The Election that Changed India

Book Review: Non-fiction/2014:The Election that Changed India by Rajdeep Sardesai, Penguin/Viking, 372pp; Rs599 (Hardback)

Seasoned journalist Rajdeep Sardesai’s 2014:The Election that Changed India is compiled to give the perspective and remedial thoughts, how elections in India are now much more complex than the conventional tussle of ballets. However, it would be a hurried effort in reckoning that all the changes happened only through 2014 elections – earlier too, we saw how ‘born-to-preach’ troops of advertisers mislead the actual issues and slogans, especially since 2004 parliamentary elections.

Advertising is an old phenomenon in Indian politics, however the matter couldn’t be put on rest without admitting the increased effects lined up through real-time sell of ideas or dreams. This book’s heart of matter is placed to capture the unprecedented shift in poll campaign strategy and the devious role played by the Media& PR Network.

Indeed this time, the Congress Party lost the election before it entered the electoral fray and the Modi as ‘factor’ emerged there to establish a new identity, with an unimagined might in terms of numbers in Lok Sabha. Rest, all is history.

Sardesai’s book unleashes his personal experiences vis-à-vis the political developments in the country of over two decades. While doing this, he maintains the depth of political storyteller as well as of an election historian. Remarkably, the historians in India have given writing on elections amiss – somehow, the hacks roving inside the country have contradicted that trend on occasions.

In recent years, those lots of journalists have been strengthened with advent of electronic media. Nevertheless, a full-fledged book on the election and with the depth this book has, is quite rare to see in other works surfaced. Through the richness of anecdotes and balanced interpretation of truths, Sardesai’s maiden voyage of book-writing charts a territory so far not covered in his columns. This, as the narrative is candid, firm and timely.

The most interesting parts of the book recount the blunders done by the UPA regimes and how the desperations of people converged with their aspirations. Amidst those unrelenting movements, the Congress chosen to do what it was doing for a decade – no action or relaying less-pragmatic voices.

As other parties except the BJP was on the same page, the outcome of the elections was almost decided before the polls. However, the common masses of this nation did not know the extent of victory would be such miraculous. The book covers in details of ‘why& how’!

Sardesai’s early encounter with young Modi (then, Narendra Bhai for the journalists) in 1990’s and their first show on Tv after the 9/11 incident (Modi came as replacement from his party) – show how restless the later was to grow full-circle. Besides introspecting the hard realities of Gujarat Roits and how Modi cornered the existing state leadership right after taking charge as chief minister of Gujarat – the author has also not forgotten to count the sensibilities of the protagonist.

Even-though not consistently in sync with stating ‘beyond the obvious’ – Sardesai’s book never falls short on giving the readers, both information and insight about the resurgent India that has been a victim of lackluster governance and not so responsive polity.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

Vinod Rai is not just an accountant

Book Review: Non-fiction/Not Just an Accountant: The Diary of the Nation’s Conscience Keeper by Vinod Rai, Rupa, 267pp; Rs500 (Hardback)

Vinod Rai is not just accountant – he is an impulsive writer too who writes diary to keep the conscience of the nation, as confirmed by him through the title of his truly sensational book. He has been a newsmaker even before publicly turning a diarist, unlike Anne Frank who could put forth her jottings only for invisible readers away from Nazi Concentration Camp.

Comparisons between the authors are like chalk and cheese, but one feature is strikingly common: both resisted the extreme tendencies of a ruling regime even though in different time, characteristics and conditions.

When the reader finishes Rai’s book, it is hard to miss the feeling that this account was written to contest former Prime Minister Manmohan Singh’s silence when the UPA-II government was limping from one scam to another. At peak of those free-wheeling scam days, Prime Minister Singh stated: “I honestly believe that history will be kinder to me than the contemporary media. I feel somewhat sad, because I was the one who insisted that spectrum allocation should be transparent, it should be fair, it should be equitable. I was the one who insisted that coal blocks should be allocated on the basis of auctions. These facts are forgotten.”

The nagging question is, how kinder history would be to Manmohan Singh. Rai, who scrutinized the government’s performance in those scam years as the Comptroller and Auditor General (CAG), obviously thinks that the then Prime Minister’s silence and apparent inability to prevent those scandals were a giveaway. By sharing the clue in glaring details, he probes why India’s thriving telecom business will be in mess after a shady allocation of spectrums right under the nose of Prime Minister’s Office (PMO).

The earlier press coverages on the whole mess and now this book give enough indications for Mr. Singh to come forward and reciprocate with his autobiography in no time, where he could make a stand clear about the lapses happened during his stint. After reading Rai’s book, one concludes that this is a good way for the former Prime Minister to redeem himself if he wants to get history’s judgment.

Rai examined the inappropriateness in the allocation in 2G telecom licenses and coal mines, both of which defrauded government money. This book documents all his findings, which show the then PM was not clueless of what was going around him. But he did little to stop the misuse of power, and no damage control was attempted. That was a scandal of its own. The scars of those scandals tainted not only his government, but himself, too.

Rai reminds that through a piece of his communication with PMO: “You (Manmohan Singh) engaged in a routine and 'distanced' handling of the entire allocation process, in spite of the fact that the then Communications Minister A Raja had indicated to you, in writing, the action he proposed to take. Insistence on the process being fair could have prevented the course of events during which canons of financial propriety were overlooked, unleashing what probably is the biggest scam in the history of Independent India.”

These few lines are enough to establish a policy decision like spectrum licensing could not be made without having green signal from the country’s highest office, PMO – also that the role of PM should not be reduced to a passive by-stander. Therefore, even though Singh is still considered a man of high integrity, his tenure as India’s chief executive was feckless and tame. That is the damning impression Rai's book conveys.

K Natwar Singh’s One Life is not Enough,TSR Subramanian’s India at Turning Point,Bimal Jalan and P Balakrishnan’s(ed) Politics Trumps Economicsand Sanjay Baru’sThe Accidental Prime Minister are the prominent critiques of the UPA government. Now, Rai's book adds to the wealth of uncomfortable truths about the UPA's 10-year rule.

