Wednesday, November 28, 2012

Opposition stumped by Congress’s Direct Cash transfer scheme….

There seems to be no limit to how inane the arguments can get when one is caught off guard. Stumped by the Center’s fast-tracking of the direct cash transfer scheme, which no one expected to be rolled out during the tenure of UPA-2, political opponents of the Congress are struggling to find cogent arguments to somehow discredit the bold initiative. That they are attempting this impossible task at all shows just how desperate, and how badly rattled, they are.

One of the inane arguments presented is that this cash transfer is a bribe to the voters! So if the government gives subsidized this and subsidized that to the voters, that’s not a bribe, but when it converts that to cash, it is a bribe! There is no logic in this. It only show the kind of fear that has spread through the opposition ranks with everyone acutely aware of the potency of the scheme. Cash in hand is a far more powerful electoral currency than a subsidy in kind. That’s what is really riling the opposition. Somehow they would like to stop it. Ideally, they would like to have been the authors of this game changer. That they have been overtaken politically by the Congress is just unacceptable to them.

The other argument is that the timing makes the objective suspicious. Now I have two counter arguments for this. Firstly, the elections are at least 18 months away. This is 30% of the life of the government. So are we saying that no big initiatives should be taken even when there is so much time left? It’s supposed to just sit twiddling its thumbs for such a long time? Is the opposition saying that policy paralysis is the only acceptable prescription for the last 30% of a government’s life? This is bizarre! The other counter argument I have is that the opposition conveniently forgets that the government is also a political dispensation. It has its own political goals just as much as the opposition has. The government will time its political moves in a way that benefits it the most, just like the opposition times its moves too. How’s this argument valid at all then? How is it ok that the opposition can play politics and that’s fair game, but when the government does so, it becomes wrong?!

The third specious argument was given by the Left yesterday. They say that in times of high inflation, cash is not as good as the underlying goods. This argument would be fundamentally correct, had it not been for what our experience has been with such things in the past. Take NREGA for instance. It started off by being a scheme providing Rs 100 a day to the beneficiaries. Soon, as the rate of inflation increased, the government linked the daily payment to inflation. Take government salaries. They are all directly linked to inflation. Take the MSP the government gives to farmers. The year on year increases are closely linked to inflation. So in India, the Left’s argument is not valid. When inflation starts to take a toll, the government will proportionately increase the cash dole. Incidentally, this was the same argument used by Obama recently in the US election campaign against Romney. Romney preferred giving a “voucher” which is like cash, with which the beneficiary could buy any insurance policy. Obama’s point was that the voucher would soon be insufficient to cover the increasing costs of insurance. The Left’s argument ironically appears to have been minted in the US! The Left should now love the US!

When I wrote yesterday that neither Kejriwal nor Anna had applauded this huge corruption busting initiative of the government, one of my readers responded by saying that this is akin to first robbing a person and then returning his money to him. This is another inane argument. This is the kind of negativity we have to avoid if we have to make progress on our various issues. Because the essence of this argument is that we shouldn’t correct what has historically been wrong. And if someone is making amends, then they must be doing so because of some ulterior motive! By this logic, why should we enact the Lokpal Act at all? It will only be reversing an age old ill! How can not enacting the Lokpal (the crux of Anna’s agitation)be a big problem, but enacting it not be a big deal? Taking the metaphor cited by my reader forward, is it better that we don’t return the money to the person who we have robbed in the past?

As a result of such political desperation, the real issues are not being discussed. One of them is that when cash reaches the hands of the poor, will they switch their spending from food and fuel to liquor and lottery. That would be socially debilitating. It would increase malnutrition amongst children and women, undoing a lot of the progress we have made in this area. There is also a worry about logistics. The government’s calendar is ambitious, but will other institutions be able to keep pace? Will banks open accounts at double quick speed? Will Aadhar enrollments cover the entire country so soon? More importantly, will the government have the time to make mid-course corrections when it experiences implementation problems (which are bound to be there)? No one is talking about these, perhaps because they are politically not very sellable to the voters!

One of the stories in the papers today is disturbing. Apparently, the government is considering providing cash transfers, in some cases like LPG, even without the backing of Aadhar cards. This is dangerous because fictitious, unverifiable, bank accounts can be opened by corrupt public officials and intermediaries, pocketing huge amounts for themselves in the process. It is only when these bank accounts are backed by biometrics – which are unique to each human – can this be prevented. In its rush to reap political dividends, the government should not go overboard. A bad start can derail a good program and a game changer can become a game destroyer. Its better to be a little late than sorry.

The real truth is that the opposition – especially the BJP – has got shaken to the bone by the direct cash transfer scheme. No one expected this government to wake up so determinedly and start firing from all its cylinders so soon. The opposition tried everything to stop this from happening – stalled Parliament, questioned Executive decisions, made arbitrary corruption accusations. But the Congress, from a position where it was being held hostage, has now started turning the tables on its captors. It’s burning midnight oil and storming ahead like there’s no tomorrow. The opposition has a reason to be distraught!

Tuesday, November 27, 2012

Did anyone hear Kejriwal or Anna praise Congress’s corruption busting Direct Transfer initiative??

It is now obvious that Kejriwal, the joker in the political pack, henceforth simply abbreviated to Joker, cares only about politics. Because if he wasn’t, and he was genuinely interested in busting corruption, then he would have paused his usual mindless rabble rousing, and applauded the BIG initiative taken recently by the government. If the government’s estimates come good, the country could save as much as Rs 1 lac crores a year in its various subsidy programs. Unlike the imaginary 2G and coal loss figures, this figure is real and tangible – lining the pockets of the middlemen as it does. With money going directly into the accounts of the beneficiaries, these middlemen’s gravy train will be cut-off. But that’s the point. Joker does not have the largeness of heart to applaud this huge move forward. He has been completely overtaken by his political ambitions.

Likewise, its unlikely he will appreciate the Parliamentary processes which have been humming in the background (where TV cameras don’t roll) and which are likely to soon deliver a Lokpal to the country. Even though several amendments have been made since the last version was passed in the Lok Sabha, Joker is unsatisfied. One has to grant him high marks for consistency. When he launched his agitation with Anna, he demanded that 100% of his Jan Lokpal act be accepted; he still retains that exact same demand even now! Consistency or bull headedness, you decide!

And talking of Anna, I haven’t heard him applaud the initiative either. What’s going on here? Was Anna’s movement merely a movement to enact an institution called Lokpal? Or was it a larger initiative to remove corruption – with the Lokpal and more. Is Anna just a naysayer which his former compatriot Joker surely is. Joker can be forgiven for being a “young revolutionary”, impatient and restless. Surely Anna is a much more mature person who has seen how law making works in our country? Or has his attitude also denigrated into being one of opposing for the sake of opposing?

Opposing for the sake of opposing reminds me naturally about the BJP and its demand for a vote on FDI. It appears the government has circled the wagons and has agreed to a vote. The government is making a mistake by putting an Executive decision to vote in Parliament. It was never about numbers, as the collective dislike for the BJP is always much higher that even the dislike for the worst of the UPA policies. It was always about propriety. That the Executive should be left unfettered so that it can take fast decisions; not hobbled by bureaucratic procedures that it slows down even more.

