Sunday, 24 June 2012

Down with corruption; Oh really ?

End corruption; a favourite slogan in India, especially in the recent past. Really ?? Beware , what you wish for.  If that really happened, it would profoundly alter life in India, as we know it. Are we actually ready for it ?

  • If we don't pay the bribe to get our driving license, we really have to learn driving to get one.  It is an absolute certainty that if the driving test were to be strictly administered, 90% of Indian drivers will fail
  • We have to really declare the right price of your house when registering the property. Is anybody ready for that ?
  • We probably have to vacate the house you live in - chances are that few of them meet statutory safety requirements. Fire safety - what's that ?
  • If we are "rich" we can't slip those crisp ones to witness/cop/judge and stay out of jail , every time we get up to mischief
  • If we are "poor" we can't accept the Rs 500 and one bottle of liquor at election time
  • We are  most likely evading tax. Even the salaried lot, who think that  taxes are deducted at source - are we really declaring the interest income on our savings bank account in our tax return ? That is , if we file a tax return.
  • We have to spoil our hairdo by wearing the helmet while riding the two wheeler. Slipping twenty bucks to the traffic "mama" won't do 
  • I know the concept of municipal/metro water is a joke, but the tankers of water our building society is buying is probably mostly illegal and much of the price that we pay actually is to grease some palms. 
  • Slum life is real tough and unfair, but we still cannot throw a piece of wire to the line and tap electricity. You see the Rs 150 being slipped each month to the linesman can't go on.
I can go on and on. Corruption, in India, is a story where its considered "smart" if you do it, but its a scam if anybody else does it.

So, do we REALLY want to  abolish corruption ??

Thursday, 21 June 2012

The Art of Giving

Life is not fair. That's an obvious lesson life itself teaches you, although  interpretations of "fairness" tends to vary widely across the spectrum. 

For some, life tends to deal a particularly bad hand. In a poor country like India, you see them all the time, although most of us have developed the ability to "not see" in order to preserve our sanity and not be overwhelmed. But we can't escape the reality of the misery around us. This post is a plea to lend a helping hand to one such group of the unfortunate - the aged.

We talk a lot about Corporate Social Responsibility and the philanthropy demands on the rich.  But we rarely talk about Personal Social Responsibility and the philanthropy demands on the common man. This post is also meant to ask the reader to reflect on what each individual can do, however small.

In developing countries like India and China, the lot of the aged is particularly tough. There is no social security net - the net is the family. The family system was designed for the times when people did not live long. Families could cope with taking care of the aged for a while. Now while lifespans extend and families become smaller, this social system is straining at the seams. It is a particularly big problem in China because of the one child policy - four aged adults are dependent on one couple. In both these countries, it is all too common to see the aged on the street, begging. They have nowhere to go and in the sunset of their lives, when they ought to have some peace, they find none.

So the next time you see an aged person on the pavement, please don't turn away. Give him a dollar, or five rupees or one yuan. Whatever be your views on begging, please suspend them for an old lady who is on the streets. She is not begging there because that is an easy way out. She is there because she has no choice.

Doing good need not take on the contours of a gigantic project. Those who do it that way are indeed saints. But not all of us can do that. That's fine. It is equally noble just to reach out and give a little to a needy soul every day. The logical and rational questions as to whether that is the best way to help are academic. For that hungry lady in the blazing sun, its a manna from heaven. Lets leave it at that.

Perhaps this touches a chord in all of us. That's why the pictures and story of Jason, a young American outside a McDonalds in China chatting and sharing a burger and fries with a granny begging on the streets has gone viral and created such a storm.

We are privileged. God willing, we will never be on the streets. But we will join the ranks of the aged for sure, as Father Time is of course relentless. So here's a plea to help wipe a tear from our fellow brethren. Keep loose change in your pocket. And everytime you see an old person on the street, give her a coin. Its not a big deal for us. Its a huge deal for that unfortunate soul.

