On the road to Liberty

Corruption: Causes, Consequences and Cures

2011-08-23T16:37:00.002+05:30

The current campaign against corruption provides a golden opportunity to Dr Manmohan Singh to lead from the front. There is an urgent need for speeding up the process of economic, administrative and judicial reforms, not only to push the economy to a higher growth path, but also to help reduce the scope for corruption. Being the Prime Minister of India, he must spell out the options before the country. Then it would be for the people to decide in a democracy.

Typically, corruption, or rent seeking, is a consequence of the gulf that exists between supply and demand for any goods or services due to regulatory interventions. Despite, two decades of economic reforms, the regulatory and policy environment in many areas of the economy continue to be quite restrictive, and discretionary powers prevail. It is particularly in those areas where corruption continues to prevail.

The current focus on corruption should help us investigate these details and come up with systemic reforms. Any anti-corruption agency has to be a part of this overall architecture, rather than being yet another body to monitor, investigate and prosecute those involved in corrupt practices. Otherwise, the Lok Pal, or any such agency, will inevitably become a Joke Pal, it wouldn’t matter which version of the bill gets passed in Passed in Parliament.

The complete analysis is available here, "Cleaning up Corruption: An agenda for India"

Gandhians today, and Gandhi yesterday

2011-08-20T12:37:00.001+05:30

Many of today’s anti-corruption protestors believe that they are participating in the second freedom struggle from misrule. Ambedkar had warned against extra-constitutional means of protests. But today, in the name of Gandhi, many believe that constitutional processes are expendable. Actually, It is good that Gandhi is back in the public memory. If this provides an opportunity to try and understand him, it will be even better. While the tumultuous protests we are witnessing today seem to cluster under the umbrella of Gandhism, how Gandhian is the Anna Hazare led movement?

In this article "Gandhism redux? Wanna be Gandhis and the original Gandhi", I attempt to understand Gandhi and his relevance today.

Corruption: How not to fight it

2011-08-17T22:38:00.001+05:30

In the past few months, the debate over black money and corruption has been raging across the country. Some social activists and the government have been at loggerheads over the scope and structure of a new anti-corruption authority being proposed. There have been claims ranging from tens of billions of dollars to over a trillion dollar, money that may have been illegally acquired or wealth that evaded taxation. But the issue of corruption is not just about policing, but should be about about policies that help generate black money in the first place. The current focus on the Lok Pal, as a super cop, is only diverting attention from the real roots of corruption. I have co-authored this article with my friend Mohit Satyanand. One version of this article is posted in the Liberty Institute website, "Chasing Black Money: In search of red herrings".

Political Poribartan in West Bengal: A blueprint for ushering in real change

2011-06-04T10:14:00.006+05:30

West Bengal just had an historic election. The thirty year rule of the Left Front government has come to an end. In the following analysis I look at the political future of in Bengal, and the policy options before the new government. A version of this article was publisehd in the Anada Bazar Patrika on June 30, 2011. Shorter versions of this article have been published in the Financial Express and Pragati magazine.

It has been a few weeks, since Mamata Banerjee and her newly elected team of ministers took the oath of office. True to her style, the new Chief Minister of West Bengal has set a frantic pace for herself, holding innumerable meetings and making surprise visits to hospitals and other public spots, firing off instant orders, cajoling the government staff to serve the people better.

While Mamata Banerjee’s intentions are clear, she continues to be the dominant face of her government and party. There is a limit to the number of places she could try and visit, and the number of orders she could issue, given the enormity of the tasks before her following her historic election, defeating the Marxist led Left Front government in Bengal which had been in office continually for nearly three and a half decades.

Football is like a religion in Bengal. A burst of speed and waves of initial attack on the opponent’s goal may be a good strategy at the start of a fresh game, but is not sustainable over the full length of the game. First, there is the danger that in this rapid forward thrust towards the goalposts on the other side, players can easily get stretched, and distracted, and end up conceding a goal themselves, from a counter-attack by the other side. Secondly, there needs to be a much more detailed planning and preparation, a range of strategies and tactics to adopt, as the game progresses.

Mamata Banerjee is leading from the front, as the captain and manager of her team. But as the Chief Minister of Bengal, will she have the time and energy left to make the kind of sustained reforms on policy fronts that alone can revive the fortune of West Bengal. She is counting on help from diverse academics, intellectuals, and technocrats to help her shape her policies. But politics is not just about technical expertise, political leaders need to give clear direction to her team, and then needs to make her case to the public in a way that makes political sense. The challenge before her is how to convert good politics in to good policies. The game has begun, and the clock is ticking away, time is no longer on her side.

She ran a campaign on the agenda of change, and the huge mandate she has won only indicates the sky high expectation of the people. While the people have endorsed the Trinamool Congress led alliance, the real challenge for the new government is now before them – to govern in a way that will meet the expectations of the people.

For the past four years, Mamata Banerjee’s political career has been rising, powered by the agitations she led in Singur and Nandigram, against the forcible land acquisition policy and heavy handed action by the previous Left Front government in 2006 and 2007. For the first time she breached the formidable rural base of the CPI(M), in the Panchayat election of 2008. Then she joined hands with the Congress, in the general election of 2009, and for the first time humbled the Left Front in over 30 years, winning 26 of the 42 Lok Sabha seats. Then in 2010, she fought the municipal elections across the state on her own, and again won in majority of urban areas, including Kolkata. The political momentum was clearly in her favour when she formed the grand coalition with the Congress to take on the Left Front in the assembly election of 2011.

For the first time people in West Bengal had a credible political opposition to the CPI(M). The election drew the curtain on the 34 year rule of the world’s only communist led democratically elected government, which had won a record seven successive elections since 1977.

Revolution thro’ the ballot

Mamata Banerjee’s electoral achievement, in the 2011 election, is historic! It is a local version of the 1977 epic general election when a people’s movement, across India, brought about the defeat of the Congress party at the national level, for the first time in Independent India. That historic election 34 years ago established the foundation of India’s electoral democracy, with the first constitutional transition of national government through the ballot box. But today, while many remember that historic event, not many may have any fond memories of the three years that the first non-Congress government ruled the country. And the same people, who had voted them in 1977, voted them out in 1980, electing the Congress again.

Today, Mamata Banerjee’s party has been propelled to political power by ordinary people at the grassroots, securing for her nearly 49% of the popular vote. If the expectations of the people are not met, the disenchantment will quickly grow. Higher the level of expectations, greater might be the sense of disappointment. If a sense of purpose and performance do not become evident, people’s support could easily turn in to ire and anger.

Just 5 years ago, Buddhadeb Bhatacharjee had led the Left Front to a resounding reelection victory riding on the promise of Brand Buddha, of industrial revival and economic opportunities. Trinamool Congress of Mamata Banerjee struggled to qualify as the legally recognized opposition party, with less than 10% of the 294 seats in the assembly. Not many believed that she could politically win the state, although her ability to take on a political fight was well established.

But within a couple of years ‘Brand Buddha’ had begun to lose its shine as the protests against land forcible acquisition build up. The violent response from the police and the cadres of the CPI(M), shocked most people, rural as well as urban population. Suddenly the protests against land acquisition had turned in to a wider issue of dignity and justice, touching millions.

This time, Mamata Banerjee provided a great vision, reviving the place of Bengal in the Indian rubric. She has promised peace and prosperity, to reinvigorate agriculture and industry, to turn Kolkata in to London, Darjeeling in to Switzerland, and to build on the rich cultural and intellectual heritage of Bengal. She sought to remind voters of Bengal glorious cultural roots, and offered a promising future.

The Trinamool Congress campaign was in sharp contrast to that of the Left Front. The latter had a two-point agenda, harping on the hollowness of Mamata Banerjee’s poll promises, and apologizing for some vague mistakes made by the party, while seeking one more opportunity. It was really strange that the Left Front hardly showcased the record of it own government in the past five years of double digit economic growth, nor did they point to any particular successes from their 34 year long uninterrupted rule. The dominant sense of the Left Front’s campaign was fear mongering and angry outbursts. On the other hand, Mamata Banerjee not only highlighted the atrocities under the Left Front, but also provided a grand vision of reviving Bengal’s culture and economy.

The new Chief Minister has set very clear timeline, for the first 100 days, for the 200 days, and the next three years. At the very least this has provided a benchmark to hold her government to account. More importantly, this may provide additional impetus to the new government to think out of the box, and try to meet the people’s expectations.

Beyond symbolism

While on the day of being sworn in, Mamata Banerjee set some new precedents and symbolizing her campaign promise of staying close to people on the ground. She invited people from very diverse walks of life, celebrities and commoner, to witness the oath ceremony. She then walked the one and a half kilometers from the Governor’s House to the Writers’ Building, the state secretariat, through tens of thousands of her admirers and supporters, who had gathered to share a bit of history in the making.

But political symbolism is no substitute for political performance, which alone can help sustain the credibility of the symbolic gestures. Mamata Banerjee’s political capital may deplete quickly unless she can find ways to improve the performance of her government in a very visible form and in a relatively short time.

She does not have to rediscover the wheel, though, since there are quite a few examples of Chief Ministers who have been attempting to turn their state around in a relatively short time. Law and order have been a key issue, in West Bengal, as it has been in states like Assam and Bihar. Improvement in the law and order situation, it is believed, contributed significantly to the reelection of the ruling parties in these states.

Change, not revenge

Mamata Banerjee has been saying that she wants change not revenge (Badal chai, Badla noi,). In addition to seeking to restrain her jubilant supporters who may seek to target the activists of the Left Front, she needs to show an improvement of general law and order situation in the state.

Over the past decade, extortions in one form or another has been almost institutionalized in West Bengal. For instance, it is not uncommon for house owners to have a visit from local youth club, if he builds additional rooms or gives a room on rent. Hardly any property can be developed without satisfying demands of some elements. Then there is the feeling among many that the police do not entertain complaints unless approved by appropriate political authority. At every festival, local youths stop commercial vehicles demanding a donation from the hapless drivers.

West Bengal has a notorious record of political violence, quite apart from those related to the Naxalites. Post election violence has been a routine feature, over the past decade. Supporters of political parties have attacked each other, killed hundreds, burnt houses, and driven out many out of their homes. This time, there have been a few instances of attacks on political activists of different parties, but so far these have been far fewer than in the past.

Mamata Banerjee has promised a change in political culture, and it is this culture of political violence that she needs to break. Perhaps this is the reason why even before the results of the election were announced she had been urging her supporters not to organize big celebrations and victory rallies. Rather she sought to channel the energy of her supporters to sing Tagore’s song and be in the constituency to thank the people, and to focus on the task of bringing about the promised change.

More critically, an attempt to put a stop to the politics of vendetta, would allow the space and time to focus on the key changes that are necessary in a politically less polarized environment.

Depoliticisation of administration

Politicisation of the police force has been a big issue in Bengal for quite some time. There have been allegations of the police being infiltrated by CPI(M) cadres, and that they worked only as per the direction of the party leadership at different levels. But it can be changed relatively easily. A political decision need to be taken that political intervention in the basic police function will not be tolerated. Once the message permeates out to the rank and file of the police force, those who had earlier politically compromised themselves will either get isolated within or have to change to their approach.

With her resounding message of change, it is reasonable to believe that their will be significant sections of people in all organizations, including the police and the administration, who given the political lead towards performance and professionalism, will soon be able to bring about the necessary changes and show results. It is these professional and dedicated police personnel who need to be assured that they should act without political consideration, and that they will not be penalized if they act impartially and professionally.

The discovery of huge cache of arms from different villages in rural Bengal almost every day, since the day election results came out, is an indication of what is possible, once the message of change permeates to the grassroots. Ordinary people seem to be coming forward with information and helping the police to unearth these weapons, something that would not have happened a month ago. Clearly, the winds of change have started blowing at the grassroots.

Today, a lot of people in Bihar believe that the most basic change that Nitish Kumar had been able to bring about was in policing, which dramatically helped in improving the law and order situation most visibly, within a very short time. This was a low hanging fruit!

One of the first decisions of the new cabinet has been to institute a committee to review the instances of political prisoners languishing in various jails. While this is a very welcome step, equally it is very important to acknowledge that West Bengal has a history of political violence, and most political parties have engaged in it at one time or another. It could be cathartic to institute a political reconciliation commission, where people of all political shades could come up and submit evidence of political violence, and also admit to their own roles in it. The idea would not be to hold anyone guilty, but to document and publicly acknowledge these tragic instances, and build popular pressure on the political leadership of all parties to eschew political violence.

In this environment of change, such a political reconciliation could truly initiate change in the political culture of the state. Political differences could then be legitimately channeled through the democratic space, rather than outside it.

Recognising land rights

However, the first cabinet decision was to return 400 acres of land in Singur to the families who were reluctant give their land for the Tata Nano project. The Trinamool Congress is also against forcible acquisition of land. However, recognizing and protecting land rights is only the first critical step towards substantively changing the land laws. The land rights need to be converted in to clear title. The title needs to be easily tradable, so that the owner is in a position to maximize the value of the property. But the value of the property is dependent primarily on what use it can be legally put to. After all, value of land is function of the use it could be put to agriculture, residential or commercial.

The political durability of the Left Front government has been largely due to “operation barga” - the share cropping rights of farmer that the government recognized in rural Bengal. Part of the problem in Singur was the lack of clarity about compensation and rehabilitation of those who may not have title to the land, but still had share cropping rights on that land. The Left Front government made the fatal political mistake in believing that since they undertook they gave land to the tiller, they could also take it away from the tiller.

There needs to be a new arrangement between land owners and share croppers where perhaps they could each hold a certain percentage shares to the land title. There could be various ways to compensate the land owners, either through a land bank or land fund. Also, if the share cropper wants to sell his share of the land, then that could be purchased back by the land owner, or the owner could get a share of the sale proceeds.

None of these steps may be ideal or perfectly just. But this could help cut the Gordian knot which has tied up huge tracts of rural land. A vast majority of cases clogging the lower levels of judiciary relate to land disputes. Bringing about such changes would free up not just the land, but also huge amount of dead capital that is currently locked up in land.

For instance, farmers could start a company on the basis of their land ownership, and convert parts of the land for commercial and residential development, while maintaining agriculture in other areas. It would be also pertinent to ask why it is right to encourage industry to grow, and control hundreds of areas of land, while farmers are expected to survive on small parcels, and legally prohibited to expand their land holding because of land ceiling restrictions.

This will require a reform in the zoning laws as well. Bengal hosts a huge number of small businesses and workshops, a very large number of them in the informal sector. These provide the bulk of employment opportunities to people. Legalising these properties would open up huge potential for investment, opening enormous economic and employment opportunities.

Recognising land rights, documenting land ownership, facilitating land transactions, freeing up land use, will also help in diffusing the apparent conflict between agriculture and industry.

The outcome of the election in West Bengal will have an impact on the national political agenda. The political significance of land rights, and respect for property rights, has now been firmly established.

Cost of doing business

The cost of such bottlenecks is increasingly becoming clear. Registering land and businesses is an extremely time consuming and costly exercise in India, more so in West Bengal. Studies like the “Doing Business” report brought out by the World Bank, has estimated that to register a property or business in Kolkata, it could take anything between 100 to over 250 days, while in some other parts of the country it takes between 20 to 40 days. Eliminating these unnecessary and cumbersome procedures, would not only greatly reduce delays, and reduce corruption, but also attract investment and improve efficiency.

Without a basic change the philosophy of governance that looked at the population with degree of suspicion, and attempted to restrain them with the proverbial red tape. In such a situation, corruption was a necessary corollary as people grasped at anything to escape the stranglehold of that red tape. On the other hand, some people close to the government agencies found an economic opportunity in the bureaucratic web that ensnared the citizen.

Therefore, unless Mamata Banerjee is able to adopt her good governance philosophy which will truly hold the common citizen at the centre of attention, and simplify and eliminate the maze of procedures that obstruct every step the people may take, real change in governance will not be possible.

The new Chief Minister and her cabinet may want to set an example, they may attend office on time, work efficiently, and be personally incorruptible, but without change in the procedures reducing scope for administrative arbitrariness and discretion, the common man will remain a hostage in the hand of the different government agencies.

Man does not live by bread alone! Over the past five years, West Bengal experienced a relatively high economic growth of 12-14% in per capita state domestic product. Yet, the Left Front government lost the election by a huge margin, primarily because of the sense of injustice that prevailed among the people. With better economic performance, the UPA2 was reelected at the national level, and the Congress performed much better in 2009, than in 2004. In contrast, the ruling Congress party in Assam was reelected despite the sharp fall in growth rate from 13% to 7% in the last few years, but the improved prospect of peace made the people reelect the party with a bigger margin. A much better industrial growth did not assure the re-election of DMK led coalition, rather the spectre of corruption and the prevailing sense of injustice decimated the ruling party in the recent election in Tamil Nadu.

Devolving political power

Mamata Banerjee has also promised to take substantive steps to tackle two of the hotspots in the states, the Maoists in the jangalmahal areas in the western parts of the state, and the Gorkha agitation in Darjeeling. She wants to engage in a dialogue, and holds the promise of a special development package to people in these areas.

But anyone who has followed various insurgency and separatist movements in different parts of the country knows that throwing money to buy peace rarely works. What is needed is a genuine political empowerment at the grassroots.

Perhaps it is not a coincidence that she dreamt of turning the hills of Darjeeling in to Switzerland. But Switzerland does not only offer scenic beauty and modern living, but also provides the most vigorous example of bottom-up democracy. The Swiss provide a federal model where most of the powers are held at the local and cantonal level, and the national authorities are largely dependent on what flows from the lower and local levels of the community to the top. And unlike most of Europe, this bottom-up participatory democracy in Switzerland has been able to nurture a country out of the linguistic, religious and ethnic diversities. The peace and prosperity in Switzerland is a consequence of it truly devolved federal polity.

The Left Front heralded the panchayat system in rural Bengal as a means to help the party control the population. Mamata Banejree has to make the panchayat truly represent the people, rather than any political party.

Mamata Banerjee may do really well to look more closely at the Swiss model of bottom-up democracy which empowers citizens, and recognizes their dignity and freedom, and adapt these to her philosophy of governance, particularly with regards to the diversities in the jangalmahal and Darjeeling. Such an approach will also significantly reduce the financial stress being experienced by the state government.

Restoring fiscal health

It is widely acknowledged that the fiscal condition of West Bengal is rather grim. The high economic growth over the past five years has not helped expand the tax base. Mamata Banerjee expects the centre to help her government through the fiscal difficulties. But it is here that she may need a real change in approach.

Development that she has promised is unlikely to come increasing “development expenditure”. India provides a stark example of ballooning development expenditure over the past decades, but very little real development changing lives of people at the grassroots. And this is not just about corruption.

Over a century ago, Tagore had noted from his various attempts to promote village development that the real challenge was to change the mindset of the people, to make them believe in themselves and therefore initiate the much needed change themselves. Tagore realized quite the hard way that despite his good intentions, and willingness to spend money to try and help the villagers, if the people didn’t have the self-belief they would not be able to seize the opportunities that may come their way.

Over the past three decades, with the Left Front completely dominating almost all spheres of life, particularly in rural Bengal, changing the mindset would be biggest challenge. In such a situation, throwing more money to usher in development may make breed even more dependence, rather than independence and self-confidence.

Politically, most people have very little idea of fiscal deficit, or tax codes or rates. Ordinary people primarily see the impact of economic policies either through price rise and inflation, or lack of economic opportunities.

The priority for the new government should be to cut the procedural red tape, and deregulate, so that supply of goods and services may increase. This would partly reduce the inflationary pressure. Secondly, the government needs to remove the economic regulations and bottlenecks that have strangulated the capacity of people to seek new economic opportunities.

These two strategies would not only open new frontiers for the people to explore new economic opportunities, but also significantly reduce the demand for government expenditure. With this fiscal consolidation, Mamata Banerjee’s government would be able to key enablers of development, law and order, and basic infrastructure.

It is always very tempting for the people’s representatives, particularly when the sit on the treasury benches to believe that they could solve all the problems if only they had the money. There can’t be a bigger political fallacy. Apart from economic inefficiencies ingrained in this approach, it also opens the door for huge corruption. Politically, however, even in the best case scenario of government led delivery of development, there is no way for the government will be able to keep pace with the spiraling expectation of the people. It is no coincidence that promises of free electricity and water, soon transforms in to colour television sets and computers, yet the ruling parties, more often than not, are humbled at the next electoral outing. The defeat of the DMK in Tamil Nadu election 2011, despite delivering the colour television sets over the past 5 years, provides sombre reminder that electoral freebees do assure political power.

It is this mindset that Mamata Banerjee would need to change among her MLAs and ministers. If she can do that, the state’s fiscal health will recover quite fast.

Economic opportunities

The new government has promised to develop economic clusters to promote opportunities for development and growth. But historically, clusters have evolved locally out of necessity when the economic environment allowed it to grow. Devolving decision making to municipalities, wards and panchayats, and removing zoning restrictions, economic clusters would grow on its own without any state assistance.

Increasingly, across the world, economic wellbeing is a function of education and skill of the workforce, as well their health. In both these critical areas, West Bengal has fallen steadily behind many other states. There are fewer colleges, universities and technical institutes in Bengal today, than many other parts of the country. Availability of hospital beds as a proportion of the population is also significantly lower in Bengal than desirable.

Mamata Banerjee has promised to build educational and health infrastructure across the state. But given the fiscal situation of the state, this may neither be easy nor quick. While she focuses on stabilizing the fiscal situation, and gradually try to build the educational and health infrastructure, she could very easily allow private investment in these two critical areas. Given the high demand for education and health services, it should be possible to attract investment in these areas. One gets a glimpse of the scale of this latent demand for education from the number of coaching institutes, computer training and English learning centres that have sprouted across the state. Rather than shacking legitimate investment in these urgent areas, her government should focus on instances of fraudulent practices, and allow competition between private and public service providers to stimulate better quality of service.

A political advantage of this approach is that entrenched vested interests in the existing public sector would not feel immediately threatened by the change. Once the competition sets in they will see the inevitable logic of perform or perish.

For instance, the health insurance for the poor of the kind implemented in Andhra Pradesh could go a long way in improving access to health care services in Bengal. The poor are insured by the government, and the patients could go to any of the health care facilities, public or private, and get treated, with the insurance companies reimbursing the hospitals.

Politics of Mamata Banerjee

She has repeatedly said that she is not against leftist ideology, but against the bogus leaders of the left, particularly the CPI(M). The communist party in India is truly unique in the world. It is their willingness to work within the constitutional democratic framework of India, yet continuing to hold Karx Marx, Vladmir Lenin, Joseph Stalin as their icons, that make Indian communists a very rare breed. They coined the term “democratic centralization” in an attempt to explain the contradiction. Two decades after the fall of the communist empire in Russia, Eastern Europe and Central Asia, the Indian communists continue to claim that the ideal of a socialist revolution under the leadership of the communist party is a valid one. The collapse of the Union of Soviet Socialist Republic was a consequence of failure to genuinely apply those ideals by the communist party, rather than any flaw in those ideals.

The economic stagnation coupled with political arrogance on display during the three decades of Left Front rule in Bengal, was not just a failure of the leadership, but a consequence of the communist ideology – economic scarcity, perpetuation of poverty and institutionalization of fear in an attempt to keep a lid on the aspirations of the people. These characteristics are the hallmark of all communist countries in the world, only in Bengal, this was legitimized through successive electoral victories.

But in a democratic polity, ideological purity is not virtue if it adversely affects political performance. Once the prevailing sense of injustice reached a critical mass in the aftermath of the violence in Singur and Nandigram, politics of fear was no longer sufficient to keep the CPI(M)’s hold on power. And Mamata Banerjee seized on this sense of injustice, and found the opportunity to revive her political career, emerging as a credible alternative to the Left Front.

She is also a rare politician in India, who is not tainted by any scam nor embroiled in any corruption case, despite being in politics for over three decades. While her obviously simple life style has added to her political credibility, but this is not sufficient to keep her political stock high, as her predecessor as the Chief Minister may clearly vouch.

In the democratic political arena that is increasingly competitive, Mamata Banerjee has been the first one to acknowledge the need for performance. She would do well not to get bogged down by any political ideology that may adversely affect the performance of her government. That would open a whole range of policy options for her to try out from, in search of ways to improve the performance of her government. Today, only she can unlock the unlimited potential for change.

