Tuesday, May 31, 2011

An open letter to Arnab....

Since I know Arnab, I am taking the liberty of writing this rather serious letter to him. Since he’s not a “friend” on facebook, I am going to send this post of mine to him over email. Since I know his levels of intelligence and maturity, I know he will understand what I am writing. Since I know how intelligent, well read and capable he is, I hope that he will pay heed to this letter and tweak a few parts of his style. This is a purely personal letter......it has nothing to do with his and my official positions in the TOI group.

Arnab, for a very long time, I have held that you have taken on a bitterly anti-establishment position. I don’t know if it’s anti-establishment or anti-Congress. In other words, if a BJP government were to take over, would you still remain anti-establishment or would you start singing paeans of the government. Since I think much of your present positioning reflects a strategic plan for your wonderful TV channel, I will assume for now that you will continue to remain anti-establishment even during a hypothetical BJP government. I also do appreciate that there is intense pressure in the TV journalism business.....and you have to do what you have to do.

Having said, assumed and understood this much, I still want to point out limits that a senior and seasoned journalist like you should draw. For eg., you raised a pointed charge yesterday to Kapil Sibal that the “Government’s Bill” itself had included the PM in its scope. When Sibal pointed out that it was not the Government’s Bill, but only a proposal by one minister and ministry, you pressed him further. He then explained that the proposed bill had not even gone through the “ministerial discussions”, nor thru the “cabinet discussions”....and hence it wasnt the government’s bill at all. It was just a point of view a single minister held.....which is fine in a democracy. You then let the issue pass. If you had had your chance to question a responsible and informed minister, why then would you grill a lame duck persona-non-grata like Renuka Chaudhury over the same question so many times later during the show? If your attempt was not at humiliating her and the ruling government, why would you embarrass her so much on the same question? I must also ask here: why do you even get a person like her on your show.....is it because she makes it easy for you to score your point? On the other hand, you get Ravi Shankar Prasad, Arun Jaitley and Nirmala Seetharaman from the BJP.....all excellent speakers. Do you believe that good oratory and good speeches make a point more correct? In cricket, if a cricketer speaks poor English, would you hold him down in regard and respect simply because he speaks poor English? Would you rather not go for content, than for packaging? Or if you like packaging so much, why wouldn’t you insist on getting an Abhishek Manu Singhvi or a Manish Tiwari everytime you got these speakers from the BJP? Since it happens again and again, I think it’s intentional.

Then let’s take this other bit in the show last night. You had Amar Singh.....and he made some points. I agree they were silly points and he needlessly personalized the issue. But he is still a senior politician. You owed him some courtesy. Instead, you had Prashant Bhushan giggling away.....and you yourself were laughing in disdain. Does this suit the seriousness of your show? You were mocking Amar Singh.....and maybe he deserved to be mocked last night.....but if you think his views are worthless, then why do you bring him on your show at all? Has your channel become a channel where politicians (especially those who cannot speak good English) are humiliated in public? Ridiculed because their views differ from yours or because they belong to a different political zone than yours?

And why would you not crib against the BJP in the same measure? Why haven’t you put the BJP in a jam over Karnataka? Why haven’t you grilled them about why they didn’t do anything about the Lokpal Bill during their six years? Why they did precisely nothing about the black money stashed abroad during their period of rule? Why didn’t they reject any mercy petitions during their time? Why is it that you suddenly turned so meek when you were interviewing Bal Thackeray? Is it because he is a politician everyone in Bombay fears? The night before last....when Harish Salve was saying that he didn’t support Anna’s “My way or Highway” style, and when he was arguing why he thought the PM and CJI should be outside the Lokpal bill, why did your “signal suddenly drop”? The debate dragged on for another 10 minutes.....surely the technical problems could have been sorted out in that much time? Just like you heap scorn on Congress leaders, why don’t you do the same on BJP leaders who mess up? You think Kalmadi is a scamster.....but you are comfortable that another politician......the BJP leader Vijay Malhotra.....has taken over the reigns at the Indian Olympics Association? Why these double standards???

Frankly, I don’t think any of us should be cynical and anti-establishment at all. Those who have not been in establishment should certainly not criticize it. If they feel strongly, they should join the establishment and change it. I like Mamata Banerjee because she’s fought her way to a position when she can change the establishment. Some would call your approach almost sensationalist – preferring to sit out and complain about those in power but not join the field yourself. I am strongly requesting you to join politics. You will realize that there are reasons why some things are wrong with our politics. Take political corruption for eg. I personally think that corruption to the extent of “covering election costs” should not be considered corruption at all. Your stand should be to correct the election funding problem.....rather than concluding that all politicians are born corrupt. I have stated in my earlier posts that the 3% surcharge that we now pay as “education cess” should be changed to an “election cess”. This will reduce the “absolute necessity” for even clean politicians to become “corrupt in a limited way”. I know a politician in the Delhi government who is clean.....but she is in a terrible financial position today. Take the corruption in babudom. You should argue in favor of increasing the salaries of babus. Instead, you cribbed when the poor souls got a little increment last year. Arnab, you know this. Even junior managers in the corporate world get salaries of Rs 1 lac a month.....why then does the Cabinet Secretary – the senior-most babu who has spent more than 30 years in service – get just that much? You will say that he/she gets massive perks including a house in Lutyen’s Delhi. But can he/she carry those perks with him/her after retirement? But even more than this, if there is a clean babu, will our society give him/her the badge of being clean? Most in our society – and media in particular – pre-suppose that an IAS officer is corrupt. A clean IAS officer would be assumed to be corrupt even if he/whe was clean. What motivation does he/whe have left to be clean then? I am sure you realize that this is the reason why the best brains are no longer joining the IAS.....they prefer to join the private sector where their salaries are more reflective of market realities. Those who are joining the IAS today are those who are comfortable with power politics and an environment of incompetence and corruption.....a majority of them come from Bihar.....a state notorious for this particular concoction. I think Arnab, you need to go to the root cause of corruption, rather than try and suggest some cosmetic changes here and there. That is what will help the country.....and grow your TRPs.

Yours is undoubtedly the no. 1 channel and you (like me) come from a highly pedigreed media group. We have no option but to be more balanced in our approach. I appreciate your aggressive style. But I and many I know think you are just too aggressive.

The real truth is that constant cribbing by our powerful media.....constant derision of the political class....taking sides....is not good for the country and for the media. Today, we are a fast growing country. We need media to support and cheer along.....even while pointing out the chinks and making sure they are corrected. Today, the world looks up to us....but we are internally so self critical that I fear that we may just be stopped in our tracks. Most people don’t realize what we have achieved in the last 60 years. I sincerely advise you to read Ramachandra Guha’s “India after Gandhi”. It will give you a picture of what condition we were in, in 1947. The first twenty years were spent in just keeping the country united. How many of your viewers know this? Let’s not forget that successive governments since 1991 (Congress mainly) have put the economy on the fast track. Do check out the economic growth during the 6 years of NDA regime and you will know what I am talking about. Let’s not ridicule the India growth story. Let’s correct what’s wrong.....not build a feeling that we’re all screwed up....

Monday, May 30, 2011

Anna style terrorism to strike India again....

Remember the famous challenge that George W Bush threw at the Pakistani establishment after the 9/11 attacks – “Either you are with us or you are with the terrorists”? This was seen as a kind of US “dadagiri”.....a form of threat to the world to take sides. And of course, the non-so-concealed import was that if you are not with us, you are part of the terrorist grouping. Many people felt at that time that the US was being a bully. It’s the same with the Anna panel.....”either you are supporting our demands or you are corrupt yourself” is the tenor of their argument. This much was argued even by Harish Salve.....who accused the Anna panel members of taking the “My way or the Highway” approach....something that he found to be totally undemocratic.

