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Archive for the ‘Uttar Pradesh’ Category

“Demonetisation” as a morality play

The politics around “demonetisation” — a misused term for what happened on November 8, 2016 — has taken centerstage in the run-up to the Assembly elections in Himachal Pradesh (that voted yesterday) and Gujarat (which goes to the polls in December). Finance minister Arun Jaitley has added “morality” to the cluster of objectives, that seemingly justified compulsorily replacing 86 per cent of our currency with new notes over a short period of just two months last year.

Whose morality?

Morality is a slippery slope to tread in public affairs. It’s certainly an individual virtue, but at a societal level it’s difficult to define. Consider the moral conundrums that arise while enforcing a law which doesn’t have widespread local acceptance. Rebels with a cause see themselves as morally-elevated outliers. Not so long ago, our freedom fighters were feted for disrupting the peace, assassination or damaging public property. Even today in areas like Kashmir or the Maoist belt in central India, it’s tough to apportion the balance of morality between those who violate the law and others who seek to enforce it.

Our Constitution, quite properly, is silent about “morality”. A quasi-moral concept of “socialism” was introduced in 1976 into the preamble, by former PM Indira Gandhi, as a populist measure. But it sits incongruously with the otherwise liberal slant of the document.

Corruption is patently immoral as it saps national wealth. Measures to fight corruption are part of public dharma. The real issue is: was demonetisation essential to end corruption?

Demonetisation to identify counterfeit money like using a hammer to kill a bug

If the objective was to weed out counterfeit money, which can fund terrorism or even legal transactions, there was no need to impose a tight timeframe of two months. This is what caused widespread panic and disruption. It would have been enough to alert the public to the menace; provide markets (banks already have them) with testing devices to weed out “compromised” notes over time. This is an ongoing activity, that all central banks do routinely, because any note (besides crypto currencies) can be counterfeited.

Better policing can identify & capture the stocks of black cash

If the objective was to capture the stocks of “black” money, held as cash, in one fell swoop, this was better done by making known “havens” of “black” cash — apparently entire warehouses — unsafe for storage through effective enforcement, coupled with strong incentives to come clean. Note that “black” money hasn’t gone away.

Black money was generated even as the notes were being replaced

Demonetisation can do very little to stop generation of black money. The government knows this. It intends to use “big data” for surveillance of potential evaders; embed governance systems with enhanced oversight and enhance transparency. Only improved technology and perpetual, intensive oversight can starve this hydra.

Was it political?

Not least the timing of the move, just before the elections in Uttar Pradesh, India’s most populous state, which sends the largest number of members to the Rajya Sabha, where the BJP didn’t have a majority, could indicate the compulsion to play to the gallery. If this was the motive it worked very well politically — not least, because UP is a poor state with low governance indicators and high levels of inequality. Hitting the rich is a tested populist strategy, perfected by former PM Indira Gandhi, and still held dear by our antiquated Communist parties.

Would Gandhiji have approved?

But demonetisation doesn’t align with Mahatma Gandhi’s precept that “means matter as much as ends”. Hitting tangentially at corruption, at the cost of scorching even the law-abiding, is unacceptable. Anti-corruption measures which ignore the social and economic collateral cost of implementation are suspect. The State has an asymmetric, fiduciary relationship of trust with citizens. Did it live up to its dharma of insulating the honest from State-induced actions intended to harm the corrupt?

Some positives – nudged people towards digital and banked transactions

Undoubtedly, demonetisation did accelerate a shift towards banked transactions and boosted digital payments. Both outcomes are winners. But it’s also true that it put a temporary brake on economic growth by disrupting business and inducing job losses, mostly in the informal sector, where workers and the self-employed are less well paid, and less well-endowed to absorb the cost of a disruption.