Pardon this blogger for a sanctimonious post. For you see, pontificating and pestering are attributes of the aged.

Sunday, 10 June 2012

Big is Bad

This blogger doesn't mind telling a story against himself. A couple of decades ago, he made his first trip to the US of A. Two experiences stand out in the trip. The first was his  seatmate on the flight. The gentleman was, to put it mildly, a mountain of lard. Having encountered many Rajalakshmis - she of the ample proportions -  this blogger thought he had seen it all. But "he ain't seen nothing yet". The specimen he was now witnessing would put all Rajalakshmis combined into the svelte and petite category . The worthy had boarded the flight first as "a passenger requiring assistance" and occupied the two seater we were to share. When I boarded, I discovered that both the seats had been "taken" (this was before the era which now requires man mountains to buy two tickets). I managed the two hour flight by standing next to the seat !

The second stand out experience was when I ordered a cup of tea at some cafe. Small size please. I got a plastic monstrosity which held some 2 litres of boiling water. And one sad looking tea bag . I have never ever asked for hot tea  in the US ever since. This is, after all the country where the smallest size in Starbucks is called Tall

This was 20 years ago. The connection between the two has only now been grasped in the US. Or at least in New York. Mayor Bloomberg now wants to ban soda fountains serving portions bigger than 16 oz (half a litre) in his crusade against obesity.


This blog has carried consecutive posts on economics and politics. That is rather heavy. Readers are now invited to wash that down with this rather "easy" post.

New Yorkers are up in arms protesting against the encroachment of the fundamental right to consume 3.4 litres of Coke in one go. I have some fundamental questions regarding how anatomically possible this propensity of New Yorkers is. I am fairly convinced that human body systems for dealing with liquids, do not have a combined capacity of  3.4 litres. Therefore if there is ingress of the stated quantity, there must also be a steady egress ! And what happens to the enormous quantity of CO2 inherent in the soda. Is this the reason for the generation of the vast quantities of hot air that The Tea Party and Michael Moore followers do each day. Or is it that all that gas adds a certain amount of buoyancy to people who are gravitationally challenged enabling them to transition from the horizontal to the vertical ?

Bloomberg is arguing that he is not banning New Yorkers from drinking 3.4 litres of Coke in one go. He is only banning them from drinking that from one glass. They can buy 7 glasses of 16 ozs each and slurp to their heart's content. Apparently his theory is that they cannot carry seven glasses at one time; so they will consume less !!

I am applying to the good Mayor for a clarification. Are the 14 kgs of ice cubes that are shovelled into each drink to be counted in his 16 oz limit or not ??  For , you see, no self respecting New Yorker will drink a soda, unless the entire Arctic ice cap is in his glass.

I am also unclear how the good state of Texas views all this. You see, all Texans believe that New Yorkers are wimps because they serve such tiny portions of food and drink. You want to see a Big Mac, come to Texas, where about two cows have to lay down their lives in the cause of doing justice to one burger. The Texan concession to the war on obesity is that he has reluctantly agreed to settle in for an order of "1 Big Mac and a Diet Coke please" !

Saturday, 9 June 2012

A political addenda to the economic blueprint

Politicians will do anything to win elections; even good things ! You can't blame them , for after all that is the objective in politics. As I observed in the previous post, an economic blueprint is of no use unless a political way can be shown as well. So the task is to show that an economic plan will win an election. Or at least not lose one.

I believe the time is ripe for that in India. The Congress government is almost certain to lose in the next general elections due in 2014. They have no plan to win it. No amount of cash doled out to the voter is going to help them win. Therefore they have nothing to lose. Ideal conditions to try something drastic.