When the Anna hunger strike had first started in April this year, I had branded this style of protest as a version of terrorism. Any comparisons with Mahatma Gandhi’s hunger strikes were ill-founded because Gandhi used this form of protest against an occupying force. Anna was using the same against a duly elected government which represented the will of the maximum number of people of the country. In contrast, Anna himself and ALL of his panel members had no proven following. Anna’s fast was no different from the threat of an ordinary hijacker who demanded that a particular type of action be taken....or else misery would follow. I had also said that Anna Hazare’s followers had no credibility. Most of them would probably be businessmen (80% of urban are into their own business after all) – who are part of the corrupt lot. How many of them pay taxes as per the law? Or they were students – those who would soon become businessmen of some sort and start avoiding taxes. These were his supporters. Urban, middle-class people who were probably part of the corrupt brigade. How many of them realized this, I am not sure. But if media were to focus attention on their own corruption, it would be interesting to see how many of them would still support Anna. Can Anna himself challenge his supporters to shun corruption? Can he himself ask the businessmen to undergo a test first before he agrees to take their support?

Nothing has changed since April. I still strongly disagree with any move that weakens the political system in the country. By setting up the Lokpal outside the government, the proposal will in fact create a demagogue who would boss over elected representatives. He would suo-motu initiate action against any politician – including the PM – and could potentially become a tyrant himself. In any case, its such uncontrolled powers that start off the entire process of corruption. Why should we support such a proposal? Even the members of the Lokpal were to be “appointed” rather than “elected”. If Anna has such scant regard for democracy, why should we even listen to him? I am sorry but I am not willing to be ruled by a bunch of self-righteous lawyers who think that they are smarter than every one else in the country.

If a hunger strike was to be the way for every protest, then its best the government takes a hard approach to it. Like we advise the government not to negotiate with terrorists, so also we should advocate that the government should not negotiate with the hunger strikers. I am told now that Baba Ramdev is planning a hunger strike against black money. How about someone planning a hunger strike against him for all the accusations of illegal wealth apparently amassed by him? Medha Patkar was on a hunger strike against some slums being broken down in Bombay. Really? Why not actually allow slums to come up in Lutyen’s Delhi also? The Maharashtra CM was begging her to stop the fast. Maybe we need fewer of these civil society activists. Maybe the government should let the hunger striker achieve the moksh that they seem to want.

This time around, the Congress has smartened up. They are now writing to the opposition parties drawing them into the debate. So far, the BJP seems to be having a free ride on the subject. The corruption issue has become a Congress v/s Anna issue while in reality it is a politicians v/s Anna issue. When specifically questioned by the media on what their position was on several issues, BJP leaders have appeared to support Anna. But they have also said that they would state their views only when the government formally asked them for the same. Now the time has come. Does the BJP support the inclusion of the PM under the Lokpal Act? And the CM also? Wonder what they will do with Yeddy if the Lok Ayukta is given powers to sack him. Do they support the demand that the judges of HC and SC should be included in the Lokpal? What about the other issues? Now the party will have to take a stand. And once they take a stand, they will have to stick to it. Wonder what they will be thinking now considering that 71% of their states (5 out of 7) are in the topmost corrupt states listing in India (read my blog dated April 30th on this subject).

My complaint today is about the approach being taken by the Anna panel.....not the specific points that have been raised. I am all in favor of covering the senior judiciary because under the Lokpal because we know just how much corruption there is over there. Interestingly, senior counsels like Harish Salve are dead against this proposal. Should we simply assume that Prashant Bhushan is a smarter lawyer than Harish Salve? Or is it possible that he is totally off the track here? Likewise, should the PM be included or excluded? We need a good debate.....not a “we will walk out” kind of a threat. I certainly don’t agree that all investigative bodies should be put under the Lokpal. That much power – all of it unaccountable – would become a threat to our democracy by itself. I do feel that the conduct of MPs in Parliament should be included under the Lokpal. But surely, there is an alternate point of view possible?

Is it possible that Anna’s members may be wrong on some of their points? Or should we assume that they are the smartest we have got in the country and everyone else is wrong? And whose decision is it going to be finally on which points to accept and which not to? A duly elected government’s or that of the civil society representatives who have no proven support at all?  

I think the government should be strong in its response. Unfortunately, they are acting weak again. Why did Kapil Sibal not come onto TV channels yesterday to explain the government’s thinking? Why was some silly MP from AP (some Rao who I have never seen before) on Times Now? He couldn’t even speak properly. Why is Chidambaram not in the media putting out his side of the story? Why is the Congress leaving the field open for the civil society activists to exploit? These are the questions that the Congress should mull about.....

The real truth is that right from the word Go, this entire Anna hunger strike has been like a terror strike. It’s totally undemocratic. Media’s role also has been irresponsible. Rather than bringing out the real issues.....and allowing each side to express itself.....it has played partisan politics. Painting politicians black is a common pastime of media channels.....but providing solutions is beyond their capability. Shouldn’t they look at changing their own tack at some time?

Sunday, May 29, 2011

Ban capital punishment. Allow mercy killing instead.....

A day when there is nothing special to report on allows for a good debate on something much more relevant and important!

A few days back, the President of India finally rejected the mercy petitions of two criminals who had been sentenced to death by the Supreme Court many years back. As is usual in India, every decision spurs a heated debate in the media and so did this one. The BJP accused the Congress on not deciding quickly on Afzal Guru though it was unable to explain why its own government did not reject any mercy petitions in the six years it ruled. Like everything else in India, even capital punishment is an intensely political subject!

Frankly, I think it’s a demonic act on the part of any government or country to kill someone. Even if that person is guilty of the most gory of crimes. The key point here is about whether a country has the right to take someone’s life away. And a related point is whether the tit-for-tat principle should be adopted at all in these matters. Admittedly, murder, terrorism, treason and the like are very serious offences and affect ordinary peace loving people.....but is killing them at all within the powers a government should have? There is also the question of morality here. Who is man to decide when a person’s life should be taken away? Hasn’t society given that task to God? Can man decide to assume the role of God at all? Because that’s what man does when he/she decides for or against capital punishment. By acting now.....after so many years of waiting.....the President has acted like God and ordered execution for two people. Equally, by not taking a decision on several others.....she has again acted as God. Who gave ordinary human beings the right to behave like God?

Just look at the countries actively practicing capital punishment. Based on 2010 executions, the list includes China (2000+ executions in 2010), Iran (252), North Korea (60), US (46), Saudi Arabia (27), Libya (18), Syria (17) and Bangladesh (9). Except for the US, which of these countries inspires us to be like them? Most of these countries are notorious in any case. Many of them.....Iran, North Korea, Saudi Arabia......actually allow public execution. What kind of system is this? Is China going to be the inspiration for India in this regard? Everyone knows of the opaque justice system in that country. How do we even know that those killed deserved to be killed? Now look at countries that have legally abolished capital punishment. Or have stopped capital punishment in practice even though the actual abolition is still to happen. This list includes all the liberal countries in the world. All of Europe (except tiny Belarus), Australia, NZ, almost all of Latin America, South Africa.....this is the list of countries I would like to see India in. The US is an anomaly.....but the US is an anomaly in so many things. It’s the only liberal country that allows its citizens extremely easy access to guns....which other civilized country allows this? In this one instance, I would rather avoid the example of the US rather than follow it.

One of the main reasons why capital punishment is practiced is that it is supposed to be a strong deterrent against crime. But statistics shows that if this is true at all, it is only if death is CERTAIN in all cases of conviction. In most countries that allow capital punishment, capital punishment is rarely used and hence there is very little co relationship with lower crime rates. Just look at the US. In many ways, the US is the where maximum crime happens.

India should abolish capital punishment. More so because we have had a long term historical policy of forgiveness and non-violence. Capital punishment is violent. Research shows that there is no non-violent method of inflicting death on the accused. Mahatma Gandhi preached non-violence throughout his life.....how can India then allow this form of violence to continue? Besides, we must keep in mind the infirmities and frailness of our judicial system......not everyone is convinced with the judgments pronounced by our courts. Our forensics capability is rudimentary......the grounds on which we convict people is hugely suspect. Even in cricket, there is a provision for a 3rd umpire and the 3rd umpire looks at irrefutable evidence before deciding. In the case of real life, let that 3rd umpire be God.....who alone knows the real truth (apart from the author of this post!).