Making predicament more obstinate, the hibernation is prolonging inside the Congress Party. Its old or new school lieutenants are lost without causes – having been not known to live in opposition, they seem loosing their edge with pen and mind as well.

So, let’s hope more such unfriendly books about the yore days – and all those to be not answered from privileged heads of India’s oldest party, now marginalised below the ground. An accountant could be an effective multi-tasker, Rai has proved it. To know the capital trails, this book too would be in essential list!
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

India's Administrative System: An Unresponsive Frontier

Book Review, Politics Trumps Economics: The Interface of Economics and Politics in Contemporary India by Bimal Jalan and Pulapre Balakrishnan (edited), Rainlight/ Rupa, 2014; pp 211, Rs 500

It was felt and highlighted that the ‘policy paralysis’ and lack of reform impetus in macroeconomic policies led to the downward spiral in the business and mass sentiments, eventually led to an alarming level of deceleration in economic growth. The UPA-II regime was blamed for that, which was justified to an extent too, but somewhere there is a need is to see the real stumbling blocks.

Foremostly, it has to be admitted that India’s administrative system has become largely non-functional and unresponsive to the interest of the masses. The book under review precisely focuses on this crux of the problem through twelve essays from some of India’s leading policy practitioners. Moreover, the central mandate of the anthology exudes at patches and in full, the well-meaning vision of its editors.

Bimal Jalan in his different administrative capacities has seen the administrative structure of this country from close quarters, and Balakrishnan – with long affiliations with policy matters is equally capable to comment on what ails the delivery mechanism through the administrative routes and where the two other arms, ‘legislature’ and ‘judiciary’ are faltering.

As the purview of governance is no longer limited with the government alone, the essays in the book put forth a deserved emphasis on ‘corporate governance’ and infer that various practices in big business are in urgent need of correction too.

T.T Ram Mohan’s piece Corporate Governance: Issues and Challenges is one that gives topical insights on the theme. He writes, “A certaincynicism has crept into the debate on corporate governance. There is a sense that, as with corruption, it is something that people will keep talking about without anything substantive happening on the ground” – this captures the views of an average citizen vis-à-vis the interventions of the government. Seemingly, it is harrowing.

The “Overview” in the beginning of the book by Bimal Jalan brings to the fore his suggestions for ‘political reforms’, besides economic and administrative reforms – to reduce corruption, the power of small parties to destabilise multi-party coalitions and attractiveness of politics as a career for persons with questionable antecedents. Indeed, without a reformed culture of politics, it is naïve dreaming for the fruits of economic reforms and that too with equity.

Pulapre Balakrishnan’s Governing for an Inclusive Growth is about addressing the challenges of delivering social justice in India today and it rightly argues for governing policies towards that end.

The other essays by Meghnad Desai, Dipankar Gupta, Poonam Gupta, Ashima Goel, Samuel Paul, Ravi Kanbur, Sunil Mani, M. Govinda Rao and Deepak Mohanty – though with varied level of interpretations, fit enough to be catogarised into three broader sections of the book: politics, governance and policy.

Their focus is on the interface between politics and economics in India, which actually determines the path of progress for the country. This book should be of interest for anyone, who has enthusiasm for the policy matters and knowing about the fast changing form of politics, governance and economic processes in India.

The flurry of activities on the land is unprecedented and hence intriguing too, with keeping the challenges upfront for the policymakers and those who are getting governed to reach a consensus. Albeit that part is tough and probably difficult to come in terms with – this book certainly makes our understanding better on the whole issue.

The essays more than modestly also offer impressionable solutions to end the menace of corruption and for achieving inclusive growth – this comes while discussing among others, the pressing issues related to the coalition government, the rise of new politics (through civic activism), the growing inequality, alienation, the contradiction between identity politics and development.

There is so much happening in India on the policy front, and a single book can have only restricted overtures with those churnings. Given this backdrop, Politics Trumps Economics is a valuable addition to the policy studies and has comprehensive prescriptions for the general readers, who are equally in need of knowing their country’s ongoing tryst with destiny.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

For the Sake of Destitute

Not all get the kind of existence, normally akin to be called ‘decent’. We know celebrities running into penury or catwalk favourites like Gitanjali Nagpal found living in squalor on Delhi’s streets after drug related problems and having no one to take care of her. The cases are numerous, a simple walk on the capital’s streets could give the glance of misery of paupers and many others, who were once fitted well in the material world, survived there for years, but eventually distanced due to emotional or other odd conditional jolts.

The Earth Saviours Foundation is a non-profit organisation, working for the old, mentally and physically disabled, poor children and anyone who has no one to support. Its headquarters, New Delhi which shelters the destitutes was running well in Vasant Kunj. But after a gruesome fire and loss of lives and assets, it had to move to Rangpuri Pahadi, where it has makeshift arrangements for more than 250 inmates.

These inmates included those, who were quite well off but fell to destitution under adverse circumstances through family disputes or other unfortunate reasons. Ravi Kalra is the Founder and President of this charitable organisation, who had to choose between family and his dedication to social service. He chose the latter. After six futile attempts, which crashed due to lack of funds and support, Ravi’s dream came true in 2008, when he started The Earth Saviour Foundation.

“I would go to the streets, find people who had been left by their families to fend for themselves; and get them to the centre. Many of them were senior citizens who resorted to begging. They had not washed for months, were starving and had maggots all over them. We gave them first aid, bathed them, provided them with food and shelter,” says Ravi, who named the shelter as Gurukul.

Ravi expanded his horizon and started getting orphans, rape victims, HIV positive people and mentally challenged adults to Gurukul. To manifest his dedication to humane cause, he also has plan to build a temple of humanity that will house more than 2,000 people.

His initiative has been supported by his own means and donations bz a few individuals and institutions – the government has shown only the timid response for the cause as well as the charitable work of Foundation. Surveys reveal that more than 10 lakh people are without shelter or basic protection of life and dignity in the capital and nearby NCR towns – that shows there is a general sense of apathy for the whole issues related to ‘destitution’, alas!

