Thursday, December 08, 2005
It is now BJP’s turn to learn this lesson. The Bihar election gives moderates in the BJP an opportunity to stand up to the RSS and prove that a backward looking appeal to Hindutva will eventually fail in a young country. Vajpayee understood this, but people called it a mask. Advani too had begun to grasp this. Their speech writer, Sudheendra Kulkarni, kept reminding them relentlessly to look to the future, to shed Hindutva, and become a moderate, inclusive, secular party of the right.
As things stand, voters don’t trust either of our two main parties, which is why neither is able to win a majority, and we have to suffer through this era of ghastly coalitions that paralyze decision making. Voters don’t trust the BJP because they fear its sectarian extremists; they don’t trust the Congress because of socialist extremists, who believe in state control. India’s democracy will only be effective once we have two strong centrist parties, which shun identity and ideology, and yet offer genuine choice to the voter. Democracies around the world have learned that extremist parties fail and centrist parties succeed. This is because ordinary voters care about things that affect their daily life. They are pragmatic and fear extreme, ideological solutions. Hence, socialists in the Congress and Hindu fanatics in the BJP are liabilities. Neither mandal, mandir, nor socialism are viable strategies long term.
Since Congress occupies the space left of centre, the BJP ought to seize the empty space right of centre. Since Congress has always appealed to the poor with populist handouts, the BJP ought to embrace the exploding new middle class, which desperately wants reforms. This might seem a losing strategy as there are more poor people than middle class, but remember that every poor person wants to be middle class. Middle class is not only defined by income, but it is a self-reliant state of mind, which looks to the future, invests in its children and pulls itself up by its bootstraps. In contrast, the mindset of the poor waits for handouts and subsidies. NCAER projects that large parts of India are already turning middle class and soon half of India will be so.
Once India has two viable national secular parties, there will be pressure on both to perform, and attention will shift to governance and reforms, and away from caste and religion. If voters of Bihar are discovering this, the voters of UP will not be far behind. They watch television and see how far the rest of India is leaving them behind. They see that the simple goods of life are plentiful and cheaper in their neighbouring states, and they will wonder why Mulayam Singh refuses to enact VAT. So, it is time for both our national parties to wake up. As for the BJP, its best compliment to Nitish Kumar would be to support him to clean up Bihar and never utter the word, Hindutva there.
Luckily, I was bailed out by the Indian economy, which continues to grow robustly, and has been doing so for two decades, contemptuously ignoring our governments. The only way to explain this contradiction is that politics and economics are increasingly getting divorced in India, and we may have become like Italy, where they used to say, the economy grows at night when the government is asleep. Stephen Roach, the chief economist of Morgan Stanley, who exercises considerable influence on investor minds, explains: “India is on the cusp of something big. After my third trip there in 18 months, I am as enthusiastic about India as I was about China in the late 1990s. What excites me is the potential for an increasingly powerful internal consumption dynamic - the missing link in most development models.”
Roach points out that India’s consumption share of GDP is 64%–higher than that of Europe (58%), Japan (55%), and China (42%). The world economy needs another major consumption-led growth nation other than America. Thus, “India’s consumption-led approach to growth may be better balanced than the resource-mobilization model of China”. That consumption is a virtue is an idea that Lord Keynes made popular, and serious economists still believe it, but Indians with their streak of asceticism are less confident. Roach suggests that this government’s populist programs, which go under the code name “inclusion”, such as the Employment Guarantee Act, might even generate a consumption dividend in the hands of the poor. I would agree with him if I had any hope that its benefits would actually reach the poor.
Vijay Kelkar reminded us recently in his Gadgil Memorial lecture that India ought not to take its “golden age of growth” for granted. The window of opportunity for “a grand demographic dividend” will be a limited to the next two decades, and if our leaders do not reform aggressively, and if they continue down “the slippery path of state capitalism and populism”, we will lose the opportunity, become economically stagnant as we did before.
So, how do we get our government off its “slippery path of state capitalism”? The political scientist, Bhanu Pratap Mehta offers an answer. “In this situation, any imaginative party would propose a new social contract. It would expand the social security functions of the state in areas such as health, education and employment. But it would also argue that reforms elsewhere - creating an integrated goods and services tax, furthering disinvestment, committing to genuine special export zones and fiscal prudence - are not incompatible with, but might actually further, social objectives.”
Our entire political class must buy this new social contract with urgency, and especially the Congress Party. The great failure of reformers in all parties is that they did not convince the rank and file that the reforms would not lose them votes. Will our stellar reformers do it now or must we resign to snatch defeat from our golden age of growth? email@example.com
Tuesday, November 08, 2005
Now, more that fifty years later, the wheel has come a full circle. It is the old Nehruvian progressives who are ‘old’, who hark nostalgically for a socialist utopia. They oppose reforms and still believe in statism when it has been discredited everywhere. It is the young who believe in the reforms today based on the conservative idea of the market. Alas, there is no political home for a secular conservative in today’s India, someone who wants vigorous reform and believes in good but small government. I had hoped that the BJP might shed its sectarian agenda and become a secular, conservative party. But this has not happened.
In my column last month, “I’m a Hindu, but”, I described the dilemma of a sensitive principal over teaching the Mahabharata in her school. My fear that secularism might undermine tradition may seem exaggerated. Certainly in the villages, our epics are well and alive. But India’s future will be written in its cities, where we must worry about preserving continuity with the past, especially before the relentless onslaught of a powerful global culture. Like Edmund Burke, who founded Conservatism, I think society is not merely a collection of loosely related individuals, but a living organism. I feel reverence for the past not as a political doctrine but a habit of mind, as a way of living and feeling. Hence, I raised the question that if Italian children can read Dante’s Divine Comedy or English children can read Milton in school, why should “secularist” Indians be ambivalent about teaching the Mahabharata?
It’s true that the Mahabharata has lots of gods, and in particular the elusive Krishna. But so do Dante and Milton deal with God. As a secular Indian, I appreciate the “wall” that our founding fathers built between religion and education. I admire France and Turkey who have the strongest “walls”. But what does one do when our literary classics are "semi-religious"? At the same time, if our kids don’t read Sanskrit classics in a secular environment they will grow up impoverished. Something has gone terribly wrong in the way our schools churn out deracinated products, who know little about their own culture but a great deal about the West. Some people would teach all the religions, and with this they hope to engender what Emperor Ashoka called a “respect for all creeds”. This too is a dangerous path, for how do you teach religion without worrying about some teacher somewhere who might hurt the sensitivities of some follower. Before you know it, you have a riot on your hands. So, I do sympathize with the school principal’s dilemma.
“Every writer needs an address”, wrote the Yiddish writer, Isaac Bashevis Singer. That is a fine way of saying that all human beings need local roots, an identity, and a link with a unique identifiable past. A writer needs it even more because he aspires to speak universally about life. Clearly, we need to ponder over this idea in India, and ask if its time has come. Is this the time to revive the Swatantra Party?
The satisfactory end to the Ambani saga, especially in the way Reliance assets were divided, represented a victory of professionalism over familism. In contrast, our political parties are beginning to resemble the old family run companies: from Bihar to J&K and from Tamil Nadu to U.P. our political leaders are busy building family dynasties. The original inspiration, of course, came from our oldest party, the Congress, but even the newer ones, like the Shiv Sena, appear to be following in its footsteps.
Our political parties are embracing the heredity principle when our best companies have succeeded in separating their family’s and their company’s interests. None of our political parties is managed by professionals. Not one has depth in organization, nor a clear command structure down to the grass roots. This weakness explains in part why some of our best performing governments fall so easily, such as the last one in Karnataka, and why in the heart of Bangalore, Congress party managed to lose the by-election in May 2005 from a constituency occupied till the other day by the fine reformer, SM Krishna. That his successors have only played petty politics and obstructed the development of infrastructure in India’s premier city is another matter.
Many shrug their shoulders and ask, what is wrong if a politician’s son enters politics? Isn’t it like a doctor’s child wanting to be a doctor? No, there is a difference. Politics is a matter of public interest, and citizens want the best person to lead them. It is possible that a politician’s son might turn out to be a great leader, but the odds are against it. This is not how nature distributes talent. In 1950 we chose not to become a monarchy but a republic. So, how can we just shrug at this return of bloodlines in our political life? Remember also, the principle of heredity is one step away from the loathsome caste system.
