The reality of the India-China strategic dialogue
Source: By Jayachandran: Mint
In assessing the restructured strategic dialogue between India and China, which concluded, the key question is: What does a strategic relationship between the two countries look like? What are its driving factors and core objectives? On paper, India and China have had a strategic partnership—specifically, a strategic and cooperative partnership for peace and prosperity—since 2005. But scratch the surface of that agreement’s rhetoric and diplomatic language and this much becomes apparent: There are, as of now, no true areas of strategic convergence.
The bilateral focus has largely been on the settlement of the boundary question, followed by the strengthening of economic and trade ties. This was carried through into the 2013 vision for the future development of the India-China strategic and cooperative partnership, signed during Premier Li Keqiang’s India trip. It was only somewhat expanded in 2015 during Prime Minister Narendra Modi’s visit to China. Notably, the joint statement issued in the latter case outlines how and where the two countries seek to coordinate their positions and work together to shape the “regional and global agenda and outcomes”.
Besides, foreign secretary S. Jaishankar, who led the strategic dialogue from India, has chosen to frame the consultation within the global actor’s paradigm. He said, “The international situation is in flux...one thing that we could do together was a more stable, substantive, forward-looking India-China relationship which would inject a greater amount of predictability into the international system”. But this vision is more aspirational than tangible—the possibility of a US that draws down its role in the Asia-Pacific region under Donald Trump notwithstanding.
Instead, there are several areas of strategic competition (the Indo-Pacific region) as well as some of outright hostility (particularly with regard to the border issue). And Afghanistan is increasingly proving to be a fault line. Last week, Russia hosted a conference on Afghanistan’s future that had India, Iran, Pakistan, China and Afghanistan as attendees. But this came after a similar conference in December last year that had only China, Pakistan and Russia. Neither Kabul nor New Delhi were pleased—and even less so when the conference’s outcome was a statement explicitly endorsing the Taliban as a bulwark against the spread of the Islamic State’s Afghan branch. This runs counter to Kabul and New Delhi’s stance; they have repeatedly warned about the dangers of the “Good Taliban, Bad Taliban” approach.
That said the evolution of Beijing’s stance on terrorism in and emanating from Pakistan—obviously, an area of prime concern to India—is interesting. There are two factors shaping Beijing’s outlook here. The first is that it is investing around $50 billion to build the China-Pakistan Economic Corridor (Cpec), starting in Xinjiang province and winding its way south through Pakistan to terminate in Gwadar port on the Arabian Sea coast. The security of Chinese investments and personnel in Pakistan is of utmost importance to Beijing—and it is of immense strategic value, giving it an alternative to the vulnerable Strait of Malacca for energy and trade shipping. Secondly, Cpec is an integral part of Beijing’s “One Belt, One Road” vision—important for the economic integration of the restive Xinjiang province. And some of the terror groups in Pakistan have links with separatist outfits in Xinjiang.
China’s reaction to the 2007 Lal Masjid siege showed that when its interests are threatened, it has no compunctions about publicly exerting pressure on Pakistan. Little wonder that it is again believed to be pressuring the Pakistani establishment to crack down on terror groups, if behind the scenes this time. Reportedly, Pakistan’s new spy chief visited China soon after he took office so as to allay Beijing’s concerns. Weeks later, the Chinese state commissioner for counter-terrorism visited Pakistan to review the security of the Cpec project. Incidentally, the latter visit came days after Pakistan placed Hafiz Saeed under house arrest—supposedly under American and Chinese pressure.
Still, the question from New Delhi’s perspective is whether such a crackdown would extend to anti-India groups such as the Lashkar-e-Taiba and Jaish-e-Mohammed. The answer is in the negative. As of now, China has no strategic rationale to push for a crackdown on these groups. It could, hypothetically, find itself compelled to pressure Pakistan here too if these groups create trouble on a scale that threatens regional stability—something on the 26/11 scale, for instance. This would, again, threaten its economic interests. But this is hypothetical at best—thin gruel indeed.
Woes of urban relocation
Source: By Bharat Dogra: The Statesman
Urban relocation projects generally involve shifting of urban poor people from central parts of a city to the outskirts. Despite reservations expressed by eminent urban planners, such relocation of slum dwellers and the homeless have become more frequent in several cities. It may be interesting to look at the experience of some groups whose relocation goes back a decade or more to see if with the passage of time they have become more comfortable.
A large number of slum-dwellers living in Banuwal Nagar in North-West Delhi were shifted about 24 kms away to G and H blocks of JJ Colony, Bawana in Outer Delhi about a decade ago. A recent visit to this colony revealed that in terms of the most important issue of livelihood, people are now in a worse position than they were.
Umesh Singh, a community leader who works as a mason explained: “In our previous home I was so well connected that I would just be roaming around and someone would call me for work. Employment was easy to get because we the service providers were living close to the more prosperous people who needed these services and could pay adequately. Then they resettled all the service providers together but in this area away from the main city. Who will use their services?”
He adds: “It is not only we as construction workers, carpenters and plumbers who have suffered. When we meet upper and middle class people of colonies where we worked earlier they tell us that they also now have much more difficulty in getting various services. So if our problems have increased and their problems have also increased then who has benefited from this resettlement?”
Livelihood problems have worsened particularly for women domestic workers. As they could not get work at the new place, many of them still go to their earlier employments in and around Saraswati Vihar about 24 km away. There is no direct bus. They have to leave home at or even before 6 a.m., grabbing a roti or two before leaving if they can get the time for this. Earlier they could return home for some rest in the afternoon. Now they do not get this rest because the home is so far away. They manage to return home only late in the evening and sometimes at night.
People complain bitterly that they still do not have access to usable toilets and have to walk a long distance for open defecation and that too in insecure conditions as an area near a canal is prone to crime. Several of them have been victims of crime. Overall sanitation is very poor as this is contracted out. Piped drinking water is not available and people have to make their own arrangements.
There is another settlement in Bawana JJ colony in front of K and L blocks. These are people who were evicted from Paschim Vihar in west Delhi, a distance of about 30 km, about a decade ago but unlike the relocated people of G and H blocks they do not have legal papers for this relocation. They have built small huts and planted trees, creating a new colony on their own. They do not have ration cards. They do not have sanitation and water facilities either and have to walk a considerable distance for a toilet. School education particularly for girl students is difficult as they have to go a long way and face harassment from goons. The nearest government hospital is also a long distance away.
Most of them are construction workers but some of them also work in nearby industries. People say that there are several industries but the prevailing wage rate of Rs. 4,500 to Rs. 5,000 per month for an eight-plus hour working day is so low that no one can survive on this. But keeping in view the poverty and desperation of people and the lack of alternatives these industries keep the wage rates so low and manage to employ desperate workers, particularly women.
A Block jhuggi in Shahbad dairy is another cluster of people shifted mostly from Shalimar Bagh area more than two decades ago. Despite the fact that the young men of this colony have grown up here, their existence remains precarious and devoid of essential facilities. There are no usable toilets and women going to relieve themselves in the open face the threat of not just harassment but even molestation. Due to lack of drainage, some houses suffer from water logging. Water supply depends on a tanker and hence is very uncertain. The nearest school needs repairs so children are being sent to a village school further away.
Hence it is clear that relocation often increases the many sided problems and vulnerabilities of urban poor households. While there is a clear need for changing urban policies which emphasise relocation, there is also need for immediate action to meet at least the most pressing and basic needs have relocated people.
Jaywalking at the RBI
Source: By Surjit S Bhalla: The Financial Express
Amidst much fanfare, and great expectations, India joined the rest of the world by forming a monetary policy committee (MPC). This six-member committee started operations in September 2016 and has been involved in three major policy announcements — one each in October and December 2016, and one in the recently concluded meeting on 8 February, 2017. While early, it is time, nevertheless, to evaluate how good this experiment has been and whether the MPC decisions have been in the interests of the nation.
Each of the three MPC meetings has wrong-footed analysts and economists. At the October meeting, the RBI reduced the policy rate by 25 bp to 6.25 per cent. Only 40 per cent of market analysts expected a rate cut. Both in December and February, more than 90 per cent of analysts expected a rate cut of at least 25 bp — yet, the RBI held rates steady. Further, at the February meeting, the RBI surprised the market with an ultra-hawkish change in its policy stance from “accommodative” to “neutral”. Though there is no easy way to verify, it is extremely unusual for any central bank to go so much against consensus — and do so for three consecutive meetings.
Some eager RBI supporters see the RBI’s policy stance of moving to neutral as enhancing the credibility of the institution; some others (including myself) see this not-logically argued decision as the most damaging blow to the credibility of the RBI. Why consensus of a rate was cut near-universal for the December and February meetings? Because the RBI had explicitly communicated at the October rate cut meeting that it was targeting a real policy rate of 125 basis points above its target inflation rate of 4 per cent. Given the present policy rate of 6.25 per cent, this means that if an inflation rate of 4.5 per cent is considered sustainable, then the policy rate should be no more than 5.75 per cent, that is, there was at least 50 bp of rate cuts at the February meeting.
