Thursday, August 30, 2012

The RBI's unsavoury policy dictates!

The RBI has been the master of all weathers and seasons concerning India’s financial sector. It holds the pulse of the national economy with tempestuous effects. But even with all its prominence, the RBI has seldom crossed the contoured spirits which obfuscate the existing macroeconomic scenario. The scrimmages from its side are causing for the fixture of topsy-turvy status in the policy domain, finally making the broad-brush more frequent than the desirable spunky actions. Until two years back, world was witnessing the central bankers sullen acts; India was indeed a sort of exception so far. But things have entered in torsion once the India’s impregnable finance ministry and the RBI got struck in the endless war stimulated by the ‘egoists’.

It’s clear that, the finance ministry is the most important place in India after the Prime Minister’s Office --this sounds awkward but becomes evident when seen against the recent reshuffling in ministries, when the serving home minister was called to hold the command of economy. This marks the moral bankruptcy, as the new finance minister will be hardly reckoning the plight of the economy which originated through the clash of interest between real and rave components -- moreover, he lacks the critical tributes like acceptance and expertise for handling a diverse economy like India’s.

This mischance will boost many inside the RBI, who earlier relied on static and soft monetary policies that at least in last one-and-half-years have cut India from both of its central economic ideologies based on ‘half-willing socialism’ and ‘half-sighted dreams of reform’. Among the list of blunders, the RBI’s extraneous policy regarding the licensing of new banks under the private sector refers the unique misunderstanding of the whole issue. It’s obvious that, the RBI is not keen on banking licenses for corporates, not to work with any neo-egalitarian model of banking based on ‘maximum happiness’ of clients of different types and figures but for securing the power to superseded the boards of existing banks and leaving the case of banking expansion in its backyard.

The insistence of the central bank on amendments to the Banking Regulation Act by the Parliament as a prerequisite for any potential flex on banking licensing is flawed and objectionable. It may be true that none of India’s NBFCs are fit enough for the award of baking business, though the many interested public sector entities could be taken for a ride under the joint venture in private partnership. Also, there would have been nothing wrong by downing the obstination on allowing corporate world at large to enter the fray of banking based on competency, not by the channel of cronyism.

By the impression of numbers, India’s corporate sector is performing but by the spirits, in no manner it’s worth of calling ‘robust’. By an example, almost all heads of India’s private sector banks have downplayed the chances for few more private banks, citing the already high competition and its aftereffects on their businesses. These were all untoward statements with no technical precision or understanding of a height of possible stagnation with which India’s banks will be reckoning sooner than the later. Banking should be means for the profit but not for the oligopoly; unfortunately, the reverse is the case in India today -- not surprising in present scenario, if the SBI has lost its tag of being the most valued bank in market terms from one of its shrewd peers.

Notwithstanding its actual role, the RBI is maintaining silence over the future growth of India’s financial sector, which has been safe more for its undersized ambition than the claimed ‘prudence’. This is totally ironic watching the curtain down on the future of India’s more than 55 percent unbanked citizens and overall the growth of financial sector at large. The path India’s banking has travelled so far hardly allows one to part the views between progressivism and ultra-materialism, here the things have to be seen in the right context. Public sector banking was more a hedging intervention, so it would be unfair considering the nationalisation of banks as the complete socialistic manifestation. PSBs/RRBs played their role immensely well and would do more good under the perfect competition around the every nook and corner.

Not even remotely, the arrival of few more banks would harm their business; contrarily it would help the sagging market sentiments to get an upward touch. Instead fearing and sharing those misleading apprehensions, the RBI should create a true healthy work culture in PSBs/RRBs, which are remarkable by their business and reach.

RRBs especially deserves much better deal in terms of human resource policies. It’s shocking to see the RBI/finance ministry’s dualism in taking them as at par with the PSBs, where the service benefits like pension is now the part of system. This discrimination should be ended by introducing the service provisions including of pensions for the RRBs employees on the line of PSBs With more than 17,000 branches across the India’s rural heartlands and the small towns, RRBs can be seen as the engine of rural growth in India -- so they need an immediate broad unification at the national level with an effective professional board, which can lead the rural banking for more inclusive businesses.