Tom Paine wrote in The Rights of Man (1791), “I smile when I contemplate the ridiculous depths to which literature and science would sink were they to become hereditary.” The idea of hereditary ruler is as ridiculous and more offensive than a hereditary author. When family interests prevail, political parties become weak, and governments don’t perform. The end result is that the things don’t get done– reforms slow down, roads don’t get built, and the house goes dark when your child sits down to study. The mentality in a family run polity is feudal. I don’t do what is right, but what serves the family. Loyalty matters more than performance. The best person doesn’t get the job but the one who is manipulative. Edward Banfield called it “amoral familism” in describing why southern Italy keeps failing and northern Italy succeeds. So, dear reader, it is time to shake off your complacency, and the next time around, don’t vote for “hereditary asses, imbeciles, and this curse of the nation,” as Napoleon put it.
This happened a few weeks after I got a call from one of Delhi’s best schools, asking me to speak to its students. “Oh good”, I said, “in that case, I shall speak about dharma and the moral dilemmas in the Mahabharata.” The principal’s horrified reaction was, “Oh don’t, please! There are important secularists on our governing board, and I don’t want controversy about teaching religion.” I protested ineffectually, “But surely the Mahabharata is a literary epic, and dharma is about right and wrong. Where does religion come in?”
As I think ought about these two incidents, I ask myself, why should these two successful young professionals be embarrassed of their heritage? Something has clearly gone wrong. With the rise in religious fundamentalism, it seems to me that it is difficult to talk about one’s deepest beliefs. Liberal Hindus are reluctant to admit being Hindu for fear they will be automatically linked to the RSS. I certainly blame Hindutva nationalists who have appropriated our culture and tradition into a political agenda. But I also blame our secularists who behave no better than fundamentalists in their antipathy to tradition.
One of the strengths of Western civilization is that in times of crisis it seeks sustenance and inspiration from the rational ideals of Greece and Rome, from Homer, Pericles and Virgil. My fear is that modern, liberal Indians may not have any use for their past, and they will abdicate our wonderful traditions to the narrow, closed minds of fanatical Hindu nationalists. If Italians are proud of the Divine Comedy, the Spanish of Don Quixote, and the Greeks of the Illiad, why should “secularist” Indians be ambivalent about the Mahabharata? Why should it become ‘untouchable’ for a sensitive, modern, school principal? In part this is due to ignorance. We do not read our ancient classics with a critical mind as secular works of literature and philosophy, as young Americans read the Western classics in their first year of college as a part of their “core curriculum”. So, we depend on our grandmothers or Amar Chitra Katha or second rate serials on Sunday morning television. Meanwhile, the Sangh Parivar steps into this vacuum with its shrunken, defensive, and inaccurate version of our history and happily appropriates this empty space. And the richness of tradition is lost to this generation.
No one reads Edmund Burke these days. He opposed the French Revolution because he feared that killing the church and aristocracy would cut off links with the past. I too value continuity in our “custom, community and natural feeling” in Burke’s language, which is so necessary to realize our full human potential. To respect tradition means that one must criticise it as our 19th century reformers did. But I fear that our secularism is unwittingly undermining tradition. The challenge before modern, decent Indians today, it seems to me, is essentially the same as the one Ram Mohan Roy faced in the early 19th century: how to grow up mentally healthy, integrated Indians? How do we combine our liberal modernity with our traditions in order to fully realise our potential?
Wednesday, September 28, 2005
A couple of weeks ago I reported that one out of four teachers in our government primary schools is absent and of those present one out of two is not teaching. Not surprisingly, many readers were deeply upset by this devastating data, and one offered the desperate suggestion of dispatching teachers missing in action to hell. I looked for Dante’s Inferno, but in the end opted for a home grown variety, a vision of hell provided helpfully by Svargarohana Parvan near the Mahabharat’s end.
Meanwhile, there is more bad news. We have now learned that if 25 percent are absent from government primary schools, the figure for absentee doctors is an appalling 40 percent in primary health centres. It varies from 67% in Bihar to 30% in Gujarat, but the all India average of 40% is the worst in a five-nation U.N. study–worse than Bangladesh, Uganda, Peru and Indonesia. In my last column I had celebrated the triumph of the human spirit that delivered cheap private schools in slums to make up for the state’s failure. But we cannot just abandon government schools and health centres. So, what is to be done? The problem is with our incentive system. If you get a regular salary and are not supervised; if you cannot be fired, or your pay isn’t cut for being absent; if your
social status is higher and you have more political clout than parents or patients; and if there is
lucrative work outside, what
would you do? So perhaps, teachers and doctors do behave rationally (albeit disgracefully) when they don’t show up.
Ragav Pandey, the former chief secretary of Nagaland, realised this and changed the incentive system in 2002. In successful economies, he realised, sellers chase buyers, doctors chase patients, and schools chase students because ordinary people control money. It would be ideal to give parents and patients control over money (through vouchers or health insurance). But since he couldn’t do that, he did the next best thing. Through a ‘communitisation program’ based on ‘no work no pay’ Nagaland transferred salaries of teachers, doctors, and nurses to elected village education and health committees. You can imagine what happened! Teacher and doctor absenteeism declined dramatically, student attendance and patient satisfaction rose spectacularly. So, the answer is for primary schools and health centres to be accountable locally. Critics claim that they would then be subject to capture by the local elite, but we now have a mitigating safeguard in the Right to Information Act.
Digvijay Singh tried something similar in Madhya Pradesh. As a part of gram swaraj, he gave authority to shiksha samitis of the panchayats to deduct wages of absent teachers both in the new informal schools and in the formal ones. They did it only in a few cases, but the threat was enough to improve teachers’ behaviour. The story does not end there. A few months ago, Digvijay Singh told me that he lost his election partly because the powerful teachers union, upset with his reforms, gave a call to defeat him. Voting machines make cheating easier now, and teachers, who were invigilators at the election, merely had to press a button-- no need to stuff ballots anymore.
Plato wrote more than two thousand years ago that the reform of our schools is everyone’s work—the work of every man, woman and child. We cannot give up on our government schools, but until we can get teachers to show up and to teach, let us not waste resources. Let’s not raise government spending on education till then.
Now this larger study proves that we have a national problem. Jharkhand (42%), Bihar (38%) and Punjab (34%) have the worst absence rates, while Maharashtra (15%), Gujarat (17%) and Madhya Pradesh (17%) are the best. But India’s aggregate teacher absence rate is worse than all Third World countries, except Uganda (27%) in an eight-country comparison for which comparable data is available. Bangladesh (16%), Indonesia (19%), Zambia 17% and Peru (11%) rank better than India. (The full study is available at http://post.economics.harvard.edu/faculty/kremer/papers.html.)
How are poor Indian parents coping with this tragic state of affairs? With typical Indian ingenuity it seems, according to another study by Prof James Tooley of the University of Newcastle. They are pulling their kids out of government schools and enrolling them into cheap private schools that are mushrooming in slums and villages across India. Of 262,075 children in 918 schools in the slums of Hyderabad’s old city, only 24% of the children were in government schools, 11.4% were in private aided schools and 65% were in private unaided schools (half of which were unrecognised). Although teacher salaries were a third in private schools, parents (many of them rickshawallas) preferred to spend Rs 70 to Rs 103 in fees because they found children learned more in private schools.
Mean scores in mathematics were 22% points higher in unrecognised private schools than in government schools. Teacher-pupil ratio was double in private schools, and roughly half the pupils were girls. Toilets, drinking water, blackboards, desks, and fans were in better condition in unrecognised privates schools than in government schools. Against the common assumption that private schools are run by fly-by-night operators, those in Hyderabad had been in operation between 8-18 years. Moreover, 20% of the children in these private schools were on scholarships. Amazing, the poor are subsidising the poorest to get educated!
Official data assembled by NIEPA confirms that two-thirds of the children in urban Maharashtra, U.P. and Tami Nadu are now in private schools. Hence, Jean Dreze predicts that government schools in Indian cities will soon be history. All this contradicts the Left establishment view (expressed in the Oxfam Education Report and UNDP’s Human Development Report 2003) which trashes these ‘mushrooming private schools’ without any data. It would close them down, and destroy any little hope for the poor. The lower bureaucracy takes advantage of this prejudice and extracts bribes, which average 5% of the school’s running cost. So, it is we who must change our elitist mindset. The parents may be poor but they are not stupid--they will certainly not spend their hard earned money unless they get results.
If insolent teachers in government schools leave one depressed, the revolution in private slum schools is something to celebrate. It represents the triumph of the human spirit when the state makes it so difficult to survive. It also explains why India is succeeding against all odds. If China’s success is induced by the state, India’s is despite the state. Hence, it may well be more durable.
