Monday, December 21, 2009

A Discovery in India, Outlook

James Tooley, The Beautiful Tree: A personal journey into how the world’s poorest people are educating themselves, Penguin; 302 pages; Rs 499

I first met James Tooley on a cold morning in Delhi. I was drawn to him by his sincerity, his passion, and most of all by his infectious smile, which made everyone in the room smile back at him. As I watched him I thought of Tagore’s observation in the Stray Birds about how much the world loves a man when he smiles.
Tooley’s remarkable book, The Beautiful Tree, is a tale of heroism. In it, he discovers that in the slums of India, in remote mountain villages of China, and in shantytowns in Africa, the world’s poorest people are creating their own schools to give their children a better future. In an extraordinary journey which began in the slums of Hyderabad, Professor Tooley finds out how committed entrepreneurs and engaged teachers in poor communities have started private schools with very low fees (Rs 70-170 per month) in two rooms or entire buildings and these are affordable for the children of rikshawallas, street hawkers, and daily labourers. He concludes that 65 percent of schoolchildren in Hyderabad’s slums are in private unaided schools. In India today, there are tens of thousands such schools which are run by the poor for the poor. The education establishment, however, wants to close them down. The new Right to Education Act gives the government three years to close all ‘unrecognized schools’.
Before his discovery in India, James Tooley believed that government schools were the answer to universal education. Then he asked parents in the slums why they had removed their children from government schools with better facilities, and why they were paying their hard earned income to send them to private schools. The answer in all cases was that government schools had failed. Teachers did not show up and when they did, they did not teach. Despite that you had to often bribe to enrol your child. This explains why more than half the children in India’s cities and a quarter in India’s villages are in private unaided schools.

The government makes it difficult for these private schools to function. Tooley was baffled to learn how often inspectors visited these private schools for the poor. It was not because of an unusual dedication to quality and standards, but to be ‘made happy’ as one of the school teachers put it. Schools have to resort to bribery to keep the inspectors from closing them down. The principle effect that the Right to Education Act will have on them will be to raise the bribe required to make the inspectors ‘happy’. This in turn will force these schools to raise fees to the children of the poor. As the headmaster of one of these schools, a man named Wajid at Peace High School, tells Tooley that he became a private school educator because ‘Sometimes, government is the obstacle to the people.’

The secret of success of these private schools is that ‘teachers are accountable to the manager (who can fire them), and, through him or her, to the parents (who can withdraw their children)’. In a government school, on the other hand, the chain of accountability is much weaker, ‘as teachers have a permanent job with salaries and promotions unrelated to performance. This contrast is perceived with crystal clarity by the vast majority of parents.’

Tooley also quotes studies which explain their success: ‘The results from Delhi were typical. In mathematics, mean scores of children in government schools were 24.5 percent, whereas they were 42.1 percent in private unrecognized schools and 43.9 percent in private recognized. That is, children in unrecognized private schools scored nearly 18 percentage points more in math than children in government schools.’ The reason is that on average, they had smaller class sizes, more motivated teachers, all the while spending less than public schools. When parents pay the fees that keep a school afloat, he reasons, the school becomes more accountable to them.

These schools do not get recognition because they do not meet standards—i.e. they do not have a playing field of a certain size and they cannot pay government salaries to teachers (which after the Sixth Pay Commission are around Rs 20,000 per year). If they had to pay those salaries and have those playing fields, the schools would have to quadruple their fees. Then they would no longer be schools for the poor.

Professor Tooley’s pioneering research has turned the conventional wisdom on its head with a profound message of empowering the poor. Instead of being dependent on government and foreign aid, the world’s poor are educating their children with their own rupees. Instead of trying to uproot this beautiful tree and close these schools, governments should help them to obtain some form of graded recognition so that they are not outside the law. The Beautiful Tree is required reading for anyone who cares about achieving universal education in India.

Saturday, December 12, 2009

Bring in reforms to prevent more Kodas

At a smart luncheon party in South Delhi this week something very peculiar happened. Someone blurted out, ‘These high and mighty guests are friends of Madhu Koda!’ This did not go well with our celebrity hostess, to whose discomfort the conversation soon went downhill as people sought the latest ‘juice’ on the Koda scandal. To my surprise, a consensus seemed to emerge that liberalization was at the root cause of corruption.

The link between corruption and economic reforms was also echoed in a cover story in one of our national magazines this week. In an opinion poll conducted by MDRA and the magazine, 83.4% of the people in eight major Indian cities believed that corruption had gone up after the liberalization process. It confirmed to me that people, who are otherwise sensible, still do not get it. They do not understand that corruption persists in India because reforms are incomplete and scams occur in sectors like mining which have not been reformed.

Madhu Koda’s is a rags to riches story. A labourer in a state owned iron ore mine in Chaibasa becomes an MLA in 2000. Five years later he is minister in charge of the lucrative mines portfolio. In 2006, he wins the ultimate prize--he becomes Jharkhand’s chief minister. Along the way he amasses Rs 4000 crores by giving away mining licenses in exchange for bribes, according to the charge-sheet. He turns non-entities into mining barons, gifting 11,100 acres of land to dubious companies. But he shares his wealth with his friends and everyone is happy.

Mining, like defence contracts, is prone to corruption. Extracting resources from the ground does not lend itself to the usual rules of competition. A mine is a natural monopoly and the state, which gives the right to mining, is also a monopoly. The two come together in the backroom and you get crony capitalism. What is the answer? It is not to focus on individuals but to change the system. Simulate competition. Have open, transparent bidding under a firm regulator (like an auction). The regulator evaluates the quantity and quality of coal in a mine, sets a minimum price (to keep out frivolous bidders and cartels) and offers the mine to the highest bidder. This would replace the present corrupt system of leases and licences, of monitoring production at each mine, checking each truck to ensure the operator does not clear 100 trucks and records only 30.

This is a tried and proven system followed in sensible mining countries and it will prevent future Kodas. The petroleum ministry has adopted it in India and it routinely auctions oil and gas fields. The Ambani brothers will not allow us to forget the many contentious issues related to the gas flowing from the Krishna-Godavari basin. But no one has criticised the government of corruption in awarding the gas fields to Mukesh Ambani’s company. The reason is that they were won in an open auction.

It is also important to break the monopoly of Coal India and de-nationalize coal mines which were nationalized by Indira Gandhi in 1973. India is the third largest producer of coal in the world but we have suffered immensely in the past 36 years from the lack of competition. ‘Power plant shut down because of lack of coal’ is a common headline in our local papers. Koda is a creation of this system. Efforts to undo it--Coal Mines (Nationalisation) Amendment Act 2000—remain stuck because politicians in the mining states do not want it.

Good societies do not look to heroes. They quietly reform their institutions. The best news is that we have in Delhi a coal minister, Sriprakash Jaiswal, who wants to reform precisely along the lines outlined above. His ministry is ready with a Bill to set up a regulator and open coal mining to competition. The Koda scandal should give him boost, but this reform will only happen if the entire cabinet and Sonia Gandhi put their weight behind it in order to counter the powerful lobby of mining interests, state politicians and bureaucrats.

The word ‘coda’ means the concluding passage in a composition of Western classical music. The coda in Madhu Koda’s story will hopefully see a speedy trial and a deterrent sentence for the guilty. But the really satisfactory coda will be the reform of the mining sector along the lines of the Hoda Committee report. The Koda story teaches that the answer is more reforms rather than less. Not only economic reforms, we need police reforms to make our investigating agencies autonomous; judicial reforms to speed up justice and deter future Kodas; administrative reforms to punish rotten bureaucrats and reward good ones and bring accountability; finally, political reforms to prevent criminals from entering politics. Only then will dharma rise in our nation. -

Tuesday, December 08, 2009

Wanted : A World Fit For Women

The conviction this week of Ajeet Singh Katiyar in Delhi in the notorious Dhaula Kuan gang rape case of a university student from Mizoram is good news. More important than the conviction is the 71 page judgement of the court which admonished the defence for maligning the victim and maintained that the private life of the victim is irrelevant. ‘A lady who has lost her virginity is not unreliable’ said the judge, whose verdict was primarily based on the victim’s consistent testimony.

We seem to have come a long way from the 1979 case of 16 year old Mathura, who was raped by two policemen within a police compound when the court acquitted the policemen on the grounds that Mathura had eloped with her boyfriend and ‘was habituated to sexual intercourse’. This case ultimately went to the Supreme Court, which sadly upheld the verdict. It became a landmark case, which went on to energise the women’s movement in India.

There were echoes in this week’s judgement of another historic case--that of Hanuffa Khatoon, who was gang raped in 1998 at the Howrah Station by railway employees. In that case, the Supreme Court in an unprecedented judgement held rape to be a violation of the fundamental right to live with human dignity. The court said: ‘Rape is a crime not only against the person of a woman, it is crime against the entire society…Rape is therefore the most hated crime’.

It is to literature that one turns to understand the human moral condition. The Mahabharata offers an amazing moment of insight about women’s status. After Yudhishthira loses everything in the game of dice to Shakuni, Queen Draupadi is dragged by Duhshasana into the assembly of nobles to humiliate her. She cries out, ‘this foul man, disgrace of the Kauravas, is molesting me, and I cannot bear it’. She reveals a right wing conspiracy to steal her husband’s kingdom in a rigged game of dice and looks to the elders in the assembly at Hastinapur for justice. But they fail her. Most disappointing is selfless Bhishma, who says ‘a woman and a slave are the property of others’. In the end, as every Indian child knows, only her never ending sari protects her from being disrobed. By the way, a company offered a ‘Draupadi Collection’ of saris after the successful TV series, which presumably did not stretch infinitely.