Life imprisonment is a strong enough sentence to be awarded in most crimes. In many ways, life imprisonment is a worse punishment than instant death. Just look at how suicide bombers are growing in numbers. What motivates them is the relatively peaceful end to their lives rather than living a life of continuous violence and hatred. Life imprisonment is as strong a deterrence as death itself is. Who wants to spend his life in the kind of jails we have in India! Of course, the flip side is that keeping a prisoner jailed for his entire life is an expensive proposition. This argument is not true in the case of India, where in any case, there are very few executions. That cost of holding prisoners is already being incurred.

Instead, countries must work together at allowing Euthanasia. Or mercy killing. Terminal patients who suffer relentlessly should be allowed to die as peacefully as possible. Of course, it’s a huge challenge in a country like India to allow euthanasia. Our religious scriptures clearly don’t allow it. Our societal structures are such that many children would be tempted to inflict euthanasia on their parents to inherit the wealth quickly. These are complications in India. But I think the western world is ready for euthanasia.

The real truth is that India is a liberal country and it must be seen in the company of other liberal countries. We are not like China or Iran. Human life has value in our country. We must abolish capital punishment. Even the UN has passed a resolution in 2008 calling for a global moratorium on executions with a view to eventual abolition. India along with China, Indonesia and the US voted against it. We must reverse this decision of ours.....

Saturday, May 28, 2011

Chennai winning the IPL was well deserved. MI not reaching the final was poor captaincy.....

Even though I feel vindicated at my prediction of a CSK win, I feel really upset at the way MI did themselves in. Had it been any other captain than Tendulkar, MI would have had a better chance of being in the finals. That CSK would still have won is a different matter; at least there would have been some sort of a logical conclusion to the tournament.

Today’s TOI does in fact talk about the mistakes Tendu has made as a captain. The most inexplicable of them all being the one to bat second in the Eliminator against RCB two days back. Now my logic is a little different from the one that the TOI has mentioned. Of course, there was the heavy weight of statistics against the decision to bat second – after all, 6 out of 7 times, the team batting first had won at Chidambaram stadium in Chennai. Why take chances? But my argument is based on a different point. My point is that when you have wild beast like Gayle as an opponent.....and you know that once you have him, you have the entire RCB on its knees.....then your strategy should be designed to get Gayle out cheap. Now, everyone knows this – most batsmen bat more freely when they are playing first. When they bat second, there is the pressure of a run rate that weighs on their heads. Take Adam Gilchrist’s King’s XI Punjab – they made some 220 odd at Dharamshala when they were batting first against RCB and Gayle misfired batting second. Likewise, King’s XI couldn’t chase the huge total against DC while batting second.. Tendu should have realized that if there was any hope of keeping Gayle under pressure, it was by making sure he batted in the 2nd innings under pressure......rather than in the first innings. That’s what Dhoni did in the finals.....and as we saw, once Gayle was under pressure, he couldn’t perform.

Besides, Tendu should have known that MI is a bad chasing side. Of course they can be a bad target-setting and target-defending side as well.....but their best chances are when they set a target and then hope that Malinga delivers the goods. In fact, MI’s run-chasing is as poor as the entire Indian team’s run-chasing record is. Even in the 2003 ODI world cup, when Saurav Ganguli decided to let Australia bat first, I had said that the match had ended with that decision. Tendu should have known how badly MI struggled to go past Kolkata’s modest 147 in the Eliminator – that too after getting off to a blistering start with Blizzard.

There were other mistakes that Tendu has made thru the tournament. He hasn’t been able to get Bhajji to perform. Bhajji has hardly remained a spinner now. He’s more of an armour bowler and in the T-20 format, when bowling slow flighted balls is an advantage, Bhajji has failed. After 16 games, he’s taken only 14 wickets and is ranked 12th in the bowler’s rankings....hardly expected of a top notch bowler. Likewise, why Tendu had so much faith in Pollard’s bowling is inexplicable. He’s very pedestrian.....on the dead Indian tracks, a ball bowled at a very gentle pace from a great height and is a great ball to hit. The additional lift that the height provides actually makes it a very juicy delivery to whack. In Australia or England, where the ball rises a lot, Pollard may be dangerous.....on the placid Indian wickets, he was easy prey. No wonder then that his Economy Rate was as high as 8.52....way higher than other wicket takers from MI like Bhajji (6.98), Malinga (5.95), Munaf Patel (6.59) and even inexperienced Dhaval Kulkarni (7.45). Almost every batsman has had a go at Pollard. Tendu goofed up again. He shouldn’t have used Pollard so much as a bowler.

In total contrast to Tendu’s captaincy flaws, Dhoni has yet again shown how smart a captain he is. When he was asked if he gave instructions to his team members when they went out to bat, he said “They don’t need instructions. They are experienced players. They know what to do. If they make mistakes, there is always a chance later to talk to them”. This in my mind is a clear sign of great captaincy. A captain who is giving fresh instructions after every over or two believes that the rest of the team is made up of rookies. Giving feedback is important, but timing is even more critical. It’s the exact same in the corporate world as well. A CEO has to give feedback.....but timing is critical.

Today, people are commending Dhoni on his persistence with Murali Vijay in spite of his bad form thru the tournament. For me, it’s not this one example alone which shows the way Dhoni thinks. In the World cup finals, when Dhoni played Sreesanth, the entire country thought it was a wrong decision. I had written even then that I thought it was a gamble Dhoni had taken. Because Sreesanth is one of the few bowlers who can get the ball to swing away even under Indian conditions. Just one good over could have got a key wicket and that’s all it often takes in an ODI match. The decision to include Sreesanth tells us how Dhoni thinks. Sometimes tactically, sometimes strategically.

RCB did well to reach the finals. But honestly, it didn’t deserve to be in the finals. A team which depends totally on one single player doesn’t deserve to be in the finals. Mumbai or Kolkata or later King’s XI were better teams overall than RCB.....

The real truth is that I feel extremely proud of having predicted the winner of the IPL-4! (I know this sounds a bit like the TOI saying “in our report published on xyz, we said so”!). But on a more serious note, it shows that prediction – even in an unpredictable game like cricket – can be done. Provided one knows how to pick the key “drivers”. For the last three games, I had said that the key drivers would be four foreigners – Malinga, Pollard, Gayle and Bollinger. The first two failed to perform in the Eliminator, while the third did.....taking RCB to the final. The same third (Gayle) didn’t perform in the finals and CSK won. The fourth, Bollinger, wasn’t really tested. The results are not so much about Murali Vijay and Ashwin performing in the finals.....by themselves, they couldn’t have ensured a win. It was really about these four foreigners either performing or not performing at critical times that decided the eventual winners. Understanding the drivers is key to predicting. In cricket. As well as in politics!

Friday, May 27, 2011

Allowing FDI in multi-brand retail....not such a good idea right now

I have been a huge supporter of laissez fair economics and like most readers of this blog, am a capitalist at heart. I have always believed that market forces are the best determinants of investment decisions and that the government must stay out of business itself. Today’s papers have a story that the government is considering allowing FDI into multi-brand retailing. Till now, it’s not been allowed. FDI to the extent of 51% is allowed in single-brand retail stores – hence we see a fair number of MNC brand shops now. I decided to do some research to come to the facts of this case.

The first point to note is that the debate is not so much about allowing FDI.....as much as it is about organized retailing itself. Organized retail means stores that are registered with the sales tax and other authorities. Even without any FDI in retail, the growth of organized retail can cause havoc in the employment sector. It doesn’t matter who owns the large format stores – domestic biggies or MNCs – the impact is the same. So most of the points in this post discuss the impact of organized retail rather than focus on FDI in retail.

