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Bimal Jalan reflects

Jalan book

 

Bimal Jalan exercises the writer’s privilege to box his reflections between three inflection points. The first is 1980, ostensibly because 1977-79 was the first time the Congress lost power at the Centre. The second is 2000, being the start of a new millennium. And 2014 is the bookend when the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) formed a majority government.
Obscure inflection points
Of these, the choice of the first two years as turning points is not immediately obvious. Conventional wisdom regards 1991 to 2014 as a near continuous development period, barring the fractious interregnum of 1997-99. In the 1980s, it is 1984 that dominates, as the end of an era with the assassination of Indira Gandhi and the beginnings of Rajiv Gandhi’s brief “Camelot” phase. The year 1980 is significant only because Sanjay Gandhi died in an air crash in June and Mrs Gandhi aged visibly. The choice of 2000 is similarly obscure, except for broadly coinciding with the start of Atal Bihari Vajpayee’s NDA government.
Dr Jalan – man for all seasons
But this is mere quibbling. The book is unconstrained by structural rigidities. It provides reflections, spanning Dr Jalan’s seven earlier publications since 1992.  It can’t get better. Dr Jalan was in the Rajya Sabha (2003-2009); the longest serving governor of the Reserve Bank of India (1997-2003) since 1992; finance secretary; secretary banking, chief economic advisor and India’s executive director to the IMF and the World Bank.
Seven key reflections
Readers would choose their own favourite reflections. But this reviewer was intrigued by the following seven.
Low public savings retard investment 
First, Dr Jalan favours the conventional view that the persistent gap between India and the fast-growing economies of Asia during the last four decades of the 20th century is explained by our low levels of investment. For this he squarely blames our ideological decision to invest in public sector industries, which failed to generate savings for future investment and instead bled scarce tax revenue to fund financial losses — a familiar story even today.
Colonial style administration ill equipped for challenges
Second, he red flags the fact that from the 1970s, we did very little to enhance the competence and efficiency of public administration. We still lack the required composition of skills and experience in the public space to provide 21st century results.
High expectation, poor execution
Third, he bemoans the fact that we unfailingly adopt best practice priorities — take the national priority for agricultural growth. But we fail miserably in making supportive policies and rules. We have throttled agriculture by ignoring the interest of the farmer to serve the interest of the consumer. Similarly, we prioritise a progressive fiscal policy. But the revenue from direct taxes stagnates while regressive indirect taxes are buoyant.
Sustained, high growth misaligned with political incentives 
Fourth, Dr Jalan’s term in the Rajya Sabha convinced him that deep political reform is the key to change India. And who could disagree? But some caveats apply. Decentralisation, as flagged by Jalan, is certainly desirable for enhanced effectiveness and public participation. But, it will not, by itself, serve to reduce the size of government. In fact, employee numbers and expenses are likely to increase as scale effects disappear.
Union government muscularity erodes state government autonomy 
In a similar vein, it is true that the Union government tends to erode the federal structure by misusing governors for narrow political ends. But constitutionally, we are a “Union of States with a centrist bias”, per political pundits, and not a federal state. Parliamentary norms and conventions are routinely subverted — a self-goal, since this reduces Parliament’s credibility.
Dysfunctional parliament erodes its own credibility
Dr Jalan cites 2006, when the budget was passed without discussion, illustrating political expediency of the worst kind. But it is open to question whether the existing process for annual Budget presentation and examination remains a productive exercise or has become mere form without substance. The cabinet system of decision-making, underpinned by the principle of collective responsibility, was undeniably subverted during the United Progressive Alliance government, since political power was dispersed beyond the government. But this was poor practice rather than a structural flaw. And it appears to have healed itself after 2014.
Judiciary – safeguarding the constitution 
Fifth, the judiciary, rightly, comes in for high praise, for progressive jurisprudence, safeguarding the principle of separation of powers, and the primacy of the Constitution. But entrenched territoriality in the judicial appointments process remains contentious.
Public sector banks – out of control
Sixth, Dr Jalan recounts, financial reforms after the Narasimham Committee report of 1998 enhanced the resilience of Indian banks. But he leaves the reader begging for more on what went wrong over the last decade to inflate stressed loans to crippling levels. Are not politicised leadership and boards the problem in public banks? And given the stakes, can UPSC selection – as Dr Jalan suggests – really be an effective bulwark? Would not ramping up private shareholding, with the government holding only a “golden share” be a more effective solution? More generally, how effective are the existing prudential norms, for limiting exposure to sector, corporate or currency risk?
Tax reform – only half done?
Seventh, Dr Jalan’s view that it is unnecessary to reopen the constitutional scheme for inter-governmental division of taxes is curious. Tax pundits advocate that GST be extended to alcohol and petroleum.
jalan 2
It is a broad canvas on which Bimal Jalan reflects, as befits one who has helmed public policy since the 1980s. Readers will look forward to his take on the more recent developments — that is, since 2014.

 

Adapted from the authors Book Review in Business Standard, September 18, 2017 http://www.business-standard.com/article/beyond-business/bimal-jalan-reflects-117091801405_1.html

 

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Book Review, bureaucracy, Democracy, Economy, India

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Well begun is half done

BOOK REVIEW
India Transformed
25 years of Economic Reforms
Rakesh Mohan – edited 
Penguin Viking 
670 pages; Rs 999

 

India Transformed
Curating 31 essays into a story on India’s economic reforms can be a giant yawn. But Rakesh Mohan, a videshi economist and a veteran of four major government committee reports, is up to the challenge. 
THE PLUMBING WHICH CHANGED INDIA
Indians believe that the actions of civil servants determine the future of India. This is an abiding fallacy. The truth is, starting from Jawaharlal Nehru to Narendra Modi, it is politics and political leaders that set the tone, whilst civil servants dutifully follow with the plumbing. This book is not about the broader political economy of reforms. Those stories have been told elsewhere. Instead, this book examines the practices and processes — back-office stuff — that achieved reform objectives. Expectedly, therefore, essays by civil servants and public intellectuals dominate this compilation. 