The attempted public disrobing of Draupadi is consistent with the moral paradigm of patriarchy. Karna’s revolting remarks show that patriarchical culture divides women into angels and whores. Draupadi has become a ‘whore’ in Kaurava eyes after their ‘defeat’ of the Pandavas. Their big-chested masculinity does not allow them to think that this unhappy person could have been ‘me’. Their wish to humiliate her is also related to the disgust that many men feel towards the sexual act. All cultures contain the seeds of violence when it comes to female sexuality. Tolstoy’s famous novella, The Kreutzer Sonata grew out of the Russian writer’s own relationship with his wife, and it describes the events that lead to her murder. The husband has violent and humiliating sex with her, and he feels miserable each time he rapes her. Since she is merely an object of bestial desire, he decides that he must kill her to put an end to his misery. Only after her death does she become ‘human’ in his eyes.

It is tempting to believe in the cynical French saying that the more something changes the more it remains the same. In two areas, however, there has been dramatic advance in human equality. One is the almost complete elimination of slavery in the world and the other is the recent rise in the status of women, even in urban India. Indian law has done its bit in addressing the issues of property, dowry, and domestic violence (and some claim that it may even have gone too far). But the real change has come with the dramatic rise in women’s education and job opportunities in a rapidly growing economy. Two-thirds of India’s women still live in villages, of course, and they have a long way to go but India is rapidly urbanizing and they too will soon feel the change.

Sunday, November 15, 2009

At last, good news about poverty

If only we would pause and look beyond the horizon of day to day events, we would see a trend of great significance. More people on the earth have risen out of poverty in the past 25 years than at any other time in human history, and this has happened primarily because of sustained high economic growth in India and China. Unlike China which has embraced growth enthusiastically, India has a vast industry of ‘poverty-wallas’, who incessantly raise doubts if our growth is pro-poor.

These ‘growth skeptics’ tend to make our reformers defensive, which slows reforms and the nation loses the potential for even higher growth. Earlier they argued that post-reform growth was ‘jobless’ until recent data has proved them wrong. Nowadays, they usually say, ‘growth but…’ While the type of growth does matter, the truth is that growth in itself is virtuous, and we should celebrate that India is experiencing this miracle.

Now, two experts on poverty have come up with new research which shows that India’s high economic growth since 1991 is, indeed, pro-poor and has decisively reduced poverty. Gaurav Datt and Martin Ravallion, both respected economists, employed a new series of consumption-based poverty measures from 1950 to 2006 and 47 rounds of National Sample Surveys, to show that slightly more than one person in two lived below the poverty line in India during the 1950s and ‘60s. By 1990 this had fallen to one person in three. By 2005, it fell again, and only one in five persons now lives below the poverty line.

The authors conclude that ‘the post-reform process of urban economic growth has brought significant gains to the rural poor as well as the urban poor’. (See ‘Has India’s Economic Growth Become More Pro-Poor in the Wake of Economic Reforms?’, Policy Research Working Paper 5103). The poor in urban and rural areas are now linked through trade, migration, and transfers, which explains why rising standards in India’s towns are helping to reduce poverty in the villages. Even though agricultural growth has been relatively weak since 1991, overall high growth has affected positively the lives of the rural masses.

This is an outcome that the reformers had dreamt of. They believed that the reforms would create a more efficient and productive economy, which would raise the overall growth rate and it would transform both urban and rural society. This had happened during the great transformations which occurred in the West during the 19th century and in East Asia in the second half of the 20th century. It is now happening in India.

An earlier study by the two economists had examined the period prior to 1991 when our economy grew more slowly. India’s per capita GDP grew at an annual rate of barely 1% in the 1960s and 1970s; it picked up to 3% in the 1980s; and accelerated to 4-5% after 1991. In the pre-1991 period, modest urban growth brought little or no benefit to the rural poor. (Rural poverty decreased only through rural growth, such as the green revolution.) High growth after 1991 seems to be different—it has pro-poor backward linkages to the rural economy. Hence, the effort to create a more productive economy through the reforms is benefiting the poor, and we have the permission now to dream of becoming a middle class country. The dampener, alas, is that inequality after 1991 is also increasing.

This happy news, however, must be seen in the context of lost opportunities. If only India had reformed agriculture and had functioning schools and health centers, the poor would have gained even more from high growth. In another study comparing India, China and Brazil, Martin Ravallion shows that China (with higher growth) and Brazil (with lower growth) have done a much better job at poverty reduction. India’s failure in education and health is not a function of money alone, as the Prime Minister suggested this week when he vowed to raise spending on education to 6%. When one in four teachers is absent and one in four is not teaching, we need accountability in delivering services to the poor. Thus, administrative reforms are just as important to the lives of the poor than even economic reforms.


Sunday, October 25, 2009

No ifs or buts, defeat Maoist violence

Arundhati Roy writes seductively. Recently I picked up her new book, Listening to Grasshoppers, and I was mesmerized by her luminous prose but I disagreed profoundly with her conclusions. I was revolted, in particular, by her support for violence. She regards Naxalism as armed resistance against a sham democracy. I call it terrorism.

Roy thinks that India pretends to be a democracy in order to impress the world. I think our democracy is as real as my grandson’s thumb. Yes, it has many flaws but it is legitimate. We need to reform the police; speed up justice; make babus accountable; stop criminals from entering politics; etc.. Yet, this democracy has done a colossal amount of good. It has raised the prospects and self esteem of the lowest in our society and protected us from the great genocides of the 20th century. Gujarat, to its disgrace, may have killed 2000 people but Mao’s China killed more than 50 million, according to the Marxist historian, Eric Hobsbawm. One may be justified in taking up arms against a loathsome African or Latin American dictator but not against the Indian state.

Like many in the 1960s I was a Leftist and admired Charu Mazumdar who had founded the Naxalbari movement. Although I belonged to that idealistic middle class generation, I was not tempted to abandon all and join the Maoists. Perhaps, it was because I lived in sensible Bombay rather than Calcutta. The Naxalite movement died in the 1970s but it revived subsequently and today it operates in 200 districts across ten states and controls huge Indian territory. The Prime Minister thinks it is the greatest security threat to India, and I agree.

Soon after the Maoist leader, Kobad Ghandy, the police in Hazaribagh got another prize catch. On October 10th, they captured Ravi Sharma and his wife, B. Anuradha. Top level Naxalites, they hailed from Andhra but were running the Maoist movement in Bihar and Jharkhand for the past ten years. On their laptop the police found their strategy and their plans. Ravi Sharma is an agricultural scientist and a member of the Maoist Central Committee. As he was being led by the police to the court in Hazaribagh, Sharma told reporters that he did not regret killing thousands of people. “During a revolution,” he spoke honestly, “one does not care how many are killed; only the goal should be achieved.”

Ravi Sharma thus raised the old dilemma of means and ends. Vidura posed the same question in the Mahabharata when he justified sacrificing an individual for the sake of a village and a village for the sake of a nation. Vidura, like Sharma, judges an act to be dharmic if it produces good consequences for the greatest number of people. Yudhishthira, however, is concerned with means rather than ends. Having given his word to Dhritarashtra, he refuses to give in to Draupadi’s insistent demand that Pandavas raise an army and win back their kingdom which was stolen in a rigged game of dice. No matter how great the goal, Yudhishthira would not condone the Maoists’ use of violence.

I usually agree with Vidura but on this one I am with Yudhishthira. Marxists have never valued human life and have always found it easy to take the gun. Mao and Stalin easily justified killing millions for the sake of the revolution. They never understood that violence in the end brutalises both the oppressor and the victim. Neither should we let the Indian state get away by using wrong means for the sake of good ends. I agree with Arundhati Roy that the state should not get away with unlawful detention or killing people in custody. I applaud her and human rights activists for raising these issues.

The Naxalite movement has always found sympathy in our influential, leftish upper middle class. Like most people I was aghast at the beheading of police officer Francis Induwar on September 30 by the Maoists, and I expressed my horror to an elegantly dressed friend who was visiting me. She is with an NGO and has sentimental feelings for Maoists. She said, “Yes, it is wrong, but we need development as well as force to defeat Maoists.” I could not disagree with her, but I was appalled at the ease with which she dismissed the beheading. Mamata Banerji, the leader of Trinamool Congress, had the same response.

For once we have a home minister who understands the Maoist threat to our nation and is determined to act with courage. It is pathetic that he should be slowed by endless debate on development versus police action; or whether helicopters should fire on rebels and risk civilian casualties. We have talked for two decades. Enough is enough. No ifs or buts, you cannot negotiate with someone with a gun. Now is the time for action.
Gurcharan Das is the author of The Difficulty of Being Good: On the Subtle Art of Dharma

Saturday, October 17, 2009

Mukesh’s Sacrifice

Corporate Affairs minister, Salman Khurshid, created quite a stir recently when he warned companies to refrain from paying “vulgar salaries” or face the music. Mukesh Ambani took his advice and cut his salary by 65%. Flaunting wealth is distasteful; it is also imprudent when market capitalism is still trying to find a comfortable home in India. However, the minister was profoundly wrong. The trouble with judging other people’s lifestyle is that soon you are tempted to control other things, and this is a short step to the command economy. Not to live ostentatiously is a call of dharma, not a legal duty.

The distinguished minister, who is a sensible lawyer, quickly realized his error and pulled back the next day. “Only the company’s shareholders can decide salaries…It cannot be mandated, but should be self-exercised,” he said. Yes, this is the right position—only shareholders have the right to fix salaries in a democracy, not the government. The significance of the minister’s two positions, however, goes beyond vulgar salaries and reflects an old conflict between our ideals of liberty and equality.
There is a voice in each of us which values liberty. It was alarmed at the spectre of the dreaded days prior to 1991 when our government did believe that the way to make a poor person rich is by making the rich poor. There is another voice, however, which values equality. This egalitarian voice was sympathetic to Khurshid’s advice to CEOs. Millions are hurting from the global economic recession and something is wrong when some earn Rs 40 crores while 250 million Indians survive on less than Rs 50 a day.

These two voices constitute the modern idea of a fair society. In democracies, liberty precedes equality. Socialist societies value equality more and will sacrifice freedom for more state control. The contest between these two ideals has been going on for 200 years but it ended when the Soviet Union collapsed in 1989. Liberty won, and it will win in China too one day. Absolute equality is unrealistic because the human ego will not shrink that far. So we have learned to live with the lesser goal of an “equality of opportunity”. In our desire for a just society, the political Left continues to champion equality while the Right gives precedence to liberty.