There is no denying that allowing FDI into retail has advantages. First and foremost is that the shopping experience becomes better. Shopping at a Big Bazaar is much more pleasant than shopping at a local kirana store. We can “touch and feel” different products.....look at smaller brands (with less advertising firepower)......read the fine print.....evaluate the consumer offers.....and then decide what to buy. As a result, we make better choices. Secondly, the quality of the products in organized stores is better. Organized retailers can be held accountable for the goods they sell (bad goods can be returned back)....thus ensuring that the quality of goods they sell is better. Thirdly, prices tend to drop as retailers buy directly (in many cases) from the producers and cut out the large margins of wholesalers and distributors in the process. In today’s high inflation environment, the government is looking at this as the key reason for allowing FDI.

Most of us well-off people urban people stop reading the rest of the story. We conclude at this point that organized retail is good and that FDI should be allowed. If however, we dug deeper, we would know the problems that would come with a higher level of organized retail. The first major problem with organized retail is that it cuts back on employment. It is estimated that if just one large Walmart-like store opened in each of our million-plus towns....then as many as 4 lac people would lose their jobs. If organized retail became 20% of the total retail market (it is only 2% right now), then as many as 8 million people would lose their jobs. Now, I used to be a skeptic of these numbers till recently. I used to think that these were bandied around by the Leftists who wanted to keep out FDI at any cost. But when I dug deeper, I realized that these numbers were indeed true. Today, as many as 40 million people are employed in small retail shops across the country.....most of them would be rendered jobless if organized retail penetrated deeper.

Why is retail so important from an employment perspective? Because for the unemployed, it is the default sector of employment. For rural people, the default sector is agriculture. For urban people, it is retail. Those who cannot get jobs anywhere often end up starting a small kirana shop of their own. The shop itself may be unviable, but at least it keeps the person busy. As much as 14% of our employment comes from the retail sector; second only to agriculture.

Why are there so few employment opportunities in our country? The reason is that the manufacturing sector hasn’t grown as much as it should have. And even where it has grown, it has grown without employing enough people. It’s sad really.....India’s largest private sector company, Mukesh Ambani’s Reliance Industries.....which has a turnover of some Rs 2.5 lac crores.....employs only about 1,50,000 people. Since most manufacturing is in the private sector, and competition is fierce, employment is usually kept fairly lean. It’s because the manufacturing sector doesn’t employ more people that the unorganized retail sector has grown so big.

If more organized retail is to be allowed, then we must be prepared for higher levels of job losses. If we have to avoid social unrest, then we must expand the manufacturing sector in a very sizeable manner. Hence manufacturing growth MUST precede growth of more organized retail. We must allow liberal doses of FDI in manufacturing first....and set goals for it for employment generation. Manufacturing currently contributes only 25% to the GDP. That figure is ok for the developed world which outsources much of its manufacturing to the developing countries. But for a country like ours, manufacturing has to be the keystone of our economy. We sometimes feel proud that 55% of our GDP comes from the Services sector.....but we often overlook the reality that this number is probably more reflective of our poor manufacturing sector than a strong Services sector.

One argument presented by the supporters of organized retail is that we should be focused on the benefits the population of 1.1 billion people would reap from organized retail. And not worry about the fortunes of the much smaller segment of retailers (some 40-50 million people). But this is a wrong logic. The 50 million retailers probably support some 250 million people. What would happen to them?

The big trick the government has played here is that it has kept the discussion focused on the subject of FDI in retail. By allowing big domestic retailers to come about, it has anyways caused harm to employment. More importantly, it has kept the debate away from its own failure in developing a more aggressive manufacturing policy. How is it any different really whether a Kishore Biyani or Mukesh Ambani set up large format stores and cause unemployment or a Walmart and a Correfour doing so? The end result is the exact same. The issue is not about FDI. The issue is about organized retail. And about the poor size of the manufacturing sector.

I am a big supporter of growth economics. So I am not suggesting that organized retail itself be curtailed. As a country progresses, its retail sector has to modernize too. When we travel to the more developed world.....even to our neighbors in South East Asia.....we are impressed by the retail trade there. We also have no option but to modernize our retail. Hence we have to allow organized retail to grow. What I would like to focus attention on thus is the manufacturing sector. How do we get more investments into this so that large scale employment can be created for our teeming millions? That’s the real issue in the organized retail debate. We need 20 years of big ticket investments in manufacturing.....before opening up FDI in retail.

The real truth is that we are likely to take the decision to allow FDI in multi-brand retail for the wrong reasons. We will take the excuse of high inflation to justify the decision. We will present it as a way to protect the consumer knowing fully well of the problems this decision will create. And we will keep skirting the real issue.....that we need to first create employment in manufacturing. I fear that like many other policies, this one also will cause more harm than do good.

Thursday, May 26, 2011

IPL-country debate meaningless and politically motivated......

There really is no need for this controversy. Which one is more important than the other? IPL or country? Clearly, both are and asking a player.....or the country at large....to choose one over the other is an unfair demand. The question’s being asked to players.....but in reality it’s a question that is being asked to the entire country.

Let’s be clear. IPL has brought India great fame and pride. For 45 days, the best of the best in the cricketing world descend on India. The lure of lucre brings them here. None of them complain about the heat and the dust. Can we remember the last time that the goras came to India and didn’t complain about the country??? For the IPL, they are willing to play in 40 degrees Centrigrade and 90% humidity levels; suffer serious shoulder and other injuries; bear the pain of many cramps and spasms, bear the uncouth behavior of our citizens, live through the pollution and the noise.....all this for the money that IPL “throws” at the players! If India is the centre of the cricket world, it’s a moment of glory for the country.

The money has made many international cricketers choose IPL over their countries. Especially those who are on the other side of their prime. Isn’t it interesting that Adam Gilchrist “retired” from the Australian side, even though he is happy to be the captain of an IPL squad here and a damn fit and energetic one at that?! Likewise Malinga. Happy to be out of the Sri Lankan side and play for the IPL. Ditto Gayle, Hussey, Brett Lee, Kallis and so many others. They have all chosen to play for the IPL and either retire or stay out of their country games. The recent row between the Sri Lankan Board and the IPL organizers was another manifestation of the same issue. But can anyone answer Malinga when he asks: How much money will I make in the last few years playing for Sri Lanka and how much will I make playing for the IPL?

Likewise, why fault the Indian players. They are in it at least partially for the money. If only 20-30 kids get the chance to play for India.....out of the millions who chance their hand at it......what’s wrong if they monetize their success? If cricket is the religion of India, what’s wrong if the gods of cricket make money? Even Indian gods make a lot of money....just check out the donations received at the various temples! Till the time regular ODI and test cricket start paying fantastic sums to the players, it will be unfair to ask players to stop playing the IPL. Playing for India gives them fame, honor and the ranking in the international and domestic order. Playing for the IPL gives them the money. The two go hand in hand. And most players can manage to do both most of the time. Once in a while, a Gambhir and a Sehwag do get injured....why make such a big fuss about it?

There is one other aspect to consider. What kind of content does a lousy cricket series with another country produce? I can understand Indian tournaments with Sri Lanka, Pakistan, England, South Africa and Australia. But really who’s bothered about the West Indies, Bangladesh and NZ. I had raised the same point during the ICC ODI world cup. There were so many “rotten” matches that the tournament overall never notched up much viewer interest. It was only at the knock-out stage when the matches became interesting and the viewers came back. If this is the truth, why have so many country-to-country matches at all?

The question also to ask is: If the IPL has become such a crucial fixture in the world of cricket, why are other tournaments organized at the same time? I am told the reason is that the IPL is not a “recognized” ICC event and hence it does not fit into the “calendar” of ICC. If it did, then there would be enough time provided before and after the IPL. Currently, the IPL has to fight for its place in the annual calendar. That it has been able to find itself such a big window is again because of the money around the tournament. Players and Boards bend over backwards to accommodate the timeline of IPL. But a few Boards will want to assert their independence (Sri Lanka, England).....a few will feel miffed that their players were not chosen in the IPL (Pakistan).....there is nothing unexpected here. But to fault the IPL for this is clearly unfair.