Must make the BJP wonder about why no one wants to side with it. Even after joining the public protests against FDI, the DMK has opted to support the UPA than join the BJP. Surely, its to do with avoiding early polls. But if that were true, the AIADMK would have been singing paeans about everything the BJP does. It isn’t and its stand of supporting the BJP is calibrated. It’s the same with the BJD, which while opposing FDI, is careful not to ally with the BJP. The Left of course wants to have nothing with the BJP. No doubt, some of these parties will join an NDA alliance if the BJP comes to power, but it’s not a happy situation for the party. The BJP’s core ally, the JD(U) also has been making unseemly sounds for a few months now. Even on the FDI issue, it was happy to be on the UPAs side and have a discussion without voting.

The Moody’s retention of the “stable” outlook for India should be seen in the context of our fractious politics and its absolutely insensitive orientation towards economics. The country needs reforms. It needs more investment irrespective of where it comes for. One is not talking of “favoring” foreigners; one is only talking of ensuring they pour in their dollars as well, even as Indian businessmen pour in their rupees. India is an attractive market alright, but even so, it needs to woo these investors. Reforms are not aimed only at foreigners, but at all businesses. We don’t want Rahul Bajaj and Mukesh Ambani to invest in other countries. We want them to continue investing in India. We also want Japanese, American and European companies to invest in India. A slightly wrong policy, and the flow of investments could reverse. We must look at how other countries woo global investors. Singapore set its timezone to align with Hongkong in spite of being so much to the West of it, at least partly because it wanted to compete with it to become the 2nd most important financial hub in Asia after Tokyo. Chinese people picked Christian names for themselves because they want it to be easy for foreigners to pronounce them. Countries bend over backwards to woo investors; but in India we try very hard to shoo them away!

The passage of the Lokpal will pacify large sections of the middle-class. It may not have everything that Anna wanted, but does have enough teeth to become a functional body. We are awaiting details. Hopefully, the Lokpal hasn’t been made into an unmanageable monster with Saddam Hussein like powers. Hopefully, it will be restrained in the same manner as all other democratic institutions are. The PM is already under its ambit. The CBI Director’s appointment will now be made by a multi-member body. The CBI team working on Lokpal-referred cases will report to the Lokpal. Prosecution is hopefully separated from investigation and the two from the judging process. It’s a good start. Let’s give it five years and see how it fares. Amendments are always possible at a later time.

The real truth is unfortunately bitter. The moot point is whether the known opponents of the government are ready to give it credit when it does something right. Whether their focus is on issues or on opposing the government. Unfortunately, it appears the latter is true.

Monday, November 26, 2012

BJP blocks Parliament again, derails democracy….

The BJP (and the Left parties) continued to block Parliament on the 3rd day of the winter session, continuing with its demand for a debate on FDI followed by a vote. This, in spite of it becoming clear in the all-party meet called by the UPA, that the numbers were with the ruling dispensation. The SP, BSP and apparently even the TMC (proves yet again that spite, more than principles, is the credo of Mamata) have cast their lot with the government. Yet for the BJP, the objectives of blocking Parliament are different. It wants to prove that there are divisions within the UPA. A vote may well prove that; but a vote could also prove that the opposition is divided too.

I mentioned a few days back (Nov 20: Why a vote on FDI in multi-brand retail is a wrong idea….) that in a democracy like ours, it is essential that institutions be allowed to fulfill their constitution-mandated roles. It is the job of the Executive to take policy decisions. It is the job of Parliament to enact new laws and amend old ones. Yes, Parliament can take the Executive to task and that is why there are several rules of Parliament which allow MPs to demand a response from the Executive. But it is not for Parliament to question the policies of the Executive. Rule 184 (debate followed by voting) is a tool for the Executive to use to get a sense of the house if it feels the need to do so. Rule 184 is not a tool that opposition can use to censure the Executive as that will lead to anarchy. If the opposition is really worried about where the ruling coalition is taking the country, it can move a no-confidence motion.

Policies are essentially political statements. For the UPA that believes in reforms (since at least Rajiv Gandhi’s times), opening up the country to FDI is kosher. Since it secured the mandate of the people on the back of such policies, it has the backing of the majority of people in the country. These five years belong to the UPA. It can make policies as it believes to be right. If the BJP has a different political viewpoint (which would manifest itself in a different set of policies), it should take this viewpoint to the people in the next elections and win their mandate. If they get it, they would be free for the next five years to write policies as they feel appropriate.

Then there is this bizarre debate going on about whether Pranab Mukherjee meant “consensus” in the literal sense (EVERYONE agrees) or in a more metaphorical way (a MAJORITY agree). Pranab is no green horn; seldom in his four or five decades in Parliament would he have seen any consensus of the type the BJP is now saying he meant. Given the fractured state of Parliament, the divergence in political viewpoints and the tendency to be opportunistic in taking stands, it is impossible to have genuine consensus. That kind of consensus can only come during times of extreme crisis – like when there is an attack on India. Even in such cases, it is theoretically possible that some party may take a more nuanced stance, while generally agreeing with the majority view. Differences in viewpoints/tonalities is what makes our democracy strong. Differences in viewpoints/tonalities is evidence that we allow freedom of speech in our country. Clearly when Pranab made that reference to consensus, he didn’t expect to stitch together 100% support. What Pranab meant was that the government would to do consultations and try to build consensus. The government did reach out to all political parties (through the CMs) and did try to build consensus. Thereafter, it exercised its rights as provided to it in the Constitution. Besides, it gave the final right to the states to decide what they want to do in this matter. How is it fair that a West Bengal, UP or MP should decide the policies for all states?

I can bet that even if the government allows voting, the BJP will find some other excuse to block Parliament. There is the recent problem the party had with the appointment of Sinha as the Chief of the CBI. Supposedly, the Lokpal Act is about to be passed by Parliament and hence the government should have waited. If Parliament is not allowed to function, how will the Act ever be passed? And after the Rajya Sabha passes the Act, won’t the Lok Sabha also have to discuss it first? Given the slate of other bills pending to be discussed and past, can one be sure that the Act will be enacted in this session. If that doesn’t happen, it is very likely to miss the budget session as well. It would then have to be taken up in the monsoon session. For so long, should the CBI remain without a boss? Maybe the BJP is comfortable with this scenario. In Gujarat, the state lived without a Lok Ayukta for so many years too!

The UPA could have allowed voting on FDI. But that would set a bad precedent. Given the nature of politics, every decision of the Executive would be tested through Parliamentary approval. The decision on NCTC – though backed by an amended UAPA immediately in the aftermath of the 2009 Mumbai attacks – was unnecessarily scuttled. The Executive should have just gone ahead with it. The diesel price hike would also be voted upon in Parliament. Given the tendency of our opposition benches to put politics over principles, it is likely that every such Executive decision would create a “crisis”. How then would the government ever function?