Ushering in change

India has changed significantly in the past 20 years. The economy has grown, poverty has been falling, and India is seen to be capable of seeking new opportunities that a globalizing world provides. The success of the IT industry has not only changed the perception of India abroad, but also given a new confidence to Indians. It is not a coincidence that this economic transformation is taking place while the politics has fragmented and become increasingly competitive. The diminishing dominance of the Congress played a significant role in ushering in changes in policy that improved economic performance.

Almost every state in India has witnessed a growing intensity of political competition. The increased political competition, forced political leaders to think of performance of their government, and explore policy options that could help them deliver, and improve their chances of re-election.

Bengal clearly missed out on the political churning experienced in the rest of the country, and consequently missed out on the economic changes increasingly visible elsewhere in the country. The lack of political competition in Bengal had ensured that Left Front could win seven consecutive elections to the state assembly. This time there was a dramatic change in the political landscape. With the first credible political challenge posed by Mamata Banerjee, people in Bengal seized the possibility of change, and the political tide turned against the Left Front.

Whether Mamata Banerjee’s government is able to bring about the change she has promised only time will tell. But one change that has already taken place - citizens of Bengal are much more politically empowered, having brought about this dramatic change in their political space. And the voters may cherish their new found political voice, and could be ready to change again if Mamata Banerjee’s government fails to live up to their expectations.

A century ago, Gopal Krishna Gokhale had famously said that what Bengal thinks today, India thinks tomorrow. Today, Bengal has steadily slipped from that pedestal. Mamata Banerjee has promised to restore Bengal lost glory. But she has to contend with two resources that are constantly running out, time and money.

Yet, change is possible. Some of the steps outlined above do not require her to provide the money, and could deliver visible results in a relatively short time. Performance would help build the political capital necessary to undertake some of the major structural and governance reforms. The politician in Mamata Banerjee will be the first one to recognize the value of political capital. The political entrepreneur in her should seize the small window of opportunity and lay the foundation for fundamental change, take the small but immediate steps towards a new Bengal. The rest will be history.

And if she fails, Mamata Banerjee would become history. Reminding us once again of the immortal line of the Bengali author Syed Mustafa Ali, “The same tradition has continued!” And the tragedy of Bengal may continue.

Prospect of liberal politics in India today - Part 2

2010-12-10T00:04:00.000+05:30

The verdict, in the recent assembly election in the state ofBihar, has attracted a lot of interest across India.The ruling coalition of Janata Dal (United) (JD(U)), and Bharatiya Janata Party(BJP), won a record 85% of the seats, 206 seats in a house of 243. Did thishuge margin of victory, signify a major shift in Indian politics? Is thepolitical agenda in Indiabeing reshaped? What does this election really tell us about the futurepolitical direction in India?

In Part 1, I look at the implication and impact of the Bihar assembly election, here.

In this the second part of the two part article, I try to look back at Indian politics, attempt to identify the various strands that dominated politics at one point in time or another - language, region, religion, caste, and find that there is a diminishing political return from various shades of identity politics that has set in. With identity politics in decline, could political ideology find a legitimate space in India?

Part 2: Evolution of Politics in India

In the first 15 years after Independence,politics was dominated by the identity of languages, and the states werereorganized along broadly linguistic lines.

In the next 15 years, poverty became the dominant element ofpolitical discourse, cutting across various social fracture lines, andencompassing different identities. During this phase, with nationalization ofmajor industries such as banks, energy and oil, textile, etc, Indiaentered a decidedly socialist era. But increased economic control, along withthe first oil price shock, led inevitably to political discontent.

Consequently, in the historic election in the aftermath ofthe ‘Emergency’, in 1977, the INC lost power at the national level for thefirst time. As the world watched, Indiabecame the first major democracy in a developing country to undergoconstitutional transfer of power from one party to another. This was an eventof enormous political significance, empowering people, and entrenchingdemocracy.

But the parties that formed the new government, pursued thesocialistic economic vision with even greater rigour, and with the second oilprice shock of 1979, inflation touched 20% per annum, and the fate of the firstnon-Congress government in Delhiwas sealed.

In the 1980s, while the INC regained power, and took sometentative steps to reform the economy, the country was almost torn apart byvarious sectarian movements. Bolstered by socialistic attempt to re-distributewealth, various political parties experimented with identity politics of caste,religion, and region, in the hope of capturing the organs of the state. Theseparatist movements in Punjab and Assamgathered steam. A lot of blood was spilled throughout the 1980s, including theassassination of then Prime Minister Indira Gandhi by her Sikh bodyguards.

At the same time, various caste groups attempted to organizeand mobilize politically, particularly in north India.In an attempt to politically consolidate some of the backward castes, asweeping policy of reservation or affirmative action was proposed.

On the other hand, another kind of identity politics raisedits head. Hindu fundamentalists were already apprehensive of appeasement ofreligious minorities such as Muslims, for electoral gain by the INC. Now thesame forces became concerned about social fragmentation on caste lines, andsought to unite the Hindu majority of Indiain to a cogent political force.

By the 1990s, while the separatists and secessionistmovements had by and large been controlled, the caste and religious polarizationcompletely fragmented Indian polity. This necessarily ushered in a new era ofcoalition politics, and for the first time, Indian politics became reallycompetitive, for the first time. With people experiencing diverse politicaloptions, routinely threw out the ruling side. This has been described as theanti-incumbency syndrome. A point came, when a sitting legislator had barely30% chance of getting re-elected.

Indian politics was again transformed. For the first timepolitical parties sensed an opportunity to gain power by winning election, andby the same token feared the very real danger of losing power as well.

It is in this tumultuous political environment of the 1990s,when political uncertainty prevailed, that Indiabegan to reform her economy in a big way. This defied conventional wisdom thatpolitical uncertainty will lead to an uncertain economic outlook.

It is precisely this political uncertainty which made thepolitical leaders and parties look for policies to improve governance and theeconomic performance, in the hope of winning the favour of the voters.

Policies became a subject of discourse out of sheerpolitical necessity in an extremely competitive political environment. Just ascompetition improves the economic efficiency, political competition sustainedthe search for policies that might improve the prospect of getting re-elected.

As India’seconomic growth increased gradually from 6% in the 1990s, to 8% and then 9% inthe mid-2000s, politics of performance became a significant factor inelections.

The second significant consequence of increased politicalcompetition was the diminishing returns of earlier identity politics. Whilepoliticians tasted power riding their favourite identity, be it caste orreligion, the voters began to relish the prospect of political competition, andexplore ways to force the political parties to perform.

The BSP, the party of the most oppressed castes, had madeits mark on Indian politics by rabidly polarizing caste opinon, and mobilizingand consolidating its targeted caste groups. It came close to political powerin UP, propelled by narrow identity of its caste base. Yet, it had to rely onthe support of other parties representing other caste groups, in order tocobble up the coalition with necessary numbers in the legislature. Theseexperiments continued throughout the late 1990s and early 2000s, and each timesuch coalition of expediency was quite short lived.

It is then, that the BSP, the party of extremely narrowlydefined caste groups, realized the need to broad base its political appeal ifit had to have any realistic chance of securing political power in UP. With nocaste group enjoying more than 20% share of the population, there was littlepossibility of any party being able to secure political power on its own. Forover two years, BSP went about transforming itself from the party of theDalits, to the party of all, particularly the poor, appealing to virtuallyevery section of Indian society, caste and religions. While the other majorparties in UP sought to consolidate their voter base, BSP was the only one thatattempted to expand its base to other groups.

In the UP assembly election of 2007, BSP reaped the benefitbroad basing its appeal. Defying all predictions, it won the assembly electionon its own, and gained political power in India’slargest state.

After 1977, when INC lost the national election for thefirst time, and the1990s, when Indian politics became truly competitive, the UPassembly election, of 2007, is perhaps the most politically significant eventin India. Forit showed the limits of identity politics, and established the political reasonfor broad basing politics.

Real significance of Biharelection of 2010

The assembly election in Bihar, in2005, also exposed the limits of identity politics. For 15 years, RJD leaderLalu Prasad enjoyed unquestioned political authority in the state. Yet, hefailed to grasp the political reality. While he tried to consolidate histraditional support base, but his almost complete failure to maintain basic lawand order, and governance, meant that his voters were growing increasinglydissatisfied.

One of the biggest advantage of the first past the postelection system is that even a small shift in support base can bring in bigelectoral dividend in terms of seats. This greatly increases the prospect ofnew political entrants to make their mark.

In 2005, in Bihar, as RJD’s politicalfortune was fraying, its main coalition partners, the INC, and another localparty, Lok Janshakti Party (LJP), moved away. As his vote base got divided, thecoalition of JD(U) and BJP gained the upper hand, and captured political power.

The election in Bihar, in 2010, onlyreconfirms the basic thrust of this analysis. Increased political competition,inevitably diminishes the political returns of identity politics as votersbegin to relish the greater range of political choices. Consequently, partiesare forced to look at ways of improving their performance in governance.

Indians typically have multiple identities in terms ofcaste, language, religion and region, and the voters are increasingly aware ofthe advantage of switching their identity to take political advantage of thesituation.

This is a fundamental lesson which Mr Kumar, the leader ofJD(U) and BJP coalition in Bihar took to heart.Realising the fickleness of identity politics, he opted to improve governanceas a way to appeal to broad section of voters beyond any particular identity.He moderated the caste based appeal of many in his own party, and convinced hiscoalition partner, the BJP, to moderate their Hindu religious agenda.

At the same time, since identity loyalties are notpermanent, as his predecessor from RJD had learned at a high political cost, MrKumar embarked on basic governance issues. This allowed his coalition toincrease their vote share by only 5%, getting about 39% of the vote in 2010election, but ending up winning 85% of the seats. The major opposition combineof RJD and LJP, secured 25% of the votes, but only 10% of the seats. The INC,which increased its votes by 2% to 8%, won just 4 seats in 2010, compared to 9seats in 2009.

Prospect for Liberal Politics in India

With identity politics running out of steam, anddistributive politics failing to keep up with the rapidly rising aspiration ofIndians today, the need for governance and development have clearly emerged onthe political agenda.

This is the first time in the 60 years of Indian democracy,that the prospect of policies that boost performance of government and theeconomic sectors are likely to get prime attention, out of sheer necessity ofpolitical survival in the extremely competitive world of Indian politics. Thisimplies that policies would have to be formulated with much greater care, and thesewould have to be politically viable. And since the ordinary voter is not apolicy expert, the only way to get the message out to the voter is by narratingthe policy proposals to the public through the filter of political ideologies.

Again, for the first time in the history of democratic India,political parties have the need to adopt a coherent ideology in order toexplain the intricacies of policies to its voters. So far, Indian politics havebeen largely devoid of ideology. All parties tended to adopt the dominantideology of the day, since their distinctive feature was identity. Ideology wasonly seen as a providing a veneer to mask the base identities to which thepolitical parties traditionally appealed to.

But with increasing significance of political performancefor survival of political parties, policies are coming to the centre stage. Tomake policies politically accessible to mass audiences, political ideology willnecessarily have to be developed. With diminishing returns from identity politics,political ideology will emerge from the shadows to the forefront.

For liberals in India,this is a once in a life time opportunity. For all these years, liberals weredevoted to their political ideals, but found very few takers. The liberals wereeither swepat away by identity politics of one kind or the other, or theirideological roots were seen as politically irrelevant, in an environment whereideologies were not needed to differentiate different political parties.

Today, with the demise of identity politics, and rise of theneed for political ideology to distinguish themselves from one another, thepolitical environment seems opportune for a liberal renaissance in India.Are the Indian liberals ready to seize their moment under the Indian sky!

This is the real significance of the Biharassembly election. It has reconfirmed the focus on governance that had emergedover the past decade, while also confirming the limits of identity politics.

Indian democracy has always been very vocal, voluble andfull of colour. Yet, one of the most startling features of democracy in Indiahas been the near complete consensus on the core political beliefs of the day,among most of the political parties.

Over the past century, as political freedom expanded aroundthe world, so too did economic freedom. Almost all the rich countries of todayare democracies. While the poor and developing countries are not typicallycharacterized by their weak democratic political institutions. Indiahas been a proud exception to that narrative.

Indiaretained her constitutional democratic republican character right through thepast six decades. But for the first time, with political competitionfacilitating an environment for economic growth and improved governance, out ofsheer political necessity, the prospect of Indiaactually joining the ranks of those countries that are economically free,politically democratic, and enjoying the highest standards of life seem to be adistinct possibility.

Indian liberals have their ideology, can they riseto shape the political destiny of India in the coming decades? The liberals have theirtask clear cut, history is confirming their path, future is beckoning them, butthey need to be able to rise to the occasion.

Prospect of liberal politics in India today - Part 1

2010-12-07T23:47:00.000+05:30

The verdict, in the Bihar state assembly election held in November 2010, has attracted a lot of interest across India.The ruling coalition of Janata Dal (United) (JD(U)), and Bharatiya Janata Party(BJP), won a record 85% of the seats, 206 seats in a house of 243. Did thishuge margin of victory, signify a major shift in Indian politics? Is thepolitical agenda in Indiabeing reshaped? What does this election really tell us about the futurepolitical direction in India? I attempt to answer some of these questions in this two-part article.

In this the first part, I analyse at the political scene in Bihar. And in the second part, I try to assess the direction Indian politics may take in the coming years, here.

Part 1: Lessons from the Bihar assembly election of 2010

Political configuration in Bihar 2010

This was the first major state to hold an election, sincethe general election to the national parliament (Lok Sabha) held in the summerof 2009. Naturally, there was a lot of interest to understand whether theverdict will be relevant only locally, or would it have national significance.Next year, 2011, as many as 5 or 6 states are expected to go to the polls toelect their legislators. So there was a high level of interest in the Biharelection, and speculation on the possible political fall out in the cominground of elections, and also on the probable impact on the political dynamicsat the national level.

Secondly, the general expectation, and the opinion polls,had all indicated that the ruling coalition of JD(U), and BJP, will bere-elected. What was uncertain was the margin of victory.

Thirdly, Bihar is a state where castebased identity politics had struck deep roots. Almost all the major politicalparties in the state have come to rely upon the core caste based support ithas. But in this election, there was a general consensus that issues ofdevelopment - law and order, roads, electricity, employment, - were at theforefront during the campaign. So, there was a great deal of interest to see ifthe election really tilted the balance in favour of the development agenda.

Then there were other lesser themes running through this twomonth long election schedule. Given that most people expected the rulingcoalition to win, there was an interest to see which of the two parties in thecoalition would fare better. To keep the coalition together, BJP had to softpedal its Hindu religious agenda.

There was also an interest to know how the Rashtriya JanataDal (RJD), the party led by Lalu Prasad Yadav, who along with his wife, hadruled Bihar continuously between 1990 and 2005, through three legislativeterms. The question was would the social coalition of Dalits (among the mostoppressed castes), the Yadavs (among the backward castes) and the Muslims, thathad seen the RJD through for 15 years, will continue to hold or dissipate.

The Indian National Congress (INC), the principal party inthe national coalition government in Delhi,was seeking to make a comeback in the two major Hindi speaking states of thenorth – Bihar and Uttar Pradesh. Over the past 30 years,INC had slowly but steadily lost its support base in these two major states.But INC had done surprisingly well in the UP in the 2009 general election tonational Parliament, and so there was speculation that perhaps the party hadturned a corner, and might improve its position in Bihar.

Finally, among the other major parties, there was theBahujan Samaj Party (BSP), which has emerged at the national level over thepast two decades. The BSP now rules the largest state in India,Uttar Pradesh, having won the election to the state assembly in 2007. The BSPprimarily represented the Dalits, which constitute about 20% of India’spopulation. But it changed its political strategy in prior to 2007, to includethe poor, the religious minorities, and the disadvantaged among differentsocial segments, and had built an unique rainbow coalition, which had propelledit to power on its own, in UP. So there was an interest to see if the BSP withits recent successes will have any impact in Bihar.

The past and the present in Bihar

Bihar is a major state in India,lying on the gangetic plains. It is politically a very significant state too.Yet, economically and socially, Bihar ranks among thelowest in India,in per capita income, or life expectancy, infant mortality, literacy, and manyother developmental indicators. Over the past twenty-five years, there was ageneral sense, that Bihar moves only in one direction,which is, downwards, falling further behind the rest of the country.

Bihar had produced many leaders ofnational prominence during the decades of India’sstruggle for Independence. Thefirst President of India, Dr Rajendra Prasad, hailed from Bihar.In the first three decades after Independencein 1947, Bihar had a major role in shaping the socialand political agenda of the country. During 1975-77, Indian democracy was undera cloud under the ‘Emergency’ rule of Mrs Indira Gandhi, when manyconstitutional rights and freedoms were suspended, Biharwas at the forefront of the movement to restore democracy in the country. Manyof the current generation of political leaders are a product of that nationalmovement.

Yet, over the next three decades, Biharhad lost its political prominence. Bihar had becomesynonymous with the worst of India’ssocial and political life. Identity politics of caste and religion fragmentedthe social fabric. Corruption and crime sky rocketed. Some of the worst formsof caste oppression and violence were witnessed in Bihar.Parts of the state were under the grip of extreme left wing forces. In otherparts, mafia dons ruled their own fiefdom with impunity. Economic developmenthad come to halt. Kidnapping had emerged as the most lucrative business.People, rich and poor, migrated out of the state in search of employment andsafety. People of Bihar seemed to have lost their self-confidenceand their pride. That was 2005.

The fifteen year rule of the RJD led coalition, in Biharcame to an end in 2005. Mr Nitish Kumar of the JD(U), formed a coalitiongovernment with the BJP. The soft spoken Mr Kumar was a study in contrast to theflamboyant Mr Prasad. With this election victory, people of Biharseems to have confirmed their faith in Mr Kumar and his coalition. In return,Mr Kumar seems to have helped people regain their pride to be a resident of Bihar.

Socially and economically, Biharstill has a long way to go. But there are a few things that the rulingcoalition seems to have done in the past few years that have clearly impressedthe people.

The most visible change was in restoration of law and order.Kidnappings declined dramatically. For the first time in years, people felt adegree of security. Even many parts of Patna,the capital city on the Ganges, particularly the riverfront had been abandoned to the criminals and bootleggers. Today, families withchildren feel safe to spend their afternoon and evening on the banks.

Apparently, the government had clearly instructed the policenot to be swayed by any extraneous influence, but enforce the law. It isbelieved that about 50,000 suspected criminals were locked up.

The Economist, the international weekly magazine, reportedon the changes in Bihar. Where there were no roads, nowthere were pot holes, recognizing the major effort of the state government torebuild the roads and bridges.

Another popular step seems to have been the effort topromote education among girls. Hundreds of thousands of bicycles weredistributed among girls who continued their education to the high school level.This step alone was credited with reducing the drop out rate among girls byabout 25%.

In an effort to promote greater political participationamong women, the state government also reserved half the seats in villagecouncils, the third tier of electoral democracy in India,to women.

And women did participate in a major way during the recentelection. According to Election Commission of India, 10% more women voted thanmen, when the overall voter turn out is estimated at about 54%. The turn outwas 6% more than the number of people who voted in 2009 during theParliamentary election.

In general, economic growth rate in Biharhas been averaging over 10%, higher than the national rate, for the past fewyears. This has been primarily driven by government expenditure oninfrastructure.

While there has been a visible change in the ground situationin Bihar, it would be incorrect to assume that the boldefforts of the ruling coalition to improve governance had been the only factorthat is responsible for its electoral success in 2010.

Development was clearly on the political agenda in Biharas never before. But Mr Kumar also had undertaken a new form of socialengineering. He promoted special welfare measures for two segments of the castecauldron, in an attempt to create new sense of identities. Traditionally,social welfare programmes for the oppressed and underprivileged castes werecaptured by the more advanced segments within these sections. So Mr Kumarinitiated special welfare programmes for the most backward among the Dalits(the Maha Dalits). He did the same for the most backward of castes (MBC) fromamong the other backward castes (the OBC).

In addition, Mr Kumar ensured that his coalition partner,the BJP, did not pursue the hardline Hindu agenda that alienates otherreligious groups, particularly the Muslims. Some of the more strident Hinduvoices of the BJP, including the Chief Minister of Gujart, Narendra Modi, werenot invited to campaign for the party.

These factors helped the ruling coalition to not only toconsolidate their traditional social base, but also move break the core supportbase of the opposition as well. It prevented polarization of opinion amongreligious ground. And it prevented the consolidation of traditional castesupport base in favour of the opposition.

Does this mean that identity politics continues to have aplace even while developmental issues are emerging on the political horizon? Tounderstand this question, one has to look back at the evolution of the Indianpolitical scene over the past 60 years.

Save the tiger from those who love it

2010-12-07T12:31:00.001+05:30

The summit in St Petersburg focusing on the plight of the tiger was the first international summit of its kind, though similar in content to the new Global Tiger Initiative launched by the World Bank in 2010 itself. Few of the tigers who roamed in the wild in the past remain that way at present, and many of the rest are in captivity. The greatest threat is the loss of habitat and man animal conflict. The tiger is a much valuable animal for human beings for parts like bones and skin. Environmental activists are busy blaming human beings for the problems of conservation without proposing practical solutions. My article titled "Save the tiger from those who love it" was published in The Financial Express on 7th December 2010.

Russia recently hosted a summit in St Petersburg to focus attention on the plight of the tiger in the wild. This is the first international summit of this kind, where heads of states of Russia, China, Bangladesh and some of the other range countries gathered to discuss the fate of the tiger. The summit follows the new Global Tiger Initiative launched by the World Bank earlier in the year. The bottle was new, but the content was the same old stale stuff!

It is believed that around 1,00,000, tigers roamed in the wild across 25 countries at the turn of the 1900. Today, barely 3,000 of them are in the wild. Another 10-15,000 are in captivity. The wild tiger, facing the prospect of extinction for the past 40 years, has seen a barrage of activism and funding. The Project Tiger was launched in the 1970s, then the World Bank’s Global Environment Facility directed more funds towards forestry and conservation, since the early 1990s. Over the years, innumerable conferences have been held and cash promised but nothing has helped the tiger yet. The summiteers in St Petersburg kept with that tradition, promising $350 million over the next few years, though more staunch environmentalists complained that barely 10% of this money is really new.

The delegates once again promised to work together to improve law enforcement so that the most profitable aspect, the smuggling of tigers parts, can be eliminated. They reaffirmed the belief that poaching of tigers poses the single biggest threat to wild tiger population, largely from India, which has half the wild tigers of the world today, to China, which has almost none, but where there is a demand for tiger body parts.

The biggest threat to the tiger comes from loss of habitat and man-animal conflict. Each year, a couple of hundred people die from wildlife attacks, mostly tigers, leopards and elephants. This often leads to revenge killings. On the other hand, poaching is estimated to constitute just about 25% of the threat to the tiger.

The most practical solution to saving tigers is allowing human beings some sense of property over them. Almost every species that brings any economic benefit to humans is generally nurtured and preserved: the humble cow is not facing extinction, despite the massive economic exploitation.

The tiger can also be as valuable. In the wild, it can attract tourists, nature lovers and even hunters, and generate revenue that can compensate for its keep. But this will only happen if the people living in its vicinity have some form of property right and ownership over the animal and its habitat, and can legitimately claim a share of profits.

A dead tiger is equally valuable for its skins and bones. And since the tiger breeds easily, even in captivity, it could be possible to breed them to meet the demand, again generating economic benefits. Alligator farming generates $20 million annually in the American state of Louisiana alone.

Demand for tiger parts in China could provide a big economic advantage and secure the future of the tiger in the wild. India is currently allocating about $20,000 per tiger per year and the money is not helping the tiger. Instead, a tiger could potentially earn 4 to 5 times as much and save itself from extinction.

The farmed or ranched animals could take the pressure off their wild cousins. And the wild ones could then become valuable as well for tourists and environmentalists.

Activists, and their political allies, don’t pursue these solutions; they are more interested in blaming humans as the problem. So they recommend clearing humans from tiger habitat areas.

Focusing on the problem creates an illusion for green summiteers that they are seriously engaged. It’s this illusive perception that helps political leaders consolidate their power in the name of protecting tiger. After all, in contrast to an ever demanding populace in a democracy, tigers make no demands. A blank check, that is a dream of all political leaders. But times are changing. Even the poorest forest dwellers in India are becoming aware of their citizenship in a democracy. They are demanding a way out of grinding poverty. They are voting for their rights. They are many times more numerous than the tiger wallahs!