I have always believed that it is none of my business how much Mukesh Ambani earns. He creates lots of jobs, pays his taxes, produces wealth for society--and that is good enough for me. Moreover, we ought to be more concerned with reducing poverty in a poor country rather worry about inequality. Controlling CEO salaries will not lift the poor. But economic reforms will. A minister of corporate affairs can make a huge difference by making it easier for a person to start and run a business. The vast majority of Indians are self-employed entrepreneurs in the informal economy. They cannot enter the formal economy because of formidable barriers of red tape and bribery. Hence, India has the shameful distinction of being 134 in a list of 180 countries in the ease of doing business. Cut the tape, Mr Minister, and you will spawn enterprise and prosperity.

A well-ordered society, however, ought to design institutions that help to diminish inequality while preserving liberty. If the advantages of the affluent are perceived as a reward for improving the situation of the worst off, then the inequality will be perceived as more just. If the lowest worker in a company believes that his prospects will improve if his company performs well, then he will not resent an outstanding CEO earning 50 times more. This was elaborated elegantly by the American thinker, John Rawls, in his famous book, The Theory of Justice.

If you want to take the sting out inequality, Mr Minister, cut red tape but also give the poor titles to their small property so that they can get a loan against it and start a business. And persuade your UPA colleagues to implement labour reforms so that 90% of Indians in the informal economy can hope for some sort of safety net. This is the way to genuine, inclusive growth. And let’s not worry too much about vulgar salaries.

Sunday, September 27, 2009

Is the middle path the way to peace with Pakistan?

The foreign ministers of India and Pakistan are meeting today in New York to carry forward the peace dialogue begun at Sharm-el-Sheikh. India’s decision to meet has been prompted by Pakistan’s arrest of Hafiz Saeed, the mastermind of the Mumbai terror attacks. Many Indians feel cynical, however, about today’s meeting, especially after the disappointment at Sharm-el-Sheikh. Negotiating with a nation whose secret service might be plotting the next terrorist attack on you seems bizarre, but is there an alternative to the slow, maddening grind towards peace with our neighbour?

All of us dream of waking up one day to discover that the border between India and Pakistan had become as peaceful as the one between Canada and United States. It seems hopelessly romantic, but this is precisely what happened to France and Germany who were in perpetual conflict for 75 years. Now one cannot imagine these two European enemies ever going to war. If India and Pakistan could pull this off, we might even realize the vision of C. Rajagopalchari, who wanted the sub-continent to become re-unified into a peaceful confederation of nations like the European Union.

After the terrorist attack on Mumbai on 26/11, Indians were divided over how to respond. The hawks wanted to make a precision attack on the camps of Lashkar-e-Toiba. They modelled their strategy on Israel’s retaliation for the attack of its athletes in Munich. (You can watch it in the thriller, Munich, available on DVD.) The doves, on the other hand, advocated ahimsa, preferring to take the high moral ground and turn the other cheek. The third position was more circumspect and lay between these extremes. It is the policy which the Indian government has patiently pursued--providing dossiers of evidence to Pakistan, hoping that world pressure would force it to act against the terrorists. Will this frustratingly slow middle path reward us with lasting peace?

The Mahabharata seems to think so. Unique in engaging with the world of politics, the epic also had to wrestle with the same three positions. The first was the ‘amoral realism’ of Duryodhana, who believed that ‘might is right’ and when in doubt strike your enemy. At the other extreme was the idealistic position of the early Yudhishthira, who refused to follow Draupadi’s sensible advice, which was to gather an army and win back their kingdom stolen by the Kauravas in a rigged game of dice. The epic also adopted a pragmatic, middle path of negotiation, but when Duryodhana refused to part with the Pandavas’ rightful share, Yudhishthira had to declare war.

Mahabharata would thus reject the hawkish idea of a retaliatory strike against the terrorist camps in Pakistan--not for ideological reasons, but because it would only escalate the conflict. Israel’s many retaliatory strikes against Palestine have failed to ‘teach them a lesson’. It would also reject the dovish high moral ground of ahimsa because ‘turning the other cheek’ sends wrong signals to terrorists and the ISI. It would commend upright Manmohan Singh’s middle path of negotiation. But if negotiations fail, the Indian PM must be prepared to wield danda, ‘the rod of force’, just as Yudhishthira had to.

This pragmatic middle path is akin to the evolutionary principle of reciprocal altruism, which socio-biologists have made popular in recent decades--smile at the world but do not allow yourself to be exploited. Your first move should be of goodness, but if you are slapped, then you have to reciprocate and slap back. Many Indians believe that our government is not following this sensible advice. We are either too conciliatory or too scared of Pakistan’s nuclear weapons. Hence, Pakistan thinks us weak, and its secret service has no qualms in planning its next terrorist strike.

This is not entirely true. We may be unwilling to play ‘tit-for-tat’ but we have never compromised on our basic principles. Take Kashmir. Pakistan believes that peace with India depends on settling the Kashmir dispute, which is a doubtful proposition. India has held firmly that the answer to Kashmir lies in getting everyone to accept the line of control as the permanent border. It is true we have lost many historic opportunities to achieve this. Our best chance was after the Bangladesh War when we should have made it a condition at the Simla Conference for the exchange of Pakistani officers and soldiers.

As the bigger and more powerful nation India has to be more conciliatory. As the world’s second fastest growing economy, we cannot afford to be distracted by interminable ‘tit for tats’. Yes, Pakistan does drag us into a pit of identity politics, hobbles us at every step, and sidetracks us from our real destiny. This is all the more reason to accept the slow, hard and frustrating grind towards a negotiated peace. In the meantime, the best medicine is to try and ignore Pakistan.

Saturday, September 19, 2009

Let’s protect workers, not jobs

Anyone travelling in India by air must have got a sinking feeling last week when the Congress leader, Sanjay Nirupam, demanded that Jet Airways be nationalized. He raised the spectre of the ugly days when Indian Airlines had a monopoly of the skies before 1991. This would have effectively turned Jet Airlines from one of the world’s best airlines to one of the worst. Naresh Goyal, Jet’s founder, on the other hand, was scared of his pilots forming a union because of his memory of the 1974 Air India pilots’ strike which started the decline and fall of Air India.

The trouble in Jet Airways began when some of its pilots wanted to form a union. The management said 'no', and sacked two of the leaders. In response, the other pilots went on ‘mass sick leave’, which left tens of thousands of passengers stranded, wondering who to blame for their undeserved suffering. This comes at a time when the aviation industry is going through very tough times and Jet Airways has reported a loss of over Rs.200 crore in the last quarter. The strike added another Rs 200 crores to its losses.

The Mumbai High Court ruled the strike illegal. After the dispute was settled last week end, Justice D.Y. Chandrachud, refused to drop the charges against the pilots. Reflecting the angry public mood, he wanted to prosecute the pilots for contempt of court. “Employees of public utility services…cannot hold the public to ransom”, said the judge. The pilots’ lawyer argued, “Pilots are an emotional lot and have a sensitive task”. The judge countered, “Even doctors and judges have sensitive jobs”.

The right to form a union is part of every democracy but should pilots, who earn Rs 3-4 lakhs a month, be equated with down trodden labour? Should persons who perform essential services in public transport, military, police, and hospitals, be allowed to disrupt services? The judge obviously does not think so.

The Jet Airways affaire is an opportunity to revisit our archaic labour laws which hurt the interest of 90% of India’s employees while protecting an aristocracy like the pilots. Of course, labour laws are needed, but they should protect workers, not jobs. All governments try to prevent job losses but they never succeed. Companies have to survive in dynamic market conditions. In a downturn, orders are reduced from customers and the only choice before a company is to reduce its workforce or go bankrupt. Sensible countries, like those in Scandinavia, give employers the freedom to hire and lay-off workers based on market dynamics. They protect workers who lose jobs through a well designed safety net of unemployment insurance and re-training. .

India’s labour laws do the opposite—they protect jobs, not workers. They assume that a job is for a lifetime, and do not allow employers flexibility to lay-off workers in a downturn. Thus, Indian companies avoid hiring permanent employees, and 90% of India’s workers have ended up in the informal sector without any benefits or safety net. This is one of the reasons that the manufacturing sector has not become an engine of mass employment in India as it has in the Far East.

The answer is not to equate income security with job security. Let us begin by raising job retrenchment costs from the present15 days’ salary for every year worked to 45 or even 60 days. Second, amend Provident Fund rules so that employees can access their retirement accounts when they lose jobs. Third, raise the contribution to Provident Fund in order to provide a softer landing to job losers. Fourth, cover unemployed workers under a universal health insurance, such as the excellent RSBY (Rashtriya Swasth Bima Yojana). Finally, companies should pay for worker re-training and inflict pain on all employees before laying-off some—e.g. cut executive salaries by 50% (as Jet Airways has done) and worker salaries by 25%. Unions will object of course, but the reform of unions has to be part of the solution.

The Jet Airways strike has presented us with a mirror to look at our labour laws, showing how we deceive ourselves, thinking that we are protecting labour when we are only protecting an aristocracy like the pilots.

Sunday, September 06, 2009

The dilemma of a liberal Hindu

With the rise in religious fundamentalism around the world, it is increasingly difficult to talk about one’s deepest beliefs, says Gurcharan Das

I was born a Hindu, in a normal middle-class home. I went to an English-medium school where I got a modern education. Both my grandfathers belonged to the Arya Samaj, a reformist sect of Hinduism. My father, however, took a different path. While studying to be an engineer, he was drawn to a kindly guru who inspired him with the possibility of direct union with God through meditation. The guru was a Radhasoami saint, who quoted vigorously from Kabir, Nanak, Mirabai, Bulleh Shah and others from the bhakti and sufi traditions.