A Chinese expert on India who lives in Beijing sent me an email saying that the Chinese would never contemplate such a job-creating scheme. ‘It would bankrupt us’, he said. ‘We create jobs by building roads, for example. A road creates opportunities for productive, permanent jobs as villagers begin to move between villages and towns. We have learned that job-creating schemes don’t create roads even when they are supposed to. This is because they are not accountable for road quality but only for creating jobs–the road is washed away in the next rain.’
Manmohan Singh knows that the Chinese expert is right–the only way to prosperity is not by giving a man a fish but by teaching him to fish. Only by giving people skills, creating infrastructure, and encouraging private investment are productive jobs born. Manmohan is a fine economist and knows that another one percent of GDP borrowed from the banks to finance this program will crowd out private investment, push up interest rates, lower the economy’s growth rate–and saddest of all, will actually reduce jobs! It troubles him that this act will pay Rs 60 a day when economists have demonstrated that paying the minimum wage diverts people from productive to unproductive jobs. The answer to more jobs is to reform our labour laws so that employers are not scared to hire workers.
The entire political class, meanwhile, smells the opportunity for a big corruption feast. This is why no one spoke out in the Lok Sabha, but only proposed amendments that would make corruption easier. Even if Rajiv Gandhi was wrong in thinking that only 15 percent of the funds reach beneficiaries, studies over 25 years in the EPW show that the poor never received more than 30 percent. Jean Dreze, author of this bill and someone I deeply admire, confesses that muster rolls were either absent or fudged in five out of six states studied under the current food-for-work program. ‘Loot for work’ are his words! Ask Manisha Varma, Solapur’s collector, how it’s done–she has just uncovered a Rs 9.1 crore EGS fraud in her district. All this puts a man of conscience like Manmohan in a dilemma–how to support a bill when you know that perhaps Rs 28,000 out of Rs 40,000 of the hard earned savings of the Indian people will be stolen. The states know it too and are thus unwilling to contribute even 10 percent of its cost.
One day I fear I shall meet Manmohan Singh weeping in a corner of India’s history–a knowing accomplice in the worst robbery in free India since the Fifth Pay Commission Award. He’ll be thinking how did this statist virus affect us just when things were going so well for India? I shall sympathize with him and hope that one day we too will become a middle class nation, and then the politics of India will also change. We will elect different sort of leaders, who will encourage us to depend on ourselves, and who will invest in infrastructure and in better schools rather than in populist giveaways.
Sunday, August 14, 2005
History has its winners and its losers, and in the 20th century there was no bigger loser than the Soviet Union. Born in 1917, it died in 1991. India, its ally in the Cold War, also ended on the losing side. I am not sure if it could have been otherwise, but let us not pretend that our diplomacy achieved anything but defeat. True, we led the non-aligned movement, but what is the point of being the leader of a failed movement? Call me naïve, but I think unworthy Pakistan did better. Not only did it end up on the winning side of the Cold War, but it also got the world to equate itself with India.
Those strident voices, particularly on the Left but also in the BJP, who have been critical of recent breakthroughs in our relationship with the United States, ought to ponder this before giving any further lessons in patriotism to Manmohan Singh. They have accused him variously of ‘selling-off India’, ‘tilting to America’, and ‘making us America’s junior partner’. The Left is of course immune to knowledge. It still sees the world through antique anti-imperial, anti-colonial lenses. But others should know better. They should be asking instead how do we avoid repeating our earlier mistakes and end up on history’s winning side the next time.
Seeing India emerge as the globe’s potential back office and a rising economic power, the world has now started to equate us with China rather than Pakistan. Thus, we are feeling better and more self-assured. But we shouldn’t allow this to go to our heads. The fact is we cannot go it alone in the world, and the smug, new autarchic rhetoric in parliament should be nipped. Everyone needs friends and allies. The world distrusts a nation that is everyone’s friend. Such a friend is unreliable.
I owe this lesson to Henry Kissinger, who taught the introductory course in international politics when I was an undergraduate at Harvard. This was during the spring of 1962, before he became famous. He taught the basic lesson of the Arthashastra, which is that there are no good or bad nations; there are only powerful and powerless ones. The leader’s duty is to relentlessly pursue his nation’s self interest. His own hero was Metternich, who sketched the map of 19th Europe at the Congress of Vienna and brought a “century of peace” to Europe. He said that when nations pursued their self-interest, it led to a balance of power, predictability and peace.
Because I couldn’t follow Kissinger’s heavy German accent, I used to sit in the front row of his class. To my dismay, he would look at me and hold up Nehru as an example of how not to conduct foreign policy. This distressed me for I passionately shared Nehru’s idealism. Kissinger felt it was dangerous to have dreamers in power, because they injected morality into foreign relations. Because of his own likes and dislikes, he thought Nehru might have compromised India’s national interest with regard to China. Although I dislike Kissinger, I think he may have been right.
To avoid repeating our failures of history we need to make choices. And we need an unsentimental awareness of our national self-interest in the 21st century. This is a talent scarce among argumentative and sentimental Indians. When the chips are down and there is a war, we may do worse than have America as an ally. If that is true, then we should not allow our personal dislike of Bush’s Iraq policy to compromise India’s growing friendship with the United States.
Sunday, July 31, 2005
Times of India, July 31, 2005
The only discordant note in Prime Minister Manmohan Singh’s otherwise triumphant trip to the US was his pleading for a permanent seat in the Security Council. I have never been comfortable with this unseemly campaign. Hankering after superpower status is a sign of our status anxiety and lack of self-confidence. Besides, a seat should never be a national goal. It is like a medal in a race; the goal is to win the race; the medal is only a by-product. So, let us focus on genuine achievements like building a prosperous and compassionate society. Let us reform vigorously, lift the poor, improve governance, and our status will change on its own.
Manmohan Singh's gracious speech at Oxford, on the other hand, showed self-assurance (reflecting the nation's growing confidence) as he gave Britain credit for bequeathing us wonderful liberal institutions. Hence, the carping of Left academics was astonishing. I have long admired Irfan Habib and Partha Chatterjee — their writings have meant so much to my education. I can only attribute their criticism to the Left's own status anxiety after Communism's fall, which was also on display in its extraordinary cheek to advise the PM not to sell out India to America. But then, good manners have never been the Left's strong suit.
Anxiety about one's status is understandable. Like nations, all human beings feel a secret and powerful need to be noticed. It hurts when we are ignored. If people praise us we feel important; when they avoid us we feel worthless. The attention of others matter because we are uncertain of our own worth. We fear that we might end up a 'nobody', and want desperately to be 'somebody'. "Our sense of identity is held hostage to the opinion of others", says Alain de Botton in a superb book, Status Anxiety. We may not admit it, but the truth is we all seek to be loved by the world.
When we are babies, we are loved whether we burp or scream or break our toys. But this idyllic state changes as we grow up, and are soon surrounded by snobs who have great capacity for inflicting pain. Snobs are social climbers, dedicated to flattering the influential and ignoring the humble. Very rarely have I come across someone who was immune to status blues. A notable exception was the noble and penniless Fanny Price, Jane Austen's heroine in Mansfield Park. Most of us are like Duryodhana in the Mahabharata, who suffers from extreme anxiety at Yudhishthira's grand celebration to confirm his suzerainty. He feels diminished by his cousin's rise in the world. He is envious by his host's magical palace. Without sycophants around him, suddenly he feels alone. Just one amongst many illustrious guests, he loses all confidence.
This is not how we would want our children to grow up as citizens of a confident, proud nation. Fanny Price rather than Duryodhana ought to be our model of behaviour. We should pursue our goals single-mindedly, with a quiet confidence, without worrying so much about what others think. My aunt used to say, "You'll waste a lot less time worrying about what others think of you if only you realised how seldom they do." Of course, we deserve a permanent seat on the Security Council, but at this stage of nation building, this should not be our priority. Let us first put our own house in order. Let us vigorously reform our economy, lift our economy's growth rate, raise the poor, and fix the depressing state of governance. This is what will eventually make us a superpower and worthy of the coveted seat.
Sunday, July 17, 2005
When VS Naipaul appealed earlier this year for a more contemporary discourse in India, he had obviously not seen Bunty aur Babli, Bollywood’s first film about liberalisation’s impact on small town India. Naipaul was referring to the stale quality of debate among Indian intellectuals whose minds are stuck in post-colonial rigidities at a time when young Indian minds are decolonised and India has moved on.