When this writer visited the Gurukul in a late afternoon of August, few inmates were found busy in Gurukul’s activities, others were either talking in groups or simply resting. But the commonness of them was their eagerness to share what they faced earlier and how they are leading a new life in this Gurukul.

Pranab Roy is one of them. An alumnus of IIMA of 1970 MBA batch and Fellow of AICWA, he worked in some leading MNC companies as financial controller and director. Distorted through disputes in family and investment losses, one day he called on the number of Gurukul and took the train from Bangalore. Unlike most of other inmates, he is perfectly fine with his skills and understanding – genuinely, he should have been in limelight for better reasons than living an existence on the fringe. An avid admirer of the writings of Nirad C Chaudhuri, Tagore and Jefferson, Roy has no views on family life, albeit he still desires to get back into consultancy domain. Then he was reading a book and shared how much he misses reading newspapers in the morning – he named all prominent papers among his favourites and requested to be provided the copies of INCLUSION and other reading material. Ironically, unlike Jefferson – he is not for ‘pursuits of happiness’!

Inder Kaur is sixty-nine year old, an affectionate lady who reminds the typical face of a grandmother, came there eight days back from Ludhiana – she has two daughters, but not even one of them sensible enough to take care of her in old age. Although she misses them but doesn’t want to be back in family so soon, instead she yearns to visit the place of her niece who is living in Sahadara.

Pushpa in her early forties came here only a day ago and was returning to her family the next day. Her case is little benign, as family shown responsiveness after a brief lapse of harmony. Shiv Kumar, a seventy-five old former mill worker has been living with this Gurukul for last six years and he wishes to stay here till end of life – as he has no incentive to go back to his sons, who allegedly kept him in a locked room for six months.

Raj Kumar, a former auto driver came here five months back – with a road accident, he lost the normalcy in life and landed here after living on street in dire conditions for months. Aaagyan Kaur – an eighty-five year old lady, who earlier was a handicraft artist, recalls the pain of treatment she met from family and the days of partition in 1947. She has three sons and a daughter.

Unlike her daughter, both the sons are in a condition to take care of her but they are indifferent even when knowing where their mother is living now. Kaur shares how she took care of a ‘Sabun ki tikki’ (a slice of soap) for over seven decades before losing it recently. For her, that was an inherited asset from family – and for others in family or outside, this might value nothing!

A report of Sunday Times (2nd March 2014, Lord Swraj Paul answers abandoned cousin’s call) highlighted the grim plight of Ajay Kumar Aggarwal, who allegedly was abandoned by his family after an accident in Solan, received a call with the help of Gurukul from his billionaire cousin, Lord Swaraj Paul. That made decisive impact in his life.

Amidst the gloom, the hope is not entirely on wane – as many of those who come here, later get united with the family or after normalcy in their state of mind and health, they also start something of their own. Probably this is the best service, The Foundation is offering to the people, who are really in need of help and care.
-Atul K Thakur
Email: Summertickets2gmail.com
(Published in INCLUSION)

The new banking time in India

The Indian banking is undergoing through some unusual structural changes and naturally the news has been making round about one of those, which is ‘differentiated banks’. As widely reported and circulated, the RBI Governor Raghuram Rajan is a firm believer in the ideas behind it, and thus the central bank’s guidelines come so hands-on this, it leaves no chance unturned to make the keen watcher believe, these new institutions will end all ill in existing system at place.

In principle, the payments banks and small banks are ‘niche’ or ‘differentiated’ banks – with the common objective of furthering financial inclusion. The Small Banks will provide all the basic banking products but will have a limited area of operation – and the Payments Banks will provide a limited range of products, such as, acceptance of demand deposits and remittances of funds, but will have a widespread network of access points particularly to remote areas.

The role of technology and Business Correspondents (BCs) would be crucial for these new banks, like all other existing banks working in rural and semi-urban areas. So, what is new in that? Nothing much. The concept of local area banks came long back in India – and in fact, the Regional Rural Banks (RRBs) took that concept of local banks much ahead than anticipated earlier.

Today, total 57 RRBs have more than 16, 664 branches – remarkably, these banks are still operative at low cost than PSBs and Private Sector Banks in rural terrains – and most of them are in profit. Surprisingly, the RBI has no plan to make these banks more aggressive – and making addition of the Post Offices, as next banking institutions.

The NABARD has for long ceased to offer any noble solutions for rural banking in India, so even in close bearings with the Chicago School of Economic Thought – Rajan should scrimp little bit time and vision to put forth a workable model rather loosing time with too romantic ideas of ‘differentiated banks’ – that appears in its idealistic fold, beating the blue eyed professionals’ flop venture in India, MFIs.

In retrospection, we would get some insights on failures from the distant land of west that has been charming Indian policy makers in recent few years like never before. The ‘hole and corner’ life philosophy of Wall Street bankers and their understanding about the game of banking could be summed-up in few clumsy but truthful words: ‘for them – money is fact, rest all is fiction’.

Time and again, these words came into fruition and brought to the world, such ‘catastrophe’ – not normally to be hatched by someone having capacity lesser than of a double-dealer.

This clears the fog to know that the winds from west seldom come with underlying merits to be known ‘progressive’. This reckoning was although at place in late 1960’s when Indira Gandhi redrawn the character of Indian banking in a single stroke of pen by nationalising fourteen major commercial banks of that time. The inherent aim was much broader and that for creating the culture of profitable Public Sector banking in India – with focus on strengthening the core economy of the country, through readily available banking services hitherto denied.

These banks played their role to an extent and indeed ensured banking among the masses – that exercise could be seen as the biggest financial inclusion drive in India. This was much effective than the Swabhimaan or Jan Dhan Yojna, whose accomplishments would not travel (based on their theoretical positioning) beyond the bank account opening in crores.

Coming to the solution side, the policy debates on banking have to take a cue from erroneously rumoring, the existing banking players in India are wimps – they are not actually. So, selling the already used applications of mobile, low cost innovations would not help now – the real course of correction would be through differentiating between the performer and pretender.