 

INDIA TAKES CHARGE OF MACRO ECONOMIC STABILITY
C Rangarajan marks 1991 as a watershed moment in the Indian economic history. Montek S Ahluwalia agrees and debunks the J Bradford DeLong (2001) and Dani Rodrik Arvind Subramanian (2004) proposition that the 1991 reform process was overhyped; that merely becoming business-friendly would have been sufficient to yield the maximum value; that external liberalisation was merely genuflecting to the Washington Consensus. He asserts that the reform architecture responded to the local context and was designed for medium-term results. Y V Reddy deconstructs the role of fiscal federalism in stabilising state budgets. Laveesh Bhandari evidences this by citing best-fit policies and programmes innovated by states using these additional devolved resources. Jaimini Bhagwati reviews the process of capital market liberalisation that was key in enabling competitive industries to grow. 

 

USING THE GROWTH DIVIDEND
Top diplomat Shyam Saran traces the post-cold war, benign, unipolar world that gave India breathing room to grow till the 2008 financial crisis. His successor in the foreign office Shivshanker Menon establishes how economic growth engendered new foreign policy options for India — a view endorsed by Martin Wolf, who advocates even greater proactivity in world affairs. Sanjaya Baru links the recalibration of India’s security matrix to the new-found confidence from successful reform. Tarun Das points to the quiet success of Track II initiatives in forging defence and nuclear cooperation. Harsha Vardhana Singh, details how substantive tariff rationalisation opened domestic industry to competition. However incomplete, domestic factor market reform shackled export growth and enhanced the trade deficit. N K Singh and Jessica Seddon illustrate how public and private roles moved from mere co-existence to co-evolution, especially in infrastructure development. 
THE MARGINALISED 
 
rural India
But the benefits from economic reform did not accrue symmetrically. Rakesh Mohan postulates that domestic labour market and regulatory rigidities continue to dull the growth potential in small manufacturing. Ashok Gulati argues that liberalisation of the exchange rate, lower industrial tariff and private investment norms never benefited agriculture due to institutional rigidities. Devesh Kapur documents that enlarged access to education was not accompanied by quality enhancement. Naushad Forbes rues the stagnation of Indian R&D spend as a proportion of gross domestic product and the skew towards science research, rather than technology development, which can constrain innovation. Nachiket Mor et al are sceptical that stepping up private investment alone can result in catching up on health outcomes. Sarwar Lateef argues for deeper governance reforms to benefit the disadvantaged. Vinayak Chatterjee laments that the PPP (public-private partnership) model died because of unrealistic asymmetric expectations between government and private developers. 

 

LISTENING TO THE “ANIMAL SPIRITS”
The voices of the intended beneficiaries from reforms — consumers and domestic suppliers — are jammed into the last segment of the book. Rama Bijapurkar caricatures the new Indian consumer, cannily devouring cheap Chinese goods and luxuriating in retail therapy, financed by the deep pocket of e-commerce start-ups. Gita Piramal points to the churn in private business league tables as illustrative of the competitive forces unleashed by reforms. Omkar Goswami adds that the concentration of business accelerated as companies sought scale economies. Services benefited disproportionately, being less constrained by the continuing hurdles in acquiring land or access to quality infrastructure. 

 

Deepak Parekh narrates how HDFC seized new opportunities in banking and insurance using its core competence in customer-friendly financial services. For Mukesh Ambani, economic reform was instrumental in fulfilling his father Dhirubhai Ambani’s dream of a global scale of operations. Kiran Mazumdar-Shaw — a first mover — lucked out. With just Rs 10,000 in her wallet, Biocon grew into a $1-billion listed company by 2004. Sunil Bharti Mittal, a spunky, first-generation entrepreneur, seized every opportunity available to establish India’s first multinational telecom company. If every second American truck has a Bharat Forge axle, Baba Kalyani has economic liberalisation to thank for it. For Narayana Murthy, liberalised import of hardware and current account convertibility alone were enough to make Infosys fly. R Gopalakrishnan recounts how storied firms, like HLL and the Tata group, also restructured and diversified. 

 

INDIA – THE QUINTESSENTIAL REFORM DEBUTANT
shy
T N Ninan describes navigating reforms in India as the impossibility of cooking an omelet without breaking the egg. Vikram Singh Mehta similarly recounts the broad consensus but only for shallow reforms in the petroleum space. Some of this reticence was because of the dharma of coalition politics. This constraint no longer exists. Will the consensus deepen now? And will it now be our time to eat?

 

Adapted from the author’s book review in Business Standard, August 17, 2017 http://www.business-standard.com/article/beyond-business/well-begun-is-half-done-117081501123_1.html

 

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Book Review, Economy, India, poverty, Public Institutions

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The Parsi who abducted Jinnah

‘Mr And Mrs Jinnah’: A Tale Of Unrequited Love And Its Aftermath

BOOK REVIEW : Reddy, Sheela. Mr and Mrs Jinnah: The Marriage that Shook India Penguin Random House India, 2017. 464 pp.

Sheela Reddy has a winner in this deftly crafted and diligently researched work on the life and times of Rattanbai Petit Jinnah. But this is not a racy read to be completed on the flight from Mumbai to Delhi. Try it only when you have the time and mindspace for it. There have been other works on the Jinnahs earlier – Khawaja Razi Haider’s Ruttie and Jinnah and Kanji Dwarkadas’s Ruttie Jinnah: The Story of a Great Friendship.

The recent release of the private papers of Padmaja Naidu provided the impetus to revisit Ruttie and her times. The author paints a broad canvas of the life and times of the commercial, professional, political and zamindari elite of the British Raj during the first three decades of the 20th century with the rumblings of guided democracy as a backdrop to profile Ruttie.

Other characters enter through the door opened by her, including Muhammad Ali Jinnah, or “J” as Ruttie called him – a relentless achiever, penniless son of a bankrupt Shia businessman in Karachi, who became the most sought-after barrister in Bombay, a multi-millionaire by the time he was 40 years old; the political leader of Indian Muslims and eventually, Quaid-e-Azam of Pakistan; austere to the point of having cold baths in freezing England and yet a dandy dresser, with an eye for fast cars and a mansion on Mount Pleasant Road, Malabar Hill.