Growing up Hindu was a chaotically tolerant experience. My grandmother visited the Sikh gurudwara on Mondays and Wednesdays and a Hindu temple on Tuesdays and Thursdays; she saved Saturdays and Sundays for discourses by holy men, including Muslim pirs, who were forever visiting our town. In between, she made time for Arya Samaj ceremonies when someone died or was born. Her dressing room was laden with the images of her gods, especially Ram and Krishna and she used to say in the same breath that there are millions of gods but only one God. My grandfather would laugh at her ways, but my pragmatic uncle thought that she had smartly taken out plenty of insurance so that someone up there would eventually listen.

I grew up in this atmosphere with a liberal attitude - that is a mixture of scepticism and sympathy for my tradition. Why then do I feel uneasy about being a liberal Hindu? I feel besieged from both ends — from the Hindu nationalists and the secularists. Something seems to have gone wrong. Hindu nationalists have appropriated my past and made it into a political statement of Hindutva. Secularists have contempt for all forms of belief and they find it odd that I should cling to my Hindu past. Young, successful Indians, at the helm of our private and public enterprises, have no time or use for the classics of our ancient tradition.

A few years ago, I told my wife that I wanted to read the Mahabharata in its entirety. I explained that I had read the Western epics but not the Indian ones. She gave me a sceptical look, and said, “It’s a little late in the day to be having a mid-life crisis, isn’t it?” To my chagrin, I became the subject of animated discussion at a dinner party soon after.

“So, what is this I hear about wanting to go away to read old books”, asked my hostess, “aren’t there any new ones?” She gave my wife a sympathetic look.

“Tell us, what you plan to read?” asked a retired civil servant who had once been a favourite of Indira Gandhi. He spoke casually as though he was referring to the features of a new Nokia phone. I admitted that I had been thinking of the Mahabharata.

“Good lord, man!” he exclaimed. “You haven’t turned saffron, have you?”

I think his remark was made in jest, but it upset me. I found it disturbing that I had to fear the intolerance of my “secular” friends, who seemed to think that reading an epic was a political act. I was reminded of a casual remark by a Westernized woman in Chennai who said that she had always visited a Shiva temple near her home, but lately she had begun to hide this from her fiercely secular friends, who she feared might paint her in saffron.

With the rise in religious fundamentalism around the world, it is increasingly difficult to talk about one’s deepest beliefs. Liberal Hindus are reluctant to admit to being Hindu for fear they will be linked to the RSS. Liberal Christians and liberal Muslims abroad have had the same experience. Part of the reason that the sensible idea of secularism is having so much difficulty finding a home in India is that the most vocal and intellectual advocates of secularism were once Marxists. Not only do they not believe in God, they actually hate God. As rationalists they can only see the dark side of religion -- intolerance, murderous wars and nationalism and cannot empathize with the everyday life of the common Indian for whom religion gives meaning to every moment. Secularists speak a language alien to the vast majority, so they are only able to condemn communal violence but not to stop it, as Mahatma Gandhi could, in East Bengal in 1947.

Part of the problem stems from ignorance. Our children do not grow up reading our ancient classics, certainly not with a critical mind as youth in the West read their works of literature and philosophy in school and college. In India, some get to know about epics from their grandmothers; others read the stories in Amar Chitra Katha comics or watch them in television serials.
If Italian children can read Dante’s Divine Comedy in school, English children can read Milton and Greek children can read the Illiad, why should “secularist” Indians be ambivalent about the Mahabharata? It is true that the Mahabharata has lots of gods and in particular that elusive divinity, Krishna, who is up to all kinds of devious activities. But so are Dante, Milton and Homer filled with God or gods?

I suspect Mahatma Gandhi would have understood my dilemma about teaching the Mahabharata in our schools. He instinctively grasped the place of the epic in an Indian life and he would have approved of what V S Sukthankar wrote: “The Mahabharata is the content of our collective unconscious .... We must therefore grasp this great book with both hands and face it squarely. Then we shall recognize that it is our past which has prolonged itself into the present. We are it." The epic has given me great enjoyment in the past six years and I have become a Mahabharata addict. I feel sad that so many boys and girls in India are growing up rootless, and they will never have access to these forbidden fruits of pleasure.

As we think about sowing the seeds of secularism in India, we cannot just divide Indians between communalists and secularists. That would be too easy. The average Indian is decent and is caught in the middle. To achieve a secular society, believers must tolerate each other’s beliefs as well as the atheism of non-believers. Hindu nationalists must resist hijacking our religious past and turning it into votes. Secularists must learn to respect the needs of ordinary Indians for a transcendental life beyond reason. Only then will secularism find a comfortable home in India.

Friday, August 21, 2009

Adam Smith's Dharma

In January this year, President Sarkozy of France, former Prime Minister Tony Blair of England, and the German Chancellor, Angela Merkel, kicked off a debate in Paris on the nature and the future of capitalism. It was in response to the global economic crisis. This article--my inaugural column for the Times on Saturday--is a contribution to this debate.

The idea that an ancient Indian epic might offer insight into capitalism’s nature, on the face of it, appears bizarre. The truth is that the Mahabharata’s world of moral haziness is far closer to our experience as ordinary human beings than the narrow and rigid positions that define debate in these fundamentalist times. Capitalism is also about ordinary persons--buying and selling goods in the market place.

The Mahabharata believes that human beings are flawed and these flaws make our world ‘uneven’, vishama--making us vulnerable to nasty surprises. Duryodhana is one of the chief causes of ‘uneveness’ in the epic. Others too have their flaws--Yudhishthira’s weakness for gambling, Karna’s status anxiety, Ashwatthama’s revengeful nature, Dhritarashtra’s excessive love for his eldest son, and so on. These defects are dangerous and they drive the epic towards calamity. Investment bankers on Wall Street and rating agencies suffered from similar infirmities. And they have brought the global capitalist system to its knees.

John Maynard Keynes, the great economist, had a comparable insight about our ‘uneven’ world. He lived during the Great Depression when there were also many calls to end capitalism. The unevenness of the world is caused by what Keynes called, ‘animal spirits’, which drive businessmen to take risks, often in the face of insufficient knowledge. John Nash, the Nobel Prize winning hero of the movie, A Beautiful Mind, traced this to ‘asymmetries of information’. And this leads to crises--such as the dotcom bubble, in which many sensible persons quit their jobs in order to make a fortune. It burst in 2000 but was soon replaced by another mania of the ‘smart flippers of securitized mortgages of sub-prime properties’, which sent the world into a recession in 2007. Keynes believed that a capitalist economy left to itself is unstable, and needs state regulation.

Standard economic theory makes the mistake in ignoring the role of human passions and animal spirits. Ever since Adam Smith, classical economics has assumed that capitalism is inherently stable. People buy and sell rationally, and this results in equilibrium. Classical economics ignores vishama--that people get into manias and even paan-wallas start buying shares on the basis of rumours. When manias take over there are bubbles and when bubbles are pricked confidence falls sharply and the whole economy collapses. Hence, we need regulation to ensure people are not falsely lured into buy bad assets. This regulation, however, must not kill the ‘animal spirits’ of entrepreneurs, which is what happened in India during the ugly days of the License Raj…and we almost lost two generations.

If Keynes thinks the answer lies in regulation, the Mahabharata seeks to ‘even’ out the world through dharma. Dharma is a complex word—it means virtue, duty, law, religion depending on the context, but it is chiefly concerned with doing the right thing. The Mahabharata recognizes that it is in man's nature to want more. Dharma seeks to give coherence to our desires by containing them within an ethical life. No amount of regulation will catch all the Duryodhanas and the Ramalingam Rajus of the world. What is needed is self-restraint on the part of each actor in the market place in order to build trust within society. The sunny world of Adam Smith may have been a tad optimistic, but Smith understood the importance of trust which underlies each transaction in the marketplace. This trust is the ‘dharma of capitalism’.

Regulators and central bankers around the world are wrestling with how to reform their financial systems. They are expending huge energy in debates between the political Left and the Right when the greater divide is between conduct in accordance with dharma and adharma. It is not enough to punish Ramalingam Raju. Institutions must also develop a culture of self-restraint and reward an act of goodness--one of the very few things of genuine worth in this world.
The writer is the author of the book, ‘The Difficulty of Being Good: On the Subtle Art of Dharma’, which examines the ambiguous moral life of India under the lens of the Mahabharata. It is being launched next week.

Tuesday, August 18, 2009

An old tale of two modern brothers

Once upon a time there was an ambitious young man named Mukesh Ambani who invested Rs 38,000 crores to look for gas, deep on the ocean’s floor off the turbulent coast of Andhra Pradesh. Some called him mad. If ONGC, the government exploration company, did not find anything after wasting thousands of crores of taxpayer’s money for decades, how could he risk his and his shareholder’s money in this reckless manner? What if nothing was found?

They did not know that Mukesh is one of life’s winners. Not only did he find the gas but the amount was beyond anyone’s wildest dreams. It was the biggest energy discovery in the world at the time. More impressive still, he has brought it into comercial production in half the normal time, thus creating another world record. No wonder he is a hero to millions. His breakthrough will reduce significantly the nation’s energy bill for importing oil and it reinforces our faith in private exploration. And there is still much more gas under the ocean floor, according to experts--Myanmar has also found gas at its end of the same ocean. Given the nation’s desperate need for energy, we must hurry and find it.

Mukesh Ambani has a younger, more flamboyant brother named Anil, who is also highly accomplished. But he has a different temperament--he loves glamour and power and cultivates politicians and film stars. In fact, he is married to one. All this does not not go down well with his sober, older brother. After their father died, power passed on to Mukesh. Since he did not trust Anil, he ignored and marginalized him. Anil fought back. After a fearsome battle, their mother intervened and divided the business. We have a saying in India: “Haveli ki umar saath saal”, which means the life of a business house is 60 years. After that the family splits up, usually in the third generation. But the Ambani brothers have split up in the second.