Make a fresh beginning. Manmohan Singh should retire and a grateful nation should say thanks for a lifetime of public service. Pranab Mukherjee can be kicked upstairs. Chidambaram, Anthony , Pawar etc are to exit with a 21st century Kamaraj Plan. For the lack of any other leader, Rahul Gandhi should take over as Prime Minister. He should form a new cabinet - 50% from the political class and 50% from technocrats and experts who are complete strangers to politics (imagine Sreedharan as Railway Minister). Form a government of national unity, giving a couple of Ministerships to the BJP and the Left as well - this may not happen, but no harm trying. This government has a two year mandate to do things .

Bribe the states to fall in line. No state is opposing any of the measures on grounds of ideology or conviction - every opposition is simply politics. The best way to overcome them is to bribe the states. Every state that wholeheartedly supports the entire agenda of the government will get say Rs 2000 crores as a dole. Fund this by running a one time deficit. States that still do not want to toe the line are welcome to stand alone, but the rest of the nation will go ahead.  If and when they join, they won't get the Rs 2000 crores.

Form a "conclave of experts". From all walks of life - social workers, businessmen, government officials, environmentalists, politicians, etc etc. Say about 50-100 eminent Indians. Appointed; not elected. The government should "sell" the plan to them. Debate and incorporate the sensible changes they recommend. Make them inclusive in the plan. Appeal to their nationalism that single point agendas (like say an environmentalist opposing any dam whatsoever and not  taking any responsibility for economic development) cannot work. There are no easy solutions. Some tradeoffs must be made. The governing principle is 75% agreement (since all cannot agree), but 100% commitment once the plan is finalised. The plan then goes through Parliament for adoption.

For two years banish any strike or agitation against any aspect of the plan. The conclave of experts have to commit that they will not agitate outside the conclave (that's what 100% commitment means). Opposition or ruling coalition parties who wish to strike are welcome to do so; the government simply ignores them and goes on ahead, daring anybody to bring down such a young, new, active government. It is unlikely that Mamata Banerjee or Mayawati or any of the usual trouble makers will increase their seats in a new election; so what's the joy in bringing down the government. The one likely gainer can be Jayalalithaa who will probably have to be "bought" by more dole to the Tamil Nadu government.

The government fully backs the bureaucracy and the judiciary to take quick decisions and implement like crazy( a bit of Sarkozy style hyperactivity would help). No bureaucrat would be punished for taking risks or taking a wrong decision - he would only be in trouble if he was corrupt. Sack the current grandstanding Comptroller and Auditor General who sees a scam in going to the loo and replace him with an eminent person from industry. Equally judiciary is "bribed" with doles to take a fast track for economic issues. The principle would be that its OK to get it 20% wrong , but quick, rather than hoping for the mythical 100% right and getting nothing done. Create a frenzy of activity - it tends to be self fulfilling and gathers a momentum of its own.

What about corruption ? It will never go away anywhere in the world. In India, contrary to public opinion, personal enrichment is a small part of corruption. Much of corruption is to create the war chest to fight elections. And the bulk of the spend is not in campaigning like in the Western world. Most of the spend is doling out cash and liquor to voters. But that has never won anybody an election. Everybody does this; so you can only lose by not doing this, but will never win only because of this. This can be lessened by moving towards proportional representation, instead of the first part the post system. Something to do immediately after winning the next election. This is an idea I wholly borrowed from Dr  Jayaprakash Narayan, an extremely impressive politician from Andhra Pradesh, where he is a MLA. For those interested, you can watch to him eloquently arguing the case here - incidentally it will also be an eye opener that such politicians also exist.

Meanwhile the current government just says no to building a war chest for elections. The Congress breaks ranks and refuses to bribe the voter with cash and liquor (remember it cannot win by doing this). Instead it tries to stand on the planks of freshness, action and two years of solid work.
Will this win Rahul Gandhi the next election. Maybe, maybe not. But he's not going to win it currently and he has nothing to lose. And maybe, just maybe, it might win him the election . The Indian voter is not an idiot. In the absence of any other compelling reason, he votes on caste lines, or whoever bribed him or sheer anger at the incumbent or fractures his vote. But give him a compelling reason and he votes in a wave irrespective of any other considerations. Remember 1977 after the emergency. Remember 1984 and the Rajiv Gandhi wave. Even the last elections in West Bengal is an evidence of the wave.

