Mumbai Police Commissioner Arup Patnaik gets transferred as expected. The reactions to any problems, any major major mishaps of political parties is so typical, the first thing they demand is the resignation of the person concerned. Thats fine so long as the person involved was directly responsible or the incident was caused due to his/her negligence. But what surprises is me is that beyond that there is no agenda on why the incident happened? where did things go wrong? did the organization as a whole fail in its duty?. These are even more important issues which need to be addressed. Unfortunately the removal of the concerned person seems to be the only thing which brings about a solution. In this particular instance of violence where outsiders come in the city and create havoc is something which needs to be studied in finer detail. Focussing the attention and energies on these issues will bring about more precaution and safety to prevent further instances. Removing the the man in office is fine which also to my mind is not always a pre requisite unless there is direct involvement or gross negligence. However there can be no denying of the fact that we always tend to be more person specific blaming the individual for mishaps rather than improving organizational efficiency.
The Difficulty of doing the Simple act.
Of late i have realized that many of the important things in life are so simple to do but so difficult to execute. Stuff like weight loss, quitting smoking, being on time, these are not very complicated things to understand, they are fairly simple but difficult to execute. Hence what is simple may not necessarily be easy.
Taking this point further sometimes a complex problem has a simple solution at hand, sometimes this simple solution is just one specific thing to be done. And even awareness of that solution may be there, but there is lack of any real execution.
The root cause behind this tendency is laziness. It is no surprise that Pandit Jawaharlal Nehru once said “Laziness is our biggest enemy”. Breaking from the shackles of laziness is really one of the key ideas to excel in any field.
The other aspect is that at times it is emotionally difficult to do certain things which we know are right. Take smoking as an example, it is easy to come from 15 cigarets to 10 and from 10 to 5 and from 5 to 1 if you are really serious. The real challenge is to quit that last one which you smoke everyday. Since quitting of that last one signifies that you are completely giving up on that habit and that maybe difficult to accept if you have been doing it for a long time.
Doing the right thing is often the hard thing. What is simple to do is not often easy to do. But we must persist.
Populism and America
Populism is one tool which is expensive for every government. Not every government in the world can afford it, but many indulge in it without realizing the dangers and hazards that will surface in the future because of exploiting this tool. The picture of every government with a huge fiscal deficit is similar to that of a farmer who is caught in a quagmire of debt. The obvious difference is that unlike the government which is bailed out by the IMF and World Bank and other such “kind” and “noble” organisations, nobody bails out the farmer. The farmer is left to fend for himself and eventually he commits suicide. After the IMF bails out the government, despite being bailed out, the government still commits suicide, guess why? Because after the bailout package the government is forced (by IMF) to reduce expenditure and increase taxation, and this is political suicide isn’t it, because that almost ensures that the present government might not come back to power.
It’s interesting to note that in the last 30 years, if there has been one factor which has been largely responsible for major economic restructuring and introspection by democratic governments; it has been a rising fiscal deficit. This is what we saw in the 1980’s in the Latin American countries, who wanted to adopt an import substitution industrialisation program, which needed them to develop their domestic manufacturing and industrial capacities. Around the same time oil prices had sky rocketed, the petroleum exporting countries were making huge money and all this money was deposited with the international banks. These banks recycled this money to the Latin American countries in the form of loans for their industrialisation program. Soon Mexico declared that it couldn’t pay back the loans, and had a huge current account deficit, because the foreign money was flowing in the country and now they couldn’t pay it back. The other Latin American Countries soon followed in similar fashion. IMF typically intervened, gave a bailout package and made the government change its plans from an import substitution industrialisation program to export oriented industrialisation. A complete change in policy, also not to mention that the governments had to reduce expenditure and raise tax collection.
Similarly the Indonesian countries in the late 1990’s went through a similar crisis. Thailand, Malaysia had huge deficits, which they were unable to pay back. These were countries that had a growth rate of more than 8% for about a decade and they enjoyed the confidence of most foreign investors, this phenomenon was called by the IMF as an “Asian miracle”. It dint take time for the miracle to become a mess, and soon these countries were unable to return the money which was flowing in from abroad, all that money had come in with a short term profit in the mind of the investors. Once again the Noble IMF intervened and bailed out the country with austerity measures as the condition and that lead to change in policy.