The real truth is that the it is the BJP that should be censured for blocking Parliament, not the UPA. The UPA has made efforts to resolve the current logjam. The government cannot be stopped from taking policy decisions. This is almost looking like a conspiracy now. The BJP should bide its time…..and hold its horses….maybe the people will give it another chance to rule the country.

Sunday, November 25, 2012

Direct cash transfer and the controversy over definition of poverty line….

There is a lot of excitement about the switch the Government is making from a physical dole out of products and services to a model where cash is transferred directly into the accounts of the beneficiaries. The identification of the eligible beneficiaries is sought to be done on the basis of Aadhar cards, the revolutionary identification system which is supposedly more than 99% fool proof and hence cannot be corrupted.

There is no doubt that this is a game changer: it will reduce subsidies drastically as experiments in Karnataka and Rajasthan have shown with kerosene and LPG subsidies. Apparently, the leakage in the existing system was found to be of the order of 40-80% in the two states. This means that this much was being diverted to illegal recipients. With such thieves identified and removed, the Government’s subsidies bill could come down by a huge amount. Given the size of the subsidies outlay (some Rs 3-3.5 lac crores per annum), the savings potential could be as much as Rs 1 lac crores or more. Now this saving could be used in many ways. The Government could cut its borrowing, reducing debt over a period of time. The reduction in debt would lead to less interest payouts and hence more resources being available for productive welfare programs. By reducing its borrowings, the Government would leave a lot more money for the private sector to borrow at cheaper rates, thus kick-starting the growth cycle. The lower fiscal deficit as a result of reduced spending would lead to the inflation coming down and start off a virtuous cycle of low-inflation and high growth that we saw in the “noughties” decade (2000-2010). The benefits of this experiment for the country are enormous.

But the benefits to the real beneficiaries – the really poor – are even more. The first step in becoming a part of this program is for the beneficiaries to open bank accounts. Even this simple necessity of life is denied to a majority of our people, for want of address proof and identity documents. The Aadhar card will now be considered to be legally acceptable for both of these. The next thing is for the money to reach the accounts on a month on month basis. That’s a huge high for someone who has been living in abject poverty and hasn’t seen anything coming into his hands except for the pittance that the rich throw at them from their car windows at road junctions. Then again, this will bring some dignity into the lives of the really poor, now that they won’t have to stand in mile-long queues outside ration shops waiting for a nasty shopkeeper to grudgingly give out some trashy products to them (the show owner would in all likelihood have swindled the superior quality products the government sent). The poor will now be able to shop for what they want, when they want and from wherever they want. Of course there are dangers in this. One social risk is if the recipients start diverting the monies towards liquor, lotteries and the like. A watch will have to be kept; and maybe, like in Latin American countries where direct transfers have been successful, the dole will have to be linked to fulfillment of specific social goals like school enrollment, birth control etc. All in all, its risk worth taking.

But all this is old hat. I have myself written about the UID initiative several times. What I want to really focus on is the clear proof now of how illinformed the debate some time back was on the definition of poverty in India. Politics, compounded by immature and politicized journalism, as usual had overtaken the debate. The Planning Commission, and Montek Singh Ahluwalia, its Deputy Chairman had drawn ire from the intellectuals (?) in the country as well as the opposition for defining the urban poverty at “a low” Rs 32 a day and rural at Rs 26 a day. Now, these numbers look and feel really small. But in reality, they are not. Why? Because firstly, these are numbers on a per person per day basis. Most goods are bought on this basis. Translated to an average family size of 5 people in the urban areas, and 5.5 in rural, this amounts to Rs 4800 per month or Rs 55,200 per annum in urban areas and Rs 4,300 per month or Rs 51,500 per annum (approx) in rural areas. These suddenly don’t look so small!

But the second and more important reason why these numbers are not as bad as they first look is that the poor have traditionally enjoyed a lot of subsidized items that covers a large part of their lives. The opposition taunted Montek and challenged him to try living with Rs 32 a day in his pocket, failing to understand that the Rs 32 was worth a lot more because of the subsidies. Here’s what I had written in my post of Oct 2nd, 2011 titled “Rs 32 a day too low a definition of poverty?”: Let’s not forget that much of the spends that a poor family incurs in India are on items that are significantly subsidized by the government. Whether it’s the LPG or kerosene for cooking; the school for the children; the food grains from the PDS system; the health facilities; all are hugely subsidized. Rice is sold at some Rs 11 per kg, wheat at some Rs 8.5 per kg, Palmolein oil at Rs 26 a litre and daal at some Rs 26 a kg. Kerosene is sold at some Rs 9.5 per litre. School education is totally free as is medical treatment at a government health center.

Well, we now have an estimate of just how much the subsidies are. By the Government’s calculations, the subsidies which will now be given in the form of cash amount to Rs 35000 per family per annum. Uptil now, the poor were getting this in a non-cash form and hence this was not getting counted. In reality, the poor were being defined as someone earning approx Rs 50,000 per annum and getting subsidies of Rs 35000 per annum – a total of a healthy Rs 85,000 per annum or Rs 7000 per month. Now, by any yardstick, that’s a decent sum to use to define the poverty level. I thought its relevant to do this maths here so that people understand that ours is not an unfair definition of poverty. Even the UN has defined poverty at a level of $1.25 per person per day measured in PPP terms (the $ adjusted for price differences between countries). That translates to just Rs 23 per day or Rs 42,000 per annum. We’re way above that UN definition.

The real truth is that the impact of the direct transfer program will be immediate and enormous. Hundreds of millions of people will be elevated out of the depths of poverty in a very short period of time. Of course, the middlemen (now whose core constituency is that?!) will feel the pinch – the blood sucking pests will lose their bite. The cash in the hands of the poor will spur demand for FMCG products and more in the years to come. Of course there are challenges. The social impact needs to be assessed and the program calibrated. What happens to the Government’s food-purchase program (for which the Government pays MSP to farmers) will have to be thought through. But overall, it’s a big step forward. Economically and politically!

Saturday, November 24, 2012

AAP or PAAP….what do you think??!!

The joker in the political pack Kejriwal (just Joker from now on for brevity) has named his party Aam Aadmi Party (AAP). In my humble opinion, after reading the kinky (sinful almost) principles that he has propounded, I think the party would have been more appropriately named PAAP (Perverted Aam Aadmi Party maybe). For no matter how many newspapers I try to read, no matter how hard I search, I simply cannot find any point that is remarkable about this new party. So forgive me, but I will call Joker’s party PAAP. And members of this party PAAPis (now I am getting kinky!)!

