. Most of these are hard working, intelligent, and complacent. For many accumulating “excess” wealth is a sin. Passion for money is mostly an urban upper and upper middle class phenomenon.
When asked “why do you not expand your business?” most SME owners, traders and shop owners, responded “what will I do with more money?”
The roots of this detachment with money, in my view, could be traced to agrarian culture and traditions of India. All our religions proscribe accumulation of excess money as sin and strongly advocate sharing of wealth with society.
The agrarian mindset makes most of us work hard and pray to God for rains; wish only for a good crop so that they get enough food and seeds for next crop; consider growing good healthy crop as our pious duty, treat the land on which crop is grown, river and clouds that irrigates the land, and mountains and woods that make the conditions conducive for cultivation as sacred deities. Altruism, socialism, austerity, and concern for environment are at the core of Indian society.
Any economic model that violates this core of Indian society is bound to fail. The economic model adopted post independence era, which was mostly an extension of the exploitive colonial model used by British Empire, has promoted inequalities, injustice and unsustainability. And that is the economic problem we need to address….to continue tomorrow
Earlier in this series:

Tuesday, March 4, 2014

Utopia: The economic problem


Thought for the day

“All the people like us are we, and everyone else is They.”

-          Rudyard Kipling (English, 1865-1936)

Word for the day

Epitome (n)

A person or thing that is typical of or possesses to a high degree the features of a whole class.

(Source: Dictionary.com)

Teaser for the day

AAP party leaders always talk about “changing the system”.

Do they mean to change the same “system” that allows a rookie like Arvind Kejriwal to become chief minister of a state; and allows a common man to hurl explicit abuses at almost everyone not publically supporting AAP?

Utopia: The economic problem


Have you ever wondered:

·         Despite having a rich culinary tradition for centuries, millions of connoisseurs, and thousands of great eateries – why we could not create a McDonald, Dominos or Pizza Hut in India?

·         Despite having over 2000yrs of rich tradition of fashion, fabric manufacturing, dress designing and abundant raw material availability why no Indian textile or fashion brands figures prominently in global fashion and textile industry?

·         Coke quit India in 1977-78, leaving behind all manufacturing facilities, customers with taste for soda based drinks, distribution and marketing channel and sales infrastructure. For 14yrs Indian manufacturers had no competition whatsoever, till Pepsi and Coke re-entered India. Why did Campa cola, Parle and Duke not survive the competition from Pepsi and Coke even for a decade?

·         Despite being one of the oldest civilization, tradition of living and networking in communities, spending considerable time in chaupals and doing Adda till late night, availability of tremendous IT skills – no Indian thought of creating Facebook – an e-chaupal with over US$150bn in market cap.

·         Despite slavery of many centuries, why we still depend on those very foreigners for supply of equipment, arms and ammunition for our armed forces?

·         Why failing to win an Olympic gold medal is a subject of national shame; failing to get nomination in Oscars is subject of national disappointment, but not getting a single Nobel for mathematics, science or literature post independence does not evoke any regrets or discussion? Remember, we always proudly claim ourselves to be pioneers in the fields of mathematics, physics, astrophysics, metallurgical and medical sciences etc.

·         Why we derive pride from the success of emigrated Indians who have taken foreign citizenship?

·         Despite being the largest producer of milk, and huge surplus food grain stock, why India is bracketed with some poorest third world countries in terms of child malnutrition?

·         Why an average Indian male feels proud in being sexist when our religion, culture, and traditions propound supremacy of feminine power (The Mother Supreme)?

·         Why an average Indian feels proud in being racist when our religion, culture, and traditions preach universality of human (Vasudeva Kutumbakam)?

These are some of the inquisitions that help us in understanding the economic behavior of Indian population and also highlight the contours of our economic problem…to continue tomorrow
 
Earlier in this series:
 
 

Monday, March 3, 2014

Utopia: The political solution

Thought for the day
“The thing about democracy, beloveds, is that it is not neat, orderly, or quiet. It requires a certain relish for confusion.”
-          Molly Ivins (American, 1944-2007)
Word for the day
Sciamachy (n)
An act or instance of fighting a shadow or an imaginary enemy.
(Source: Dictionary.com)
Teaser for the day
Heard Sanjay Nirupam talk about secularism!