As part of the family division, Mukesh agreed to provide gas to a power plant which Anil intended to put up in U.P. at a price of $2.34 per mmbtu. This was the price that Mukesh also agreed to supply NTPC, the mamoth government owned power producer. Mukesh refuses to honour these contracts. He claims that the official price is $4.20, which is also closer to today’s market price (based on actual bids made in April 2007). The difference in the two prices is worth tens of thousands of crores. So, a lot is at stake. Both the brothers, it seems to me, have a strong case, which is now before the Supreme Court, and I am glad I am not the judge.

Normally a fight between two brothers should not matter to the nation. But it does in this case. The quantity of gas is so vast that it affects the nation’s finances. A lower energy price also means lower inflation—it means a lower government subsidy to fertilizer and power plants. But a lower price also implies that the government will make a huge loss from its revenue sharing contract with Mukesh. Hence, the court has to bear in mind the interests of both the producers and the consumers of gas.

Whatever the outcome in the court, it is crucial that the image of India as a mature democracy with a rule of law is protected. Only then can we hope to attract investor-explorers in the future. They are all set to gamble vast sums without any certainty of finding the gas. They should at least have the comfort that they are dealing with a trustworthy government, which will not nationalize, nor change the rules of the game midway, and will uphold their contract. If the court judgement upholds the lower price, it will certainly dampen the spirits of investors. On the other hand, by upholding the prior contract between the brothers, the court will also send a positive signal to future investors that the rule of law prevails in India.

Investors are thus watching the government carefully. The state should not take sides in private conflicts. It should be neutral and fair. This is how trust is built. But last month Anil Ambani attacked Murli Deora, the petroleum minister, at the annual meeting of his company. He suggested that something smelled rotten—the government was favouring Mukesh. The suggestion of crony capitalism has shaken the confidence of investors. I cannot remember the last time when a businessman had the guts to publicly attack a cabinet minister. Businessmen have too much to lose--tax raids, denial of licenses and loans from public institutions. Why did Anil Ambani take this risk? Wait for the next episode.
Gurcharan Das is the author of The Difficulty of Being Good: On the Subtle Art of Dharma, which interrogates the Mahabharata in order to answer the question, ‘why be good?’ It is being launched on August 25th.

Friday, July 17, 2009

Scenes from a Punjabi Childhood

It was around four ‘o clock in the afternoon that my grandfather used to come home from the courts. We would eagerly await his arrival since he always brought home fresh sweets from the Bengali hunchback’s shop. As he approached the wooden gate of the house he would clear his throat, and this was a signal of sorts. His daughter- in- law would quickly cover her head; my grandmother would go to the kitchen and put water on for tea; we, his grandchildren, knew that it was the last round of dice in our afternoon game of Pachisi before the scores were tallied. This family routine persisted right through the 1940s.

My grandfather had other uses for his harsh, grating cry . When he cleared his throat in his office, his client knew that the interview was over, not unlike the government officer who signals the end of a meeting by noisily pushing back his chair. Occasionally, my grandfather would strike terror in the witness’s heart with the same piercing sound in the middle of an interrogation.
As we settled down to tea, my grandfather would ask, ‘So, what’s happening?’
‘Nothing much’, my uncle would reply nonchalantly, ‘Gandhi and Nehru were arrested again today ’.

My grandfather would grunt and the conversation would move on. We were a professional, middle-class family, not particularly given to patriotic enthusiasms. We were more interested in the latest scandal in our neighbourhood that had been uncovered by my uncle. Men like my grandfather were typical of a new professional middle class that had emerged in the late 19th century in the Punjab with the introduction of western education. It consisted of lawyers, post masters, railway engineers, medical and forest officers, and of course, bureaucrats and clerks.--all the new professions that were needed to run a province. Since passing an exam was the only barrier to entry, its members came from various castes and backgrounds. Although opportunities were open to all, the upper castes were the first to seize them. Once you learned English, cleared an exam, rewards and prestige were showered upon you. You became the new westernized urban elite whose rise matched the decline of the landed gentry.

My father was a civil engineer with the Punjab government and he spent his days building irrigation canals and bringing water to the parched land. I shuttled as a baby on the lap of my mother between canal colonies and my maternal grandfather’s sprawling home in Lyallpur. Most of Punjab was arid, but over three generations, the vision and toil of engineers like my father had created a network of canals that irrigated the land and turned it into a granary. The lower Chenab canal was one of the first to be built in the last quarter of the 19th century. With it came the orderly and planned town of Lyallpur, named after Sir James Lyall, the Lt. Governor of the Punjab. My grandfather proudly moved there in the early part of the twentieth century to start a law practice. And it was where I was born soon after Mahatma Gandhi challenged the British to ‘Quit India’ in 1942.

In the middle of Lyallpur was a brick clock tower from where eight roads emanated and a town spread out in concentric circles. Our house was off one of these roads called Kacheri Bazaar and the district courts were located there. Our road connected the tower with the sumptuous gardens of the Company Bagh which sprawled over forty acres. Since it was hot in the summers and cold in the winters, our daily life varied considerably with the seasons. We spent most of the day in our open courtyard where most of the business of the house was transacted. In the summers, we moved from the courtyard to the covered veranda before the sun rose too high. By midday, it was very hot and we went deeper into the cooler rooms inside. The bamboo shades came down after lunch as the house prepared for sleep. We returned to the courtyard in the early evening after the mashkiya had sprinkled cool water on it from his bag of goatskin. We even slept in the courtyard on hot summer nights and watched the brilliant stars high above. In the winters, this process was reversed. We slept inside and came out gradually with the morning sun. We spent most of the day in its luxurious warmth, shifting our chairs and charpais according to the sun’s path, and only returned inside at sunset.

Grandfather’s house was one of the first to come up in Kacheri Bazaar. He had been young and ambitious in the early years of the century with all the confidence of a man on the way up. He was filled with hope, thinking that the British were doing some good in India. Their railways had bridged the country and their canals had made a huge difference to the economy of the Punjab. But their best contribution, he felt, was the rule of law. As a lawyer he had experienced English justice first hand, and he reminded us more than once that English magistrates were mostly fair and decent.

As we sat drinking tea in the courtyard, grandfather would tell us of his latest case in court. My uncle would sometimes interrupt with an appreciative remark about the quality of the hunchback’s sweets. Conversation was the great pastime in our house. If two persons were together they would not read or work, they would sit down with a cup of tea and talk. And they could talk for hours about people they had never met. One day to our dismay, grandfather did not back bring sweets. He brought fruit instead. The house immediately rose up in revolt. Grandfather explained patiently that sweets were bad for us, and in the end he had to pull out all his lawyer’s tricks in order to persuade us. So, we switched reluctantly to eating fruit, and the air began to smell of mangoes and leechies in the summer and oranges and maltas in the winter. But for months we talked nostalgically of the hunchback’s sweets.

Grandfather valued routine, and at five o’clock his friends would arrive to play bridge. Some of them smoked the hookah while they played. Soon afterwards the family barber appeared and he gave give each bridge-player a shave, and would even oblige with a haircut if needed. After playing a few rubbers, grandfather would get up, ask for his cane and leave with his friends for the Company Bagh. As they walked, they talked about the politics of Lyallpur and of India, and in particular the growing distance between Hindus and Muslims.

In the gardens, grandfather was drawn to the odours exhaled by the exotic plants. Although his friends preferred the colourful beds of English flowers neatly laid out during our brief spring season, he was pulled by the fleshy, erotic scents of the magnolias, the jasmine and other decadent vegetation. He told us one day how he had been filled with nausea on learning that they had found the corpse of a Hindu boy in the carnation beds. The innocent boy had been stabbed by a Muslim youth and had come here to die all alone amidst the fragrance of the magnolias. They had found him face downwards, his face covered in vomit, his nails clinging to the soil. They had turned him over and he had covered the handsome face with his white handkerchief.
‘What did he die for, this poor boy?’ grandfather exclaimed when he returned home.
There were increasing incidents of violence between Hindus and Muslims throughout my childhood. One day when I was four my aunt had pulled me away from the window, and closed the shutters because a Muslim mob had begun to throw stones at our Hindu neighbour’s house. Grandfather talked about the madness of Hindus and Muslims killing each other ever since Jinnah had brought the possibility of a homeland for Punjab’s Muslims. Who would have thought, he said, that this would be the consequence of India’s struggle for freedom from colonial rule? His bridge friends reassured him that Hindus and Muslims had lived together for hundreds of years and they would continue to do so for hundreds more. It was merely a temporary insanity. After all, they were the same people--Indian Muslims were mostly converted Hindus. But we feared the worst.

After returning from the Company Bagh, grandfather would sit in his cane chair and watch the fading summer light in the courtyard. I sometimes joined him. We would watch my grandmother lead the women to the roof of the house in order to perform the sandhya. With lighted earthen lamps the women would chant Sanskrit verses in praise of the evening and the setting sun. Listening to them from below, grandfather had once observed with a smile that not a single one of them understood what she was saying.

My grandfather’s status had risen gradually over the previous decade as he had gradually married off his daughters, one by one, to Class I officials of the colonial bureaucracy. The eldest had married an official in the Indian Railways, who had impressed us with his luxurious salon-on-wheels in which he once came to visit us in Lyallpur. The second girl had married a professor of English in the prestigious government college at Lahore. He was an accomplished tennis and bridge player and this gave him an entry into a social world denied to the rest of the family. When he came to visit us in Lyallpur, he did not fail to drop important names casually in his conversation. The third, my mother, married a civil engineer in the Punjab government’s department of irrigation; and the fourth an officer in the Indian army. By marrying his daughters shrewdly to high-ranking professionals rather than to landlords, who were in fact wealthier than these officials, my grandfather bought social status and security for his family. And so we rose from the middle to the upper middle class within a generation.

As he rose in the world, grandfather became more finicky about his clothes. I would watch him change before he went out in the mornings. The servant would bring him polished shoes and helped him to put them on. Then he assisted him with his coat. Finally, it was time for the turban, an important moment, when all conversation was suspended. He wore his turban in a particular fashion, which he had learned from a stylish lawyer who had recently returned from Lahore, the capital of fashion. He made one, two, and then three turns around his head with the starched white cloth, and it was done. The servant offered him a silk handkerchief and his gold watch. He saw himself in the mirror and twirled his moustache. He looked a man of substance as he opened the gate and strutted off to his chambers.