Despite this liberation I am still troubled by our moral discourse, which fails to distinguish between being ethical and religious. The frustrating word, dharma, adds to our confusion because it can mean both. Too many visit temples in the morning but commit perjury in the afternoon. Too many shrug at our massive governance failures with, “What can you do? We live in Kali Yuga”. True, every civilisation harks back to a Golden Age without moral flaws. It’s also true that Indians are deeply religious and God has always settled right and wrong. But I was deeply dismayed recently at my failed attempts to convince students at one of Delhi’s best colleges that dharma and moksha are separate projects and religion is often a distraction for morality. The students believed that truly spiritual persons had to be moral.
I gave the example of a god-fearing person who is about to betray someone’s trust. She might argue, “Well God won’t like it, but then he is forgiving, so I might still gain in the end.” All of us agreed that this is not how a moral person reasons. She simply says, “It is betrayal, so I wont do it.” A good person doesn’t do wrong because of fear of God but out of a sense of duty. Plato, in the Euthyphro, explains that religion gives mythical authority to a morality that is already there. Religion doesn’t create ethics but it captures moral ideas in a symbolic way that engages our imagination. Unhappily, religions have too often sanctioned bad moral ideas—the Hindu caste system, women’s inferiority among Muslims, or Catholic opposition to birth control. Thus, it is best to keep religious and moral spaces separate.
Our ancients did separate them when they said dharma is one of the four aims of life. “What counted was a person’s conduct not his belief”, Professor Radhakrishnan used to say. James Fitzgerald recently pointed out that the meaning of dharma changed during the writing of the Mahabharata. Earlier, it meant observing Vedic rituals and doing visible deeds endorsed by society. Gradually, it changed to mean a personal (and universal) sense of right and wrong in order to become a better and refined human being. This happened probably under pressure from the newer ethics of yoga and Buddhism. Much later did Dharma come to mean religion, as in sanatanadharma, in the 19th century, and this has caused the confusion.
The West too separated religion and morality only in the18th century Enlightenment. This led the Russian writer, Dostoyevsky, to ask, “If God is dead, isn’t everything permitted then?” Delhi University’s students also sensibly asked me, “If God doesn’t decide your duties, then who does?” My answer is that we have to learn to depend on ourselves, on our humanity, and our capacity for empathy. Neither do I despair like many Indians over declining moral standards because I see undeniable gains around me: in our increased sensitivity to the condition of women, the Dalits, and the environment. These have been hard fought victories, and we should feel proud of them. Like Bunty and Babli I don’t think it matters where you are born or your faith; what you make of your life is all that matters.
Sunday, July 03, 2005
The sad story of how our callous regulators lost us a world-class university, which I narrated two Sundays ago, has resulted in new discoveries. One of the happier ones is a metamorphosis in the All India Council of Technical Education (AICTE). Not only have corrupt officials gone, but it is committed to regulate non-intrusively via the power of information. Last month it posted its initial findings on its website, and all hell broke loose as the masks of important men fell off. Students could now cheerfully begin to distinguish between the good, the bad and the ugly. Not surprisingly, many ugly colleges turned out to be those run by important public figures–ministers, MPs, and wives of powerful officials. The MPs from Andhra, led by a minister, even laid siege on the AICTE’s offices. And more masks are set to fall this month when new data will reveal which universities operate above halvai shops, and which ones charge Rs 50,000 in fees but pay its professors Rs 5000 salary and don’t possess a working toilet.
What do you do when keepers of the law become its oppressors? Since I knew one I decided to confront this eminence grise. He was polite and solicitous in his opulent home in Lutyens’ Delhi. With a straight face, he replied, “What can you do--we live in Kali Yuga?” I chuckled like Markandeya in the Mahabharata. The more mantriji talked the more he sounded like hypocritical Dhritarashtra half heartedly disapproving of Duryodhana’s wicked plan to trap Yudhishthira in the crooked dice game. Soon he began to blame AICTE, which is another law of nature–the guilty will always blame others. Ah, the self-deceptions of great men!
The Right to Information Act is the best thing to happen for improving our day-to-day governance. Our officials should learn from AICTE’s example that the Right to Information doesn’t mean that you must only respond reluctantly to citizens’ queries. It is your duty to pro-actively publish information. Information is also the best ally of markets, who need it like oxygen. The rotten colleges will now either improve or competitive forces will shut them down. If Drona had access to the Internet he would have known that the report of Ashwatthama’s death was only a wicked rumour–a crooked scheme to demoralise him.
The prize for India’s best regulator must go to the Directorate General of Shipping which regulates maritime training institutions. It is one step ahead of the AICTE–not only does it believe in non-intrusive regulation, but also in raising quality. It has asked three highly respected and independent rating agencies, CRISIL, ICRA and CARE, to grade both public and private maritime institutes (and their courses) and post the results on its website. Of course, some institutions don’t need ratings. Hyderabad’s famed Indian School of Business is neither accredited nor rated, but the market so respects its worth that its graduates earn a mean starting salary of Rs 10 lakhs a year. It’s a true testimony to autonomy.
The era of Rs 15 college fees is over as the government has finally realised that higher education is a “non-merit good”. Hence, universities desperately need private funds. But these will only come if colleges are given autonomy—if they are liberated from licence raj, corruption breeding case-by-case approvals, and court induced price controls. The state’s only job should be to ensure mandatory disclosure. Competition and information will take care of the rest. Students will be able to make an informed choice of their college based on ratings by independent agencies and the fees. Now, here is a model of higher education for India’s future!
Sunday, June 19, 2005
It is with anguish that I sit down to write this column. Two years ago I met a distinguished friend in Delhi, who is the president of a prestigious American university that has produced several Nobel laureates. He loves India and he told me with some pride that India is increasingly perceived as a future knowledge capital of the world. He thought he would contribute to this future by setting up a branch campus here so that Indians could acquire his university’s degree at a fourth of the cost in America. I was delighted. Here’s a chance for a world-class education for our young, I thought.
Two years later I heard this tale of woe. His university’s application to the Association of Indian Universities (AIU) for an equivalence certificate went unanswered despite three reminders. Their meeting with the All India Council of Technical Education (AICTE) resulted in the demand for a huge bribe. Their efforts with the University Grants Commission (UGC) and the Ministry entangled them in miles of red tape. After knocking about like this for a year they concluded that their only hope was to go to Chattisgarh, which allowed private universities. Just as they were about to acquire 25 acres of land and make the Rs 2 crore mandatory deposit came the infamous Supreme Court ban on Chattisgarh universities.
“Infamous”, I say, because the court judgment did not distinguish between good and bad private universities in Chattisgarh. All of them were asked to go and take UGC’s approval. But if UGC had been willing to give approval in the first place, why would they have gone to god forsaken Chattisgarh? And wait--hasn’t UGC, in fact, killed off higher education? Only two dozen out of its 200 plus universities offer reasonable teaching and most of these existed prior to the birth of UGC. For fifty years it has promoted rote learning, incompetent faculty, and mediocrity. It has punished original thinking and failed to create an employable graduate. Hence, students have been pushed into a parallel universe of coaching classes, which ironically take their obligation to students far more seriously. The eminent Prof Yashpal, the former UGC chairman and the mover of the Public Interest Litigation should look himself in the mirror. If he is an honest man, he will confess that UGC has betrayed our trust.
Along with his letter my friend has attached draconian new AICTE guidelines for private universities, which he says “will decide our fees, student intake, and even the size of our buildings, and prosecute us like criminals for non-compliance. Even if we get their approval, it’s only for a year, and meanwhile the courts could overturn things as they have done in Manipal’s case”. Sadly, he concludes that India is a hopeless cause and he has decided to set up a campus in China. After reading his letter I felt like weeping.
Who could be against enlightened regulation of private higher education? We all wish for a body that ensures standards. But if this is how we regulate—with corruption and red tape—isn’t it better to give universities autonomy and leave it to parents and students? A private education costs less than a car, and we don’t protect car customers via AICTE or UGC. Rather than fall into the trap of case-by-case approvals, good regulators everywhere provide lots of information–such as our magazines, who now rate colleges by polling students and faculty. These ratings are not precise but they help students make an informed choice. A free society must offer autonomy to its universities--only then will minds be able to fly.
Monday, June 06, 2005
“When I was growing up, my parents told me, ‘Finish your dinner. People in China and India are starving. I now tell my daughters, ‘Finish your homework. People in India and China are starving for your job.’” Tom Friedman, the influential columnist of the New York Times recounts this in his new book, The World is Flat: a Brief History of the Twenty-first Century. He argues that technology and market reforms are fast flattening the playing field in the global economy, where India and China have emerged as early winners. If things keep going like this, we may soon realise Adam Smith’s dream of a world in which standards of living will converge.