It’s the same in other talent-based sectors also. These days, top film stars choose to act in only one film or less a year. Take Aamir Khan. He acts in barely one film a year. Sometimes, he spaces his films two years apart. But in-between, he monetizes his popularity through advertising deals and other similar stuff. It’s my bet that Aamir makes about Rs 100 crores in the two years between his films. He probably makes only Rs 25-50 crores in the film itself. So two thirds of his earnings comes from non-film income. Does anyone ask Aamir to reverse this? To act in more films and do less of ads? Then why should Gambhir be asked a similar question? Why can’t he do both?

I think the reason such controversies are brought up every now and then is because there is a lot of envy for the IPL. Unfortunately, the envy is as much from Indian people and bodies as from international. There are many in India who grudge the BCCI the success the IPL has had. Within BCCI itself, there are many who feel left out of the jamboree. There are powerful ex-players who feel they have been sidelined. There are large corporates who feel they should have been in the game too. All of them conspire to create sensational stories around the event. In the past, they have cribbed about the after-match parties. What’s wrong with that? Sure, it takes a toll on the player’s fitness levels.....but isn’t it a tough world out there? Shouldn’t players be willing to slog their butts off for the money they make? Of course, there is also the omnipresent and all-powerful media which fans the controversies. By supporting even inane controversies, they lend credibility to them.

After all, when Arnab asks “Is it India before IPL”, there can only be one answer. It’s the same when the BJP raises ultra-nationalistic questions. Remember the ego issue around raising of the Indian flag at Srinagar on Jan 26th this year? “Isn’t Srinagar a part of India”??? Of course it is.....but there is also a lot of tension in that place. Can you just shut up?! Sometimes, a person’s and a party’s maturity comes from appreciating the nuances around an issue.....rather than fueling jingoism around it.

The real truth is that the current controversy around IPL v/s country is politically motivated. There are many who want to discredit the tournament. In fact, they would be happy to see it die. Since it’s an extremely popular fixture in the world of cricket, they cannot criticize it openly. So they trigger these kinds of controversies. The real truth also is that the IPL is more exciting than most rotten country-to-country tournaments. No one wants to watch a Bangladesh-India match or even a West Indies-India match. People would much rather watch the IPL! Hence I say: No reason to sweat about this controversy. This too shall pass!

Wednesday, May 25, 2011

Phew! Mumbai makes it to the top 3......my forecast of a MI-CSK final looks closer now!

This is the time for me to say “I told you so”! On 10th May, I had written a post titled “It will be a Mumbai-Chennai final and Chennai could win it again” and after many surprising ups and downs, that prediction looks like its coming good!

However, let me honest here. Chennai and Mumbai may have hit the top-3 league, and my prediction may be coming true, but the model that I had developed surely appears to have failed. The journey for the then favorites Mumbai Indians has been anything but how I predicted. At that time, Mumbai Indians were at the top of the tables and they had a win% of 80%. Little did my forecast suggest that immediately after that forecast, MI would actually lose – not win – nearly 80% of the remaining four matches (3 losses out of 4.....the last one also won on the last ball with the help of a lucky six). At that time, I had calculated that six MI players were in form – Tendulkar, Pollard, Bhajji, Malinga, Rohit Sharma and Rayudu. Now we know how this changed since my forecast.....Pollard, Bhajji and Malinga have just crashed out. In fact, in the last four league matches of MI, Malinga has taken only 3 wickets after having taken 24 in the first ten. So poor has been Mumbai’s form that they got bundled out for just 87 in the match against Kings XI Punjab. Mumbai also had the ignominy of losing to the then lowly teams of Rajasthan Royals, Deccan Chargers and Kings XI Punjab.

If Mumbai’s fall from form has been dramatic, Bangalore’s rise has been too. I had written then that “No one can predict when Gayle will fire again and he alone could take RCB to a win this year” and that’s come really true! Gayle’s risen to the top of the run scorers with an astounding total of 519 from 10 matches at an average of 74. It is this form of his that has taken RCB to where they have reached. I had also written that Chennai had the maximum number of “in form” players and that’s stayed true. All of them – with the possible addition of Ashwin – have been at the forefront of Chennai’s charge into the finals. But most importantly, I had said that Dhoni is the world’s most astute captain and that’s the real reason why Chennai has reached the top. The man’s captaincy has made Chennai reach the finals three times out of the four IPL tournaments so far. Of all the variables used in my predictive model, the one that has been most consistent (and hence very reliable) is Dhoni’s captaincy. That’s why I had written “But if I have to place my bets, it’s on CSK”. That is still my position!

So now, it’s time to do the analysis all over again......and while it may appear to predict now because one has to only predict the results of three teams and two games, in reality its even more difficult. The chances of error are much more because one does not have the benefit of using “ long term averages” as in the past. Now, it’s just about the performance on those specific days. Who will hold their nerves better in the remaining two matches? That’s going to determine the winners.

I have no way of bettering my forecast. It could be either a CSK-RCB or CSK-MI final. It’s probably an equal probability and only for this reason, I will stick to my original forecast of it being the latter rather than the former. What I can try and do is identify the key factors that could determine the finalists:

For Mumbai, it’s a case of Malinga firing. He’s the main weapon that the Mumbai Indians have. Without Malinga firing, MI cannot get the opponents out. Why he didn’t bowl his yorkers in the last four matches is surprising.....is he holding them back for now? Or is he out of form? The other key factor is going to be Pollard’s form. Can he match Gayle’s fiery form and temperament? On a good day, he can outdo Gayle....but of late, he has been totally out of touch. And can Tendulkar please not count on Gayle to bowl....he’s probably the easiest bowler to whack in the IPL. He’s a slow pacer....and his height actually helps bring the bowl to a comfortable height to be whacked. For RCB, they will have to hope and pray that Gayle comes good against MI. They are a very good side, but if we take Gayle out, there is very little left (Of course Kohli was the key contributer in their match against CSK....but even then). Between Raina, Dhoni and Hussey, they will always get runs on the board....but whether they get to 160 (beatable) or 180 (unbeatable) will depend on Gayle. The other person who is crucial for CSK is Ashwin.....a spinner who has done well but can do much much better (the other one Bollinger can be safely predicted to do well).

So net net, in my current opinion, who wins in the MI-RCB semi-final (if it can be called that), will depend on Malinga, Pollard, Gayle and Bollinger. Two West Indians, one Australian and one Sri Lankan will decide (in my opinion) who enters the final from these two sides. Such is the international character of the IPL!

The real truth? Whoever their competitor, CSK is the one who is going to lift this cup. At home, the team’s virtually unbeatable. The other thing that is unbeatable is Dhoni’s captaincy. My strong recommendation is to bet on CSK.....!

Tuesday, May 24, 2011

India beats China in Internet Contribution to GDP.....

Thank India’s infrastructure problems for this! This is a story on the front page of today’s ET. What caught me by surprise was the ranking of India ahead of China and other BRIC economies. And we are not talking mere internet-user numbers here....we are talking about the contribution of the internet to the overall GDP growth rate over the last five years.

According to this new McKinsey study, the internet contributed about 5% to India’s GDP growth between 2004-9, while the same number for the US was 15%, for China 3%, for Brazil 2% and for Russia 1%. Many would be surprised by this high ranking. It’s not clear what the ranking of Western European nations is, but it is fair to assume that they would be above India and below the US. Even so, the high ranking of India within BRIC nations is a matter of great pride and comfort for us.

Even though the high ranking looks surprising at first glance, once the statistic is accepted as true, it is not that difficult to explain why the internet has assumed so much importance in India. The reason why the net has assumed so much importance in India is very different than the reason in the western world. There, the net has added to convenience. Life was already good there.....the net only made it better. In India, on the other hand, life was horrible before the internet came in. Even today, there are infrastructure problems all around in India. The internet in India is a life saver, not merely a convenience enhancer. Its importance in daily life is of a very high order compared to in the western world (even though it appears to be the same). The lack of physical infrastructure is unique to India. And this has contributed to the fast uptake of the internet. In India, the mobile and the Internet are tools to fight against infrastructure shortages. An internet connection ranks much higher in the hierarchy of purchase priorities in India than in many other countries in the world....