For making financial inclusion effective and rural banking spectrum, free from the unrealistic notions – first and foremost, the RBI should trust more on the RRBs, besides making PSBs and Private Banks less pampered, so they can work and don’t show excuse that the ‘baking is expensive for poor’. They should make profit by banking with the poor, but must stop making BCs, not only poor – but pauper, by offering less than 1/3rd of minimum wage made mandatory by the Constitutional provisions.

The Post Offices have already a huge network at place that covers the nook and corner of the entire country. If the Finance Ministry and the RBI is really serious for going ahead with actual financial inclusion drive – the next banking license should be given to the Post Offices. As not all existing things could be called bad – the time is ripe now to make the plethora of ‘innovations’, truly grounded and coming into terms with the realities of India.

Also an understanding should be at place, the Indian banking is not in nascent phase – and it certainly has some strong economic fundamentals, which giving enough reasons for the banks to get serious about their business prospects. Even those have not returned recently after attending a short-term crash course on ‘emerging economies’ in any Ivy-League Institution (including this writer), can have a logical edge in saying Indian villages have enough too offer for the bank, who will follow the basics of banking there. Not that any show of dramatics would return back well.

The game plan should be to make better course and stay on that. A differently famous, Gordon Gekko from Wall Street (1987), delivered these words very aptly, ‘don’t run when you lose – don't whine when it hurts’.The banking in new time in India has to go that way, it could be said by this moderate polemist!
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

Taxation & the Reforms: Speed is Essence

Under unavoidable compulsions, the tax reforms have to enter the next phase, since the whole tax structure, as commonly known is still not flawless. So, the government must include various stakeholders in its ambit, to make tax reforms truly thriving on the ground.

Next, the irrational complexities of tax laws in India are jeopardising the potential utilisation of the services. Precisely, the modern days law-making is bereft of practical purposes and not making life simpler for citizens. Apropos to the plethora of existing issues, the use of big data and analytics could bring in, the much needed transformative changes within the system.

Shaktikanta Das, Revenue Secretary, Government of India, recalled the crucial role of technology, for the next level of tax reforms in India. He said that the Goods and Services Tax (GST) should usher the country into a new direction in tax clarity. “The new law would enhance the trust between centre and states,” Das said while addressing the 37th Skoch Summit.

The time heals the wound and the hope gives better chance for sustenance. That is something making the government juggling between its two propositions and enjoys speaking less overtly than required. If believing the old tax practitioners, who keep bearing to the wisdom – one should not expect radical shift in their lifetime on taxation front. Here, the complexities are the only tested fodder – and sufferers or slappers, all seem adept with it.

Sumit Bose, Member, Expenditure Reforms Commission admits that the tax laws needed serious introspection to address the challenges of the changed times. In further elaboration, he reminded that the role of the Finance Commission is crucial and undermining it in any capacity would be short on logic.

“Sharing of tax data is another area that had needed to be looked upon,” he said adding that the areas hampering the revenue income should be spotted and delinked from the system on priority basis.

Besides transparency in tax administrative procedures and laws – getting judiciary more proactive and sensitive towards the tax cases is equally urgent. The country needs no less than a tectonic shift in tax administration to minimise the spectre of disputes. The policies must be set closely with the formulation of strategies – as in principle, the General Anti-Avoidance Rules (GAAR) and Tax Administration Reform Commission (TARC) too have been excellent but are not being able to meet their true potential for lagging on implementation front.

GAAR is basically a set of rules framed to give Indian tax authorities the right to scrutinise and tax transactions, structured to avoid taxes. The rules are applicable to all taxpayers. It was intended to target tax evaders, especially the Indian companies and investors trying to route investments through Mauritius or other tax havens.

Another major tax initiative, the TARC was set to give recommendations for reviewing the Public Tax Administration System of India in the context of global best practices, and to recommend measures for reforms required in tax administration. This makes the case stronger for thorough introspections in policy making and implementations.

The Goods and Services Tax (GST) is a Value Added Tax (VAT) to be implemented in India by 2016. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. It is aimed at being comprehensive taxation for most goods and services. Idea-wise, it is perfect too.

But India is a federal republic, and the central and state governments will thus be implementing the GST concurrently (as the Central GST and the State GST) – so stopping imminent double-dealing underlying with it shall be top-of-the mind for regulators. Moreover, this law will make exports be zero-rated and imports to be levied the same taxes as domestic goods and services adhering to the destination principle.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

No real 'Digital India' without including Panchayats

Prime Minister Narendra Modi’s vision of “Digital India” won’t come true without including Panchayats, a senior government official has said.

Addressing a conference on ‘Digital India’ held as part of the 37th Skoch Summit here, N. Ravi Shankar, Secretary, Ministry of Personal, Public Grievances and Pensions, highlighted the importance of roles to be played by individuals and Panchayats in transforming the overall digital culture in the country.

“Time has come now when the Public Private Partnership (PPP) should be known as Public Private Panchayat Partnership (PPPP),” Shankar said. He said rural India has been looking for it for long and greater convergence would be effective for empowerment of the masses.

The comments came in the backdrop of the government’s plan to connect 50,000 Gram Panchayats this fiscal and 100,000 in the next financial years and a similar number in 2015-16.

A daylong conference on ‘Digital India’ brought to the fore the key nuances of the government’s recently launched “Digital India” programme. The conclusion emerged through the experts and citizens’ views that while the newly launched “Digital India” has path-breaking potential – but the earlier launched programmes too were helpful for India in charting out an important journey of a technology intensive economy in the wake of economic reforms.

Albeit this time around, the focus has to be laid upon to remove the possible flaws from the new digital drive in offing– with carefully taking into account, the implementation specific lapses of previous programmes as ‘key learning’.

Notionally it sounds fine. However, the reckoning should be zeroed at how the missing gap in eService delivery has slowed down the digitisation efforts of the previous governments and eventually caused for lesser impact than their actual potential.