This is Friedman’s flat, democratic, connected world. Without a trace of irony Friedman compares himself to Christopher Columbus, who set sail in 1492 for the riches of India, but found America instead; yet he declared that the world was round. 512 years later, Friedman flies east to Bangalore once again seeking India’s wealth, but discovers that the world is flat. By "flat" he means "level," as in the level playing field on which virtually any nation can now compete, thanks to the explosion of global telecommunications, especially the Internet, which is levelling all kinds of hierarchies. The riches he finds is India’s brainpower–rapidly taking away the West’s jobs.
From the Indian perspective this is indeed an age of unprecedented opportunity. Never before could a young Indian with ambition and smarts rise to the top regardless of where he or she started. Not even the babu can stop him now. Eight of our top ten companies today are run by persons who did not inherit wealth and half of these came from humble backgrounds, not unlike some of our cricketers. Make no mistake, however--India’s rising prosperity is due to the liberal global order. It is General Electric, for example, that invented the outsourcing of white-collar jobs to India. Instead of reviling multinationals, we ought to do what the Chinese do--take full advantage of them.
Ironically, it was Marx who first predicted that the inexorable march of technology and capital would dissolve all feudal, religious, and national barriers. Now that it is happening, it is the West that is complaining. Anxiety about globalisation is the reason behind the negative French vote last week. The French want to protect their 35 hour week when Indian and Chinese workers are willing to work 35 hours a day. Having preached globalisation to the world, Westerners find that they prefer the unequal, unflat world after all. They will now have to earn the high salaries to which they are addicted. They are suffering from the withdrawal symptoms of an undue sense of entitlement.
Global competitive markets are helping to flatten urban India but what about our hierarchical villages? Thanks to Lalu and Mayawati, our backward castes certainly have more confidence and higher social esteem. But I don’t think village India will flatten until it gets better schools, health clinics, and every child gets a chance. Nor is it a problem of money either. The dirty truth is that government teachers, doctors, and nurses in villages don’t perform and we don’t sack them. Our state has failed utterly to deliver services to the village. Prof Nirvikar Singh’s fieldwork shows that even a single Internet kiosk in a village can lower transaction costs, provide education and health, and raise the village’s productivity. Perhaps that is the straw we ought to clutch. In the end, the Chinese can depend on their state, but we will always have to depend on ourselves to flatten India.
Monday, May 23, 2005
Good news comes quietly, and it did two weeks ago on a typical May evening as Prime Minister Manmohan Singh announced a new system to evaluate the IAS officer. Our real failures, I have always believed, are managerial and not political. Laloo may grab the headlines but good governance lies in the ubiquitous daily interface between the lowest babu and the public. It is not a good thing for a whole generation to grow up despising public servants, and this new performance based report card is the first in a series of administrative reforms that could begin to cure our sick bureaucracy. It replaces the subjective Annual Confidential Report and if implemented well, it could make our officers accountable, motivating the honest and punishing the lazy and corrupt. A similar system has helped improve performance of private and public sector bureaucracies around the world. Our bureaucrat too is basically careerist and he ought to respond to the right incentives.
There are two kinds of individuals in government. One is helpful; the other entangles you in red tape. My neighbour’s aunt goes to collect her pension every month in person, and if the first type is at the window, she quickly gets her money and returns home happy. If it is the second, she gets the run around, and her whole week is often ruined. So, it comes down to a matter of attitude, which percolates down from the top to the lowest official. I am pleased that the new system will also assess attitude (at least once every five years.)
In the private sector the competitive spirit helps create an attitude of service. A saree shopkeeper will show you 50 sarees even if you don’t buy one because he fears his competitor. Studies confirm that high performing companies create an environment that rewards employees with a helpful attitude. Such employees, they know, win customers and raise the organisation’s morale. Hence, they often hire people for their attitudes and train them in skills. It is difficult to uncover attitudes in a single interview, however, which is why an investment bank like Goldman Sachs interviews a candidate 17 times on the average, even when she is A+ from Harvard. It is looking for character, which is revealed not in how a person treats his superior but his subordinate or a stranger. I am delighted that peers, subordinates, and clients will also now help assess an officer. There are many proven ways to uncover attitudes and the UPSC would also do well to adopt them when recruiting new officers.
At the end of his book, Governance: and the sclerosis that has set in, Arun Shourie explains how the nature of the Indian state has changed. In the 1950s Jawaharlal Nehru made an effort to fashion the state into an engine of growth. In the following three decades the Indian state became the “Great Monitor”, which authorized, banned, channelled every step that we citizens took. Today it is being refashioned by economic reforms to into an enabling state--a state that enables its citizens to do what they can do best.
Motivated senior officials with the right attitude are crucial to creating an enabling state. This new appraisal system is thus a good beginning. The next step is to link good performance with faster promotions and slow or stop the promotions of bad officers. Many more such reforms are urgently needed. Meanwhile, coming as this does on the heels of the new Right to Information Bill, gives us reason to cheer that the much abused Indian public may finally get a chance at good governance.
Monday, May 09, 2005
We would be pretty sceptical if Laloo Prasad happened to promise us happiness. Most of us sensibly believe that human unhappiness is a private matter, and is the result of things like unhappy marriages, ungrateful children, losing a promotion, or even the lack of faith. We know too well what would happen if our government got into the act: Chidambaram would tax ungrateful children, Sonia Gandhi would ban divorces, Manmohan Singh would create a promotions commission, Arjun Singh would detoxify faith, making atheism illegal. So frankly, I am glad that our wonderful Constitution is silent, unlike America’s, which enjoins the state to the ‘pursuit of happiness’.
Yet governments can help promote happiness. Knowing I will not be attacked when I step out of the house is central to my well being. I am a relaxed entrepreneur if I don’t have to see the excise inspector. I am a contented phoolwalli if I don’t have to pay hafta. I am a happier farmer if I don’t have to bribe the patwari. Seven out of ten Indians live in a village. Even if tiny, most have a parcel of land, and once in their lifetime they must transfer its title when their father dies. Surveys show that it takes 100 days of running around to affect this transfer. It is also a 100 days of humiliation, and by the end one has lost all dignity and self esteem. The insolent revenue official has not changed his attitude since the British Raj and continues to lord it over the helpless peasant.
A 123rd rank on corruption implies, in a sense, that we are behind 122 countries in our chances for happiness. If you are rich money may not bring happiness but it can make a huge difference if you are poor. An effective poverty program can bring many smiles. Good primary schools and health care centres will do the same. Although the state doesn’t have to run them, it needs to be an enabler. Good governance is thus central to my happiness, and the makers of the American Constitution may have had a point.
I had taken Manmohan Singh at his word and had hoped that happiness would have begun spreading across our land by now. On taking office he had promised that governance was his top priority. Well, we have been waiting. Instead, he has gone and broken our hearts and announced the umpteenth administrative reforms commission. Now our only hope for good governance is that our economic reforms continue, the Indian state keeps shedding its illegitimate functions, and government slowly gets out of the way. As this continues, I also hope we will get around to deleting the word “socialism” from our Constitution, one of Indira Gandhi’s pernicious legacies from the Emergency. The word “socialism” has a precise meaning: it is state ownership of all means of production. No one believes in this any longer, not even Karat, the new head of the CPM.
As to personal happiness, I go along with Freud. I believe that if you can get absorbed in your work and love the person you live with, you will be happy. To this recipe I would add Panchatantra’s advice: have a few good friends. It says, “mitra is a two-syllable gem, a shelter against sorrow, grief and fear, and a vessel of love and trust.” Aristotle too had the same idea, although he did not express it as poetically. So, it as simple as that–love your work, love the person you live with, and have a few good friends. Like all things, however, it’s easier thought than achieved.
Monday, May 02, 2005
Two reports appeared recently in my newspaper and they left me bewildered. The first said that the Karnataka government has still not decided to rescind its ban on English in primary schools despite huge popular pressure from parents. In the second report, a Karnataka minister, after a busy visit to China, announced, ‘Members of the Standing Committee of the Jiangsu Provincial People’s Congress wanted the help of the Karnataka government in teaching English in its primary schools’. This was in pursuit of its objective to make every Chinese literate in English by the 2008 Olympics. The contrast between the ambivalence of India and the certainty of China is always instructive.