Similar story in India, in 1991 when the fiscal deficit was high and the current account deficit was high, and the country had foreign reserves which could barely take care of the expenditures of the next few weeks. The then Finance Minister and Prime Minister decided to take the help of the IMF before they offered it themselves. And the result of that help is what we see today, the liberalization of the economy and the removal of the license raj system.
Therefore it is very clear that if there is one major factor which leads to restructuring of the economic policy, it is a rising fiscal deficit. Currently the US and Europe is faced with the same crisis.
The Debt/GDP ratio of many of the western countries has gone above 100%. It is but obvious that the US government has to reduce its debt. Let’s look at their possible options: (A) They raise the taxation, but for that to happen effectively the GDP has to rise which seems difficult in the near future. (B) Reduce expenditure, which seems to be the most sensible thing to do. Currently 40% of the expenditure of the government is from borrowed money. And (C) is to print so much money that they blow the debt away, at the cost of huge inflation and the reduction of the value of the dollar. The option of reducing expenditure seems to the most viable.
It’s very clear that US can no longer afford to keep low taxes while giving high social security benefits and wage wars on foreign soils.
Access to justice
There is currently an interesting debate on in the Supreme Court about establishing more number of regional courts which would be the final court for appeal. One proposal says that the Supreme Court should establish more number of branches so that even people coming from far off need not worry about access to justice. The second proposal is, the Supreme Court cannot be split into various branches but we can have more regional courts which will be the final courts of appeal.
This comes in view of the high number of pending cases in the Supreme Court, in 1950 the pending cases before the Supreme Court were 680, as of September 2010 are 53,221. It is argued that one of the reasons behind this is that the appellate jurisdiction of the Supreme Court has been stretched too far. Whereas the constitution wanted the Supreme Court to be the apex court to decide matters of national importance and concerning public good. But it is believed by many that the Supreme Court has entertained too many appeals which should have been decided by the High Court itself.
But the flip side of these proposals are that if the Supreme Court only confines itself to issues of national importance then the injustice done to the citizens and which should rightly be placed before the Supreme Court if the High Court has mislead itself is necessary.
Access to Supreme Court is in a way is access to justice and if these doors are closed on the grounds that the issue at stake is not of national importance then it is a violation of the very principles of justice. Injustice done is injustice done whether at the local level or at a national level and it has to be given its due importance.
Underdeveloped-Developing-Transforming-Third World-New South
In an article in the ‘Hindu’ by Jorge Heine from the Balsille School of International Affairs, the subject is very interesting, the author speaks of the World Bank President Robert Zoellick now officially stating that the term “Third World” is now made redundant. This term was coined by Peter Worsely in his book “The Third World: A vital force in International affairs”. The author of this book had spent many years after World War 2 in Africa and India, he had the first hand experience of how these post colonial countries were emerging. The author was particularly impressed by seeing how Nehru, Castro, Nkruhma, Nyere left behind the debris created due to colonialism and started the work of nation building.
Going by this perception of Mr. Worsely the term Third World seemed appropriate at that time, many other people at that time gave other terms like Underdeveloped, Developing, lower income each more disappointing than the other. These terms only tried to suggest that these Post Colonial countries only were a mere footnote to the real history.
In the sixties and seventies many nations in Asia, Africa and the Carrribbean were economically weak and were dependent on trade from the north, hence they created groups like Non Aligned Movement (NAM), UNCTAD, and forwarded proposals in the U.N like New International Economic Order, sometimes these proposals got passed but very often they were not backed by any concrete reasons, they had little power apart from the voting rights in the U.N.
But over the last 10 years this scenario has changed substantially, countries like India, China, Brazil who are some of the fastest growing economies now “speak from strength not weakness”, they do not ask for aid but they want to trade. They expect a stronger say at the IFI, high table of global economic governance. Also another trend that has been observed is that these countries are not dependent only on the north countries for trade, they also trade among themselves.
Noted historian Ram Chandra Guha in a recent lecture spoke about why India is not and should not be a super power. The lecture was a kind of refutation to the media’s favourite headline “The Global Indian take over”, when there exists so much tension, conflict and disparity in our own society the take over in the world is “premature”. India’s domestic challenges and the situation with the immediate neighborhood demands more of settling immediate issues than any take over.
Therefore concludes the author the New South in the new century is going to be a strong force to reckon with. And the term Third World has been done away with.