India’s jobless growth or the slow industrial momentums are the outcome of chronic passivism from the RBI for the mass issues. It’s not more than an excuse in passing the fault on global financial uncertainty by the India’s policy regime for the present mess-up at domestic front. The last two decades of India’s growth story was based on the domestic consumption strength, rather than on any other fancied factors. This should be the time of reckoning by India’s central bank, moving clearly and with a goal must be the basic catch which it has been missing for long under its mix of placid shows off and painful affects. Until India’s central bankers will rise from their very long slumbering, any hope to see the financial sector on bloom would be near about the day dreaming in a rainfed season like the present!
Atul Kumar Thakur
(Published in Governance now on August27th 2012/ )

Bihar's Industrial Renaissance

Once synonymous with the "land of opportunities", the outbreak of political corruption in the early 1990's saw Bihar fall from grace. Long periods of misrule based on casteist politics in the guise of social justice thwarted progress and development in the state. Post liberalisation, while other states were riding the high tide of growth, Bihar was wading through (political) inaction which defied growth aspirations that tolled and shambled its impressions outside. Between 1990 and 2004, Bihar suffered hardships more acutely than those revealed by any official statistics.

Due to strong political governance, Bihar had been one of the performing Indian states prior to 1990; it lost that edge in the next fifteen years. The process of recuperation began with the arrival of a thinking leader, Nitish Kumar, in 2005. He took charge of a state in ruins and made it thoroughly functional and even competent by boosting basic services such as infrastructure, law and order. This has had a radical impact and helped metamorphose the state's work culture positively.

Post independence, India's planned economy was single-mindedly shaped on an industrial policy targeted towards developing heavy industries near raw material supply centres along with creating an effective infrastructure network for mobilising the resources among different aimed destinations. An undivided Bihar, with its rich mineral base and close proximity to Kolkata for transport access, became an exciting hunting ground for large scale investments. The operations of Tata Iron and Steel Company (Tisco) in Jamshedpur and public sector units like SAIL in Bokaro testify to the positive prospects Bihar was offering. Despite the flaws of policies regarding traditional communities, new industrial cities such as Ranchi, Bokaro, Jamshedpur, Dhanbad and others came up under the changed policy atmosphere.

The pattern of industrial policy manoeuvrings in the initial five years plans significantly influenced the shaping of growth prospects in Bihar for the long run. Their impact was felt in three different ways. Firstly, the resource rich southern parts of Bihar, especially the regions of Chhota Nagpur emerged as the hub of industries. Secondly, over emphasis on heavy industries in South Bihar undermined any chances of developing agro-based industries in the naturally conducive Gangetic plane of northern region of the state. Consequently, the industries of southern Bihar failed to establish any significant interface with the minor industries located in North Bihar. In the absence of such strong linkages between south and North Bihar, the bifurcation of the state in the year 2000 (the creation of Jharkhand) came as a severe blow to the newly formed Bihar.

Moreover, the bifurcation resulted in some structural changes in the overall industrial pattern of Bihar. All big mineral based industrial houses were located in the new state of Jharkhand and very few large scale industries are left in post bifurcated Bihar. Thus,there have been no mineral based industries in the state and the industrial enterprises were bound to be restricted in lightweight segments such as agro-based, food processing, textiles, leather, wood and paper industries.

Despite this, macroeconomic overview on the economy of Bihar marked a significant increase in Gross State Domestic Product(GSDP) since the beginning of the last decade and during the second half of the decade. As per the Central Statistical Organization (CSO), the average annual growth of GSDP in Bihar has been robust at 8.5 per cent during the period 1999-00 to 2009-10 and more importantly in the second half of the decade. During the period from 2005-06 to 2009-10, the state income of Bihar grew at an impressive average annual growth of 10.9 per cent.