It does seem bizarre that the state whose capital is Bangalore, the symbol of India’s success in the global economy, and derives its competitive advantage from its mastery of the English language should remain hostage to the deep insecurities of its vernacular chauvinists. This is after more than 15 years when it first banned English from its primary schools in the late 1980s. Meanwhile, Bengal and Gujarat have realised their mistake and have gone back to teaching English after they discovered they had created an unemployable generation.
I thought this debate was over, and English had won. But now I realise that many states, including Kerala and Karnataka, are still in a state of paralytic inaction, interminably discussing the language of school instruction. In a world where a quarter of people already know the world language and where experts predict another half will be English literates within a generation, it is painful to see Indians, who are the envy of many countries for their English skills, being stopped in their tracks by vernacular Stalinists with their bogus arguments, telling parents, ‘You don’t know what’s good for your children. We do.’
As for the Chinese, I try not to feel envious or fearful. While I am confident they will win plenty of medals at the next Olympics, I don’t think learning English will be quite as easy. Even though I cannot help but admire their ambition, I console myself with the thought that India has been spared their earlier ambitions at social engineering, the most prominent being the Cultural Revolution. A Chinese engineer, who is in India to improve his software and English skills, tells me coincidentally that China’s ambitions with regard to English are not only connected with their superpower ambitions but are also driven by envy over India’s facility with English.
I sometimes wonder what language we Indians will be speaking fifty years from now.
If we look beyond the horizon of current events we will see, I think, two trends that are likely to determine our linguistic future. One is the rapid spread of English across India, including the aspiring lower middle classes; the second is the unprecedented popularity of Hindi, even in the South, thanks to blockbuster Hindi movies, along with the universal appeal of certain programs on the Hindi TV channels, such as Indian Idol and Kaun Banega Crorepati, which won respectable ratings in the South.
At the intersection of these two trends is the fashionable collision of the two languages. It is called Hinglish, but should in fact be called Inglish because it is increasingly pan-India’s street language. Mixing English with our mother tongues has been going on for generations, but what is different this time around is that Inglish has become both the aspirational language of the lower and middle middle classes and the fashionable language of drawing rooms of the upper and upper middle classes. Similar attempts in the past were down-market and contemptuously put down by snobbish brown sahibs. But this time Inglish is the stylish language of Bollywood, of FM radio and of national advertising. Advertisers, in particular, have been surprised by the terrific resonance of slogans such as, ‘Life ho to aise, ‘Josh machine’, and ‘Dil mange more’. Radio Mirchi, to its delight, has found the same adoring response from its listeners to: ‘ladki ko mari line, girlfriend boli, I’m fine!’
Unlike my generation, today’s young are more relaxed about English and think it a skill, like learning Windows. No longer does it fly the British or American flags, except in the insecure minds of the Left or the RSS. Bollywood, television, advertising, cricket—indeed, all our mass culture is conspiring to take English to the bazaar. Gone too is the ranting against English by swadeshi intellectuals. Every Indian mother knows that English is the passport to her child’s future—to a job, to entry into the middle class—and this is why English medium schools are mushrooming in city slums and villages across the country, and English has quietly become an Indian language fifty years after the British left our shores. David Dalby, who measures these things in Linguasphere, predicts that by 2010 India will have the largest number of English speakers in the world. Thus, one of the cheerful things happening in India is the quiet democratising of English.
In Inglish, perhaps for the first time in our history, we may have found a language common to the masses and the classes, acceptable to the South and North. We are used to thinking of India in dualisms--upper vs. lower caste, urban vs. rural, India vs Bharat—but the saddest divide, I always thought, is between those who know English and those ‘who are shut out’ (in the phrase of my deaf friend Ursula Mistry in Mumbai, who deeply feels the tragedy of those who can’t participate). The exciting thing about Inglish is that it may be able to unite the people of India in the same way as cricket. We may thus be at a historic moment. One day, I expect, we will also find Inglish’s Mark Twain, the American writer who liberated Americans to write as they thought. Salman Rushdie gave Indians permission to write in English, but Midnight’s Children is not written in Inglish, alas! And this is not surprising for the young Indian mind was not decolonised until the reforms in the1990s.
What exactly is Inglish is not easy to define, and needs empirical research. Is its base English or our vernacular bhashas? If its foundation is bhasha, then it is similar to Franglais, the fashionable concoction of mostly French with English words thrown in that drives purists mad. Or is its support English, with an overlay of bhasha? I think it is both. For the upwardly mobile lower middle class, it is bhasha mixed with some English words, such as what my newsboy speaks: ‘Mein aaj busy hoon, kul bill doonga definitely’. Or my bania’s helper: ‘voh, mujhe avoid karti hai!’ For the classes, on the other hand, the base is definitely English, as in: ‘Hungry, kya?’ or ‘Careful yaar, voh dangerous hai!’ The middle middle class seems to employ an equal combination, as in Zee News’s evening bulletin, ‘Aaj Middle East mein peace ho gai!’ Three Hindi words and three of English.
In contrast to this vibrant new language, the old ‘Indian English’ of our headlines is an anachronism: ‘sleuth nabs man’, ‘miscreants abscond’, and ‘eve-teasers get away’. In the ultimate put down, Professor Harish Trivedi of Delhi University contemptuously says, ‘Indian English? It is merely incorrect English.’ Inglish has parallels with Urdu, which became a naturalised subcontinental language and flourished mainly after the decline of Muslim rule. Originally the camp argot of the country’s Muslim conquerors, Urdu was forged from a combination of the conqueror’s imported Farsi and local bhashas. As Urdu was transported to the Deccan, so is Inglish is riding on the coat tails of Bollywood across India.
So, is Inglish our ‘conquest of English’ to use Salman Rushdie’s famous words? Or is it our journey to ‘conquer the world’ in the words of Professor David Crystal, the author of the Cambridge Encyclopedia of the English Language, who predicts that Indian English will become the most widely spoken variant of English based on India’s likely economic success in the 21st century and the sheer size of its population. ‘If 100 million Indians pronounce an English word in a certain way’, he says, ‘this is more than Britain’s population—so, it’s the only way to pronounce it.’ If British English was the world language at the end of the 19th century, after a century of British imperialism, and American English is the world language today after the American 20th century, then the language of the 21st century might well be Inglish or at least an English heavily influenced by India (and China, to a lesser extent).
What will happen to our mother tongues? This is the insecurity behind the ancient, paralysing debate over teaching English in primary schools. The Vernacular chauvinists believe that our languages and cultures will die under the mesmerizing dominance of the power language, English. They point to Gaelic and Welsh, which were eradicated by English. Vernacularists think we have made a pact with the devil: while fluency in English gives us a competitive advantage, losing our mother tongue impoverishes our personality.
‘Can English satisfy the imaginative hunger of the masses?’ asks Kannada writer, U.R. Anathamurthy.
‘Give me a break’, retorts the poet, Arvind Mehrotra. ‘The masses don’t have imaginative hungers, and who is satisfying them anyway?’
Anathamurthy has proposed that kacca or spoken English be taught from 1st standard to the Kerala government, but the medium of instruction ought to be Malayalam. I do not agree. Unless you acquire the nuances of English before ten, you are disadvantaged. But I have more confidence in our culture. When Indians embrace English in order to win in the global market place, they don’t turn their back on their mother tongue. While English empowers us, our mother tongue continues to give us identity. I agree with Anathamurthy that in our big cities, we retain our ‘home tongues’, while using a ‘street tongue’ and working in the ‘power tongue’.
In a wonderful essay, ‘Cosmopolitan and Vernacular in History’, Sheldon Pollock, a professor of Sanskrit at the University of Chicago, tells that our vernaculars were also ‘created’ and are not primordial, as vernacular nationalists would like to believe. The vernacularisation of Sanskrit began in the 9th century as Kannada and Telugu became the languages of literary and political expression in the courts of the Rashtrakutas and Chalukyas. Hindi was fashioned by Sufi poets in principalities like Orcha and Gwalior in the 15th century. Bearers of these languages were the elite and not the people, as Gramschi and Bakhtin made us believe. Our consciousness of a ‘mother tongue’ did not even appear until the Europeans arrived. Languages are evolving things and we ought not to do too much social engineering. Vernacular nationalism is bad because it goes against people’s wishes for learning English. Instead of encouraging them by creating more English teachers, nationalists thwart their democratic aspirations. Meanwhile, instead of worrying about our phantom losses, let us celebrate our potential gains. Let’s celebrate cool Inglish!