Writing about the joys of the net is totally unnecessary. Let me just focus on the infrastructure problems which are leading to a higher acceptance of the net:

1)      Shortage of physical infrastructure everywhere: Poor quality of roads. Shortage of space at homes. Shortage of time.....all make it impossible to “meet” friends the conventional way today. Ergo social networking. Facebook and Twitter have changed our lives forever. The number of “friends” has expanded dramatically. Old co-students in college and school; old colleagues in past organizations; are all in touch again. And I don’t agree that most of these cannot be called “friends”. In the strict sense....yes, they are not friends. Maybe “acquaintances” is a better description for them. But that’s the way I like it. I want to stay in touch with hundreds of my acquaintances but I want to have only a few friends!
2)      Banking infrastructure: Before the net became popular, waiting for hours at a bank counter to withdraw money was a common sight. Who wants to do that today?! I cannot remember the last time I went to the bank to check my balance, to order a cheque book, to transfer money from one account to another.....thankfully, it’s all online today.
3)      Long queues everywhere: One of the big burdens of today’s life is the monthly payment to be made to umpteen credit cards, utilities, loans....And there are bound to be long queues everywhere......aargh! Fortunately today, I don’t have a single item that needs me to move by butt at the end of the month as everything is linked either to a credit card or to a bank account directly through ECS. Electricity, telephone, credit cards, SIPs, EMIs for housing and car loans.....everything is linked online to the bank account. Likewise, cinema bookings, share purchase, sale, transfer of demat securities, applying for IPOs, job searches (haven’t done it in 10 years!); house hunting (5 years); spouse hunting (20 years!).... it’s all online today! No more queues anywhere!
4)      Problems linked to cable connections, newspaper deliveries: I get the newspaper at 7.15 am. This is pathetic but the poor delivery boy cant help it.....physical delivery does take time! Online newspapers it is for me! Even entertainment has gone online. Today, the IPL matches can be watched online! Likewise the news. It hardly matters if one is home or not; one can catch the favorite channel online!

All of India’s physical infrastructural problems are being licked by the internet. That’s the real reason why the internet has assumed so much importance in India. Indian’s are basically lazy people; and they don’t have the patience to wait in queues (notice how the queue in India is never a straight line....it’s always a crowd!). The net helps us beat all these problems!

Likewise, the terrible problems in trying to acquire visas, the cost of the travel....all have made internet the preferred medium for Indians to do business abroad.

Even though the net has assumed a lot of importance, it’s a nothing compared to what’s about to come. The shortage of roads has been replaced by the shortage of bandwidth now. At best, the quality of the bandwidth in India can be described as extremely poor. Data cards which are supposed to work at high speeds hardly manage to churn out data at one-tenth their promise. Dial-up connections still dominate internet access. Mobile internet bandwidth is still stuck in the 2G era. Fortunately, now the availability of 3G bandwidth is making life a little smoother. Availability of computer screens is still low in India compared to most other developing countries. That is why there is so much excitement about the mobile screen being more relevant to India. However, even the availability of smart phones is very low in India. Apparently, 80% of London works off smart phones; that number would be no more than 5% in India’s metros.

The real truth is that in India, the internet is the solution to our infrastructure problems. That’s why people are lapping up on the net. That’s why they spend money on an internet connection before they spend on many other “necessities”. That’s why there will soon be more than 300 million internet users in India. Today, the net is not an option; it’s a basic necessity....

Monday, May 23, 2011

DMK revival already starting......Kani’s already being seen as a “victim”

The way Kanimozhi has been treated – being denied bail in spite of the Supreme Court’s views on the bail v/s jail debate – and the way the father-daughter meeting in Tihar jail is being covered by media makes me believe that the revival of DMK has already started. Indians love tear jerkers and Indians are perpetually protective of the perceived underdogs. The same factors that made DMK the villain are working now to making them the underdogs.

I have written earlier my views on Kani’s arrest. There is no reason for her (or anyone else really) to be denied bail in this case. Reasons: Firstly, if the worry is that these people may tamper with evidence or influence witnesses, then the solution is in making sure that this doesn’t happen. The solution is not simply jail the concerned person. Secondly, the Indian judicial process is so slow that these people may stay in jail as under-trials (not convicts) for ever and that can hardly be called fair. And lastly, Kani is a woman and the Supreme Court has apprently specifically said that bail must be a preferred choice when it comes to the young and the elderly and women. The Delhi HC denied bail after the special 2G court denied it. It appears that the courts are pandering to public opinion in coming to their decisions. Even though the public may feel happy with Kani getting jail, I hardly think it is a fair decision.

There is also a huge difference between Raja and Kanimozhi. Raja is a man and in our society, a man is considered capable of being a thief. A villain. A woman on the other hand can be a vamp.....but the common sense is that women can be possessive about their men; they can “prey” on other men; etc. But our society has never really accepted that a woman can be a thief. A scheming corrupt politician who stole hundreds of crores of rupees. Let’s be clear: the aam aadmi is happy to see Raja in jail, but the same aam aadmi’s heart goes out to Kani.

Further, Kani comes out as being a shy and polite woman. She’s not brash as Jayalalitha or Mayawati are. She has the demeanor of being the victim here. Her statement that she was made the shareholder upon the insistence of her father may not cut ice with the courts; but it does with the masses. When she is jailed, it’s almost like Sita being “jailed” in Lanka. When Kani weeps in court, a million people weep with her. She pulls at the heartstrings of many millions not only in her native TN, but all over the country.

This is hardly the first time that Indians have sided with women who have been seen as underdogs. Indira Gandhi was booted out after the Emergency in the 1977 elections. But the country voted her back to power with 350+ seats (65% of the total number). Again, it was the policies of the Janata government between 1977 and 1980 that made Indira Gandhi the “victim”. All her “crimes” during the days of Emergency were forgiven by the public of India. Likewise, Jayalalitha has been accused of severe charges of corruption in the past; she was made the villain. And yet, the same public of TN has voted her back to power every five years. Because the public have felt sympathy for her after she lost power. It’s the same with Sonia Gandhi. When she sacrificed the PM’s post for Manmohan Singh in 2004, she deified herself as a “devi”. The politicians may have cast aspersions against her nationality, but the public had already made up her mind about her. Sonia benefits from the same sentimentality of Indian people as Narendra Modi does with the sentimentality of the Gujjus. Everytime someone attacks Modi for his communcal philosophy, the people of Gujarat rise in his support. Likewise, every time the BJP accuses Sonia of personal corruption or other similar charges, the people of India have risen in her support. It is probably this understanding that made Advani remove the attacks on Sonia in the case of holding a large stash of illegal money abroad. That was backfiring.

As long as an Indian woman politician behaves in a coy, demure, “sati-savitri” manner, she will eventually earn back the sympathy of the voters. But if she behaves as a brash, aggressive “phoolan devi” type of person, the people will be unforgiving. Mayawati has reasons to worry, but Kanimozhi, Sonia, Jayalalitha and even Vasundhara Raje don’t.

The real truth is that if DMK and Kani really need to be punished, then she should be handled with utmost care, respect and decency. She should be freed. The public must feel that she has not been victimized. Over a long period of time, the public will punish her by not voting her back to power. Too much haste, and she’s back to power. Such are the ways of Indian society and politics!

Sunday, May 22, 2011

I give the UPA-2 a “Meets expectation” 7.5/10 rating.....

Thanks to all the politician bashing that’s going on in the media, I am feeling compelled to defend them! At least wherever its due, we should acknowledge the good work done by the ruling class. As the UPA-2 government completed two years yesterday, it’s mood must have been sombre.....after all, it has been rattled by corruption scandals and accusations almost since July last year. Sifting out the grain from the chaff however reveals some interesting facts.

