Modi's Cabinet Reshuffle: What A Waste of an Opportunity

So the biggest move (game-changer, said one over-the-top anchor) of Narendra Modi in this cabinet reshuffle is making Nirmala Sitharaman India’s first woman defence minister? There are women serving in the army and the mere appointment of a woman minister is the breaking of a glass ceiling? If the gender of a minister – and not any policy or directional change – is a game-changer, it is a sad commentary on our expectations from government. As for the media, the less said the better. 

This cabinet reshuffle has certainly been a disappointment, barring some heartening exceptions.

Let’s get the exceptions out of the way, first. Piyush Goyal taking over from Suresh Prabhu as railway minister is good news. Prabhu was undertaking some significant reforms in railways – his only problem was that he was unable to deal with a railway bureaucracy running rings around him. It is unfortunate that he put in his papers after a series of railway accidents, but Indian politics requires such meaningless optics. Goyal is a go-getter and his chartered accountant background could be useful in dealing with the mess in railway finances. He has addressed some of the fundamental problems in the power sector (though how the UDAY scheme plays out in the long run remains to be seen). He will be getting an equally go-getter of a Railway Board chairman in Ashwani Lohani. So he is well placed to take Prabhu’s creditable legacy forward.  

Fortunately, Prabhu has been given an equally important portfolio in commerce and industry. His immediate task will be to prepare for the World Trade Organisation ministerial in Buenos Aires in December. There are several knotty issues there and he will be on top of things. India needed a competent negotiator for the ministerial and Prabhu will fit the bill. The ministry holds other challenges for any minister – the need to grow the country’s exports at a time of increasing protectionism, the need to get investments going, to name two crucial ones. Prabhu’s presence gives a sense of reassurance. 

The fact that Goyal, Dharmendra Pradhan and Mukhtar Abbas Naqvi got promoted to cabinet rank is also a positive. All three have earned their spurs. R. K. Singh replacing Goyal in the power and renewable energy ministry is being touted as a positive, but one will have to see how he performs; the power sector is a pretty knotty one, after all. 

But this reshuffle has certainly not been about rewarding performance. If that were the case, there would have been change in the agriculture ministry. Radha Mohan Singh’s stewardship of the ministry has been uninspiring, to say the least. Agriculture is in deep crisis and there was need for a dynamic minister there in the run-up to the 2019 elections. The argument being put out that Modi did not want to take any chances with new people having to learn the ropes does not wash. Singh has been given three years of chances; it has not worked. Sitharaman, too, did  not exactly set the Yamuna on fire with her underwhelming stewardship  of the commerce and industry ministry; yet she has got a promotion in rank and portfolio. 

The performance-oriented reshuffle line draws strength from a shifting of additional charges of some ministers. But none of these are going to make a big difference to governance, which should have been the main criterion for the cabinet rejig exercise. 

If this reshuffle was about performance, what explains ignoring the core strengths of people when allotting portfolios? This has been a common malaise in most governments over the decades and, unfortunately, Modi is continuing on the same path. What is the logic of putting Hardeep Puri, an extremely distinguished diplomat who would have been better placed in external affairs, commerce or defence as minister of state, in the urban development ministry? And in giving Alphons, a seasoned bureaucrat who shook up the Delhi Development Authority and was PS to Ram Jethmalani when he was urban affairs (or whatever that ministry was called those days) in Atal Behari Vajpayee’s cabinet, responsibility for tourism, a ministry that has no business to even exist? The befuddlement at these postings is best summed up in a tweet by Kunal Singh @d_extrovert: “In India if you have specialised in a particular field, it is counted as a negative in ministry allotment”.     

A slight digression here to deal with the jeers about the induction of four ex-bureaucrats into the cabinet. That, Modi’s legion of critics say, is a sign of the lack of talent in the BJP and further proof of Modi’s preference for bureaucrats. This is a silly criticism. One, there is a factual problem with this. And all four are BJP members, Alphons since 2011. Two, if there is a lack of talent among elected representatives, that shows talented people lack winnability and that is a reflection on us voters. But R. K. Singh and Satya Pal Singh have won elections.  Three, if you are bemoaning lack of talent, how can you object to Modi bringing in talent from outside? Doesn’t it  show Modi in good light – he is accepting the lack of bench strength and is addressing  it? Four, why should former bureaucrats not come into politics? 

What completely boggles the mind is the way ministers have been given additional responsibilities. There is very little synergy with the main ministry in most cases. When Modi in 2014 clubbed power with new and renewable energy and, more importantly, coal, that seemed to indicate he understood the need to combine related ministries. But that principle has been completely undermined in the latest reshuffle.

What synergy does petroleum and natural gas have with skill development? Why has coal been de-linked from the power ministry? Goyal has additional charge of coal along with railways. The only link between coal and railways relates to movement and coordinating that does not require the railways minister to be in charge of the coal ministry. On the other hand, coal is important for the power sector and that is why the two ministries had been brought under a single minister in 2014. Why has Gadkari been given additional charge of water resources; what does it have to do with the transport related sectors he is looking after very competently? He’s pushing for inland waterways but that is a small part of what the water resources ministry deals with. What is the logic of clubbing mines with rural development and panchayati raj?

All in all, this exercise is a waste of opportunity. Pity.  