In October 2017, when the RBI did cut interest rates by 25 bp, the three preceding headline y-o-y inflation numbers available to it, for June, July and August 2016, were 5.8, 6.1 and 5 per cent respectively. The August inflation number just met the new RBI criteria and the RBI reduced the policy premium to 125 bp to justify the rate cut. If the RBI had not reduced its real target rate from 1.75 per cent to 1.25 per cent, the MPC would not have been able to cut rates.
At the February meeting, the RBI had the following latest inflation levels: 4.2, 3.6 and 3.4 per cent for October, November and December respectively. Even the pre-demonetisation October inflation level of 4.2 per cent (if considered sustainable) would have justified rate cuts up to 100 basis points. So, why no rate cut at the December (and February) meeting? The nation wants to know.
The MPC answer for no rate cuts and a move towards neutral from accommodative was provided by Governor Urjit Patel in a TV interview on 17 February: “The committee felt that inflation, excluding food and fuel, is something that has been stubborn since September-October and has shown little sign of coming decisively below 5 per cent.”
Monetary policy makers concentrate on core inflation because it is a good yardstick for measuring “sustainable inflation”: Which means that core inflation has to be correctly measured? Unfortunately, core inflation is mis-measured in India because the CPI for Fuel and Light includes kerosene and electricity, but excludes petrol. True core would exclude food, fuel and petrol. The reason monetary policy should be concerned with true core is because the excluded items are broadly outside the influence of monetary policy. For example, it is a bit difficult to argue that the RBI’s repo rate policy can affect OPEC’s pricing policy for oil!
To correctly evaluate RBI policy, we need to keep the following definitions in mind: (False) India Core Inflation = CPI Inflation excluding (Food + Fuel) inflation; and, (True) Core inflation, worldwide (and at RBI) = CPI Inflation excluding (Food + Fuel + Petrol) inflation
The RBI is well aware of the problem of wrongly measured core inflation in India. Hence, it has continuously warned, and emphasised, that inflation excluding food and fuel is not an adequate representation of core inflation. For example, in the September 30, 2014 Policy Statement (PS), the RBI warned that “CPI inflation excluding food and fuel decelerated to its lowest level in the new series, mainly on account of sharp disinflation in transport and communication”. In the February 3, 2015 PS, the RBI said: “Inflation excluding food and fuel declined for the second consecutive month in December. This was largely on account of the declining prices of transport and communication since August, reflecting the impact of plummeting international crude oil prices.”
A true core price index can easily be constructed by excluding the effects of petrol consumption from the transport and communication (TC) basket (TC has a weight of 8.59 per cent in the CPI and petrol consumption weight is 2.4 per cent), and adding it to the basket of Fuel. (CSO, please note and correct the Fuel index to include petrol, and exclude petrol from transportation and communications).
The correct and incorrect core inflation series, along with petrol price inflation, are reported in the chart. Note three important facts. First, twists and turns in false core inflation seem to be closely aligned with twists and turns in petrol price inflation. The stickiness in false core reflects the fact that crude prices have been rising at a fast clip (65 per cent y-o-y increase in the price of crude oil, 15 per cent increase in the domestic price of petrol).
Second, true core inflation, at 4.8 per cent in December 2016 (even lower at 4.7 per cent in January 2017, a data point the RBI did not have on February 8) is on a declining trend and at the lowest level since the new CPI series started in 2011. Third, extending the CPI series backwards to 1990 (using CPI-IW, CPI for industrial workers) yields the result that CPI minus petrol inflation was at 3 per cent in January (and 3.3 per cent in December) — the lowest level since June 2005.
These facts counter the post-truth core inflation scenario painted by the RBI. All six members of the MPC, somewhat co-incidentally, cite the wrong core index to justify no rate cut. All three RBI members, and Ravindra Dholakia, support the changed policy stance as revealed by the minutes of the February 8 meeting— Ghate, Dua: Core Inflation remains sticky; Dholakia: Core inflation continues to be high, around 5 per cent. Patra: The recent sharp disinflation is entirely driven by transitory forces. Underneath, there is a broader-based firming up of inflation pressures.
Excluding both food and fuel, inflation was 4.9 per cent. Moreover, all of these levels have become persistent since September 2016. Acharya: Core inflation has been more or less sticky in recent months. Patel: Core inflation has remained sticky, notwithstanding the transitory impact of demonetisation on consumption demand.
For a central banker, there is no bigger “crime” than to be logically, and knowingly, inconsistent. The MPC conclusion is disingenuous, because its members knew and know that inflation excluding food and fuel is mis-measured in India. So, let us see the incredulous RBI policy decision in the correct and credible true light. Inflation, and true core inflation, is at the lowest levels in at least six years, and possibly, the last 11 years. It has been steadily declining for the last several years, and especially the last six months. Yet, the MPC unanimously emphasises that core inflation is sticky at an unacceptable level. How can inflation be both sticky, uncomfortably high, and the lowest in history? Again, the nation wants to know.
End of jobs
Source: By Govind Bhattacharjee: The Statesman
A friend, who was an office-head, once recounted a poignant story about his stenographer. A vendor had come to his office to demonstrate the use of speech-recognition software that would allow a note to be dictated directly to the computer. After the vendor had left, the steno asked him, “Sir, does that mean my services are no longer needed?” Stenographers are no longer recruited in any office.
In 2014, writing software called Quill was developed by an American company; it could convert numerical data into a written story, accomplishing within seconds what it took experienced analysts weeks of synthesis and analysis of huge volumes of financial data. In 2014, Associated Press began publishing a large number of articles about US corporate earnings most of which were written not by humans but by robot journalists. These are increasingly getting better, sharper, and more analytical.
All work can be divided into four types -- routine jobs that require the same task repeated over and over again as opposed to non-routine jobs, and cognitive jobs that require the use of brains as opposed to manual jobs that mostly requires the use of our bodies. Routine labour stagnated way back in 1990, having been replaced by technology, and many manual jobs followed suit. In the 21st century, cognitive and non-routine jobs are being automated at an increasing pace, with exponential progress in developing robots that can learn by themselves.
The future world will be one in which machines can perform all the four types of jobs at a fraction of the cost of human labour. It is creating the spectre of a jobless growth for our youth. In a 2013 study on the impact of computerization upon jobs, Oxford scholars Carl Frey and Michael Osborne found that algorithms for big data had started to penetrate higher cognitive domains like pattern recognition and to substitute labour in a wide range of non-routine cognitive tasks.
Computers have already started replacing jobs in easy-to-automate areas like transportation, logistics, production, services, sales, and construction. Harder domains will also be captured during the next wave of computerisation, putting at stake jobs in management, science, engineering, and even arts. They have predicted that nearly half of all American jobs will be lost to automation by 2033. It will probably be faster.
Advanced robots are now being produced with enhanced features, mobility and dexterity, allowing them to perform a much broader range of tasks requiring superior cognitive skills. Demands for industrial robots are increasing exponentially. Their worldwide sales in 2015 touched 225,000 -- 27 per cent higher than in 2014. This is sending shock waves across industries and occupations, impacting wages and educational requirements for jobs.
The periodic slump in the demand for skilled labour is nothing new in human history. In the nineteenth century, manufacturing technologies substituted for skilled labour through simplification of tasks by introducing the electricity-driven, partly-automated assembly-line production system. As a result, real wages stagnated while the output per worker expanded due to increased efficiency. In response, the educational system became highly specialised, imparting complex skill-sets that, aided by the phenomenal expansion of transportation networks and the consequent increase in market size for the products, increased productivity manifold. This in turn led to a rise in real wages and improvement in the living standards in industrial societies after the middle of the nineteenth century.
The computer and the internet revolution of the twentieth century again dented middle-income jobs, requiring higher levels of education for recruits and giving an unprecedented spurt to innovation and creativity. As productivity increased with the replacement of labour by technology in some industries, attracting more companies to enter those industries and in turn forcing more automation, job-contraction and lowering of wages. Industries that could not be automated shifted to low cost low wage countries, like Bangladesh and Vietnam.
But alas, tasks that were hitherto considered non-susceptible to computerisation are now increasingly being taken over by the computers, e.g., textiles and footwear. German sportswear firm Adidas opened its first automated factory last year and revealed the robot-made Future craft shoes. As Nicholas Carr, author of The Glass Cage: Automation and Us said, “Jobs, that used to be very complex, idiosyncratic and interesting, start to look more like computer operator jobs, just putting in data and interpreting screen readouts.” Computerisation is no longer confined to low-skill and low-wage occupations it once used to be.
The emerging portends are truly ominous. Truck driving is a popular job in the USA. It is easily available, pays decently and has so far remained immune to automation. But no longer are Google, Uber and Tesla all working on self-driven vehicles, and once operational, it will immediately send 3.5 million drivers and 5.2 million additional personnel instantly out of employment. Uber is already testing self-driving cars on the roads of San Francisco and so is Google (Self Driving Cars now known as Waymo -- way to mobility). The ultimate goal is to replace all human drivers with robots threatening millions of drivers’ jobs.
If this is not scary enough, consider the following: The e-commerce giant Amazon now has 30,000 fulfillment robots working in its warehouses worldwide; it expects to replace all employees who perform repetitive tasks with machines in the not-too-distant future. The Shanghai-based Cambridge Industries Group, one of China’s leading suppliers of telecom equipment, is replacing two-thirds of its 3,000-strong human workforce with robots, and eventually creating energy efficient ‘dark factories’ where robots would work in darkness to save power.