Jinnah Gandhi

JINNAH – Macaulay’s perfect product with GANDHI – wily, veiled Macaulayputra

ruttie

RUTTIE JINNAH – THE PARSI BEAUTY WITHOUT A CAUSE

Ruttie could have passed into the pages of history unnoticed had it not been for two red lines she crossed. First, at a time when caste and religion were impregnable walls for getting married, Ruttie, a Parsi, married Jinnah, a Shia, without her parents’ approval. Even today “Love Jihad” – a Muslim man marrying a non-Muslim woman, remains socially somewhat unacceptable. But in 1918, this was unheard of. Such were the religious rigidities, that even Motilal Nehru, a contemporary, anglicised Kashmiri Pandit barrister from Allahabad, twice president of the Congress, could not stomach his daughter, Nans (later Vijay Laxmi Pandit), marrying a Muslim man she loved. He successfully moved heaven and earth to break up the romance, aided and abetted by Mahatma Gandhi.

THE PULL OF OPPOSITES

For Ruttie, to have followed her heart, without considering the consequences, was typically foolhardy but also exceptionally courageous. Second, characteristically, it was Ruttie who pursued and wooed Jinnah, a regular guest at the Petit mansion, which with its fabulous cuisine and gracious hospitality was a melting pot of high society.

“I abducted him” was Ruttie’s conclusive declaration to the judge hearing the abduction charge lodged by her father against Jinnah, once he came to know of their secret marriage according to Islamic rituals. It is easy to understand why Ruttie desired Jinnah. He was quite simply the most desirable man around, seemingly impervious to the charms of dozens of swooning society damsels, including, rumour has it, Sarojini Naidu. It was a challenge Ruttie could not ignore.

Not so obvious is why Jinnah wanted Ruttie. Salacious rumour, implausibly, insinuated that it was Ruttie’s wealth which attracted Jinnah. The author perceptively suggests that behind his mask of male invincibility lay an insecure man, craving love and affection. Ruttie, a romantic with undentable self-confidence, bravado and panache must have been the perfect blend of strength and womanly caring which Jinnah had never experienced. Their romance was short lived. From the time they got married in 1918 – when Ruttie turned 16, the cold embrace of Jinnah’s austere life began to cool the flames. It was not the age difference which mattered (Jinnah was 24 years older than her).

Jinnah had devoted himself to his work and to politics since 1898 when he first came to Bombay from Karachi. There was never any time for anything outside his professional and political ambitions. For Ruttie, life was meant to be enjoyed, travelling, meeting and making friends, partying and dancing – which Jinnah detested, interspersed with a fierce commitment to social causes and extravagant gestures defying convention, like sitting on Jinnah’s desk with her legs dangling, during business meetings.

The need to shock, to be out of the ordinary, manifested itself in unorthodox behaviour in Ruttie – refusing to courtesy to the Viceroy, instead greeting him with folded hands in the Indian way; venturing out into the Lower Bazaar in Shimla to eat chaat by the roadside, which upper class women of her time never did. Her portrait penned by Lady Reading, the wife of another Viceroy, is tellingly pointed: “Very pretty, a complete minx. She had less on in the daytime than anyone I have ever seen.” Not surprisingly, the marriage quietly unraveled.

NO PLACE FOR WOMEN LEADERS IN POLITICS

Ruttie longed to join Jinnah in his struggle against the British. On one occasion, whilst Jinnah and the Home Rule Leaguers were engaged in a fierce struggle within the Bombay Town Hall to outvote the supporters of Governor Lord Willingdon, who wanted a memorial erected to honour the governor’s services, Ruttie succumbed to her secret desire to directly engage with the massive crowd gathered outside. Climbing atop a soap box, she delivered a rousing speech which had the crowd begging for more.

Such was the tumult they created, that the Commissioner of Police arrived to disperse the crowd. She refused to leave and resolutely stood up to the water cannons which were unleashed on her and the crowd, drenching them completely. Her beauty, now clingingly displayed, her passion and her determination were much praised.

Jinnah never commented on her actions. But Ruttie understood that her place was not to lead but to sit mutely behind Jinnah in public support of him. This continues to be the role for many talented but unfortunate Indian women even today in our patriarchal, gender-biased society. Jinnah was entirely self-centred, craving attention and love, but only on his terms and at his bidding.

INDEPENDENT WOMEN AT A TIME OF INSTITUTIONALISED DEPENDENCE

The more traditional amongst modern Indian women continue to resignedly cater to it. But Ruttie never was a traditional Indian woman. She, more than any other, was what rich, Indian women from anglicised homes were being taught to become by imbibing the “enlightened” European-style education and lifestyle they were exposed to. That hers was the right way was reinforced by the examples of liberated womanhood around Ruttie. Sarojini Naidu, her key confidante and a frequent guest at the Petit Mansion, equally at ease in Gandhiji’s ashram as in Bombay high society, spent more time out of home on lecture circuits and Congress meetings than with her family in Hyderabad. But her good fortune was to find in MG Naidu the perfect, enlightened, supportive husband, gently explaining to their daughter, Padmaja, that her mother had committed to serve the nation, which thereafter became a duty she could not ignore even at the expense of spending less time with the family.

NEVER A FAMILY

A girl child was born to the Jinnahs in 1919, known today as Dina Wadia married to Neville Wadia of the illustrious Mumbai industrial family. But parenthood created no new bonds. Like the other super rich, anglicised Indians of the time, the Jinnahs outsourced care of their child to European nannies and tutors. Jinnah took no interest in her, beyond willingly paying the bills of the nannies. But that was not atypical for the times.

Why Ruttie, who seemingly adored children and lived with a menagerie of pets, took no interest in her child, remains less clear, except if examined through the lens of Ruttie’s all-consuming love for Jinnah, which left no place for any other.

Seeking a stabilising routine, Ruttie emulated her mother and diverted her creative energies into wifely duties, turning Jinnah’s mansion, South Court, into a breathtakingly beautiful home. But she was unable to cope with the loneliness of unrequited love. Jinnah was not given to expressing his emotions. On the contrary, his entire life had been a struggle to master them.