Hence, the “Digital India” platform shall be carried like national roll-out of application rather than reinvention – with keeping in focus, effective application and citizen centricity.

As the fog is still not clear how exactly the new policy scheme will work, the discussions must go further with spotting the criticality of outcome based governance in the current scenario where the technological changes are fast-paced and hardly belittling with any bound. So, the “Digital India” shall make citizens empowered and key stakeholders that only can remove the hassles of procedures, those blocking the free flow of information and entrepreneurial opportunities.

Hitherto missed, but now the technology required for the specific policies have to be made India specific, as inevitably it has to cope with an uniquely diverse populace and culture – also the eWaste has to be dealt on priority basis to control the environmental hazard, it unrelentingly offers.

The close overtures between the government and industry has been seen and noticed in recent years, so it is irrational to call any longer the existing technology stakeholder, a ‘vendor’. As lately, the realisation should be at commonplace that they play game-changing role in handling various schemes and making them meeting with the aims targeted.

Technology is fast changing and it is really hard for any system to keep the pace in its accordance. So, the government has to be emphatically proactive to meet with the imminent challenges. Among those challenges, the new time will see “Agile Governance” – and that agility will come from the industry and citizens, not alone from the government.

Apart from these legitimate challenges, the “Digital India” mission may face hurdles within the government. Some of insiders are not convinced with the whole framework behind making it on mission mode so soon. Among them, one is Rahul Khullar, chairman of the Telecom Regulatory Authority of India (TRAI). In a recent interview to ET, he said the plan is short on specifics. He added, "Is it possible to get a birth or a death certificate online in Delhi? If not, what sort of applications are we really talking about?”

Principally, the vision set forth for “Digital India” is concentrated in three areas: digital infrastructure as a utility to every citizen – digital identity, mobile phone and bank account, safe and secure cyber space, and governance and services on demand; services available in real time on online and mobile platform, making financial transactions electronic and digital empowerment of citizens; and all documents, certificates available on cloud.

Indeed, a lot more thinking and resources must be devoted to release these applications instead of rushing to launch e-based programming for critical core areas like education and health. Experts believe that the current bandwidth of 100 mbps per Panchayat is not sufficient. They opine on condition of anonymity that it should be at least 1 gbps given that it serves three villages of around 10,000 people and videos are in HD (high definition) now.

As a matter of fact, one can't keep laying new fibre and the current architecture does not allow for the bandwidth to be revised.

So far, the views aired by the experts from the different walks of life on the “Digital India” are to an extent in conformity that the great convergence in India will come through actual digital revolution – not merely by another policy initiative. The new digital policy has to pass the acid test – it seems mandatory.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

BRICS 'development bank' must aim effectively to end Bretton Woods Institutions' disparities

The move to establish BRICS bank is meant to provide patient money and risk capital to long term projects and not aimed at challenging the existing multilateral financial institutions like the IMF and the World Bank, the RBI Governor Raghuram Rajan has said in a speech at an event organised in Chicago on Friday by the Chicago Council on Global Affairs.

In verbatim, his views came as: "I don't think it was primarily meant to challenge the existing multilateral institutions but it certainly is saying look we have plenty of money ourselves, why don't we put some of this money to use in a way that benefits us rather than necessarily depending on the multilateral institutions to change which is taking much more time than anybody thought of".

This is quite surprising from him, seeing he is heading India’s Central Bank and India is going to get the first Presidency of the new bank, would be headquartered at Shanghai. Rajan’s remarks certainly have potential to start a serious debate, about the future course of old mammoth discriminatory financial institutions, which have underwent almost no practical changes (mildly he admitted this time too) towards the need of the developing countries since their inception and on wake of sea of changes in the fundamental orders in the world.

As in collective reckoning, the consensus among the BRICS countries (Brazil, Russia, India, China and South Africa) to establish a New Development Bank (NDB) and a Contingent Reserve Arrangement (CRA), finally emerged out of their dissatisfaction with the ultra conservative Bretton Woods Institutions, such as the World Bank, International Monetary Fund (IMF) and the unflinching extremes of west-centric dollar dominating global monetary system.

The US has been ruling the multilateral institutions – and the BRICS that include five super-performing economies with over 20 per cent contribution in the global economic activity, posses just 11 per cent of the votes in IMF.

Adding more jerks to the adversities, the IMF's precautionary credit lines found reluctant receivers in underrepresented countries – that made central banks of these sides desperate for dollars to obtain the credit from the Federal Reserve only. The Fed played a proactive role during the height of global economic crisis in 2008, but not necessarily the similar policy will be replicated ahead too.

The BRICS countries’ inhibition in such scenario is forthcoming but rational – and their beliefs in NDB and CRA have sufficient logical traction. The NDB aims to meet with the credit requirements of heavy infrastructural projects – although the demand for credit will not be equal from these five countries, as they are into different development stages. But for meeting additional needs of infrastructure creation, the NDB has a balanced approach in terms of activating the prospective creditors and borrowers at same platform.

So, the business proposition of NDB is free from contention. However, the Bretton Woods institutions and the flocks of economists nurtured through their legacy have reservation on it, as this new development bank will promote regional co-operation unlike the already existing Inter-American Development Bank, Asian Development Bank and African Development Bank. That apprehension is totally misplaced, as the NDB with seed capital of just $100 billion or even with an incremental outlay will be not able to challenge the might of an established and mighty, IMF or World Bank – but it would be surely a beginning for BRICS to chart a new course for them in meeting with the bundled challenges of long-term finance.

Intently, the CRA intended to lessen the BRICS dependence on the Fed and dollars, showcases something different than the NDB. It is allocated $100bn – for swap lines, accessible to all five-nation members. With no permanency of lending and borrowing structure, the idea of CRA may not work as expected. But it would be naïve to reject it too early, as the potential of closer co-operation among the BRICS can unleash conducive impacts on its functioning.