Hardware store Lowe’s has just deployed a series of autonomous retail service robots called ‘Lowebots’ at 11 stores in the San Francisco Bay area; these multilingual “bots” are performing customer service and inventory management functions. Pizza Hut has just opened a concept store in Shanghai with robot waiters, which welcome customers, show them to their seats, take orders and serve drinks.
Walmart is testing warehouse drones that fly around its distribution centres monitoring inventory levels and flagging up low stock or missing items. Many of the world’s major companies spanning practically all sectors, like Nestle, SNCF, Foxconn, Marriott Hotels, ING, DHL, Nissan, Fidelity Investments, Zara etc., are transferring the bulk of their workload to robots.
In January 2016, the World Economic Forum had brought out a report on “The Future of Jobs”. It predicted that the Fourth Industrial Revolution, brought about by artificial intelligence and machine-learning, robotics, nanotechnology, 3-D printing, genetics and biotechnology, will cause widespread disruption to business models and labour markets over the next five years, with enormous changes in the skill set requirement in the new age, costing a net loss of five million jobs in 15 of the world’s largest economies. These include Australia, Brazil, China, France, Germany, India, Italy, Japan, Mexico, South Africa, Turkey, UK and USA, plus the ASEAN and GCC groups, which together account for 65 per cent of the global workforce.
These are conservative predictions and the disruptions caused will vary widely across industries. It is only in this context that economists are arguing for decoupling income from work for providing a universal basic income to all to immunize the human workers from the negative effects of automation. Switzerland, Finland, the Netherlands, and Canada and even India are toying with this idea, the costs and benefits of which are now being assessed.
As technology continues to invade the labour market, education and businesses must get ready for upskilling, reskilling and collaborating rather than talent hunting. Tools made us human, and the tools we now have, artificial intelligence and computers, are the most powerful tools ever invented. In our networked age, innovation, adaptability and speed would be essential for survival, to equip our youth with a new set of cognitive skills combined with creative and social intelligence to work alongside robots. Mere cognitive skills aren’t enough in the robot economy. As Geoff Colvin asserts in his book, Humans Are Underrated, the new age industry needs empathy, people who can understand what the client or customer really feels and wants. This will require social skills and creativity which robots don’t have, not as yet at any rate.
And that requires a new curriculum and pedagogy for our schools, colleges and universities. We may be the fastest growing economy, but the growth is going to be jobless as it has been in recent years, and governments can’t do much. In the days to come, the clamour for reservation in government and private sector jobs is only going to be louder and more contagious, not only from Patels, Jats, Marathas and Ahoms, but from all communities, backward or forward.
Designing the bad bank of India
Source: By Rohan Chinchwadkar: Mint
To solve the problem of bad loans in India, the Reserve Bank of India (RBI) has introduced multiple schemes over the last few years: Flexible Refinancing of Infrastructure (5/25 scheme), Asset Reconstruction (ARC), Strategic Debt Restructuring (SDR), Asset Quality Review (AQR) and Sustainable Structuring of Stressed Assets (S4A).
However, the “twin balance sheet problem” persists. On the banking side, stressed assets now stand at over 12% of the total loans in the banking system. Public sector banks, which own almost 70% of banking assets, have a stressed-loan ratio of almost 16%. Banks are unwilling to take on fresh risks which have led to negative growth of real credit, the lowest in over two decades. So, what now?
A new solution gaining popularity is the “bad bank”. The concept is simple: Divide a bank’s assets into two categories, good and bad. By separating the two, a bank can avoid the contamination of good assets by the bad. It also alleviates the concerns of investors and helps the bank focus on future lending by improving health and transparency.
However, while the concept of a bad bank is simple, the implementation can be quite complicated. A variety of organizational and financial choices are available while designing a bad bank. When RBI deputy governor Viral Acharya was asked if setting up a bad bank could be an effective solution to India’s problem of bad loans, he said that it could help “if designed properly”. So, how to design the bad bank of India? A report by McKinsey & Co., “Understanding The Bad Bank”, proposes four organizational models for a bad bank based on two decision factors.
First is to decide whether or not to keep the bad assets on the bank’s balance sheet. Moving assets off the balance sheet is better for investors and counterparties and provides more transparency into the bank’s core operations. But it is more complex and expensive. Second, is to decide whether the bad-bank assets will be housed and managed in a banking entity or a special purpose vehicle (SPV). Depending on the choices, the four basic bad-bank models are: on-balance-sheet guarantee, internal restructuring unit, special-purpose entity and bad-bank spin-off.
In the on-balance-sheet guarantee structure, the bank gets a loss-guarantee from the government for a part of its portfolio. The model is simple, less expensive and can be implemented quickly. However, the transfer of risk is limited and bad assets continue to remain on the bank’s balance sheet, clouding its core performance. This approach is useful for stabilizing a bank in trouble.
Consider the case of the Indian Overseas Bank (IOB). As of the quarter ended December 2016, the bank reported gross non-performing assets (NPAs) of 22.42%, net NPAs of 14.32% and a net loss of Rs554 crore. Since May 2016, the stock price of IOB has dropped more than 20%. An on-balance-sheet guarantee by the government can quickly restore confidence in the bank.
Internal restructuring unit
An internal restructuring unit is like setting up an internal bad bank. The bank places bad assets in a separate internal unit, assigns a separate management team and gives them clear incentives. This works well as a signalling mechanism to the market and increases the bank’s transparency, if the results are reported separately. It is clear that this model relies on the existing management team to restructure assets. However, if the existing management is looking to kick the can down the road, as is the case for many banks in India, this is not an effective solution.
In a special-purpose entity structure, bad assets are offloaded into a SPV, securitized and sold to a diverse set of investors. The model works best for a small, homogeneous set of assets. The bad loan problem in India is concentrated in a few sectors like infrastructure and basic metals. An effective solution would be to transfer bad loans from these distressed sectors into sector-specific SPVs, securitize them and sell them in an auction. If the pricing is determined by the market, PSU bankers will receive less blame for losses to the exchequer.
A bad-bank spin-off is the most familiar, thorough and effective bad-bank model. In a spin-off, the bank shifts bad assets into a separate banking entity, which ensures maximum risk transfer. But the model is complex and expensive because it requires setting up a separate organization, equipped with a skilled management team, IT systems and a regulatory compliance set-up. Also, the problem related to asset valuation and pricing will be the most severe in this model. The Public Sector Asset Rehabilitation Agency (PARA) proposed by the Economic Survey 2016-17 falls in this category. However, given the complexity and cost of the model, it is recommended to be used as a last resort, after all other initiatives fail.
Setting up a bad bank is a very complex process. It is not a silver bullet which will solve all the problems in the Indian banking sector. More importantly, a one-size-fits-all approach to designing a bad bank can be very expensive and less effective. Just setting up one PARA will not be enough to get the banking sector back on track. The most efficient approach would be to design solutions tailor-made for different parts of India’s bad loan problem.
Truth lies and videotape
Source: By Ruchir Joshi: The Telegraph
Perhaps it might be more accurate to say that we've always been living in a 'non- truth' world, with the occasional surge of 'fact- connected truth' barging in. It may even be more precise to say that different sections of society, the world over, have lived at different levels of 'fact' and 'truth' since time immemorial.
For centuries, rural areas all over the world were self- contained bubbles, occasionally penetrated by different outside truths and facts, whether in the shape of natural disasters or invasions. As the world became more connected, as information became more widely available, as the means of disseminating it became more mechanized — and, nominally, more equitable — an idea coalesced that human civilization was, finally, moving away from superstition, baseless beliefs and rituals to a new world ruled by rationality and science and the supposed corollary of those two, this notion called humanism.
We know, of course, that with human beings things are never that simple. As we know, the Enlightenment that developed in Europe was a triple- edged sword, or perhaps, to really stretch the weapon metaphor, a cluster bomb carrying a mix of sharp objects, both good and bad. On the one hand, Enlightenment brought us an extensive articulation of human rights, models of adult franchise, progress in medicine, the establishment of healthcare systems and so on; on the other hand, for the longest time, this Enlightenment seemed chiefly to be reserved for the people who'd first thought of it, with the 'lesser breeds', the conquered non- Europeans, the enslaved ones, the colonized ones, the ones labelled 'savage', all being denied the privilege of being treated on equal terms; on yet another hand, this very same Enlightenment was used as a justification by the colonial powers, which varnished their rape and robbery with the veneer of 'bringing civilization' to the subjects of empire.
History, as ever, played its complex games, and this Enlightenment, coupled with other, non- European, systems of justice and fairness ( not always acknowledged), ushered us into the 20th century. But just because human beings are capable of being rational doesn't mean they like being rational. One great proof of this was the madness that gripped Europe — the birthplace of the Enlightenment — in the shape of the First World War.
If some self- serving sanity ruled for a period after that mass slaughter, it was radically overturned after just two short decades with the start of the Second World War. Across the turbulence of time, it's useful to remember that before Joseph Goebbels, well before the Soviet and American propaganda machines, there was the whole post- truth or non- truth of ideology and misinformation that fuelled the mass butchery between 1914 and 1918.