India just published its most explicitly pro-markets policy document in history

http://qz.com/232064

Each year, the Economic Survey offers a snapshot of the economy and a glimpse into the government’s thinking on important policy matters. Along with the budget, it is the most important annual statement on policy made by the government of India.
This year, the Economic Survey tabled by finance minister Arun Jaitley in Parliament earlier today, is an emphatic statement. It is the first policy document in modern India that has explicitly pitched for a market-based economy and for the government to work on an enabling regulatory framework. It goes to the extent of saying that market failure should be demonstrated before the government considers stepping into any sphere of economic activity.
If this document is any indication, the Narendra Modi government intends to usher in an unprecedented policy push towards a markets-based economy and away from the welfare-centric approach favoured by all the previous governments, including the earlier governments led by the Bharatiya Janata Party (BJP) .
Since the mid-1990s, Economic Surveys have pitched for many reforms—of the labour market, real estate market, agriculture, the food economy and the subsidy regime. But none have set out a case for the market economy in such explicit terms as this one has.
Consider this: a chapter titled Issues and Priorities has a section called Foundations of a Market Economy. The opening paragraph says: “The biggest challenge today is improving state capacity suitable for a market-based economy. A long-term, careful and systematic effort is required for undertaking institutional change.” This is perhaps the closest a government can come to in moving away from a socialist legacy which has got enshrined in the Constitution. The Preamble to the Constitutions describes India as a sovereign, socialist, secular, democratic republic (the words socialist and secular were inserted in 1975).
And mull on this: “In a market economy, the economy thrives because the state interferes only when there is ‘market failure’, i.e. monopoly power, asymmetric information or externalities.” The Survey argues that any restrictions on private activity must be “part of a known and predictable regulatory regime unlike now where a lot of restrictions—well intentioned as they are—are not part of a stable framework.”
That is probably a veiled reference to the retrospective amendment of tax laws by the previous government, an issue that has been making foreign investors extremely jittery. It could just as well be interpreted as a reference to the ruling BJP’s opposition to foreign direct investment in multi-brand retail. One of the first actions that the BJP government in the state of Rajasthan did was to rescind the earlier Congress government’s decision to allow FDI in retail. There are differing schools of thought within the ruling BJP on economic matters.
Though the Survey speaks about the state intervention in the case of market failures, it insists on credible and strong grounds for such intervention. “Before a state intervention is initiated, it is important to demonstrate that there is a market failure. It should be shown that an intervention will solve the market failure. Further, the costs to society of government intervention should be outweighed by the benefits.” The significance of this is underlined by the fact that even a reformist government like the present one thinks it fit to impose stockholding limits on potatoes and onions and clamp down on exports when prices of these vegetables started heading north.
Will these issues influence the budget that is to be presented tomorrow?
Many of the issues that need to be addressed in order to lay the foundations of a market economy are not within the scope of the Union budget—they relate to other ministries and to state governments (state-level regulations do more to hamper economic freedom). Within the BJP itself there is a group that is not in favour of a genuinely free market economy; it prefers to protect domestic business against foreign competition.
How much of the prescriptions in the Economic Survey will be carried out by the government? This depends on the degree of consensus that differing factions within the BJP can reach. In the past, Economic Surveys have made bold and reformist suggestions. The governments of the day have not always closely followed the policy recommendations.
But as the Survey points out, this government may not have the luxury of inaction. Setting up legal and regulatory frameworks for a market economy is one of the three key measures it recommends to revive investment (the other two are ensuring a low and stable inflation rate and fiscal consolidation). There is hope, then, that this government will move—slowly—in the direction of a real market economy.

Some bad days are needed for good times to roll

This was published in Nai Dunia, 17 June 2014. 
http://naiduniaepaper.jagran.com/Details.aspx?id=686267&boxid=13104
Giving below the English draft that I sent.

Prime Minister Narendra Modi’s remarks in Goa on Saturday that tough economic measures will have to be taken to put the economy back on track have invited predictable jokes about achche din and bure din. Perhaps the BJP brought these jokes upon itself by overdoing the achche din aane vaale hain message during the elections, but this is neither the time nor the subject for jokes.
Because the simple truth is that the economy is in a bad state and government finances are in even worse shape. It is true that the UPA government was not fiscally responsible. Former finance minister P. Chidambaram may have kept the fiscal deficit at 4.6% of GDP, but this has been done by postponing some expenditure (which the new government will have to bear) and getting some revenue in advance. So the Modi government’s first economic step will have to be to restore some order to government finances. Sound government finances are the foundation of a robust economy.
The other major problem facing the government is that of inflation, which is still not in the comfort zone. The Reserve Bank of India governor Raghuram Rajan has moderated his hawkish stand on interest rates to give the new government time to address the structural issues that are fuelling inflation. The government needs to get cracking on these to create an environment where he can bring down interest rates. 
So what are the tough measures that Modi is planning? It is clear by now that the only person who knows Modi’s mind is Modi himself, but if he is really serious about doing what he has indicated, these are some of the steps he could – and should - take.
One, on the revenue side, increase in tax exemption limits may not happen (though media reports say this is expected). The inflation monster has not been tamed yet and giving people more money to spend without addressing supply shortages and bottlenecks will not be a wise step. The economy certainly needs a demand push, but this has to be calibrated. Besides, an increase in the exemption limit to Rs 3 lakh is expected to cost the exchequer Rs 60,000 crore a year, according to the finance ministry. This is certainly not the time for such giveaways. The corporate sector, too, will have to reconcile itself to having some excise cuts given by the previous government taken away.
Two, on the expenditure side, there will be a drastic overhaul of the subsidy regime. The President’s address and Modi’s own statements during the elections show a welcome emphasis on infrastructure. This will mean that the bias towards revenue expenditure – which is 86% of total expenditure – will be corrected and capital expenditure will get the focus it sorely needs.
But revenue expenditure has one item that is committed expenditure – interest payments, which absorb over 40% of tax revenues. Defence and salaries too cannot be touched. That leaves subsidies, which eat up 25% of tax revenues. Interest payments do not affect people’s budgets directly, so it can be safe to assume that when Modi speaks of tough measures, he intends to cut the subsidy burden significantly. This is something the economy has been crying out for.
Subsidy reform will not mean withdrawing all subsidies or drastically cutting allocations across the board. What it will mean is better targeting, which means only the genuinely needy will get subsidies and a lot or undeserving people will not.
If Modi is really serious about subsidy reform, then the cap on subsidised LPG cylinders should go back to nine. That will not only result in a saving of nearly Rs 4000 crore, but it will still cover 89% of the population.
His government should also allow decontrol of diesel prices or at least allow price hikes. This will have an immediate inflationary effect, but that will fade out in time. Importantly, it will also moderate wasteful consumption and bring enormous savings to the government.
A far more tricky issue will be tackling the food subsidy, the biggest subsidy item at nearly 40% of the total bill. The BJP backed the National Food Security Act (NFSA) which could lead to the food subsidy bill ballooning. But this problem will have to be tackled. One way to bring down the food subsidy bill would be to bring down the cost of procuring foodgrains. This could mean not allowing huge increases in the minimum support price. There are other ways to reduce this cost – reforming the procurement mechanism and eliminating inefficiencies but that will be a long-drawn out process. The farmers will be up in arms, but the government will have to remain firm. 
There are a whole lot of other tough measures that the economy needs but these are the ones that will bite the people. That is why governments are generally loath to take them. The fact that Modi seems to be preparing the climate for these unpopular measures is a good sign. It shows two things. One, that he is not going to let politics prevail over good economics. Two, he has realised the necessity of explaining things to the people, something all reforming prime ministers and finance ministers from 1991 onwards have ignored.
People are not unwise. They know the need for belt tightening and cutting wasteful expenditure – they do it all the time with their household budgets. Surely, they will realise that if they want achche din forever, they will have to put up with bure din for some time.