Take the point on “not more than one family member will be given a ticket” one. This is illogical. For it presumes that there just cannot be more than one “good” person with noble social goals in his heart in one family. And as a corollary, two independent good people who work together selflessly as PAAPis cannot marry and become one “PAAPi family”. It also means that if there is ever a PAAPi politician in a family, the other members of that family cannot be PAAPis (strange as that may sound)! I am sure there will soon be an addendum to this rule….family members of PAAP cannot be members of another political party as well, because by Joker’s definition, the members of the other political parties have to necessarily be corrupt (though not PAAPis!). Family members cannot be businessmen also because in Joker’s wisdom, they are anyways PAAPis (like Gadkari, though not belonging to his party). Net net, the moment a person joins PAAP, his or her family becomes a PAAPi family, though no one else can become a PAAPi! On a serious note, I do understand the motivation for such a rule, but does Joker have the common sense that rules should never be made in the extreme. Rules are always best made with “exceptions” or “conditions” built in. PAAP could have said “family members will be allowed but their names will have to be cleared by the national council” or some such thing. Or that they will be subjected to even stricter norms of public behavior and personal conduct. Disallowing family members from becoming members of PAAP is dictatorial; but then so much about PAAP is like that.

We are also told that PAAP will make its donors list public. Again, this is an idiotic principle, if it can even be called one. The law of the land already prescribes this for all political parties. The problem comes from the “small donations” which are under Rs 20000; the collections made at rallies when people donate Rs 10 and Rs 50 in “collection boxes”. Now PAAP may either have to disallow this entirely. Or it may have to cook up names of donors to live by this principle. Again, the rule has been made in the extreme. Instead, the rule should have been that PAAP will put out audited reports on a monthly basis in the public domain. And they will be certified by a CA of high public credibility. Or some such thing.

Right to recall is a ridiculous concept. In the multi-polar electoral reality of ours, how will it ever work? The winner of a poll usually gets less than 30% of the votes, so 70% of the voters are against him even at the time he is elected. At what point will the winner be recalled? And who will determine and how, that the time to recall has come? If it’s a voluntary recall made by PAAP based on public perception, then that’s not permitted by law unless the person himself agrees to resign. If the person is forced to resign, and a new election has to be held, there will be huge expenses incurred.

And this thing about “lawmaking through referendums” is even more ridiculous. For every decision that the Executive will need to take, a referendum will be held, is it? Should India allow FDI in aviation? Referendum. Should India amend pollution norms for automobiles? Referendum. Should India and Pakistan play a cricket match on Indian soil? Referendum! Maybe this is the reason an election researcher like Yogendra Yadav has been taken into the party! As with all others, this rule has been made in the extreme. Funny.

And what about platitudes like “accessible judicial system”. The problem in India is that the judicial system is too accessible. Everyone can file a case making the list in courts longer. Everyone can appeal in a higher court, making the list there also longer. One of the villains of this plot is Prashant Bhushan himself, piling on senseless PILs one after the other and clogging the already clogged judicial system. The problem is not one of accessibility, but of speed of justice. For that to happen, maybe the access has to lesser, not more. But this is much beyond the rustic wisdom of these urban PAAPis.

Of course the funniest suggestion is the one about the internal Lokpal (PAAPi Lokpal!). How convenient. One PAAPi will investigate charges of corruption against another PAAPi! Isn’t that a little different from what Joker has been demanding of others so far? That an external person should do the inquiry? Why is he not saying that an SIT comprising three SC judges will be set up for this?! And what if the person is found innocent by the PAAPi Lokpal? Will that be any different than Salman Khursheed being found innocent by his party? And Gadkari by his? These guys are truly a comedy show – inspired no doubt by their founder, Joker!

I am sorry but the real truth is that AAP is precisely what I don’t want. What I want is a modern party with liberal economic ideals; of course without the problems of crony capitalism etc. I want a secular party which promotes genuine bonding between people; not appeasement of one community or the other. I want an electoral system that provides decisive mandates; not one that gives hung verdicts most of the time. I want a judiciary that is fast; not one that is merely accessible to all. In short, I want a party that is politically modern, economically pro-reforms and culturally liberal. That would be the real Aam Aadmi Party and one that I would support; not this ragtag combination of frustrated bigots who are out to ruin the country. Stealing another party’s slogan and mocking it may give momentary joy, but it doesn’t take one too far. For that, one has to have a positive and happy agenda. India is a nation of happy people after all….

Friday, November 23, 2012

BJP won’t let Parliament function; nor the Executive….

Day 2 of the winter session was a washout as expected. The pattern has become clear. Under any pretext, the BJP will ensure that Parliament is held to ransom. Then BJP spokespeople will rush to TV studios and spit out more venom at the Government and try to justify their unjustifiable blockade of democracy itself. Given their good oratorical skills, they will make it appear as if the Government has something to hide. Forget FDI in multi brand retail. The blockade could be for anything. The appointment of the new CBI chief, the new financial bills, anything.

Given its position as the principal opposition party, such conduct is unacceptable. Along with the ruling party, it has enormous responsibility in the running the country. It’s like two surgeons who are performing an operation on a patient. One is the lead surgeon (the “attending” in the language of Grey’s anatomy!) and the other is like an anaesthetist. The two have different jobs to do, but there are some places where their paths cross. The responsibility of the surgery is the attending’s, but without the help of the anaesthetist, the surgery cannot be done. Now imagine, if the two can’t stand each other. The anaesthetist wants to be the attending but is not being able to earn the chance. So he creates hurdles for the attending to try and make him fail. Does the anaesthetist care for the patient? Not one bit. The anaesthetist in our politics – the BJP – is doing the same thing.

So the BJP won’t allow Parliament to function; ensuring that important bills are not passed. It spurned the co-operation talks with the PM and the FM – even though the bills under debate could resuscitate the patient (the economy) back to health – behaving like an irresponsible, immature child who is sulking over the snub on the discussion on FDI in multi brand retail. It couldn’t care about what the nation wants in Parliament. In fact, its sole objective is politics and to make sure the duly elected government of the day is hobbled from performing.

We haven’t heard of any specific opposition the BJP has per se with these bills. The bills have gone through standing committees no doubt in which the BJP must have had a chance to express its viewpoints and attempt to build a consensus. It is likely the Government would have accepted many, if not all, of these viewpoints. If the bill is now ready to be placed in Parliament and passed, how can a scuffle on another issue block the passage of these bills? A responsible, mature person knows how to compartmentalize issues. A disagreement over one issue does not stop him from working with the other person. This is not a choice that he gets to make. He is obligated to work with the other. If he doesn’t work with the other person, he will be doing disservice to the people. It’s that simple.

The BJP also won’t allow the Executive to perform. It has questioned the enabling policy decision of FDI in multi-brand retail on the back of some unsustainable, political reasons. In the past it had blocked the appointment of the NCTC – though it was being set up as ordained under the Act passed by Parliament with the support of the BJP itself – under the pretext of federalism. Now it has objected to the appointment of Sinha as CBI chief, for some controversy 16 years back. Sinha is known to be an upright officer and has served the country in various capacities including handling graft in an earlier stint in the CBI. (the online portal of the India Today group – which has no love for the Congress) says that Sinha is a soft spoken officer with remarkable administrative acumen. The Patna HC indictment that the BJP referred to was in a case of corruption against Laloo in which Sinha recused himself because he came from the same state (Bihar). He was not  corrupt. If he was corrupt, he would have stayed on and tried to help Laloo. If he recused himself and earned the ire of the HC, its for the HC to answer why it was upset, not for Sinha. But for the BJP, Sinha is just a little foot soldier. The target is the Congress, not Sinha.