When M. K. Gandhi returned to India in 1915, he was already well bruised and hardened by the bullying lies of the white supremacists in South Africa as well as by the gross cruelty of imperialism that depends on these lies for a moral alibi. While others have understood intellectually that empire generally operates in similar ways the world over, MKG understood the kinship between South Africa and the British raj viscerally.
In South Africa, he had made up methods of resistance, experimenting, trying and failing before succeeding partially, often unexpectedly. Returning here, he developed this admixture of rationality and irrationality. There are two contradictory things Gandhi counted on throughout the rest of his life: the huge ' irrational' religiosity of the Indian masses and the completely rational and relentless spread of information that the growing international press provided him.
In other words, he mobilized a mass, including a rural population, that had forever lived in a post- truth or non- truth time, and unfurled that mobilization before the witnessing eyes of that segment of the world which was widening its definition of Enlightenment, of justice, of humanity and the ( quite rational) notion that all humans are created equal. Faced with the most monumental system of 'non- truths' and ' alternative facts' the world had seen, Gandhi deployed the insistence of truth.
Crucially, Gandhi welded this notion of satyagraha to the principle of non- violence. At a deep spiritual level, whether of Christianity, Vaishnavism, Jainism or Buddhism, he was both right and correct in saying that doing violence to another being should be abhorrent to a god- fearing human being, that you should not do unto others what you do not wish to have done to you. However, he was also spot on in terms of rational strategy: every perpetrator of violence has a story, a narrative of self- justification, whether public or secret, just for himself; every act of counter- violence, of revenge, retaliation or ' pre- emptive strike', likewise, comes with a counter- narrative; in this messy war of narratives, it's supremely easy, nay absolutely necessary , to create a non- truth, a post- truth, a cascade of ' alternative facts'; the only way to de- fang an opponent, who is superiorly equipped both in arms and in the means of creating and propagating a supporting narrative, is to give him little opportunity to use his arms, to give him as little fuel as possible for powering his narrative.
Gandhi declared his principles to be eternal, but he chose his strategies in the context of his time. Mass mobilization for swaraj began at a time when there was no radio, and when telephones were rare, but it could not have happened before the telegraph system or the rail network were put in place in India — the communications for organizing depended hugely on these two things.
The radio network, even as it spread, was controlled entirely by the State. However the press was a different matter, as were the radio networks of other powerful countries which broadcast different news from what All India Radio let through. There were various other factors, such as the independence not only of the British press but also of the newly formed BBC, and there were elements of chance and luck, just as there were huge mistakes and miscalculations before we finally arrived at Independence.
Now, how does one contemplate non- violent resistance in the age of Modi and Trump? At a time when the notions of a free press and unfettered media are under attack from so many different directions? How do you answer the argument that says 'when Gandhi fasted he made front- page news, but today when an adivasi or someone from the Northeast fasts the media ignores them?' Well, for one, it's not a good idea to take up arms just because an ambush with AK- 47s makes for sexier headlines.
Likewise, if Trump or one of his vile associates advocates opening fire on unarmed protesters, it's crucial that the protesters be really unarmed, the odd handgun going off towards the police will not help shut down machine guns and armoured cars. If the people in power in this country keep buying up the news groups while simultaneously attacking contrary reporters as presstitutes, we will need to have some answers that are out of the box and outside mainstream media.
In the meantime, it's good to remember that what the press and TV say does have an effect — there is a reason why every politician in power gets highly incensed by what is carried in the vernacular press and channels, even as they blithely ignore what the English language press says. Equally, it's important not to lose sight of the fact that across the history of the last hundred- odd year’s truth and alternative truth, facts and anti- facts, have always been seesawing in conflict. We may be at a new bend in the river of history but our fore bearers have traversed a lot of similar topography.
Lapses in monitoring
Source: By Sriroop Chaudhuri: Deccan Herald
In India, potable water quality impairment is astoundingly diverse and appalling. Fluoride levels, above permissible limits, are reported from 19 states, salinity from 15, iron from 21 while nitrate from 12 states. Among these, arsenic and fluoride have severe health concerns. Globally, India ranks high among nations for fluorosis and arsenicosis cases/ deaths. Salinity is a cumulative expression of all dissolved chemical species. Nitrate can be harmful to infants as it causes a typical blood disorder, blue baby syndrome, in which oxygen carrying capacity of the haemoglobin drops alarmingly.
In the sphere of extreme climatic aberrations, availability of clean water has emerged as a prime concern to the international authorities (WHO-Unicef). Special emphasis, in this regard, is placed upon bolstering rural water supply services (RWSS). Clean, sustainable, potable water is also linked to safe sanitation, still an appalling scar on humanity, especially through vast areas of rural India.
To keep a tab on rural potable water quality impairment, the Water Quality Monitoring and Surveillance Programme (WQM&SP) was launched in 2006, by the Ministry of Drinking Water and Sanitation (MoDWS). It strove to empower rural communities by: (a) building awareness through Information, Education and Communication (IEC) to address ownership of systems, health hazards due to poor potable water quality, hygiene, sanitary survey etc; (b) training five grassroot workers in each Gram Panchayat (GP); (c) training two people at state, four at district, and five at block level; and d) providing field testing kit (FTK) to GPs.
Since its inception, over 4 lakh FTKs have been distributed, alongside about 1180 lakh bacteriological vials; over 28 lakh people have been trained; numerous chemical laboratories have been established. Presently, the MoDWS is also setting up an International Centre for Drinking Water Quality in Kolkata, with specific focus on arsenic and fluoride contamination. Genuine progressive advance towards innovation and rural development indeed. Yet, sadly, results still appear far from expectations.
Lab-test results, under WQM&SP, reveal water contamination for about 13% rural habitations in the 2015-16 periods. But technically, this would be quite an understatement, as a vast fraction (>55%) of rural habitations remained untested even for a single source. Considering the habitations actually tested - at least one water source per habitation - about 35% habitations appear contaminated. Apparently, only 9% rural habitations across the nation were fortunate to have all their water sources lab-tested.
Among habitations tested, Kerala topped the list with about 99% habitations found contaminated, for at least one water source. For Kerala, the unequivocal champion of the nation's literacy drive, it seems a tad befuddling. Other leaders are the NER states of Nagaland and Tripura with over 85% households in grip of contamination. In West Bengal (72%), Assam (67%), Rajasthan (62%), Karnataka (58%), Telangana (55%) and Andhra Pradesh (53%), over 50% habitations tested positive for contamination, for at least one of their respective water sources.
Presently, there are 12 states where over 50% habitations have been tested for water quality in at least one source, with Gujarat (92% habitations) leading the tally. On the other hand, in UP, Uttarakhand and Nagaland, only about 5% habitations appear fortunate enough to have at least one source tested. Overall, in 16 states, over 50% rural habitations lacked water testing (lab-based) during 2015-16 period, which gravely accentuates human health risks. Globally, India has always been a top runner for cases of arsenicosis (only after Bangladesh) and fluorosis.
Challenges in potable water quality monitoring draws from several interweaving factors such as, weak regulation and enforcement of water quality standards, poor operation and management (O&M) of RWSS, weak provider accountability, lack of private sector involvement, sloppy disbursement of funds, lack of intersectorial collaboration and low awareness among rural population.
A burgeoning concern in water sector in India is over reliance on groundwater, the mainstay of RWSS. Even though recent MoDWS mandates assure of nationwide piped water system soon, handpumps/tubewells still form the core of RWSS. But with expanding human settlement, rising demand, climate change and increasingly deeper drilling, groundwater contamination/salinisation events are becoming ever more common. What's more, when polluted groundwater is used for irrigation, it accentuates bioaccumulation potentials of toxic species in human tissues via consumption of 'contaminated' crops. Sadly, even though reckoned with extreme importance globally, bioaccumulation studies are relatively sparse in India, if not completely absent in most parts of the nation.
Honestly, water quality monitoring and assessment has been an eternal benchwarmer at high-level policy meeting in India. As always, we learnt to lavish more on quantity over quality. But of what use is quantity if it's not 'usable'? For water, quantity-quality nexus is universal, and it is time we realised it. Nineteen states/UTs have registered multiple contaminants, whose synergistic effects on human physiology are yet to be fully comprehended.
Although, official records show lakhs of people trained and FTKs distributed, a fundamental doubt remains: are they reasonably aimed at states/ districts/ blocks/ villages where potable water quality is indeed an issue? How about official follow-ups on O&M of the FTKs distributed? Are FTK-results internationally publishable? Every year USGS, BGS, EPA, WHO, UNICEF offer hundreds of fellowships to study water quality impairment. But how many government fellowships in India have been recently awarded to explore links between human expansion, climate change and potable water quality?
What we probably need, is a four-way hook-up between the administration, GPs, civil societies, and the private sector. What we probably need, is for health adversities of polluted water to be advertised on prime time media slots. What we probably need, is ample resources for our research communities around the country to investigate region-specific factors that influence water quality.
What we probably need, is real-time open-sourced spatial digital database of epidemiological assessments of water-borne diseases, based on which efficient monitoring schemes can be devised at the grassroot level. But before all, what we absolutely need is realisation dawning at the crest of a pyramid so a few wheels can start turning at the grassroot level.