Modi’s government may be small; the state continues to be big

Narendra Modi’s 45-ministry government has attracted a lot of attention. It is also being hailed as the first step in what could be his signature style of governance – minimum government, maximum governance.
Sorry, but it isn’t.
Modi’s government is certainly a lean government, but it isn’t a minimum government. Let’s not confuse the two concepts. A lean government is about size and numbers. A minimal government is about a philosophy, a certain view of the role of the state.
A minimal state, as defined in the classical liberalism lexicon, is about the state confining itself to just a few areas. There is consensus on two – defence of external boundaries and enforcing law and order as well as upholding the rule of law. There are departures from this point on details. Some liberal streams include the provision of public goods as a responsibility of the state and there are differences on the definition of public goods as well. But the broad point is this: the state should not get into too many areas and most definitely not in areas where people are able to manage their own affairs through their own individual enterprise.  
India is not familiar with the idea of a minimal government. Before 1947, it was used to a colonial-feudal set up and post 1947 that got converted into a mai-baap sarkar. The state kept assuming more and more responsibilities till it was present in practically every aspect of the lives of individual and enterprises, riding roughshod over personal and economic freedoms. And yet the size of the government remained relatively small. Indira Gandhi, remember, ran lean governments. The unwieldy size of ministries is a post-seventies phenomenon. Remember also that gargantuan cabinets continued even after 1991 even as the command-and-control economy structure got steadily dismantled. 
It was only the Swatantra Party that came close to articulating the idea of a minimal state. The second of the 21 principles of the party stated: `. . . The party stands for the principle of maximum freedom for the individual and minimum interference by the state consistent with the obligation to prevent and punish anti-social activities, to protect the weaker elements of society and to create the conditions in which individual initiative will thrive and be fruitful. . .’ It is unfortunate that the party did not get much traction.
Modi’s government doesn’t quite pass this test.
It will if his government decides that the state should not be running hotels, airlines and providing telecom services and gets rid of the public sector in these areas. Instead, Modi talks about strengthening public sector undertakings. It is not clear if the government will pursue an aggressive disinvestment agenda.
It will pass with flying colours if the information and broadcasting ministry, steel ministry, culture ministry and the Planning Commission were disbanded. These are clearly, clearly relics of the socialist era. There are a host of other ministries that could make it to the axing list, but changing their role instead into a more of facilitating/regulatory role can be a subject of debate. Closing down these four is a complete no-brainer; no debate is needed.
There are some who argue that since the increase in the role of the state led to the unwieldy size of the government, limiting the size of the government will automatically result in a reduced role for the state, since administration will be a challenge otherwise. This argument is flawed. One, as already noted, Indira Gandhi ran a tight ship but one which was omnipresent and omniscient. Two, reducing the number of ministries and departments will not lead to shedding of work. On the other hand, technology can make it easier for the state to have its tentacles everywhere – far, far more easier than in the seventies.
Though Modi’s minimum government maximum governance idea does talk about the government moving from an interventionist to a facilitating role, the focus is more about using technology to speed up processes, clearances and permissions and make them transparent. It does not question the need for the myriad procedures that any interface with the government involves. It does not question the number of points of interface with the government. It is about making the government efficient in its current role, not about questioning its role.
Maybe that will come. Maybe Modi will realise that the problem with governance in India is that the state/government has taken on far more responsibilities beyond what should be its core responsibility of defence, law and order, upholding the rule of law and provision of public goods. Maybe he will realise the need for the state to focus on just these and do its job well.
Modi must be persuaded into making the 45-ministry government the first step of an ideological leap of faith. A small government must also mean a small, but effective, state.