After he left, my grandmother would get ready to do her social rounds in Lyallpur. She would be dressed in a starched white sari and she would often ask me to join her. We would set off at ten or eleven in the morning in our horse-drawn carriage, sometimes to mourn a death and other times to celebrate a birth or even an engagement. On the way we had to sometimes go through Civil Lines where the small British community and westernized Indians lived. The avenues would become broader and the bungalows more spacious. We passed the imposing Government House where the District Collector lived. It was a dazzling white building surrounded by colonnaded verandas set amidst acres of green lawn. Against the boundary wall there was an occasional splash of red or white bougainvillaea. The overall effect befitted the dignity of the district’s highest official. Next to it was the equally imposing government college surrounded by playing fields.

As our carriage went along the geometrically laid out roads and past the curving gravel driveways of the lesser officials of the Raj, my grandmother observed that the smells in this part of the town were different from ours. I once asked her why we could not live like this, in a stately house with green lawns amidst these splendid avenues shaded by trees. She replied that she would feel lonely here. She liked the bustle of the town, and she had got used to the high walls of her courtyard. My grandmother felt sure that she would feel naked in these ‘inside-out’ houses where the verandas and gardens faced the outside. It was not natural to live like this, she added

It was unnatural in another respect as well, and I understood this many years later. Civil Lines certainly had an unmistakeably different atmosphere from the chaotic part of the town where we lived, but it was not English either. Years later I visited England when I was grown up. I searched for our Civil Lines there but I did not find it. Our sun is too strong, our land is too flat, and these buildings were too imposing. Our alien rulers may have tried to create a bit of England, but they had not succeeded. Civil Lines was an imperial, intrusive, and antiseptic imposition and it was alien to both races.

During our journeys about town my grandmother would sometimes tell me a story from the Mahabharata. I would listen in fear and pity to her account of the epic’s great heroes. She had no doubt that the events actually happened. They had taken place before our degraded age. In those days, gods used to mingle with men, and human beings were more inclined to adhere to the highest ethics of dharma. Grandmother had a sense of cosmic time and she believed that the epic was a true account of the deeds of her righteous ancestors in the Punjab, who with the aid of the God, Sri Krishna, defeated unrighteous foes. For her the Mahabharata was not merely an epic—it was a divine work.

I was born a Hindu and had a Hindu upbringing. My grandfather belonged to the Arya Samaj, a reformist sect that had come up in the nineteenth century. Our ancestors did not have a living memory of their own political heritage and this must have been difficult. We had lived under Muslim rulers since the 13th century and had regarded political life as something filled with deprivation and fear. After the Muslims, we saw the rise of the Sikh kingdom of Ranjit Singh, and with its collapse around 1850 came the powerful British with Christian missionaries in tow. Thus, three powerful, professedly egalitarian and proselytizing religions surrounded us--Islam, Sikhism and Christianity. And so I can understand why my ancestors were eager to receive the Gujarati reformer, Dayananda Saraswati, who established the Arya Samaj in the Punjab in the second half of the nineteenth century. He advocated a return to the Vedas, a diminished role for Brahmins and vigorous social reform. He ‘modernized’ our Hinduism.
‘Arya’ in Sanskrit means ‘noble’ among other things. European scholars in the nineteenth century took this ancient word from the Vedic texts to propagate a racial theory of ‘Aryan’ origins of Hindu culture and society based on a common Indo-European language system. We embraced this idea enthusiastically for it related us racially to European Aryans. Arya Samaj had the positive impact of helping to create a nationalist sentiment among the new Punjabi middle classes for freedom and independence from Britain. The invention of an Aryan race in nineteenth century Europe had tragic consequences for Europe, culminating in the ideology of Nazi Germany. Half a century after the Second World War, the word ‘Aryan’ evokes repulsive memories of Nazism and is thoroughly discredited in the West. In India, however, it has been revived, curiously enough, with the rise of Hindu nationalism and the ascent of the Bhartiya Janata Party.

The Arya Samaj started many schools in the Punjab and my father went to one of these, the Dayanand Anglo-Vedic (D.A.V) School, in Lahore. After completing it, he passed the entrance examination to the coveted Roorkee Engineering College, which had been set up by the British in the mid-nineteenth century to train civil engineers who were to build the growing network of irrigation canals and roads in the Punjab and the United Provinces. By the time my father went to Roorkee in 1931, there was a growing Punjabi middle class. Roorkee was a fine place. It not only gave my father an excellent technical education, it also fostered intellectual curiosity and introduced him to modern ways. He learned to ride, to play tennis and to think for himself. Oddly enough, it also made him deeply curious about the spiritual life.

Two years later, my father came home triumphantly waving a coveted degree. This was in 1933 in the middle of the Great Depression when the Punjab government had stopped hiring irrigation engineers. But he was patient. He bided his time, and eventually he got into the government the following year. During the year of waiting, he embarked on a spiritual quest. He found a mystically-inclined Guru who had an ashram on the banks of the Beas River; through him, he developed a lasting passion for the spiritual life. The Guru was a sant of the Radhasoami sect, descended intellectually from medieval bhakti and sufi traditions that gave him about the possibility of direct union with God through devotion and meditation. His modern mind appealed to my father’s rational, engineer’s temper. So, my father turned away from the Arya Samaj.
My maternal grandmother in Lyallpur remained a traditional Hindu when everyone was rushing to join the Arya Samaj. Her dressing room was filled with the images of her many gods, prominent among them Krishna and Rama, and she would say in the same breath that there are millions of gods but only one God. Her eclecticism did not stop there. She would visit the Sikh gurdwara on Mondays and Wednesdays, a Hindu temple on Tuesdays and Thursdays and she saved Saturdays and Sundays for discourses by holy men, including Muslim pirs, who were forever visiting our town. In between, she made time for Arya Samaj ceremonies when anyone was born, married, or died. My grandfather used to jest that she had taken out lots of insurances—at least someone up there might listen to her. My father’s mysticism, my grandfather’s Arya Samaj and my grandmother’s traditional Hinduism seem to have coexisted in a chaotic sort of way without causing disharmony in my mind. Amidst this religious pluralism, I have grown up with a liberal attitude and temper that is a mixture of scepticism and sympathy for the Hindu way of life.

Our family in Lyallpur had a hypocritical attitude towards money. Officially, we did not accord it a high place, but, in fact, we loved it. Although we professed a low opinion of the bania commercial castes, grandfather was not above money-lending. Belonging to the Arora sub-caste, we thought we had descended from ruling families from mythical times. Aroras and Khatris were the dominant castes of urban Punjab, although Khatris thought they had a higher status. Both of us, however, engaged in commerce and were also functionaries at princely courts. When the British came in the mid- nineteenth century, both were among the first to embrace western learning and the modern professions. Although Brahmins were superior to us in caste hierarchy, they lost their social position because they were slow to learn English and confined themselves to studying Sanskrit and to religious duties.

I remember my grandmother used to admonish our bania grocer for manipulating his weighing scale. It was the same with the family jeweller, but she treated him with more finesse. She would also scold her son for wasting his pocket money on “adulterated” ice cream. Each commercial transaction, it seems, was a challenge in our lives. It was always a case of us—educated, honest, middle- class citizens—versus them—tax dodging, street-smart banias. We may have looked down on banias, but we loved the bazaar. The most famous bazaar in the Punjab was Lahore’s Anarkali, and to shop in it was the fondest wish of every Punjabi. People came from all over the Northwest to taste its fun, gaiety, and laughter. All of Anarkali’s women, they used to say, were beautiful, and all its men handsome. And if something could not be had in Anarkali it was probably not worth having. For this and other reasons, they called it ‘paradise on earth.’

The great event of the year was our annual visit to the orchards of my great aunts who lived in Gujranwala district. It took weeks of planning and co-ordinating and there was much excitement and bustle in our Lyallpur house before we left. The entire family went by train from Lyallpur to Gujranwala, and along the way, at different stops, other relatives would join our train, and by the time we arrived, we had become a great big clan party. At the railway station at Gujranwala, we piled onto sad-looking tongas, and amidst much merry making, we headed for the prosperous orchards of our country cousins.

Their prosperity as landlords was recent. It had come with the canal. With water available in plenty, they began to grow fruit that was transported by agents to far away places like Lahore. There was a sharp divide in attitudes between our cousins and us. We were from the town and we considered ourselves superior even though they were wealthier. They owned lands but we were better educated. We felt squeamish about their bathroom and lavatory arrangements but they were more generous and their big-heartedness always won us over. My grandfather once observed that more than anything else it was the English language that divided us from our Gujranwala family. They had the money but we held the status. When Punjab was partitioned in 1947, they suffered far more than we did. All of us became refugees--both Gujranwala and Lyallpur went to Pakistan. But they lost their lands, and they became poor. We were educated and we could get jobs and get going.

My stay in Lyallpur with my grandparents came to an end when my father found a house in a canal colony in the Hisar district of East Punjab. We went by train and stopped en route at his Guru’s ashram. My father wanted to receive the Guru’s darshan, which he believed held the power to protect us and give us spiritual moorings. My father’s mother had also accompanied us to the ashram and she impulsively placed me at the Guru’s feet and asked him to give me a name. She suspected that my mother had given me my name, Ashok Kumar, because she thought my mother was secretly in love with the movie star of the same name. His film Achhut Kanya, produced by Bombay Talkies, had been a big hit in the cinemas of Lahore, Lyallpur, and in the rest of Punjab.

‘Since you have placed him at my feet, let us call him ‘Guru Charan Das’, he said with a smile. Thus, I was transformed overnight from the ‘prince of happiness’ to the humble ‘servant of the guru’s feet’. The Guru must have known that this child needed to be reminded about the virtue of humility every day. The first two parts of my name became gradually condensed into one, but it did nothing to make me humble or spiritual.