Remarkably, these arrangements by the BRICS were made to counter the persisting discriminatory policies of the giant financial lenders – as in the case of IMF, it has changed everything but not its conservative structure, aligned in favour of the western countries. There is enough merit lies in the BRICS claim that the international financial system has worked against their interest. Rajan and others must heed to this truth.

Policymakers from the BRICS have been vociferously airing their views about the partial policy stances of the rich countries’ institutions, disguised as ‘multilateral agencies’. Earlier, Raghuram Rajan, was one among them, who aptly identified rich countries for pursuing selfish policies with no thought of their negative impact on emerging economies. Will he recall it now?

And the economic bubbles, their temptation of falling and making the global financial system on toe is something never amiss the scene. The Bretton Woods institutions in their present shape will be keeping such threats alive, so the notion of getting adrift from the crisis would be rather too simplistic at this point of time.

Hence, the space is for an alternative financing arrangement – first at regional, and next on the international level. This new bank is capable of bringing that, although initially with limited impact. China has been lending in Africa and that made good effects but it also violated many basic procedures – the BRICS bank has to move cautiously on this, as carrying forward the legacy of any one country out of those five would be against its collective foundational spirit. So, the mode of operation must be carried forward with a standard set of norms, never to be tempered with any one member’s discretion.

The BRICS bank has immense potential to bank with the huge number of roads, power plants and sewerage systems, as those all need large-scale funding. With the long-term capital base of the bank and meeting with the financing demands of these projects, the purpose of its establishment would be justified.

However, the new bank is not completely free from the challenges. Among the shortcomings it has, is its relatively small size, seeing it will have to work on international level. Also as Ben Steil and Dinah Walker of the US-based Council on Foreign Relations note that, China, India and Brazil have borrowed $66bn from the World Bank alone – more than the entire subscribed capital of the BRICS bank. That indebtedness may hamper these countries to go too agile in promoting policies in favour of their new bank and finally to counter the influence of the World Bank – possibly, there may be temporary ambiguity in loyalty.

Moreover, the BRICS bank will be facing adjustment related issues with the different political systems of the five member countries – as the differences between the systems in India and China are far too wide to be adjusted so easily. The new bank will have to look on the ethical concerns, include that related to the handling of natural resources by the projects, it would be financing. Its articles, which ensure that the founders will never see their voting rights drop below 55 per cent, must be scrapped or made more democratic. As this particular clauses make the idea of BRICS bank, less democratic than claimed.

Beyond even an iota of doubt, the Bretton Woods institutions are symbolising the spent time of empire, which are on verge of ruining after a painfully long saturation phase. The rest world, including former colonies have changed in the recent decades – so, the experiments like BRICS bank outlines positively where the future is – apparently, its on the side of emerging economies. Rajan should see the turning point of history little more cautiously, wishfully like he once saw the spectre of global financial crisis as early as in 2005– and delivered memorable Jackson Hole lecture.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

Making 'Un-Planning' Commission - Is it a Viable Proposition?

Bibek Debroy’s piece in The Economic Times, mentioned an unheard term - ‘un-planning' - while contesting the relevance of planning in India. This ‘un-planning’ commission, according to him, would be the replacement of the existing Planning Commission with a different nomenclature – However, he supplied no further details, about how this new institution would function.

Thus one could reckon that he too lacks information - if not the understanding - about the new think tank, in which he will probably have some major say. Debroy has been assessing governments since their early days – from UPA -I at the centre, JD (U) in Bihar, TMC in West Bengal and now to the new BJP government at the Centre. Nothing is really unusual about it.

But Indian polity is evidently in the midst of a tectonic shift, where the government is planning policy bereft of the fixed intellectual convictions of a select few, and the scheduled, fleeting cheers by related stakeholders. So, this process of ‘disillusionment’ is likely to stick amongst policy experts, who consistently spend their time and energy in channelising the interface between politics and economics – and that too in hope reciprocation from the power the seats of power.

In his piece, Debroy has articulated that the Planning Commission lost its shine soon after the 2nd Plan – even someone who is not a blind believer in the free-market - will not hold exception to this. Indeed it is true, Planning Commission turned sharply pro-Congress after the 2nd Plan and even more so in 1970’s. The aggressive control the it inadvertently had over the government and its functioning severely attacked its autonomy.

Hence, not only did the irrational annual plan discussions and the misuse of entitlements by the established cohort of cliques survive, they thrived. Moreover, what made matters worse for the Planning Commission were the falling standards of research inputs, relying too much on studies from questionable sources and being unable to competitively come to terms with the realities faced by the implementing ministries.

Somewhere along this process, the federal spirit suffered the most, and any exercise aimed at introspection disappeared from the central government. Although, now when the Planning Commission is supposed to be replaced with a new institution, which is predicted to possess a higher propensity to support the economic reforms – it would be worthwhile would be for the new government at the Centre to remember that 'planning', per se, cannot ever be irrelevant for any set of systems.

Hence, scrapping the institution merely for the sake of scrapping it hardly makes any sense. What would be the best policy correction, however, is to restructure it in tandem with the requirements of the present and the future, and to ensure that the overhaul retrieves the transparency and the efficiency losses. The UPA-I&II miserably failed in even acknowledging the ills of the Planning Commission, let alone making any effort in improving its working.

That being said, the new government has a fair opportunity to make the improve the Planning Commission by introducing some much needed changes related to the states, funds allocations, and its internal working mechanism. But instead imbibing those changes, which would have made it accountable to the ‘federal spirit’ – the decision of simply removing it does not bode well beyond enthusing momentous cheers for ‘name change’ and letting the opportunity of a ‘spirit change’ pass.

It is intriguing that so far the new institution, as it stands proposed, is not supported by any important details within the public domain (although the speculative news stories of the leading dailies are making rounds and being proved wrong simultaneously). The Planning Commission was moulded to define our economic goals in post-independence India. Except in odd patches, all it did was try and align the political goals with the social and economic aspirations of a new India.

The intent behind making Planning Commission prominent was not mala fide and with an alarming increase in income disparities, which continues to grow – it would be of grave concern if an institution such as itself ceases to exist altogether.