A call to arms: Time to get the classical liberal agenda going

What does the stupendous victory of the Narendra Modi-led BJP in the recent elections mean for India’s liberals - the genuine liberals, not the left-of-centre variety?
But first, let’s get definitions out of the way. The word `liberal’ has been appropriated by far too many pretenders and it’s time for the real liberals to reclaim the tag. The genuine liberals are those who believe in the supremacy of the individual, a small but strong state and no overbearing state intervention in the economy. Not for this section a paternalistic state, one that encourages a dependency syndrome in the garb of empowering people. Not for this section any compromise with personal, intellectual, cultural and economic freedoms. And with the rule of law.
This section was starved of a political voice after the Swatantra Party disappeared from the scene in the mid-1970s, though it has been making itself heard, especially after 1991, through other forums. It cheered the initiation of the economic liberalisation process but despaired at the continued overhang of the socialist era, in the form of the paternalistic-cum-nanny state. Contrary to the lampooning of it by the leftist brigade as `neo-liberals’ pushing the agenda of big business, this section has been warning against the economic reforms process being more pro-business than pro-market and pressing for a correction of this skew.
This group (barring a section that is firmly with the Congress) has, undoubtedly, aligned itself with Modi, decisively rejecting the fear-mongering by the leftists and the Congress. His articulation of the minimum-government-maximum-governance idea, spot-on linking of corruption with lack of transparency in governance and promise to address that, disinclination for sop-driven welfare-ism, clear focus on infrastructure and an enabling business environment has resonated with them. Other post-1991 governments had opened up the economy, but no Prime Minister (not even Atal Behari Vajpayee) had articulated a cogent view of the role of the state the way Modi has.
The liberals have quibbles with Modi’s silence on privatisation and his opposition to foreign multi-brand retailers, but see these as minor details that don’t detract from the fact of a directional shift in economic policy and the role of the state.
This, the liberals seemed to have realised, is the closest they could get to the old Swatantra model. For them the decisive mandate that Modi has got is an affirmation of their belief fact that people – even if they don’t understand ideological labels – are instinctively against dole-centric policies (it isn’t as clear as that but let’s leave that for now).
This group will obviously want Modi to deliver on completely dismantling the socialist edifice that had been built up in the pre-1991 era. They know it can’t be done overnight – the stroke-of-pen reforms got over in the early 1990s. It will be a long-drawn out process, with roadblocks aplenty and even some rollbacks. But they will give him time so long as his focus is clear and he reins in the swadeshi economics brigade in the BJP and the sangh parivar which gave the Vajpayee government a hard time. Some leading lights of this group could get closely involved with a Modi government. 
But there are concerns.
One, what if Modi’s promise of a new economic paradigm isn’t what it seems? What if, as Vivek Dehejia asks in this article, `Modi’s instincts are certainly pro-business, but are they pro-free market’? Wouldn’t this run the same risk of encouraging the kind of cronyism that became rampant in the past decade? Two, will he decisively junk the dole-centric welfare model, which the BJP is not entirely averse to (after all it merrily went around supporting the rights-based entitlement legislations)?
Three, and this is a larger concern, what about the role of the RSS in the personal, cultural and intellectual space? The fact that Modi will not allow the RSS to dictate the economic agenda is clear; that he will do so in other areas as well is not. He hasn’t revealed his mind on the issue of non-economic freedoms, the upholding of which is just as important to the liberals as the ensuring of economic freedoms. He has, till now, remained silent on this. There has been no reaction to the Supreme Court order on Section 377. He has also never come out and expressly condemned attacks on intellectual and cultural freedoms as well as provocative statements against Muslims by the rabid right-wingers.
Also, though they don’t buy the mass-murderer imagery that the so-called `secularists’ propagate, they are critical of Modi’s failure to check the 2002 riots. Upholding the rule of law and protecting life and property is an essential part of the classical liberal agenda.
So there is a dilemma.
Should the liberals remain silent on the social issues, and concentrate their energies on getting the economic agenda going, ensuring particularly that this agenda is a pro-market one and not a pro-big business or worse pro-business house one? After all, the entire left-of-centre brigade will be extra-vigilant on the non-economic freedoms, looking for the first chance to trip Modi up. Should the liberals focus on redefining the role of the state in a way that it doesn’t get into the personal and intellectual space and on strengthening institutions so that they can never become compromised regardless of the regime in power? But what if the doomsday predictions of the `secularists’ come true and gangs of sanghis go around attacking minorities,  young couple indulging in PDA and getting books and art shows banned? Should they remain silent spectators because the economic issues are getting addressed?
Would criticising Modi strengthen both the fringe elements in the sangh parivar, who want to push their exclusivist and conservative social agenda, as well as the leftists/Congress supporters, who are just waiting for any opportunity to discredit and pull down India’s first avowedly right-of-centre government?
These are questions the liberals have to wrestle with in the coming days.
The problem they will face is that if they criticise the government, they will be at the receiving end of the ire of the online and offline Modi fanatics as well as the we-told-you-so jeers of leftists and Congress supporters. If they remain silent, the latter will label them fascist sympathisers waiting for suitable rewards. 
But is this twin attack new to them? Haven’t the liberals always been criticised and labelled by extremists on both sides, as well as Congress sympathisers masquerading as neutral intellectuals? Should the fear of such name-calling come in the way of making the most of the first opportunity they have got to expand the genuinely liberal space in India?
Certainly not.
The Swatantra had limited success because the intellectual climate in the sixties and seventies was overwhelmingly leftist. That is no longer the case.
So why can’t the liberals work with the Modi government, flooding it with new ideas and creating an environment for greater receptivity to economic reforms, something that has been sorely missing till now? At the same time, any attempts to subvert institutions, impose an artificial intellectual consensus or a conservative social agenda and snuff out dissenting voices (including left-of-centre voices) should also be opposed. The two approaches need not be contradictory.
History will not forgive India’s real liberals if they pass up this opportunity.

Modi's poochandi effect on Congress

http://www.firstpost.com/economy/quick-modi-is-coming-fear-spooks-cong-into-reform-action-1311349.html

