governance, political economy, institutional development and economic regulation

Posts tagged ‘bollywood’

Only credible leaders can skill the youth

Barefoot college

Photo: A skilling leader from Bunker Roy’s Barefoot College, Tilonia, Rajasthan- an international training center in solar engineering for the illiterate. Photo credit: The Guardian,

The appointment of the president of the Film and Television Institute of India (FTII), Pune, is taking on the epic dimensions of Satyajit Ray’s Ganashatru.

Gajendra Chauhan, the new president, is no enemy of the people. But the students seem to be right in resisting the government’s attempt to foist a minor film personality on them. Compared to past presidents, the present appointee is a wafer-weight.

India produces around 1,600 films annually, which gross $2 billion on 2.6 billion tickets sold. Other revenues are additional. The nexus between undeclared wealth, films, drugs and over-the-top living is tighter than a two-person lift crammed with six. Despite the sleaze, visual media and entertainment is where the world is headed. We should join the race to the top.

Instead we are stuck in Byzantine power struggles — between students and the government in the FTII; between management and the government in Nalanda University and recently in IIT-Delhi. Why these autonomous trusts and institutions are micro-managed by the government is a mystery — one of many in the inscrutable world of the Indian public sector.

The Nalanda University is an innovative public-private partnership. It created breaking news recently, not for its academic standards, but because the celebrated academic and Nobel Laureate Amartya Sen went public, that he was nudged to resign from the post of chancellor and chair of the governing council, thereby drawing attention to the pervasive power of the government to manage public institutions by proxy.

How should Chauhan and Dr Sen have behaved in the public interest?

Chauhan should have recused himself in the face of the student protests. If he feels the agitation lacks depth or is politically motivated, he could offer to conduct a referendum amongst the students, a la Alexis Tsipras in Greece, to prove his support.

Dr Sen’s public criticism, albeit carefully evidenced, of the “Gujarat model of development” — closely linked to Prime Minister Narendra Modi’s prowess — was sufficient to put the new governments back up. But he didn’t stop at data. He followed up with a weaker and more political attempt to tarnish the government’s credentials.

He publicly and pointedly rejected the parallel drawn by Narayana Murthy of Infosys between, the 1984 anti-Sikh riots and the 2002 “Godhra” anti-Muslim riots, as the consequence of misguided abdication of responsibility by political parties in power. By seeking to instead distinguish between the two horrors, Dr Sen wore his Congress affiliations on his sleeve.

In the event, the right thing for him would have been to resign from Nalanda on the grounds that it was against his conscience to work with a government he despises. By not doing so, he weakened his moral stand.

The last thing Mr Modi needs is disquiet in the higher echelons of the skilling establishments. The demand for skilling for employment is estimated at 425 million people over seven years till 2022. The available capacity is only seven million. India has a network of around 14,000 technical training institutes. What it does not have is a network of 100,000 leadership level professionals trained to manage this massive effort.

Existing initiatives in that direction seem disoriented. Why should one need a university for skilling — reported as one of the intermediate steps the government intends to take? Training trainers is the easy part. The really hard part is to link each training establishment to its natural market for skills with an eye on outcomes (employment) not outputs (the number trained).

The private sector can best fill the skilling gap. The information technology industry did this to grow and continues to do. Old economy companies in steel, cement, chemicals, engineering and construction are less willing to fund this public good. They complain that trained employees leave for better opportunities and skilling becomes a never-ending drain on company resources.

Old economy manufacturing is struggling under the twin challenges of squeezed margins due to domestic and imported competition and the large-scale migration of skilled workers overseas.

Mr Modi has astutely adopted this challenge as an opportunity. His proposal is for India to become the workforce supplier of the world. Presumably the idea is that the swelling inward remittances — $80 billion and counting — from overseas Indian workers is adequate compensation versus the cost of publicly funding the skilling effort.

Skilling is a public good but with strong private good characteristics. Displacement of worker skills from one company to another is not a net loss to the industry but an inter-company transfer. One company’s loss is another’s gain. Skilling costs should be borne by the respective industry associations — Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry and Associated Chambers of Commerce and Industry of India — from funds created for the purpose based on member subscriptions and donations.

But there is also a case for partial public funding. Worker skills transferred by migration to a foreign economy are a net loss for Indian industry but helps the country’s external finances via remittances.

This justifies some public funding also for skilling.

The elephant in the room is not the amount of money to be spent nor the number of skilling opportunities. These are manageable with good leadership. What is more difficult is getting the maximum bang for the buck. Spend on skilling should result in people getting employment.

The option to encourage workers to migrate flies against the wind. Borders are increasingly closing to migration as the world economy winds down. Labour shortage in the developed world can be envisaged in future. But for every job available there will be 10 applicants from developing countries in queue. Add to that the fact that workers from compatible cultures and those who speak the language fit better and Africa will have a head start on India.

No, the real elephant in the room is that there are not enough jobs available for skilled workers in India. The desire to become highly skilled wanes if one is to subsequently while-away the hours at nukkads (street corners) scanning the “wanted” advertisements.