At St Petersburg, delegates recognised that 40 years of conservation efforts to protect the tiger have failed, yet went on to promise more of the same. Pitting people, who live in close proximity to wild animals, against the animals. In such a conflict, the animals stand not a chance. It is time to realise that forests and wildlife are renewable resources. If the people are able to profit from those resources, then they will go out of their way to nurture and grow those resources. It is time to harness the power of commerce for the cause of conservation of tigers and its habitat. There is no need to wait for the delegates in St Petersburg to show the way.

Just as the world economy is trying to claw its way out of trouble on the basis of growing demand in developing countries, so too the tiger in the wild could be saved precisely because there is a demand for it, both dead and alive. Let the tiger earn its stripes!

Climate of Politics vs Economics of Development

2010-12-02T13:00:00.009+05:30

In this article, I look at the political dimension of various environmental concerns. This is particularly relevant since the annual meeting of the United Nations Framework Convention on Climate Change (UNFCC), opened in Cancun, Mexico, this week. Last week, the first global summit on tiger conservation was held in St. Petersburg, Russia. What is common to such diverse environmental agendas is that they offer enormous opportunity to political leaders to escape accountability. After all, if one claims to speak on behalf of the tigers, the animals won't make any demand. Likewise, if one claims to speak of protecting the interest of future generations 50 or 100 years later, the leaders can be sure that the future generations will not be able to hold them politically accountable for any misdeed. Such agendas tend to be political blank cheques! Please read and comment.

Can the climate save the tiger!

This week, the annual summit organized under the auspices of the United Nations Framework Convention on Climate Change is taking place in Cancun, Mexico. But after the collapse of the talks in Copenhagen last December, and the continuing economic turmoil in many parts of the world, not many are expecting any radical outcome.

The summiteers in Cancun may want to follow another meeting that was held in St Petersburg, last week. Russia hosted a summit to focus attention on the plight of the tiger in the wild, mostly in Asia, and Siberia, called the International Tiger Conservation Forum, organised under the auspices of the Global Tiger Initiative of the World Bank.

Economics of Tiger

The wild tiger has been facing the prospect of extinction for the past 40 years. Various initiatives such as Project Tiger were launched in early 1970s. Trade in tiger parts has been banned since 1975, (for Siberian tiger in 1987). Nearly two decades ago, the World Bank had launched the Global Environment Facility, a fund which was to have been used, among others, to help develop sustainable ecology in villages and reduce the human pressure on the forest and wildlife. Today, in India, many of the village eco-development committees are either non-existent or defunct.

India, which is home to about half of world’s tiger population, ranging between 1200 to 1500, now has nearly 40 forests areas are declared as tiger reserves. Thousands of villages dot these so-called tiger havens, where neither the tiger nor the people feel safe. In any such conflict between man and animal, where human toll ranges in a few hundred each year, the animal will necessarily lose out.

While participants gathered in Russia, in Chandrapur village in the western Indian state of Maharashtra, a tiger was found dead, and officials tallied the number of people killed, presumably by tigers, in the district to 11 this year. A senior official in Madhya Pradesh estimated that there were over 700 villages in the different tiger reserves in the central Indian state, but about 100 villages are really critical, located in the heart of the tiger territories, and the people need to be moved and resettled elsewhere. For just this task, the bill could be around $600 million.

The summiteers in St Petersburg discussed the threat to tiger, promised $350 million over the next few years, and environmentalists complained that barely 10% of this is new money.

It is this kind of hopeless mismatch between the ground realities and global discourse, which has only perpetuated the crisis, whether it is the tiger or the climate. Ironically, most of the environmental activists look at people as the problem, and fail to think of people as the possible solution as well.

Almost every species that brings any economic benefit to the people are generally nurtured and preserved. The humble cow is not facing extinction, despite massive economic exploitation. Wilderness areas with tigers can attract tourists, nature lovers and hunters, and generate revenue. Particularly, if the people living in the vicinity have some form of property right and ownership in the animal, the habitat and can legitimately claim a share in the profits. It is estimated, that annually fishing and hunting generates economic activity in the range of $ 50 to 70 billion.

A dead tiger is equally valuable for its skins and bones, for fashion and Chinese traditional medicine, respectively. Since the tiger breeds easily, even in captivity, it could be possible to breed them to meet the demand, again generating economic benefits.

Alligator farming in just the state of Louisiana, in the US, generates $20 million annually. Rather than breeding tigers for commerce, the participants at St Petersburg promised stronger effort at enforcing prohibition, a policy that has not helped the cause.

In addition, if trade is liberalized, there could be significant demand for tigers in zoos, private collectors,circuses and among a section of exotic animal owners. There is no reason for such a magnificent and valuable species to face the prospect of extinction from the wild, if only one practiced what is generally preached at every environmental summit – think globally, but act locally. Particularly, allow the local people the freedom to act, since they know their immediate environment much better than anyone else.

But many environmental activists, and their political allies, are more interested in focusing on the problem, rather than practical solutions. Focusing on the problem creates an illusion for the various green summiteers that they are seriously engaged. And it’s this illusive perception that usually helps political leaders to consolidate their power. As for the solutions, if the problem were to be really solved, a whole range of activists and managers, who have thrived from the political patronage, will lose their bread and butter.

Claiming to represent the tiger is an attempt to secure a political blank cheque. After all, tigers make no demand to the political leaders, unlike the increasingly demanding human voters.

Politics of Climate

The debate on climate change actually illustrates the same argument. A problem is proposed so far ahead in the future, typically 50 to 100 years, that political leadership across the world finds it very convenient to escape accountability, in the name of the future generations. After all, the future generations will never be able to hold the present leaders accountable.

But if people’s present priorities are not met, the prospect of that political power turning out to be a mirage is quite real. The collapse of so many totalitarian and authoritarian political regimes in the past two decades is an illustration of that reality too.

Like the tigers, the leaders face a practical problem today. Most people, particularly in poor countries, have many immediate problems to grapple with. For two billion people, daily survival is a top priority, and they cannot afford the luxury of considering future options, decades or generations down the road.

So political leaders gathering in Cancun will have to again consider the option of either dealing with a distant future, or confront the realities of today. Whether planet’s climate will change 100 years later, and wreck havoc on the people is uncertain. But what is not in doubt is that at least 2 billion people around the world do not have access to clean and safe energy. In India alone, particularly in the villages, indoor air pollution from inefficient cooking stoves poses daily health hazard to millions, with an estimated annual death toll of around 500,000.

Diseases may pose a problem in the future, but malaria poses a daily threat to hundreds of millions today. Tens of thousands of people die each year in rural areas of India and elsewhere, because the rural clinics do not have reliable electricity to run the refrigerators and preserve many medicines, vaccines and anti-venoms.

Two decades ago, ozone depletion was considered to be a top threat, increasing the risk of skin cancer to people with lighter complexion. Under the auspices of the UN, the governments agreed to replace the CFCs, used in air-conditioning, refrigeration and various aerosol sprays, which were believed to be the culprits. Today, there is not much talk of ozone-hole, or skin cancer epidemic, but the HFCs that ultimately replaced the CFCs, are believed to be a far potent greenhouse gas, contributing to global warming.

Over the past year, the political undertones of the global warming debate have been thoroughly exposed. The mis-pronouncements of the IPCC were not mere mistakes, but inevitable consequence of following the political lead. The political risk of miscalculation is very high, and which is why the political leaders are wary. The leaders of the rich countries, which typically funded or supported many of the environmental causes, no longer have the economic muscle to engage in their favourite pastime.

This provides a golden opportunity for political leaders going to Cancun, to focus on the realities of today. Whether it is the pressure on forests which is threatening the habitat of the tiger, or the lack of access to safe and cheap energy, these problems of today, affect millions, and these are all manifestation of misguided regulations stifling opportunities for economic development.

Reality check

With economic freedom, countries like China and India would be able to afford more efficient energy technologies, and reduce the load of pollution on the environment. After all, even with currently available technologies, energy intensity of Germany at 0.12 tons of oil equivalent for $1000 of GDP(2005), is less than one fifth of India’s at 0.68. Likewise, with economic development, and improvement in agricultural efficiencies, pressure on forest would decline, improved habitat will help revive the wildlife, including the tiger. It is agricultural productivity that helped China expand its man-made forest cover by over 2 million hectares, annually, from 2004 to 2008. In contrast, India added 0.3 million hectares annually, between 1997-2007, India. It is this kind of development that has allowed the US to reintroduce wildlife in to areas from where they had disappeared decades ago.

Today, half the world population does not have access to reliable sources of energy. Ignoring that reality, and focusing on a problem that may or may not occur 50-100 years later and demanding a reduction in consumption today, will not be very politically palatable.

If Copenhagen in 2009, exposed the limits of political power, Cancun could show the enormous possibilities if the political leadership of free countries focus more on the real concerns of today, rather than choosing to enter a battle like Don Quixote! That battle may be very exciting, but also completely futile. It is the economics of development that should determine the climate of politics, rather than the other way round. It is only with economic development, will environmental quality improve as well.

Corruption Trips Up India's Rise

2010-11-17T00:16:00.002+05:30

The growing scandal over a newly built apartment tower in Mumbai, and the collapse of an old building in Delhi on the night of November 15, killing over 60 people reflect the peril that haunts Indians everyday - lack of secure property right, and strangulating regulation. The result is the pyramid of corruption that weighs heavily on citizens, and retards India's progress. This kind of systemic corruption cannot be dealt with by symbolic resignation of a minister. A shorter version of this article has been published in the Wall Street Journal, on 17 November 2010.

Just a week ago President Barack Obama received repeated applause from Indian Parliamentarians for saying that India has risen, not merely rising! In the week since, Indians have been witness to the scourge that has held India back, corruption, with a capital C. President Obama’s host in Mumbai, Mr Ashok Chavan, Chief Minister of Maharashtra, resigned due to serious allegations of malpractices surrounding an apartment tower in the heart of the city.

That India’s rise could literally collapse, was tragically brought home when a building collapsed in Delhi on Monday night killing over 60 people. Collusion between unscrupulous builders and various officials allowed the addition of two more floors to an old three-storey building when the tragedy happened.

In this past week, Mr Suresh Kalmadi, a member of parliament, and a senior office bearer of the Congress Party, resigned from his party post. Mr Kalmadi heads the much ridiculed Commonwealth Games organizing committee, for various acts of omission and commission. The allegations involve gross misappropriation of public money by a number of public and private bodies, operating under lax supervision, leading to deliberate delays, massive cost escalation, and last minute procurements at highly inflated price. The public games provided a golden opportunity for private loot to the tune of hundreds of millions of dollars.

Just this Sunday, Mr A. Raja, the minister for telecommunication, resigned. Since 2007, there had been growing questions over his decision to allocate 2G spectrum slots on a first come, first serve basis to companies many of whom were not even in the telecommunication business, at very low prices. Some of these companies then sold their allotments within months to others at five to six times the original price. Some have not bothered to launch their services in the past few years. The 2G spectrum scandal, which notionally involves a loss of about US$ 30 billion, to the exchequer, is a consequence of arbitrary exercise of discretionary power by the minister.

The winter session of Parliament which begun last week, have been continuously disrupted by opposition parties on three counts of corruption – the misappropriation of funds in Commonwealth Games, the loss to the exchequer from sale of 2G spectrum at a fraction of the market price, and the scandal surrounding the Adarsh housing society in Mumbai. Various official committees, departments, and law enforcement organizations have begun looking in to all these issues. Cases are being heard even at the Supreme Court. But very few Indians believe that anything substantive will come out of all these procedures. At the same time, unfortunately, influential sections of Indians believe that corruption is a consequence of moral failure, rather than inevitable outcome of the rent seeking regulatory and legal regime that have been established with the design to extort, behind the facade of public welfare.

Over the past six decades, Indians have heard about many financial irregularities in the government, and many people have resigned. Yet, hardly anyone has ever been convicted much less imprisoned for these alleged misdeeds. The current set of corruption charges has once again highlighted the systemic nature of the problem afflicting India.

The Adarsh housing society was formed with a few members in the mid-1990s, but it was only in 1999 that real action started. While Indian soldiers valiantly fought to push back the intrusion by Pakistani forces in to the Kargil hills in Kashmir region, a group of officials, military and civil, were strategizing to lay their hands on a piece of prime real estate in downtown Mumbai.

The society claimed to help provide low cost housing to the widows and soldiers who had sacrificed so much in the Himalayan hills of Kargil. For this noble effort, they received 3800 square metres of land at 15% the market price, for a six-storey block, very close to a navy establishment.

Neither the state government nor the defence ministry was sure about the ownership of the plot. Not unusual, since in most of India, land settlement has not been undertaken since the departure of the British. The state of land records are pathetic, and so very convenient to manipulate. Across the country, hardly any land transaction, particularly in urban India, takes place completely legally. In major cities like Delhi and Mumbai, it is believed that typically 60% of the payment is made in cash for high end properties.

Today, Adarsh housing society is a 31-storey tower, with 103 apartments, for which owners have paid between US $ 140,000 and 180,000 for the 625 to 1000 sq feet of carpet area. But market rates for these apartments are believed to be over 10 times that. Hardly, anyone of the members seems to have fought in Kargil, and in addition to defence officials, the society includes relatives of senior bureaucrats and politicians as well. So egalitarian has been the operation, that rich businessman and their chauffeurs have been given a roof in the same tower. People with monthly salary of US $ 250, seem to have got generous loans of US $ 150,000 from their companies.

According to news reports, the modus operandi of the promoters of the housing society was to simply offer an apartment to any bureaucrats or politicians who either helped in securing various permissions, or turned a blind eye to the various regulatory violations.

The scandal had been brewing for the past two years, but it really hit the headlines in the past couple of months. Today, every department of the state and central governments, from defence and environment ministries to land and revenue, are competing with each others to point out the various violations by the society. Yet, the same departments had by their acts of omission and commission had allowed the tower to come up in the first place.

In Mumbai, over 8.6 million live in slums, out of 18-20 million people in the city. Yet, Mumbai regularly finds itself among those with the highest real estate prices in the world. Here, land is almost completely controlled by the political mafia. No surprise that traditionally, the urban development ministry in the state always remains with the chief minister. Successive chief ministers of different political hues have had no reason to kill the goose that laid the golden eggs.

For instance, a former Chief Minister had secured a prime land at a fraction of the price, in the city of Pune, for his educational trust. Across India, massive land grab under diverse welfare initiatives are rampant, with the powerful getting access to public property at notional prices.

Resignation of the political leaders will not help resolve the regulatory mess, but may only detract attention from the real source of the problem.

It is time to realize that the legal and regulatory framework in India, particularly that surrounding land, has been tailor made to facilitate the wheeling and dealing of the powerful and privileged class, all in the name of protecting the poor, and providing them affordable housing. While yet another official panel has just found that over 93 million Indians live in slums today, an increase of 18 million from 2001.

India’s poverty can be traced to this single most important factor – poor land records, and lack of respect for private property rights. Thus greatly limiting the capitalization potential of assets for the vast majority of Indians. This is coupled with arbitrary regulatory regimes, which instead of facilitating smooth transactions among people, invite powerful middlemen to extract their pound of flesh.

President Obama may have pleased India’s political leaders, by acknowledging India’s rise, but ordinary Indians are unlikely to be able to rise as long as they are weighed down by systemic corruption of their regulatory regime.

Obama calling India: Is anyone listening?

2010-11-03T02:47:00.002+05:30

President Barack Obama will be coming to India later this week. He is the third US president to visit India in this decade, and the only one to have done it so early in his term. Yet, the visit has not triggered any great popular interest. In my article titled "In Bush's footsteps in India" in the Walls Street Journal Online, published on November 2, 2010, I outline the possible issues on the agenda, and the reason for the lack of expectation from this visit.

In a longer version of the article "Obama calls on India: Is anyone listening?" I contrast the different political contexts between President Obama's visit now, and that of his predecessor President Bush in 2006. I suggest that President Bush and Prime Minister Manmohan Singh shared a political vision for India, and that enabled the two leaders to stake so much political capital on issues such as the civilian nuclear deal that the two signed. In contrast, India does not seem to figure significantly in President's Obama's scheme of things, consequently, neither side is willing to risk precious political capital on any significant issue. Here is an excerpt from this article.

In politics timing and popular mood significantly impact policy and colour the perception. President Barak Obama is coming to India this week. But the visit by the leader of the only superpower in the world has not raised much expectation among Indians, this time. The only hope is that there would not be any new flashpoint, given the whole range of issues on which the perceptions between the two governments diverge today. But most importantly, what is missing is a mutually shared vision that looks convincing!

Let’s look at the two issues which could have transformed the dynamic between the two sides, and taken the relationship to a really new phase. For the first time, the Indian side has agreed to buy fighter aircrafts from the US, worth $11 billion. And for the first time in decades that the US had agreed to sell offensive military equipments to India. Yet, the Indian government is unable to bell the cat, unsure of the political cost.

Likewise, the US administration is keen that the India’s civil nuclear liability law meets the concerns of the private players. This would have taken the hard fought India-US nuclear deal to a culmination. But in the aftermath of the re-ignition of the controversy over the Bhopal gas leak in 1984, the Indian government is unsure whether to risk further political capital at this moment.

The contrast with the 2006, visit by George W Bush could not be starker. Bush and Manmohan Singh had staked huge political capital on the India-US nuclear deal. Bush was already becoming unpopular at home because of the direction of the war in Iraq, and there were high decibel protests in India too. Manmohan Singh risked the survival of his government to get the deal signed.

No US president had done so much to accommodate India. And No Indian prime minister had put so much faith in a single piece of Indo-US policy. To this day many Indian policy wonks wonder why and how such a thing came about. This was one rare instance when two political leaders chose to lead from the front, in the face of major opposition to the deal on both sides. But this spark of leadership was underscored by an unusual level of trust and confidence the two leaders seemed to enjoy.

Obama will address the joint session of Indian Parliament during this visit. In 2006, rising political temperature in India meant that Bush did not get the same honour. Bush spoke to a select audience under shadow of the old fort in Delhi. Most Indian’s who heard that speech felt convinced that George W Bush truly believed in India’s democracy. The shared values of democracy, tolerance and pluralism were not mere clichés, but ideals that Bush and Manmohan Singh really believed in, and were convinced that the other truly shared that belief. In the context of emergence of international terrorism, the political significance of the democracy agenda had been greatly enhanced, and stood in sharp contrast.

Once that kind of relationship is established, almost all political obstacles can be overcome. Manmohan Singh and the Congress party leadership were completely vindicated when the parties that had opposed the new Indo-US camaraderie lost heavily in the 2009 general election. This is why the Indian prime minister had unusually warmly received Bush even after he had demitted office.

Obama had come to the world stage capturing the imagination of the people with his inspiring ‘Yes we can’ theme. Yet, he seems to lack the broad political vision that unites many people for a common purpose. Consequently, Obama, who won promising bipartisanship in domestic affairs, has now polarized the Americans as much as Bush or Bill Clinton. Internationally, Obama’s personal approval rating is still high, but over the past years his charisma has lost a lot of shine.

Obama’s lack of unifying vision could be on display during his maiden trip to India. To his credit, he is the first US leader to come to India so early in his term. If reelected in 2012, Obama may have an opportunity to come to India again, and perhaps he would discover his own vision by then. But this time, it is clear that in two years India and the US have drifted apart on a whole range of issues.

Obama has three key issues on his international agenda – Af-Pak, the Yuan-US dollar exchange rate, and climate change. In none of them the two sides share a common perspective. Either the US administration does not see any significant role for India, as in Af-Pak, or the Indian priorities are different as in climate change.

When Bill Clinton visited India in 2000, the reception was euphoric. A lot of Indians saw the first visit by an US president after a gap of 20 years, following the economic reforms of the 1990s, as an indication of India’s emergence on the global stage. But in the aftermath of India exploding nuclear devices in 1998, Clinton hardly had anything tangible to offer to India.

In 2006, Bush visited India amidst very polarized conditions, experiencing eulogies from one side of the political spectrum, and extreme political hostility from another. Indian democracy with its attendant debate, dissent and dirt were in full display.

Obama’s lack of broad vision for this trip has meant that he has failed to attract enthusiastic supporters, nor energized the traditional detractors of US policies. For the leader of the oldest and the second largest democracy in the world, the trip to the largest and vibrant democracy, is likely to turn in to a damp squib.

You may read the complete article on our website In Defence of Liberty.

Ayodhya awaits court ruling: Indians’ have already given their verdict on the temple-mosque dispute

2010-09-22T00:38:00.001+05:30

This week India would be awaiting the verdict of a court in a title suit. But it is much more than a property dispute. It is a contest between rule of law and politicisation of religion. The dispute has come to symbolise different visions of India. Should Indians today be burdened by the past, or should India move forward, drawing the proper lesson from the past, while preparing for the future.

In contrast to the frenzy surrounding this dispute twenty years ago, the prevailing disinterest in this issue is a sign of progress, and an illustration of how far the people have moved on.

A shorter version of this article, "India Has Moved on From Its Mosque Controversy", appeared in The Wall Street Journal Asia on SEPTEMBER 21, 2010

At one level, it is a dispute over land, which is quite a common occurrence. After all it is said that 80% of court cases in lower judiciary relate to land. The verdict is coming sixty years after the original suit was filed. But that too is not unusual, given that 30 million cases that are pending at various levels, judicial wheels are known to turn distressingly slowly in India.

Yet, this no ordinary title suit. This is a debate that has simmered for a few centuries. Over the past two decades, the dispute has come to symbolise two contesting visions of India. Twenty years ago, a political campaign to claim the site sparked off most vicious riots across half the country, that had raised the most serious doubts about the viability of a muti-religious, multi-linguistic, multi-ethnic sub-continent that is India.

The dispute surrounds a piece of land in the small town of Ayodhya, in the northern state of Uttar Pradesh. This town of 150,000 people, share the name of the mythical capital of Lord Rama, the heroic prince in the oldest Indian epic, the Ramayana. Rama is believed to be the incarnation of the Hindu God Vishnu, who was born to end the regime of a demon king.

In the 16th century, the founder of the Moghul dynasty in India, Emperor Babur had built a mosque in Ayodhya. Some Hindus believe that the Lord Rama was born at the very site on which the Mosque stood. Others believe that a temple existed on the spot where the mosque was built. There had been reports of Hindu - Muslim conflict over this spot in the 18th and 19th centuries.

Then in 1949, some idols had mysteriously been placed inside the mosque. And that started the present legal dispute over ownership of the property. Petition was filed in the name of the residing deity that the property belonged to Lord Rama. Members of the Muslim community contested the claim, and held that the property was a mosque. The disputed site remained locked up for fifty years.

In late 1980s, the BJP had mounted a political campaign to build a temple on the disputed site. The campaign brought rich political dividend for this marginal party, which had won just 2 seats in the 1984 general election, The social and political mobilisation on the issue of the Rama temple during this period was among the largest in post-Independent India. In response to the rising sentiments, and accusations of playing vote bank politics with different minority religious groups, the Congress government led by Rajiv Gandhi allowed partial access to Hindus to offer prayers in the hope of diffusing the tension.

Not unexpectedly, the political machinations only helped further boost the Hindu extremist groups, and contributed in no small way to the rise of the BJP. Their numbers in Lok Sabha jumped to 84 seats in 1989, and became a major political force and staked claim in the name of Hindu cultural nationalism. Ten years later, in 1998, BJP became the single largest party in the Lower House with 182 seats out of 545, and led a coalition government in Delhi for the first time. They repeated their success in the mid-term election of 1999, and lasted the full term till 2004.

From being dormant, the politicisation of the dispute came to define the political agenda of India in the 1990s. The highlight of the movement was BJP leader, Mr L K Advani’s 6000 km drive across the country, in 1990 to mobilise support in the name of the Lord Rama and the promise of building a temple. Although, the mobilisation did not enable the BJP to come to power in Delhi in the 1991 general election, it did shape the political agenda of the day. The movement climaxed on 6 December 1992, when tens thousands of Hindu zealots gathered near the disputed site, and stormed the old mosque to raze it to the ground. During this period, communal riots repeatedly flared up in different parts of the country that led to about 2000 deaths.