Means matter as much as ends

Seemingly desirable steps to make the system honest can have grossly inequitable outcomes, which Gandhiji would have termed “immoral”. It’s possible to reduce corruption by replacing income-tax with a “head tax”. Citizens are more easily identifiable than their income, so very few would be able to escape this tax. If a “head tax” were to replace income-tax, each citizen would pay Rs 3,600 per year. But consider, for 40 per cent of the population, which is vulnerable to poverty, the head tax would be a minimum 12 per cent of even the poverty level income of $1.90 per day. Currently, even an income of Rs 10 lakhs (Rs 1 million), or 22 times the poverty level income, attracts a low effective tax rate. Protecting the weak is cumbersome. It creates tax escape routes, which need to be plugged with minimum collateral damage to the weak and the honest.

GST the first efficient, corruption buster

The good news is that the Narendra Modi government has got it bang-on with its second major corruption-busting initiative: the Goods and Services Tax (GST). Implemented from July 1, 2017, it has also disrupted business and compounded job losses, arising from the shutting down of businesses, which relied on the illegal competitive advantage of avoiding tax. GST is a potent standalone, medium-term winner. This expectation mitigates the interim economic “amorality” arising from the collateral harm to innocent workers and suppliers to such businesses. The proactivity of the GST Council in correcting mistakes and acknowledging errors has only deepened its credibility and conveyed a sense of responsible stewardship. This is welcome.

Compensate for the distress & dislocation

cashless

Demonetisation was misguided even if it had “moral” end-objectives. One-fifth of our population, which suffered the most, is in the income segment of Rs 50,000 to Rs 5 lakhs (0.5 million) per year, being workers and those self-employed in the informal sector. They have still not been compensated. Hopefully, the finance minister will apply some balm in his 2018-19 Budget and bring this tragic “morality play” to a happy end.

Adapted from the author’s opinion piece in The Asian Age, November 10, 2017 http://www.asianage.com/opinion/columnists/101117/end-morality-play-its-a-misfit-in-eco-policy.html#vuukle-emotevuukle_div

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

Change UP to change India

victory 2

When it comes to winning elections, the sophistication and efficiency of the BJP political machinery is unmatched. Of course, Prime Minister Narendra Modi’s charisma provides the base, which the party leverages, to ensure that their individual candidates win. So what does this historic win — pulling in an unprecedented 77 per cent of the seats up for grabs in the UP Legislative Assembly — mean for the nation. And specifically, is UP the tail which can wag the dog? PM Modi knows it can. This is why he has set five years from now 2022 as the milestone for changing India – not 2019 when the next general election is due.

UP the sleeping giant

The taj

UP has a rich past and a glorious future. It is the present which needs some looking after.

Uttar Pradesh accounts for around 12 per cent of India’s GDP but has 17 per cent of its population. If you sometimes wonder why India doesn’t grow more than it does or why the existing growth is not well-distributed, look no further. UP is to blame for both negative outcomes. It pulls down national metrics on per capita income and growth. It also makes us look bad on social inclusion. Nearly a quarter of all Muslims and the poor (based on the government’s poverty headcount metric) live in UP. The state’s poverty level, at just under 30 per cent, is the second highest in the country, after Assam.

UP – the key to ending poverty

child poor

If the BJP can halve poverty in Uttar Pradesh, bringing it down from 30 to 15 per cent (same as the existing levels of poverty in Rajasthan, Gujarat and Maharashtra), the national poverty ratio will fall by a massive 10 percentage points, from 22 per cent to 12 per cent. Reducing the levels of poverty in UP also has high positive externalities — particularly political. There are sizable communities of migrant workers from UP in Kolkata, Mumbai and Delhi, through whom the message of “achche din” can travel to these metros, generating a “feel good” tsunami.  Consider that if the BJP can make Uttar Pradesh grow at the average rate of national GDP, it would increase the rate of growth of the national GDP by 0.5 percentage points. This additional income, even if it is proportionately distributed across the population of the poor, would reduce poverty to single digits in UP.