Harassed Tamilian parents troubled by their naughty children invariably use two words to get them to behave. Poochandi varan (poochandi is coming) or poochandi koopuduta (should I call the poochandi).
A poochandi is a fictitious fearful person – I remember being told as a child that a particularly frightening looking vagabond was poochandi  - who would, children were told, take them away. The threat invariably worked – children ate their food, drank their milk, went to sleep or did whatever their elders wanted them to.
Narendra Modi seems to have had a similar poochandi effect on the Congress Party (thought it is rather difficult to think of a 129-year-old political party as a below five-year-old child). Psyched by the very real possibility of a Modi-fronted BJP coming within more than touching distance of power in 2014, the Congress and the government that it leads are suddenly in a policy and implementation overdrive, doing all that they had dithered over all these years.
Gone is the arrogant complacency; there is now a new sense of purpose. So an obstructionist environment minister is shown the door; the norms for approvals are eased; coal supplies to nine power plants have been cleared as have some port projects; and Rahul Gandhi is no longer sounding lost and confused. His focussed speech at Ficci last Saturday and a press conference on the Lokpal Bill the Saturday before that signalled this change. His press conference yesterday following the meeting of Congress chief ministers could be another sign that the party is not taking its eye off the ball. Lost in the noise over the rap that Maharashtra chief minister Prithviraj Chavan got are the four actions Congress-ruled states have been told to take to tackle price rise and reach essential commodities to the poor.
One of these is time-bound. By January 15, the states have to remove fruits and vegetables from their respective Agricultural Produce Marketing Committee (APMC) Acts. They have also been told to be strict in implementing the Essential Commodities Act (ECA) to deal with hoarders and to invoke the Prevention of Black-marketing and Maintenance of Supplies of Essential Commodities (PBMSEC) Act, 1980 against chronic offenders. And they have to take steps to immediately implement reforms in the public distribution system (PDS) in line with the Food Security Act. Finally, Congress-ruled states have to open fair price shops run by state governments on self-help groups of women to sell essential commodities like fruits, vegetables and eggs at reasonable prices.
Clearly, someone in the Congress has finally got the message that rising prices is not something the Reserve Bank can control through higher interest rates and that supply bottlenecks have to be eased. Delisting fruits and vegetables – the items that have seen the highest levels of inflation – is a good first step in that direction. Of the 12 Congress-ruled states, three – Maharashtra (Vashi), Karnataka (Bengaluru) and Andhra Pradesh (Hyderabad) – have the largest fruits and vegetables mandis, according to the Financial Express. This move will enable framers to bring fruits and vegetables directly to the market, which will help in easing prices and bring some relief to household budgets, though some agriculture policy watchers like Devinder Sharma are skeptical of this happening. It remains to be seen if the chief ministers can take on the powerful lobbies that control these mandis merely because Rahul Gandhi has asked them to.  It will be great if they can.
The other steps Gandhi announced may not be so effective.
The Essential Commodities Act (ECA) is dusted out and deployed every time the inflation dragon rears its head, but its effectiveness is somewhat doubtful. Both its critics (who want it scrapped) and supporters (who want it to continue) agree that the ECA has not been able to check price spikes whenever there is a shortage of some food item. On the other hand, it is implemented in a ham-handed manner and often becomes a tool for harassment. 
The logic behind setting up more fair price shops to sell fruits and vegetables is not clear. If these items are delisted from the APMC Act, and if silly rules don’t hamper hawkers and street vendors, the cooling effect on prices will make such steps redundant. Special outlets work only during times of price spikes. In Delhi, for example, government sales outlets were set up to sell onions at cheaper rates. Unless this is a way of doling out shop licences ahead of the elections.
The PDS reforms will take time to pan out. They have more to do with improving the last mile of the PDS chain – transporting food grains from godowns to fair price shops and then to the consumer – to eliminate diversion. This requires the deployment of technology – Aadhar, digitization of ration cards and list of beneficiaries, smart cards, use of GPS and SMS to track movement of food grains, to name just a few. These can’t be done overnight.
Questions naturally arise about the haste that is driving the flurry of decisions and actions. Are decisions and actions being pushed through without enough thought going into them, just like the Lokpal Bill was passed without sufficient discussion? Could these then lead to more problems some months down the line – when the Congress isn’t around to deal with them? These are questions that need to be asked and answered.
There are reports that Veerappa Moily, as environment minister, may give the go ahead to GM crops. The hyper-active and obstructionist green lobby has been red-flagging this and had managed to persuade the previous two ministers, Jairam Ramesh and Jayanthi Natarajan, to block field trials. But in overturning these, are essential precautions – that are in place in countries that have embraced BT foods – being given the go-by? When easing environmental norms for large industrial projects, are necessary safeguards being junked?
Is the fear of the Modi poochandi leading to rash decision-making?
Actually, it was the Congress and those whom economist Arvind Virmani calls the LIMPs (Leftist Intellectuals, Media and Politicians) who first portrayed Modi as poochandi. Except that they used the H-word from Europe of the 1930s. Poochandi varan, they warned the public, pointing to 2002, fake encounters, Haren Pandya’s murder, the snooping controversy and a lot more. Your freedoms will be jeopardised; your lives will be in danger, they all warned. But the public didn’t get spooked.
I remember a young cousin turning the poochandi tables on my grandmother once. Should I call the poochandi, she asked, when my grandmother did not do something she wanted. It was a sign that she wouldn’t be frightened any more.
Voters in four states have, in effect, shown that they are not going to be frightened into not voting for the BJP. They, too, have turned the poochandi tables on the Congress.
Whether the poochandi comes or not is immaterial. What matters is the effectiveness of the threat. It is the Congress that is now being spooked into action. Someone now has to ensure that it is the right action in the right direction.

Beyond voting: Why we can’t outsource change to netas

http://www.firstpost.com/politics/beyond-voting-why-we-cant-outsource-change-to-netas-1270437.html

What a sad reflection on the Delhi voter that a 67 percent turnout in an assembly election is being hailed as record-breaking and historic. The missing names in the voters’ lists and other glitches that prevented people from voting would not have made more than a difference of a few percentage points. It is the lowest voter turnout in the country (as it has always been) from a place where whining by the people is perhaps the highest.
Those lower down in the class hierarchy – the lower middle class and the poor – have always made up the bulk of the voters in Delhi. It is the relatively better-off and the well-heeled who preferred to grumble about The System in the comfort of their homes instead of actually getting out and doing something about it, even if it is just to take a couple of hours off on a holiday to stand in a queue and vote. They didn’t need to, because they could manage The System, regardless of who was in power. Maybe this section also came out to vote this year.
Various explanations are being offered for this year’s high turnout – the galvanising chutzpah of the Aam Aadmi Party, the Narendra Modi appeal and the dissatisfaction with the Sheila Dikshit government – but one will have to wait for the results to see which of these proved decisive. But it isn’t about this year alone. Depressing as the voter turnout scenario is, one must perhaps take grudging cheer from the fact that it has been increasing over the years. Something is obviously changing.
But does this indicate a more active engagement with politics and democracy, as almost the entire commentary on this year’s phenomenon seems to suggest? Voting during elections is seen as sufficient for doing one’s duty by democracy. Once that is done, everyone retreats into their apathetic, insular worlds for another five years. That is where the problem lies.
Engagement with democracy cannot be merely a quinquennial affair involving pressing a button on a voting machine. It involves being in a constant state of alert and speaking out – on everything from overflowing drains to corruption in high places. It is about keeping the pressure on elected representatives through the five years and not just at the end of that period.
It is also about the way we engage with our immediate environs, taking responsibility for our actions or non-actions, as the case may be. There is little point in knowingly flouting the law and bribing officials to, say, build an unsafe structure and then blame only politicians and officials when disaster strikes.
There is little point in turning away when a woman is being harassed or not accompanying someone who has been to a police station and following up a complaint and then blaming the government for lack of women’s safety.
Harassment bribes can be fought; there are mechanisms for that. It requires putting up with some inconvenience. That’s not easy to do for a middle class that is sapped of all energy by the daily grind of living life in Delhi. But are we doing even the little bit that is possible?
There is little point in demanding the right to recall or that elected representatives be held accountable to us when we are not even willing to hold office-bearers of our resident welfare associations (RWAs) – who are far more accessible, since they are our neighbours – accountable. One can’t go lower than the RWA as far as building blocks of democracy are concerned. But attendance at general body meetings held once in three months (sometimes even less) to discuss the colony’s problems and how the RWA’s budget is to be spent is rarely more than 30 percent, across Delhi. As a result, most RWAs are dominated by a few groups, which run amok whenever they are in power, just like political parties and politicians do.
Given this attitude, what is the guarantee that people will actively participate in the mohalla samitis that the Aam Aadmi Party has promised to set up? The proposal involves dividing assembly constituencies into zones (based broadly on municipal wards) and holding regular town hall kind of meetings which all residents of that zone can attend and discuss how the budget for that zone should be spent. It could, as supporters claim, deepen democracy by involving people more closely in the governance process, something they are excluded from currently. Or it could lead to anarchy, as critics insist. But given the high levels of public indifference, will either of these assertions even get a chance of being tested?
Change is not something that can be outsourced to a Narendra Modi or an Arvind Kejriwal or whoever else represents change at a particular point in time. They can come up with solutions for the macro issues, but it is the people who have to ensure that those solutions make a difference at the micro level. The leaders and political parties can bring in steps to bring corrupt officials in line, but they can’t come to your locality to supervise how roads are being built or see if officials are harassing someone for a bribe.
The change that they represent and perhaps facilitate will come only when individuals shake off their ennui and put the systems they may set up to good use. When we refuse to pay a bribe even if it means harassment. When we follow up repeatedly on a faulty public works project. Are we ready for that? Or will we go about our lives as usual and then, at the end of five years, blame Modi or Kejriwal for failure to bring change and then look for some other messiah?
The record voter turnout in Delhi is a cause for celebration only if it is a tentative first step towards a more active citizenship and a more sustained engagement with governance systems, inconvenient as they may be. Only that will lead to sustainable change, set the foundation for an entirely different kind of politics lead to a deepening of democracy.