Post-Truth Europe ~ II
Source: By Arunabha Bagchi: The Statesman
More important, of course, is the election in France due to take place in two rounds ending in May. France has a presidential form of government and all eyes are directed towards the presidential candidates running in the first round. France has an even longer history of strong right-wing movement, started by the uncouth nationalist leader, Jean-Marie Le Pen. The traditional coalition of parties to the right and to the left were able until now to put National Front of Le Pen behind them in the first round, except once when National Front came in second and competed in the direct fight for presidency against Jacques Chirac of the right-wing coalition. To stop Le Pen, the entire left threw their support for the “hated” Chirac to ensure his victory. This time it is more complex. Le Pen’s daughter Marine has now taken over the leadership of the party and modernized it with somewhat broader message to attract new voters. Opinion polls show her winning the first round with about 25 per cent of the votes.
The question is: Who will be the runner-up to qualify for the direct election in the second round. There were surprises galore during the primaries of both the recently named Republicans and the Socialist camps. Early favourites on the right, Nicolas Sarkozy and Alan Juppe were soon out of the race and finally an ultra-conservative and champion of morality, Francois Fillon, became their candidate. On the left, voters in the Primary elected the left fringe candidate Benoit Hamon to run as their presidential candidate.
Then the French satire magazine, Le Canard, published the damning report that Fillon emloyed his wife with huge pay as his private assistant while holding the Prime Minister’s office. Either candidate may not get enough votes of the other camp to defeat Marine Le pen in the second round. There is total confusion among traditional parties, and this led the current socialist industries minister, Emmanuel Macron, to start a new party, En Marche, meaning “Onwards”, and run for the for the first round of the presidential election. If he makes to the second round, opinion polls show Macron defeating Le Pen by a margin of 65 per cent to 35 per cent!
The climax of all will be the election in Germany in early autumn. The electoral system there is very similar to that in the Netherlands. There are two major parties in Germany, the centre-right Christian Democrats CDU/CSU and the cenre-left Socialist Party SPD. Then there are smaller parties that often join coalition governments, like the Free Democrats on the right and the Greens on the left. After the unification, the Communists of erstwhile East Germany also formed a minor force in Germany. When the last SPD Chancellor Gerard Schroder made drastic cuts in social welfare programmes, many disillusioned socialists formed with the Communists a new party, called Die Linke.
The party has considerable clout in the eastern part of Germany. One feature of the German eletion is the five per cent threshold, with any party failing to reach that threshhold being denied seats in the Bundestag. This was designed to stop the Nazis, after the Second World War, to enter the Parliament. But now this is going to change, with a new “post-truth” party dominated by neo-Nazis, Alternative for Germany (AfD), expected to win more than 15 per cent of the votes, according to all opinion polls.
This is threatening the chance of Angela Merkel to be re-elected as the Chancellor. Merkel is the leader of CDU, whose sister party CSU that represents Christian Democrats in the ultra-conservative mountain region of Bavaria is on a collision course with her. Its leader, Horst Seehofer, is against the sanction of Russia and openly supports Donald Trump. This makes the “post-truth” politics a formidable force in Germany. On the other side, SPD after Schroder suffered from lacklustre leaders. That too changed suddenly this month when the President of the European Parliament, Martin Schultz, took over the leadership of SPD, which seems to have chnrged the political base of the party. The whole of Europe is waiting.
Richard Rorty’s vision of an ideal society in a world with multiple truths is being tested in the West with the traditional politics on a collision course with the “post-truth” brand. European elections will determine the course of politics in the West for years to come. The situation is different in India. Enlightenment was imposed on us by the English educated elite. It never got diffused into our society. To this was added the post-modernist phenomenon of “post-truth”, driven by the digital hype. This is another illustration of the Bharat-India dichotomy.
Post-Truth Europe ~ I
Source: By Arunabha Bagchi: The Statesman
The Oxford dictionary has decided to anoint “post-truth” as the word of the year 2016. The dictionary defines this as “relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion or popular beliefs.” The usage of the word increased dramatically after the Brexit vote in the United Kingdom and the election of Donald Trump as the Republican nominee in the US presidential election in the summer of last year. Two canonical examples cited by the liberals as “post-truth” are the claim of the Brexiteers that 350 million pounds that the UK contributes to the EU budget every day would be used to improve the National Health Service if the UK withdrew from the EU, and the other was the deliberate silence of Donald Trump when asked about the innuendo that Barack Obama was actually born outside the US, and therefore became the US President illegally.
These were just two of a series of statements by politicians to circumscribe obvious facts by appealing to prejudices of the electorate to achieve their goals and the “post-truth” world became a full-fledged reality in the West. Since India lies beyond the radar of the western intellectuals and analysts, they failed to realize that the “post-truth” world was actually born two years earlier in India with the campaign of the BJP during the parliamentary election of 2014.
After Oxford dictionary’s decision to term “post-truth” as the word for 2016, numerous articles appeared in major international media around the turn of the calendar year on this topic. Cheap philosophical discussions ensued, with Plato and Nietzsche taking the centre stage. Plato’s theory of forms was portrayed as conceptualizing “the truth”, the first attempt towards a theory of knowledge.
Eminent philosophers since then developed their own versions of the theory of knowledge, which finally led to Immanuel Kant’s revolutionary idea that we never could know “things-in-themselves”, but only reflected through causality, possibility, and necessity etc that he called categories. The Plato-Kant paradigm was to know the truth as an eternal and unchangeable concept. This illylic idea was shattered by Frederische Nietzsche when he argued that truth was a function of power ~ the power to dominate the thinking of others.
Coupling truth with power changed the western philosophy forever. The key concept was “contingency”, and Nietzsche argued that “truth was relative to the perspective of the truth-seeker.” This meant, in essence, that there were many “truths”, and the concept of “one truth” was a fiction. The fractured truth put the idea of God on a shaky foundation and morality lost its moorings in the West. This actually excited Nietzsche, as he thought that this would work against the herd mentality of people and they would have to “create” their own morality.
Nietzsche dominated western philosophy, both from the right and from the left, throughout the last century. Then towards the turn of the century the American philosopher Richard Rorty developed a theory of an ideal society where multiple truths were the norm. The key is intellectual humility and the need of conversation to reach a consensus. He argued that the political and intellectual elite are still trapped in the Enlightenment mindset and think that “we can discover the truth, provided we use our reason the right way.
Whoever does not manage to get at the truth simply hasn’t been using their God-given intellect the right way and therefore needs to be enlightened.” Rorty predicted catastrophic consequence of this attitude in the post-Enlightenment world of Nietzsche. He argued in Achieving Our Country that ordinary people not sharing the “truth” of the political and intellectual elite would elect a “strongman” and “all the political correctness the academic left had been trying to build for decades would come flooding back as discrimination, stronger and ruder than ever.”
It took only eighteen years for his prophecy to become reality with the election of Donald Trump as the President of the United States. In fact, it was already realized two years earlier with the overwhelming victory of Narendra Modi in India. The fragmentation of truth was atomized with the advent of social media like Facebook and Twitter and the “post-truth” world became the reality in India, even before it took decisive hold in the West during the unstoppable election campaign of Donald Trump.
Now “post-truth” is threatening Europe as three major national elections are coming up there within the next eight months. Let us start with the election in the Netherlands, a small but significant country situated between Germany and the United Kingdom. The Dutch have a liberal tradition going back for centuries and they were a founding member of the European Union. In a way, they are the bridge between the Continental Europe and the Anglo-Saxon world. They had traditionally three major parties, the center-right Liberal Party, the centrist Christian Democrats and the center-left Labor Party. A decade ago the exterme right of the Liberal Party split under the leadership of Geert Wilders with the same isolationist and rabid anti-Muslim message as that of Donald Trump long before he came to the political scene.
The Netherlands has parliamentary democracy and proportional representation. Coalition is a must to form a government there. As per convention, the Queen asks the party with the largest percentage of votes to start the coalition deliberation. With the Christian Democrats and Labor Party steadily losing their support, despite veering to the right, the PVV party of Geert Wilders has now become the largest party in the Netherlands in all opinion polls. At first it was considered the voice of protest in between two elections. The belief was that at the polling booth the level headed Dutch would still refrain from voting for PVV.
This time it is different. With Brexit and victory of Donald Trump, Wilder’s support has solidified and there is real panic among the traditional political parties. There are behind the scene campaigns for supporters of all center/center-left parties, including the Greens, to vote for the Liberal Party just to thwart Wilders from getting the highest perccentage of votes. The whole of Europe is watching.
Battles in history and history-writing
Source: By Jayachandran: Mint
Winston Churchill once famously quipped that “history will be kind to me, for I intend to write it”. Implicit in his statement was the certitude that those with the privilege of writing history have the first shot at distorting it. And it is often said that the privilege of writing history ends up with the victors. So, who won the 1576 battle of Haldighati between Pratap Singh (better known as Maharana Pratap), ruler of a rump kingdom of Mewar, and the forces of Akbar, the Mughal emperor? The question has gained relevance since three ministers in the Bharatiya Janata Party (BJP) government of Rajasthan have backed a proposal to rewrite the history books for university courses. The ministers contend that the textbooks must be changed to reflect that Singh defeated Akbar and not the other way round, as is more widely understood. Not to be left behind, Haryana’s education minister too is keen on making the same changes in his state.