Why the BJP is uniquely place to take up the challenge

BJP leaders

Cynics could ask how can we be sure that the BJP will extract the potential? Others think the BJP will face headwinds while picking a chief minister, thereby risk displeasing sections of the winning rainbow coalition. The squabbling in New Delhi in 2014 is evidence that even the BJP is not immune to internal sabotage by disgruntled cadres. The BJP works best when it functions in a vertically-integrated manner — much like the Communist Party of China. Significant decisions are all made at the very top. Targets are determined for lower level formations at the state and municipal levels. These are then vigorously followed up and performance measured against targets. Now that UP is directly controlled by the BJP, the Narendra Modi performance juggernaut can be rolled out uniformly across the state.

So here are three focused ways in which the BJP can be different.

Give UP back to real-time management by it’s bureaucracy

UP officers

UP has many Durga Shakti Nagpals – officers who seek to serve. The present Cabinet Secretary, the Chief Election Commissioner and the PMs Principal Secretary are all UP cadre officers. But two decades of “populist” rule post “mandal” in the 1990s have diminished the excellence, which was the hall mark of UP administration.

First, today UP is a state which is resource poor and deficient in entrepreneurship. Out of the 100 top companies listed by market capitalisation on the Bombay Stock Exchange, only one company — Dabur India — is headquartered in UP. The Annual Survey of Industries 2014-15 lists only six per cent of the total number of factories and industrial workers, and just five per cent of industrial capital in UP. This illustrates that government efforts remain crucial, unlike in more developed states, where private sector initiatives can substitute for government efforts. The Modi magic, of revitalising the bureaucracy through direct interaction and consultation, as is now being practised at the Centre, must be institutionalised. This “direct contact” pattern of administration at the Centre has significantly reduced the earlier proliferation of corruption and silo-based operations. Mr Modi must return Uttar Pradesh to the real-time management of its bureaucracy, who have been sidelined and broken in spirit for too long.
The State in UP has become moribund. It must be reinvented, and used as an instrument for social change.

Make UP the international “laboratory” for agri growth

farmer

Second, agriculture is the heartbeat of Uttar Pradesh. Poor rural infrastructure and lawlessness have constrained additional investment in agriculture. Eighty per cent of the poor also live in rural areas. Agriculture based on “per drop more crop”; large scale diversification to non-cereal crops and commercialisation of agriculture outside the subsidy regime format of minimum support prices; cheap fertiliser and energy can pay rich dividends. The new land leasing arrangements should be led by UP, just as Rajasthan has taken the lead in amending outdated labour laws. More urgently, crop yield is not uniform across the four sub-regions. Average agricultural productivity can be increased by 10 per cent by simply pushing up productivity in the lagging central and eastern sub-regions (which account for around one-half of total foodgrain production in UP) to the levels prevailing in the state’s western region, adjoining Delhi and Haryana.

Invest in UP’s infrastructure

gadkari 2

Finally, UP has the worst road infrastructure in North India. Power cuts are rampant, even in Noida, which is a satellite township that adjoins Delhi. A proposal to build a regional air hub to service Agra has been gathering dust because the political alignment between the Union government in New Delhi and the state government in Lucknow was not favourable since 2002. If Delhi plans to link Myanmar and Southeast Asia by road with Afghanistan and beyond, over 700 km of this highway must pass through UP. Some of transport minister Nitin Gadkari’s expertise in getting infrastructure going could be usefully applied to UP.

2017 election results are a gift – use it well

The BJP is known for its executive and managerial abilities; its disciplined cadre; its capacity to ramp up domestic and foreign investment and to link investment to results. Uttar Pradesh is likely to give it the biggest bang for every buck it spends, simply as the desire to do better in UP is matched only by the utter frustration of its citizens over their stagnating future prospects. If UP booms, India will follow. This is one chance that we simply must not lose.

bangles

Bangles in Firozabad, brassware in Moradabad, rich textiles in Varanasi, the juciest mangos from orchards across the state, Nimish – the flavoured forth from early morning milking of cows, Mughal delicacies from Lucknow and Rampur, ancient monuments at every turn and a culture bred by centuries of civilised life – UP has it all, except transformational leadership- will Modi be the one? 2022 will tell.

Adapted from the authors article in Asian Age  March 13, 2017 http://www.asianage.com/opinion/columnists/130317/if-bjp-can-uplift-up-all-of-india-will-gain.html

 

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