As a result, the economy of Bihar has undergone major structural changes during the last decade with the changes in composition of its GSDP between 2000-01 and 2009-10. The share of agriculture has declined from 38.8 per cent in 2000-01 to 20.8 per cent in 2009-10. On the other hand, the share of secondary sector increased from 10.7 per cent to 19.9 per cent and share of the service sector increased from 50.5 per cent to 59.4 per cent during the same time period. But the Per Capita Income (PCI), measured by the per capita net state domestic product at current prices, of Bihar remained abysmally low at Rs 13,663 compared to all India average of Rs 37,490 in 2008-09.

The fiscal front of the Bihar shows that the gross fiscal deficit ratio to GSDP is at 2.7 per cent in 2010-11 which is within the desirable Fiscal Responsibility and Budget Management (FRBM) target level. The revenue receipt/GSDP ratio is also at a comfortable level in Bihar at 28.1 per cent for 2010-11 and the state enjoys a revenue surplus as per the budget estimate of 2010-11. Bihar is among the top states when it comes to central transfer (CT). The 2010-11 budget shows a CT- GSDO ratio at 21 per cent. Even Bihar's expenditure pattern is very impressive as the state spends mostly under the heads of developmental expenditure, social service expenditure and capital outlay. Therefore, Bihar gives strongest fundamentals, which are considered essential for sizable investments; undoubtedly it has an undeniable edge on this in eastern side.

Micro, small and medium enterprises (MSMEs) have been playing major role in the economy of Bihar. 2000 onwards this trend has grown stronger. As on 2010-11, the state has about 183729 registered MSME units with a total investment of Rs 1,275 crores, which creates employment to about 6 lakh people. According to the fourth all India survey of micro, small and medium enterprises conducted in 2006-07 by Ministry of MSME, a total number of 71,435 enterprises were surveyed in Bihar. Out of these surveyed enterprises, 52,188 MSME units are operational. These operational units constitute more than 73 per cent of total number of enterprises surveyed in Bihar during 2006-07. The future growth of industry in Bihar will be continuing heavily propelled by MSMEs.

A FICCI- KAF (Konrad Adeneur Foundation) report has made wide-ranging recommendations for improving industrial growth in the state. The suggestions, based on industry's feedback on land allocation, power, labour, taxation, transport infrastructure, marketing, credit availability, technology upgradation and agri-led industrial development, were based on macroeconomic assessments.CII too has made recommendations for Bihar's industrial growth; interestingly a wide ranging policy convergence could be seen with the pragmatism of state government.

More than the availability of resources, Bihar's industrial saturation or deterioration was caused by the inaction of policy makers. With the upgradation of machinery and absence of subversive politics in Bihar the focus on growth is evident from the signing of more than 176 Memorandum of Understanding (MoU) for major business deals. Nevertheless, rate of execution is still short of a satisfactory primarily because of the Centre's apathy to provide coal linkage for the critical needs of thermal power in the state. Despite north Bihar being a rich resource of water, hydroelectricity capacity of the state remains abysmal.

There is huge potential in the flood affected districts of Madhubani, Saharsa, Supaul, Sitamarhi,Purnea, Araria, Kishanganj, Katihar to be used as the cluster of hydroelectric generation through effective water management for commercial uses. This can help make Darbhanga a major industrial city in the north Bihar; with historical preeminence and excellent geographical location, this place deserves to retrieve its lost glory. A new vision with comprehensive action plans is needed to include Bihar's northern regions (Mithilanchal) in the proper growth framework. This will not only help in boosting entrepreneurship in these regions alone but across the state. Also a renewed negotiation with Nepal is need of this hour; Patna must be allowed to play bigger role in the future bilateral dialogues of India and Nepal.