Ruttie, ostracised by the Parsi community, took refuge in dancing, the occult, Theosophy and ultimately drugs. Ironically, Motilal Nehru visited the lonely Ruttie whenever he was in Bombay. Every visit to the miserable Ruttie must have served to reassure him that he had done the right thing in saving his own daughter from crossing the communal divide. By 1928, the couple were ready to part. Jinnah chided himself for marrying a mere child.

THE END

Ruttie felt stifled by the need to keep up the charade of a hollowed-out marriage, which was devouring all aspects of her character except the role she was expected to play. “Try and remember me beloved,” she wrote to Jinnah “…. as the flower you plucked and not the flower you trod upon.” Her letter to Jinnah on separating is a damning indictment of unrequited love. “Darling, I love you. I love you – and had I loved you a little less, I might have remained with you.” Within a year of separating, Ruttie was dead – rumour has it, through an overdose of drugs. She died on her birthday – February 20 – at the age of 29.

LIVING CONTEXTUAL LIVES MATTERS

Born at the dawn of the 20th century, Ruttie exuded the confidence and exuberance of one born to lead. But her gilded life remained imitative, out of context, a parody of an alien culture, lacking in the sense of purpose or deep roots, which are the bedrock of inner peace and happiness.

Rapid urbanisation and the tech explosion in India have spawned similar incentives today to live “out of context”, “over the top” lives, in insulated, comfortable, alien bubbles. But take heed of Ruttie’s lesson – nothing which is out of context is sustainable.

Sheela Reddy’s book is a treasure trove. A must-have for your bookshelf.

Adapted from the authors BOOK REVIEW in Swarajyamag, August 3, 2017 https://swarajyamag.com/magazine/mr-and-mrs-jinnah-a-tale-of-unrequited-love-and-its-aftermath

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Book Review, India, Jinnah

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India’s pressured public institutions

BOOK REVIEW
Rethinking Public Institutions in India
Devesh Kapur, Pratap Bhanu Mehta, Milan Vaishnav (Eds)
Oxford University Press
548 pages; Rs 995

Rethnking Pub Inst in India

Public institutional reform has a stale air about it. There are plenty of options but little action. The sombre packaging of this book adds to this gloom. Possibly, the “monkish”, value-for-money branding is a consciously adopted tactic, setting it apart from the current trend favouring glitz and hype. The authors appear to be flinging a dare — that in their case substance needs no gloss. They are right.

PBM

The editors’ academic pedigree is reassuring. Pratap Bhanu Mehta is the best-known of them, a public intellectual extraordinaire and the acknowledged voice of evidenced, liberal political thought.
Devesh
His co-editors Devesh Kapur and Milan Vaishnav are US-based academics.
milan vaishnav
This new publication is a follow-on of a 2007 publication Public Institutions in India: Performance and Design co-edited by Messrs Kapur and Mehta.
The contributors are an eclectic mix of UK-, US- and India-based academics and Indian civil servants, serving, repositioned or retired. What is common is their deep and systematic association with public institutional development and an enviable record of publishing their work and opinions.
Are public institutions in India doomed?
So, are central public institutions going to seed? And does that explain India’s future challenges? The introductory chapter, written by the editors, provides an elegant, broad sweep of drivers and trends in institutional malaise, highlighting areas where performance has been dangerously below par. But the helicopter view is a mite too one sided, veering to a dark view of the state of national institutions.
Institutional resilience outnumbers the failures 
A more nuanced and refreshing view emerges from the succeeding chapters, each about a single institution. James Manor, writing on the Presidency, exquisitely details how this apex institution, despite the occasional failures of individual incumbents – think Fakhruddin Ali Ahmed who signed on the dotted line to impose emergency in 1975 and Giani Zail Singh, who was not averse to being actively political – has been a steady hand, safeguarding constitutional propriety and citizen rights from potential executive and legislative transgressions.
Errol D’Souza, reviewing the Reserve Bank of India, describes its pugnacious success in enlarging its regulatory space, solely through its performance-driven credibility. E Sridharan and Milan Vaishnav pen a fluid and attractively rendered tale, about the Election Commission of India, which has similarly earned its spurs. Eighty per cent of Indians trust it because of its remarkable conduct of timely, fair and efficient elections. Madhav Khosla and Ananth Padmanabhan describe how the Supreme Court has nurtured the public’s trust by courageously and consistently ruling in favour of equity, inclusion and fair play. However, they warn that dark clouds loom unless justice is delivered more efficiently.
Navroz Dubash writing on new infrastructure regulatory institutions – the Central Electricity Regulatory Commission (CERC) and the Telecom Regulatory Authority of India (Trai) – acknowledges that in the initial years both had to fight severe challenges from publicly-owned monopolies and their patrons in government. Two decades on, they are the arbiters of positive change. The CERC has overseen competition in bulk electricity supply. The Trai has curated highly competitive private telecom customer services and tariffs. However, Dubash correctly points to the need for enlarging the regulatory space such that all actors – the Parliament, Judiciary and the Executive become active players in negotiating regulatory outcomes, with the Regulator playing the balancing role,
Institutional failure more visible in sub-national entities
“State failure” is a malaise more visible in sub-national institutions, which have failed to imbibe the positive changes taking place in related central public institutions. State governors, legislatures, the lower judiciary, state public financial management institutions, electricity regulatory commissions, vigilance departments, and election commissions are often severely blemished. T R Raghunandan woefully records that institutions of local government remain ignored, underfunded and underused, except in Kerala, Karnataka and West Bengal. Consequently, inclusive growth suffers and an opportunity is lost for embellishing and inculcating local traditions of results-based democratic functioning.
But there are black sheep at the national level too
Not all national institutions, despite inherited advantages, have developed benignly. Parliament is one such. M R Madhavan ruthlessly excavates the reasons it has lost the public trust. R Shridharan similarly unravels why the Central Vigilance Commission, India’s anti-corruption agency, and its investigative arm, the Central Bureau of Investigation, have failed to establish their credentials. The former is merely a tool, to be used selectively, by the executive against its own officials. The latter is at its nadir. The moniker “caged parrot” accurately reflects why it has lost credibility in the fight against corruption.
The Comptroller and Auditor General (CAG) of India, the supreme audit institution, gets mixed reviews from R. Shridharan and Amitabh Mukhopadhyay. The CAG is uniquely placed and significantly empowered, to guide and assist Parliament to exercise granular oversight over the executive. Its path-breaking exposure, under Vinod Rai, of massive inefficiency and financial impropriety in spectrum and coal allocations lifted its public profile. But, in its “independence”, also lies the danger of it being ignored, through a “conspiracy of silence”, between a dysfunctional Parliament and a pliant executive.
The civil service, particularly its elite component – the All India Services (AIS), which constitute 0.03 per cent of the total civil employees and just 1 per cent of the Group A employees of the Union Government – have unambiguously failed. K P Krishnan and T V Somanathan admit that nothing has changed for the better over the past decade. Recruited on merit, this tiny elite thereafter enjoy the rents accruing from that initial, one-time achievement. But the authors shrink from endorsing that the AIS be phased out and its functions reallocated to the specialist cadres of the Central Services — these constitute 99 per cent of the Group A civil employees, who currently fester despondently.
This is a multi-layered, exhaustively referenced publication, which surgically exposes the dark side of public institutional dysfunction. But it also provides sufficient evidence of institutional resilience, on which an enlightened political leadership can build. A must-have, for all those who either belong to, or wish to join, the frustratingly uplifting community of public institutional developers.
Adapted from the authors review in Business Standard June 15, 2017 http://www.business-standard.com/article/beyond-business/public-institutions-under-scrutiny-117061401505_1.html
raj ghat
Raj Ghat – Gandhi ji’s memorial keeps the flame of “independence” alive