Twenty years later, the Allahabad High Courts is scheduled to give its verdict on September 24. There is a distinct change in public mood. And the two contesting side seems to have sensed the change.

In the past few decades, five suits have been filed, four by Hindu organisations, and one by a Muslim organisation. They have all been consolidated in to one, and now judgment day is near. There are three key elements in this suit are,

did a temple exist at the disputed site, before 1538
did the Muslims perfect their title through adverse possession
is the suit filed by one of the Muslim organisations, in 1961, barred by limitation

If the court goes to look in to issues surrounding the mysterious appearance of idols inside the mosque in 1949, that could be seen as matters of faith, and pose the biggest challenge to the judges who are best suited to decide on matters of fact. On the other hand, if the court looks at adverse possession, and decides on any pre-existing temple at the site of the mosque, and overrules any time limitation, that could open the Pandora’s box, with the prospect of igniting fresh disputes over many other religious sites. The best course of action for the court would be to limit the scope of their verdict to the legal issues surrounding the title of the land.

With the prospect of possible communal discord in the aftermath of the verdict, the government is appealing for calm. Even more importantly, all the organisations involved in the legal dispute have been repeatedly affirming that they will abide by the verdict, and adopt constitutional and legal measures in response to the verdict. All sides retain the freedom to appeal the verdict in the Supreme Court. This is a far cry from the belligerent claims by both the sides twenty years ago that matters of faith cannot be subject to judicial rulings.

What is even more significant is that since 1992-93, there have been many communal flash points in different parts of the country. Yet, hardly any has spread to other areas. Even the most serious communal riots in Gujarat in 2002, which left about 2000 people dead, did not spill beyond the province. The diminishing political returns from religious polarisation are clear, at least for now.

Even the BJP when in government, had to put the issue of temple on the back burner, for the sake of the coalition partners who supported the government. It is this moderating impact of electoral calculus that is perhaps the most understated strength of Indian democracy.

Popular mood has shifted away from sectarian issues, and political parties are being forced to recgnise this change. This provides a good opportunity to take a fresh look at the idea of India.

How has the idea of India or Bharat survived centuries of military conquest and political turmoil? It seems that given the diversity of the population, and a lack of political or religious or social structure and authority that could have a sway across the sub-continent, authority and social customs evolved locally. For instance, every practicing Hindu would have a temple in his or her own home, and had the freedom to choose from the plethora of gods, without much inhibition. Consequently, the invaders and conquerors could defeat the local rulers on the battlefield, or destroy a few places of worship, but not the ideas that prevailed in almost every home. In the civilisational sense, it was quite futile to destroy religious or temporal structures, in an attempt to subjugate the population.

The rich mythologies and the epics of India provided guidance, without requiring a structure. This best explains the survival of the civilisation that is India over the past two millennia. As the poet Rabindranth Tagore had noted a century ago, invaders rarely went back, instead got absorbed and added to the richness of the mosaic of India. This explains the many instances of different religions living in close proximity with each other. Today, a Muslim flower seller meeting the needs of Hindu devotees, or a Muslim artisan making Hindu deities or Hindus visiting the tomb of a Muslim saints hardly raise any eyebrows.

In this sense, the fundamental questions that the disputed site in Ayodhya raises are how Indians should look at historical wrongs. Should historical evidence of a temple pre-existing at the disputed site in Ayodhya be found, would it automatically require reestablishment of the temple? Would it then follow that other such religious sites where conquerors had left their imprint be corrected too? Should India attempt to correct these alleged historical wrongs, or should India take a leaf from its own history, and try not to repeat the same mistakes again?

After all, historical wrongs can never be corrected. Any such efforts inevitably lead to compounding of the wrongs, and perpetuation of misery for ordinary people. If India’s survival as a civilisation did not depend on correcting historical wrongs, now that India is emerging on the international horizon, it has no reason to try and do the impossible.

Twenty years ago, India was a very different place. It was characterised by scarcities, and government was the principal source of patronage. Today, many Indians have got a glimpse of the possibilities, as the Indian economy and society have opened up. Increasing number of Indians are no longer satisfied being frogs in the well.

Like the rest of the country, the people of Ayodhya have moved on, too. The town is said to have 20,000 temples and three mosques. But the young people are flocking to the numerous institutes that have sprung up to teach English, prepare them for various entrance examinations for engineering, management, and medical schools, and to cyber cafes. The ubiquitous cell phone towers dominate the skyline, over temples and mosques. The future beckons the young in Ayodhya, as elsewhere in India. It would be a far greater injustice to try and sacrifice the youth of India to the past in the name of correcting history.

In India, religious freedom matters, not religious structures.

Land and mineral rights must belong to private people

2010-09-08T23:08:00.001+05:30

The multi-billion dollar Vedanta bauxite mining project in Orissa has been been mired in controversy. Recently the Ministry of Environment and Forest issued show cause notice to the company for violating various provisions of the Forest Rights Act, and suspended their mining permission. Following is my latest oped on this issue. I look at the debate from the perspective of land and mineral rights, and say that these should belong to the people who live there. This article was published in the Wall Street Journal under the title, "Landing India's Next Big Investment", on September 8, 2010.

Endemic poverty amid environmental riches has been the fate of most indigenous tribes in India for generations. There are perhaps 90 million so-called "tribals" in India today, 80% of whom live in the central belt from the states of Orissa in the East to eastern Gujarat in the West, to Madhya Pradesh in the North and Andhra Pradesh in the South. Most of these people live in and around forested areas and are extremely poor. And a recent government decision to block a British company's investment shows why they're likely to stay that way.

Last month the central government suspended London-based Vedanta's permission to mine bauxite in Orissa and issued a "show cause" notice for violation of forest laws. The committee that reviewed the proposed $8 billion project noted that the lifestyle of two tribes—the Dongria Kondh and Kutia Kondh—might be disrupted by interruptions to water supplies and other natural resources. The committee also said the tribes consider the hills sacred, although the exact location of the holy site isn't clear. Vedanta's co-investors withdrew their support for the project on possible human-rights violations.

Never mind that these two tribes consist of 8,000 people, of whom about 20% are believed to have been adversely affected. Or that the mining project lies in the 250-square-kilometer Niyamgiri Hills—of which only seven square kilometers of one hilltop were supposed to be mined. Or that none of the tribes were expected to be displaced.

The problem is not necessarily that tribals might object to this particular mining project. Rather, the trouble is that a lack of clear property rights makes it impossible for anyone to determine whether the tribals truly do object—or whether other special interests are cloaking their own causes in the mantle of tribals' rights. This lack of clarity helps crony capitalists to muscle in with state patronage.

Under colonial rule, the British failed to recognize the land rights of tribal people, denying them the ability to own or sell their property or profit from its resources. Now, some 60 years after independence, tribals still don't legally own their property, either individually or as part of a village's common land holdings. The problem is compounded by the fact that minerals and other underground natural resources by law belong to the state, not to the people who work and live on the land.

One result is that an investments like Vedanta's become more politicized than they otherwise would. Where mining interests seek ready access to resources, anticorporate activists find an easy target to campaign against. But if individual tribals were granted land ownership rights, they could decide for themselves whether to accept a development project or not. Rather than being forced off their property, thanks to the abuse of eminent domain by the government—as often happens—they would be able to shape their own destiny. By the same token, they would be free to pursue projects they truly wanted. Only then could land owners and capital providers negotiate as equals and explore areas of mutual interest.

Delhi is trying to strike a balance, but as usual the politicians may make matters worse. The government is considering a draft mining law that proposes to give 26% equity of mining projects to local populations. The mining industry is vehemently opposed to this idea, mostly because giving equity may lead to greater uncertainty over management control. In addition, the tribal population would have to share the risks associated with such projects that stem from the wide fluctuations in commodity prices. Most importantly, though, without clear ownership and objective valuation of assets, it would be impossible to determine the value of the local people's equity holdings, leading to possible legal disputes.

Rather than muddy the waters in this way, Delhi would be better served to consider more fundamental changes. It is time to recognize not only individual and community land rights, but the right to the minerals lying under that land too. In addition, there must be a greater recognition of property rights over village common land and the associated forests on which its residents depend.

There are already precedents for doing this. In the United States, for instance, the right to minerals, including oil and gas, belong to the land owners. These mineral rights can be sold, leased or subdivided, and these mineral rights can also be separated for different minerals found in the same property. An estimated one million landowners in America enjoy these rights.

The Dongria Kondh tribe, at the heart of the present controversy in Orissa, is officially classified as "primitive." Its members practice slash-and-burn agriculture and are among the country's poorest citizens. They are too deprived—socially, economically and educationally—to be able to reach the rarefied heights of salaried employment in India; only 10% of India's workforce has that privilege. The current Chief Justice of India once pitied them as "living on grass."

How ironic, then, that because of the archaic laws of India, promoters of a multibillion-dollar mining project cannot directly negotiate with the people who are on the land. And how tragic that this project's closure is being celebrated by NGO activists as a "victory." It is just the opposite.

Save the tiger: Environmental dividend from economic development

2010-08-25T08:40:00.000+05:30

This is the Chinese year of the tiger and people are interested in saving the tiger from extinction more than ever. Several conferences are being held, and a lot of money is being thrown at saving the tiger, but all this can't work if the Government can't mitigate the conflict between locals and wild animals. The lack of agricultural productivity forces farmers to encroach on the habitat of the tigers. This has to be resolved. China and India can save the tigers by cooperating with each other.

A shorter version of my article was published in The Wall Street Journal on August 25th.

Asia’s economic potential was first demonstrated by the four tiger economies. In recent decade, the focus has shifted to China, India and others. While economies are growing, the real tigers in the wild are living a precarious existence. It is time to reap the environmental dividend from growing prosperity, and save the tiger from extinction.

This is the Chinese Year of the Tiger! Undoubtedly, the focus is once again on ways of saving the wild tiger from extinction. This coming weekend the international Tiger Forum will meet in the north-eastern Chinese city of Hunchun. Next month a tiger summit is scheduled in St Petersburg, Russia. Last month 13 nations - Bangladesh, Bhutan, China, Cambodia, India, Indonesia, Laos, Malaysia, Myanmar, Nepal, Thailand, Vietnam, and Russia agreed, at a meeting of the Global Tiger Initiative (GTI), to double the tiger count from about 3200 at present to 7,000 by 2022. Incidentally, the tiger numbers have halved since 2002, when the claim was 7,000. Many today believe that these numbers were grossly inflated due to faulty counting procedures.

In 1900, it is believed that there were about 100,000 tigers in the forests of Asia. The number declined to about 40,000 by the 1950. Today, billions of dollars are being spent to save one of the iconic animals in the world, but the future of the tiger continues to be bleak.

According to estimates used in draft documents for the St Petersburg Tiger Summit, the economic benefit of ecological services coming from forestry and wildlife estimated in 1997 to be as high as $ 33 trillion annually, and would be much higher today. But another estimate claimed that for the people living in tiger forest in countries like Cambodia, the annual economic benefit per household to be barely $675. The numbers don’t add up!

Over the past decade, just the central government in India increased its allocation for Project Tiger, from $ 16 million (Rs 75 crore) in the 9th five year plan, to $ 32 million (Rs 150 crore) in the 10th plan, and $ 128 million (Rs 600 crore) in the current 12th Plan (2007-2012). This is equivalent of about $ 25,000 per tiger per year, for a mere 1200 animals. Compare this with the flagship rural employment programme for the poor that promises about $ 70 per family per year.

There seems to be growing gulf between the prescriptions offered by many international, largely western experts, and what domestic policy makers in China, India, and elsewhere confront on the ground.

Many of the international experts agree on the need to commit larger sums of money, monitoring of the tigers and their habitat, and almost military style enforcement to keep people and poachers out.

But these old prescriptions don’t inspire confidence any more. Indian policy makers are increasingly aware of the rising aspirations of the people, and the demand for land, for agriculture and other developmental purposes. For some others, the biggest threat to tiger comes from the growing intensity of conflict between man and wild animals. They would not like to stake everything on counting tigers.

Just in the past two months, two people lost their lives in the vicinity of the famous Ranthambore tiger park. Typical compensation for a life lost is only $2200. This is barely 10% of the annual allocation by the central government for every tiger each year, at present. Just this week, in the same park, a forest ranger who was bravely trying to shepard a tiger that had strayed near a village, armed only with a stick, was mauled.

Last year Bangladesh reported 50 deaths from tiger attacks in the Sundarbans area of the Gangetic delta. In India, the annual death toll from wild animal attacks range from 200-300 each year, in addition to injuries, loss of property and crops. Tigers and other wild animals will have a future, only if this conflict can be diffused. Otherwise the beasts will stand no chance against the ire of man.

The problem in India, and some other tiger range countries, is not that there are too many people living in close proximity to wildlife. Typically, in such areas agricultural productivity is abysmal, poverty is endemic, and non-farm economic opportunities non-existent. Without resolving this human problem, neither a proliferation of conferences nor throwing cash will help the cause of the tiger.

But this need not be the situation. If India doubles its agriculture productivity the demand for agricultural land could fall by almost 40%. If non-farm opportunities are allowed to spread, dependence on subsistence agriculture will decline rapidly. One can already see glimpses of how the natural environment can recharge once the human pressure declines.

This is most dramatically visible in China. China’s agricultural productivity is almost double of India’s. The rapid movement of millions of people from rural to urban, and changing economic structure from agriculture to industrial, explains the rise in forest cover.

Between 1990 and 2007, according to World Bank database, China’s Per capita GDP increased 8 fold, from $ 314 to $2,566, while for India it just tripled, from $374 to $ 1,046. During this same period, China’s agricultural GDP shrank from 27% to 11%, and forest cover as a share of total area rose from 17% to 22%. It is this 30% increase in forest cover in 17 years, which makes it plausible for China to attempt to rebuild wildlife habitat, and reintroduce animals. In contrast, for India, agricultural GDP declined slowly from 29% to 18%, but forest cover stayed almost the same from 22% to 23%. This indicates that in India, there is a much higher pressure on forest from people who are not able to move beyond rural livelihood, and explains the continuing conflict between man and animal.

China and India, are neighbours and competitors in many fields. But in the arena of tiger conservation, they could greatly complement each other. China barely has 45-50 tigers in the wild, mostly near the Russian border in Siberia. India has among the best wildlife experts with capacity to manage tiger habitats.

India is already trying to reintroduce tigers in to two tiger parks where all the tigers were lost in recent years. India is also toying with an ambitious effort to reintroduce the Asiatic Cheetah, which had gone extinct in 1947. But today, India’s economic transformation is not yet deep enough to remove the potential for man and animal conflict. But it will happen. Working with the Chinese on tiger conservation would help build up Indian capacity to reap their own environmental dividend.

By cooperating with each other today, China and India would not only save the tiger in the wild, but redefine the meaning of “Asian Tigers”. Wildlife and forest are not mere intangible resources, whose values are only determined by creative book-keeping. For instance, in the US, the tangible economic benefit from wildlife and nature tourism, including fishing and hunting, was estimated at $125 billion in 2005. Asia could surely give the US a run for its money, if it manages the environmental resources better.

This will require a see change in thinking. Only when people profit from forest and wildlife, will they have any interest in preserving them, and then counting every tiger will become irrelevant. Tiger economies are better equipped to secure the future of the species too!

Commonwealth Games: The Politics of Sports

2010-08-15T15:15:00.000+05:30

The excitement of the forthcoming Commonwealth Games is building up in Delhi. The spot light is not on sporting performance, but the construction delays, cost overruns, and allegations of corruption. These are symptoms which have affected many other projects. I believe, the legacy of these games could be that all such projects would be put under similar scrutiny. Below there is a table giving the official break up of expenditure on account of the games, and related development project. A version of this article was published in the Wall Street Journal Online, on 10 Aug 2010, titled "India's Political Games".

Indian politicians played games in Parliament, this week, as they debated the chaos surrounding the Commonwealth Games set to open in Delhi, on October 3. While dozens of members of Parliament from many political parties had their say, the chairman of the CWG organizing committee, Mr Suresh Kalmadi, who is also a MP from the ruling Congress party, chose not to speak.

It is politically correct to believe that sports and politics should not be mixed. But international sporting events are often close to a war, which is politics by another name! Equally politics is a sport too, and can be even more exciting.

Less than two months before the Commonwealth Games is to open in Delhi, the media is giving live commentary on the state of preparations. Everything that could have gone wrong, seems to have gone wrong – construction delays, poor quality of construction, cost escalation, allegations of corruption and money laundering, inflated prices of items procured, resignation and sacking of senior officials.

Virtually every agency of the government at the city, state and national levels, and the CWG organizing committee, have been starring in this competition for a share of the wealth, which the games have provided.

But should anyone be surprised? Political leaders have always used sporting opportunities to try and claim a share of the glory and the pie.

For instance, the communist countries traditionally invested a lot in sports in order to show its prowess, in an attempt to seek legitimacy for its political system. Following the collapse of the Soviet Empire, China has the baton, and has emerged as a major sporting nation. The Beijing Olympics in 2008, was therefore much more than just the medals won by China.

Politics in sports has a long history. The 1936 Berlin Olympics was tailor made for Hitler to display his Aryan supremacy. Unfortunately, Jesse Owens punctured that balloon on the field. Even India had a small role, winning the first field hockey gold medal by beating the German team. That was India’s first of the eight Olympic gold medals in hockey.

But India is not a sporting powerhouse. According to some calculations, India is among the two bottom ranked countries on the ratio of Olympic medals to population size. India’s lone individual Olympic gold was won only in Beijing by Mr Abhinav Bindra in shooting. Bindra hardly owed anything to India’s sports establishment, but to his parents who were capable of meeting the requirements for his talents to blossom.

Comparisons with the Beijing Olympics and the recent Soccer World cup in South Africa are inevitably being drawn.

The question is, if Beijing did it, South Africa could do it, can India follow? The answer lies in politics. Both China and South Africa had primarily a political reason for wanting to host a major international sporting event. For the Chinese authorities, the Olympic was an opportunity to announce to the world, and more importantly to its own people, that it can exercise control, yet awe the world. On display was China’s political capacity, in terms of resources, technology and management, to handle the spectacle. Although an area in Beijing was demarcated for officially sanctioned protests, officials did not approve even one of the 77 applications for protest during the games. And it was among the top two in the medals tally.

For South Africa, following the end of apartheid, and establishment of democratic freedoms, it wanted an event that would provide an opportunity to showcase the new country. South Africa overcame all the doubts and hiccups to present a most fun filled World Cup, probably because most South Africans had apparently accepted the idea. Although, the tickets were priced beyond the reach of most citizens, and the home team was not expected to progress beyond the initial group stage, the fans more than made up for it by staying engaged and supporting a diverse range of teams competing. They created a new icon – the vuvuzela! The noise of the vuvuzelas was drowned only once when the real life icon, Nelson Mandela, made a brief appearance during the closing ceremony.

Unlike South Africa, organizers of CWG have not really involved the ordinary people, and the public at large seems to have not taken to the idea of the games with any particular enthusiasm. And, unlike China, Indian leaders did not really have any broad political vision for the games.

India had bid for the CWG in 2003, when the “India Shining” campaign of the BJP led coalition government in Delhi was at its peak in the run up to the national parliament election in 2004. But, the campaign did not inspire the voters, and the electoral mandate passed on to the Congress led coalition. The Congress in its election strategy had focused on the common man, the “aam admi”, in contrast to those who few were perceived to be real beneficiaries of India’s economic changes.

Consequently, CWG was no longer a political priority. Despite repeated efforts to rope in Mr Rahul Gandhi, the influential Congress general secretary, and son of the party leader, Mrs Sonia Gandhi, he showed little interest. This is in contrast to his father, late Mr Rajiv Gandhi, who began his sudden entry in to public life, by taking over the leadership of the Asian Games in 1982, the last major international sporting event held in India.

The 1982 Asian Games did not bring any political benefit for the political leaders of the day. Within a year the country was torn by social and political unrest, and bloody insurgency in Punjab and Assam. Then in 1984, the violence in Punjab escalated, and the Prime Minister Mrs Indira Gandhi was assassinated by her Sikh bodyguards.

The Asian Games quickly faded from memory, and the sporting infrastructure decayed due to neglect. But the political class seems to have taken a vital lesson, political dividend from such international events are quite illusive. This explains the consistently lukewarm political support for these games.

This lack of political interest in CWG, however, seemed to have created a new incentive for a game of wealth. It would not be far-fetched to suggest that almost every project was initiated late, and deliberately so. After all, unlike traditional infrastructure projects, the CWG projects have a sharp deadline. These delays created an opportunity to justify cost escalation, and lower oversight in the rush to meet the deadline. This is perhaps the best explanation for the unprecedented increase in costs, and the delays.

Connaught Place is the circular arcade at the heart of Delhi. The construction of a new series of underground walkways was initiated barely six months ago, and now the holes on the roads are being filled up, because of the realization that the project cannot be completed before the games.

The Jawaharlal Nehru Stadium, the main venue of the games, was built in 1982 for about US$ 2.1 million (Rs 10 crores). Today, the cost of renovation and expansion of the facilities in that stadium alone has been put at US$ 204 million (Rs 961 crores). The cost of organizing the games had been put at US$ 31.9 million (Rs 150 crores) in 2003, the current estimate is over ten fold. At that time, it was said the games village would be converted in to students’ hostel after the event. Now it is being sold as premium apartments to the rich and powerful. The total cost of games including some of the infrastructure in Delhi and the various venues have been officially set at US$ 2.4 billion (Rs 11,494 crores), others have estimated at two or three times as much. However, barely 5.7% of the official expenditure is actually aimed at helping the sports persons who are expected to bring laurels to the country.

The games have also been criticized on the ground that the money could have been much better spent on more important developmental projects. But only a small fraction of such expenditure actually reaches the targeted beneficiaries. Administrative costs and leakage, consume the bulk of the budget. There is nothing to assume that the games' money could have been well spent elsewhere. This week, the government acknowledged in parliament that of the 578 large infrastructure projects being monitored, 268 are delayed and have had cost overrun to the tune of $ 10.6 billion (Rs 50,000 crores).

But like everything else, India runs on multiple tracks. While many of the publicly supported sports bodies have systemically failed to produce champions in their disciplines, there are quite a few sports persons who have made their mark on the international arena through their personal dedication and commitment. Ms Saina Nehwal, the current world number two in badminton is the latest star on the horizon, and has just been joined by Ms Tejaswini Sawant who became the first Indian women shooter to win a gold medal at the World Championship in Germany.

The organizing committee of CWG is struggling to raise funds, and has so far secured sponsorship from 11 companies, of which all but two are public sector enterprises, and the Indian Railway. Yet over the past three years, Indian Premiere League for cricket, a game that is played in barely a dozen countries, has emerged among the most promising sporting ventures in the world. The value of the league, in its third year, is estimated at US$ 4.13 billion (Rs 18,000 crores), which compares with the National Football League in the US, and the English Premiere League football ($14 bn). The IPL reportedly had an income of $450 million in 2009, and that is expected to double in 2010. This contrasts sharply with the struggles of the CWG, which got a loan of $500 million from government, with little prospect of recovery.

CWG is caught in an unprecedented dilemma. If it is conducted well, there will be little political dividend, and still be accused of wasting money could have been spent elsewhere. If the games go badly, then of course, they will be damned.

The current public acrimony over CWG is in a way a demonstration of changing political dynamics. The gulf between the abilities of the public and private sector in India are out in the open. The deepening of democracy is bringing the all its public agencies under unprecedented scrutiny, and that is likely to have a much longer lasting impact, than the games. That impact could be more than the medals won in sports, and much more than the apparent gold medal in corruption that many are offering to these games. Asking questions and holding the authorities accountable are the necessary first steps forcing political leaders to explore alternative policy options. That would be a much preferred legacy of the Commonwealth Games for India.

Some tidbits –

Over 8000 sports persons and officials from 71 countries are expected to participate. But the hotel industry has not reported any surge in bookings.
The Delhi government is trying to ship the beggars out of the some areas of the city where CWG participants might be visiting.
Over 70 construction workers have died at different CWG sites. The condition of workers is hardly befitting those who are supposed to be building world class facilities for others.
The 1982 organising committee has continued to exist because of a court case involving a dispute over Rs 1.5 crore or about US$ 3 million, and must have spent more money during the past three decades.
In 2009, the IPL is estimated to have had an income of $450 million, which is expected to double in 2010. The CWG is struggling to raise even $250 million
The current economic crisis in Greece was not helped by the extravaganza at the Athens Olympics in 2004. The legacy of these sporting jamborees is not very rosy.