My mother was visibly unhappy in the canal colony. She felt lonely and the vast, unbroken horizon on the dusty, treeless plains of Hisar added to her sense of isolation. She missed her family, her friends and the comforts of Lyallpur. She was also anxious because I got diarrhoea soon after we arrived. Her only comfort was the continuing monotonous sound of the running canal behind our house. My father was a quiet and shy man and at first his silence also troubled her, but she got used to doing all the talking. As a sub-divisional officer, he was the most important official of the Raj for miles. His job was to maintain his portion of the canal, making sure that the water flowed efficiently through smaller distribution channels to the farmers’ fields. This was difficult at times because some farmer would invariably divert his neighbour’s water, and this led to a quarrel - and even murder. In such a situation, he became the judge.
The few buildings in the canal colony were of brick. They had flat roofs with wide verandas, all white washed inside as dictated by the Public Works Department. My mother tried to make friends with the wives of the overseers but she found them uneducated and could not resist a feeling of superiority. She liked being the wife of an important official. The farmers overwhelmed her with gifts of grains and vegetables from the fields, but my father invariably returned them. They were a bribe and he knew that the price he would have to pay, and it would be to look the other way when the farmer illegally widened the water channel to his field.

After eighteen months in Hisar my father was transferred to a desk job in the government’s irrigation department in Lahore. After the canal post, my mother was thrilled to be in the capital city of Punjab where she had been to college and had many friends. My father got a modest house in a middle-class area, not too far from the sprawling Lawrence Gardens, presided over by a statue of John Lawrence, the ‘Lord Sahib of India’. It was our first real home and my mother furnished it with pride and care - but within my father’s limited means. She was overjoyed to be young and alive and living in Lahore. She was under the spell of its enchanted streets, its vivacious bazaars and its beautiful women.
Our idyllic life in Lahore was short-lived. In the late afternoon of 20 August 1946, there were urgent steps outside. My mother was sitting at the dressing table. She held a bottle of coconut oil in her hand and she was combing her hair. I was watching her in the mirror when my father burst in and announced that Lord Louis Mountbatten had been appointed Viceroy and he had declared that the British would finally leave India. My mother dropped the bottle.
‘Look what you did!’ she exclaimed accusingly.

Eight months later, Mountbatten announced that Punjab would have to be partitioned to make room for the Muslim state of Pakistan. Our happiness over our country’s approaching independence turned to fear and uncertainty, and a pall of gloom settled over the Hindus of Lahore. We wondered if Lahore would go to India or to Pakistan. In those months before the boundary line was drawn, everyone was in a panic. We no longer felt safe. Large-scale violence broke out in early August 1947. While the Muslims were in a majority in Lahore, the Hindus owned eighty percent of the property. When our neighbour's house was burned in early August, we realised that we might be trapped on the wrong side of the new border. The next day a Muslim mob came and threatened to burn us alive if we did not leave. We escaped that night to the home of a Muslim friend of my father's who hid us in his storeroom. On August 8 we fled. My younger aunt's husband, a major in the army, brought us to safety in a military truck, and deposited us at the Guru’s ashram at Beas. On August 9, 1947 occurred the ‘Great Killing of Lahore’ in which 10,000 Hindus were slaughtered.

At midnight on August 14th the British Raj came to an end. On the same day Pakistan was born, carved out of Punjab and Bengal. Sir Cyril Radcliffe did the actual carving in five weeks and the demarcation on the map came to be known as the Radcliffe Boundary Award. The Guru gave asylum to thousands of refugees like us. He set up tents and make-shift kitchens. To our good fortune, according to the boundary line drawn by Mr. Radcliffe, the ashram found itself forty miles inside the Indian border. My mother cried continuously for she had heard no news from Lyallpur and she was afraid that her family was trapped. In his last letter, my grandfather was reported to be stubbornly insisting on staying on even if Lyallpur went to Pakistan. My father had been to Jullunder, the nearest town, to enquire after their whereabouts, but he had not succeeded. On the historic night of the 14th, dozens of people were huddled in our ill-lit tent glued to the radio. Despite the suffering and the uncertainty about the future, the refugees were filled with emotion as Nehru began his historic speech at midnight. For the first time we heard the new nation’s anthem but few recognised it. Someone stood up. Then, one by one the others also got up until everyone in the dark tent was standing up, and many had tears in their eyes. When the reference came to ‘Punjab’ in the anthem, the refugees looked at each other, helplessness in their eyes.

In the end, my grandfather had no choice. On August 9, a train filled with half-dead Muslim refugees arrived in Lyallpur. They told a harrowing tale of murder, arson and rape on the other side of the border. The Muslims of Lyallpur vowed revenge. On the morning of the 10th, the Muslim clergy called a meeting in Lyallpur’s main mosque and called upon God fearing Muslims to kill non-Muslims. Sikhs were singled out to pay for the crimes in Amritsar, Jullunder and Ludhiana. On hearing this, Sikhs began to cut off their hair and shave their beards. The barbers of Lyallpur were unusually busy that day. But it did not help. Two thousand Hindus and the Sikhs were killed on the 10th. Grandfather’s family escaped miraculously. My uncle, the major, showed up at their door without warning on the same afternoon with a military van. He gave them an hour to pack. As they piled in, my grandmother said, ‘O wait! I forgot to lock the front door’. My grandfather shook his head, ‘she’s locking the Muslims out’.

A week later, my father learned that he had been transferred to Simla, which had now become the temporary capital of the new, truncated state of Punjab after the loss of Lahore to Pakistan. We left the ashram the following day but found only chaos at Jullunder’s railway station. No one knew to what schedule the trains were running. On both sides of the railway platform, crowds of refugees were huddled together, believing that they would be safer in groups. As soon as a train approached, the refugees would get up. Pushing and shouting, they would rush for the train. But the last four trains had not stopped.

We did finally manage to get onto a train which was going east. But it did not move, and seemed to stand still for hours. My father went to check with the station master. From the window of our compartment, I watched him go past and I saw a tall Muslim police officer standing erect on the platform. Suddenly, there was movement. A train was coming from the opposite direction—from Delhi going to Lahore. Activity increased on the platform, but the policeman seemed unaffected, and continued to stare straight ahead. Then two very young Sikh boys emerged from nowhere. They could not have been more than fifteen or sixteen. They came from behind and thrust a dagger into the policeman. He did not cry. He just fell and died. My mother pulled me back and tried to shut the window, but it would not close.

We heard screams as the incoming train slowed down. There were sounds of bullets. My mother pushed me down. We lay on the floor of the carriage. They were shooting at the incoming train. There were more shots followed by more shouts. The train full of half-dead bodies did not stop. Minutes later an old Sikh forced his way into our compartment. Full of fear my mother screamed. ‘We are Hindus, don’t kill us!’ Then she saw her husband come in after the stranger. My father had found him at the ticket window when the shooting began and the old man grabbed hold of my father’s shirt. Both had hidden in the toilet of the First Class Retiring Room. Eventually we began to move. We reached Ambala, where we changed for Kalka, and from there got on the hill train for Simla.
The view from the tiny window of the miniature hill train was enough to refresh the most exhausted emotions. On each bend of the winding route, we saw green slopes with tiers of neatly cultivated terraces, which looked like gardens hanging in the air. Belts of pine, fir and deodar punctuated the terraces. Masses of rhododendrons clothed the slopes. Towards the south, we could see the receding Ambala plains far below. Sabathu and the Kasauli hills were in the foreground. Northwards rose the confused Himalayan chains, range after snowy range of the world’s highest mountains. The stench of death was left behind at Jullunder station.
The train stopped at Barog where a white car on rails went speeding by. ‘The rail car’, the Anglo-Indian ticket collector explained, ‘carries the rich and the busy who don't have luggage and who want to reach Simla in a hurry. Until a week ago it was the only white sahibs rode in it, but now it seems everyone is doing it. Amazing, how quickly the brown sahibs have slid into the shoes of their departing masters!’

At Shogi, we glimpsed the first wondrous vision of Simla. From afar, it looked like a mythical green garden dotted with red-roofed houses. Our excitement mounted. We passed Jutogh, crossed Summer Hill, turned into tunnel number 103, and finally reached Simla's Victorian railway station. The town of Simla occupied a spur of the lower Himalaya and ran in an east-west direction for six miles. We settled in a little cottage which was situated in an unfashionable part of town known as Chhota Simla, at the southeast end, sloping directly south towards Jakhoo hill. The government provided us a house that was tiny and icy cold at night. But we loved our little house. It was situated in a handsome grove of deodars and from our veranda we had a spectacular view of the next ridge and many ridges beyond. From the narrow veranda, we stepped onto a little lawn; from the lawn, there was nothing to step onto except fresh air for the ground suddenly dropped beneath our feet.

My earliest memory of Simla is of waking up suddenly on a frosty morning. It was just after dawn and I was only half awake. It had been raining and along with the wet there was a rawness in the air. I could hear the wind blow. I ran to my mother’s bed. She stretched her arm and I nestled by her side. With her warm hands she felt my body and pressed me closer to her.
‘Did you have a bad dream?’ she asked.
I did not answer. I was content to feel her warmth. In her big bed with her soft arms around me, I felt protected. I cuddled against her and in a moment I was blissfully asleep.

I was put into St Edward’s school soon after we arrived. I cried on the first day when I was taken by the headmaster to the first grade. I stood shyly behind the door, not daring to go in. I was shorter than the other boys and my hair was cut square and parted in the middle like a peasant’s. I was ill at ease in a new shirt which pinched me under my arms. My new shorts braced up tightly. I sat down at a desk at the back, not daring to cross my legs. When the bell rang in the afternoon I did not get up. I would have kept sitting there had the teacher not returned to the class to pick up her bag. The daily two mile walk to school along Cart Road framed my new life. In the mornings I would be rushed and nervous, my hair wet, as I hurried to school, In the afternoons I would dawdle back home, usually with other boys. I would linger, eat wild berries along the way, and arrive kicking a pine cone with my new Bata shoes.
In the evenings, everyone in Simla went to the Mall no matter what the season. Between five and seven o'clock the thing to do was to get dressed and take a stroll from the Ridge to the end of the lower Mall in order 'to eat the air’. It was a wide, winding stretch of about a mile along a gentle slope with glamorous shops and smart cafes. One went there to be seen and to see others, and every evening you found a veritable fashion parade where men, women and children vied with each other in the elegance of their clothes.