Through all one may gather about the new institution through public sources – this one will differ in functioning with the existing secondary and tertiary national planning processes which were aimed at handling the plan process and funding between the finance ministry and various other ministries, and between the centre and the states.

Most likely, the new body will have no overseeing authority to evaluate the quality of programme implementation and hold consultations with the government to ideate on the same. So, contrary to generic criticism, the fact is that the Planning Commission, while having the right to mediate between the centre and the state, is notionally not against the federal structure of the country.

Wherever it faltered, the blame was erroneously attributed to its structure and it would have been much better if the practices under the aegis of the central government and other stakeholders had been brought under due scrutiny.

The level of performance varies and is influenced by many factors and if the new institution in the offing can set things right, there is no reason why the Planning Commission cannot be rebuilt. Simply pronouncing capital punishment for a few wrongs should not be confused with the idea of justice.

If the central government is really serious about strengthening the federal structure and empowering states – then it should first make space for wider consultations on crucial issues like this. Simply relying on new media and discussing a policy issue as serious as this in open forum could be seen as anything, but a practical step.

The concept of maximum governance is praiseworthy but only if it also optimizes the government, as the government has to continue playing its essential role.

In the past, we have seen the names of our metropolitan cities change in the pursuit of tempering significant historical realities and respecting legacies. By scrapping the Planning Commission in one go, it seems one more such mistake is going to be committed in India's policy spectrum.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

Kathmandu is now Closer Post Modi's Visit

In the official establishment of Nepal, and among its masses, there has been a lingering sense of dissatisfaction over improper diplomatic reciprocity from India. This was understandable, as no Indian Prime Minister thought it essential to visit Kathmandu for seventeen long years. Hence, Modi's invitation to SAARC leaders for his swearing-in ceremony was seen as an indication of a strong neighbourhood policy, and that was welcomed by Nepal.

Further, Nepalese Premiere Sushil Koirala's visit to New Delhi in May helped establish fine working terms with the new government, which became evident when India’s external affairs minister Sushma Swaraj made a visit to Kathmandu and won the hearts of the Nepalese people.

India has always played a crucial role during the political transitions in Nepal. This goes back to the time in Monarchy, where India thoroughly enjoyed a non-competing role.

Thus, Modi’s long and nuanced extempore speech in Nepali Parliament wherein he touched upon certain long-pending issues, was very well received in the country. He also spoke a few sentences in Nepalese, which was a humbling gesture. Apparently, even radicals like Prachanda and Baburam Bhattarai hailed his efforts and came to agreement.

Modi not only offered Nepal soft credit to the tune of Rs (Nep) 10,000 crore for various development projects, he even simplified the terms of diplomacy in his precise remarks that “India is an elder brother, not a big brother”. In the past, anti-India sentiments over the interventionist approach of the Indian mission in Kathmandu persisted, and there was no parity in political negotiations.

So, under this backdrop – Modi's simple yet sensitive approach to the issues at hand made his time in Kathmandu highly productive, not only on a political level but also in terms of improving trade relations between the two countries. He also spoke for rationalising the telecom arrangements and enhancing cooperation on security related matters.

Although the open border has been a unique feature of Indo-Nepalese relations, it has also been a major cause of concern for India apropos to its potential misuse by unscrupulous elements posing security threats to either side.

It was agreed that neither India nor Nepal would allow their respective territories to be used against each other. Both sides agreed to finalize the texts of Extradition Treaty and MLAT on an early date.

Crucial projects such as the Pancheshwar Development Authority (PDA) received the nod for approval. The Karnali hydro-power project– besides other power projects like Arun III, Upper Marsyangdi and Tamakoshi III - has also seen significant development. The development of projects of this magnanimous size will be a major catalyst for the development of Nepal’s enormous hydro-power potential.

The Nepalese side highlighted the trade deficit it is facing viz. its trade with India, and suggested measures to address this deficit through increased Indian FDI, relaxation of non-tariff restrictions including SPS standards for agro products, increased support in product development, relaxation of Rules of Origin requirement for duty free access to Nepalese products, and mutual recognition of standards, conformity assessment and accreditation.

The Nepalese side also requested the removal of Quantitative Restrictions (QRs) on the four core Nepalese export products namely vegetable fat, copper products, acrylic yarn and zinc oxide. The Indian side assured it would consider these requests – however it reminded them that the trade deficit could best be bridged by the development of hydro-power in Nepal and the export of surplus power to India.

The talks also included deliberations over three additional air entry points at Janakpur, Bhairahawa and Nepalgunj, and cross border routes to facilitate direct flights between regional airports (Pokhara-Bhirahawa-Lucknow), in order to save time, cut costs and improve air connectivity.

The two Prime Ministers directed relevant authorities to expedite all work related to the development of cross border transmission lines as was agreed by the Joint Commission. At the request of the Nepalese side, the Government of India agreed to consider undertaking the rehabilitation of Koshi Pump Canal, Koshi Western Canal System, and West Gandak Canal System with a Lift System to irrigate additional land in Nepal.

Modi’s visit to Nepal has brought about decisive and visible changes. It has reset the game with China now batting from a weaker pitch.

In the last two decades, China has been spending billions of dollars to categorically diminish India’s traditional stronghold in Nepal – but with new synergies in Indo-Nepal relations, China's propagandist interventions into the Himalayan nation will be in vain.

In the 1970s King Birendra proposed that Nepal be a ‘zone of peace’ between India and China and in the 1980s, Nepal began importing Chinese weaponry, which to India was clearly against the spirit of India-Nepal 1950 treaty.

With no Monarchy and the Maoists in mainstream, those arms export struggle between Indian and China is almost over in Nepal – however India’s concern stays about the seized Chinese advanced arms from the Maoists, which all are not under state control.

Nepal is a country landlocked between two Asian giants (India and China), along with a disputed Tibet – this complex geographical and political reality has been a key influence on ties among these three countries.