Commonwealth Games official expenses, based on the statement by Jaipal Reddy, Minister for Urban Development, Govt of India, in Lok Sabha on Aug 9, 2010
Responsibility	Type of Project	Expenditure in Rs Crores	In US dollar (million)
Government of India	Sports infrastructure	2,934	624
	Training of sports teams	678	144
	Loan to CWG organizing committee	2,394	509
	MTNL (telephone and connectivity)	182	39
	Ministry of Urban Development	828	176
	Ministry of Information and Broadcasting	483	103
	Ministry of Home affairs (security)	747	159
	Ministry of Health	71	15
	Archeological Survey of India (monuments)	26	6
	Government of Delhi	2,800	596
	Others	351	75
	TOTAL	11,494	2,446

Government of Delhi	On Commonwealth Games (stadiums)	670	143
	Flyovers and bridges	3,700	787
	ROB, RUB and IG Airport	450	96
	BRTS (dedicated bus corridor)	215	46
	DTC bus fleet	1,800	383
	DTC bus depots	900	191
	Roads	650	138
	Streetscaping	525	112
	Road signages	150	32
	Delhi Metro connectivity	3,000	638
	Power plants	2,800	596
	Water supply	400	85
	Health	50	11
	Parking facilities	400	85
	Communication and IT	200	43
	Others	650	138
	TOTAL	16,560	3,523

Changing climate: Hope for the tiger?

2010-08-11T11:42:00.001+05:30

Two crouching tigers, some hidden dragons

The winds of change between the two giants could impact not only the environment but also politics. In this article published in the special issue (July-August 2010) of the "India China Chronicle", I look at the possible implications of the cooperation between these two countries at the climate conference in Copenhagen, last year. I believe a much bigger opportunity lies in the field of wildlife conservation, particularly in saving the tiger. Following is the text of the article.

Over the past half century, relations between the two Asian giants have been on a roller coaster ride. In recent years too the two countries have seen sentiments swing wildly on issues ranging from trade to Tibet, coloured periodically by the border issue.

Despite its history of turbulence, the two neighbours together made history at the climate summit in Copenhagen in December 2009, for the first time, the world got a glimpse of the possible consequence when China and India join hands for a common cause. prior to the climate summit, there had been a flurry of high level exchange between the two sides. Both countries came up with evidence to show that carbon intensity of their economies had been falling over the past decades. Both made unilateral announcements to reduce the carbon intensity further over the next decade. They also underscored the need for equitable share of the planet's atmosphere to meet the developmental aspirations of the people, and finally, they proposed to focus on a target of temperature increase in the future, as an alternative to the carbon emission targets which had been the cornerstone of the global climate negotiations.

While much of this information was trickling out of Delhi and Beijing prior to Copenhagen, there was very little appreciation of the possible implications of all this at the UN climate summit.

That became clearer in Copenhagen, when it was acknowledged that China and India were in constant touch, developing their negotiating strategies together. Even the ministers on the two sides were meeting almost on a daily basis to ensure that issues were smoothened out.

Today, it is clear that this joint positioning was the most significant factor in the ability of developing countries to withstand the pressure mounted by the rich countries in Copenhagen. With all the hype that was built up prior to Copenhagen, hardly anyone could have believed that at an international event of this magnitude, at an European capital, would have led to the marginalization of Europe itself. It was the Americans who seem to have realised the tectonic shift that was taking place, and decided to cut the losses by striking a deal on the political statement at the end. European governments had banked on the prospect of an agreement in Copenhagen to infuse new life to the Kyoto protocol, which is to expire in 2012, and so the political statement left them quite shocked.

China has been a member of various developing country groupings, including the G-20. But hardly ever was China seen taking the lead at international negotiations. At the WTO meetings over the past decade, it was the Brazilian and Indian ministers who typically articulated the developing country perspective. Copenhagen has changed all that. It is likely that the 2009 climate summit will be remembered not so much for its failure to reach an agreement to go beyond Kyoto protocol, but for the impact that China and India, by cooperating with each other, had on the whole process.

The question that arises: Is this a new phase of India-China cooperation in Copenhagen an exception, or would that become the norm for the future? Will the climate of relationship between the two giant neighbours undergo a fundamental shift in the aftermath of the climate summit?

Needless to say the two countries have a wide range of issues confronting each other. They range from economics to environment, from the unresolved border to geo-politics. While political frictions do surface periodically, both the countries seem to have matured enough not to allow the political cloud to affect the growing trade and economic relationship.

But the wide convergence on different environmental issues facing China and India, could help the two countries to seek common grounds on these areas. Without the historic baggage that affects the political relationship, and the periodic tensions that surface in any trade relationships, the prospect of better relationship on environmental issues because of the convergence of interest seem much brighter. And the cooperation on environmental issues may help improve the level of mutual trust and confidence that could rub off positively on political relationship as well.

The two countries are already cooperating on conventional and non-conventional sources of energy. Other potential environmental areas where there could be complementary relationship are newer and greener technologies, ship-breaking, recycling of material, etc. But perhaps the highest political capital lies in the possibility cooperation in the area of tiger conservation.

Tiger is an iconic animal in culture and history of both China and India. There are perhaps two dozen tigers left in the wild in China, mostly along the Siberian border. India currently estimates that about 1400 tigers are roaming in the wild. But globally, tiger is a highly endangered species, and remains so despite many initiatives launched to save it over the past four decades.

India believes that the demand for tiger parts in traditional Chinese medicine is one of the major sources of threat to tigers in Indian forests. Others think that the pressure of poaching to meet demand in China constitutes a smaller threat, about 25%. The bulk of the threat to tigers in India comes from shrinking forest habitat and the consequent conflict between human and wildlife.

Tiger conservation is not primarily an issue of law enforcement. India has problem of protecting its tigers, just as China has problem in completely eliminating all trade of tiger parts.

Recently there were some indications that there is perhaps a shift from this mutual blame game. India recently recognized that protecting tigers is primarily India's responsibility, since the Chinese do not come to India to poach the tigers.

China, on the other hand, is exploring alternative conservation strategies. following its economic rise, increasing number of people are finding non-rural economic opportunities, as a result, human pressure on forest and wild areas in many parts of China have significantly reduced. In some of these parts, forests have made a dramatic comeback. Some of these old tiger habitats could be ready again to host wildlife.

China is seriously looking for ways of reintroducing tigers in a controlled manner, in a few areas where tigers once roamed. Hardly any country has as much expertise and experience of managing tiger habitats as India. With recent relocation of tigers into areas from where they had vanished, India is also grappling with similar problems.

China does not have wild tigers ready for translocation. so they have set up an ambitious effort to try to develop ways of re-wilding tigers that have been born in captivity. This is a very exciting scientific opportunity.

In both these aspects, preparation of tiger habitat, re-wilding and reintroduction of the tiger, China and India could cooperate, and if successful, it would secure not just the tiger, but generate huge amount of goodwill between the elephant and the dragon!

China poses an even more audacious challenge to old conservation mindset. It has almost perfected the art of breeding tigers in captivity. It has more than 5000 tigers in captivity in zoos and other facilities. It could initiate a controlled trade in tiger parts from its captive tigers, and that could lower the incentive to poachers to kill wild tigers.

Even if India does not wish to join in this effort to help the cause of conservation through commerce, it stands to gain if China is successful in meeting the demand for tiger parts from its stock of captive tigers.

From the history of world trade, it is clear that smugglers and criminals profit only when there is a restriction on trade, creating an unmet demand for goods and services. Naturally, when trade is outlawed, only outlaws trade! If China were to legalize trade in tiger parts from its breeding facilities, the poachers in India would have little chance of competing with the market forces. Consequently, threat of poaching will almost get eliminated in India. There are many examples from across the world where legal trade has eliminated illegal trade. Over a million crocodiles are harvested each year from farms, yet there is hardly any evidence of any crocodile being killed in India in order to meet the demand from the international fashion industry.

China and India need to find ways of building on the new climate they sought to create in Copenhagen. Their common position on climate was premised on the belief that economic growth would actually enable the countries to improve energy efficiency, reduce pollution, compete effectively and clean up the environment. And as economies improve, they de-carbonise, as the history of human development illustrates over the past 400 years.

This is the real potential of the changing climate between China and India - harnessing the power of commerce, benefiting people and improving the quality of environment. Today, economic potential of both China and India are now openly acknowledged by all. Now is the time to reap the environmental dividend from economic development

A time to Party! and part with socialism

2010-08-03T00:38:00.005+05:30

Political ideologies are simple tools by which people decide on the general direction they think society ought to take. In a true democracy, different political ideals have to compete to win the support of the people. The authors of the Indian Constitution had specifically debated and rejected the idea of binding the country to socialism. Yet, the Preamble to the Constitution was amended in 1976, and the election law in 1989, requiring all political parties to affirm to the Constitution, and to socialism. Now, the Supreme Court has acknowledged that there are valid questions on the issue of socialism, though academic, at this point in time. So it is a time to form a Party, and part with socialism. Let us be liberal, and play the tune of freedom!

This article of mine, "A time to Party!", was published in Pragati, a national interest magazine, in its August 2010 issues.

Recently, the Supreme Court dismissed a public interest litigation (PIL) that questioned the validity of the 42nd amendment to the Indian Constitution, which among many other things, added the terms “socialist, secular” to qualify the democratic republic in the Preamble. The amendment dates back to 1976, to the dark days of Emergency. Later, the Representation of the People Act, the law governing political parties and elections, was further amended to include the section 29A, making it mandatory for all political parties in India to affirm to “socialism” if they were to be registered by the Election Commission of India for the purpose of participating in the electoral process

The courts always dismiss petitions before them once they pronounce a particular judgment. In this case, however, the Supreme Court acknowledged the “academic” question raised in the petition, but felt that since no political party has so far objected to it, there are perhaps no really aggrieved parties. So it allowed the petitioner to “withdraw” the petition. This withdrawal, however, means that the Court has not ruled against the issue, but considers it to be valid, and has kept it open for a future occasion.

The champions of individual freedom in economic and political spheres have long bemoaned the fact that there is no political platform in India that truly reflects their aspirations. No doubt there are liberals of different shades in almost all political parties, but still there are no avowedly liberal political parties.

Political parties are plentiful, with around 50 parties represented in the national parliament, and hundreds of parties operating at state and local levels. They represent a diverse range of interests: national, state, regional or local. They claim to represent varied sections of society based on national, ethnic, linguistic, religious, caste, and other identities. Yet, the political ideals on offer are very limited, as all parties are bound by socialism if they are to participate in electoral politics. Incidentally, independent candidates are not required to affirm to socialism, and if elected have only to take oath to uphold the Constitution. One of the reasons for this limited range of political options in the largest and the most vibrant democracy in the world, is the law that requires affirmation to socialism.

By legally restricting the political ideology to “socialism”, a couple of serious anomalies have been created. Having introduced “socialism” through the political and constitutional process, it is now being implied that “socialism” cannot be opposed and removed by the very same constitutional process. How can one mount a political campaign calling for the removal of “socialism” in the election law or in the Constitution, after having affirmed to “socialism” as a political ideal?
Secondly, what does socialism mean? The Constitution does not define it. The judges hearing the PIL commented that the meaning could vary. But could “socialism” include feudalism, imperialism, fascism, Nazism (national socialism), communism, capitalism, and everything else? If it does have such a wide range of meanings, why have it at all? The judiciary spends a lot of effort on interpreting the law by trying to precisely define the words in it. Justice would come to an end if words were given such variable meanings.

The Supreme Court has seen this as an “academic” exercise. But the impact of “socialism” in the Constitution and in the election law raises questions about possible violation of fundamental rights such as freedom of expression, freedom of association, and basic structure doctrine. If democracy is among the sacrosanct elements articulated in the judgments on basic structure, then what good is democracy where political discourse is limited exclusively to one political ideology?

Political ideologies matter in shaping public opinion and policies. The stated goal of all political action may be to improve general welfare; but, it is the ideology that provides the vision, and determines the direction and nature of the policies that are designed. Policy decisions whether to nationalise an industry or economic sector, or to privatise it, are shaped much more by political ideologies, than by hard core technical analysis of the merits of the proposed policy measures. In a democracy, people and leaders are not experts in all fields. Political ideologies come as a simple tool by which people decide on the general direction they think society ought to take, and the merits of specific public policies.

There is no functioning democracy in the world which restrains the space for peacefully competing political ideologies, except perhaps Germany, where there is some restriction on propagation of Nazi ideology. In every major democracy, the political ideology that is most successful in reflecting the aspirations of the large number of people at any given time, changes the political dynamics during elections. From Ronald Reagan to Barack Obama, from Margaret Thatcher to Tony Blair, the fortunes of political leaders and their parties have swung with the popular perception of the political ideologies of the time. This is what makes democracy such a potent political tool, and ensures the political survival of the society through the various competing ideologies.

The Constituent Assembly had deliberated at length on this very question of “socialism” in 1949. Even while acknowledging that there are many provisions in the Constitution that are socialistic in nature, the constitution makers had decided not to tie the hands of the future generations to a particular political idea. No less a person than Dr B R Ambedkar, the chairman of the drafting committee had then said,

“What should be the policy of the state, how society should be organised in its social and economic side are matters which must be decided by the people themselves according to time and circumstances. It cannot be laid down in the Constitution itself, because that is destroying democracy altogether …”

If democracy is one of the basic features of the Constitution, then restricting it to on political ideology, is clearly a violation of the basic feature doctrine. What would be a democracy, where political parties are not free to fly their particular ideologies, and compete with each other in an attempt to peacefully persuade the citizens to one vision or another?

Swatantra Party Maharashtra—the inheritors of the mantle of the Swatantra Party, founded by stalwarts like C Rajagopalachari, Minoo Masani and others in 1959—had written to the Election Commission of India in 1994, noting their opposition to the ideas of socialism, and their inability to affirm to socialist ideals. The Commission had replied by pointing at the amendment to the section 29A of the Representation of the People Act which mandates affirmation to socialism. It thus acknowledged that its role is to implement the law as it stands, not to change or reinterpret it.

By acknowledging the “academic” nature of the question in the PIL, the Supreme Court has actually opened a door for the political liberals to come out of the woodwork. Now is the time for the liberals to come together and form a political party, with the sole objective of registering their opposition to the affirmation to socialist ideal. After forming the political party, an application to the Election Commission for registration needs to be filed, even though it is likely to be rejected for not meeting the legal requirement. That would enable the party to go to the Supreme Court and seek redressal of a legitimate and real grievance.

Liberals may not yet be a political force to have an electoral impact in India, but by forming a party with this narrow objective, can leave a permanent imprint on the political future of democratic republic of India. This is a not an exclusively liberal cause, though, and it is open to all shades of political opinion. If one ideology enjoys legal sanction today, then tomorrow another could very easily be banned. Putting democracy in a straitjacket will signal the end of political freedom.

All are welcome to the Party of the free and the brave! If the political space can be legitimately opened up, then the political agenda would have to change too, and then the electoral space will inevitably follow.

We're All (Still) Socialists in India

2010-07-26T11:20:00.000+05:30

Though Indian politicians talk a lot about reform, they are good at spending tax payers money, mostly because they are socialists. Every political party in India should swear allegiance to socialism, according to the 42nd amendment to constitution.There are around 50 parties represented in the parliament, but people of India do not have much of a choice as there is no liberal political party. The petition filed by Sanjiv Agarwal is a case in point. The petition was withdrawn on the grounds that no political part has opposed the insertion of the word 'Socialism".Political parties should take up this cause.My article titled "We're All (Still) Socialists in India" was published in The Wall Street Journal on July 26th 2010.

India's politicians love to talk about "reform," but if the recent past is any indication, most of them like spending money more. There's the $22 billion annual bill for food and fertilizer subsidies; the billions spent every year on the rural employment guarantee scheme; plentiful government-subsidized loans; and on, and on. The lack of debate over the virtues of these wasteful policies is striking in the world's most vibrant democracy. A big reason is because all Indian politicians are—officially—socialists.

That's not a typo. During the height of Indira Gandhi's Emergency Rule in 1976, policy makers passed the 42nd Amendment to the Constitution, which added the words "socialist" and "secular" to the preamble. Then in 1989, the Representation of People Act, the law which governs elections and political parties, was amended to make it mandatory for all political parties seeking registration with the Election Commission to affirm not only the general constitution but also socialism. Since then all political parties have sworn to socialism without any hesitation, without bothering to define what it means.

These are more than just semantics. Political parties are plentiful in India, with around 50 parties represented in the national parliament, and hundreds of parties operating at state and local levels. Yet, the political ideals on offer are very limited, and there are no avowedly liberal political parties. The "socialist" pledge, as it turns out, has created a serious legal anomaly and a damaging precedent.

Look no further than the recent case of Sanjiv Agarwal, the head of the Good Governance India Foundation in Calcutta. In 2007, Mr. Agarwal, whose nongovernment organization fights for property rights and the rule of law, filed a public-interest petition to the Supreme Court questioning the validity of the 42nd Amendment and the relevant section of the Representation of People Act. The petition argued both provisions violated the basic premise of democracy and political freedom enshrined in the Constitution.

Two years later, the Election Commission filed a response and acknowledged that the 1989 law required all parties to affirm their loyalty to socialism. In other words, although the word "socialism" was included in the Constitution through the political and constitutional process, it cannot be opposed and removed by the very same process. The Government of India did not file a reply.

When the petition was first heard by the Supreme Court in January 2008, Mr. Agarwal's lawyer pointed out that the anomaly in the election law had been questioned in 1995 by the Swatantra Party Maharashtra, a small political party located in Maharashtra State. Unfortunately the Mumbai High Court still has not heard the petition—even though 15 years have passed since its filing.

Mr. Agarwal couldn't legally substantiate the details of the old case, and the judges on the bench observed that while it was a valid point, it was also an "academic" one, since no political party in the country had actually opposed it. So the petition was withdrawn on July 12.

The fight isn't over, however. The Supreme Court did not reject the petition outright. Instead, the three-judge bench implied the court would prefer to deal with it when a political party actually is aggrieved, or refused registration because of its refusal to affirm socialist beliefs. The Court's statement also implies there is merit in Mr. Agarwal's arguments.

As it should: India's founders debated the question of socialism at length in 1949. The chairman of the constitutional drafting committee, B.R. Ambedkar, said: "What should be the policy of the state, how society should be organized in its social and economic side are matters which must be decided by the people themselves according to time and circumstances. It cannot be laid down in the Constitution itself, because that is destroying democracy altogether."

Fixing India's foray into socialism will take time. None of the serious political parties engaged in the electoral fray in the past 20 years has objected to the socialism clause, including nominally conservative parties such as the Bharatiya Janata Party and Shiv Sena. All see great political benefits from large public-spending programs that cement political patronage, even if those policies ultimately create more dependence, higher unemployment and lower future economic growth.

Yet India is changing slowly but surely since the "big bang" economic reform of the early 1990s. Today, the economy is poised to enter into a 10% annual GDP growth phase. Foreign multinationals have purchased two of the biggest Indian pharmaceutical companies at record prices, and rather than raising fear, many Indians feel proud that Indian assets could fetch such high values in the global marketplace. The recent auction of third-generation telecommunication spectrum raised a phenomenal $20 billion.

All political parties need to take up this cause. If the political space is legitimately opened up, then the political agenda would have to change too—and then the electorate may inevitably follow. India's free-market liberals then might find their rightful place in the political mosaic of the country. Just as India's diversity has sustained her democracy, political diversity will only strengthen the foundation of the republic.

Land Titling: Empowering people, capitalizing assets

2010-07-14T15:45:00.003+05:30

An interesting new law aimed at simplifying land titles and land records, has been proposed by the government. The draft of the Land Titling Bill 2010, is now on the website of the Department of Land Resources.

In the following article I look at the some of the problems in laws and regulations governing land, and assess the possible impact of the new proposal. I also suggest a few key points that might make this innovative law really transformative one. A version of this article was published in the Wall Street Journal Online, under the title "India lands in a mess", on July 13, 2010. Tthe proposed property-rights bill could have far-reaching, positive implications for the economy.

Bollywood star Amitabh Bachhan cannot buy a piece of farm land outside Mumbai, the city he made his home 40 years ago, because he has first to prove that he or his family are farmers in his home state of Uttar Pradesh. A businessman ended up paying twice for a piece of land in a Himalayan mountain village in Uttarakhand because he discovered he had originally bought it from someone who didn’t actually own the land. A man in Delhi sold his ancestral property without the consent of other members of the family.

These are not isolated instances, but a reflection of the dismal state of land laws and records in India today. As with many other economic dysfunctions here, blame politics: Since independence in 1947, policy makers have mounted a steady assault on property and land rights in the name of equitable distribution and protection of the poor.

Today, the labyrinth of bureaucracy makes it hard to realize property values, condemning landowners to poverty and making land artificially scarce. The system also breeds fraud: According to some estimates, 80% of cases in the lower judiciary are related to land disputes and fraud. The mafia, unscrupulous developers and their political patrons dominate the real-estate business.

Thankfully, democracy has struck deep roots in India, and citizens are beginning to grasp the symbiotic relationship between democracy and property ownership. Over the past decade, policy makers have been forced to address growing protests against land displacement and alienation. The Forest Rights Act in 2006 attempted to recognize the land rights of one of the most marginalized populations in the country—the 80 to 90 million indigenous tribal people who largely continue to live in the vicinity of forests.

While the implementation of this law has yet to gather momentum, another law has recently been proposed by the government to help give the people clearly defined land titles. The Ministry of Rural Development has recently drafted the “Land Titling Bill 2010” to encourage states to adapt similar legislation at the provincial level. The ministry has extended the deadline for public comments to August 31.

The draft Bill introduces title guarantee principles practiced in many parts of the world. It tries, for instance, to address the problem of presumed title. Under current law, when land is contested lawyers have to try to dig up the chain of past titles to prove ownership. Between the poor and corrupt land-record system and incredibly slow judicial process, this is a daunting task.

The Bill proposes a title guarantee system and indemnification. This means that a land holder granted conclusive title to his property by the State will have an indefeasible right over this property. If anyone contesting this title can come up with evidence to the contrary within a specified timeframe, the latter claimant would be compensated from a title guarantee fund for loss of his title, but the title would not be restored to him. The basic goal is to help clean up the land records and begin with a relatively clean slate.

While the goal is very laudable, the devil lies in the detail. The Bill seeks to digitize land records and proposes to complete the process in five years. Many states have already made significant progress in digitizing existing land records. But there is a significant difference between what is actually on the ground today, and what was on the old records. Rather than emphasizing the need to make the records reflect the reality on the ground, the Bill proposes to keep both paper and electronic records. This could easily open the door for further fraud.

Also, given there are estimated over 400 million individual properties, it would be impossible to document claims and clean up the records through the administrative machinery alone. It is imperative that people participate in this process actively, not just because of the volume, but also to legitimize the whole process.

Then there’s the problem of tackling corruption, which mostly surfaces in transaction costs like stamp duties and registration fees. State governments tend to view these levies as lucrative sources of revenue. But a number of expert committee reports over the past two decades have shown that abolishing these levies would not lead to any revenue loss. Under the current system, apart from rampant under valuation, there is a proliferation of transactions using power of attorneys, and camouflaging the sale as loan, thereby completely bypassing the tax net. Typically, in major cities, price of property is split with about 60% expected to be paid in cash.

The Bill also raises the problematic issue of property valuation. But valuation is function of zoning and land-use regulations. The same piece of land will have a very different value when it is classed as agriculture than if it is allowed to be used for housing, industry or other commercial purposes. Farmers in Singur were offered about three times the then prevalent agriculture land price for the land acquired by the West Bengal government for the Tata Motor’s showcase Nano car plant. But with the prospect of land being allowed to be converted from agriculture use, the price of land had shot up ten fold in the vicinity. No wonder that the land owners were agitated at the role of the state government as land broker.