The word “Ban”
I guess overreacting to things is what our politicians love doing especially when they see a political mileage which they can possibly gain. Take for example the issue of IPL where there has been some splendid mud slinging from two sides, the Shahi Tharror team and the Lalit Modi team, truly this battle in the IPL has been the most memorable match in this IPL 3, more memorable than the cricket matches. Since there is an Income Tax inquiry on the IPL of source of funds and how they are utilised, which is a mere inquiry the opposition parties have already jumped to the conclusion that IPL should be banned and we should go back to Test Cricket. I fail to understand the connection between banning the IPL and the fault of perhaps a few people in misusing the funds. Its so easy to make such sweeping statements for politicians about what they dont like. Anyways this time its been a bonus for IPL fans since along with great clashes on the cricket field we also seen a good clash on the political field…..
Criminalisation of Politics or Politicisation of Criminals
Sitaram Yechurry member of the CPI(M) Politburo recently spoke about the “Maturing of the Indian democracy” in an article in the Times Of India. He referred to the 4 C’s in Indian politics, Corruption, Crime, Communalism and casteism He further goes on to say that from these it is crime which manifests itself in all the other factors. Corruption is a crime, dividing people along communal lines and spreading hatred in society is a crime, suppressing members of the lower caste is also a crime. Therefore it is crime which is the common factor amoung all these C’s. The nature of the crime which we are referring to with regard to politics is of a different nature. It is said that “society creates the crime the criminal executes it” this quote however applies to those offenders who commit a crime due to certain extenuating circumstances, in which the criminal is placed in such a situation in which he is forced to commit a crime. But the crimes committed by Politicians mentioned above cannot be placed in this category. Crimes committed to gain political mileage cannot be justified.
Also the parties fielding candidates with a criminal record is a matter of concern. The Vohra committee report on the criminalization of politics has brought in some changes that candidates have to disclose their criminal pending cases, and there is a law to prevent certain candidates from contesting polls if they are found guilty under certain offences. But we also the know the judicial process in our country is very slow and can take decades when the matter travels from the lower courts to higher courts. Hence until the matter stands finally disposed the accused simply remains an accused and has the rights to contest polls and hold public offices and offices in government.
Hence the criminalization of politics eventually leads to the politicization of criminals.
Take a tour of the universe and see how big it is….
Check out this video to know how BIG the universe is! Its awesome, take a tour of the universe……….(Video developed by Mr. Patel)
Inflation, government and the people
The current phase of inflation seems to have undone much of the good that the UPA government created for itself through a “revolutionary budget” as Sonia Gandhi put it. The ‘Times of India’ describes this whole process as ‘pollonomics’. The government obviously wanted to showcase itself as a magnanimous organizing body which was compassionate enough to call of all the money which was due from the farmers, which was actually anyway lost, but calling it of at the most propitious time when elections are due would have resulted in electoral and political gain for the government. But now all that ‘good work’ (of a few weeks!!) may not ultimately give the government the edge that it needed for the next election. The BJP and CPI (M) are already threatening a nation wide agitation in second week of April if prices are not under control by then.
Whether the government will still win the election or not is a different matter, let us look at the phenomena of inflation that we are facing at the moment. First of all it is a global phenomenon; there is a jump in the food prices in the world market. Let us compare our inflation rate with the country we always like getting compared with for every reason, China. Currently China is growing at 11.4% and the inflation has hit a 12 year high of 8.7%, now that’s something to scream about, “inflation nearing 9%” almost sounds like “I have put on 20 kgs in one month and I have to lose the same in 15 days!” There is no doubt that bringing down the inflation rate from such a high rate not only takes a little time but it also affects the growth rate. We have already seen a drop in our economic growth rate to 8.7% from the high of 9.4% in 2007. Basically there is a clash between these two objectives of growth and maintaining price stability, but with both these figures going to their worse end we might have to face stagflation. Stagflation was a term employed by the supply side economists in the 70s, to describe the then existing economic crisis, and moreover they(supply side economists) held that these crisis had resulted because of neglecting aggregate supply in the economy and only focusing and framing demand managed polices which were advocated by Keynes. However, stagflation is not a properly defined term in economics, we know that when there is negative growth in two quarters continuously it is called recession, but there is no so such barometer which you plan plug in an economy and determine whether stagflation exists or not.