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Book Review, bureaucracy, corruption, Democracy, Economy, India, Law and regulation, Public Institutions

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Book review: Tharoor, An era of darkness

tharoor

Shashi Tharoor’s latest book originated in a debate at Oxford on whether Britain should pay reparations to its erstwhile colonies. The YouTube clip of Tharoor systematically demolishing the opposition, his brilliance evident in the thrust and parry of debate, has been watched by more than three million viewers. But the author says he felt a “moral urgency” in informing the “layman and students” in India and in Britain, about the “horrors” of colonialism and hence this book.

The book is conveniently divided into eight chapters. Unusually, each is virtually self contained though each focuses on specific topics, as for example, the extent of the loot; dividing, rather than unifying India; subverting Indian diversity in ersatz modern British institutions; the policy of divide and rule; the absence of enlightened despotism et al. Whilst this stratagem of comprehensive rendition adds to the length, it facilitates selective, speed reading. There are also 295 helpful references to other works—both Indian and foreign, a veritable treasure trove.

The Raj – long on loot short on local benefits?

The author deploys the familiar nationalist tactic of talking up the wealth and virtues of pre-British India, while playing down the inadequacies of much of post-independence India, to book-end the “horrors” of the Raj. The benefits from the Raj are dismissed as few and that too, unintended, barring the development of a pan-India modern press and media; development of canal irrigation; scattered electrification of towns; and of course -the railways. Oddly, the planning and building of regulated, urban settlements for the British, expanded versions of which, subsequently, also became the refuge of India’s political, business and professional elite and in less oppulent versions for India’s middle class, goes unacknowledged.

The “loot” neither began nor ended with the Raj 

The litany of colonial woes is expectedly long. Nothing attracts instant attention more than stories of loot and rape inserted early on in a book. The British drained 8 per cent of India’s GDP as per Paul Baran’s 1957 estimate. Annual outflows are separately estimated by William Digby at 4.2 billion British pounds during the 19th century. Extrapolating this trend onto the first half of the 20th century, the additional outflow was 2 billion British pounds. Huge as this cumulative sum seems, consider that Indians themselves are estimated to have amassed $500 billion of illegal wealth abroad in less than seven decades of India’s independence as per the CBI in 2012. Consider also, that against the less than 10,000 British subjects employed in India, the Report of the Indian States Committee of 1929 lists a total of 562 princely states, each with a retinue of vast numbers of relatives of the ruling family living off the state treasury. There is no corresponding account of how much these effete rulers and their families cost the ordinary Indian.

maharaja-bhupinder-singh-patiala

Indian Maharajas delighted in maintaining humongous households and extravagant habits – and why not, since the aam admi paid for it all.

Yes, the British used India as a source of capital and raw material for their industries, which stilted Indian industrial development. Yes, they helmed organised commerce in India via the Managing Agencies. But just as surely, Jamshedji Tata’s dream of establishing a modern steel mill saw fruition because British India guaranteed the off-take of steel and built the railway to link the steel mill with raw materials and markets, thereby making it India’s first Public Private Partnership.

tata-steel

Jamshedpur, 1912: The first steel ingot is rolled 

The author cites the regulations forcing Indian mills to produce only British Specification Steel as a low stratagem to make them uncompetitive. But it could also be viewed as the first step towards internationalising standards in Indian industry. Not producing to international standards was our failing till we liberalised industry and opened our markets to competition in 1991.

The Raj was neither elightened nor did it serve a moral purpose

Of course, the British, as a colonial community, were rapacious, openly racist and self-serving. But the evidence is thin that they were any worse than the long line of Indian rulers that preceded them. Admittedly, it mattered where you lived. The princely states of south and west India were generally better managed and more progressive than those in north and eastern India.

Colonial consequences: The death of institutionalised privilege & rise of the new middle class

Tharoor’s view that neither the political unity of India nor the adoption of democratic norms was a direct outcome of the pan-India political architecture of the Raj is inadequately backed up with evidence. The mere fact that Arabs refer to all Indians as “Hindi” is hardly evidence that pre-British India was already integrated. By this logic, all those living south of the Vindhyas are “Madrasis” because that is what ignorant North Indians called them and all of Arabia is one because we refer to people from there as “Arabs”.

The author ignores the greatest accomplishments of the Raj—the decimation of the old order of inherited privileges and rights; kindling of the spirit of democracy and incubation of the great Indian middle class via government jobs in the railways, the army and in civil governance.