A fresh competent government may create a wave. Somebody trying this may lose, but will still go in a blaze of glory. Really worth a try.

Friday, 8 June 2012

An economic blueprint for India

It isn't enough to just criticise. A critic must also state what is the alternative.There have been lots of criticism of India's economic performance in recent times and the government's seeming inability to do anything right, economically. The blogger has been one such critic too. But precious few have really laid down a comprehensive argument of what needs to be done , and equally how this can be done; for we cannot, and should not,  wish away political realities.

Government action should be for sustained long term economic development - not short term fixes. Improving "sentiments" , like trying to bolster the stock market, is a waste of time and should not be anywhere in government's priorities. Issues like FDI in retail, fiddling with tax laws, which are getting a disproportionate amount of airtime, are all side shows - they won't make or break India.

This blogger is no expert on anything. He is just a concerned citizen. So here's one citizen's blueprint of what can be done and how it can be done. This blog is not a research paper, so there are a few ideas but no space to present data and research to back this

Stimulate agricultural growth:  Right through the last two decades, agricultural growth has lagged way behind GDP growth. This is unsustainable in a country where the majority depends on agriculture and therefore do not see the country's growth as inclusive. Some thoughts
  • Significant investment in agricultural research and wholehearted acceptance of genetically modified crops . In doing so, insist on clear labelling of genetically modified crops and let the consumer choose - take on the environmental lobby and stand firm.
  • Large investment in the power and water sectors of infrastructure referred to in manufacturing is also important for agriculture. Remove the freebies like free power (what use is free power when rural India has 14 hour power cuts).
  • Revamp the APMC rules that distort trade and let the agricultural sector freely export - there is a massive opportunity to feed China.
  • `Drive cooperatisation of agriculture ( a al Amul model) and even allow corporotisation without allowing any of these entities to acquire land.

Arrest the fall in manufacturing :   India's growth story is stalling primarily due to the decline in manufacturing. In Jan-Mar 2012, Manufacturing actually declined by 0.2 %. Manufacturing growth is the only route to creating jobs for the large population of India. Here's what can be done to drive the manufacturing sector
  • Setting a land acquisition policy that is sensible (the current one is not). This is an incredibly difficult thing to do; no country, including China, has managed this and there is unfortunately  no easy way. The current attempt in India is a step backwards. We must learn from states like Gujarat which have managed this well.
  • Decide on mega projects that require high level government approval quickly. Today every large project is in complete paralysis as the government is terrified of doing anything for getting dragged into controversy and accusations of scams. You can't be accused of a scam if you do nothing !
  • Significantly step up investment in infrastructure. The government has actually done a great job in two sectors - roads and telecom (although the misguided courts are trying their best to reverse the gains in telecom). It has performed abysmally in Railways, Power, Water and Urban Development. These are the four sectors for concentration
  • Implement the Goods & Services Tax, Direct Taxes Code and the new Companies Bill.
  • Do nothing else and let both private and public sectors drive the growth 