According to a national survey in 2006, about 40% of Indian farmers would like to sell their land and move to more lucrative occupations, but can't find buyers because of archaic laws regarding farm land. Likewise, a survey this year found that about 40% of people in urban areas live in slums. Again restricted supply of land has meant that there is no supply of affordable housing and economic avenues for the poor.

Constitutionally, land is a state subject, and therefore political leadership is needed to have the states adopt such a progressive law in the provincial legislatures. There are quite a few examples of model laws at the national levels, which have been orphaned by the states, as in case of agriculture reforms.

India’s policy makers have clearly identified a critical area for reform. Poverty in India isn’t due to a lack of access to capital, but to people’s inability to realize the value of their most prized asset—land—and to put that money to its optimal use. The beauty of such reforms is that they do not require major financial commitment, only a political realization of the significance of recognizing what is already happening on the ground. The deliberations over the coming months could determine whether this legislation will transform India or merely remain a piece of paper that scores high on intention, but fails in practice.

Fixing Delhi's Demonic Traffic

2010-07-01T21:05:00.001+05:30

The Commonwealth Games is just a few months away and the transportation system in Delhi is in a big mess-whether it is the metro rail system or the public-sector bus system. Planners blame these problems on population growth and unlicensed private transportation. The blame , however, should be placed on the planners themselves. Restricting the entry of vehicles is not the solution.Entry barries should be eliminated and traffic police should be privatized. My article titled "Fixing Delhi's Demonic Traffic" was published in The Wall Street Journal on July 1st 2010.

The Commonwealth Games in New Delhi are just four months away, and residents of India's capital city are bracing for more traffic nightmares as players and guests from over 40 countries pour into town. The city already contends with crumbling public transportation and mind-numbing traffic jams. National and state governments have opened their wallets to meet the exponentially growing costs, arguing the spending will help realize the capital's long-term infrastructure needs.

This is the triumph of hope over experience, especially when it comes to the wisdom of the government's urban planners. Take Delhi's metro rail system, built over the past five years with the help of Japanese contractors. It is one of the rare projects that is being completed mostly on time, and within budget. Yet on the day a new section opens, demand always exceeds the metro's capacity, because of perpetual shortfall in coaches. Many admiring users have given up and resumed use of their own vehicles.

The public-sector bus system isn't much better. Delhi Transport Corp. reportedly makes more money idling buses than when it runs them. It is now acquiring a glittering fleet of modern vehicles, but the process has been slow, and no one knows how the fleet will be maintained. Privately licensed operators are mostly in the hands of small-time mafia bosses. Those buses make headlines more for their accidents and fatality rates than their service.

Then there are examples from the theater of the absurd. Take, for instance, a one-way flyover on a busy route that connects one of the highways to the international airport was recently inaugurated. Its opening led to such chaos that the authorities had to reverse the direction of traffic, with the explanation that the traffic pattern on that stretch of road had changed drastically in the two years the flyover was under construction.

This is by no means an isolated incident. Two years ago, a 20-kilometer stretch of highway connecting Delhi to Gurgaon, the fastest growing suburb to the south of the city, was expanded to eight lanes and opened with a 32-gate toll plaza. The day the road was inaugurated, the traffic flow exceeded the projection for 2014. Today, on a typical working day, it takes more time to queue and pay the toll than to drive through that stretch of highway.

Urban planners brush off these problems by blaming unrestrained population growth and an explosion in unlicensed private transportation. They focus on limiting the supply of vehicles. In a city of 15 million, there are about 10,000 permitted taxis, 50,000 three-wheeled automobiles and a few thousand cycle-rickshaws. Unofficially, there are around 38,000 taxis, 75,000 three-wheelers and 100,000 rickshaws, thanks to the high costs of running legal transportation. The vehicle density is around 10 per 100 people, which is high when compared to the rest of India, at one per 100 people.

But congestion on the road is not just a function of the number of vehicles, but also of the quality and amount of road space and the efficiency of road use. Delhi's streets are no more congested than any of the main streets in small towns across the country.

This misguided focus on the number of vehicles has meant that every transportation policy seeks to restrict the entry of vehicles. Consequently the supply of transportation falls chronically short of demand. There are layers of licenses and permits regulating the operation of private buses, taxis and automobiles, which apart from breeding inevitable corruption, perpetually restricts supply. What's more, taxes on gasoline, and vehicles are among the highest in the world, all aimed at reducing personal forms of transport. This has retarded the technological innovation and added to pollution and congestion.

So citizens turn to the private sector. Many Delhi residents have to bargain regularly for the fare with cab or auto drivers, bus conductors and other informal service providers. Thousands of vehicles ply Delhi each day, without authorization, to meet the demand, while contributing millions of rupees to the kitty of road transport officials and the traffic police, whom they have to pay to be allowed to operate.

There has been one small step in the right direction: A few months ago, the Delhi High Court, in a landmark judgment, nullified the license raj that had hobbled the cycle-rickshaw industry in the city. The vehicle, a human-powered bike attached to a wheeled chair, is a low-cost investment, providing employment to tens of thousands, and an accessible mode of transport for relatively short distances. By licensing its numbers to absurdly low levels, municipality officials, traffic police and the rickshaw mafia ruled the streets, depriving citizens of an affordable means of transport, and denying an honest, albeit hard, day's work to the riders.

The decision to liberalize the cycle-rickshaw trade should now be extended to all forms of public transportation. Even better, Delhi's authorities could ditch the idea of regulating tariffs for licenses altogether. Entry barriers should be eliminated, if not drastically reduced. The government could also privatize the traffic police, who are rewarded now for their numbers of bookings, rather than the quality of their work.

These moves would have several advantages. First, they would legalize existing informal service providers. Second, they would allow more organized operators to benefit from scale of operations. This may incentivize many individual operators to merge and compete for clients on the basis of price and quality of service. Third, they would improve the policing of the system, too.

These suggestions aren't as radical as they may seem. With the advent of private radio taxis two years ago, there has been a perceptible improvement in the service of many small and informal taxi operators. In fact, the 2,500-odd such taxis currently operating in Delhi have led to a driver shortage, providing a new economic opportunity to many aspiring workers.

The Commonwealth Games are the biggest event India has hosted in years. Rather than asking people to stay at home during the celebrations, or forcing those who can afford to leave town to do so, simple changes in traffic and transportation rules could help improve the quality of life for all of Delhi's residents. Now that would be a game worth playing for!

Does Anyone Care About Bhopal's Real Victims?

2010-06-17T11:00:00.002+05:30

The sense of urgency Prime Minister Manmohan Singh displays in taking stock of the court verdict on the 1984 Bhopal gas leak is to appease anti-capitalists of various persuasions. Few people care about the real victims of the Bhopal tragedy. There is much outrage over the fact that Warren Anderson, the then chairman of the parent company has not been charged. My article titled Does Anyone Care About Bhopal's Real Victims? was published in The Wall Street Journal on June 14th 2010.

Prime Minister Manmohan Singh asked senior ministers Monday to take stock of last week's court verdict on the 1984 Bhopal gas leak and report back within 10 days. This belated sense of urgency is meant to placate everyone from anti-American groups to anti-industrialists, antitrade advocates and antitechnology believers who are up in arms over the court's light sentencing of executives implicated in the accident. Lost in the public outpouring are the long-suffering victims of the tragedy—and the issues that Indians should really be angry about.

The Bhopal disaster was a seminal moment in India's modern history. On December 3, 1984, about 40 tons of methyl isocynate leaked out of storage tanks at the Union Carbide factory in Bhopal. The gas spread through low-lying areas of the city, killing people in their homes and on the streets and in the railway station as they tried to flee. The death toll is estimated between 15,000 and 20,000, with over half a million said to be affected in some form.

Yet no one has asked how the disaster was tacitly aided and abetted by government neglect. The plant was established in 1969 to produce pesticides. In the 1970s, the company was allowed to implement vertical integration to produce hazardous ingredients such as methyl isocynate.

Back then India was a highly controlled economy with a web of licenses and permits and an inspector raj to ensure that regulations were followed. So how did Union Carbide acquire the land, then on the periphery of the city, for the factory? Why did the civic authorities allow the growth of slums and settlements in such close proximity to it? Prior to the 1984 tragedy, the factory had a series of minor accidents and leaks, so what was the army of inspectors doing? Why was there was no disaster management plan in place?

The government's post-crisis actions were equally irresponsible. In a bid to fend off U.S. trial lawyers eager to file class-action suits in American courts, India passed the Bhopal Gas Leak Disaster Act, which made the government the sole representative of the victims. Delhi also convinced a U.S. court to agree to transfer the jurisdiction to Indian courts. Such a legal restriction on victims' right to have a say in determining the quantum of compensation would be impossible in the U.S.

Victims' compensation was restricted when the Supreme Court approved the $470 million deal between government of India and Union Carbide in 1989, and quashed all further civil and criminal charges. The figure was based on the assumption of 3,000 deaths and 100,000 injured. Until recently, compensation had been awarded for over 15,000 deaths, and to 500,000 injured, reducing per-capita payouts dramatically. Many genuine victims had to pay bribes to access their compensation money.

Then there's the role of the various environmental activists and bureaucrats who made a career out of showcasing the tragedy. If they are so concerned about the victims, then why does ground water contamination allegedly continue to affect thousands of people who live in the vicinity? Why does the unused factory continue to stand without any effort at dismantling it, reclaiming the land and decontaminating the soil? Why does the hospital set up to care for victims remain understaffed? Why have many victims accused the hospital of refusing care? Ordinary Indians are right to be irked when they see cash splashes for any en vogue government program, but not for the victims of Bhopal.

Indians are also right to feel outrage over the two-year prison sentence handed out to the former non-executive chairman of Union Carbide's India operation, 87-year-old Keshub Mahindra, and a clutch of senior managers and plant operators, last week. In 1996, the Supreme Court had approved the prosecution of some Indian officials of the company's local subsidiary for criminal negligence. But not so for the American executives. There is greater anger that Warren Anderson, then chairman of the U.S.-based parent company who was accused of knowing about safety problems, has not been charged.

The Bhopal gas leak case undoubtedly exposes the shortcomings of India's broken judiciary. Court cases can drag on for decades, with about three million cases pending at various levels, including over 50,000 in the Supreme Court. Many smaller Bhopals get buried in this quagmire each day.

Prime Minister Singh and other government ministers may move in the coming days to paint Mr. Anderson as the main villain. That may help to score a few brownie points among professional anti-American protest groups, but such a move would hardly reduce the woes of long-suffering victims of the gas tragedy. It would only serve to divert the public's attention away from policy makers' responsibility toward their own citizens. Aside from the victims' terrible suffering, this would be a woeful way to pay tribute to their legacy.

Striving students and strangulating state

2010-06-01T23:02:00.004+05:30

Here is my latest article where I discuss the relationship between education and employability, and the challenge that we in India face. I am doubtful of the effectiveness of the "education reforms" initiatives of the present UPA government, in meeting the challenges. And I suggest an independent system to assess the employability of youngsters. I will appreciate any comment or criticism that anyone might have.

The original article was published in the Wall Street Journal Asia, on 2 June 2010. The title was "Indian Students and the Strangulating State", New Delhi is trying to regulate innovation out of the educational system.

Indian students waited eagerly last week for the results of entrance exams to the most sought-after engineering schools, among them the famed Indian Institutes of Technology. More than 450,000 students competed for some 9,500 seats in what is perhaps the most competitive exam in the world. This year's success stories included a home-schooled 14-year-boy in Delhi and poor students from rural areas in Bihar state. They are even more remarkable because they triumphed over the state's strangulating embrace of the education sector.

With one of the youngest workforces in the world, India's economic potential is widely acknowledged. But the transition to a knowledge-intensive economy requires more skilled and competent employees. Barely 5% to 7% of the current workforce has had any formal training in a skill, and 70% may not even have completed primary schooling. According to estimates, only 10% to 15% of graduates are employable, and just 12% of the 18-24 age group enroll for any post-high-school courses. Although 135 million children are enrolled at the primary level today, about 15 million are in college, and only 2.3 million will graduate this year.

India's biggest challenge is not unemployment, but unemployability. A study by McKinsey and the National Association of Software and Services Companies a few years ago found that barely 25% of engineering graduates are employable. Last year, another survey by the Federation of Indian Chambers of Commerce and Industry and the World Bank reported that 64% of the employers were not satisfied with the skills of the engineering graduates. According to biotech industry sources, barely half of the 200,000 post graduates in science are employable.

New Delhi is making the situation even worse with its new Right to Education Act, which came into effect on April 1. The Act requires the government to educate children for free until age 14. The government estimates this mandate requires additional 1.2 million trained teachers in the next five years, tens of thousands of new schools, and by 2020, another 700 universities and 35,000 new colleges. Foreign investment will be encouraged at the margins. The government is also engaged in creating a new national regulator for higher education, which would create multiple new layers of bureaucracy.

New Delhi's policies are highly flawed, starting with the assumption that the private sector will not build schools and invest in education. Yet surveys have found that 40% to 50% of children from the slums of Delhi attend private informal schools. In a country where 35% of the people are still officially illiterate, setting up schools is completely tied up under a license and permit raj. It requires 30-35 types of permissions to set up a school even in Delhi.

Secondly, the government wants to attract investment. But education is one area where for profit activity has been completely prohibited. For instance, hardly any of the thousands of coaching institutes preparing students for admission to engineering and medical colleges would meet the regulatory requirements and standards set by the government to qualify as a school.

Thirdly, the regulatory environment has created a system of patronage to favored organizations seeking to enter higher education. In the past year, senior officials at regulatory bodies in both the technical and medical education have been accused of corruption. While they maintain their innocence, the Central Bureau of Investigation is said to be investigating more than 100 people across the country. Yet, rather than deregulate, the present effort centralizes control even further.

Each year hundreds of organizations apply for permission to start technical institutes, but many seem to have no scruples about bribing the authorities to acquire the necessary clearances. In one instance, a college in Uttar Pradesh had an address where nothing stood except farmland. Just last month, out of 150 self-financing engineering colleges inspected in Tamil Nadu, 67 were asked to improve their faculty and strengthen physical infrastructure before they can admit any students this session. It is not uncommon to find engineering colleges rotating faculty, equipment, and students to hide the real situation when inspectors call.

Last year, a local Kolkata newspaper estimated the various rates of bribes to a technical education authority. To start a technical or professional institute, the rate ranged from $10,000 to $50,000, whereas deemed university status would set you back $1-2 million.

To overcome the scarcity of skilled workers, Indian companies are already investing in education in a big way. Major companies have undertaken steps to engage with faculty at many colleges and universities to help them understand the needs of the industry, and adapt their curriculum. Companies are spending huge resources to train the recruits. In 2008, Infosys spent $5,000 on retraining each of the thousands it hired. Wipro spends about 1% of its annual revenues on retraining thousands of fresh graduates it recruits.

The natural solution is for companies, business chambers and even universities to define a base set of skills they are looking for among first-time employees. They could create an independent body to design and conduct the test periodically among job seekers. It could be organized on the lines similar to the independent standardized tests which are widely accepted by all major colleges across the United States. Given the scale of private education initiatives in India, if there are such independent assessments linked to employment, a whole host of service providers will grow to prepare the students accordingly.

Young Indians are seeking relevant education in unprecedented numbers, as the hordes of students taking the IIT entrance exams and enrolling in private coaching schools demonstrate. From the "education reform" initiated by the government, though, one cannot help escape the feeling that the government is merely looking to expand bureaucratic control and increase the scope of political patronage.

Education is not primarily about any particular content or skill set, but about the continuous capacity to seek new knowledge and acquire new skills. Education can empower only in an environment of freedom, where students can choose from a range of educational providers offering a diverse package of knowledge and skills. India will enjoy demographic dividends only when education becomes free from the clutches of the state, and the youth are able to leverage their education in the competitive economic environment.

Mr. Mitra is director of the Liberty Institute, an independent think tank in New Delhi, and a columnist for WSJ.com.

Diminishing returns from politics of caste

2010-05-19T09:30:00.003+05:30

My article titled India Goes Backward on Caste was published in The Wall Street Journal on May 19th, 2010. In this article, I point out that economic growth and urbanization has made caste distinctions irrelevant. In cities, people no longer bother to find out the caste identities of others.

Caste has cast its shadow once again over Indian politics. Over the past few weeks, parliament has witnessed uproarious scenes on whether to include caste in the once-a-decade census that has just gotten underway. Opinion is split among political leaders, social activists and the public. But far from being ultimately divisive, this debate is a perfect demonstration of how India's vibrant democracy and growing economy is making caste less and less important.

For a start, counting castes is increasingly a practical absurdity. When the British tried it as part of the first census in 1881, they identified fewer than 2,000 subcastes, and found that 58% of these groups had a population of less than 1,000. They omitted caste from the 1931 census because they couldn't standardize the categories in view of enormous local variations.

Even Indians have problems defining caste. When a commission was set up in the 1980s to identify socially and economically backward classes, it identified more than 4,000 "other backward castes." Including all the subcastes among the upper castes, there might be around 10,000 castes in India today—or more.

But does any of this really matter? As time goes on, economic growth is eroding strong caste distinctions. Indians who want to escape restrictive social customs in their villages can find economic opportunities and upward mobility in cities. Urbanization has also provided an opportunity to remain anonymous in a sea of humanity, in contrast to small towns or villages where it was easy for residents to know each other's ancestry and caste.

Society is also becoming more tolerant. A century ago, caste-based discrimination prevailed in social and religious practices, marriage customs and eating habits. Bhimrao Ramji Ambedkar, who chaired the committee that drafted the Indian Constitution, was forbidden to touch water pots at his school because he was from a lower caste. Barely 40 years ago in New Delhi, it was not uncommon to find Brahmin teachers refusing to eat or drink if they were served by lower castes. Today, students and teachers at government schools participate equally in midday meals, and schools that are found to discriminate on the grounds of caste are castigated.

Thus the only people who would advocate a caste census would be the people who personally benefit from it: namely, politicians who depend on identity politics to win votes. They hail from mostly smaller parties like the Rashtriya Janata Dal in Bihar or the Samajwadi Party in Uttar Pradesh. Marginalized from the halls of power, they think a caste census could facilitate the flow of more money and affirmative action programs to their political constituencies.

This trend started in the late 1980s, when the Congress Party's grip on power eroded. Smaller parties emerged to seize the political opportunity and sought to mobilize voters based on their regional, religious or caste identities. But to win support, they had to give those groups special benefits. Citizens quickly realized they needed to be classified as certain castes to obtain certain benefits. In the 1990s, so many groups in Andhra Pradesh demanded to be recognized as "backward" that the total number was a figure four times larger than the official population of the state.

The bigger problem is that playing identity politics has a diminishing marginal return. Indians are generally comfortable with multiple identities—ethnic, linguistic, regional and religious, as well as caste. Hardly any narrow homogeneous identity dominates any specific electoral constituency or region.

That's why in a country where over 80% of the population professes to be Hindu, the Bharatiya Janata Party's attempt to mobilize support based on that identity did not assure them electoral success. Uttar Pradesh chief minister Mayawati figured this out in 2007, when she expanded the base of her Bahujan Samaj Party to include all castes, rather than just untouchables. The strategy propelled the party to power by itself for the first time ever in India's most populous state.

Thus it's little surprise that the big political parties—the Congress Party and the BJP—have mixed views of the calls for a caste census. Since these parties are national in scope, they are naturally more cautious.

They also understand the limits of Indian politics. The "first past the post system" mandates that the winning candidate must win the maximum number of votes in a geographic constituency. Given the diversity of India's population, a candidate has to form political coalitions that cut across caste, religious and ethnic identities to have any chance of winning. This is especially true for state or national-level legislative elections—and invariably necessitates a degree of compromise.

More practically, there is a limit to political patronage that can be distributed. The public sector, including national, state and local levels, employs barely 5% of the more than 450 million people in the labor force. Even if all the jobs were reserved for the lowest and backward castes, it would barely make a dent on the socio-economic status of these communities. In addition, finding qualified and competent people from within a lower caste would be a challenge, given 35% of that population is illiterate, and less than 15% of the youth actually enroll for any kind of college education.

India's politicians face a clear choice: They can side with the old social order and try to secure their own political future through patronage, or they can discard it, like the rest of the country is doing. Indians are on the move and their many identities are becoming optional. It is the politicians who are in danger of being left behind, exposing the true nature of their own identities.

An Economic Spark for SAARC

2010-05-05T08:33:00.005+05:30

Last week, the 16th summit meeting of the eight countries of South Asia was held in Thimpu, the capital of Bhutan. While there was a lot of talk about further talks in the future, there was also a recognition that the region has performed far below its potential. In this article, "An economic spark for SAARC", published in the Wall Street Journal Asia, on 5 May 2010, I suggest that we in India need to go beyond talking, and lead the way by unilaterally opening our economy to free flow of goods and people, and contribute towards a more prosperous and peaceful South Asia.

The biggest news out of the recent gathering of South Asian leaders in Bhutan was that the prime ministers of two of the largest countries in the region, India and Pakistan, took a stroll together. The eight-member regional grouping, which has always been under the shadow of the India-Pakistan relations, pledged to have more meetings in the future, and the big two reiterated once again to resolve all outstanding issues peacefully through—that's right—more talks.
The South Asian Association for Regional Cooperation has been elegantly recycling this playbook for a quarter century now. It's time for another strategy: namely, unilateral liberalization. And India should lead the way.

The idea isn't as crazy as it sounds. In his opening address to the conference last week, Indian Prime Minister Manmohan Singh said "regional cooperation should enable freer movement of people, of goods, of services and of ideas," adding, "it should help us rediscover our shared heritage and build our common future." He noted the share of intraregional trade and investment flows in total trade and investment flows in South Asia is far below that seen in East and Southeast Asia.

There's certainly an economic case to be made for cross-border liberalization. According to a World Bank estimate, intraregional trade within Saarc could rise to more than $20 billion annually, from $5 billion today, if the gamut of trade barriers were removed. Trade between India and Pakistan alone could jump to about $9 billion from about $1 billion today. Nepal, one of the poorest countries in the world, could double its GDP if it could harness its hydroelectric potential and sell electricity to energy-starved India.

If Saarc doesn't formalize these flows by allowing trade, they'll happen in a more inefficient fashion in the underground economy. Informal trade between Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka could already be in the range of $5 billion, according to scholars who specialize in tracking the underground trade. The tiny United Arab Emirates has emerged as one of India's top five export destinations, and is believed to be a conduit for Indian goods in demand in Pakistan. Across the more porous Bangladesh-India border, almost everything from sacks of rice, live cattle, cooking gas cylinders and a whole range of other goods are routinely smuggled. Screenings of popular Indian films are prohibited or restricted in many of the countries. Yet pirated music and movies from India are in very high demand across the region.

There is already a history and culture of free trade in the region. Traditionally, India and Nepal have enjoyed an open border. Millions of Nepalis already work in India. There are perhaps a few million Bangladeshi migrants who are working "illegally" in India, defying border controls. Far from being terrorists waiting for an opportunity to strike, the fact that Muslims from a neighboring country prefer to enter India in search of a better life provides the best evidence of the success of an open and pluralistic India.

Clearly Prime Minister Singh's vision of an integrated South Asia is already taking shape, despite the many barriers. People are either expressing their choice through their wallet, or voting with their feet. By removing those barriers unilaterally, India stands to boost greatly the economic prospects for the whole region. If Indian companies have been able to successfully adapt to meet the competition from China, then competition from Saarc would pose no threat.

India's soft power would offer new opportunity to the talented, and new icons with local flavors would emerge to rub shoulders with India's own, the likes of Aamir Khan or Narayana Murthy, or Sachin Tendulkar or Lata Mangeshkar. Experiencing such possibilities would drive out the last vestiges of parochialism, as people begin to enjoy the rich diversity on hand. In such an open environment, it's unlikely that regional identities, especially in Kashmir, would pose a threat to anyone. Freedom of movement and trade will open the door to prosperity, and build a peace constituency in the region against extremism and violence.

More importantly, with an open border security agencies will be able to focus all their attention on those few who really pose a threat, rather than trying to stop the flow of a vast array of contraband goods through a closed border. Traders and travelers are among the most useful sources of information from places they visit. And information is the most powerful weapon in any effective counterterrorism operation. Also, liberalizing trade will cut the source of funds to criminals who typically work hand-in-glove with the terrorists. After all, only when trade is outlawed can outlaws profit from trade.