Prime Minister Indira Gandhi, by abolishing privy purses in 1971, ended what the British began—the consigning of India’s numerous Maharajas to the dustbin of history. By institutionalising the common law and opening up vacancies—admittedly too few—at the very top, the Raj inspired millions of young, ordinary Indians to aspire to be literate and professionally qualified. That three generations of Indians had to serve as clerks to British superiors, not necessarily more accomplished than themselves, is a regrettable but possibly an inevitable consequence of gradual transition.

The Indian Constitution – equity, liberty and inclusion

The Indian Constitution is a direct outcome of the groundwork done over the previous four decades, since the Minto-Morley Reforms of 1909, to implement consultative democracy by including the professional middle class in the process. Ask any Dalit, backward caste, tribe or other minority and they will ascribe their liberation from traditional shackles to the modernist, reformist social and economic thinking which emerged, possibly as a nationalist response, to British rule.

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Babasaheb Ambedkar: Iconic messiah of dalit inclusion

It is not for nothing that Babasaheb Ambedkar wore a suit and a tie rather than a dhoti. For him the suit was a symbol of liberation from the oppressive rule of India’s traditional, upper caste elite and the Constitution was his guide to a more equitable future. Mayawati, Manmohan Singh and Prime Minister Modi are the organic outcomes of the much-needed, albeit self-serving, prising open, by the British, of India’s dormant, traditional cleavages—a black box of competing religions, castes and regions. Consolidation of these traditional identities at the national level via democratic institutions is what has changed the social landscape of India.

Sans the Raj – either a balkanised Hindustan or Red India

Tharoor speculates that if only the East India Company had not been as successful as it was, India would have found its own way to modernity. But what if we had remained hopelessly Balkanised instead? Why would we have not succumbed instead to the romance of Communism and gone the Chinese way? Would bloody revolution, social upheaval, the end of private enterprise, de-legalisation of religion and cultural diversity, unrelieved even by the constitutional promise of human rights and freedoms, have been better?

Contempt for the “box wallah” and the bania -Colonial hangover or the convenience of ersatz socialism? 

Tharoor speciously links our inward looking, anti-business attitude in the first four decades of independence till 1991, to our bad experience with the East India Company. This looks awfully like a red herring. It would be more instructive instead to examine the role played by our ineffective brand of ersatz intrusive socialism, used by the elite as a cloak, to retain domestic privilege. The ordinary Indian has looked westward for higher education and advancement, primarily because the professional choices at home have been too narrow and the glass ceilings too low.

Even the author accepts that the British Raj was more efficient than the domestic institutions it replaced. He is right that the rapacity of the Raj was exaggerated, precisely because its extractive capacity was greater than the loosely regulated Princely States. Consider the establishment of land records and the uniform and regular assessment and collection of revenue.

High taxes, yes but also efficient systems and records

Tharoor bemoans the high rates of taxes and the resultant penury for landowners since the burden of taxation fell on land and not trade. Yes, indeed. But that very system also bequeathed an embedded practice of recording individual property rights and updating transactions thereof, which is fundamental for development of private enterprise and for access to bank finance. The British left us with a treasure chest of land tenure, revenue and demographic data and an entire community of rule-bound “babus”. Better this than the institutional anarchy many other developing countries faced, post-independence.

Tharoor packs in masses of information and opinions around the British Empire in India. But it is all done in a grand, Quixotic style of tilting at windmills. The book is a hard-hitting, one-sided debate and caution is advised in succumbing to its mesmerising message, that the Gora (white man) is to blame.

Adapted from the authors book riview in Swarajyamas December 2016 http://swarajyamag.com/magazine/tilting-at-windmills

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Book Review, Democracy, India, Indira Gandhi

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Book Review: Ram Guha’s latest soup

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Ramchandra “Ram” Guha’s latest book- Democrats and Dissenters – a collection of sixteen essays – is a meandering but delightful read. Part one explains India. Part two is about the scholars who have helped Ram do so. The link between the two parts is a stretch unless part two is the marshalling of a scholastic framework used in part one. By this logic inverting the sequencing – reading part two before part one, helps.

Ram Guha’s thought leaders

In this pantheon of six scholars, Dharma Kumar (1928 to 2001) is the only woman. The Delhi School of Economics professor and economic historian is the archetypal “nurturer” – mentoring students; incubating research; being a role model for unselfconscious women’ s empowerment; a “liberal polemicist”; determined opponent to fundamentalism and to the politics designed to take advantage of such bigotry.

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Professor Dharma Kumar, Ram Guha’s “fellow radical” and the “last Liberal”

Possibly Dharma Kumar was the engaged academic, the one Ram decided never to became. Eulogising Dharma is his way of atoning for the consequential social loss.

Eric Hobsbawm’s (1917-2012) life-long commitment to Marxism illustrates the perils of sacrificing scholastic distance to wed ideology.  Guha builds on this theme in the chapter on the eight barriers to freedom of expression in India -ideologically committed writers being one.

The rooted, intellectual energy of the revered Kannada novelist U.R. Ananthamurthy (1932-2014) is implicitly contrasted with Hobsbawm’s dogmatic obsessions. Ananthamurthy, a Lohiaite had scant regard for identity obsessed Lohia descendants. His advocacy for sustainable development strikes a chord with Ram’s green roots, as does his dismay with Narendra Modi’s style of combative politics. For Ananthamurthy – and one suspects for Ram – building a “supple” India is far more important than building a “strong” India.

Benedict Anderson (1936 to 2015), an Irish scholar earned his spurs by deepening the study of nationalism in Latin America and Asia. His is the framework, Ram prefers, for nation building – “modern, contingent, forged out of struggle and contest…. replacing faith in God with faith in the nation …. never rooted in ancient history or in ties of blood or soil”. This is Guha’s elliptical manner of pointing out where Indian nationalists are going wrong.

Guha poses a provocative question – why are there so few right wing, conservative Indian intellectuals, other than in economics? R. Jagannathan, writing in the Times of India, has riposted that bench strength is not a good measure of intellectual vigor. Independent scholastic thought depends crucially on the availability of a supportive environment, which is rarely a feature of developing countries.