A few weeks ago, again in Rajasthan, some ruffians belonging to the obscure Rajput Karni Sena assaulted film-maker Sanjay Leela Bhansali while he was shooting for his next movie in Jaipur’s Jaigarh Fort. Based on the story of queen Padmavati, a character in Malik Muhammad Jayasi’s epic poem, Bhansali’s movie attracted attention due to the rumour that it shows a romantic dream sequence between the queen of Chittorgarh and Alauddin Khilji, the sultan who ruled Delhi more than two centuries before Akbar.
The poem, which most probably is a work of historical fiction—the name Padmavati has no reference in available historical sources—portrays the queen choosing to self-immolate (commit jauhar) rather than become Khilji’s possession. The alleged romantic sequence could not be tolerated by the Rajput Karni Sena, a self-appointed guardian of Rajput honour.
The film’s production house has denied the existence of any such romantic sequence. But that is not the issue here. Bhansali and his crew have the artistic freedom of expression. Even if there was a romantic sequence, no one has the right to assault Bhansali for it. On the other hand, history textbooks in schools and universities are not the arena for freedom of expression. They should be based on evidence—recorded in literature, archaeology or folk memory. And all the available evidence points to Singh’s defeat in Haldighati. At best, some sources which claim that the battle ended without a clear winner could be coughed up. To be sure, Singh was a valiant ruler who would demonstrate steely resolve after his defeat and recapture most of Mewar (except the coveted capital city of Chittor) before dying.
Some have been quick to link this attempt of BJP ministers to the alleged sectarian outlook of the political party. And such charges are inevitable especially if the attempted change has a weak grounding in historical evidence. To be true to history will, however, also require confronting the sectarianism embedded in the famed battle of Haldighati. Most historians have argued that Hindus and Muslims were divided in the battle of Haldighati—Man Singh fought for Akbar and Hakim Sur Afghan fought for Pratap Singh—and hence the battle should not be seen on communal lines. But there was also an Abd-ul-Qadir Bada’uni who fought for Akbar and documented the story of the battle. He records asking his commander Asaf Khan about how to distinguish between friendly and hostile Rajputs. Bada’uni notes Khan’s response: “On whichever side they may be killed, it will be a gain to Islam.” Some historians claim Bada’uni was simply using Khan as a cover for his own bigotry but such a claim is open to contestation.
While the ministers may have chosen the wrong battle, the cause of making amends in India’s Marxist historiography is a worthy one. In their revulsion for alleged nationalist periodization of history into Hindu, Muslim and British phases, and Marxist historians built a narrative around social and economic stratification with a special eye on agrarian associations. But in the process they completely lost the religious and cultural aspects of the evolution of Indian civilization.
While the “communal” periodization which the Marxists reviled was pioneered by the British historian James Mill, they were quick to legitimize other colonial precepts like the Aryan invasion theory. There are layers of problems with India’s mainstream history as we know it. A fixation with Delhi has ignored India’s rich maritime culture. The kingdoms of north India have gotten more attention than those in the south. The Marathas have been given short shrift in favour of the Mughals. On a micro level, as the author Sanjeev Sanyal has documented, the great achievements of individuals like Marthanda Varma, who defeated the Dutch forces, and Lachit Borphukan, who vanquished Aurangzeb’s mighty army, have been almost completely obliterated.
Clearly, some rewriting is required. Equally clearly—for history is a core component of identity for communities and nations alike—rewriting will be a contentious project. BJP leaders replacing the wrongs of Marxist historians with their own would be exactly the wrong way to go about it. Attempts like the one in Rajasthan will discredit the project beyond rescue.
Freedom with defects
Source: By Ramachandra Guha: The Telegraph
After the third general elections held in 1962, the scholar- statesman, C. Rajagopalachari, wrote a fascinating, if now forgotten, essay on the imperfections of our young democracy. "The Indian electorate", remarked Rajaji, "suffers from well- known defects from which Western democracies are relatively free. The Indian voters are in great measure poor and vulnerable to bribery: even a day's expense for food serves to buy a large number of the poor voters." Rajaji had witnessed and campaigned in elections held in British India, and now in independent India as well. "What is to be deplored most in the recent elections", he wrote in 1962, was "the terrible rise in election expenditure and the manner in which money flowed for the purchase of the votes of the poor and illiterate. Money running so alarmingly ahead of education, leads one to ask what hope or way out is there for democracy.
The hunger for good government thus foiled inevitably leads to some form of violent escape which spells disaster for democracy."Rajaji was one of the first to comment on the role of money power in elections. This led, in turn, to the deployment of muscle power, a phenomenon that is the focus of Milan Vaishnav's new book, When Crime Pays: Money and Muscle in Indian Politics, a closely researched study of the increasing criminalization of Indian politics in recent decades. Vaishnav presents vivid case studies of individual goonda - politicians, matching these with the massive data- set on criminal charges against candidates assembled by that remarkable watchdog, the Association for Democratic Reforms. He then interprets this qualitative and quantitative evidence through the lens of political and economic theory.
Vaishnav begins his narrative in the late 1960s, when the decline of the Congress and the rise of multi- party competition, while good for democracy in general, also opened the door to large- scale defection as parties scrambled to forge anti- Congress alliances and governments. Candidates now changed parties for a price. Then, the decision by Prime Minister Indira Gandhi in 1969 to ban corporate funding "was to set parties off on a competitive search for underground funding". In 1985, corporate funding was once more legalized, but by now, writes Vaishnav, "the damage had already been done," with widespread use of black money in elections. Companies now, in fact, preferred to donate in black, fearing retribution in case a party they had not funded came to power.
In the first few elections, the threat of physical force had played a role behind- the- scenes, with musclemen intimidating voters to fall in line behind particular parties or politicians. But from the 1980s, these goondas sought to become netas themselves. Now the pursuit of protection was a crucial objective for aspiring politicians with criminal records. Parties, for their part, often chose criminals because they brought with them their own stock of cash to fight and win elections.
Thus " in a context of costly elections, weakly institutionalized parties, and an ineffectual election finance regime", parties increasingly began to " prioritize self- financing candidates who do not represent a drain on finite party coffers but can contribute ' rents' to the party". Why do voters so often choose criminals to represent them in legislatures and in Parliament? One reason is the government's failure to provide essential services such as health, education, and safety.
Thus "what the Indian state has been unable to provide, strongmen have promised to deliver in spades." There has been, argues Vaishnav, "a partial privatization of the functions of the coercive functions of the state". His book also points to a partial privatization of the welfare functions of the State, with winning candidates transferring to voters who supported those freebies of different kinds. These transfers are often done on lines of caste and community: thus “when politicians can manipulate their discretionary authority over goods and services the state provides, they often choose to do so along ethnically motivated lines. When Crime pays, also documents the buying and selling of tickets, paid news and other distortions of democracy so common in India today.
Vaishnav quotes a Congress MP as saying that ' crores and criminals are the essential ingredients' (of an Indian political party). He himself writes that "most politicians in India... do not perceive fixing basic services as a readymade path to electoral success." This is not entirely true — at least in rhetorical terms, quite a few politicians in recent years have based their election campaign on the delivery of social services.
Thus, they have promised that, if they come to power, they will bring to their constituents bijli , sadak aur paani — regular electricity, reliable roads, and clean water, or else roti , kapda , aur makaan — food, clothing, and housing. More broadly, they have claimed to stand for the welfare and dignity of the last person or of every person, as in those slogans used in the last decade to fight and win general elections: '[ Hamara ] Haath Aam Aadmi ke Saath' and ' Sabka Saath, Sabka Vikas' . What is true, however, is that this rhetoric masks a very different reality, where professedly development oriented politicians retain close links with other politicians with alleged criminal records, as has been the case with Nitish Kumar in Bihar and Narendra Modi at an all- India level.
In the book's last chapter, Vaishnav quotes from Modi's speeches during the 2014 election. In one speech, Modi said "we must do away with the criminalisation of politics, and delivering more lectures won't help." In a second, he said that after he became prime minister, "no [criminal] accused will dare to fight polls. Who says that this cleansing cannot happen? I have come to cleanse politics." In a third, he even specified a time limit for this cleansing, saying "I am positive [that] after five years of our rule, the system will be absolutely clean and all criminals will be behind bars."
Even as Modi was making these claims and promises, overseeing the nitty- gritty of his election campaign was his close associate Amit Shah, himself charged in multiple criminal cases, and at one stage even externed from his home state by the Supreme Court ' for fear that he would exert undue influence over the state's law enforcement apparatus'. Many of those contesting for Parliament on the BJP ticket had equally shady records; indeed, when the results came in, a full 35 per cent of the BJP's MPs had criminal cases pending against them.
It is now close to three years since the Bharatiya Janata Party won power in New Delhi. Notwithstanding the prime minister's claims, in the states and at the Centre, the dependence of the ruling party on criminals continues. As this column goes to press, the ADR has just completed its analysis of the affidavits of the candidates contesting the first three phases of the Uttar Pradesh assembly elections.
In the first phase, 25 per cent of the candidates contesting on a Congress ticket had criminal cases against themselves. For the Samajwadi Party, the figure was 29 per cent, for the Bahujan Samaj Party 38 per cent, and for the BJP as high as 40 per cent. On the other hand, for the third phase, the Congress has the greatest percentage of alleged criminals ( 36 per cent), while for the second phase of the UP polls the ' topper' is the Samajwadi Party, with 41 per cent of its candidates facing criminal charges.