Fiscal Responsibility : Both central and state governments have to adopt fiscal responsibility. Do the following
  •  Statutorily fix a ceiling (low) on deficits as a % of GDP . Neither the Centre nor the states can breach this under any circumstance.
  • Phase out subsidies slowly - it is impossible to phase them out in one shot, but over 5-10 years they can be phased out. In order of priority, they should be petroleum , fertilizer and then finally food. Some component of food subsidy can never be phased out and should always remain as an anti poverty safety net.
  • Reduce significantly doles such as the Rural Employment Guarantee Scheme
  • Increase tax revenue by broadbasing tax - remove the exemption for capital gains and agricultural income and go after taxing property transactions
Fight Inflation : Fighting inflation must assume almost religious proportions (a la Germany).
  • Make RBI truly an independent Central Bank and task it with monetary policy. The government must abdicate its right to tinker with monetary policy. In the current environment, RBI is completely right to keep interest rates high
  • Fiscal responsibility referred to above, will automatically reduce inflation
  • Fight inflation supply side; boosting GDP growth is a good way to fight inflation.
Inclusive Growth : Mere GDP growth, without benefiting most (all is impossible) is not sustainable in any society. Growth must touch a large proportion of the population.
  • That is why, agricultural growth is at the top of my list
  • Invest massively in education. Inequity must be tackled at the level of opportunity. It is NOT an objective to achieve equity of outcome.
  • We should establish a social security net. No Indian shall starve and nobody will go naked. No child will be unable to go to school. Everybody will get basic medical care (note the word basic). Anything more than this is an agenda item after 10 years.
That's it. Do nothing else. Results come from doing a few things very well rather than lots of things poorly. 

None of this is new, and I am not vain enough to believe that this is an earth shattering blueprint. Wiser minds exist in government who know all this and more. The problem is the political will for implementation. Politics and economics cannot be divorced. So how do we make all these things happen politically ?? That's for tomorrow's post.

Sunday, 3 June 2012

A sporting classic from the past

The telly in this blogger's household leads a cushy life. It is in a state of perpetual rest. It is only occasionally called to perform and then immediately sent back to the state of rest with an apology for disturbing the slumber. All that changed a week or so ago.

You see, ESPN has bagged the rights to telecast the London Olympics which begin in a couple of months. As a lead up to this event, ESPN has been airing some memorable documentaries of past Olympics. If ESPN marketed those videos they are airing, I will stand in line for 72 hours in Chicago in freezing winter to buy them ! There are some absolutely riveting stories there. This post is about one such memorable sporting event.


Atlanta 1996. The rather unglamorous sport of weightlifting. What happened that Monday will go down in sporting legend as one of the great days of sport. It was the 64 kg category - not the man mountain variety. Naim Süleymanoğlu from Turkey was already a legend. Nicknamed the Pocket Hercules for his short stature, he was, pound for pound, the greatest weightlifter of all time. He was an absolute hero in his country. He was already a double gold medalist - from Seoul and Barcelona, but was now coming out of retirement to compete in Atlanta. His main competitor was the world record holder Valerios Leonidis of Greece. Adding spice to the contest was the fact the Greece and Turkey share a relationship somewhat akin to India & Pakistan.

The atmosphere in the hall was electric. On the left were legions of red Turkish supporters. On the right were the blue Greeks. Flags were waving everywhere. The noise was deafening. The event has two types of lifts - snatch and clean & jerk. Each lifter has three lifts in each category and the sum total decides the gold medal. When the snatch was over Naim had a 2.5 kg lead over Valerios. The drama reached a crescendo in clean & jerk. Naim went for a world record at 185 kg with his second lift and succeeded. Valerios asked for 187.5 kg for his second lift and succeeded, beating the world record  Naim had just set. Remember these guys were 64kg in body weight  - they were lifting three times their body weight. For his final lift Naim went for 187.5 kg and succeeded, equaling the world record just set, but would win the gold medal  since he was carrying a lead from the snatch. For the final lift of the competition, Valerios asked for an unbelievable 190 kg (10 kgs more than he had ever lifted before). He lifted it to his shoulders but couldn't complete the lift. The Pocket Hercules had won his third gold medal.   The men embraced. The public-address in a rare departure from the cript, actually said, "Ladies and gentlemen, that concludes today's competition, and you have probably witnessed one of the greatest weightlifting contests in the history of the world."

Later on as they lined up for the medals ceremony, Leonidis sportingly patted Süleymanoğlu and said "Naim, you are the best". To which Naim was reported to have replied , "No Valerios, WE are the best"

You can catch a little of the drama here. Of such stuff are sporting legends made.

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