The BJP in any case is seeing its grand plot unraveling. The 2G “scam” has exploded in its face. Now with its leader and head of PAC, Murli Manohar Joshi being charged with an attempt to influence the report of the CAG (there has been enough speculation about the CAG cosying up to the BJP to secure a future ministerial posting under an NDA government), there is egg on the BJP’s face. The Government’s push towards cash transfers is another Executive decision that the BJP is mortally afraid of. When people get cash in their bank accounts at the end of every month, they are bound to vote for the party that made that happen. The BJP is suddenly finding its grand plans all coming unstuck. The only way it knows to stop this tide is to block Parliament. And the Executive.

It would help if the BJP focused more on a positive agenda, rather than pulling someone else down in a crabby way. The people would want to hear their views on FDI. What is the real reason they are opposed to FDI in retail? What is their plan for faster economic growth? How will they create more jobs? What kind of power policy do they support (since they oppose Kudankulam). Like it happens in America, we want to have a debate on specific points that concern development, not those aimed at scoring political brownie points.

The real truth is that the BJP is desperate. It will do anything and everything to stop the Parliament and Executive from functioning. As for its concern for the nation, the less said the better.

Thursday, November 22, 2012

Boo BJP….back to disrupting Parliament

The BJP is back to what it has gotten addicted to in the past few years – Disrupting Parliament. But what better can we expect when the Leader of the Opposition in the Rajya Sabha and senior BJP Leader Arun Jaitley makes a virtue out of disrupting Parliament? Remember his statement that had it not been for this, the 2G scam would not have assumed the importance it did? Well we now know exactly how important the 2G scam was. It was a completely bogus scam to say the least. The former DG, Post and Telecommunication at the CAG, Mr. RP Singh has shown just how the BJP manipulated the CAG’s report. And the auctions have shown how silly the report was.

The compulsions of the BJP in not letting Parliament function are understandable. If it doesn’t stop it, how will it stop the Congress from delivering? The Congress seems to have acquired a renewed vigor in the last few months, much to the BJP’s chagrin, and appears to have realized that this was the last chance it had to improve its credentials before the next polls. It now wants to do a lot more, a lot faster. It’s a clear political fight for the BJP; the country be damned. The more the country is damned, the more the BJP will pin the blame on the Congress.

The latest excuse of course is the debate-and-vote or only-debate-but-not-vote issue with respect to FDI in multi-brand retail. I wrote on this a few days back. The whole purpose of the BJP doesn’t seem to be to debate the issue; but to embarrass the Congress. And if that is the case, then the Congress is justified in playing its own politics by denying the voting motion. There cannot be any moral positions here.

But look at the inanities that are being dished out by the BJP on the subject. If you listened to the BJP and the Left (strange bed fellows?), it would appear that “crores” would be out of jobs if the Walmarts came in. Really? How many crores have already lost their jobs since the large format Indian retail stores came out? How many kirana shops have closed down since these Indian chains opened? And has the BJP protested against the rapid expansion of these Indian giants? Or is the party’s argument one of “Swadeshi” v/s foreign? That it prefers that Indian chains kill the jobs market but not the foreign ones? Or maybe it feels compelled to protect its core vote banks made up predominantly of “baniyas”? Come come BJP, let us know what the truth is. We understand the Left. They don’t like anything measured in dollars or euros. But what about you? Do you also not like these currencies?

And then this preposterous speech of Jaitley’s yesterday. That the stores will be owned by the Americans and the Europeans; the goods will be from China and India will become a nation of “salesmen”. What kind of exaggerated rubbish is this? European and American chains are hardly likely to launch more than 50-100 stores between them all over the country. That too in the very long run. We tend to believe that these chains come with unquestioned investment plans and that they don’t bother about viability. The fact is that they have serious questions to answer before they enter a market and they always cut their coat according to the cloth they have. In contrast, Indian chains are aggressively growing and now operate more than 5000 stores between them. What about the goods from China argument? Is there an import restriction on Chinese goods even today? Aren’t there large importers today who already import thousands of Chinese goods as per demand? Aren’t the Indian stores capable of importing from China the way Walmart would? Rajan Mittal of Bharti Walmart recently said “97% of the items in our stores are of Indian origin”. Which world are you living in Mr Jaitley? And what about the salesmen logic. Did Arun Jaitley complain likewise when the BPO sector opened up in India? Did he not feel that Indians were doing low-order telephone-operator like jobs in these units? Was the BPO growth good for India or bad? And what about the millions who do the same salesman job in today’s broken down retail sector? Jaitley is good with words; but that’s about all he is good with.

I have always said that FDI in multi-brand retail is a political issue. It’s the Congress’s big game plan to win the next elections (along with the Unique Identity card based direct-cash-transfer plan and the Food Security Bill). It has made this amply clear – hosting a huge rally (some say more than 5 lac people attended) in Delhi. It has secured the support of the 700 million farmers represented by their bodies. It knows very well that the urban middle class has none of the BJP’s insecurities; and in fact, looks forward to the stores opening up so that more jobs can be created. That’s 300 million more. The same 300 million that cheered when the BPO sector boomed; the same 300 million who voted the Congress to power after the Indo-US nuclear deal polarized the voters. It is the same 300 million who the Congress believes will steer them to victory in 2014.

If the battle is political, then let the fight be political as well. I haven’t heard Narendra Modi speak much about this issue in his election rallies. Why? Want to know the reason? Because Modi will be the first one to welcome Walmart into his “suvarna Gujarat” (Golden Gujarat). The BJP is not holding any public rallies anywhere else too. Why? Because they know they don’t have any grounds to stand on.

But wait a second. There is another huge benefit in blocking Parliament. The huge step forward that the Congress wants to take – the enactment of the Lokpal – will also be blocked and hopefully the BJP will be able to use that issue in the polls. If the Lokpal becomes a reality, the BJP will have nowhere to hide.

The real truth is that for the BJP the FDI issue is just another excuse to block Parliament. If it hadn’t been that, it would have been something else. The party has decided they won’t let Parliament function for a majority of the time. And they will blame the Congress for it. Their strategy is clear: block the passage of bills. Then blame the government for “policy paralysis”. This conduct is pathetic to say the least; anti-national is a more appropriate way to describe it.

Wednesday, November 21, 2012

Kasab execution good but India should now stop capital punishment….

Ajmal Kasab’s executions was obviously the right decision. Given the sentiment prevailing in the entire country, there was no way he could have been given clemency. It’s the same story with Afzal Guru whose plea for clemency has been awaiting a Presidential decision for 11 years now. In spite of the doubts of whether he got a fair trial or not (a matter surely considered by the SC before giving him the death sentence), Guru should be hanged. But I think it’s important to draw a line between regular cases of hate crime and acts of terrorism. Capital punishment must only be given in cases of terrorism; not otherwise.

I had written on this subject first on May 30, 2011in my post titled “Ban capital punishment. Allow mercy killing instead.....”. I am re-producing portions from it for the benefit of those who didn’t read my earlier post.