The ADR's analyses show that every major party in Uttar Pradesh, as well as in almost every other state of the Union, displays an unhealthy dependence on criminals for contesting and winning elections. Indian democracy thus rests on an uncomfortable paradox; that while the conduct of state and general elections remains reasonably free and fair, too many of the winning candidates are dirty and dangerous.
Foreign degrees ~ made in India!
Source: By AK Ghosh: The Statesman
The Centre intends to allow foreign universities to open campuses in India. Though the government allows 100 per cent foreign investment in the higher education sector through the automatic, the granting of degrees by foreign institutions is not permitted as that authority rests with the universities established through central or state acts. However, several foreign institutions have been offering various courses since 2000 through joint ventures in the form of twining arrangement, franchises, and online courses. However, it is feared that the India-made foreign degrees may not be a genuine ticket to a global career and the institutes dispensing them will prove to be nothing more than dodgy degree shops selling fancy dreams.
The innovation of courses offered in India by foreign universities suffered a setback with a Madras High Court ruling in 1977. Responding to a petition, the court issued an interim injunction restraining foreign universities or institutions with offices in India from conferring degrees on students in this country. The court intervention showed that these institutions could expect such resistance from several quarters. This used to be the general pattern with most foreign and multinational initiatives in India during the 1990s ~ initial outrage and protests followed by gradual acceptance.
In order to regulate their operations, the government introduced in Parliament “The Foreign Educational Institutions (Regulation of Entry and Operation, Maintenance of Quality and Prevention of Commercialisation) Bill, 2007”. The objective was to provide “an ideal regulatory framework…in which reputed institutions are able to enter and operate in terms of India’s national policy, and at the same time check and control sub-standard or fly-by night operators”. The revised version the “Foreign Educational Institutions (Regulation of Entry and Operation) Bill, 2010 was introduced to facilitate the opening up of the higher education sector to foreign investors as well.
Among provisions in the Bill is the requirement of setting up a corpus fund of Rs 50 crore and withholding of permission to repatriate any part of the surplus revenue. This might seem to be too restrictive to the foreign providers, and could make them opt for foreign direct investment through the automatic route. There would be no difficulty as such to offer training or vocational programmes leading to certificates of proficiency. At a time when there is a demand to delink jobs from degrees, the foreign providers would be able to exploit the situation.
The University Grants Commission Act states that only universities set up by Parliament or a state legislature, and those declared deemed universities by the government, can award degrees. The Centre can have the UGC Act amended to allow foreign campuses that will operate as full-fledged universities in India, or introduce a new bill allowing them to function as deemed universities. In 2010, the government unsuccessfully introduced a bill in Parliament to allow foreign campuses. However, in 2013, the UGC notified rules allowing foreign universities to set up campuses and award degrees. In 2014, the HRD ministry did prepare a bill in favour of foreign campuses, but it was not sent to the cabinet.
It should not be taken for granted that the foreign institutions can ensure quality. There are a large number of universities that are chronically suffering from mediocrity. It will be difficult for these centres of learning to face the competition with quality foreign universities in the most developed countries. The dynamics of foreign universities in India would lead to commercialisation without enhancing competitiveness.
Many of the renowned off-shore universities are willing to invest in campuses abroad, and, in practice, it is hard to replicate the standards of the home country in some other country. Other related problems are: returns from the investment made in establishing and running of campuses, non-repatriation of profits as mentioned, the regulatory mechanism of the host country in regard to the fee-structure, faculty salaries, curriculum to be offered, and issues pertaining to research and intellectual property rights etc.
The University of New South Wales had shut down its campuses in Singapore within months of being established. The John Hopkins Centre also packed up its activities as it did not meet the performance benchmark in Singapore. A foreign university cannot enter China without a local university as partner. In Malaysia, private institutions could enter into twinning and franchising arrangements with partners of their choice prior to 2000, but subsequently new foreign partnerships and branch campuses have been allowed to be set up only on invitation from the Ministry of Education to the foreign institutions.
In India, we have been in the process of encouraging FDI not only in the development sectors, but in retail segment as well in order to enhance foreign funds with incidental advantages of technology transfer, job opportunities and benefits to domestic firms and consumers. But since education is not a tradeable commodity, the implications of FDI in the higher educational sector call for reflection.
It should not be taken for granted that the number of students intending to go abroad can be brought down by setting up offshore-campuses in India. The motivation of the students in such cases is mainly towards getting jobs and migrating at a later stage. The presumption that the cost of foreign education at home will be cheaper is also not based on reason. The idea that the foreign programmes will reduce the outflow of Indian currency is not realistic because the lion’s share will go to the foreign partners. It is also doubtful whether the quality of the off-shore institutions will be better than many of our internationally renowned institutions. The highly reputed foreign institutions would be interested in investment for developing or fostering centres of excellence in joint research programmes, faculty exchange and the like.
The foreign universities are very likely to focus on the market-oriented and demand-driven professional and technical disciplines. No foreign provider has shown any inclination in introducing courses in Humanities and Social Sciences. This is a major area of concern. This may have a negative effect on the future of these disciplines. Also, they may employ Indian faculty offering more attractive pay packets that would enhance the shortage of faculty in our universities. This has been noted by a parliamentary committee.
The standing committee on human resource development in its 237th report on the Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010 said that the entry of foreign universities into the country would aggravate the shortage of qualified teachers in Indian educational institutions both government and private. Foreign Direct Investment (FDI) in higher education is certainly harmful for home-grown institutions. It is an educational invasion on the principle that the superior party will win. The rational approach is to improve the standards of our institutions. It is only reasonable that any foreign university that intends to set up a campus should undergo certain checks and balances. Strict norms for permitting them to offer programmes either on their own or in collaboration with Indian counterparts or through online or in the distance mode should be followed.
The fact that students make a beeline for degrees offered by foreign universities is a sad commentary on the state of higher education in our country. Professor Venkatraman Ramakrishnan, the 2009 Nobel Prize winner, has doubts as to whether foreign campuses in India would be able to “reproduce the culture of the original place”, as similar campuses in South-east Asia and the Middle East have failed to live up to the people’s expectations. If foreign universities with an indifferent record at home are allowed to set up shop in India, the whole process will be counter-productive.
Election challenges for India and Nepal
Source: By Birendra P Mishra: The Statesman
The new constitution of Nepal, which was promulgated on 20 September 2015, is the seventh in seven decades. It provides for three-tier elections - to parliament, provincial assemblies and local units. A new parliament has to be elected by mid-January 2018 if the tenure of present House is not extended by amending the constitution. During this period, the provincial and local level elections should also be conducted.
Local level elections are primary, as the designated elected representatives of the local units have to elect the members of the Upper House of parliament. To hold all these elections simultaneously is also considered difficult as local units elections are getting delayed by the Madhesi opposition to some provisions of the constitution and also to the report of the restructuring commission submitted to the government.
Every election should be free and fair, on the one hand, and less expensive and cumbersome, on the other. The Constituent Assembly adopted the new constitution without sufficient deliberation. It neither paid any serious attention to the challenges that might crop up while holding elections nor did it take lessons from Indian experiences. Significantly, the Indian constitution, which was adopted after long deliberations by intellectuals and legal stalwarts, too, could not foresee the challenges of unscheduled elections, To avoid it, simultaneous elections to Lok Sabha and State Assemblies are being considered.
It took almost two years in India to conduct elections to parliament and state assemblies after the constitution was adopted. It was really a tremendous effort to hold simultaneous elections to the Lower house of parliament and also the state assemblies as India have the largest number of voters in the world. Four simultaneous elections (till 1967) went on almost smoothly.
However, it was needed to hold states elections at different times on account of dissolution of the state legislatures. Even the Lower House of parliament went to mid-term polls a number of times. Now it is felt that simultaneous elections should be conducted to avoid unnecessary expenditure, administrative involvement and restrictions imposed by the electoral model code of conduct, as almost every or alternate year, and there is a mini general election when a number of states go to the polls. In short, irregular elections are necessitated when Houses are dissolved prematurely.
Dissolution of the House takes place in different conditions, such as, when there is no single party majority to form the government and fresh people’s mandate is required and when governor of the state recommends dissolution of the assembly after finding constitutional breakdown or on the advice of the state assembly itself. There is a history of dissolving state assemblies on the ground that they had lost people’s mandate if the parliamentary election gave a different verdict. It is held that the parliamentary system is a Prime-Ministerial system and a general election is held to choose a Prime Minster.
Thus, Prime Minister/Chief Minister, being the leader of the House, has the right to recommend dissolution of the house, when she thinks it proper. In Indian and some other constitutions, there are two different criteria, one for choosing a constructional authority and another for removing it. For example, the speaker of the Lower House is elected through a simple majority of votes but s/he can be removed only through two-thirds majority. Such provisions are supposed to make the process of removal difficult, if not impossible. If this provision is also made applicable to the dissolution of the House, it can prevent dissolution to a great extent.