Adapted from an article by the author in Asian Age July 20, 2015: http://www.asianage.com/columnists/skilling-gap-252

The writer is adviser, Observer Research Foundation

When I’m 64

Paul Mccartney

(photo credit: wikipedia)

Paul McCartney -he of the long, brown hair who hung out in the company of the Beatles in the 1960s-wrote this song when he was just 16. Clearly he was not an economist and didn’t need to be hesitant about asking his “love” to project forward by 48 years, her likely feelings for him at the ripe, old age of 64. We don’t know what she told him then, but today it is unlikely to be the right thing to do.

First, not many lose their hair by 64 and the ones that do, get them back with renewed vigour, courtesy a visit to Dubai for a hair boost. Second, it is unwise to ask the modern spouse if she would lock the door if you remain out till 3 AM. The likelihood is that you would be opening the door for her when she comes in at 6! Third, the role distribution between men and women is no longer about the former mending a fuse and the latter knitting a sweater. Nor do women typically look forward to have three grandchildren dangling at their knees. But Mccartney got one thing right when he plaintively asked “will you still feed me when I am 64”.

The way to a man’s heart remains via his stomach and it is not just food that we refer to. In rural areas women have traditionally done most of the drudge of farming, animal husbandry and cottage industry along with fetching firewood, water and often carrying the weekly supplies home from the village market.  But now, even in urban areas, supporting the family by earning an additional income has become a critical role for women. In fact several studies of recent migrants to urban areas find that women adjust far better to the demand for skills in cities than men. The bulk of the labour demand in the urban informal sector is for housework and hospitality related jobs. Nannies in Gurgaon earn Rs. 40,000 a month, the same as recently graduated engineers. Women are better equipped to meet this demand than men, who tend to slide down the labour profile, from being proud farmers to become daily wagers in manual unskilled muscle-power related work or fall into petty crime. A woman with a steady income is consequently not to be sniffed at.

Even amongst the rich, women today play an important role in salving the stomach. Take for example the case of club memberships in the megacities. With a limited number of “legacy” clubs- leftovers from the colonial past- and growing demand, membership of a decent club has become a problem, even if you don’t have Groucho Marx’s hang up of not wanting to be a member of a club which would accept him. Most clubs however do have fast track arrangements for women memberships. A spouse, with a membership in these “legacy” clubs, is consequently a fairly efficient way of ensuring perpetual access to decent food and booze at ridiculously low prices, relative to the extravagantly generous environs.

Our PM Modi is already 64 and so must sympathise with the problems of his age cohorts. We know that this makes little electoral sense for him. After all, less than 5% of our population is above 64. Far better to cater to the 80% who are below 44. But here four things the PM should think about.

First, caring for the elderly is no longer a family effort. Nuclear families and migration make that impossible. Catering to the health needs of the old is a completely different specialization than looking after working adults. India is hopelessly deficient in this skill and public health institutions do not even waste their time on this “marginal” activity. The one thing the PM should remember is that social norms are built around how the elderly are treated. Even elephants will remain with a sick and elderly herd member, providing comfort and company. Should India not have a similar publicly funded HealthLine for the elderly?

Second, better nutrition, awareness and altered social expectations have enhanced longevity. The fond, greying, father marrying off his daughters and setting off for pilgrimage; his worldly duties done, is a Bollywood caricature, observed more in the breach, than in real life. India does not use its elderly purposefully. We tend to look at the “jobs and employment” pie as fixed. An elderly person occupying a job is seen as one job less for the young. This age based discrimination violates the fundamental principle of human rights and the economic principle of merit-based employment. Callow youth can be a disadvantage in many jobs and experience coupled with reasonable health, an economic virtue. A society which seeks to provide productive employment to the “specially enabled” cannot logically discard the elderly from its work force.

Third, the PM and FM Jaitley should regulate our private Medical Insurance Industry better. These companies blatantly cherry pick medical cover for those above 60 and make it available only to those who can either fudge their heath reports or to the few who enjoy “perfect health”, even after 60 and that too at astronomical premia.  There is no insurance cover available for those who have the typical “old age” health concerns of hypertension; diabetes and other assorted pains and aches. The pity is that there is significant demand from those who are more than 64 and can pay handsome premia but who want to insure against all possible “old age health risks and care”. Surely there is a business opportunity there which Insurance Regulatory and Development Authority (IRDA) should nudge the private health insurers to exploit as a desirable private good?

Lastly, FM Jaitley was recently reported as supporting the reduction of interest rates for kick starting the stagnant realty sector. Whilst, setting interest rates should be strictly in the purview of the RBI Governor, could Mr. Jaitley please think about extending tax and interest rate benefits to “retirement homes” of which, yet again, the supply is far less than the demand, across all price segments. Caring for the old and giving them a good send-off when they die, is a nit-picky, long term business investment and does not lend itself to the typical realty practice of theme of doubling your money in two years by hiving off an leveraged assett. Big, established, realty and hospitality companies, with a reputation to protect, can only be attracted into the retirement home segment if the deal is sweetened by government.

Hopefully the FM will include this “public benefit” in the 2015 budget. This writer is waiting to sign up for one such “home” now that I am 62.

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