Don’t allow 1984 to be whitewashed

http://www.firstpost.com/politics/not-just-2002-dont-whitewash-culpability-of-congress-in-1984-riots-1203581.html

Yet another anniversary dawns. Of the cataclysmic events of October-November 1984, when the assassination of a Prime Minister set off the cold-blooded, targetted retaliatory butchering of thousands of innocent Sikhs over three days. 
Yet again political parties will play their set games over the killings, even as the community agonises over the fact that the guilty have not been brought to book. The Bharatiya Janata Party (BJP) will raise the issue and the Congress will ask about the Gujarat riots of 2002.
There will be some non-political voices who will ask about both. And there will be another set of non-political voices which will be dismissive, and scornfully so, about 1984 being raked up. Yes, yes, 1984 is condemnable, it shouldn’t have happened; but can we now get on with asking questions about 2002, they will say impatiently. This section also wants to know why one should talk about 1984 whenever 2002 is mentioned.
But there is a very good reason for talking about 1984, especially in the context of 2002. Because there is a pernicious attempt being made to downplay 1984, make it fade away from public memory even as no effort is being spared to ensure that 2002 never does. This is not to argue that 2002 should be allowed to be forgotten. Neither 1984 nor 2002 should be allowed to be forgotten. The memories of both need to be preserved if only to remind Indians of the kind of diabolically violent politics that the two mainstream parties have both indulged in, with equal measure. 
What is worse is the attempt to draw artificial distinctions between 1984 and 2002; to somehow show that 1984 was not as vicious as 2002; that it was handled better; that Congress leaders have expressed regret for it and that Narendra Modi has not. Is it a coincidence that such distinctions started when it was found that the attacks on Narendra Modi for the 2002 riots were being blunted by lack of justice for the victims of 1984? 
No double standard is too odious in order to whitewash 1984. No fact too important to be airbrushed away.
Over 3000 people were killed in 1984, more than double of those killed in 2002. In 1984, only Sikhs died; in 2002 both Hindus and Muslims died (though admittedly Muslims died in larger numbers). And yet 2002 is a pogrom; 1984 is not!
Yes, Modi’s failure to check the 2002 riots is a bigger black mark than Gandhi’s failure to stop the 1984 massacre. Modi had been in office for six months when Godhra and the subsequent riots happened. He should have had that much political and administrative savvy to ensure that the bodies of the Godhra victims were not taken in a procession. The 1984 killings happened within hours of Gandhi being sworn in and, remember, this was immediately after his mother – the Prime Minister – was assassinated. A supposedly capable home minister – no less a person than P. V. Narasimha Rao – was in charge.
But what of Gandhi’s actions and words after the events?
Why are we supposed to accept that Gandhi’s famous `when a big tree falls, the earth is bound to shake’ speech is not as insensitive as Modi’s equally famous kriya-pratikriya (action-reaction) speech?
Take also the Congress advertisement campaign ahead of the December 1984 elections, which seems to have faded from public memory. These ads, carried in all the major newspapers, clearly identified Sikhs as the `other’.  One in the series was about whether you could trust your taxi driver – the sketch that accompanied it was that of a Sikh.
The ads and the speech came more than a month after Mrs Gandhi’s assassination. By that time reason should have got the better of emotions. Let us be charitable and say that Gandhi spoke without thinking when he gave that analogy of a big tree. But were those ads also cleared without thinking? He was firmly in charge of the party and the government at the time they were put out. Could it have been done without his knowledge? Could he not have nixed them?
Much is made of the fact that Gandhi felt deeply about the 1984 killings. Yes, he did express his anguish in his first address to the nation. In 1998, Sonia Gandhi did the same about both Operation Bluestar and the 1984 massacre during a visit to the Golden Temple. Manmohan Singh said sorry on the floor of Parliament. Modi has steadfastly refused to do so. Worse, he even inducted people like Maya Kodnani (now facing death for her role in the 2002 riots) into his council of ministers.
What the whitewashers of 1984 would probably like us to forget is that Gandhi made two of those accused of instigating the 1984 killings ministers in his government. One was a cabinet minister, the other a minister of state. And remember these Congress biggies were repeatedly given tickets by the Congress party – even after Sonia Gandhi took over. How are teary-eyed commiserations with riot victims compatible with rewarding those responsible for their plight? Going by this logic, all that Modi has to do is shed a few tears, say sorry, bring on expressions of anguish to his face when talking about 2002 and then merrily go on shielding and rewarding people who perhaps should be behind bars.
The impatient rejoinder this attracts is that courts have not held these Congress leaders guilty. So why not wait till the courts hold Modi and others who led the 2002 rioters guilty? How can they, comes the prompt response, when the police refused to register FIRs, witnesses are browbeaten, people who speak up harassed and even Supreme Court appointed panels suppress facts to protect him?
These are very valid points. But why is it so easy to assert this about 2002 and deny it about 1984? Why are we expected to believe that in the case of 2002, police refusing to file FIRs shows a sinister conspiracy, but in the case of 1984 it means particular incidents never happened at all?
What is perhaps more galling is the attempt to deny the Sikhs their hurt over 1984. Those enraged by the 2002 riots are incensed by the Sikhs protesting the acquittal of Sajjan Kumar by a Delhi court in a case related to the 1984 killings. That is apparently a communal attitude and a sign that the Sikhs want Narendra Modi as Prime Minister! This from the very sections who criticise the rabid Hindutva types for adopting a if-you-are-not-with-us-you-are-with-the-Congress attitude.
The focus on 2002 is needed, we are also told, because the riots stemmed from an ideology of antagonism towards Muslims. The Congress isn’t anti-Sikh; the sangh parivar is anti-Muslim. Yes, there is a strong anti-Islam strain in the sangh ideology; the Congress is not antagonistic to any one community. But will it make Sikh families feel better to know that they were not the targets of a hate mentality, but only of momentarily inflamed passions (never mind that these passions were fanned by senior party leaders)?  Will this lessen the pain of seeing the killers of their relatives go scot free?
One can understand – even accept – the Congress and the BJP indulging in one-upmanship over the two riots. They are political parties competing with each other for power. This jousting over riots is par for the course.
But when the non-political thinking classes start drawing distinctions between two horrendous hate crimes presided over by the two main parties with the sole purpose of showing that one is worse than the other, it is worrying and dangerous. Because this sends out a message that one kind of violence is acceptable, another is not. And once this point of view gains currency, the very people it is directed against will start using it to their benefit.
So today, please remember and feel angry about 1984. And in February-March next year, please remember and be angry about 2002.