Now let’s look at the measures taken by the government to tackle the problem of inflation. First and foremost it must be mentioned that this problem will not be short-lived, as the latest report of the Asian Development Bank says that inflation will be a regular problem with the Asian countries. But the government undoubtedly has to do something for two reasons:
a) To ensure the welfare of the people
b) To win the next election (I can’t stop talking about it!)
So lets see what the government has done, first it has banned the exports of various commodities including rice, next it has abolished import duties to increase imports and increase supply of goods in the domestic market, then it has banned forward trading and recently it was reported that it is also taking measures to control prices of cement along with food articles by importing cement from Pakistan at Rs150-175 for a bag of 50 kg (it is sold at 225-240 in the northern states). Now all of these measures consist the supply side polices, along with that there are some monetary and fiscal polices also that he government might undertake, like increasing interest rates (it’s actually done by the RBI) tight money supply to prevent demand pull inflation and appropriate fiscal management. Apart from this the government also considers increasing food subsidies to bring about temporary stability in prices. However, while all these policies are being implement it is interesting to note that currently many countries are facing the problem of inflation, therefore they are also implementing similar such policies if not identical, what happens then?? If our government decides to ban exports and abolish import duties to increase supply, it can happen that other countries are doing a similar thing; Saudi Arabia is already implementing these policies. So how then does the government proceed with this problem? Im not saying this is happening per se at the moment, but currently with many countries facing a similar problem this is a theoretical possibility.
It is needless to say that the above policies will affect growth and in turn the stock market but this is inevitable, controlling inflation at the moment is of utmost importance, all the national newspapers can wait for a few months to write their favorite headline “Growth back on track” and “Sensex like never before”.
Union Budget and the Common man
I recently read a quote about the union budget, “The common man can’t understand the union budget, and the union budget can’t understand the common man!!” Although our current finance minister would like to contest the second part of the phrase, there is still no doubt that the common man can’t understand the budget. First of all the budget is prepared in complete isolation and secrecy. It is kept a big secret until ‘budget day’ for mysterious reasons. When every issue of national importance is discussed in a transparent and open manner in the parliament, why should the budget be an exception? Why is it that the finance minister straight away comes to parliament and reads out his speech and how he and his assistants have planned things for the entire year. The point that Im pressing here is that of transparency in the budget making process. Now let us see why the common man can’t understand the budget or why is it that he is not much interested in it, which in my view is the real reason behind his not understanding it. It is lack of interest not intellect which determines this. When Nani Palkhivala eminent jurist and economist delivered a lecture on the budget in brebourne stadium in Bombay, thousands of people used to come to attend the program, and were interested in knowing what is in store for them in this budget. Palkhivala could actually make a dry and boring subject like the budget interesting and enjoyable and moreover could simplify it from the technical economic language, which drove people to listen to him. His budget speeches finally ended in 1994. Today there are many people who deliver a similar lecture on the budget, lawyers, Charted Accountants, tax consultants; financial experts all express their opinions and views about the budget and its implications for the various segments of the population. But these people cater to a very niche audience. These are lectures where, businessmen, management experts, industrialists go and attend. It is difficult to find the common man here, who once sat in brebourne stadium and intently listened. After interest comes knowledge of economics or atleast elementary economics. Arindham Chaudhuri says “Economics is complex, mathematised, pseudo intellectual, quite unfit for the common man, around whom economics should actually revolve”. Reading and understanding the budget definitely requires good understanding of simple macro economics nothing more. And finally comes the role of the media in spreading the analysis of the budget far and wide. The print media does a very good job in analyzing the budget. ‘The Times Of India’ made a good presentation of the budget, simplified most of the provisions, especially the ones related to income tax and other taxes. They even showed how various sectors are affected by the budget. But the problem is with the electronic media. On the day of the budget, I saw 4 programs on television, on CNN IBN, TIMES NOW, NDTV and CNBC. All these programs were good but the problem is that they were only and only in english, the hindi news channels dint seem to cover the budget as extensively as the english channels did. This straightaway means that only the english speaking urban people will be able to understand what the panelists are saying. The panel members were almost the same in all the programs. Why dint some of the eminent panel members like Sitaram Yechury, Kapil Sibal and other financial gurus go on to atleast one hindi channel where they can explain the details to a much larger audience.
Ashmu 