We had never seen anything quite like Simla: the Tudor belfry of Christ Church cathedral with its massive brass bells; the elegant Victorian villas with their gardens bursting with dahlias and pansies; the imposing architecture of Viceregal Lodge. Simla had been, after all, a grand bouquet to the Englishmen's fondest imperial dream. For five months of the year, from mid-April to mid-September, it used to be the imperial capital from where the British Viceroy ruled the Indian Empire (extending, administratively speaking, from Burma to the Red Sea). Every English man and woman in India used to yearn to be in Simla for 'the season', when it was one of the gayest places on the earth. The refugees from West Punjab were so happy to be alive that they embraced Simla with reckless abandon and tried to make a new life; this helped them to forget the one they had lost in Pakistan.

My father earned a modest salary, and my mother ran the house on a tight budget. Her biggest expenses were on school fees, uniforms, and milk for her growing children. She worked hard to get us into an English-medium school although it cost more than she could afford. It had a long waiting list because of the recent influx of refugees and she had to apply “influence” to get us in. She made sure that we worked hard at studies, got good marks, especially in English and Mathematics. At the end of the month there was little money left for anything else.
A shy mid-level government official, my father was a man content with his own company. But my mother had a great and unrequited desire to be a part of Simla’s fashionable society. She wanted ‘to see and to be seen’; she wanted to mix with the elite; she wanted to be a ‘somebody’--and she lived in fear that her own world was insignificant compared to the grand world beyond us. The natural solution was to join ‘the club’, the ADC. Although it had begun as an Amateur Dramatics Club, a sort of extension to the Gaiety Theatre during the British days, it was now mainly a social club and, more importantly, the meeting place of the fashionable in Simla. Unfortunately, we could not afford it.

She must have transmitted her anxieties to me for I grew up with an acute concern for status. I compared myself to those who had things that I did not possess; to boys who were more attractive to girls than I was; and especially to those who made it to the school cricket team. I must have been twelve when a bachelor friend of our family’s saw me hovering outside the ADC one day. He put an arm around me. ‘Come, my boy, let’s go into the Green Room for a cup of tea,’ he said.

We were greeted by the hall porter and we walked past smoke-filled card rooms to another room full of young people and laughter. I looked around me with awe. Bearers in starched white uniforms with green cummerbunds and sashes and tassels were gliding between the tables. ‘So, this is where the smart people of Simla meet’, I thought. As my host hailed a group of young people to join us, I was intoxicated by my first encounter with an inaccessible and forbidden world--the glamour, the clothes, the sophistication of language and manners. I imagined these people dwelling in big houses, with tall hedges and high gates, leading a life quite unlike my own.
Among them I recognized a girl who was a few years older. She looked utterly beautiful. I kept looking at her, hoping she would recognize me. But she looked through me. Even when I smiled at her she ignored me. My head was spinning when I returned home. I was excited by my first encounter with a forbidden world. I tried to recall her thin face. I could visualize her shining brown eyes, her long dark hair, and the unusual way she tilted her head. The more I thought about her, the more inaccessible she seemed to become. I would lie awake for weeks thinking of her.

My discovery after a few days that I knew where she lived left me breathless. I had recognized her because I used to pass her house daily on my way to school. I had seen when I had accidentally peered through their hibiscus hedge. What had been an impersonal landmark on my daily trudge to school now seemed to acquire a special character. Even before the bell rang in the afternoon announcing the end of school, I would begin to think of her. I would hurriedly gather my books and run out before any of my schoolmates decided to tag along. A red, round post-box—a proud symbol of the British days—stood a hundred yards from her home and it announced the pleasure that awaited me. When I reached her gate, I would slow down my galloping pace, take a deep breath, and walk with measured steps.

My heart beat would quicken as I looked thorough the latticed gate, which gave a view of the side of the house along with the winding path leading up to it. From this angle I could tell if they had company. I could observe the servants moving back and forth to the lawn with the tea service. As I walked along the road I could see the front of the house. I was grateful for the hibiscus hedge that was cut low for I could see the lawn but I had to be careful not to be seen. I became skilled at hiding behind a giant deodar tree that was on a slightly higher level. The house itself had a long gabled front of red brick but years of Simla’s weather had mellowed it.
They always seemed to have company and on my ‘lucky days’ I would be able to spot her. She would sometimes be talking to her friends. At other times she would be playing badminton towards the side of the house. I saw her one day up close. She was in light blue and sitting on the lawn a few yards away from the hedge. She was speaking with two boys and a man of indeterminate age. Her head was unmistakeably tilted as she listened to the man. Suddenly she looked up and she saw me. Her lively eyes seemed to mock me. A shiver ran through my body and I quickly moved away. A few minutes later I heard a voice. It was the same man who called out to me from the hedge. He told me that it was not polite to stare at people. I was mortified and I walked away quickly. When I reached home I was depressed by the contrast of my drab life with the brilliance of her world.
Some years later, I met the object of my dreams properly and discovered that she was a snob, and like all snobs she had an enormous capacity for inflicting pain.

bhakti : love or devotion for a personal form of God
charpai : a bed with a wooden frame, interwoven with rope
darshan : seeing, beholding, vision of the divine; to see with reverence
dharma : duty, law, virtue, doing the right thing
mashkiya : a person who pours water from a goatskin bag
pir : a Sufi teacher, spiritual leader
sant : saint, guru
Sufi : inner, mystical dimension of Islam
tonga : light horse drawn carriage

This account forms a chapter in Remembered Childhood, Oxford University Press, Nov 2009. Some of the incidents have appeared earlier in a different forms in my autobiographical novel, A Fine Family and my non-fiction narrative, India Unbound.

Thursday, July 09, 2009

Like honeybees collecting nectar, (Outlook, July 20, 2009)

Ever since 1991 we have come to expect a vision of the economy’s future in the Budget speech of the Finance Minister. This did not happen on July 6, 2009. The day before, the Economic Survey had raised the hopes of real reform. Those hopes were dashed. Pranab Mukherjee spoke like an accountant, not a statesman, and the stock market fell by almost a thousand points. The new government lost an opportunity to spell out its program and win over domestic and foreign investors.

Ultimately, the nation needs private investment to pull us out of this economic downturn. Because of the failure to articulate the long term, investors worry that the big spending stimulus of this government is here to stay and it will crowd out private investment. A large deficit is understandable in these recessionary times, but we needed a commitment to return to fiscal responsibility once normal times return. Deficit spending on this scale risks a re-rating of the country, which would mean a higher cost of money, higher inflation, and bad consequences for the Indian rupee.

Nevertheless, there are many positives in this Budget. In our bad old socialist days, Finance Ministers would have raised tax rates to cover fiscal deficits. This time the FM actually decreased tax rates for individuals (from 34% to 31%) while holding them for companies. This was courageous and it is strongest indicator that Pranab Mukherjee has changed and believes in growth. Many countries suffering from the global recession have increased tax rates. This FM also showed guts in scrapping the irritating and ugly Fringe Benefit Tax. The major negative was the raising of the Minimum Alternative Tax for companies from 10% to 15%, and this will hurt our fastest growing companies and those in infrastructure.

The best thing the in the Budget is a re-commitment to a dual Goods and Services Tax (GST) from April 2010. This is a wonderful idea which has been championed for years by Vijay Kelkar. India is not a common market where goods and services move smoothly. Anyone who sells a product lives through a nightmare of excise, state and central sales taxes; entry, turnover, and service taxes; and the terrible octroi which keeps trucks waiting for hours at check points. GST will integrate all these indirect taxes into one flat tax, which is IT intensive, offering frictionless interface between taxpayer and collector. Like the VAT, it taxes only the added value at each stage, lowering the overall tax burden. Those who persist in selling without a bill will lose credit on taxes already paid, it will force them into the tax net. It will improve compliance and make us a more honest nation. A lot of work needs to be done to make GST happen but the Finance Minister’s re-commitment to GST will now galvanize the centre and states to work hard and move to the most important tax reform in India’s history.

Another positive feature of Pranab Mukherjee ‘s speech was his commitment to changing the attitude of tax collectors. P. Chidambaram, in his well-intentioned zeal for taxes, had let loose the tax departments on the taxpayers and this had created fear, bad blood, and the loss of some of the goodwill created during Jaswant Singh’s time. Mukherjee wants tax collectors to be “honeybees collecting nectar from the flowers without disturbing them, but spreading their pollen so that all flowers can thrive and bear fruit.” This is the right attitude. Despite many honest and hard working officers in income tax, customs and excise, these departments continue to give India a bad name. In successive surveys, foreign investors cite them as the reason why India is not a good place to do business.

The Congress Party was re-elected in May on the promise of economic populism. On July 6 the government delivered on that promise. This is bad news for India because populism is a temporary palliative and does not lead to long term prosperity of the poor; it is also something that our country cannot afford. The nation waited to hear about the reforms that would create precisely those enabling conditions for the poor to pull themselves up. India’s tax payers are not against a safety net for the poorest, but they want the benefits to reach the poor. When the FM announced handouts in the thousands of crores, it was his duty to reassure us that the money would not be lost once again in corruption. We waited in vain to hear what government was doing to improve delivery. Without the overhang of the Left, there is no excuse for the UPA taking the country backward. If it persists in this it will lose the goodwill of so many who voted for it.
Gurcharan Das is the author of The Difficulty of Being Good: On the Subtle Art of Dharma (Penguin 2009), which interrogates the Mahabharata in order to find the answer to ‘why be good?’