Monday, April 25, 2005
We have had an unusually long spring this year. It is over now, and so is the frenzy of board exams. It is not surprising that thoughts of the young have turned to romance. But not for long for one has to think of a career and making a life. Millions of young Indians as they leave school and head for college, ask: should I study science, arts or commerce? ‘Making a life’ is different from ‘making a living’, and I’ll recount my own experience as I answer that question, not for any other reason but because one person's life, honestly captured, is not only unique, but is the only certain data of history that we possess as human beings.
When I was 16 I got a scholarship to an American college when it was fashionable to go to England, especially to Oxbridge. Like the diligent son of an engineer, I began to study engineering. Inspired by Crick and Watson, who had recently discovered the DNA molecule’s shape, I switched to chemistry. During the summer I came back and saw for the first time India’s grinding poverty. (One has to go away sometimes to notice these things.) Hoping for answers, I switched to economics in my second year. A few months later I was enticed by the humanities–by courses in Greek tragedy, Islamic history, Russian novel, and Sanskrit love poetry. I wanted to study everything, but I couldn’t of course. So, I did the next best thing. I switched to a joint major called History & Literature.
By now my parents in India had begun to despair. My mother didn’t know quite what to tell the neighbours. Adding to her discomfort, I discovered two new temptations at the end of my second year. I was attracted by philosophy, but also by the visual beauty of Bauhaus buildings. So much so that I seriously considered becoming an architect. In the end, two moral philosophers, John Rawls and Isaiah Berlin, prevailed. I wrote my thesis on Aristotle and graduated with a degree in philosophy.
Apart from being a thoroughly confused young man, what this story tells is how a liberal education is a search. One shouldn’t feel that one has the answers. It is enough to know the questions. My unusual college allowed me the freedom to search for what I wanted to be. My parents too were patient and didn’t pressure me to do “something useful”. Our system in India, alas, doesn’t allow for such experimenting. You are called a duffer if you are doing the Arts here–it means you didn’t get into engineering.
My confusion didn’t quite end there. I still didn’t know what I wanted–so, I took a year off and a job selling Vicks Vaporub. And like the man who came to dinner I stayed on. I rose to head the company, and at 50 I took early retirement to become a writer. At first, not having an MBA proved a drawback, but later I discovered, oddly enough, that my liberal education was an advantage. Writing essays had taught me think and write clearly. I had a better understanding of human motivation for I had consumed vast amounts of literature. Stoic philosophy offered a refuge in my many adverse moments. Most of all, my liberal education had given me confidence in my own judgement, and this often allowed me to be innovative. In the end it matters less what one studies in college and more that one acquire the right attitudes. Without realising it I had built a self in college, and I could cope with life’s ambiguity.
Monday, April 11, 2005
Times of India, April 10, 2005
The Chinese premier’s visit to India is a good thing because it takes our minds off Pakistan. We really have to learn to ignore Pakistan and heed China. Pakistan pulls us down into an abyss of religious fundamentalism, terrorism, and identity politics. China will lift us up, firing our ambition for better roads, schools and health centres.
Ten years ago I used to either admire or fear China. Now, I am more relaxed. Both our economies are among the world’s fastest, and both are on the verge of solving their age-old economic problem. China’s success is induced by the state whereas India’s achievement is due to its private economy. For 25 years China has been growing at 8 percent and India at 6 percent; hence, China is now 20 years ahead, thanks to a purposive state that has reformed faster and invested in infrastructure. We may have ‘law’ but they have ‘order’.
Our different pasts explain a great deal about us. In the last 100 years China suffered devastating violence while India was spoiled by amazing peace. China’s 20th century opened with the ravages of warlords; the Nationalists followed with their butchery in the twenties. Japan’s invasion of Manchuria in the thirties made our British Raj look angelic. In the forties came Mao’s massacres as Communists took power. Mao’s ambitions sacrificed 35 million in the Great Leap Forward in the fifties and brought more misery during the Cultural Revolution. It was not until 1978 that the Chinese breathed easy. And then they went on to create the most amazing spectacle of economic growth in human history.
Saints, on the other hand, created India (in Andre Malraux’s words) and this happened in the shadows of Hitler, Stalin and Mao. Not only did we escape the World Wars, but we became free without shedding an ounce of blood, thanks to Mahatma Gandhi. Yes, half a million died in the Partition riots, but it was not state sponsored violence. Because we were addicted to peace we created the world’s largest democracy. Nehru’s socialism slowed us down for 3 decades, but he did not wipe out our private economy with its invaluable institutions of banks, corporate laws, and the stock market. So, when we broke free from our socialist shackles we had this advantage over China.
This is why India’s recent economic success is driven by its entrepreneurs. The best thing that India’s bungling government is doing is slowly getting out of the way of its dynamic citizens through reforms. India is spawning highly competitive private companies that are likely to become global brand names in the future. Reliance, Jet Airways, Infosys, Wipro, Ranbaxy, Bharat Forge, Tata Motors, Moser Baer and Hindalco are just a few examples. China’s miracle, on the other hand, is based on the success of state enterprises and foreign capital. China’s government is, in fact, suspicious of its entrepreneurs. Only 10% of China’s banking credit goes to the private sector, although it employs 40% of its labour. While Jet Airways has quietly become the undisputed leader of India’s skies after a dozen years, Okay, China’s first private airline just began to fly in February.
We too could grow at 8 percent. We do not because our incompetent governments don’t govern. Democracy too slows us down. If it came to a trade-off, I don’t think anyone in India would give up democracy for a two-percentage points higher growth rate. We have waited 3000 years for this moment to wipe out poverty, and if needed let’s wait another 20 years and do it with democracy. And frankly, life is more than just a race.
Monday, March 28, 2005
Since I am constantly tripping over my frailties it is a relief to stumble over someone else’s for a change. Last week I read about a woman in Lajpat Nagar in Delhi who had always dreamed of owning a car. After years of working hard and saving money, she finally got a white Maruti. But instead of being happy, she was plunged in sorrow because her best friend got a Zen the same week. It is not easy keeping up with the Khannas in this post-reform age!
Khushwant Singh once wrote that no people are more envious than Indians. He was wrong, of course. Behavioural economists have found that relative wealth matters more than absolute wealth everywhere. A study among Harvard University students shows that they would prefer to earn $50,000 a year (when their peers are earning $25,000) rather than earn $100,000 (when their peers are earning $200,000). CEO compensation in America has been pushed to astronomical levels because each company board wants its CEO to earn more than his competitor. Envy is universal problem, and hence, the proverb: if envy were a fever the whole world would be ill.
Competitiveness seems to be built into our genes, and envy is its nasty face. Even jealousy, envy’s cousin, is excusable because it has the mitigating quality of the potential loss of a loved one. Othello’s jealousy is forgivable because he is afraid of losing Desdemona. But envy is general and arises from the inability to tolerate the good fortune of others. Such as Duryodhana’s uncontrolled envy of the Pandavas, which is the driving emotion of the Mahabharata. If I can’t make it, let me spoil it for the others.
The Left has always had more problems with envy. Marx thought that he would conquer inequality by giving everyone equal income. Yet, the old Soviet Union was reeking with envy because tiny differences, such as a new tablecloth, got exaggerated in the neighbours’ eyes. Lord Richard Layard in a recent book, Happiness: Lessons from a New Science, characterizes income inequality as a psychic wound uniquely worthy of state intervention. He suggests that while those who work excessive hours may improve their own income, they also cause others to feel dissatisfied. The rat race forces people to spend less time with their families and community activities, and reduces the overall contentment of the community. Hence, he recommends the classic (and pathetic!) answer of the Left—tax those who work too hard. This will, he feels, tame the rat race, reduce envy, and improve overall human happiness.
Although I believe that every Indian is equal inside the polling booth, I am quite happy if a few become filthy rich, increase society’s wealth, and help raise our economy’s investible surplus. The rise of inequality after 1971 may be a problem in the West, but in India we should single-mindedly focus on investment and growth, which are the best remedies for lifting the poor. The Indian Left’s obsession with inequality verges on silliness, I think, just as the Left’s obsession with state intervention makes me value my liberty all the more. Although I value liberty over equality, I do believe that everyone ought to get an equal chance. That answer lies in primary education, and India’s tragedy is that the worst minister in every state cabinet becomes the education minister.
The cause of envy is excessive self-regard. This is why Krishna teaches Arjuna nishkama karma or the art of diminishing the ego. If one could somehow learn this art of self-forgetting, without hurting one’s healthy ambition, it would certainly make for a better world.