Utopia: The political solution

“It is Swaraj when we learn to rule ourselves. It is, therefore, in the palm of our hands. But such Swaraj has to be experienced, by each one for himself. One drowning man will never save another.”
“I believe that you want the millions of India to be happy, not that you want the reins of government in your hands. If that be so, we have to consider only one thing: how can the millions obtain self-rule?”
[M. K. Gandhi, Hind Swaraj]
I have been highlighting since ever that one of the best things India has got in past 150years is Mahatma Gandhi. And the most unfortunate thing to occur since independence from British rule in 1947 is brazen desertion of Mahatma Gandhi by Indian politicians. To my mind hanging his pictures in government offices or currency notes and naming roads after him is even more contemptuous given the complete ignominy for his principles and ideas.
If that not be so, how the political class could have so insolently ignored the model of Swaraj conceived and proposed by him. The Gandhian idea of Swaraj could have been proposed only by a person like him who had experienced India so intimately.
It may be pertinent to recall here that in my view Arvind Kejriwal’s idea of Swaraj is at best a perversion of Gandhian concept of Swaraj and deserves to be rejected with due contempt.
M. P. Mathai explains the Gandhian idea of Swaraj very succinctly as follows:
“Although the word swaraj means self-rule, Gandhi gave it the content of an integral revolution that encompasses all spheres of life. “At the individual level swaraj is vitally connected with the capacity for dispassionate self-assessment, ceaseless self-purification and growing swadeshi or self-reliance". Politically swaraj is self-government and not good government (for Gandhi, good government is no substitute for self-government) and it means continuous effort to be independent of government control, whether it is foreign government or whether it is national. In the other words, it is sovereignty of the people based on pure moral authority. Economically, poorna swaraj means full economic freedom for the toiling millions. For Gandhi, swaraj of the people meant the sum total of the swaraj (self-rule) of individuals and so he clarified that for him swaraj meant freedom for the meanest of his countrymen. And in its fullest sense, swaraj is much more than freedom from all restraints, it is self-rule, self-restraint and could be equated with moksha or salvation."
In one of his letters to Leo Tolstoy Gandhi explained Swaraj as follows:
“Independence begins at the bottom. A society must be built in which every village has to be self sustained and capable of managing its own affairs. It will be trained and prepared to perish in the attempt to defend itself against any onslaught from without. This does not exclude dependence on and willing help from neighbours or from the world. It will be a free and voluntary play of mutual forces. In this structure composed of innumerable villages, there will be ever widening, never ascending circles.
Growth will not be a pyramid with the apex sustained by the bottom. But it will be an oceanic circle whose center will be the individual. Therefore the outermost circumference will not wield power to crush the inner circle but will give strength to all within and derive its own strength from it.” (as cited in Wikipedia)
Thus, the individual is the sole basis of Swaraj. Swaraj is unfathomable without dispassionate self-assessment, ceaseless self-purification and growing self-reliance at individual level; and sovereignty of moral authority, as against the political authority.
Swaraj encompasses fiercely competitive free market, moral duty to be free, fearless, truthful, fair, just, self reliant, nationalist, and religious.
This Swaraj, many argue is Utopian in current context. Some argue that it is desirable but we have traveled too far down the road we took post independence from British rule; and it is too late to go back and begin again.
In my view, this defeatist and fatigued attitude is unwarranted. What we need is a zero base discussion on the subject and solutions will emerge that would lead us to the desired goal of making 1.3bn people free, fearless and happy. An incremental approach howsoever sincere might not yield the desired results.
With this in mind I dream of a free, fearless and fair socio-political organization for the country.
During my “Discover India” trip last summer, I found strong 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”.
This “communalism” is arguably a key strength of Indian society. Therefore, in my view, the social ecology model suggested by author and activist Murray Bookchin which advocates a “stateless, classless, decentralized society consisting of a network of directly democratic citizens' assemblies in individual communities/cities organized in a confederal fashion” appears relevant in our context.
Unfortunately, our politicians and social activists have dissipated the term “communalism” to mean intolerance and hatred towards other religions, especially amongst Hindus and Muslims. This debauchery has introduced many distortions in our socio-political order. In my view this needs to be corrected as pre-condition before we begin working on any course correction.
Religious fundamentalism (which is usually referred to as “communalism” in Indian context), is mostly a political problem in India. A secular political system, as envisaged by Mahatma Gandhi and incorporated in the soul of our Constitution, would automatically weaken these miniscule elements leading to their eventual extinction.
My Utopian state is thus based on our ability to build and nurture strong communities and live in harmony with the nature.
The key features of my Utopian political organization are as follows:
Local council
(a)   The primary unit of the country should be a democratic assembly of people in a town or village (Town or village council).
(b)   Each such town or village should directly elect a suitable number of representatives on a periodic basis. The winning candidate must score at least 51% of the eligible votes (not just the casted votes).
(c)   Every adult citizen of that town/village should have equal opportunity to get elected for a term of three years.
(d)   The local council shall be a permanent body with 1/3rd members retiring by rotation each year. No person shall be elected for more than 2 terms.
(e)   The performance of each local council member should be evaluated on annual basis by an independent agency. A member failing to score the passing grade should be barred from politics for a period of 6yrs.
(f)     The chairman of the local council should be elected with minimum 51% members supporting him/her.
District council
(g)   Town and villages with largely homogeneous characteristics could be grouped in various districts. Each district should have a governing council.
(h)   Local councils falling within the districts should nominate from their best members who have served 2 complete terms to the district council.
(i)      The number of members to be nominated by each local council should be in proportion to the population, area and social indicators.
(j)      The district council should have a fixed term of 6years, with 1/3rd members retiring by rotation every 2years.
(k)    No member should be nominated to district council more than once.
(l)      The performance of each district council member should be evaluated on annual basis by an independent agency. A member failing to score the passing grade should be barred from politics for a minimum period of 10yrs.
(m) The chairman of the District council should be elected with minimum 51% members supporting him/her.
National council
(n)   Each district council should nominate members to the national council, in proportion to population, area and social indicators.
(o)   Districts council should nominate from their best performing members who have served their complete term on the district council.
(p)   The chairman of the National council should be elected with minimum 51% members supporting him/her.
Tomorrow I shall present my Utopian economic model to go with this political model.
Earlier in this series: