governance, political economy, institutional development and economic regulation

Archive for the ‘Law and regulation’ Category

Lives dedicated to change India

RTI story

This is not a glib account of mobilising the rural poor, penned by a peripatetic babu or a drive-in-fly-out development expert. It is, refreshingly, a record of activists, who elected to spend the better part of their working lives making a difference, bottom upwards, and three decades later remain rooted in their karmbhumi — village Devdungri, Rajasthan.

school for democracy

Some came from well-off urban backgrounds and yet stuck it out in the harsh and relentless realities of the rural poor. This testifies to their commitment. But even to attribute high moral incentives to them, betrays the tinted glasses of this urbanised reviewer. The authors do not vent their frustration, voice their regrets or betray even a whiff of resentment against an uncaring world. What shines through instead, is their quiet joy and fulfillment, at doing something useful.

Aruna Roy, for all her careful attempts to disperse the credit, is the central figure. Born into a family of lawyers, she drifted into the elite Indian Administrative Service in 1968 but resigned in 1975 to work with the Social Work and Research Center (SWRC) in Ajmer. Clearly, goaded by the need to be more immediately and directly involved with real people in rural India, she left SWRC in 1983. Nikhil Dey — recently returned after college in the United States, seeking something beyond a comfortable life, became a friend; Shanker Singh, a local village official’s gifted son, adroit puppeteer and communicator extraordinaire, completed the group which bonded and decided to check out the rural empowerment landscape in Jhabhua, Madhya Pradesh. That seed did not flower. But bonds between the three deepened.

They resolved, in 1987, to put down roots in village Devdungri, which today is part of district Rajsamand in the Mewar region of Rajasthan. This was close enough to Shanker’s village, Lotiyana, to give the group an entry into rural life through his local bonds of kinship. Here, in a mud hut, rented from his cousin, the small group lived like the villagers around them and awaited a gradual immersion into the rhythm of village life and hopefully, local social acceptance — their doors and hearts open. Trust and credibility is central to an activist’s effectiveness.

MKSS

Meanwhile, the group refined the credo of their concerns. These coalesced around the need to enable the rural poor and marginalised, to look beyond their sordid reality of traditional social and cultural constraints, to understand and avail of, the constitutional rights available to them, within India’s democratic and institutional architecture. The disastrous drought, blighting the region, presented an opportunity. The standard mechanism for drought relief was to initiate civil
works.

By 1983 the Supreme Court had directed that public works must comply with payment of minimum wages. But this was rarely done. The group resolved that getting workers minimum wages would be their central concern. A related opportunity arose due to the tyrannical ways of a local sarpanch who misappropriated village development schemes for personal benefits and whose benami holdings encroached on village land.

In both cases, empowering the poor meant getting access to the government records of money allocated by the government for different schemes; the amounts spent, on what and when. At that time ordinary citizens could not access these records as a right. Often mistakenly, even a list of Below Poverty Line cardholders was conveniently construed to be secret. Consequently, in any dispute with government entities — around wages or non-inclusion for welfare schemes “the villagers were always the liars”. They had no way to prove their case because the truth was hidden inside the official records, to which only the government had access.

Getting the dispossessed to appreciate that access to information and knowledge is vital, was the easiest part. The awareness that local government intermediaries were swindling them kindled anger, and sometimes outrage among villagers. While the immediate oppressor is visible and becomes vulnerable, the veiled support of those higher up in the hierarchy, maintains the status quo. Getting villagers their rights, means changing the status quo from the top.

The political vehicle used by Aruna and her activist colleagues to generate awareness; the desire for change and an ecosystem for long-term support to deliver rights to the rural poor was the Mazdoor Kisan Shakti Sangathan (MKSS). The artful, determined and collaborative way in which it was constituted, and the strategic depth of its functioning is a delight to read. The ideological roots of the MKSS lie in the life and thoughts of Gandhi ji (non-violent protests against government apathy), Babasaheb Ambedkar (equity and dignity for all) and J.P. Narayan (social and political revolution within constitutional constraints).

The movement for access to political and social rights, formally started in 1987, expanded organically over time from the village level to the state level by the mid-1990s and finally to the national level by 2005, when the Right to Information Act was passed by Parliament. Parivartan, the Delhi-based NGO, headed at the time by Arvind Kejriwal, evolved its strategy of “direct democracy” from the MKSS methodology — a mix of rootedness in organising the poor from within; high moral, ethical and personal values; imaginative use of local folklore and theatre like the Ghotala Rath to lampoon corrupt politicians; careful research to unearth government information to pinpoint negligence, fraud or corruption using the vehicle of Jan Sunwais (public hearings).

Less successfully the MKSS also branched into directly managing kirana (provisions) stores in villages as a competitive force to make local traders less rapacious and reduce their profit margins. While useful as a temporary local intervention to break a trader cartel in a small village market, this model proved difficult to scale up. The MKSS also dabbled in village-level elections to get some of its well-intentioned members, elected and collaborate with like-minded parties. But it is far from transmuting into a political party.

Aruna and the team

Aruna, 41 years of age in 1987, is 72 today, Shanker is 64 and “young” Nikhil is 55. During the last three decades of their struggle, the Right to Information has been embedded into the accountability structure of the State, bringing the much-needed transparency. But making the State accountable to the people, in real time, is a broader unfinished task — top-down accountability and bottom-up participation, both need deepening. The good news is that the indefatigable trio is upbeat about conquering this frontier too.

This book is a must read for cynics, who want their optimism restored; those eager to share the pain and the joy of activism; organisational behavior “experts” and budding activists looking for pathways to India’s development.

Adapted from the author’s book review in The Asian Age, April 22, 2019 http://www.asianage.com/books/220418/read-it-to-know-the-pain-and-joy-of-activism.html

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corruption, Democracy, Economy, elections, Environment, India, jobs, Law and regulation, politics, poverty, Public Institutions, RTI Act, Secularism, social protection

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India’s 50-50 reforms

half reforms

Unlike politicians, who can choose their targets, business leaders have to dance to the tune of  shareholders, who buy or sell, based on the existing or the future bottom line. In politics. it is relatively easy to change the goal posts or indeed, shift the goal itself.

Changing goals

In India, the current metric for political performance, is jobs. Self -selected by the Bharatiya Janata Party, this may become a self-goal because even globally, there are few, near-term solutions.Prior to jobs, in the noughties, it was all about boosting economic growth — where again headwinds have built up. Before growth, it was about ending poverty in the 1990s. Earlier, in the late 1960s and till the mid-1970s, it was about boosting agriculture, becoming self-sufficient in food and avoiding famines. Even further back in the 1950s, heavy industrialisation and infrastructure were the mantra. Of course all these are part of development. But sequencing matters. Also, pancaking more reform targets on the existing ones, confuses even the reformers.

Partial success abounds, but excellence less visible

Seventy years on, we are only narrowly competitive in manufacturing; our infrastructure is vast but shoddy; agriculture has low productivity levels; 40 per cent of us are either poor or are vulnerable to poverty; we are still stretching for sustained real growth in high single digits; unemployment is rife and the participation rate in the workforce is a low 44 to 48 per cent, with women faring worse than men.

This is not to trash what we have achieved. But it is useful to look beyond the efforts made by the successive governments, at the outcomes and ask the question, why are the results always worse than expected?

Elusive transformative change

Tribal protest

Transformative change is disruptive. We have been slow in embedding credible instruments to mitigate the cost of disruption. This increases the risk perception of change, leading to a public push-back on reforms. Consider how poorly we acquire land in public interest. The instruments for identifying, determining and managing the acquisition are loosely supervised, at the cost of ensuing inequity and poor transparency.  Massive amounts of mineral resources continue to lie buried in tribal areas, whilst tribes prefer to eke out a subsistence level traditional life, rather than participate in the process of development. The overriding fear of every property owner, or occupier, is of being gypped in the process of acquisition, by forces beyond their control. In a democracy we cannot ignore insulating people, especially the poor, from the cost of disruption.

Public trust and credibility in short supply

Managing change successfully, requires a governance system good at modern parenting rather than a patriarchal approach to directing and controlling people and events. Our governance systems still follow the colonial legacy of collaborating with entrenched elites to get things done, somehow. Those affected at the bottom become a hindrance rather than participants. There is very limited institutional appetite or capacity to deal directly, as a change agent, with those who are most affected by change. Even when specific processes, like consultation are provided for, the approach degenerates to ticking the box, rather than using the opportunity to gather feedback on the process, test assumptions and obtain buy-in for the way forward.

“Accountable discretion” is not an oxymoron

It does not help that there is a near ubiquitous ban on the transparent use of executive discretion — prompted by misuse of the privilege in the past and a judicial preference for impossibly rigid rules, regardless of their negative impact on implementation.Consider, for example, the burgeoning non-performing loans of banks. The rule bound approach to bank lending insures the lender- manager, if sufficient security against the loan existed, on paper, when the loan is approved. The focus is on achieving secured lending targets rather than adding economic value. This makes gold plating of projects, to increase the notional value of an asset, a mutually convenient tactic between the lender and the borrower, especially at times when the real lending rate is low. Never mind that it can adversely affect the project’s viability and thereby the repayment capacity of the borrower. The public sector no longer trusts its employees. But ending supervised, executive discretion has significant efficiency costs.

Chasing impossible scale 

We succumb easily, to the insidious temptation to effect instant change at sub-continental levels, rather than build change, bottom upwards, block by block. India is heterogenous without parallel. For us, the political model should be Europe, rather than China. Multi party politics in India requires sufficient elbow room for diverse political agendas. The political architecture may prescribe the objectives and principles of public management. But being flexible in program implementation is a must.

The Constitution fixed past challenges, but under-provides for the future

Our constitution reflects the challenges faced at the time of independence rather than today’s priorities. Integration fears at the time led to a centrist constitution. This is what enabled the Union government in 1959 to dismiss the first elected E M S Namboodiripad government of Kerala. The governor of a state, appointed by the President, acting on the advice of the Union government, is another centrist feature as are the emergency powers of the Union government.

Overlapping mandates

The capacity constraints existing at independence shaped the lop-sided division of mandates between the Union and the state governments, with the former unduly burdened. The sub-state or local government came into existence only through a 1993 constitutional amendment.Delhi is a good example of poor inter-governmental allocation of mandate resulting in a governance logjam. Overlapping mandates confuse citizens. and reduce accountability. Consider that Members of Parliament get elected by getting drains made and Members of Legislative Assemblies by promising higher prices for agricultural products or by proposing a separate flag for their state — all areas outside their mandates.

Poor arrangements for resource management

The constitutional scheme for recruitment and management of the bureaucracy is unduly complex and diffuses accountability. Officials must be “owned” by the level of government they serve. Fiscal resources, at every level of the government, must be aligned with form, which should fit the functions executed at that level.

Avoid the Banyan Tree 

banyan tree

The top-down, centrist approach has the disadvantage of an overblown apex crushing the little people below. Remember, nothing grows under the Banyan tree.Change, sensitive to mitigating the costs thereof, flexible implementation of norms driven from below, with primacy for real value addition can deliver 100 per cent results in reforms.

 

Adapted from the author’s opinion piece in the Business Standard, March 27, 2018 http://www.business-standard.com/article/opinion/india-s-half-baked-reforms-why-are-the-results-always-worse-than-expected-118032601102_1.html#

Category:

BJP, bureaucracy, Democracy, India, jobs, Law and regulation, poverty, Public Institutions

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BJP’s new script – defending the losers

Modi grim

Thus far, the BJP has played to a core script of development; a more effective State and muscular nationalism, fanned by Hindu revivalism and an assertive foreign policy stance. This has resulted in a “tick all the boxes” type strategy, with the central focus being on winning elections. This strategy has paid rich dividends politically.
But some of the steam appears to be leaking out of this construct.

Admittedly, more Indians still put their faith in the BJP than in any other party – not least because of its charismatic Prime Minister – Narendra Modi. But voters are notoriously fickle. A politician is only as good as the last bag of goodies delivered to supporters. The BJP needs a strategy to generate goodwill in a more sustainable manner.

One option is to systematically address the concerns of those who have fallen through the cracks of the neo-liberal, open economy model we have followed since the 1990s. Of course, in doing so, the BJP will have to distinguish itself from populism and vote buying, which is the hall mark of a failed politician. Here are some options.

Protect children from malnutrition

stunted

First, we have smashed the pre-1980s growth, glass ceiling of 4 per cent per year, also called the “Hindu rate of growth”. Sustained growth reduced poverty to around 20 per cent with an additional 20 per cent teetering on the edge of the abyss of poverty. But it is shocking that 40% of children remain malnourished and not all of them are poor.

Unless a child is adequately nourished in the first eight years, there is a high likelihood of permanent damage to its brain. Clean air (to increase lung capacity), clean water (to avoid diarrhea) and micronutrient rich food can guard against stunting. Unless this is done, we are continually handicapping around 90 million kids or 7 percent of our population, from childhood.

Spending today, on these three inputs – clean air, clean water and nutritious food, is well worth the avoided economic cost of perpetually sustaining a stunted population of around 500 million. Do the math if you are not convinced. Consider also, that looking ahead, the quality of the human brain and not brawn, will determine if a nation succeeds or fails.

Social protection for the elderly- 50+ and poor

old man 2

Second, experts agree that the capacity of the average human brain to learn and innovate decreases sharply with age. Start up India, Make in India, Mudra – loans for MSMEs, all benefit those under 50 years of age, who retain the vitality to do new things. For those above 50, who have been thrown out of jobs or others who have never held a job, there is little on offer, except the back-breaking NREGA.

SKILLS India is also not a solution for them because failure rates in adult education are very high. Around 6 percent of the people above 50 years of age, or 80 million people, are poor. They could never have saved for their old age. Also, poverty is sticky and disadvantages entire families. Even their children must be barely able to keep body and soul together.

Cash benefits for this set of 80 million, at a paltry Rs 1000 per person per month would cost Rs 1 trillion per year. A progressive annual cash allocation, increasing with age, as the likelihood of doing gainful work decreases, would be sensible. This is expensive but an inevitable cost of our past public transgressions.

In addition, they must get free basic medical insurance schemes, allowing them to seek in and out-patient treatment, at any registered clinic for free, just like the middle class and rich do. This way the elderly poor will cease to be a burden on their children. The cash and other benefits for supporting the girl child have worked well. So can, a benefits scheme for the elderly poor.

Respect land ownership rights

Third, liberalization, whilst creating enormous private wealth, also generates inequalities. There are losers who fall through the cracks. Take our historic failure to provide credible commitment that acquisition would “cause no harm” to land holders. The common apprehension is that bank financed, land acquisition, incentivizes excess acquisition for speculation. It also robs the land holder of the ensuing value creation.

This creates resistance and fear. Even the latest version of the Land Acquisition Act is backward looking. It merely seeks to “compensate losers”. It should explicitly provide for “sharing of the ensuing value creation” between the land holder, the project developer and the government, using a Participative, Public, Private Partnership (PPPP) model.

land protest

India is land starved. The ownership of this valuable asset must be respected as an equity contribution to new projects, with pre-defined, time bound returns, insured by the government. Even “public purpose” must bow to the rule of law, which upholds the property rights of land-owners.

Penal sanctions for public delinquency

Lastly, some tough love is necessary to improve our public services. We should legislate – “The Public Services Act” – sanctioning those who fail to use the fiscal resources put at their disposal; we must attach criminal penalties to public actions which result in public harm, due to lack of due diligence whilst budgeting or poor implementation of projects.

death 2

If citizens die in road accidents because an ambulance cannot ferry them, in time, to hospitals; if hospitals negligently harm, not cure patients; if defective public buses, trucks, aircraft, ferries and ships are allowed to ply, resulting in deaths; if shoddy public construction causes death or disability; if an official values her time more than the life of a citizen in urgent need or if a citizen dies because the police is away on VIP duty, the delinquent officials must be held accountable. Only then can the right public service culture and moral fiber be created, so necessary, to deal with the ceaseless challenges in public life. It cannot be a one-way street with only citizens serving the State.

Also available at TOI Blogs, December 31, 2017 https://blogs.timesofindia.indiatimes.com/opinion-india/bjps-new-script-defending-the-losers/

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BJP, bureaucracy, Economy, India, Law and regulation, poverty, social protection

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Aadhaar – catching crooks & criminals

UIDAI members

The Aadhaar fever started in 2009, when the UPA government was in office. It encountered turbulent times in 2014 when the government changed. But Prime Minister Narendra Modi, a technology enthusiast, was persuaded to look beyond the past at the opportunity it gave to reduce official discretion and corruption, whilst targeting and delivering public services.

Inspirational achievements: Speed, scale, low cost & sustainable institutions

The results have been impressive on three counts — speed, cost and sustainability. First, the system was scaled up at breathtaking speed. Around 15 citizens were digitally registered every second, over seven years, assuming a 60-hour week.  Registering 1.2 billion residents out of around 1.3 billion, in a country spanning 3.3 million sq km is by itself a “never- before” achievement.

Second, unbelievably, this feat was achieved at a nominal cost of Rs 73, a little more than $1, per person. The norm for biometric identification anywhere else has been at least $10 per person. Clearly, frugal Indian innovation was at its best here.

Third, Nandan Nilekani, the single parent of Aadhaar, moved on in early 2014, serially to politics, social impact ventures and today heads Infosys as its non-executive chairman. Small, effective public institutions — UIDAI had a sanctioned staff of just 115 in 2009 — tend to be helmed by charismatic banyan trees — leaders who allow nothing to grow under their horizontally spread branches. But the Unique Identification Authority of India (UIDAI), which he first headed, continues to flourish, which speaks volumes of its sustainable management systems and the quality of successor chairpersons.

Why, then, the angst?

So why then the public angst against Aadhaar? Three reasons come to mind — all of them related not to the technical effectiveness of the system itself but the manner in which it is proposed to be used.

Illegal immigrants are rich political fodder

First comes politics. Illegal immigrants from Bangladesh — between three million to 20 million — along with legal immigrants from Nepal, have acquired voter IDs and ration cards. They are difficult to distinguish from their neighbours. But it has also suited the government politically, till now, to not identify such immigrants. Aadhaar can upset political calculations. Targeting Aadhaar at residents — a more inclusive genre — than citizens was a compromise solution. But the threat remains that this powerful data set will feed into culling voter lists of duplicates or ghosts and weeding out passports wrongly issued to people who were never Indian citizens.

We are all “crooks”

Second is the scale of disruption associated with ending corruption. Consider that 14 per cent of Indians, or 180 million, have a driving licence. But one-third are fake and many more are improperly given to ineligible drivers — a key factor in road fatalities.  290 million Indians have a unique number called PAN, required for filing income-tax. But 80 per cent are not authenticated with the Aadhaar database. This illustrates the poor integrity of the tax database.

Big bang reform catches headlines but induces a push back

Third, managerial ambitions have outrun executive caution in graduating the pushback from those adversely affected. From being a back-office tool, Aadhaar has become a digital shortcut to cull ghosts from the burgeoning food security scheme; weed out manipulations in income-tax submissions; introduce a security check over phone connections or use big data to link bank accounts, phone numbers, vehicles, houses, financial investments with each biometrically identified individual. Aadhaar is the shortcut to dig out our dirty secrets. And no one likes that.

Protection needed against low data integrity at time of issue & poor connectivity for authentication of Aadhar

aadhar center

Section 7 of the Aadhaar Act 2016 specifies that Aadhaar shall not be the sole arbiter of identity for accessing public benefits.  Section 5 makes it obligatory for UIDAI to get those, who lack identity documents — children, women, the specially-abled, senior citizens, workers in the unorganised sector, nomads are mentioned — covered under Aadhaar by other means. The intention is clear. The State must devise methods to include all residents in the database and ensure, till then, that the flow of public benefits to eligible recipients continues uninterrupted. Similarly, the onus for protecting the privacy of the individual is on the State. The government has no option except to align with the law. Indeed, it seems to have already diluted its hard stance on the timeline for the implementation of Aadhaar.

Rolling back or stalling the program a poor option

Two options present themselves for the way forward. First, the government could downsize its ambitions for Aadhaar and allow other modes of identity verification to continue till the availability of Aadhaar becomes universal and, more important, the hardware for authenticating Aadhaar is widely available. This is unlikely, in the short term, till the Bharatnet fibre cables have been laid and are operational in all gram panchayats. Just one-fourth are connected today. But the more real downside here is of a slide into never-ending inertia. This seems alien to the present government’s style.

Prescribe fall-back identity authentications with better oversight over the quality of initial data capture 

AAdhaar alt

The second and better option is to deal with the fears of activists who have petitioned the Supreme Court against linking bank accounts and phones with Aadhaar. With respect to privacy, the fact that the State will be able to trace individuals behind phone conversations or bank accounts seems innocuous. On the contrary, both security and tax revenue considerations point to this being desirable, if not essential.

Better branding: disseminate tax and security advantages of Aadhar widely

The government has advertised the Aadhaar principally as a means to transfer benefits to citizens in a more targeted manner and thereby optimise the public subsidy on such benefits. But this is only part of the story. Aadhaar is a significant tool in increasing tax revenue and bringing criminals to justice. What is in it for those who do not enjoy social security benefits? They must be made aware of how Aadhaar creates a trade off between privacy on the one hand and public finance and security on the other. It must be re-branded as a broad governance tool. It should take a cue from what President Obama said about privacy concerns. No individual right, against the State, is perfect. It must needs bow to the larger public interest.

Theoretically, any information, available with the State, can be misused to violate the privacy of an individual. But surely an income-tax officer using the Aadhaar authentication to check if you have included all your bank accounts in your tax return does not fall in that category. What about a duly authorised police officer who traces the owners of phone numbers talking about crime or a threat to public security? Protocols for tapping phones and accessing details of private bank accounts already exist. The Aadhaar link simply makes it easier and faster to catch crooks and criminals.

recovery ITGovernments rely on their credibility to gain the trust of citizens. Safeguards for individual rights do help. But only for governments that are public-spirited and well-intentioned. Once this is no longer the case, the only recourse is to voice your opinion through your vote, and good luck to you on that.

Adapted form the author’s opinion piece in The Asian Age, December 13, 2017 http://www.asianage.com/opinion/columnists/131217/aadhaar-fever-unveiling-secrets-to-secure-india.html

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bureaucracy, corruption, Digital connectedness, Economy, India, Infrastructure, Law and regulation, Tax

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Privacy – an elite fantasy

privacy

Elite concerns are usually disconnected from the ground reality. For the 1 per cent of Indian who live privileged, cocooned lives, the judicial right to privacy created by the Supreme Court yesterday will add yet another layer with which they can insulate themselves from the “barbarians at the gate”. So, here is what the rich may now be able to do which they couldn’t earlier.

Is the right to euthanasia next?

First, they may now be able to refuse medical treatment and die in their beds, peacefully, instead of being compulsorily hooked up to tiresome, life-saving machines in hospitals. But try explaining this “right” to the millions of poor Indians for whom just getting admitted to hospitals is still a dream and refusing treatment would be unimaginable.

Deletable past lives

Second, the well-heeled may now be able to press for being judicially forgotten – all traces of their past lives and identities expunged, giving them a fresh start without having to flee to distant London or arid Dubai. Contrast this with the Herculean efforts the average Indian makes to become part of a database and have an officially recognized identity – a voter card, a passport, a PAN card, anything which proves that she exists.

LGBT sex may become legitimate

Third, those with alternative lifestyles – the Lesbian, Gay, Bisexual Transgender (LGBT) community might now hope to be free of the notoriously archaic Section 377 of the Indian Penal Code, which criminalizes everything other than straight sex. But would this give them the right to marry a partner of their choice; adopt children or be socially accepted?

Evidencing crime will become harder

Now ponder the downsides. Law enforcement agencies struggle to manage terrorism, Naxalism, urban mafiosi, drug pushers and armed rural gangsters even today. “Privacy” concerns will provide a legal shield to undermine information collection, crime detection and investigation. Nothing less than the over-the-top, draconian Armed Forces (Special Provisions) Act – used today only in the “disturbed” areas in Kashmir and parts of the North East – would be effective. Since gangsters can afford to hire the best lawyers, the violation of their fundamental right to privacy in the process of enforcing the law, will now become a favourite ploy to keep these worthies free to wreak havoc.

How intrusive is the Indian State anyway?

Will this fundamental to privacy help the 200 million slum dwellers or the unknown millions who sleep under the stars on urban streets? Is not our fear of the “big State” overblown? The India I know is under policed, under governed and under regulated. There is a plethora of agencies, laws and rules to bind down anyone and yet very few – mostly the timid, those mindful of their public image and the law respecting middle class get intimidated by the legal spaghetti. The rich buy their way out of any mess and the poor are so inured to danger and risk that it is second nature for them to live with uncertainty.

Biometric targeting of beneficiaries to be abandoned?

Take the case of Adhaar for verifying the identity of those using the Public Distribution System (PDS). Recent studies in Jharkhand by responsible social scientists – Jean Dreze and Reetika Khera – found that 15 percent of the eligible PDS beneficiaries were excluded because of technical glitches or access problems in using Aadhar as a test of identity. But 85 percent of the beneficiaries were targeted correctly. If the right to privacy eliminates the use of Adhaar, we will be back to what Rajiv Gandhi famously called the 25 percent approach to poverty reduction – where 75 percent of the funds are siphoned-off by intermediaries. How and why would a reversion to a system which has huge inclusion errors (ineligible people getting benefited) be any better?

Big data to be throttled?

Finally, consider how retrograde is the fight by “right to privacy” advocates against big data. It is big data – the billions of pieces of information on human behavior and preferences linked to specific human demographics, which enables algorithms to predict trends, thereby aligning products and services with customer needs. This is what makes big data commercially valuable. In price sensitive markets like India, telecom and e-commerce penetration is being driven by the potential to monetize big data. Putting brakes on this process means putting brakes on the rolling out of technology services which will become more expensive if the actual user is to pay for them.

India lost an opportunity in 2014 when facebook- Bharti Airtel wanted to roll out free internet services on mobiles. TRAI regulations ensured that this venture never took off, thereby slowing down internet access for all except the 300 million people in the upper most income segments who can afford it.

Tilting at windmills

Nandan Nilekani is now an evangelist against “digital colonialism” in the context of tech majors like Google and Amazon aggressively expanding their presence in India. We should be wary of tech industry insiders playing the “anti-foreign” card. Similar attempts were made by the infamous “Bombay Club” to scuttle the 1992 economic liberalization. Their contention was that liberalizing the domestic market was fine but Indian industry should continue to be protected from foreign competition. We are fortunate that the government of the day paid no heed to this self-serving agenda.

Keep India open for competition

India is a big economy with very shallow industrialization. We need to remain open to all economic actors – domestic and foreign who want to invest in India. It would be a huge mistake to emulate the xenophobia of the United States and draw up our bridges. Data is the new oil. Data security needs to be ensured, irrespective of whether data is stored in India, or overseas. But generating anti-foreign hysteria is not in our interest as we try to integrate into global supply chains and become a part of the global value creation eco-system.

It is easy enough to legislate rights. We have many notional rights. Creating a level playing field for all citizens to enjoy these rights, equally, is another matter altogether.

Also at http://blogs.timesofindia.indiatimes.com/opinion-india/privacy-an-elite-fantasy/

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Economy, India, Law and regulation, poverty, Public Institutions, technology

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Is hubris slowing down Modi?

Hubris

So when does hubris — the corrosive comfort of undiluted power — overtake a government? Conventional wisdom points to three early red flags. First, when routine tasks are ignored for grand ambitions. Second, when party cadres act out of entitlement rather than commitment. Third, when rant replaces reason as public outreach. Has this already happened to the BJP government?

Ignore routine tasks at your peril

Venkaih

First, consider the recurrent trail of routine lapses. Take the embarrassment in July of being unable to get the non-controversial bill to give constitutional status to the Other Backward Castes Commission passed in the Rajya Sabha because BJP MPs did not even bother to attend in sufficient numbers. There is no glory in floor management. Ergo, it gets overlooked. Next, consider the election of Ahmed Patel to the Rajya Sabha from Gujarat. The strategy to keep him out was brilliant. But shoddy execution, or worse, deliberate sabotage, let down the BJP. Finally, the mass death of children in a Gorakhpur hospital. The hallmark of the RSS has been effective management during emergencies and disasters. That oxygen cylinders couldn’t be swiftly organised speaks volumes of how low the cadres have sunk.

Rulers can’t ignore the Rule of Law

Second, consider contempt for the rule of law. Mohan Bhagwat, the RSS supremo, violated the law in Kerala by unfurling the national flag, on Independence Day, at a school in Palghat, contravening a restraining order by the district collector. The order was perverse, based on pique and politics rather than prudence. The manner of its service — just prior to the occasion — was hurried and amateurish. But it was a legal order and anyone violating it is liable to be arrested. Mohan Bhagwat got away. But the lesson he taught the schoolkids and party cadres was that no law is sacrosanct if you are powerful enough.

Gandhiji would not have approved. Disobedience of an unjust law is fine, if followed by submission to its consequences, under the rule of law.

Gandhi

This contempt for the law is visible in the cadre vigilantes protecting cows, supporting unruly, disruptive religious yatras and the demonisation of alternative voices. Add to that, the raging testosterones of a BJP “princeling” in Haryana and you have party cadres which align more with gaali (abuse) and goli (bullets) rather than the galle lagana (hug) that Prime Minister Modi has espoused as the leitmotif of New India. Third, let us consider why no one came away inspired from Red Fort this year.

Outreach by high decibel rote no substitute for passion

The Prime Minister’s speech was a prime example of zombie behaviour, where the mind is elsewhere but the motions are acted out. The wide ramparts of Delhi’s historic Red Fort have set the stage for Prime Ministers to grandstand every year since 1947. Two (Lal Bahadur Shastri and Morarji Desai) barely had a chance to give a second speech before they were gone.

Four others (Charan Singh, V.P. Singh, H.D. Dewe Gowda and Inder Gujral) were even more transient, managing not more than a single speech each from Red Fort. One — Rajiv Gandhi, a young, stunning-looking charmer — was suddenly elevated to the position but never quite unbuckled the pilot’s seat he used to occupy earlier. Manmohan Singh had a decade to hone up his act. But he knew that he was a mere seat-warmer for the Nehru-Gandhi dynasty — having been taught his lesson earlier, when party workers sabotaged his election bid to the Lok Sabha. P. V. Narasimha Rao — a friendless, private man was not given to making big public gestures from the Red Fort. His political games were deadly effective, but played entirely in privacy.

Nehru, Indira Gandhi and Narendra Modi are the only three Prime Ministers who have had the mandate and the charisma to use the ramparts to strut their act. Mr Modi thrilled us in 2014 with his energy and his earthy enthusiasm at reaching out to people — quite a change from the taciturn Manmohan Singh or the imperiously distant Sonia Gandhi. In 2015, he filled in the vacant spaces in his act with data, slogans and acronyms. We were impressed. In 2016, we were still agreeable to look kindly on him, given that the economy was racing along and government performance was projected as trending sharply upwards.

By 2017, the act was flat as yesterday’s soda. This is remarkable considering that Indian testosterones are racing at the government effectively holding off the Chinese muscle-flexing at Doklam and now in Ladakh; Pakistan is reduced to being a mere vassal of the Dragon and economically hollowed out Western powers are fawning at our doors for Indian business.

Modi 2017 Red Fort 2017 (3)

International acquiescence has bred much-needed confidence. But it is disquieting that in domestic policy it has led to complacence, drift and distance from the public. Mr Modi’s speech was rambling, glib, unnecessarily argumentative and just plan stale. The turban was way too shiny to be classy. The stance too casual to be purposive. The look too staged. Very confusing was the discrete use of the terms — Bharat, India and Hindustan.

Bharat, India or Hindustan?

Hindustan was used in the context of pledging support for the victims of the irresponsible Muslim practice of triple talaq. Bharat was referred to as the mata (mother). But it is New India that we seek to build. Meaning?

Bharat, India or Hindustan, all three remember earlier episodes of hubris — disconnects between reality and rhetoric — which ended badly for us. In 1964, we discovered, too late that India needed the world, not the other way around. In 1975, we realised Indira needed India, but we didn’t need her. In 2017 (Delhi municipal and Uttar Pradesh elections), a shallow social revolution met its downfall. In 2004, we tired of using the stock market as a metric of progress. The metrics proposed for New India are similarly flawed. Corruption, poverty, filth, early death and unemployment are long-term outcomes, unachievable by 2022.

Child India

Focus on the essentials, Mr Prime Minister: Ending poverty by providing jobs and social security; improve results in education and health; build infrastructure for the 21st century and professionalise your government. We supported you in 2014. We want to do so again in 2019. But is your party up to this task?

Adapted from the author’s article in The Asian Age, August 17, 2017 http://www.asianage.com/opinion/columnists/170817/is-a-sense-of-hubris-slowing-down-modi.html

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BJP, Democracy, Economy, elections, Hindu leaders, India, Law and regulation, RSS, Uttar Pradesh

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FM Jaitley, aim for the sweet spot

Manmohan Jaitley

Former Prime Minister Manmohan Singh, recently released a book titled India Transformed — 25 years of Economic Reform, edited by Rakesh Mohan, at the appropriately historic Nehru Memorial Library. After the obligatory photo-op, Dr Singh turned to finance minister Arun Jaitley and with a beatific smile, handed the book over to him, as if, symbolically, he was satisfied that he could hand over trusteeship of the economy, to the three-year-old NDA government, and walked off, disregarding the speech he was scheduled to deliver.

The reform baton passes on

It was indeed a poignant moment and well chosen, for the economic baton to be handed over. The high-decibel criticism by Left-oriented, liberal public intellectuals of the economic vacuity of the BJP government’s economic policies continues. But the fact is that we are now at a cusp, an inflexion point. In all likelihood, we shall do substantially better on inclusive growth. This may sound incredulous at a time when growth, industrial investment and exports have fallen from the earlier upward looking trend line. But a dip in the industrial investment and growth rate are natural short-term consequences of the BJP having finally walked the talk on corruption.

Pressing the economic accelerator is not enough

Over the first three years, the NDA merely pressed the accelerator harder on the positive legacy of the UPA — rural unemployment support, fast-forwarding Aadhar, digitisation of commerce and banking, financial inclusion, space technology competitiveness, making electricity surplus, making access to telecommunications even more affordable, better transport and urban infrastructure, disinvestment of minority shares of state-owned entities, ensuring fiscal stability and progressively higher financial devolution to sub-national governments, including local governments.

Burying past negativities is good but not enough

It also did very well to bury the negative legacy of the UPA. The biggest achievement is in fast forwarding of expenditure programmes without the viral outbreak of corruption scandals seen earlier. More positively a three-pronged action plan is in place to make public systems resilient to corruption.

GST – the corruption buster

First, getting the GST is the biggest legislative and operational achievement to dampen corruption and enhance value addition by integrating the national market. Glitches remain due to poor drafting of rules which burden the small, honest taxpayer. Many such are the obsessive dedication to maximising revenue, even at the expense of simplicity. As usual the pain is being most felt by those least able to bear it — ragpickers — at the bottom of the urban food chain – their daily income have halved because the “kabadis” (junk yards) they sell plastics and glass to, are playing safe on the likely new tax liabilities. Small individual consultants or homeowners,  who live in one state but get work or rent from another, re similarly caught in a bewildering tax reporting spaghetti.

Bankruptcy & NPA resolution – The crony capitalism killer app

Second, is the frontal attack on crony capitalism — identifying the borrowers who have defaulted on Rs 12 trillion owed to banks, getting the Bankruptcy Act operational and signaling public sector banks that there will be no more “Mundra scam (1950s)” type telephone calls from the government. Reaffirming that sensible lending shall be rewarded and inept or corrupt lending punished.

Big brother must watch use smart analytics

Big data

Third, the proposed use of “big data”, including data from social media, to zoom in on potential tax evasion and crime. Taken together, these actions lay the systemic capacity for reducing corruption.

Aim for the sweet spot

cricket sweet spot

Whilst perfecting its drive at real sector reforms, here are the four “tests” the government must pass.

Defang the trade Unions

First, the unleashing of genuine privatisation (offloading of majority shares in a state-owned entity) as proposed in the long-delayed case of Air India is the winner. It sends the signal that India is open to efficiency enhancing financial restructuring. That it intends to free up existing public capital to create new public goods — jobs, physical infrastructure, improved social services, like health and education, whilst fresh private capital gets infused into the commercially viable supply of private goods — air and rail travel, steel, metals, petroleum and electricity. The Labour Unions are up in arms. This is where privatisation flagged in 2003 under Minister Arun Jaitley and Prime Minister A.B. Vajpayee. Can the Modi-Jaitley team de-fang the inward looking, protectionist, labour “aristocracy” comprising the Trade Unions – the bedrock of the moribund CPI(M)?

TU

Grow private banking rapidly

Second, financial sector restructuring to make state-owned banks commercially viable. Uday Kotak, of the Kotak Mahindra Bank, surely over-stretches when he advocates the  wholesale exit of loss making public banks and their substitution by private banks. But clearly, the strategy of incremental privatisation, as done earlier to enhance telecom, aviation or electricity generation, will pressure state-owned banks to become competitive. This should also circumscribe the ability of the government to use banks like ATMs for populist goodies.

Nail large. serial loan defaulters as criminals 

Modi nail

Third, the strong action proposed for making collusive default on bank loans a criminal act is commendable. It brandishes a big stick for potential defaulters. The intention is virtuous. But experience shows that criminals, especially rich ones, find it easier to evade the law than poor innocents. To avoid this perverse outcome, criminal powers should not be delegated outside the judiciary. The record of tax tribunals and quasi-judicial agencies is not sanguine enough to empower them with criminal powers in addition to their economic mandates.

There is no option except to reform the judiciary through incentives and structural changes in judicial governance. This is a tough nut to crack, but shortcuts will give rise to the miscarriage of justice, vigilantism, and massive public resentment — specially in the middle class, which will be the most impacted in cases related to property and small business.

Remain a classic, fiscal fundamentalist

Lastly, the finance minister’s determination to maintain macro-economic stability has been amply demonstrated. This resolve must not weaken even during the run up to the 2019 general election. This will be the biggest economic win,lo if achieved. The report of the N.K. Singh Fiscal Responsibility and Budget Management Committee 2017 embeds too much flexibility to provide credible guidance for the future. Fiscal fundamentalism is better.

cricket defense

Good politics must also be good economics. There is an appetite now amongst voters for hard reform. This, by itself, is a tribute to the credibility of the NDA government. A populist pre-election budget would be seen by the voters as an early admission of defeat. That is not the winner’s way.

Adapted from the author’s article in The Asian Age, August 9, 2017 http://www.asianage.com/opinion/columnists/090817/hard-reforms-vital-nda-needs-to-shun-populism.html

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Fix the “market” for political power

Indian army

Citizens expect governments to intervene when the markets fail. The market for Diplomacy failed last month at Doklam. If the Chinese Army is to be stopped well north of the tri-junction between India, Bhutan and Tibet/China, then only the Indian forces, funded by taxes, can do the job. This is a satisfactory arrangement for all Indian and Bhutanese citizens, who otherwise may be hard-pressed to secure their territory.

When State failure fails to fix the underlying market failure

But not all government actions have an obvious rationale. Demonetisation was unleashed in November 2016 to end black money. Few believe that this objective has been achieved. Black money is not an outcome of market failure. It is an outcome of governmental failure to tax income effectively; control corruption or control crime. Poor governance only encourages the generation of black money, which then requires another intervention to root out black money. Economist Shanta Devarajan of the World Bank, in New Delhi last week for the NCAER annual India Policy Forum <http://www.ncaer.org/event_details.php?EID=184>  believes such iterative interventions are ineffective in improving the quality of governance, and can reduce the legitimacy of governments. Far better instead to rethink how to deal with the underlying market failure – in this case the “market” for political power.

Poor tax administration

So why do governments tax ineffectively? Most commonly, multiple objectives in the tax policy are to blame. The sale of loose groundnuts — the ordinary person’s food — may be tax-free but packed groundnuts, even if unprocessed, are taxed. This creates a five per cent tax differential for arbitrage between the two categories, which are difficult to administer separately. A single rate of tax levied on a non-evadable tax base is the most effective. But consider that this would be akin to the colonial “poll or head tax” — levied on each person uniformly. Effective, but terribly inequitable.

The killer “app” for instant equity – Universal Basic Income- how effective?

Admittedly, mechanisms like transfer of a basic income to the poor can neutralise such an inequity. But transfer of a similar amount of cash, to each poor person, itself creates huge inequities, even among the 40 per cent population vulnerable to poverty. Transferring differential amounts, depending on need, attracts the same inefficiencies as trying to administer progressive tax rates fairly.

The big 2Cs – Corruption and Crime

Why is corruption or crime so hard to control in India? If citizens feel that political power can be acquired by subverting the “popular” vote, it reduces their faith in the power of their vote. It also delegitimises the government and undermines its ability to rule, in the eyes of those who voted against the government. Bihar faced this conundrum for two decades.

It does not help that, in India, governments can be formed even with a minority of the total votes cast in elections, so long as each elected member of the ruling party gets more votes than the next candidate. This first-past-the-post system fractionalises politics. It encourages parties to form coalition governments, which are unable to discipline errant behaviour by their constituents. This “coalition dharma” fosters crime and corruption.

Are laws aligned with context?

An alternative explanation for pervasive crime or corruption is that laws are out of sync with local customs. And not enough has been done to change social behaviour beyond legislating transformative rights and duties. Ending open defecation — a prime driver to reduce the vulnerability of women to crime — is one such example. The benefits from ending open defecation are dependent on collective action. One reason why we did not do more earlier could be that the political incentives are perverse. They favour exaggerating, rather than bridging, the social cleavages of caste and religion, which inhibit collective, progressive decision making.

Feudal governance patterns breed poor accountability

Low public accountability and lackadaisical collective action can also be traced to the continuation of feudal traditions of governance and poorly distributed income growth. Richer citizens are more resilient to State encroachment of their rights and less dependent on State largesse. Luckily, over the past three decades, we have become less poor, better educated and more aware of our rights versus the State.

But the extent of inequality remains significant as does the infrastructure deficit across rich and poor areas. The privileged crust is thinner than a hand-tossed Neapolitan pizza — possibly just 10 per cent of the population. The rest seethe in forlorn frustration. Can we get away from this low-level equilibrium? Yes, we can by fixing the market for political power.

End the perverse incentives in our political architecture 

Our political architecture is riddled with perverse incentives which  constrain the will to reform. Here are four changes which are overdue – deepening decentralisation; enhancing state government autonomy; enhancing the representativeness of the legislatures and regulating political parties better.

First, bridge the trust deficit and distance between citizens and the State. Empower state governments versus the Union government and local government versus state governments. Hopefully, the 15th Finance Commission will carry forward the trend of forcing the Centre to devolve functions and Central taxes to states and directly to local governments based on performance criteria.

Second, cut the colonial fat; abolish the titular but unedifying position of state governors. These are unelected nominees of the Union government exercising oversight over elected state governments. Transfer this role to the President, who is elected. This will level the playing field between states and the Centre versus the presidency.

Third, make Parliament and state Assemblies more representative. Sharply reduce the size of constituencies. Only directly-elected members should be eligible to become Prime Minister or chief minister. A candidate should be able to contest an election for only one seat at a time. The winner must secure a simple majority of the available votes and two-thirds of the votes cast. Municipalities must be headed by elected mayors.

Fourth, the functioning and finances of recognised political parties must be made transparent. Inner-party elections must conform to common but effective guidelines. The Election Commission must be empowered to determine constituency boundaries and diversified beyond the administration, to include citizen representatives and the judiciary with the chief election commissioner chosen specifically.

Use the GST process of risk-free consensual decision making

GST became a reality as a process of cooperative federalism was followed led by the finance minister. Reforming the market for political power could benefit from a similar approach.

Adapted from the author’s article in The Asian Age, July 19, 2017 http://www.asianage.com/opinion/columnists/190717/power-structure-needs-reform.html

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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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Pensioning-off cows

cow veneration

So is “the cow” (including bulls) a living deity, like the Ganga or Yamuna rivers, to be revered as a “mother”, or just another productive asset like a buffalo or a goat? This debate dates to the Constituent Assembly sessions in the late 1940s.

Cow protection smuggled into a non operative part of the Constitution

constituent assembly

Hindu traditionalist members of the Constituent Assembly wanted complete protection for the cow as a fundamental right. This was stolidly opposed by realists like B.R. Ambedkar, who saw it as a veiled attempt to deify upper caste brahmanical practices, to the detriment of the poor — for whom the cow means a source of milk, meat and leather.

Modernists like Jawaharlal Nehru thought it would blemish the liberal, secular character of the Constitution. A consensus was urgently required. Clever drafting by Dr Ambedkar pleased all by inserting an ambivalently worded Article 48 (on working towards prohibiting cow slaughter) in the Directive Principles, that are not legally enforceable. Therein lies buried the knotty, seven-decade-old problem of what the cow means to Indians.

But Hindu reverence for the cow has increased seven decades later

Neither modern education nor “development” has diminished the demand for prohibition of slaughter. Educated, well-off Hindus, across castes, are avid supporters. Higher incomes enable more people to “Sanskritise” — fashion their customs by emulating brahmanical practices. Vegetarianism is a “luxury” in desperately poor India, as is substituting cereals with vegetables and lentils. The clamour to save the cow will increase as ever more people are economically capable of “assimilating” themselves, culturally, into upper castes. Beef is already an “inferior” food eaten mostly by the poor.

Our “secular” government and political parties are politically expedient

Rather than amend the Constitution outright to reflect this demand, devious bureaucratic means have been adopted to achieve the same effect, whilst hiding behind the economic usefulness of the cow. Nine state governments — Jammu and Kashmir, Haryana, Punjab, Himachal Pradesh, Delhi, Uttarakhand, Uttar Pradesh, Rajasthan and Gujarat — ban the slaughter of cows and bulls outright. Seven states — Arunachal Pradesh, Meghalaya, Nagaland, Mizoram, Manipur, Sikkim and Kerala — allow slaughter. Others permit slaughter of animals who are no longer productive — usually more than 15 years old. The varying levels of “protection” are directly related to Hindu upper caste political dominance in a state. The only exception is J&K — a Muslim-majority state, which bans cow slaughter. In more normal times this would be an example of our “syncretic” culture.

New rules drive Beef markets underground

cow markets

The Union government has chipped in by banning the export of beef and cows, thereby minimising the incentive for cow slaughter. It also promulgated rules on May 23, 2017 under a Central law, Prevention of Cruelty to Animals Act, 1960, which ensure cattle markets are not used to purchase “bovine” animals for slaughter. The rules are onerous. They require multiple certifications, declarations and identity verifications. They will ensure all sale/purchase of “cattle”, which includes buffalos and camels, would end in cattle markets. Curiously, a convenient “out” remains available. Direct purchase from a cattle owner doesn’t attract these rules. The net result will be trading will move to one-on-one sale/purchase, or to large commercial dairy farms — now facilitated by the agricultural land leasing policy. These will be informal cattle trading hubs, without health certification to ensure meat quality.

Ironically, even as the Niti Aayog and agriculture ministry are striving to make agricultural markets efficient, the trade in dairy animals is being driven underground. Perversely, the new rules are being touted as the fallout of a July 2016 Supreme Court order, that was intended primarily to stop the flourishing cross-border traffic of cattle into Nepal and Bangladesh. The loud protests by West Bengal and Kerala and muted noises from Tamil Nadu and Karnataka are as farcical, playing to the dalit and Muslim vote banks.

Are we willing to pay for pensioning-off cows?

Surely, this farce played out repeatedly, since 1948, should end now. Why not have a referendum to establish the extent of support for cow protection? Seth Govind Das suggested this in 1948. The cost would be around Rs 50 billion, equal to the cost of a general election. The outcome, as in Brexit, is by no means certain.

If the existing 190 million (2012 data) indigenous and hybrid cows are to be cared for after their useful life, for say an additional five years (underestimated), the annual cost at a daily spend per animal of Rs 50 is Rs 1.1 trillion.

This is four times the spend in 2017-18 on medical, public health, welfare of SC-ST, backward castes and minorities and social security — spread thinly across around 400 million of India’s income-insecure citizens. It’s more than half the spending on defence. Maneka Gandhi and animal rights activists will be delighted, but it’s impossible to fund a pension scheme for cows publicly.

cow employment

Cow retirement homes run by the private sector on viability gap funding basis will create around one million jobs. But there is no free lunch, even for spiritual or emotional fulfilment. So how many of the 280 million Indian households would be willing to pay an additional Rs 4,100 per year for protecting the cow?

What about the environmental consequences of keeping 70 million old cows

The 1.5 lakh hectares of land to house the “retired” cows can be found. But the additional water resources — far exceeding the needs of 200 million humans — would be a challenge. The retired, unproductive cows will increase methane emission, which are worse than carbon dioxide, by an estimated 0.6 per cent, even as we are struggling to reduce carbon emissions.

Of course, it may never come to this absurd end. Farmers won’t buy cows if they can’t sell them for slaughter. Bulls are redundant in mechanised farming. Buffalos are more productive milk producers. “Nandi” clone bulls and milk white cows might become like racehorses or elephants — the treasured preserve of rich people and temples. And this is how it should be.

bulls

If the suggestion by Justice Mahesh Chand Sharma of the Rajasthan high court (now retired) “trends” sufficiently, the cow could become India’s third national animal, alongside the other “big two” —tiger (de jure) and Gir lions (de facto). Welcome to India’s new-age action safari.

cow temple

Adapted from the authors article in The Asian Age June 3, 2017 http://www.asianage.com/opinion/columnists/030617/the-cow-indias-icon-wholl-pay-the-price.html

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