Monday, March 14, 2005
The Budget has come and gone, and it is time now to turn to governance. It was a good Budget, overall–it should continue our growth momentum. It lowered tariffs, reduced corporate tax rate, raised infrastructure spending via public-private partnerships, and simplified personal income tax. I especially liked some of the reforms buried inside like nuggets: for example, a city like Mumbai will only get funds if it reforms land ceilings, stamp duty and rent control; states will get funds from the horticulture mission only if they disband their dreaded Agricultural Produce Marketing Committees, thus giving farmers freedom to sell anywhere; scholarships will not go schools but to Dalits, who can now choose their school. The folly of the fringe benefits and cash withdrawal taxes has been rightly criticized--it’s a pity that Chidambaram persists in defending the indefensible, and diminishes himself in the process.
Every leader, whether political or business, has two jobs: to deliver results and to build the organization. For a finance minister, the Budget falls in the first category and it will deliver a certain sort of result. It is time now that Chidambaram turns his considerable talent and energy to his second job, which is to reform his three revenue-collecting departments. Despite many honest and hard working officers in income tax, customs and excise, these departments give India a bad name. Surveys show that foreign investors invariably cite them as the chief reason why India is still not a good place to do business.
In the case of Income Tax, a huge opportunity for transparency is waiting to be seized. Government has invested over Rs 1000 crores in creating a powerful computerized Tax Information Network. As with any new IT system, it has plenty of teething troubles and tax collectors and tax payers are tearing their hair out. Part of the reason is that the actors, especially in the banks, have not been trained. In the private sector we have learned that a major IT investment is a great opportunity to change systems and attitudes, and Chidambaram would do well to invest in a massive training program by outside professional, expert change managers and transform the ethos of the dreaded tax officer.
There are similar opportunities for transparency, improved systems and attitudes in Excise and Customs. Now is also the time to begin work on a national VAT and the dream of a borderless India. To small entrepreneurs, the excise collector is our government’s blackest face that holds the unfortunate power to imprison. He unleashes terror daily in honest entrepreneurs’ hearts, and is the symbol of the Inspector Raj that continues to prevent India’s industrial revolution. I applaud Chidambaram’s zeal for revenue, but he must reverse the unintended impression he has given to some officials that he doesn’t care about the means.
This Budget has continued India’s slow, elephant-like pace of reform. While it is frustrating to know that we could grow faster, let’s remember that even slow reforms add up over time, and it is this that has made India one of the fastest growing economies in the world. Prosperity is indeed spreading, and one per cent of our poor have been crossing the poverty line relentlessly for 25 years. Hence, I am confident that India will solve its age-old economic problem within a generation. I am less sure about governance. It is tragic to see the pain inflicted daily on the ordinary citizen by bad governance. This is partly because ministers ignore administrative reform. Ironical, isn’t it, that succeeding finance ministers have made our companies world class while our administrations remain in Jurassic Park?
Monday, February 28, 2005
There is really one paramount issue that concerns us all, and we should remember it tomorrow when the Finance Minister gets up to announce the nation’s Budget. Fifty-seven years after Independence India is sadly not a common market where goods and services move smoothly. If Bollywood, cricket and Hinglish unite us, our irrational system of indirect taxes divides us.
Anyone who sells a product across India lives through the nightmare of state sales taxes, central sales tax, entry tax, turnover tax, service tax, excise, octroi—all cascading to make us perhaps the highest indirect taxed nation in the world. Octroi is the worst. Today a truck takes 40 hours to deliver goods from Delhi to Bombay. Of this, only 24 hours are spent driving; the remaining16 hours are spent negotiating bribes at octroi nakas. Thanks to the Golden Quadrilateral, driving time will soon decline to 12 hours as trucks have already begun to move at double the speed. But the pain and corruption of octroi posts will remain.
The answer is to replace this nightmare of taxes by a single flat Goods and Services Tax (GST) that is IT intensive, offers transparent, frictionless interface between taxpayer and collector, and integrates us into one market. As a virtual national VAT, it would tax only the added value at each stage and thus lower our total tax burden. It would discourage cash transactions because no one in the value chain wants to lose credit for taxes already paid. Thus, compliance would rise, taxpayers would swell, and government revenues would multiply. By eliminating the entire plethora of indirect taxes, transaction costs and corruption would also decline, and the nation’s competitiveness would climb. Kelkar’s team had proposed this sensible idea last summer, and I find it shocking that neither CEOs nor the Chambers have fought for it in their pre-Budget dialogues.
This April our states will begin to replace their sales taxes by state VATs. It seems to be a historic first step towards GST, but its design is so flawed that I fear it will give VAT a bad name. It will increase paperwork for taxpayers and tax collectors, multiply checkpoints at borders, cause delays, corruption and invite the wrath of the trade. It is tragic that we are blundering into a paper-based system when technology exists to create a paperless, transparent and corruption free system. Since this VAT is not integrated between states, VAT credits will not flow across borders, and India will not become a common market. As a result, the 20th century’s most important tax innovation, the VAT, may invite a backlash in India.
The answer is not to stop the momentum on state VATs. The solution is for Chidambaram to prove to the states how a modern GST works. The wonderful Tax Information Network (TIN) is now in place, which handles TDS for 350, 000 firms for income tax purposes. It could easily be adapted to manage VAT credits for 100,000 firms. The ensuing transparency will strike a great blow against Excise and India’s entire corrupt indirect tax establishment.
The rub is that the GST requires a buy-in from the states. Since it could usher India’s industrial revolution, the centre ought to sweeten the deal with a gift of Rs 50,000 crores to the states and the nation will still come out ahead. It is tempting to defer big and bold ideas, Mr Chidambaram. Nor is it pleasant to negotiate with our unruly states. It is easier to rationalise by saying that Brazil took 40 years to evolve VAT. But great leaders know they are mortal and won’t get a third chance.
Monday, January 31, 2005
They tell me that putting my email id at the end of this column is iffy, but when a gem crosses your path, such as this one, it makes it all worthwhile. Last week a female traveller to India wrote this:
“‘We are a filthy people’ was almost right, but the problem appears to be cultural, not governmental. Women manage to find a place to urinate and defecate out of public space. It is the Indian man who has claimed an ascendant status, apparently based upon his right to urinate anywhere…what you don't mention is that hawking and spitting appears to be a national hobby, one that, to a westerner, is as appalling as Indian men using India as a toilet. And why does the Indian man keep looking for his penis? Is it not attached? It is most disconcerting to be speaking to a well-educated Indian when suddenly he goes looking for his penis. This at first was startling to me, but I see that this penis searching is merely a national preoccupation. Touring India is not for the fastidious.
“I've travelled here for almost four months; the people are lovely and charming and beautiful and kind. As I'm in the last few days…and as I'm crossing Howrah Bridge in a taxi, traffic is jammed, all going around a stalled rickshaw. An accident? Mechanical trouble? No: the rickshaw driver had stopped in the middle of the bridge to urinate!”
My reader admonishes me for blaming governance when public filth is a cultural failing. Mahatma Gandhi would have agreed. Everyone was dismayed at a famous AICC Session when he spoke endlessly on the defecating habits of the AICC delegates instead of delivering a rousing speech on swaraj. Gandhi believed that one had to be worthy of freedom and Indians needed to reform personal discipline and public hygiene in order to be worthy.
Last week’s email was equally divided between those who blamed culture and governance. One observed that upscale Khan Market in Delhi has two spotlessly clean toilets, yet men prefer to pee on the toilets’ walls. A second asked: why does the Radhasoami ashram in Beas remain spotlessly clean when the same 250,000 devotees throw trash out of their windows at home? A third looked for answers from American parents, who always remind their kids when they leave home, “Did you go to the bathroom?” He added that civics courses in American schools have helped. A fourth blames governance and is so upset with politicians that he wishes terrorists had succeeded in bombing our Parliament so that we could begin anew.
It is an old debate between those who would change culture versus those who would reform institutions. British colonial officials routinely blamed India’s poverty on our otherworldly spirituality. Max Weber, the sociologist, attributed our backwardness to the caste system. Gunnar Myrdal, the economist, also blamed our unpunctuality and poor work habits on cultural attitudes. Today, however, we are more skeptical of national stereotypes. We have seen that Indian entrepreneurs can be both extremely otherworldly in religion and aggressive in business. The Green Revolution showed that Brahmins with a contempt for manual work ploughed their land vigorously when the incentive system changed.
I prefer to focus on institutional change because it is quicker than cultural change. After all, lots of garbage bins and public toilets combined with a stiff and vigorously enforced penalty did transform Singapore’s culture. Any Indian town could do the same. This is what our reforms are all about: aligning the incentive system of institutions with people’s self-interest will bring good behaviour both from the rulers and the ruled.