Guha’s gold standard for right wing conservatives is C. Rajagopalachari 1878-1972. Out of sync in the post-independence, ersatz socialist, Congress party, Rajaji left to found the Swatantra party in 1959. Rajaji defies conventional pigeon holing – a devout Hindu and a liberal, he presciently advocated against “big government” and the “megalomania of …. big projects”. His advice to the Hindu right wing Jan Sangh in 1968 was to go beyond mere toleration of the minorities. Guha’s view is somewhat similar – “a credible conservative intellectual tradition can only emerge outside the…. (reactionary) …. ecosystem of the Sangh Parivar”.

Andre Beteille is to sociology what Amartya Sen is to economics. More high praise for the sociologist comes by way of Ram labeling him the C. Rajagopalachari of our times. Devoted to field work related research; committed to no ideology or utopia other than his vocation; far removed from the convivial seductions of Delhi (much like Ram), Beteille embodies the ultimate scholar. Consider this understated gem from him, which speaks to the divide between Bharat and India: “While educated Indians are inclined to think and speak well of the village, they do not show much inclination for the company of villagers”

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Andre Beteille, sociologist extrodinaire and diligent practioner of evidence based analytics.

Roots and how to not abuse them

There is a long chapter on Ram’s book review of Sen’s, “The Argumentative Indian”. Ram objects to Sen imposing modern concepts like “constitutional secularism” or “judicially guaranteed multi-culturism” to the pre- modern practices of emperor Akbar’s court. Sen’s motives are progressive, in portraying medieval Muslim rule as not wholly anachronistic. But Ram apprehends unintended negative consequences from other revivalists, similarly departing from historical rigor, by sanctifying the past to further current political objectives.

A distant glorious past dictating the present is Guha’s worst nightmare as in Pakistan – a revivalist country so devoid of outstanding current accomplishments that it compulsively harkens back to medieval times for inspiration. Vignette one is Pakistani liberals being nostalgic over dinner for the “high noon of Muslim political power in the sub-continent”. Vignette two is the rewriting of Lahore’s history – casting over it “an Islamic glow” whilst ignoring past accretions to its culture by the Sikhs, the Hindus and the British.

“likes” and “unlikes”

Ram does not take kindly to the political philosophy of Hindutva. For him accepting majoritarianism means abandoning inclusion and secularism – fundamental principles that India, unlike Pakistan, was founded on. In a similar vein, he privileges democracy versus authoritarianism. This is the message Ram carries on his travels to China in 2008, to a conference on multi-culturism.  His host- a Professor Lin – whilst generally approving of Ram’s credentials as a proselytizing, liberal, gently remarks “If India were not so economically backward, it would persuade the world more easily about how it has nurtured democracy and diversity.

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India: Free to be desperately poor

The Congress party – makers of modern India or merely savvy rentiers

Ram is an intellectual- one who has much to be immodest about. But often the polemicist prevails.  How does one square his more than fulsome praise of the Congress party for making India “less divided, less violent, less hierarchical, less patriarchal, less intolerant, less unequal and less unfree” with his assessment of its progressive decline and its eminent death due to its conversion into a family business by Nehru’s “abysmally incompetent and self-seeking” successors.  He may yet have to eat his words as political Phoneixs rise routinely in India. Add to this that he flags the ill-judged, abandonment of the party’s liberal, secular credentials for perceived political gains in 1975-77, 1984, 1986 and 1992? Three of these figure in Ram’s list of the eight worst years for India. Consider also his assertion that India lacks a culture of actively preserving the constitutionally mandated freedom of expression and the acknowledgement that subversion of this right occurred as far back as 1951 via an amendment to Article 19 (2) inserting “public order” as an additional exception for curtailing this freedom. Put all this evidence together and you would be hard pressed to align it with Ram’s assessment of the largely benign impact of the long years of Congress rule.

Make peace not war

On the use of violence as an instrument of self-determination Ram’s conclusions are pragmatic and surprisingly conservative. He notes that in the past half century only two nations have been born from armed struggle – Eritrea and Bangladesh. He could have also included the most recent case of South Sudan in 2010. His advice to armed secessionists in Kashmir is sound. Learn from the failed insurrection in Sri Lanka. Emulate the Dravida movement of Tamil Nadu and the Mizos. Both abandoned entrenched isolationist ideologies seeking independence – the former in 1963 and the latter in 1966. Both are better off for it.

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The no-where people: Adivasis of Central India – caught between joining the rat race at the bottom or remaining at the top of a hunter-gatherer past.

The theme of alienation and marginalization continues into the essay on the Adivasi tribes of central India. Unlike tribal communities in the North East, the Adivasi do not dominate the region they inhabit. In no state are they in a numerical majority, despite the creation of Jharkhand and Chhattisgarh. Consequently, they remain politically disempowered.  Predictably the result has been the convenient “harvesting of souls”, earlier by Christian and Hindu missionaries and most recently by the Maoists – none of whom have the welfare of the Adivasi as their prime objective. Ram, ever the pragmatic peacenik, advocates that the government give Adivasi tribes the safeguards assured to them by the constitution and the Maoists learn from the evolution of the CPI, the CPI (M) and the Maoists in Nepal and reconcile themselves to electoral democracy – though he admits that this advice is likely to fall on deaf ears.

This book is mixed fare from the high priest of Indian liberal thought.

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Ram Guha, historian and creator of word symphonies.

What is sorely missing in this book is recognition that this “unnatural nation” has moved on, along the lines suggested by Professor Lin, to Ram, a decade ago. Even as revivalist conservative scholars dredge up past glories- somewhat futilely; right wing, conservative politics is creating the space – economic and political, for strengthening this great but “unlikely democracy” that is India. Meanwhile vigilant, liberal, alarmism – as by Dharma Kumar earlier and now by Amartya Sen and Ram, to flag deviations from this path, can only help.

Adapted from the authors book review in Swarajyamag, November 2016 http://swarajyamag.com/magazine/in-guhas-latest-book-the-polemicist-often-prevails-over-the-intellectual

 

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Book Review, Democracy, India

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Book Review

 

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Connectography: Mapping the Global Network Revolution, Parag Khanna, Weidenfeld and Nicolson, 2016

In the 1980s, Disney World, Florida offered a gripping, virtual journey as viewed by a blood corpuscle as it rushes through the arteries, veins, into and out of organs in the human body. Parag Khanna’s fourth and latest book –Connectography: Mapping the Global Network Revolution – does much the same for the world of physical and digital infrastructure -roads, railway tracks, power lines, communication cables, oceans, rivers, canals and electrons joining suppliers to customers, uniting families physically and virtually, whilst creating ever widening value enhancing networks around mega cities.