Today, the world has woken up to India, after decades of self-imposed isolation. Now India should open itself to the neighbors, and to new possibilities. Rather than talking about talks, here is an opportunity for India to walk the talk, and truly reshape the destiny of nearly one-quarter of humanity.

Legalise gambling

2010-04-23T14:53:00.000+05:30

In the wake of the growing controversy surrounding the Indian Premiere League (IPL), and the accusations of illegal betting and possibility of matches being fixed, the Times of India, on 23 April 2010, invited a few people to comment on this issue under the title, "Legalize gambling, subject it to regulation". I was one of them, and the following was my brief comment.

Gambling is socially acceptable, but legally not. It is this dichotomy which is at the root of the periodic bouts of headlines about betting and match fixing that comes to haunt us.

The IPL format was tailor-made for betting, and cricket could have benefited even more had betting been legal. By bringing the bets on the table, the competing interests of various stakeholders would have ensured that the prospect of match-fixing did not affect them. We will do well to remember that the epic tussle between the good and the evil in the Mahabharata could not have happened if people did not know that the game of dice was fixed. The good would not have won had the game been played underground. Freedom to choose, and bearing the consequences, is at the root of free society, a lesson from the epic we may do well to remember.

(Liberty Institute had published a small book titled ‘The Joy of Gambling’ (2002). It had three essays authored by Rakesh Wadhwa, Atam Uppal and Tom W. Bell, looking at economic, ethical and social aspects of gambling)

Pull the land from under the Maoists

2010-04-21T00:19:00.000+05:30

There has been a lot of discussion about the growth of the Maoist insurgency in tribal dominated forest areas. While the security issues have dominated the debate, there has not been adequate attention on winning the hearts and minds of the local population by recognising their property rights in land. That is what I discuss in this article titled, "Pull the Land Issue Out From Under the Maoists" in the Wall Street Journal on 21 April 2010.

India is girding for war against an internal enemy, the Maoist guerrillas known as Naxalites. This conflict will inevitably be bloody—in the last three years alone about 2,500 people have died in Maoist violence, about one-third of them civilians. However, counterinsurgency operations are won not only on the battlefield, but also in the hearts and minds of the people. While the government beefs up the security forces, it shouldn't neglect the main complaint of the population from which the Maoists recruit their fighters: a lack of land rights.

The Maoists thrive mainly in forest areas amid tribal villagers whose right to land is poorly defined. The origin of the problem lies in colonial times, when forests were seen as royal estates, and the tribal people were at best tolerated, at worst seen as pests. There were no surveys to try to settle the land claims of indigenous populations who had lived there for longer than anyone could remember. After Independence in 1947, the Indian state recognized these people as citizens, but their right to the land was largely ignored.

India's Maoists capitalize on the anger and frustration of these marginalized groups by promising to protect their land. This highlights one of the greatest ironies of Indian democracy: The state, whose primary task is to protect the life, liberty and property of its citizens, is resented by a section of the tribal population. And the Maoists, who have no respect for individual life, liberty or property, pose as protectors.

However, there is precedent for this. Land rights and property ownership have fuelled the drive towards political participation and democratic governance ever since the ancient cities of Greece discovered democracy. Sixty years ago, Mao Zedong successfully mobilized Chinese peasants by promising to give land to the tiller. Of course, after taking power Mao broke that promise and extinguished private property. His experiment in communal farming led to the starvation of tens of millions in the worst man-made tragedy in human history.

The Indian government has been trying to bring economic development to the indigenous tribes, but it has been going about it the wrong way. In the past few years, it has invited companies to invest in large projects in some of these remote areas. Governments at the state and national levels believe that the projects will benefit the local population.

But the projects may be making the situation worse because they involve forced land acquisitions. The tribal groups then protest against the projects, fearing displacement and loss of livelihood. Given the record of extremely tardy compensation and inadequate resettlement policies for such projects in the past, their suspicion is hardly unjustified. Consider that indigenous tribes constitute only about 9% of India's population, but over the past few decades about 40% of land acquisitions have affected them. Coupled with lack of basic amenities, collapse of law and order, and appalling blindness to injustice, the alienation of the population from the state seems complete.

Today, the Maoists are claiming to defend the land rights of the tribals for tactical reasons, just as they have tried to ride other popular movements that express resentment against some state policies in the hope of expanding their support base. For them, power only flows from the barrel of the gun. Indeed, the Maoists are profiting by extorting protection money from the companies, their agents and contractors operating in these areas, even while accusing them of land grabs.

The government's bleak record on land rights is beginning to change, however. After years of political struggle, the Forest Rights Act was passed in 2006, for the first time recognizing the land rights of the tribal people, despite vociferous opposition from various environmentalists. Under this law, every nuclear tribal family can claim up to four hectares if they were working that land prior to 2005.

While the law has many shortcomings, it does have the potential to empower some of the most deprived sections of Indian society. If it improves the economic condition of these people, it would dramatically alter the political equation. The Maoists' support base would be undercut.

Unfortunately, the Indian state has been slow to appreciate the law's importance, and little attention has been paid to its implementation. A few nongovernmental organizations, like the ARCH Vahini in Gujarat, are using low-cost GPS devices to plot the land and then are transferring the coordinates to Google Maps. This is being done with active participation by local communities, who have shown great maturity in trying to resolve any disputes over boundaries of each other's land. For the first time, they hope to secure a clear title over the small plots on which their ancestors have lived for centuries.

These initiatives can and should be replicated across the country. If the state were to take its primary task of protecting property rights more seriously, the Maoist movement would be deprived of popular support. Empowered by property, poor Indians will be able to participate more actively as citizens and strengthen the country's democratic foundations.

Sri Lanka: Will election weaken democracy?

2010-04-07T19:53:00.000+05:30

Sri Lankans will go to polling booths on April 8, to elect a new parliament. The general perception is that the coalition headed by the president will win. There seems to be an uncanny parallel between the political siutation in India in the 1970s, and Sri Lanka today. I hope history will not repeat itself. Will Mahinda Rajapaksa choose to secure his own future or that of Sri Lanka?

My article titled "Winning the War, Losing Democracy" in the Wall Street Journal was published on April 6, 2010.

Sri Lankans will elect a new parliament tomorrow [April 8]. The election results are a foregone conclusion, but the future of Sri Lanka, unfortunately, may not be so certain. On the face of it the idyllic island nation seems poised to seize on a historic political opportunity at the end of a 25-year civil war against the terrorist Liberation Tigers of Tamil Eelam. But the initial sense of hope that followed the total military victory over the terrorists last May has slowly dissipated as President Mahinda Rajapaksa consolidates his hold on power.

Those who are alarmed by the developments of Mr. Rajapaksa's rule often point to parallels with the history of neighboring India under the rule of Indira Gandhi in the 1970s. After military victory over Pakistan in 1971, Mrs. Gandhi led her Congress Party to a huge victory in the general election. But her populist policies failed to deliver; as inflation rose, political and social unrest spread. By the summer of 1975, Gandhi declared emergency rule, suspended civil liberties, jailed political opponents, packed the judiciary with yes-men, and coerced most of the media into submission.

In Sri Lanka, Mr. Rajapaksa followed up on his emphatic victory in the presidential election in January 2010 by jailing his main opponent, former Army Chief Sarath Fonseka, for allegedly plotting a military coup. This has damaged the country's democratic credentials and aggravated political fissures. Gen. Fonseka, who led the military in its finest hour, today stands accused of corruption and of engaging in politics while still in uniform. The date for his trial has not been announced yet, but he remains in custody.

The presidential election also exacerbated political fractures between various ethnic, linguistic, religious and regional groups. The opposition candidate, Gen. Fonseka, carried six provinces with larger concentrations of Tamils and Muslims, while Mr. Rajapaksa carried the Sinhalese dominated countryside in 16 other provinces. With the end of the war, the elections should be an opportunity to restart the normal political process. But it would be an unfortunate result if the democratic process only deepens the pre-existing political and social tensions. It is precisely those tensions between the Tamil and Sinhala ethnicities that helped sustain one of the bloodiest ethnic terrorist movements in modern times.

Criticism of Mr. Rajapaksa's government is not looked on kindly, which is impacting democratic discourse. Violent attacks on journalists and media offices have continued, and these incidents are not being conclusively investigated. This has given rise to speculation not just about the competence of the administration, but also its possible complicity. In one of the best known instances, Lasantha Wickramatunga, a senior journalist who was killed in January 2009, left behind a statement laying the blame on the authorities should he be harmed. Today, even many supporters of the government are afraid to speak their minds.

There are also growing doubts over the independence of judiciary. The Supreme Court has repeatedly failed to clear the air surrounding a 1982 constitutional amendment about mid-term presidential elections, which allows a president to call a snap election to run for a second six-year term at any time after the fourth year of his first six-year term. The amendment under debate gives a re-elected president the right to begin his second six-year term after completing the year in which the midterm election is held, regardless of when he called the election. In 2005, Supreme Court took the common sense view that a second presidential term should begin immediately after a midterm election is held, without invalidating the constitutional amendment. But within days of the latest presidential election, on February 1, the Supreme Court appeared to reverse that ruling and—at Mr. Rajapaksa's request—issued an interpretation that essentially hands him an extra ten months in office.

On top of this conflict between the letter of the law and the spirit of justice, security forces still maintain a visible presence on the streets, making it seem as if the war hasn't ended. Neither has the economy improved, with double-digit inflation and a ballooning budget deficit.

It's not too late to save Sri Lanka's democracy, however. In India, Gandhi redeemed herself by accepting the electoral verdict in 1977, when the Congress Party lost power at the national level for the first time since independence in 1947. That single act of accepting the electoral verdict helped secure the political foundations of democracy in India.

With the acceptance of political pluralism in India came a much greater appreciation of federalism. No doubt, there are still many unresolved problems in the world's largest democracy. But the idea of India—the recognition that social and ethnic diversity enriches, rather than weakens, the country's political unity—has only strengthened in recent decades.
President Rajapaksa dominates Sri Lanka's political landscape. His popularity is not questioned—he received a very handsome 58% of the votes in January. That should give him the confidence to respect a diversity of opinion, which is the essence of a functional democracy. He has an unprecedented opportunity to secure the political future of the island.

But bolstered by military and electoral victory, will the president turn despotic in a vain attempt to secure his own future at the cost of his country? Only Mr. Rajapaksa can answer this. Meanwhile, he could draw some valuable political lessons from recent Indian history and avoid repeating the same mistakes. That would go a long way in ensuring a democratic, plural and peaceful future for Sri Lanka.

Why I am against reservation for women in legislature

2010-04-01T19:32:00.000+05:30

The women’s reservation bill will disempower the voter, and reduce the incentive for the elected representative to be seriously concerned with the issues affecting the constituencies. It will also seriously undermine the prospect of inner party democratic structures, and empower the entrenched party leadership. More importantly, this amendment is completely unnecessary, since there is nothing that stops political parties to nominate more women candidates, if they were really committed to that cause.

My article titled, "The political fallout of the battle of the sexes" was published in the monthly magazine, Pragati: The Indian National Interest Review, in April 2010.

Symbolism plays a very important role in politics. So it was symbolic that on Monday, March 8th, 2010, the centenary of the International Women’s Day, the governing UPA coalition wanted to present the country with a constitutional amendment to empower women, by reserving 33 percent of the seats for women in national and state legislatures. And it was also indicative of things to come when, at the end of the day, the law minister acknowledged that it was national day of shame, as a few unruly MPs, particularly in the Rajya Sabha, created such a ruckus that the house had to be adjourned six times without conducting much business.

The bill was adopted in the Rajya Sabha the next day, with a overwhelming majority of 186 to 1, out of a total strength of 225, with some of the opposition parties staging a walkout. The government promised to bring further amendments to the bill, and also decided to wait till after the passing of finance bill in the ongoing Budget Session of Parliament, rather than undertake the adventurous constitutional amendment immediately in the Lok Sabha.

While hardly anyone is opposed to the idea of greater political participation by women, yet the political and intellectual divide over the bill can hardly be papered over. Its implementation would have grave consequences for the quality of governance and political culture in the country.

With the major political parties from the governing and opposition sides having expressed their support for the bill, the passage of this constitutional amendment should have been a simple matter. Yet it has not been a smooth sailing for this bill, illustrating the political hypocrisy that underscores the apparent sense of unanimity that surrounds the bill.

The bill had been pending for about 14 years, and many political parties routinely vouched for it in their election manifesto over the past decade. Despite the obvious divide over this issue, there had hardly been any attempt to seriously discuss and explore the implications of this proposal, even within the political parties.

First, it shows that party leaders responsible for drafting their manifestos rarely take that document seriously enough, and therefore do not feel the need to consult even their own party candidates about the key provisions. The candidates take the cue, and focus only on winning elections, not on the policy agenda. There are major political parties that have given up preparing election manifestos altogether.

Secondly, the hollowness of the political consensus stood exposed from the fact that without the fear of disobeying the party whip and attracting the penalty of disqualification from the house under the anti-defection law, the women’s reservations bill could not be passed in parliament. There was no substantive debate on any of the real clauses of the bill in the Rajya Sabha, except perfunctory commitment to gender equality. Afghanistan and Rwanda were presented as models of women’s empowerment in the India’s temple of democracy.

So, the third point that emerges is that under the anti-defection law, parliamentary debate itself has become a casualty. After all, what is the purpose of a debate if under the discipline of the party whip, parliament is turned only in to a number counting chamber. Should it come as a surprise, then, that debates have been increasingly displaced by disruptions in the supreme debating chamber of the country?

Fourth, if there was genuine widespread political and social support for reservation of seats for women in legislatures, would such a constitutional amendment be necessary at all. Nothing prevents the political parties from choosing more women candidates, and nominating more women from constituencies where they have strong presence, thereby enabling more women to enter the legislatures. Parties do not give too many tickets to women because they do not see women as being able to win election on their own strength.

Fifth, it is argued that putting more women in legislatures will somehow change the status of women in the country. It is another matter that having one of the first women prime ministers in the world, in the mid-1960s, did not really change the fortunes of most women in India. Some of the worst forms of discrimination and deprivation of women continue to take place, with not many politically active women raising their voice against the daily atrocities.

Sixth, there are women leaders like Jayalalithaa in Tamil Nadu, and Mamata Banerjee in West Bengal, Mayawati in Uttar Pradesh, who have been able to rise on their own on the political map of the country through persistence and political acumen. Others like Sushma Swaraj, Vasundhara Raje and Brinda Karat have been vocal and visible. And there is Sonia Gandhi, who despite the family name, had to struggle to revive the political fortunes of her party. None of these women needed political reservations to find their own space. So, in the name of empowering women, this bill perpetuates the belief that women cannot make it in politics on their own.

Seventh, the bill raises a fundamental question about the nature of India’s representative democracy. If the reservation of constituencies for SC and STs were considered a temporary anomaly necessary to correct some historical wrongs, the reservation for a section of the population, the women, inevitably undermines the first past the post (FPTP) election system that India had adopted. The bill raises the prospect of fundamentally moving India towards a proportional representation system dividing the population on sectoral lines. The clamour for caste and minority quota within the women’s quota is a logical step in that direction. This would be a fundamental change from the basic design of the constitution, and the debates in the constituent assembly, when the notion of separate electorates was debated and rejected.

Eighth, from the past political experience, it is clear that reserving seats for SC and STs did not lead to the development of authentic political leadership within those communities. Indeed, it led to the creation of a generation of leaders who were pliable and dedicated more to their parties than to the people. The leadership among some of the other historically oppressed sections of society emerged only as the newer leaders mobilised politically, and not because of any reservation, and created their own political territories.

Ninth, it is said that there is a potential political dividend by giving greater space for women, and women as a class would vote en masse for parties that support that section. This is not only vote bank politics at its worst but is completely futile. Sectional mobilisation has rarely worked politically, and could never be sustained. There is no national constituency for women, just as there is none for men.

This of course raises the question, if the social and political context is not conducive why do we have such a demand for reservation for women in legislature.

Everyone agrees that the proposal will significantly change the political contour of India. At one stroke, by rotating the constituencies reserved for women, an enormous political churning will be triggered. Powerful political leaders, legislators who may have nurtured their constituencies seriously for years, will be undermined at a stroke. In effect this will disempower the voter, and reduce the incentive for the elected representative to be seriously concerned with the issues affecting the constituencies. This alone could be a ground for testing the constitutionality of this amendment, because it dilutes the idea of political accountability and representative democratic character, it could fall foul of the basic feature doctrine laid down by the Supreme Court.

In a system where the voters are not in a position to assess the performance of their representative, the parties have to constantly search for new candidates and where there is no inner party democracy there will be one set of of beneficiaries. The proposal to reserve and rotate a third of the legislative seats for women is mainly an attempt by entrenched party leaders to hide behind the fairer sex, to further empower their own authority over the lesser members of the party in the legislature. In an era of coalition politics and fragmentation of the polity this is a misguided attempt by party leaders to keep control over their flock.

Ironically, the bill has also exposed the weakness of the political leadership in all the major parties. No one doubts that Mrs Gandhi’s writ runs in the Congress party. But even she is counting on the anti-defection law to get her will enforced among her party MPs. And despite all her authority within her party, she will not find it easy to replace so many of her MPs and aspiring candidates with women of her choice, without the force of law behind her. The situation is the same within all parties, which is the main reason why entrenched party leaders are supporting this bill.

If the anti-defection law has undermined democracy within the legislative chambers, the rotational reservation for women, with its attendant political turnover, will undermine the democratic process outside.

Environmental crisis: Fuels growth of government

2010-03-24T23:05:00.000+05:30

The IPCC's climate-change fearmongering is only the latest excuse to expand the public sector. My article titled "Environmental 'crisis' and government power", was published in the Wall Street Journal Asia, on 24 March 2010.

The United Nations' Intergovernmental Panel on Climate Change admitted for the first time last month that it is facing a crisis of confidence. But the IPCC's failings go far beyond the recent spate of errors identified in its reports. The problem began with the global political climate that led to the formation of the IPCC two decades ago.

Contrary to popular perception, the IPCC is not a scientific organization. It does no research of its own. Composed of scientists nominated by different governments, its key function is to collate evidence of human-induced climate change, not just changes in climate.

It is hardly surprising that with such an inherently biased objective the scientists lost their objectivity. Many of them went on a crusade to support the political goal of proving anthropogenic global warming. Concerns about scientific objectivity and critical discourse were thrown overboard.

Why did political masters set such a nonscientific mandate for their scientists at the IPCC? Because over the past half century, governments have often ridden the green bandwagon to justify public-sector expansion.

Almost every decade we have witnessed the birth of a new green scare, apparently based on new scientific findings. First came the campaign against the pesticide DDT in the 1960s, followed by the population bomb in the 1970s. Then we had the campaign to protect forests and species in the 1980s, the ozone hole in the 1990s, and most recently the crescendo over climate change leading up to last year's Copenhagen summit.

Each time, the scare was shown to be false or overhyped. For instance, millions of people in the developing world died of malaria because DDT was wrongly vilified. It took decades to overcome the blanket ban of the chemical, and now it is once again being used to control mosquitoes in Africa.

Predictions of a rising population depleting the world's resources have proven equally false and destructive. India today is enjoying the demographic dividend of a young workforce, while China is getting worried at the prospect that it may become the first society in history to grow old before it becomes rich. Likewise, forests are making a surprising comeback in many parts of the world, as the rise in agricultural productivity and economic growth are lowering demand for agricultural land.

Clearly, the track record of green prophecies has been pathetic. And with the collapse of the Soviet empire, and periodic economic turmoil, (such as the Asian economic crisis in 1997, and the dot-com bust in 2000), the public's confidence in their leaders' capacity to make effective economic policies has been shaken. It is in this context that climate change provided a new opportunity for many governments to legitimize their role, and expand their scope.

The formation of the IPCC and its apparent focus on the science of climate change allowed the political establishments to claim science as the basis for proposed climate policies that increased the power of government and curtailed the private sector. The time frame of the projected climate change was longer than earlier green crusades, typically from 50 to 100 years. This allowed policy makers to escape accountability for their misguided policies since they would be out of office by the time the consequences became apparent.

The relationship between a section of political leaders and scientists turned out to be mutually reinforcing. Policy makers justified their empire building on the basis of "scientific consensus," and scientists found a very profitable avenue for political influence and access to funding.
To sell this climate strategy, political leaders and scientists adopted the classic carrot-and-stick approach. The rich countries offered money to the poor ones in an attempt to buy support for the climate policies. More recently there is the threat of trade sanctions, which reflect the stick.

This approach was apparent in the build-up to the Copenhagen summit last December. The distinction between scientists and activists virtually disappeared as the scaremongering reached a new depth. The rich countries' carrots virtually broke the Group of 77 developing-world nations, as some of the poorest countries found the lure of easy money in hand more attractive than the fruits of economic growth in the future.

The grand design failed on three counts, and the world was saved from the onslaught of the climate crusade. Copenhagen coincided with the global economic slowdown, and therefore the promise of money seemed more like a mirage. Second, the scientific authority of the IPCC collapsed. And finally, deepening developmental aspirations in some of the major developing countries, such as Brazil, China, India and South Africa, meant that the leadership in these countries could not afford to barter their economic future for the sake of some small change today.

The current crisis in the environmental movement is not limited to a few leading climate scientists; its root lies in the political shifts taking place in many countries. Leaders are being forced to take their responsibilities more seriously, and not to outsource it to scientists. And scientists will have to regain public confidence by returning to their traditional values of objectivity and intellectual rigor.

Debasing India’s Democracy

2010-03-10T00:29:00.000+05:30

The constitutional amendment to reserve seats for women, in a rotational basis, in national and state legislature was introduced as a historic step. While Rajya Sabha passed it after a tumultuous two days, it exposed the deep political fractures. If adopted, this legislation will seriously undermine the roots of democracy in India.

I assess the political cost of reserving seats for women, in the article titled "Debasing India's Democracy", in the Wall Street Journal Asia, on 9 March 2010.

It was advertised as a historic day. On March 8, the centenary of International Women’s Day, India’s governing coalition planned to present the country with a constitutional amendment reserving 33% of the seats for women in national and state legislatures. However, it was not to be. The failure of the amendment to pass was dubbed by the law minister a national day of shame, as a few unruly MPs, particularly in the Rajya Sabha, the upper house, created such a ruckus that the house had to be adjourned six times.

The bill was adopted in the Rajya Sabha the next day, with the government promising to bring further amendments to the bill. But it has also exposed the widening gap within the governing allies, and it is likely to be a close race in the Lok Sabha, the lower house. Increasing women’s participation in politics sounds like a fine idea in principle. But its implementation would have grave consequences for the country’s quality of governance and political culture.

A comfortable majority in the parliament professes to support the women’s reservation bill, with dominant parties on both sides of the political divide in favor. However, the truth is that many members are apprehensive about the consequences. And that opposition can’t be explained away as simply the vested interest of male politicians.

First of all, the justifications for the amendment don’t stand up to scrutiny. If there is indeed political and social support for greater participation of women in politics, nothing prevents political parties from choosing more female candidates. Nor would reservations somehow change the status of women in the country—some of the worst forms of discrimination against women continued to take place even after Indira Gandhi became prime minister in the 1960s. And finally, there are formidable women leaders like Jayalalithaa in Tamil Nadu and Mamata Banerjee in West Bengal who have come up on their own through persistence and political acumen. In the name of empowering women, the bill is actually is very paternalistic, believing that women cannot make it in politics on their own.

More importantly, the bill poses a fundamental threat to the nature of India’s representative democracy. While the reservation of a small number of seats for certain castes might be accepted as a temporary anomaly necessary to correct historic wrongs, a reservation for such a broad section of the population inevitably undermines India’s “first past the post” electoral system. The bill moves India toward a proportional representation system dividing the population on sectional lines. This represents a fundamental change from the basic design of the constitution, and the debates in the constituent assembly, when the notion of separate electorates was considered and rejected.

In the current system, parliamentary constituencies are comprised of a wide range of people, forcing candidates to build a social and political coalition to have a reasonable chance of winning the election. It is this tendency to bridge the sectional divide among the population that has been the hallmark of Indian democracy, where diversity has only strengthened the political institutions.