Let’s evaluate the UPA-2’s performance:

On the economy: The economy faced its biggest challenge starting Sept 2008 and continuing till about April 2010. These one and a half years were disastrous for much of the developed world; they were difficult even for the fast growing emerging economies. India fared reasonably well during this period of time, recording a 6.5% GDP growth rate in the year ending March 2009 and then 8% in the year ending March 2010. We are now talking of growing by 8.5% or so in the next year. India’s position as the fastest growing democracy continues unchallenged. High economic growth is leading to even more investments and consequently the outlook for the future is generally better than it is in most countries. The one major worry on the economic front....though caused largely by external factors (related to oil prices, strife around the globe) is the high inflation rate. There is a perception that the UPA could have done better.....but in my own belief, this perception is more political in nature than based on cold facts. High inflation is a phenomenon around the world.....it’s not India’s problem alone. On the economic front, I would give the UPA a 7.5/10 rating.

On security issues: There have been no major terror attacks since Nov 2008 when 26/11 happened. There is generally a consensus that Chidambaram has been able to bring a lot of gravity to his job (of course he did take over from a real nincompoop Shivraj Patil!). He’s managed to galvanize the plethora of security agencies into a more coherent and united fighting force. The recent goof-up about the “Most wanted” terrorists is so small that it takes nothing away from him. It must be remembered also that Police is a subject under state authorities; so Chidambaram cannot do anything with respect to the security in most parts of the country directly. His mandate includes larger issues.....modernization of internal security forces; improving the intelligence set-up; fighting cross-border terrorism etc. I do wish Chidambaram had done more in terms of improving the perception of the security forces and the police. The police in particular continues to be perceived as the most corrupt of all government departments. I would give Chidambaram an 8/10 rating.

On trade: India’s exports have been growing at a feverish pace; fast outpacing the overall GDP growth rate. At nearly $250 billion, India is now in the top 15 exporting countries. While it’s in the top 10 as far as GDP is concerned (in fact, it is #4 in GDP on a PPP basis), its ranking on exports is lower primarily because India has never focused much on exports. The new confidence of Indian businesses of looking at the world as their oyster is now helping propel Indian exports forward. With imports of nearly $350 billion, total trade is $600 billion.....a number that makes India a very important trading partner to the world. It is this trading muscle (and the underlying economic muscle) that is bringing the world’s biggest leaders to India. If India does manage a seat in the UN as a permanent member, it will be because of this economic muscle. I would give Anand Sharma a 9/10 rating.

On governance: There have been accusations against the UPA government on the subject of governance. To a large extent, these have been unnecessarily blown up by media. Chief amongst the embarrassments to the UPA is the entire CVC issue when Thomas refused to quit as the CVC. Why he was appointed one was questionable in the first place; not being able to ask an official to quit is a different and totally unacceptable situation. I am going to talk about corruption charges next.....so am not including them here. The affairs in Karnataka with an over-enthusiastic and partisan Governor is also giving the UPA unnecessary blushes. But apart from these two issues, I really cannot think of much to blame the UPA with. I would still give the UPA a lower rating of 5/10 on governance.....largely for its inability to handle the accompanying perception.

On corruption: A pet subject of mine! The Congress has been lambasted for an increased level of corruption. This is a silly argument to start with. Cases of corruption being unearthed relate to the past....it’s not as if the UPA-2 is responsible for having created them. Of course, it hardly helps that the corruption charges related to the period of time when the UPA-1 was in power. My complaint with the corruption charges is that they have been bloated beyond reasonableness. Take the 2G issue. After so many months of sustained investigation, what has the CBI found? ONE link of possible corruption between DB Realty and DMK? That’s it? There is nothing at all on Unitech? What about Reliance? Why are Sanjay Chandra and the Reliance officials then being held in jail? What happened to the Rs 1.76 lac crores of scam? Where is all that money?? I think it was all CAG’s intentional and politically driven activism.....and media’s competitive urge for survival. As I have argued that giving spectrum cheap was the government’s prerogative.....CAG has no right to comment on it. Giving spectrum cheap has brought about a social, cultural and economic revolution in the country lifting so many millions out of poverty. UPA goofed up in not being able to defend it’s actions properly. There WAS corruption in the way Raja flouted procedures....but that sum of money is only some Rs 200 crores. Take the Kalmadi affair. I cannot understand why everyone is acting so stunned. The total charges of corruption against Kalmadi relate to ordering goods and services worth a mere Rs 200 crores. This is the size of the order.....the size of the corruption must be no more than 10% of this. Is that ALL???? Besides, let’s not forget Kalmadi took decisions like many of us have when faced with a time crunch.....he cannot be panned for that. Our media made Kalmadi an ego issue and that’s why it hasn’t bother to apologize to the public for having misled it to believe it to be a Rs 70,000 crore scam. Further, one forgets that Kalmadi was one small cog in a big wheel.....a wheel that includes the BJP as well. There are corruption charges against the BJP led MCD which will soon come out. As also, the charges against this party in the 2G affair will come out soon. The Adarsh scam is one that could be easily avoided in the future by having sensible real estate policies. Increase the FSI in Bombay to 4 or even higher. In fact, make a high FSI mandatory. It’s like the sign on an expressway which says “No stopping”.....in Bombay, in the real estate sector, there should be a sign which reads “No small buildings”! One last point: As I pointed out in a previous post of mine (April 29th, “BJP and Left as corrupt as Congress).....the extent of corruption is the same in all parties. In fact, the Congress comes out the best. In the top 13 corrupt states, 5 are BJP ruled; 4 Congress ruled. Likewise, 5 out of 7 BJP ruled states are in the list of the most corrupt (71% corrupt). Only 4 out of 12 Congress ruled states are in this list (33% corrupt). On corruption issues and taking a positive approach towards making changes, I will give the UPA a 7/10 rating.

Failures: I think the UPA’s failure has been in defending its reputation better. It seems to have become “too decent” for its own good. Accepting mistakes and being introspective is not appreciated in Indian politics....and it now appears, even in English media. I have argued in the past that the Congress must fight dirty.....give it to the opposition where it hurts the most. Bring the attention on the BJP on Karnataka. Apart from the corruption there, ask the question: why is the state faring so poorly on economic growth?

The real truth is that the UPA’s overall rating would still be 7.5/10. Not bad at all! The fact is that the UPA is today led by some very decent people. Both Sonia and Manmohan Singh give the Congress an enviable image of being committed to cleaning up corruption and being personally above board. There are many ministers who are performing exceptionally well: Chidambaram, Pranab, Kapil Sibal, Ambika Soni, Praful Patel, Kamal Nath, Antony......some UPA allies like Sharad Pawar and Raja have unfortunately harmed the UPA’s image. But such is coalition politics. One can complain about it.....one cannot get out of its grip!

Saturday, May 21, 2011

Finally Maharashtra gets an action-oriented CM

After nearly a decade of mis-governance, Maharashtra finally appears to have got a performing CM. I wrote about him once earlier in the context of the several infrastructure projects that are being speeded up by him. Today, I write about him because of the cleaning up of the real estate sector in Bombay that he is doing.

Everyone knows that the island of Bombay has no land left. In any other country, this would have meant the coming up of huge skyscrapers which are far more efficient users of land. Small buildings are a luxury a city like this couldn’t afford. Even in Bombay, skyscrapers are coming up thick and fast. However, in the past, the process of sanctions to high rise buildings has been shrouded in secrecy and corruption. Instead of changing the laws to allow higher buildings legally.....clearly a need of the hour.....the government continued with the old law that provided an FSI of just 1.3 in the island city (and 1 in the suburbs). This was an antiquated law that needed to be changed. How can the permissible FSI be so small when there is such a paucity of land? If the government’s idea was to encourage a shift in the population to areas outside Bombay (even further away from the suburbs....like New Bombay, Virar,
Mira Road
, Bhayander, Bhiwandi etc), then the government didn’t do enough to build connectivity from these areas to areas of work in Bombay (like Nariman Point or Lower Parel). Not building this connectivity probably was also intentional.....a way of keeping pricing high in “town”. The real estate sector was a den of corruption, with municipal officers apart from politicians, using discretionary powers to clear new building projects for a stiff price. The maximum corruption in Bombay came from the real estate sector.