Today Bihar presents the ideal high ground for attracting investments and business activities from both within and outside. Among the eastern states, Bihar has a clear lead for placing its claim for a new potential based on its immaculate governance and a regime of clean politics. Hitherto, it was never so persistently resonant and especially after one and a half decades of intense gloom, the new found optimism in Bihar is a 'pleasant end to a tragedy'. Under the sea of changes, the concentration of debate has shifted from 'parochialism to progressivism'. This gives big hope to industry becasue unlike Gujrat, in Bihar, both the politics and enterprise are rational and sustainable, so there is no longer any reason of industry's inhibitions to operationalise its activities in the state. The culture of coalition politics mars the unbiased functioning of the state, this is quite clear with the Centre's consistent apathy to assist the Bihar through special aides in last seven years. However, Bihar's growth agenda will not be compressed too much and the present sense of optimism should be maintained.
Atul Kumar Thakur
(Published in Businessworld on August 13th2012/ )

Teething troubles of a linchpin and beyond!

Book Review: Fiction/Chronicle of a Corpse Bearer by Cyrus Mistry, Aleph, 247 pp; Rs495 (Hardback)
Under the socio-cultural practices in vogue, a corpse bearer seldom is known for a heroic claim-alone going beyond the corporeal construct to look on them too will be not considered less than ‘altruistic’. But against the limiting factors, Cyrus Mistry’s “Chronicle of a Corpse Bearer” makes thing malleable with bringing a reneged as catalyst and his lively overtures as the frame of reference for this beautiful literary fiction. Hitherto, very few novels have written in English on the enterprising Parsi community of Mumbai and certainly the life of a Parsi “corpse bearer” never drawn any workable attention from the writers, who dwelt extensively to work on this city surrounded with hypes and its collapses.

Zoroastrian faith was a beginning with an inter-community marriage of a girl, which later shaped through the normal growth of her family and turning into a social group in the course of time. Zoroastrian theology considers all dead matter bruising and unhygienic. Cyrus derives the idea of the novel from a Parsi dock worker who married Khandhia’s daughter. The timeframe of novel is set in the pre-independence era, with having a corpse bearer (Phiroze Elchidana) as narrator. Phiroze, the son of a revered priest who fall in love with Seppy (Sepideh), the daughter of Khandia-Elchi agrees to become a Khandia (on his father-in-law Temoorus’s condition for marrying his daughter), but unfortunately loses his beloved Seppy to snakebite soon after the birth of their daughter, Farida. Mistry presents lucidly, and with amazing clarity, dark humour, the social and occupational details of a Khandia and his continuing low position in Parsi community.

Khandias are sort of ‘untouchable’ because they deal with the corpses, which are symptomatic of frenzied biases in favour of standard or sub-standard socio-economic existence, never such heavy dose of emotion allow to accept something like ‘exhuming’ as an important work done by the corpse bearer. Availing the mass-market senses, here too rituals downgrade the potential of rational thinking. Though the Parsis do not officially have castes or sub-castes, barring an overt categorisation of Athornan and Behdin but Mistry’s analysis of Parsis seems dominating those old narrow and misleading systemic beliefs. His verbalization of clear occupational biases are supported by the impressive odysseys, so it would be hard for anyone to let down this well conceived commentary on intrinsically closed Parsi society.

The good thing is, neither this book carries the amount of controversial puts to draw any ban or high sounding resistance of non-reading crowds (which are quite rampant these days) nor the author is acting in haste of dethroning the old set of beliefs, which are outdated and not so venial deserving simple pass off. Parsis have seen high time in India through theirs enterprising quest and the success came along with those merits. However, trade is much open now and drawing the interest of all sections-hence making things competitive in ideas and cronyism as the real plank of action. It’s not the Parsi’s business position has dwindled only because of liberalisation of India’s economic outlook but prominently through theirs persisting reliance on ‘closeness’ still as the order of the day.

Although, this novel is set in the time of greater orthodoxy but it’s hard enough even today to see Khandias lower positional claim caused with the poverty or any other factors-still the ‘rituals’ are the excuse for theirs segregation. Cyrus Mistry, a writer of high senses for those all who follow his works have a sound basis in putting forth his community’s inner life picture-while all this, the absorption of intricate social accounts confirms the high degree of authenticity coming through the author’s long solitary life and his overtures within and outside of the Parsi’s usually acclaimed close circle. Distinct from Mistry’s own earlier novel, The Radiance of Ashes; his present work deals more straightly with the Parsi community through having sharper focus on an unusual and telling subject.