My first point is about what kind of countries India wants to be bracketed with on the subject of capital punishment. 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.

My second point is that the purpose of any punishment should be to act as a deterrent. One of the 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 (including India) 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.

And lastly, I think God did not want man to be decider of life and death. 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 should have the right to take someone’s life away. 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.

That post was written in the aftermath of rejection of two mercy petitions by the President. 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?

My conclusion even then was that India should abolish capital punishment. 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 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.

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.

The real truth is what I had written back then. 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.....Unfortunately, India has against voted against the UN resolution banning the death penalty a few days back. Sad….really sad.

Monday, November 19, 2012

Why a vote on FDI in multi-brand retail is a wrong idea….

It’s not about whether there is a precedent for this or not. It’s also not about whether the Government has the numbers or not. It’s about Governance and the way we take decisions in this country. If the Executive’s decision making is questioned by Parliament, how do we expect decisions to be taken? If the Executive is expected to go back to Parliament for a ratification of its decisions, how do we expect the Government to ever function? On the one hand we demand quick decision making, but on the other, we hobble the Government up in such time-wasting political shenanigans.

There are clear cut reasons why the Government must not allow a discussion on FDI in multi-brand retail followed by voting.

The first one is that in a complex country like ours, each authority has to respect the roles and responsibilities of the others. What is in the Parliament’s domain cannot be exercised by the Judiciary for instance. And what is in the Executive’s domain cannot be exercised by the Parliament. It’s that simple. Specific to the issue on hand, there is no doubt in anyone’s mind that the decision to allow foreign retailers into the country lies with the Executive. If that is unquestioned, there is no reason for a vote in Parliament on the issue. If as a matter of informing the Parliament, a short debate is required, by all means have it. But a vote is unnecessary and unwarranted.

Second, every one knows that the real objective of seeking a vote on this subject is to embarrass the Government. The opposition knows that it cannot overturn an Executive decision. Even if the Government loses the vote in Parliament, the Government won’t fall. The opposition wants to score brownie points; nothing else. If the entire issue is a political one, then the Government should also be allowed to play its own politics. By disallowing voting, the Government will merely be playing a legally permitted brand of politics. There cannot be any moral questions here – about why the Government is not allowing voting, whether its afraid of losing, about it being in a minority etc. It’s a political move and it should be countered by the Government politically.

Allowing FDI in retail is a political decision. The Left (and that should now include Mamata and the joker in the political pack, Kejriwal) is dead opposed to anything foreign (except of course the choice of colleges for their kids’ education and the companies in which they work!). Their views are well known to the electorate since they have been consistently talking about them for so long. The fact that their numbers in Parliament are only a fraction what they once used to be indicates that their ideology is fading. People really don’t care for such obstructionism any more. Then there is the BJP – the otherwise pro-reform party – which on a different day would have supported FDI in any form. In fact, if it wasn’t for so much politics, I would have bet that it would Narendra Modi’s Gujarat which would have been the first state to roll out the red carpet to Walmart. But the BJP smells a chance to embarrass the Government here. It hopes to gain from opposing FDI in retail politically. It appears to be having no qualms in showing its back to its usual pro-FDI policy preference. It’s opposition is purely political and purely opportunistic and the fact that they are happy to join hands with the Left (though the two cannot otherwise see eye to eye on anything) shows just how opportunistic they can be. The only thing that can unite the BJP and the Left is their keen desire to oppose the Government.

If the only unity they share is in opposing the Government, then they should be moving a no confidence motion against it. But they don’t want to do that. Because they know that they have no chance of winning it. And if they lose, they will not be able to bring another one for at least six months. Look at the irony of the situation. The one party that wants to bring the vote of no confidence is unable to even cobble together the 50 odd MPs required to introduce the motion! And this party claims to be representing the “mood of the country”. Forget the country, they no longer even represent the mood of their state. If the mood is what they are bothered with, let them hold rallies. As things stand, it is the Congress that held the biggest rally on the issue. Even the BJP has not held a rally against FDI. The farmers bodies are all behind the Government as is the urban middle class which looks forward to the jobs that foreign retailers will bring. FDI in multi-brand retail has become the touchstone for economic progressiveness; and the Government’s policy has united the 700 odd million farmers and the 300 odd million urban middle-class. Is there any doubt in anyone’s mind what the mood of the country is on this issue any longer?

The fragmented opposition may sometimes appear to represent the majority viewpoint (given the time they get on our news channels), but in a Parliamentary democracy, the views of the people are expressed only once in five years. The current Lok Sabha represents the mood expressed in 2009. If the opposition has gained popularity, that will show up in the next Lok Sabha in 2014. And when that happens, the Government of that day will have its chance to rule as per its beliefs; to take decisions as it deems fit. The whole point of Parliamentary democracy is that the one that is voted into power be allowed to rule as it deems fit, in accordance with its beliefs. If people don’t like their policies or their beliefs, they will vote them out in the next elections. The opposition cannot be impatient….

The real truth is that every time a Parliamentary session is about to start, the opposition parties find a reason to stall its working. The last session was almost completely disrupted for one reason. This time, it will be for a different reason. Last time, it was the BJP which did it; this time it will be another set of parties. The only thing I have to say to them all is that the people are watching they conduct themselves….and they will express their views in 2014. The obstructionists better beware!

Wednesday, November 14, 2012

CAG Vinod Rai must quit….2G auctions prove his loss estimates were all baloney

Rs 1.76 lac crores. Isn’t that the number that CAG Vinod Rai had brandished to tarnish the Congress’s reputation and ruin the once-successful telecom sector? Isn’t that the estimate of the “notional loss” suffered by the Government of India in 2008? Isn’t that the amount of profit that he hinted someone illegally made? Why did this Harvard educated CAG’s mathematics go so wrong? Was it just his incompetence or was it evidence of his political agenda? Will the CAG now please stand up and answer? Better still, will he please resign, since it will be impossible to impeach him, given the politics of the country? If he has any self respect left, snubbed as he has been now, he should.

The CAG’s report has been shown to be completely false. Kapil Sibal has been shown to be completely right. There was indeed “zero” loss suffered by the Government. In fact, the Government’s collection of Rs 9600 crores in these auctions is less than what the telcos had paid in 2008 (and which I suppose will have to be returned now that those licenses have been cancelled), even at the 2001 price of some Rs 1650 crores each. The only difference is that now the Government is sitting on spectrum, which no one wants to buy; spectrum that it should have offered in full in the auction process. Had it done so, the pricing would have been even lower. Only five companies participated in the bid. And none in the Delhi and Mumbai circles from where a bulk of the monies were expected… If ever an auditor’s report could ever be disastrously wrong, it was this one.

If Vinod Rai does resign (which I am sure he won’t), he would have the time to think of the reasons why he failed so miserably. And lest he feels like accusing the Government of intentionally rigging the bidding process, let me remind him that the auctions were directed by the SC itself. And in the interim, the Government had turned into a capitalistic monster waiting to garner Rs 40000 crores for itself. The Government is surely not happy, even though it has been proven right.