Today, the new CM of Maharashtra has decided to make the rules a little simple. And a little more logical. He’s legally allowed an FSI of 3 for “cessed” buildings.....cessed buildings are probably unique to this city.....these are buildings which have been grabbed by tenants many decades back. They pay extremely low rents and they refuse to vacate the premises. There are some 15000 such cessed buildings in Bombay. Since the tenants pay low rents, the “owner” (who cannot evict the tenants) refuses to keep the building in good conditions. These buildings are obviously in dilapidated conditions; many crumble every monsoon. And since they were built long long back, they are small in height. They are inefficient users of land. The only way land usage can be made more efficient is by breaking this dilapidated low-rise structure down, building a taller new structure and allowing these “grabbing” tenants space in it. It’s a bit like slum re-development projects. Slum dwellers (mostly illegal) get legal and permanents accommodation in a much taller building structure that comes up in place of all those illegal shanties. The taller structure makes much more efficient usage of land. Making an FSI of three automatic removes corruption. It’s a more transparent policy and its a good move.

Prithviraj Chavan must now take the bold step and make the FSI three (or four) for ALL building that come up in proper Bombay (“town” and suburbs). He must do away with all the devious (and discretionary) schemes that exist now to grant permissions for tall buildings. He has already scrapped the controversial “public parking” scheme....under which a builder was told to construct public parking structures.....in return for higher FSI in his commercial project. Obviously, builders latched on to this scheme.....because there is so much demand for taller structures. But they cheated the system. The “public” parking structure would actually be built next to the commercial structure and the access to this public parking structure would be intentionally made difficult for the public. The public would never get to use the facility. In reality, the builder got a double advantage. He could provide more parking to the buyer of his commercial property (at a price of course!)....and also get a higher FSI (and make even more money)! All this was done with the connivance of the authorities. Chavan has dismantled this controversial scheme.

While making higher FSI automatic, Chavan must, of course, take care of the several other requirements a densely populated city like Bombay has. All parking must be self contained in the building itself; the building must be as “green” as possible; water harvesting must be mandatory. The access roads to the building must be wide and well developed for smooth movement of traffic in and out of the building and so on and so forth.

Chavan has also tweaked the rules for the “slenderness” of buildings. Slenderness ratio is defined as the ratio of the height of the building to the smaller dimension of the plot of land on which it is built. This ratio has now been set at 9. Anything above this is considered structurally unstable. The rule now is that structures with higher slenderness ratio than 9 will need approval from the municipal authorities.....but the rules for their approval have been laid down. The structural worthiness of the building must be proven by the builder. Even under earthquake conditions. In a way, this will encourage neighboring plot owners to “merge” their plots (thus increasing the smaller dimension of the plot of land) and construct a taller combined structure, rather than the many “slender” and unstable structures that have been coming up in the past.

If the intention is clean, it’s not that difficult to make the right laws. But if the intention is to make money on the side, and keep discretionary powers to themselves, politicians will intentionally make laws that have loopholes. Loopholes are not an unfortunate byproduct of law making; it is an intentional “provision” introduced by corrupt politicians to make money. All that Chavan is doing is removing these loopholes from existing laws. It may appear to be very little that he is doing, but often small changes have a very large impact.

Even otherwise, Chavan has been using his clout in the Central government to get clearances for Bombay. The airport at Panvel was cleared (finally) by Jairam Ramesh under cajoling from Chavan. The Sewri-Nhava Sheva sea link will also now be cleared quickly. 300 kms of roads are being built as a “ring” around Mumbai.....all of them are getting quick clearances. The 2nd metro line has been cleared; the 3rd one has already been drawn up. It’s a question of time, before this beautiful city regains it’s past....and slowly but surely depleting....glory.

The real truth is that Maharashtra has had poor governance for too long. The Ashok Chavans and Vilasrao Deshmukhs have exploited Bombay to fund their political ambitions across Maharashtra. Bombay has been treated like the proverbial goose that laid golden eggs. In an ideal scenario, Bombay should be made independent. It’s a global city like Hong Kong and Singapore and it needs to be run as such. If for political reasons, it cannot be made independent, then it should be treated “specially”. If India grows at the pace it is expected to, Bombay will become a strong financial hub in Asia. It had better gear up for that day!

Friday, May 20, 2011

Any civilized country provides bail to the under trials. Kani should have been given bail

No one is going to complain today that Kanimozhi was sent to jail. There’s such a great sense of satisfaction that a politician has been shown her place. So high is the angst against politicians that even the judiciary has been influenced by its force. But how is it fair that an accused person.....whose trial has not even begun.....is put in jail without anything being proved? Is this the way a civilized country should conduct itself.

I had written once on the same subject in the context of the numerous accused Muslims in the Godhra case being found not to be guilty. They had already been in jail for several years. If we pause and look back at what we did to them and their freedom, it would shame us. So many people jailed merely on the basis of some unproven charges framed against them? What kind of justice system is this? What kind of a country are we becoming?

In the US in contrast, Dominique Strauss Kahn (DSK) has been given bail within 2 days of being charged.....even though he is such a high profile diplomat and politician. Courts in the US could have argued that this powerful person could “influence” witnesses and hence it was safer to keep him in jail. But they didn’t think that way. Because in the western world, there is a huge importance attached to freedom of citizens....even the ones who are accused of serious charges. There is a difference between the charged and the convicted.  Mere charges are not reason enough to jail someone. If there are worries of witnesses being influenced, the solution lies in protecting the witnesses; not in jailing the accused. The only exception that the US made to this rule is with respect to Guantanomo....the US base in Cuba.....where those charged with serious terrorism related crimes are jailed. Even though the US continued to justify the presence of this facility, it was severely castigated by its own people. In fact, Obama had made it an election issue when he stood for President. Upholding civilian rights.....even in the face of extreme public anger.....is what makes the US a civilized country.

In this context, look at Kani’s jail sentence. Why is she being jailed? Only because of the “magnitude of the case”. Why not jail every single politician in this country because a similar “magnitude” case could be built against each of them. Because the CAG has accused the government of a staggering loss of Rs 1.76 lac crores in the allocation of 2G spectrum, why not jail the entire cabinet? After all, this is so staggering a sum and hence the magnitude is so high, that it would justify the action. Why not jail Chidambaram because the magnitude of the embarrassment caused in the “most wanted” list matter is so high that it deserves him to be jailed. How ridiculous is this approach?

The case against jailing the accused is even stronger in India given its slow justice system. The case against Kani could go on for years as her lawyer argued. It’s true. The Godhra under trials were released after several years of being in jail. There are cases that languish in our courts for decades. If the courts know this reality.....and they are the only ones responsible for creating this mess in the first place.....shouldn’t they take note and weigh in, in favor of bail? Alternatively, if bail is denied for whatever reason, shouldn’t a short time frame be set for the trial to be concluded? Shouldn’t there be a law that bail can be denied only for a few days or weeks at most?

The unfortunate thing is that even the judiciary has lost its sense of fair play and is swayed by public opinion. In fact, I am not even sure what public opinion we are talking about here. It’s just the misrepresented and biased stories that the media puts out in a totally unchecked manner with no sense of responsibility. Media makes judges believe that the entire country wants Kani jailed. The point is not about how this kind of journalism should be curtailed; the point is about why the judiciary takes note of public opinion in its judgments?

It’s the same with all the other accused people being put behind jail. The media may gloat over Kalmadi being in jail.....but that cannot take away the fact that this has given India the reputation of being a very intolerant, uncivil nation. The inability of the “system” to protect witnesses; to avoid tampering of evidence; is the real reason why the accused are being put in jail. This is a travesty of justice. And apparently, if the media in the country is to be believed, the public at large are supporting this travesty of justice. This is pathetic.

The real truth is that India is gaining the reputation of just being another banana republic. There are hardly any civil rights in this country. Anyone can be picked up and jailed, with the trail taking years to conclude. The punishment happens before the trial. Rather than fix problems in our law enforcement and judicial systems, the easy way of putting the charged person in jail is being taken. The media....instead of taking up cudgels for liberty and civil rights and reforming of the inefficient government systems....is instead applauding the jail terms being handed out by the courts. This is making India like the lawless Arab nations.....where even the concept of civil liberty doesn’t exist. It’s time we think about this....