Rooting for a Minimal State

This piece first appeared in Firstpost. Unfortunately, the heading was not quite in tune with the article. Apart form the fact that it won't endear me to either Narendra Modi or Digivijay Singh, and got me a lot of abusive comments from Modi-bhakts who seem to rule cyberspace.

Was Modi's governance speech inspired by Digvijay Singh?

Seetha
As I listened to Narendra Modi hold forth on the theme for which he is being feted all around – maximum governance, minimum government – my mind could not help but go back 11 years. On 27 May 2002, a then-celebrated chief minister and now Modi’s arch baiter, Digvijaya Singh, delivered the first Minoo Masani Memorial Lecture. The topic: More Governance with Less Government.

Singh had used this phrase when I had interviewed him for the business magazine I then worked for. That was so much in line with the philosophy of the Swatantra Party that Masani had co-founded that I got him to deliver the lecture.
There is no text of Modi’s address at the ThinkIndia dialogue series for readers to judge for themselves, but as speeches go, I rate Singh’s lecture higher. It put the issue in a historical context and provided a perspective that Modi’s chatty-jokey sermon did not. 
Singh had wowed the audience at the India International Centre then, much the way Modi captured everyone’s imagination when he first articulated his now pet phrase while addressing students at the Sri Ram College of Commerce earlier this year. But there was no social media then to hype up the speech and the speech-giver.
But, just look at the irony. The Congress had a headstart over the Bharatiya Janata Party, with a chief minister who was probably the first to articulate this idea and, dare I say, attempt to implement it as well. And it is the Congress that is heading a government whose actions are designed to perpetuate the mai-baap orientation of the government, thus increasing its size, even as governance suffers.
Take education. As chief minister, Singh experimented with government financing of education and leaving provisioning and supervision to the community. The jholawala brigade castigated him for initiatives like para teachers – part-time teachers drawn from within the community who were paid less than government teachers but were more accountable than them – but it was a commendable experiment. In contrast, his party first pushed through and is now implementing a law – the Right to Education – that insists all schools must pay government salaries to teachers and hence shuts all community and low-cost private initiatives for the poor, even as the government schools are unable to meet the demand for education.
M. R. Madhavan of PRS Legislative Research, an independent research initiative, had once pointed out how some of the new Bills that the United Progressive Alliance had either introduced or mulling – the National Food Security Bill, the draft Communal Violence Bill (the National Advisory Council’s version), the Lokpal Bill and the Right of Citizens for Time-bound Delivery of Goods and Services and Redressal of their Grievances Bill – would result in a large number of new posts being created. The Food Security Bill, for example, requires the appointment of a grievance redressal officer in each district and for every state to have a State Food Commission, comprising a chairperson and five members. The Grievance Redressal Bill stipulates 11-member grievance redressal commissions at the centre and the states. The Communal Violence Bill talks about an Authority for Communal Harmony, Justice and Reparation, at the centre and in the states, each with a chair, a vice-chair and five members.
Meanwhile, the state’s primary responsibility – law and order and rule of law – suffers because of shortage of police personnel and judges. Clearly, Singh hasn’t managed to get his own party to buy into his model of governance. Its motto, on the other hand, appears to be More Government with Little Governance.
Both Singh and Modi would bristle at this, but there are many similarities between the two lectures, despite their contrasting world-views.
# Both spoke about the need to right-size the government as against the more reviled concept of downsizing, with examples to show that rationalising the workforce need not affect the quality of government services. Singh got jan swastha rakshaks (educated village youth trained in primary health care) to provide basic health services in villages; Modi got students from engineering colleges to do internships with departments that needed technical help.
# Both spoke of the need for effective decentralisation and devolution of power to the grassroots and how the country cannot be governed from Delhi or state capitals.
# Both drew attention to how people’s involvement in governance leads to better outcomes. Singh’s experiments included rogi kalyan samiti (government-run hospitals being managed by people’s committees), joint forest management and water users’ associations. Modi’s P4 formula (people-public-private-partnership) is somewhat similar.
# Both also highlighted the fact that people are willing to pay user charges if they see a clear benefit for themselves. The rogi kalyan samitis, for example, managed to raise finances through such user charges which were then used by hospitals to buy equipment. In Gujarat, people are willingly paying a fee at 200-odd One Day Governance centres where paperwork related to 160 services is completed in one day, with the help of technology.
Singh’s lecture has some tips for Modi, who lamented that politicians often delayed unpopular decisions – retrenchment of excess government staff being one of them – whenever there was an election around the corner. Singh’s government abolished thousands of vacant posts and retrenched 28,000 daily wage employees in municipalities, despite criticism from within his party, just before elections to local bodies in 1994. The Congress won those elections.
Does his speech indicate that Modi really wants a small but effective state in the classical liberal mould, one which will confine itself to national security, internal law and order, upholding the rule of law and protecting individual liberties and the provision of public goods?
It’s difficult to decide on the basis of one speech. Such a concept of a state will mean doing far more than allowing self-certification of boilers and lifts or electronic delivery of services that Modi boasted about. These, in any case, are not initiatives he or Gujarat pioneered or invented. Besides, this is just tinkering. A minimal state will require a complete change in the way both politicians and the people view the role of government.
A strong but effective state will leave little scope for patronage by politicians and will definitely not have any room for the state to be in business. Modi is not an unconventional politician so it is unlikely that he will willingly give up the heady power of patronage (ditto for Singh). And when quizzed about privatisation of state public sector enterprises after the lecture, he very clearly waffled.
In any case, even if Modi does subscribe to the minimal state idea, it’s not certain if he can carry the rest of the BJP with him, just like Singh couldn’t influence the Congress.
But what I found encouraging about the two speeches – 11 years apart though they may be – is that the two mainstream parties have people who appear to be thinking alike on issues of basic governance.
May their tribe increase.