Vinod Rai would realize that the first mistake (and his first sign of incompetence) was that he equated 2G spectrum with 3G. To be fair, even the TRAI had made such an assumption in one of its notes.  But its impossible for the CAG to hide behind the TRAI. It had no reason to act so “clerically”. It could have disagreed with the TRAI and made its own assumptions. The assumption was fundamentally flawed. How can an old technology used mostly for voice be compared with a technologically superior product that is used mostly for high speed data transfers? As evidence, consider the price that subscribers are willing to pay for voice v/s data. Obviously, the pricing for data is far higher. Data is a business requirement; talking a mostly social need. Data is for upscale people on the move; talk is for basic communications between people. The two are as different as chalk and cheese. And yet, the CAG compared the two. Pathetic.

The second major mistake the CAG will find he made was that he believed that the telcos made huge profits. That since the telcos got license cheap, they must have made a windfall profit. But the CAG ignored the competitive nature of the market that had been created by the cheap spectrum. The competition ensured that telcos dutifully passed on the low spectrum costs to subscribers in the form of low rates. I have pointed out many times earlier that telcos were actually bleeding, not making windfall profits. Even large operators like Voda turned in their first profit only after operating in the country for more than 15 years. The third largest operator Reliance was also making losses till recently. Only Airtel, the leader was generating “decent” margins (nothing exceptional). In fact, it was the experience with cheap tariffs that encouraged Airtel to chance its hand in a market outside India. It’s African model was essentially based on reducing tariffs and gaining market share in a market operating on high fares. The low pricing Indian model was a game changer – evolved in the ruthless Indian marketplace; brought about by the low spectrum pricing. But Vinod Rai didn’t have the gumption to understand this.

Actually the CAG never wanted to understand this. It failed to realize that this was an example of the most efficient of all transfer of national resources ever made by the Government. What would have happened if the Government had collected the imaginary Rs 1.76 lac crores as license fees? A bulk of that money would have been frittered away in feeding the vast bureaucracy. Very little of it would have passed on to the poor. Instead, the private sector transferred all the benefits in the most efficient possible manner; and to the poorest of the poor.

The CAG forgot the cardinal principle that it shouldn’t have – that if someone lost money, someone else should have gain too. In this case, the CAG could never convincingly explain who made the money. The BJP chose to say that the Congress made the money. Ridiculous.

In trying to suggest who made the money, the CAG made the third major flaw. Vinod Rai intentionally misrepresented the stake sale of Unitech’s telecom venture to Telenor and Swan’s to Etisalat after winning the licenses to be a case of profiteering. Unitech’s telecom venture indeed saw it’s valuation increase after it won the license, and it took advantage of this to issue new shares to Telenor. Telenor put money into the company. Unitech did not take home even a single paisa by stake sale. The money that came into the company was deployed to pay the license fees, roll out the infrastructure and cover operating losses. As it was later shown, India proved to be a tough market and most new telcos lost money hand over fist; and as that happened, their valuations plummeted. Even before SC cancelled Uninor’s licenses, its value had plummeted. But that must surely have been expected. No new venture succeeds immediately after roll-out. If Voda – which came in early into the Indian market – took 15 years to turn in a profit, surely Uninor would take much longer to do so? But the CAG was interested in making outrageous claims.

Vinod Rai would never have expected the 2G matter to go the way it did. The BJP spun it into a corruption story. Raja was forced tor resign. And the SC canceled the licenses and ordered an auction. The TRAI recommended that the 3G bid amount should become the starting point for 2G auctions. Such was the climate in the country that no one wanted to be seen objecting to something so downright stupid. Well….the auctions happened and the truth has now come out. 2G licenses simply aren’t valued more than what operators had paid back then in 2008. Vinod Rai’s worst nightmare has come true. He has been proved to be incompetent. He has embarrassed his office. He has no where to hide. In my mind, the only option any dignified constitutional authority has under such circumstances is to resign. But will he? I will bet my shirt he won’t. They say politicians have a thick skin. Well, this CAG has proved he is ready for politics.

The real tragedy of this entire episode is that the real corruption has been forgotten. The corruption figures are probably much smaller, but it would have been better if the focus was kept on the real numbers rather than on the sensational rubbish the CAG put out.

The real truth is that there is spit on Vinod Rai’s face. His incompetence has been proved beyond doubt. Given his academic background, one has to assume that his motivations in putting out such a report were political. To that extent, he is a disgrace for his august office. He should resign forthwith….

In support of a noisy, polluting Diwali….

Almost everyone is against a noisy Diwali; most of all the intellectuals (pseudo?). For them, the bursting of crackers during Diwali is evidence of our apathy towards the environment. Our lack of concern for pollution. Noise pollution. Air pollution. Water pollution. Blah blah blah. I am not denying that the bursting of crackers causes pollution, but to suggest that this single night of revelry is anti-environment and a major cause of pollution is blatantly unfair.

Blaming firecrackers for pollution is typical of the Indian habit of misrepresenting the truth and directing the blame in the wrong direction. The real reasons for pollution are the CO² generating coal-power plants, effluent releasing industries and petrol and diesel guzzling two and four wheelers. Take these out and a bulk of our problems would be solved. But do we do enough to move towards a clean environment? Do we invest heavily in nuclear power plants and in electricity-driven trains? Not at all. Besides, pollution arising from these sources is a round-the-clock and round-the-year problem. In terms of proportion, the contribution of Diwali to India’s pollution is immeasurably small. And yet, most of the ire of our rabble rousing NGOs and activists seems to be directed at this most auspicious of festivals.

Incidentally, most of our understanding of pollution is wrong. We don’t allow shore-hugging eateries and pubs supposedly because they cause water pollution or some such thing. Then how come so many of the world’s most progressive countries don’t put similar restrictions on the same? Again, in the name of protecting our coastline, we have the mostly ugly looking things called mangroves (scattered all over Mumbai for example). So much of Mumbai’s dirt and muck settles on these mangroves and yet, we are not supposed to chop them. Why can’t we find a better solution?

But then, making simple thigs compex is second nature to us Indians. We don’t allow pubs to stay open beyond 1.30 am because (apparently) pub goers create nuisance outside the pub. The real reason I suspect is that we are basically a “sadu” (mentally constipated) lot who don’t really like this entire “western” culture of drinking and partying; especially since such places are frequented in large numbers by young, well dressed women who sometime also smoke. But at the same time, we also want to make Delhi and Mumbai international cities. We find it extremely difficult to simplify things. Ideally, we should replace the dirty mangroves with something less ugly (and more effective). We should allow eateries on the sea fronts but have rules to prevent pollution. We must allow our pubs to remain open till as long as they want to but locate them in non-residential zones. But we don’t do any of this. We instead prefer to continue a fake fight against pollution.