In this world, national borders are little more than irritants; national sovereignty a barrier to be overcome; national passports a poor substitute for global identity options and the ownership of land valueless, unless it is part of global supply chains.

Global citizen

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Parag is a self-confessed global citizen. He was born in India, grew up in the United Arab Emirates, studied in the US, works in Singapore but feels at home anywhere – chatting with Chinese workers in Tibet, Turkish Gastarbeiters in Germany or breakfasting with the President of Mongolia in Ulan Bator. There are around 300 million others like him. This book describes the way the world could be from the view point of global citizens. A world without borders or intrusive governments; self-regulating businesses kept customer friendly by competition; open markets allowing capital and goods to move freely, perpetually in search of optimizing costs and maximizing value.

Open economy

The virtues of the “open economy, networked” universe are generally accepted today, even if most peoples’ view on markets is similar to their opinion of democracy – not the best option but better than anything else available.

Parag hammers away at re-establishing these generic concepts with relentlessly energy via a high octane delivery, interspersed with a wealth of granular information to buttress his argument. It helps that the book is extensively researched. Its bibliography lists nearly 500 references and almost each page has a quotable quote. An added attraction is the 38 color plates which illustrate what connectography could look like. Maps or traditional cartography which represent geographical or political features, actually tell us very little about the world. These are of little use beyond being partial navigational aids. Consider that Singapore is a mere dot on the world map with just 0.1 percent of the world’s population. But if countries were mapped to scale on the size of their GDP, it would be twice the size of Bangladesh. Does Singapore’s land size or population determine its function in the world today or its economic heft?

Connectivity is key

The book is divided into five parts. Part one dwells on the truism that connectivity and not territory or resource endowments, are the arbiter of how nations grow. In a riposte to the reasons listed by Paul Collier of why nations fail, Parag argues, that countries can overcome the disadvantage of poor geophysical endowments. There is hope even for land locked nations, like Rwanda. Despite being resource poor, it is one of the fastest growing economies, in Africa, because it actively searches out opportunities for becoming part of global supply chains.

The withering Nation State

Part two posits controversially, that the nation state is an artificial construct whose longevity is explained by inertia rather than any irreplaceable value addition ascribable to it. This is especially true in nation states which spend much time and effort to reconcile mutually antagonistic and parochial domestic stakeholder identities. Far better then, to devolve power away to homogenous, smaller sub entities – tribes, communities, companies and cities which, in any case, are the basic framework for solidarity and common interest.

The recent splintered vote in Britain, with London, Scotland and Northern Ireland voting to remain in the European Union whilst the rest of the country voted to exit, seems to illustrate the inherent fragility of nation states in the face of sharp internal divisions based on self-interest. The nation state is similarly powerless against the loss of sovereignty to larger regional aggregations- earlier the United Nations, cold war alignments and now regional trading blocks. Better connectedness and communications fosters this trend towards aggregation, driven by Metcalfe’s law that the value of a network increases proportionately to the square of the number of interconnected users. Scale is everything.

Sub- national entities are stable

Part three asserts that a future world of connected sub-national entities aggregated into large regional entities, is a more stable and competitive arrangement than the present geopolitical architecture. Sovereign nations seem besieged by split mandates and dissidence at home whilst simultaneously assaulted by external threats. Competitive connectivity trumps national sovereignty. There is no incentive for destabilizing any actor because all are connected for mutual gain. In comparison, Orwellian instability is built into the DNA of competing nation states.

Snap shot of a connected future

Part four fleshes out the future as a landscape of connected megacities. Multinational businesses will be replicas of the Dutch 19th century colonial empire – a web of small enclaves – business hubs for a global supply chain. The nodes of growth would be the four thousand Special Export or Economic Zones, which dot the world today and are also the foundation of China’s extraordinary economic growth.

….and everything else

Part five is mixed fare – an overview of current issues in the digital economy; the genetic transformation resulting from human cross breeding inherent in the physical movement of more people across the globe than ever before- provocatively titled “a mongrel civilization”- and how to best deal with the competing needs of conserving nature and welfare enhancing growth.

For resilient readers only

This is not a book for the faint hearted. The style varies from the explanatory; the exhortatory to being chattily conversational. Some parts are too dense for a lazy afternoon’s read. Others, particularly where the author links his own experiences to more generic issues are lucid and revealing. Editing is unfortunately, lackluster. Rwanda is not a country which is natural resource rich as claimed on page 94; the lead paragraph on page 337 under the attractive title “The digital identity buffet” is an incomprehensible, single sentence of seventy-one words! Deng Xiaoping’s reforms kicked in during the 1980’s in China, not the 1970s as page 380 claims.

Read this book if you are interested in knowing more about the intersections between globalization, geopolitics, business, technology, urbanization and culture. If you are looking for deep knowledge in any one of these areas, you are likely to be disappointed. If you are looking for a new theory of development or growth, it isn’t here. What you do have is masses of information brought together anecdotally in a narrative format.

This is a tour de force of contemporary world trends with attractive, self-explanatory titles to each of the seventy-eight sub chapters. Each of these is self-contained so you don’t have to read the book sequentially. And don’t miss the quotable quotes. My favorite is “a smart rabbit keeps three holes to hide in” to explain why large numbers of Chinese citizens invest in the US or Canada as a safe haven option.

If you are looking for advice on very long term business investments, check out the heat map on plate 31. Be warned, India, China, Africa, Southern Europe, the US and South America may all be deserts by 2100 dried out by the ravages of climate change – unlivable but good for generating solar power. Think instead of investing in Canada, Greenland, Northern Europe, Russia and Western Antarctica, where the climate is expected to be salubrious and the resources plentiful for the depleted population which manages to emigrate there.

This book review by the author first appeared in Swarajyamag, August 2016 http://swarajyamag.com/

 

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Book Review, Digital connectedness, Economy, India, Infrastructure, Space

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