A Red Rag Called Modi

Two things have prompted this post.
The first is an article a friend posted on Facebook. It is an open letter to Madhu Purnima Kishwar by a Gujarati Muslim writer, Zahir Janmohamed, in kafila.org. Kishwar had apparently visited Gujarat recently and posted favourable tweets about Gujarat under Narendra Modi. Janmohamed details all that is wrong in Gujarat, especially the status of Muslims there. The friend who posted this article had this to say in his status message: “A must read for 1. all Modi bhakts 2. all poor sods who believe in activists.”
That reminded me of an incident that is the second reason for this post. Last week, a report, Economic Freedom of the States of India, 2012, was released. Gujarat topped in that. At the launch ceremony, the noted agricultural economist and currently chairman of the Commission on Agricultural Costs and Prices, Ashok Gulati, was speaking about the role of rural infrastructure in promoting agricultural growth and mentioned that the rate of growth of agriculture in Gujarat was 9.6 per cent a year for six years, which was unheard of. A friend sitting next to me, scoffed and whispered, “then how come BJP didn’t do well in the rural areas in the elections?” I pointed out that Gulati was citing figures. “No, but I’ve seen villages in Gujarat, some are worse than Bihar.”
The sub-text in my friend’s status message, Janmohamed’s article and my other friend’s refusal to accept agricultural growth figures for Gujarat is the same: How can anything good be happening in Gujarat, considering Narendra Modi is the chief minister? How can a man, during whose reign the 2002 riots happened, ever do anything good at all?
The way people get worked up whenever something positive is said about Modi or about Gujarat under his rule reminds me of the reaction in the Congress whenever the Gandhi family is criticised. All sense of perspective is lost as people scramble to deflect criticism (or praise in the case of Modi). Facts are ignored or (if they can’t be) some completely unrelated fact is quoted as a counter.
I am not getting into a debate on the facts about Gujarat. For one, I don’t know enough about the state. Besides, this post is less about Gujarat or Modi and more about how we refuse to accept facts if they don’t confirm our perceptions about something. I am using the Modi example only to show how a phenomenon that was largely limited to those committed to an ideology or political party has extended to general discourse.
Take Janmohamed’s open letter. He starts by saying he was keen to meet Kishwar because he had heard that she had once signed a petition calling for Modi’s dismissal after the 2002 riots. Shouldn’t that establish the fact that she is no Modi admirer and she is definitely not endorsing his government’s failure to control the riots? Why does the fact that she was once critical of the Modi government mean that she should not give credit where she thinks it is due?
Or take the case of my friend, who questioned the figures on Gujarat’s robust agricultural growth only because the BJP fared poorly in rural Gujarat. So now the soundness of official data has to be tested against electoral verdicts? Besides, why can’t Gujarat have a 9.6 per cent agricultural growth rate and also have villages whose conditions are worse than those in Bihar? How does one fact disprove the other? Going by that logic, India could not have posted over 9 per cent growth for three years in a row because there are parts of the country where conditions are worse than in sub-Saharan Africa. India is a land of contrasts and nowhere is this more obvious than in the economic condition of its people. If Mumbai can have an Antilla and Dharavi, why can’t Gujarat have both great agricultural growth and pressing poverty?
Take also the reactions when Tata Motors shifted its Nano plant from Singur in West Bengal to Sanad in Gujarat. (See my 2008 post on this.) Industrialists hailing Modi as prime minister material and king of kings is sickeningly over the top, yes, but what is wrong if they decide to put their money in a state with a good business environment? I am surprised that even people who criticise CSR (corporate social responsibility) as a concept on the grounds that businesses should be concerned only with profit are uncomfortable with Corporate India’s endorsement of Gujarat as an investment destination. If companies’ sole motive should be to run a business profitably, why should they bother about the ideology of the government in power? If they can invest in China, why not in Gujarat?
This kind of double standards does not augur well for debate and discussion in the country. When an innocuous tweet about Ahmedabad’s auto-rickshaw drivers going by the meter is seen as an endorsement of Modi, when his disgusting comment about Sunanda Tharoor is linked to her being groped (it turned out later that the groping happened before), it’s time to stop and reflect. Isn’t there a danger of such constant, and at times unfair, bashing backfiring? It allows Modi to paint himself as a victim of a biased mindset and, worse, convince people of the fact.
Keep the heat, by all means, on Modi on the 2002 riots and discrimination against Muslims and other real failures. But give credit where it is due. And don’t paint everyone who talks about one positive aspect of him or of Gujarat under him as a Modi admirer or BJP-RSS supporter in denial about the riots.
Kishwar also tweeted: “If I as much as say Gujarat roads are best in country, see Modi’s inclusive development for urself I become political untouchable. Why?”
Why, indeed?
Many readers of this post would have stopped reading mid-way, convinced that I am a Modi-bhakt. Earlier, whenever I would counter such biased views, I would preface my statement by saying I am not a Modi supporter, but today I wondered why I should do it. This blog is called Beyond Labels and the reason I started writing it is to air my views without the fear of being labelled (see Why this blog and why this name?). So go ahead and call me a Modi-bhakt. Because the Modi-bhakts call me a pseudo-secular. Chew on that.