Worldwide, firecrackers are the preferred way to celebrate any happy occasion. When the Olympics start or end, there is a grand show of firecrackers. When we welcome the new year in, there is a pyrotechnics show organized in many major cities – from Sydney to Singapore to even London. There is also reportedly an annual firecrackers show in Munich which the whole town (including thousands of tourists) gathers to see. If all this is fine in the far more environment-conscious world, then how come its not fine in India? Is it because Diwali firecrackers symbolize a religious celebration that the pseudos find unacceptable? Is it that in reality they are not opposed to firecrackers per se (they do cheer the pyro shows abroad) – but they think it is the modern thing to oppose? Has protesting against Diwali fireworks become a touchstone to prove our progressive credentials?

I for one have no such qualms. For me, bursting crackers is a lot of fun. Agreed, it needs to be regulated. There must be time limits prescribed; 12 midnight on the outside. There must be limits on the decibel levels generated by the “bombs”; the fun of fire crackers is not in the noise generated, but in the visual grandeur of fire and lights. The particularly vicious air polluters must be disallowed and replaced with more benign ones. There may even be restrictions placed on the where firecrackers cannot be burst – densely populated societies; hospital neighborhoods and crowded markets should be out of bounds. The Kolkata model – where firecrackers are allowed to be burst in the Maidan area only – is a good one to follow. Regulation that helps control pollution and reduce trouble to the old and the sick is a very welcome idea. But to make bursting of crackers look like one is committing murder is completely unnecessary.

The real truth is that there is hardly any pollution created by fireworks during Diwali. The pollution to worry about is the political pollution. When leaders bad mouth each other in unbecoming ways. When Jokers like Kejriwal hurl accusations against their rivals without bothering to go through the due process of law. When media conducts itself so immaturely that it becomes a mere tool in the hands of political rivals. When our institutions become so political that they start playing games with the truth. When people indulge in bribe-giving but at the same time support the Anna movement. These are the real forms of pollution that will destroy us all. Blaming Diwali firecrackers is plain unfair.

Monday, November 12, 2012

Lukewarm 2G bidding shows how wrong CAG was….

The CAG started a vicious attack on the telecom sector (and I use these words carefully) with its bizarre report alleging that the Government lost Rs 1.76 lac crores by not auctioning 2G spectrum in 2008. That vicious attack was followed by the opposition converting the loss estimate to a corruption estimate. It was as if Raja (or the Congress) had pocketed Rs. 1.76 lac crores (and that’s what the common man on the streets today believes). Then the Supreme Court added to the blunder by canceling en masse all 122 licenses that Raja had allotted, putting at risk investments of several corporates as well as India’s image as a safe destination for investments. Foreign investors wont be able to trust even the sovereign Government of the country in the future. All this – and the flawed “revenue maximization” auction policy of the Government – will ensure that the telecom “revolution” and one of the most successful policies of the Government ever becomes a “disappointment” and its biggest failure.

What was it that the CAG had said? That had the Government auctioned 2G spectrum, it could have got Rs 1.76 lac crores? And how did this brilliant accountancy body arrive at this conclusion? By comparing 2G with 3G airwaves. Silly as this sounds now, this is exactly what it did. This was akin to comparing the high-toll expressways with the cheap-toll national highways, forgetting that the two were inherently different value propositions. The expressways were fast, and the few who had a need for speed, would have to pay a high toll. But those who couldn’t afford the high tolls and still wanted to travel could use the cheap-toll national highways. The CAG’s report forced the Government to make the tolls on the national highways same as those on the expressways. Well guess what? The people will soon be forced to stop traveling. They will be restrained to their centuries-old hell-holes rather than being able to explore the delightful new-world of opportunities. For the telecom revolution was just about that; empowering hundreds of millions of poor who no one could help. It was the 2G revolution that lifted them from the morass of inhuman poverty. And now, thanks to the CAG’s obnoxious report, that revolution is about to be undone. Pat yourself on your back, Mr. CAG.

I have written about this earlier. When spectrum becomes so expensive (Rs 14000 crores reserve fees), it leads to an increase in call rates. As rates increase, subscribers start to drop off. Not you and me, but the ones who are on the fringe. Already our subscriber base has come down by some 25 million in the last few months. As subscribers drop off, telecom companies feel relieved of burdensome obligations. They also need lesser spectrum. They start to actively “cull out” low value subscribers. The Government which is now party to this crime can’t push the telcos any longer for “inclusive” growth. The telcos cock a snook at the Government and tell it to decide whether it wants their money or inclusive growth? The poor have no hope. I fear that the subscriber base could shrink to less than 500 million in the next few years.

Of course, the CAG won’t accept its mistake. It didn’t when it ludicrously compared S-band spectrum with 3G spectrum and alleged a Rs 2 lac crore loss. When it realized its mistake, it went silent, but it never apologized. Now again, the CAG won’t apologize. Instead, we can expect it to say that “in 2008, the Government could have got Rs 1.76 lac crores”. Really? The fundamental illogic of the CAG’s report cannot be overturned by such silly assertions. The CAG has to answer itself now. Since it is accountable to Parliament, let is present its defence to Parliament now. Let it explain why its inference – that led to the Government changing its policy of cheap spectrum – was so wrong. Let the CAG address the poor of the country on prime time TV and admit it was wrong and had taken away the powers the telecom revolution had presented them. Like I have written in the past, the CAG has mixed up issues. It has created a concoction of really bad accounting with really strong political ambitions. The institution has been abused to no end.

The BJP also must apologize. The policy it assailed the Government for has been overturned by the Government desperate to prove that it was not corrupt. Had the BJP supported what was primarily its own policy, we would not have had to do this. But the BJP sought to play cheap politics. It somehow made the creative leap of converting the CAG’s “notional loss” into Congress’s “mota maal”. Well, it should be clear now that there was no mota maal there at all. All the slogans they raised – that there was corruption above and below the surface of the earth – are now going to bite them. Because the BJP has to count itself as a party responsible for the destruction of this vital sector. For snatching away the one chance the poor had to help themselves.

The Anna brigade also has a lot to answer. By demanding that all national resources be auctioned, and by demanding that the Government maximize its revenues, they have contributed to encouraging an anti-people policy regime. On the one hand they are solidly Leftist, but on the other hand, and maybe without understanding the issues, they are capitalistic. If resources are to be given only to the richest, then how will new entrepreneurs emerge? Will India forever remain in the grip of the Tatas, Birlas and Ambanis? Will that not be “crony capitalism”?

Where do we go from here? I think the Government needs to take a u-turn. Maybe it should think about “Right to telecom” ahead of “Right to Food”. Maybe it should reduce Reserve fees drastically. Maybe, it should release all the spectrum that was vacated post the SC order. It should adopt auctions as the method for allotting scarce national resources, but it should abandon revenue maximization as its goal. Even the SC hasn’t asked for this. In fact, it has stated that “maximization of common good” should be the primary objective of the Government. Its policies must ensure that the poor don’t have to drop off because of high rates. I will now wait to see how it handles the situation.

The real truth is the failure of the 2G auctions will prove that the CAG, the BJP and the Anna brigade were all wrong. There was no loss when the Government gave away spectrum cheap; no “notional” loss either. It was a conscious Government policy….a policy that ensured that a billion Indians benefitted; most of all the poor. It may not be too late even now. The Government must replace its revenue maximization goal and substitute it with a maximization of the common good…..