Arvind Krishna Mehrotra’s blurb aptly defines the qualities of the novel in these scintillating words -“There’s more magic in Mistry’s realism than in magic realism”. His remarks are convincing for the readers and critics who have read this book that totally moves to tell on the margins of history with an amazing level of originality. Tells of tragic love and degradation seldom could be so charming and horrific at the same time, as it appears in the Mistry’s Chronicle of a Corpse Bearer. Beyond recognition, he was being taken for long as one of the leading literary merits of his generation; now this book will also give him the limelight as much he will desire. Still if left with the choices, Cyrus Mistry will be prefer to rove in the world of ideas rather with the noisy acclaims.

It would not be an exaggeration, if said “Indian writing is English is now more diversified and matured with this novel”. This is a kind of literary work repeats not frequently but in sporadic arrival, the level of such high standard works imbue new spirits, essential for the functionalities and excellence alike. The floods of writing can’t do good except making irrelevant interfaces as popular habit-the well shaped and targeted writing like this, certainly has better reach to the readers (even though not very high in numbers). A pure literary fiction on Mumbai celebrated Parsi’s community life is a new phenomenon, here the underlyings are not bollywood, Shiv Sena or the filthy capital-so giving time for a special overview on forgotten Khandias and his personal life. Personally, I will rate this book as the best literary work of the year, written so far…readers seeking insightful reading must spend time with Cyrus Mistry’s Chronicle of a Corpse Bearer..!
Atul Kumar Thakur
August31st2012,Friday, New Delhi

The many facets of Premchand

Book Review: Fiction/ The Temple and the Mosque: The Best of Premchand-Translated from Hindi by Rakhshanda Jalil, Harper Perennial, 197 pp; Rs250 (Paperback)
Munshi Premchand’s writings depict the ‘other’ world — a world which most of us see either as wretched, poverty-stricken or idealist, self-sufficient, depending on the side of the ideological divide we stand. In the process, this well-known Hindi writer too has become the other. A compassionate litterateur and visionary, Premchand strived for progressive ideals. But hardly many English-speaking, city-wallah Indians know him. And, even less people know that Premchand was only a pen-name adopted by Dhanpat Rai, who left behind more than a dozen novels and about 300 short stories.

Today, we don’t have a congenial milieu for translation works, thus hindering our indigenous literature from getting a larger audience. Imagine if Maupassant, Leo Tolstoy, Kafka and Milan Kundera had met the fate of Premchand, would they have been the international phenomena they are today. It doesn’t seem so. And, herein lies the importance of The Temple and the Mosque. The 17 stories of Premchand, selected and translated by literary critic Rakhshanda Jalil for this volume, introduces him as a literary genius. Unlike the usual translated works, there is no attempt made by the translator to force ‘transcreation’ while dealing with the natural ambience and characters of these stories. Jalil has done justice to her translation with this collection of Premchand’s stories and earlier with Phanishwar Nath Renu’s stories (Panchlight and Other Stories, Orient Blackswan, 2010).

In this work, the inclusion of stories like, Idgaah, Do Bailon ki Katha, Namak Ka Daroga, Mandir Aur Masjid, Budhi Kaki, Push Ki Raat, among others, gives ample chances for the first-time readers of Premchand to comprehend the other world. Also, the stories, in no way, seem dated. The villages of Premchand’s literary world may have changed today but the basic flaws that cause agrarian crisis remain as agitating as ever. In fact, the deprivation today is more acute in both relative and comparative terms. Yet, responses during the adversities have radically changed and they are closer of escaping the situation rather facing them the way a young Hamid did in Idgah. A new India with its consumerist strength has many avenues to hide its moral dilemmas.

Jalil has done a commendable job to get Premchand back to the centre-stage of literary discourses. In the changed time too, his works remain as relevant as they were before.
Atul Kumar Thakur
August31,2012,Friday, New Delhi
(Published in The Pioneer,Sunday-August4th2012/ )