In India, the BJP has its government at the Centre and in most of the states. The Congress party has less than half a dozen governments in the states. There are several regional parties, which are ruling states on their own. Every party has its natural interest to continue in power. Thus, the following procedure is suggested. First, the constitution can be amended to restrict the dissolution of legislatures.
For amendment, there must be consensus on the national level. Secondly, there should be a coalition government at the Centre of those parties that have their governments at the state level. The major party at the Centre has to sacrifice its interest to continue in power paving the way to sharing power with other parties. Thirdly, no party at the state level should suffer while dissolving the legislatures to hold simultaneous polls. Fourthly, for a limited period, there should be either Central rule in the state or the existing governments should continue as caretaker governments.
Practically, if BJP forms its governments in Uttar Pradesh, Uttarakhand and a coalition government with the Akali Dal in Punjab, it can hold simultaneous elections in 2019 along with Lok Sabha elections. In case, BJP fails to form governments in these states, simultaneous elections can be held in 2020 April or May so that the parties, which form governments in 2017, can enjoy the benefit of continuing in power till 2020 to execute their commitments. Nepal, if it decides to hold simultaneous elections has to think over all these obstacles before taking any concrete action on this score.
Perils of the global monetary non-system
Source: By Jayachandran: Mint
Uncertainty seems to be the only certainty for the global economy after the 2008 financial crisis. While the period preceding the financial crisis is termed as the great moderation because of underlying stability and expansion of economic activity in various parts of the world, the phase after the crisis—which still continues—can perhaps be dubbed as of being one of continued chaos. The global economy has not been able to attain the desired level of economic growth and is dealing with one risk after another. Although policy intervention in the immediate aftermath of the crisis managed to contain the damage, it has proved insufficient in restoring the pre-crisis order. Consequently, the world is struggling continuously to cope with economic risks with political implications. Now, all of this has been further complicated by the focus of US President Donald Trump’s administration on currency.
Trump believes that the dollar is overvalued and large trading partners of the US such as China and Japan have kept their currency undervalued to remain competitive. He was recently reported as saying, “You look at what China’s doing, you look at what Japan has done over the years...they play the money market, they play the devaluation market and we sit there like a bunch of dummies.”
Meanwhile, the head of National Trade Council, Peter Navarro told Financial Times that Germany is using the undervalued euro to exploit the US and its other trading partners in the European Union. The German administration has rejected the accusation. Writing in The Wall Street Journal last week, for instance, Germany’s deputy finance minister Jens Spahn said: “Germany and the US understood early on that economic competitiveness is central to successful integration into the world market and for reaping the benefits of globalization. Blaming a country that has embraced these tasks and benefits from a highly competitive business environment would be bizarre. Nobody can have an interest in provoking a trade war.”
The global financial situation has become fairly complicated. The problem for the US is that given its domestic economic condition, the dollar is likely to strengthen in the short to medium term; this will have a bearing on its trade balance. And it is true that Germany has the advantage of a weaker euro as its value depends on the fundamentals of the entire euro zone. But, to be fair, German policymakers have been vocal against the policies of the European Central Bank (ECB) which are adding to the weakness of the euro. Meanwhile, Japan is also pursuing aggressive quantitative easing with negative policy rates, which has implications for the currency market. However, China, which is often accused of keeping the currency undervalued and accumulating large reserves, is now busy intervening in the market to defend the renminbi. China has lost about $1 trillion in defending its currency against depreciation.
To be sure, these complications in the global currency markets are not new. The then Brazilian finance minister, Guido Mantega, talked about an “international currency war” in 2010 to reason that countries are using competitive devaluation to improve their export competitiveness. The former governor of the Reserve Bank of India, Raghuram Rajan, raised the issue of spillovers from unconventional monetary policy on other countries on several occasions. For example, in a 2014 column, Rajan noted: “…the disregard for spillovers could put the global economy on a dangerous path of unconventional monetary tit for tat. To ensure stable and sustainable economic growth, world leaders must re-examine the international rules of the monetary game, with advanced and emerging economies alike adopting more mutually beneficial monetary policies.”
The unconventional monetary policy being followed by the ECB and the Bank of Japan is an extension of the policy adopted by the US Federal Reserve after the financial crisis. In fact, it is still not clear as to how and when the Federal Reserve will start shrinking its balance sheet which has expanded from the level of about $900 billion before the financial crisis to the present level of about $4.5 trillion.
Thus, the unconventional monetary policy continues to remain a risk for the global financial system as the extent to which systemically important central banks will use it and the manner of their exit are still not clear. The unpredictable style of functioning of the new administration in the US and its protectionist policies has further increased the level of uncertainty for the global economy. The hope of coordination on issues like the competitive use of currency and its impact on trade has also diminished because of the unilateral actions of the Trump administration.
In the last few years, India has managed the risk emanating from currency and financial market well; it will now have to be vigilant to be able to protect its trade interests.
Source: By Nirmalendu Bikash Rakshit: The Statesman
When India attained freedom in 1947, its people were not familiar with the democratic system. Democracy was once described by Abraham Lincoln as a system “of the people, by the people and for the people’. But, such a definition hardly mirrors the reality of politics. It implies, ultimately, the existence of a system of Government formed by the majority of the people. However, the autocratic rule of the British Raj for two centuries ruined the spirit of the people and the widespread illiteracy compelled them to live in sub-human conditions. No wonder some political thinkers had remarked that democracy would fail to strike roots in the Indian soil.
Jonhn Stuart Mill, the distinuished British political philosopher, had suggested that ‘universal education must precede universal adult-franchise’. In Britain, the voting right was actually extended step by step with the march of time and the spread of education. But Article 326 at the Constitution of India overnight granted the adult franchise in spite of nationwide illiteracy.
Yet it is a stark reality that elections in India have revealed considerable enthusiasm among the masses. Since the first general election in 1952, a large number of people have evinced keen interest in voting. Even the villagers have taken part in the electoral process despite a variety of hazards. It would be instructive to note that as many as 1,635,000 votes were declared invalid in the first election. Many voters, because of illiteracy, left the ballot papers on the floor of the booths or on top of the ballot box. This would imply that the right to vote was granted long before the proper time. But, it can, by no means, be ignored that they were keenly interested in the electoral affairs and many disabled people reached the booths with the help of others in order to cast their valuable votes.
Indeed, the success of democracy largely depends upon the participation of the people in the elections. As SL Sikri puts it, “Elections lie at the heart of every democratic process”. They are actually the accepted means for modern democracies to establish legitimate Governments ~ they secure people’s participation in public affairs, ensure peaceful transfer of power and combine the authority of the Government with legitimacy. But, from that point of view, our experience has not been particularly encouraging. True it is that a large number of people take part in the elections; but it is equally true that many others stay away from the polling booths for various reasons.
But, as Dr H H Das has pointed out, political participation is vital to the proper functioning of a democratic polity. It actually provides vitality and creativity of democracy and it also offers a defence-mechanism against tyranny and autocracy.
The usual method of political participation is to exercise the right to vote in the elections. Yet a large number of people are averse to political participation or they participate at the lowest level. Political scientists have determined four reasons for such aloofness. First, there may be “apathy”, which would mean the individual’s indifference towards or abstention from electoral affairs. Such a mentality stems from a lack of interest in political affairs. Second, there may be a certain “cynicism” rooted in suspicion towards and distrust of the motive and activities of others. This attitude develops because of the feeling that politics is a dirty game and that the politicians are, usually, unscrupulous persons. Third, there may even be a degree of “alienation” or hostility towards politics. In such cases, the person keeps a distance from the active political system. Then, there is also a sense of “anomie” ~ a feeling of personal ineffectiveness and divorce from the society.
It is because of these reasons that some people keep themselves away from the centre of affairs. It is significant that in the parliamentary election of 1984, the voter participation was the highest (64 per cent), but subsequently, the figures remained between 55.3 per cent and 62 per cent. A recent report reveals that the voter-participation in some provinces has reached 70 per cent, but the overall figure is not at all sufficient when compared with the 80 to 90 per cent polling in the Western countries.
Obviously, there are some cogent reasons for this poor turnout. Politics in India has, in recent years, often become a dirty game and this is one of the reasons why many honest and idealistic people take no interest in it. Men of principle and morality are increasingly remaining outside the electoral arena and, in their place, self-seeking persons of less than third- rate quality, have occupied a dominant position in the polity. Moreover, people often feel that sometimes crime and politics go hand-in-hand and the mafia-dons have polluted the social life by their unholy alliance with the ruling party leaders.
The Vora Committee once reported that the crime-world was running a parallel administration in our country and that no effective measure has ever been taken to stem that pot. This is why; many people have lost their interest in political affairs. Of course, democracy means demos (people’s) kratia (Government or the rule of the people). But if a large number of people stay away from the polling booths, democracy surely becomes a misnomer. Modern democracy has become an indirect system due to the enlargement of territory and population. So, people’s rule through elections has come to the fore. Naturally, it requires the active and full-fledged involvement of the people in electoral affairs.
Hundreds of thousands of people remain away from the polling booths and some others turn up only to cavil that they do not support any candidate fielded in the particular constituency. Hence they press the NOTA (None of the above) button. Indian democracy is now suffering from a chronic ailment and it urgently needs to recover. Instead of blaming the absentees, it is imperative to purify our democracy so that it can serve the real interests of the people.