Modi’s is scheduled to visit Nepal again for the SAARC Summit in October, with which the South Asian Free Trade Area (SAFTA) may see a new lease of life. For now, Nepal no longer sees India as ‘Swayambhu’ – this is an achievement.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

Economists Agonize Over a ModiNomics Budget

They said “economists make more opinion than their own numbers” – thus means, most of their opinions see no light of the day. This year’s Union Budget came like a shocker to all those, who are in the ‘business of complexity and disillusionment’ – ‘frission of thrills’ replaced by the essentiality of ‘common sense’ in key policy formulations, hence leaving the flock of double minded economists and policy wonks without any anticipated prominence.

Pratap Bhanu Mehta’s piece in Indian Express (Achhe din, like old times, 29th July 2014) otherwise offers a hurried overview on the works of new government at centre but in patches exudes well, the agony of ‘those economists and policy wonks’, who lent their helping hands to the ruling party, in anticipation of plum positions, which did not materialise!
Free from preoccupations so far, this government means business and that more for maximum common good rather than the appeasement of an affluent few.

A very well meaning book by Sameer Kochhar, ModiNomics: Inclusive Economics, Inclusive Governance - came before the term ‘Modinomics’ eminently positioned as a bandwagon in policy circle and seems having strong effect on this year’s budget. The heart of the matter of this book lies in knowing first, and then highlighting the developmental works of Narendra Modi, as the Chief Minister of Gujarat – something, which is known as the “Gujarat Model”.

Precisely this book sums-up the “Gujarat Model”, as nothing but applying common sense in policy planning and ensuring implementations through good governance practices. In that case, bureaucracy becomes an enabler rather than a ‘hassle making blocks’, disowning clarity, honesty, common sense and sense of purpose.

Above all, the intention of leadership makes real difference – and its within recognition, Modi today epitomises it in effect, better than anyone else in Indian politics.

The new government’s preferences are akin to the developmental thinking of Prime Minister, who puts priority on top and work on that. As clearly visible, the budget underlined some of the key visions configured in the first chapter fromModiNomics, The essence of ModiNomics:Rethinking Subsidies (page 28-30):“Sound fiscal management is essential in promoting sustained, strong economic growth” – following that line, the Finance Minister during his maiden and interim budget, tried setting the finance of government in order by strong moves of fiscal correction. The budget aims a new fiscal deficit target of 4.5 per cent and GDP growth forecast between 5.4 and 5.9 per cent for current fiscal year, reflecting the policy clarity from the government – noticeably, ModiNomics pitched high on this.

Financial Inclusion (page 32-34): “The idea of inclusive growth rests on financial inclusion. Savings mobilised through regular institutional sources can sustain India’s economic growth. The role of regulators and bankers is important on this.” During his budget speech, the Finance Minister made it clear that the RBI will issue few more bank licenses and those banks would be differentiated banks, for catering the specialised needs in rural areas.

There are many other provisions but most importantly, on Independence Day, the Prime Minister will be announcing something big on financial inclusion plans, which means common men are the focus of this government in deeds, not only in words.

On Social Inclusion (page 34-36), ModiNomics says, “One of the biggest benefits of good governance is that it does not look at welfare of any particular section of the people; it results in welfare of all. For example, if you improve education or health services, all citizens in an area benefit. That is why we have adopted the mantra of ‘Sabka Saath Sabka Vikas’. After all, this is good governance. In fact, Sarva Jana Hitai, Sarva Jana Sukhay is the basic mantra.”The budget came in conformity with that.

On Digital Inclusion (page 36-38) – ModiNomics mandates, “We must accept that e-governance has a major role to play in our efforts to establish good governance. Gujarat has empowered Panchayat institutions through technology and not replaced them with technology. If I merely centralise all governance through technology, it weakens the participatory process. In our state, the basic philosophy is that technology should strengthen the institution’s capability to deliver services. We have one of the largest networks at the state level under GSWAN, and also the highest connectivity in rural areas. Gujarat is the only state in which 13,685 gram Panchayats have broadband connectivity” – the budget carefully carved niche for technological innovations across the India with the vision shared in the book.

Employment and Skills Development (page 40): ModiNomics says “To realise the full potential of the demographic dividend, he believes that a fundamental transformation has to be made in the way in which the government realises the potential of its youth” – the budget has shown ample orientation towards achieving employment elasticity (relationship between GDP growth and employment data).

The budget ensures that additional jobs have to be generated through the structural changes that Indian labour market has been going through. This has to happen with outbound movement of people from agriculture and allied activities to manufacturing and services. In all probability, this should be a reality with the latest policy supports.

On Public Private Partnership (page 42): ModiNomics recounts the experience of Narendra Modi as Chief Minister of Gujarat, “My experience tells me the same government set-up, the same laws, the same officers can still deliver good governance. What governance needs is good leadership, and not merely political leadership. Quality leadership must be available at every level, including within the bureaucracy. The government cannot run merely on dreams. The government must be policy driven. If the governance is policy driven, those who have to execute those policies will be clear in their mind as to their functions – responsibility and accountability will follow. When decisions are take, the nation moves forward.”

Much on this line, Public Private Partnerships (PPP) have given the heavy weightage in this budget for infrastructure creation but the Finance Minster has also called for to improving some of areas where PPPs are waiting for that. Intently that means, now the PPPs would be working, rather scrawling or not working at all.

And among the many positive stances in the budget, the praiseworthy is assurance to the investors that the Indian tax administration is not adversarial – also that the very effective tax dispute mechanism would be at place soon – to counter the ‘stuck cases’ and lacunas, those constrict tax collection in India.

The revival of economy would be possible through transparency and efficiency in taxation policies those plug leakages. This is for the country’s economic progress and inclusive national growth.

With clarity in mission, this budget will give country a much required growth impetus – at the same time, without overlooking on the incessant ire of inflation and unemployment. Afterall ModiNomics is about applying intelligent economic principles and executing them properly. This budget has shown, aiming growth and inclusiveness is very much possible through the same yardstick.
-Atul K Thakur
Email: summertickets@gmail.com

(Published in INCLUSION)