If India is to tread the path toward ensuring representation according to the diversity of the population, by adopting a kind of proportional electoral system, then the social coalition will inevitably break down, leading to increased political instability. The demand for a sectional quota within the women’s quota would be a logical demand in that direction. And the next step could be to demand political reservation for men as well along sectional lines. This would signal the end of the idea of India.

Accountability to voters will also be reduced. At one stroke, by rotating the constituencies reserved for women, an enormous political churning will be triggered. Legislators who have built up their own independent base of support within their constituencies will be forced out of office. Two-thirds of the sitting members of the legislature may have to surrender their seats under a rotational reservation for women. In effect this will disempower the voter, and reduce the incentive for elected representatives to be seriously concerned with the issues affecting their constituencies.

Party leaders stand to benefit the most from a system where the voters are not in a position to assess the performance of their representative. The parties will have to constantly put forward for new candidates, and these are chosen by the leadership—there is no inner party democracy in India. Hiding behind the fairer sex, entrenched party leaders are solidifying their authority over their backbenchers.
This represents an extension of the antidefection law which was passed by the Congress government of Rajiv Gandhi in 1986, when it had an unprecedented majority in Parliament. Under this law, a legislator is required to vote along party lines or face disqualification from parliament. That spelled the end for meaningful parliamentary debate.

Now Sonia Gandhi is now attempting to push through a constitutional amendment that deals another body blow to representative democracy. At a time when the rest of the world is just beginning to appreciate the democratic miracle that is India, it is ironic indeed that the country’s own political leadership is seeking to undermine its democratic character to further its own narrow interests.

Financial Crisis: Failure to recognise the significance of property rights

2010-02-26T16:04:00.000+05:30

Writing the foreword to the International Property Rights Index 2010, I note that "The present economic crisis, with its root in housing and property, provides a very good opportunity for people in the rich and poor countries to take a fresh look at the significance of property rights and to renew our appreciation of a system of formal ownership of property."

The International Property Rights Index is published annually by the Property Rights Alliance, an international network, based in the US.

Foreword to the IPRI 2010, by Barun Mitra

The crisis that has shaken the financial world over the last two years is ascribed to many failures – from easy money, human greed or a lack of government oversight to the lethal financial derivatives created by financial whiz kids. While relevant, much of the public discourse has ignored a fundamental cause of the present economic woes. In my view, this financial crisis is the consequence of distorting or altogether disconnecting the relationship between property and ownership.

A modern economy is built on clear ownership of property whether tangible or intangible - be it land, shares or intellectual property. It requires a commonly accepted form of documentation of that ownership, an easy method of trade of ownership and transfer of property and an unencumbered market where the transactions can be undertaken leading to the discovery of the price of the asset concerned. Once that chain of ownership is lost, it becomes almost impossible to assess the real value of the asset.

Hernando de Soto, the noted economist who unveiled the secret of property in his book The Mystery of Capital, recently wrote:

Look around: everything of economic value that you own – house and car titles, mortgages, checking accounts, stocks, contracts, patents, other people’s debts (including derivatives) is documented on paper. You are able to hold, transfer, assess and certify the value of such assets only through documents that have been legally authenticated by a global system of rules, procedures and standards. … That system [of legal property rights] produces the trust that allows credit and capital to flow and markets to work.

[De Soto, H. (2009, February 21). Toxic paper, in the Newsweek magazine.]

The first time-bomb that exploded in the dramatic chain of events leading to the financial crisis was the US housing market. It had long been in a boom phase supported by public policy aimed at widening home ownership and facilitated by an elaborate network of financial institutions. Whether owned by the US government (such as Ginnie Mae), implicitly supported by it (such as Fannie Mae and Freddie Mac) or entirely private, these institutions created an ever more elaborate chain of securities which funneled savings from across the world into securities that were issued against mortgages taken out by US home-owners.

Originating in single, often modest loans taken by US families, these mortgages were packaged by banks into so-called MBSs (Mortgage Backed Securities). Beginning in a small town in Texas, for example, a retail bank would bundle its mortgages and transfer them to a regional office. Within days, often hours, the paper would find its way to New York where one of only six rating agencies would slice the bundles into layers of securities. The rating agencies would determine what proportion of the securities should be rated AAA (the safest, with correspondingly low interest rates) based on statistics of housing loans over the earlier decade and how the remaining paper should be pegged down the ladder of safety – and up the ladder of return.

Thus rated, the paper would be offered to buyers across the world - whether banks, hedge funds, or pension funds. Having traveled at the speed of the internet from a US suburb to a small town in Germany, the securities were essentially ‘virtual’ in nature. The savings institution in Germany had no way to assess the risk underlying the paper it owned except via the rating stamped on it in New York. This risk assessment was frozen in time and in turn, derived from a series of historical default rates generated during a period when US home prices were on a steady upward path. When the downward slide began as often happens with all asset booms, there were no reliable mechanisms to reassess the risk underlying the securities.

The current financial troubles illustrate the tragic consequences if the relationship between property and ownership is blurred. For instance, the stock market operates on the basis of continuous disclosure of financial performance of companies, and facility to trade the information in comparison to other assets. These institutions allow for the price of the asset to be discovered. If the chain of ownership is lost, it becomes almost impossible to assess the real value of the asset. This is precisely what happened with the MBS.

It seems quite clear that the political attempt to promote housing in the U.S. and easy money policy stimulated the growth of new financial derivatives by repackaging many doubtful mortgages. As on earlier occasions when snake oil charmed the investors of the 19th century or the seduction of the French by the Louisiana Company in the 18th century, the housing boom in the US in the early 21st century apparently created such a sense of euphoria among investors that they failed to keep tabs on the paper trail of ownership. Thus, investors lost track of the real value of the underlying assets. But unlike in the previous centuries, today, real estate is a much smaller part of the broader economy. Also, the world economy is presently much more integrated and therefore, dispersed and diverse. Consequently, the world economy seems on a recovery course in less than two years despite the economic turmoil.

While world attention is focused on the economic situation in the US and other developed countries, the situation also underscores the perpetual economic crisis in many developing nations and poor communities. In these societies, recognition of property rights and respect for ownership is weak, and title document is often non-existent. Typically, these are places where informal economic activities dominate. But the consequences are very similar in both - lack of credit. The ironic problem of the poor is not that they do not have assets but rather, they are unable to effectively capitalize their assets. The present crisis demonstrates the rich are equally vulnerable to being unable capitalizing their assets if they lose their connection to the real economy and the clear titles that it requires.

Fortunately, the developed countries which have a well established system of property rights are in a much better position to deal with present turmoil. Despite all the talk of this being the most serious economic crisis since the great depression of the 1930s, one has not seen the streets of London or New York lined with the unemployed or impoverished outside soup kitchens. The enormously larger capital base in these countries today enables them to tide over the crisis with very little disruption. The problem seems to be that even these relatively small disturbances in an otherwise tranquil and predictable economic environment greatly magnifies the perception of these disruptions, as the former stands out sharply in contrast to the latter.

Unfortunately, by this very similar process of perception, the perpetual economic crisis in the poor countries where millions of people struggle to survive in an informal economic environment are seen as the “norm” rather than the exception. Unlike their counterparts in the developed countries, the poor in the less developed nations are paying a very real price for their inability to grow out of the informal economy - at times even with their lives.

A critical component of a functioning and stable system of property ownership is the property registration system. Typically, the government is the sole agency that surveys property, registers ownership and the title deed. In such a monopolistic environment, it is not surprising that many governments tend to behave as rent seekers viewing the property registration system as a way to maximize revenue. Rather the registration system should be an instrument for providing protection, facilitating transaction of property, and enabling its capitalization. The present crisis in the rich world and the perpetual crisis in the poor world should encourage us to look for alternative ways of recording property.

For instance, all property particularly tangible physical property like land and structures on it are situated locally. Could the local community, with support of agencies like banks and insurance companies, and private surveyors, undertake the process of recording and registering property in a more efficient manner? One of the additional advantages of such localized approach would be for local people to gain a much better understanding of the need for recording and formalizing property ownership.

The present economic crisis, with its root in housing and property, provides a very good opportunity for people in the rich and poor countries to take a fresh look at the significance of property rights and to renew our appreciation of a system of formal ownership of property. The International Property Right Index 2010, a unique comparison of some of the key parameters measuring different aspects of property rights, therefore, acquires special significance in the current economic environment.

I hope future issues of the IPRI report will explore the possibility of including new parameters to better capture the information regarding recording and registering property and make it even more relevant for the people across the world.

India Supports a Toothless IPCC

2010-02-09T00:13:00.000+05:30

The less credibility the climate body has, the less it can do to block vital economic development. My analysis of India's relationship with IPCC is in this article titled "India Supports a Toothless IPCC" published in the Opinion Asia section of the Wall Street Journal Asia, on February 8, 2010.

Prime Minister Manmohan Singh expressed support for the United Nations' Intergovernmental Panel on Climate Change and its leader, Rajendra Pachauri, at a local energy conference in New Delhi Friday. The move has surprised many observers, but it may prove to be politically astute.

The IPCC's credibility is in tatters. From climategate to glaciergate, Amazongate, natural-disaster gate, and now Chinagate, the revelations of bad science keep coming. Given all that, plus the much-publicized flap between Environment Minister Jairam Ramesh and Mr. Pachauri over the science behind "melting" Himalayan glaciers weeks before the Copenhagen climate summit in December, superficially one might have expected the Indian government to jettison Mr. Pachauri as soon as possible.

But Delhi isn't just offering him and the organization rhetorical backing. At Friday's annual flagship event of the Energy and Resources Institute—which Mr. Pachauri has headed for almost 30 years—the prime minister offered to provide technical assistance through a newly established glacier research center. The government has also formed a network of scientific institutions to develop domestic science and research capacities on climate issues.

The explanation for this support is simple: It is in the Indian government's interest to perpetuate a weak IPCC and a toothless Mr. Pachauri at its helm. Given the recent scandals, the IPCC is hardly in a position to lobby India for carbon concessions. No one from the IPCC can again cavalierly dismiss their critics as promoting "voodoo" science or "vested interests," as was Mr. Pachauri's wont. By offering scientific support to the IPCC, the Indian government is actually confirming its lack of confidence in the U.N. body's scientific credentials.

Mr. Pachauri is now in his second term as the head of IPCC. He is not a climate scientist—or indeed a scientist at all. He is an able science administrator who built his institute from scratch. Influential governments in the rich world probably accepted Mr. Pachauri not just for his redoubtable skill in institution-building, but also in the hope that by placing an Indian like him at the head of IPCC, he might be able to influence Indian policy.

That's important because after all, if countries like China and India do not subscribe to any commitment to reducing emissions, developed countries' best efforts will not have any significant impact. Having bought the idea of man-made global warming, rich countries had to try and ensure that developing countries fell in line.

But in democratic India no leader can afford to ignore the developmental aspirations of the people. Even if some Indian elites want to sell the future of the country by agreeing to some form of restrictions on energy usage—and thus on economic growth—in the fiercely competitive world of Indian politics they stand no chance.

The IPCC was created as a way to make the world, particularly the poor, fall in line and support expensive climate-change initiatives by overwhelming them with the apparent authority of the world's leading technical body on the subject, backed by a supposed scientific consensus. This attempt was doomed to fail, because scientific inquiry does not respect consensus, and orthodoxy is anathema to scientific progress.

There is some poetic justice in this whole drama. Countries like India that were always apprehensive of institutions like the IPCC now prefer to keep it twisting in the wind. The rich countries that gave birth to the idea of the IPCC cannot afford to disown it without exposing their own underlying design. They could try to replace its head, in the hope that the new face might be able to rebuild the credibility of the institution. But having tasted blood, there is no reason why India and China should let the current advantage pass so easily.

The IPCC has been checkmated, as have so many other U.N. institutions before it. This is the inevitable consequence of the desire for global government under the misguided belief that ordinary people do not know what is in their own interest. With the deepening of democratic ideals, people power can no longer be overturned so easily. The failure of the IPCC shows that sovereignty still lies with the people, not with the aspirants for global government.

Market economy's contribution to environment

2009-12-07T15:44:00.000+05:30

Rather than focussing on reducing emissions, India can make a difference by liberalising its economy, improve efficiency, and thereby contribute to a cleaner and safer environment. On the eve of the Copenhagen climate conference, I look at the relationship between economic reforms and energy efficiency in this article, "Earth Story", published in the Financial Chronicle, on 7 December 2009.

With the opening of the climate conference in Copenhagen, India has an opportunity to change the climate of negotiations.

Surprisingly, Jairam Ramesh, the minister for environment and forest, decided to play for a draw with his statement in Parliament last week proposing voluntary reduction in India’s carbon intensity. Despite his strong assertion that India will not accept any legally binding international commitment to reduce emission, he proposed to reduce the intensity of the economy by a modest 20 to 25 per cent.

Just when the world of climate science was getting shaken by allegations of massaging of data to support claims of global warming, the minister acknowledged that Indians are among the most vulnerable to global warming, and then promised to announce domestic emission norms by 2011. Yet, he failed to drive home the point.

Between 1992 and 2005, India’s energy intensity, that is energy needed to produce a unit of GDP, improved by about 52 per cent, from 1,281 kg of oil equivalent per $1,000 of GDP in 1992 to 618 kilogram of oil equivalent (kgoe) per $1,000 by 2005. During this period, carbon intensity declined by 45 per cent, from a high of 3.15 tonne of CO2 per $1,000 to 1.73.

These figures are impressive, and comparable to the major economies of the world, which varied in 2005 from 0.44 tonne per $1,000 for the US, 0.252 tonne for Europe area and 2.44 tonne for China.

India’s GDP in 2008 was estimated by the World Bank to be $1,217 billion (current dollar). At 2005 energy intensity level of 618.46 kgoe/$1,000, this required total energy of 752,969 million kg of oil equivalent (mkgoe).

But in 1971 energy intensity was a high 2,259 kgoe per $1,000. To achieve the GDP level of 2008 would have required 263 per cent more energy than it actually did. Likewise, at 1981 energy intensity of 1,154, would have required 87 per cent more energy. And at 1991 energy intensity of 1,409, would have required 127 per cent more energy to attain the GDP level of 2008.

The improvement in energy intensity is mirrored in carbon intensity. At 2005 carbon intensity level of 1.73 MT per $1,000, the GDP of 2008 emitted 2,094,083,144 MT of carbon. But at carbon intensity levels of 3.08 (1971), 1.96 (1981) and 2.72 (1991) the GDP of 2008, would have emitted 79 per cent, 14 per cent and 58 per cent more carbon, respectively, than it actually did.

This suggests that between 1992 and 2008, effective saving in total energy used was 127 per cent and effective decline in total carbon emission was 58 per cent, for the 2008 GDP level. The decrease in carbon intensity between 1992 and 2005 was a whopping 82 per cent from the 2005 base, and energy efficiency improved by 56 per cent, according to an analysis of the World Development Indicators.

The minister’s defensive strategy became apparent, when invoking national interest he offered to do domestically, emission reduction and emission standard, while vehemently rejecting similar measures under any international legal mandate.

The dramatic improvements in energy use since 1992 were not a coincidence. Equally, there was little conscious effort aimed at such environmental goals. The real secret of this amazing transformation is the economic liberalisation initiated during this period, which unleashed greater competition, ushered in a relatively free trade regime and facilitated investment and technology adaptation.

Globally, however, decarbonisation of the economy has been going on for the past 400 years as societies moved from fuel wood to coal, oil and electricity, driven by economic needs, leaving a safer environment in its wake.

Given this track record, rather than seeking to balance economics and environment, we need to push ahead with economic reforms with much greater vigour. We need to recognise that cleaner and safer environment is like value added products, which become accessible only with higher economic growth and prosperity.

We need to recognise that the poor are vulnerable to natural hazards, were so in the past, are in present and will be in the future, because of their poverty, quite irrespective of any change in the planet’s climate. If we are really concerned about the plight of the poor, then it is the intellectual climate that we need to change.

Even at a nominal economic growth rate of 8 per cent annually, India’s GDP will rise 150 per cent from 2008 level to over $3,000 billion by 2020. At our current carbon intensity level of 1.73 MT of CO2 per $1,000, the total carbon emission could increase by 2.5 times. But if our carbon intensity falls to European or Japanese levels, 0.252, prevalent today, the total carbon emission would fall by a sixth. This is possible at current levels of technological development.

And this could happen irrespective of whether man-made carbon is the cause of climate change or not. It would happen because of the economic need to improve energy efficiency. This is the real “business as usual” model.

The minister will emerge as a true ‘deal maker’ in Copenhagen if he succeeds in changing the intellectual climate at the negotiations. Economic freedom generates greater wealth and makes energy accessible, and that in turn, enables people to better insulate themselves from the vagaries of nature.

The Writing on the Wall

2009-11-10T15:14:00.000+05:30

The 20th anniversary of the fall of the Berlin Wall in 1989, has become particularly poignant because of the current economic slowdown in much of the rich countries, particularly in that apparent bastion of capitalism, the US. Over the past two years, the foundation of global finance has been shaken, not because of any Marxian foresight, but because of the failure on the part of the capitalist world to appreciate the relationship between property ownership and valuation of that property. In this article, "The Writing on the Wall", published in the Financial Express, on 10 November 2009, I try to draw fresh lessons from the fall of the Berlin Wall, in the context of the current financial crisis.

On November 9, 1989, the Berlin Wall that divided East and West Germany, both physically and ideologically, finally fell. It was a political earthquake, which signalled the end of communism.
Communism was characterised by its contempt for private property, by the complete control of the state over the economy, and consequently, by its disregard for price as a signal of scarcity and guide for investment. For over 50 years, price of bread did not change in the erstwhile Soviet Union. Not surprisingly, for much of that time, there was hardly any bread available for increasing number of people.

Communism collapsed not because of its ideological baggage, but because of the practical cost of the ideology that tried to make private property redundant.

The 20th anniversary of the fall of the Berlin Wall has become particularly poignant because of the current economic slowdown in much of the rich countries, particularly in that apparent bastion of capitalism, the US. Over the past two years, the foundation of global finance has been shaken, not because of any Marxian foresight, but because of the failure on the part of the capitalist world to appreciate the relationship between property ownership and valuation of that property.

The blame for the financial crisis has been ascribed to many—from easy money to human greed, from a lack of government oversight to the lethal financial derivatives.

The fact is that this dramatic chain of events was triggered by the collapse of the housing market in the US in 2007. The housing bubble was supported by public policy aimed at widening home ownership, and facilitated by an elaborate network of financial institutions. These institutions created an ever more elaborate chain of securities that funnelled savings from all over the world into securities that were issued against mortgages taken out by US homeowners.

Originating in single, often modest, loans taken by US families, these mortgages were packaged by banks into so-called MBSs (mortgage-backed securities). First, a retail bank in a small town would bundle its mortgages and transfer them to a regional office. Within days, often hours, the paper would find its way to New York. There, one of only six rating agencies would slice the bundles into layers of securities. Based on statistics of housing loans over the earlier decade, the rating agencies would determine what proportion of the securities should be rated AAA (the safest, with correspondingly low interest rates), and how the remaining paper should be pegged down the ladder of safety—and up the ladder of return.

Thus rated, the paper would be offered to buyers across the world, to banks and funds. With electronic transfer from a US suburb to a small town in Germany, these securities were virtually ‘virtual’ in nature. The savings institution in Germany had no way to assess the risk underlying the paper it owned, except via the rating stamped on it in New York, and disseminated to it, perhaps by way of London and New York. When the bubble burst, as invariably happens with all asset booms, there were no reliable mechanisms to reassess the risk underlying the securities.

This financial crisis illustrates what happens when the relationship between property and ownership is lost or gets fuzzy. A modern economy is built on clear ownership of property, whether tangible or intangible, be it land, shares or intellectual property. It requires a commonly accepted form of documentation of that ownership, a continuous flow of information about the owners’ capacity to harness the property, and an unencumbered market where the transactions can be undertaken leading to the discovery of the real price of the asset concerned. This price information is critical because it allows capitalisation and ensures the flow of credit, which in turn keeps the wheels of a modern economy turning.

The stock market operates on the basis of continuous disclosure of financial performance of companies, and facility to freely trade the information. So, despite the widely dispersed share ownership, the information regarding the value of the assets, market capitalisation and future prospects gets continuously updated and vetted.

In contrast, for the various financial derivatives backed by the mortgages, it was no longer possible to identify the actual assets, no way to assess the financial health of the owners of these properties, and therefore no real market to vet the prices of these papers.

Unfortunately, much of the public discourse has ignored this fundamental dimension of the current economic woes. The housing bubble and the consequent banking crisis provide a glimpse of the tragic consequences of decoupling between property ownership and property valuation.
While world attention is focused on the economic situation in the US and in other developed countries, the situation also underscores the perpetual economic crisis in many developing countries and poor communities, where recognition of property rights and respect for ownership is weak, title documents often non-existent, and access to credit almost impossible. Typically, these are places where informal economic activities dominate.

But the consequences are very similar in both the rich and poor countries—lack of credit. In rich countries, the collapse of real estate prices has shaken the financial structure. With highly leveraged banks and over-extended borrowers, flow of credit has inevitably dried up.
On the other hand, the problem in poor countries is not that people don’t have assets, but that they are unable to effectively capitalise their assets. With lack of title, grossly inadequate documentation of ownership and relatively high transaction costs have contributed to these assets remaining perpetually uncapitalised. This is what Hernando de Soto, the eminent economist, explained in his path-breaking book The Mystery of Capital.

Developed economies, despite the current turmoil, are strongly rooted to property rights. With a greatly diversified economy, they are likely to come out of the present trough, sooner than later, shaken perhaps, but not stirred!

Poor countries, with lack of institutional recognition and respect for property ownership, may not have been shaken as much by the financial crisis. But the vast majority of people will continue to languish in perpetual poverty with little prospect of being able to capitalise their assets, build their creditworthiness and climb the ladder of prosperity.

This partly explains how one small section of India, operating in the formal economy, continues to shine even in these turbulent times, while a vast majority of people operating in the informal sector barely crawls to hold on. Tragically, these poor people, who may not be much shaken, are constantly stirred by the swirling grind of poverty all around them.

Property ownership and respect for property rights laid the foundation for capitalism and opened the door of prosperity in much of the Western world. On the 20th anniversary of the fall of the Berlin Wall, as the global economy grapples with the turmoil and tries to come out of it, it’s time to once again renew our appreciation of the significance of private property.

India beats China in prosperity index

2009-10-27T14:27:00.000+05:30

India is ranked 45 compared to China's 75 on parameters of wealth & well-being. Roger Bate & I look at the new global prosperity index, in the Daily News & Analysis, on27 October 2009. Read the original article here.

Together, India and China account for 40% of the world's population and about 16% of the world's economic output. China bests India in both categories. And as home to glittering cities like Shanghai and Hong Kong, it's generally considered more prosperous than the subcontinent.
But is that really the case? Just as an individual's well-being is based on more than his bank balance, a country's prosperity depends on more than rote calculations of its gross domestic product (GDP). And on these less-celebrated, but no less important metrics of prosperity, India surpasses China, on all of them.

If prosperity is defined as a mix of wealth and well-being, India is streets ahead of China, ranking 45th worldwide, while China lags far behind at No 75. In Legatum Institute's recently-released Prosperity Index, which assessed 104 nations comprising 90% of the world's population, prosperity is defined through 79 variables sorted into nine overarching categories.

A growing number of world leaders are rethinking the conventional barometers of prosperity. French president Nicolas Sarkozy, for instance, has charged a commission whose members include five Nobel laureates — including Amartya Sen and Joseph E Stiglitz — to come up with a more accurate measure of a nation's level of advancement than GDP. The blue-ribbon panel recommended a range of new variables to capture not just the cash value of a country's output, but its quality of life as well.

That is precisely the rationale behind the Prosperity Index. So, while it's true that China outperforms India on several economic indicators, including the level of foreign direct investment, the population's savings rate, the unemployment rate and even entrepreneurship, India bests China in critical non-economic categories. These categories demonstrate how citizens benefit from freedom, sense of community, and governmental integrity that a democratic system fosters.

These characteristics put India in a much better position to deal with economic challenges in the future.

Take "democratic institutions," a category which evaluates everything from the civil and political protections afforded a citizenry to the relative level of power and independence granted to the executive and judicial branches of government. On this metric, India ranked 36th — 64 places higher than China, with its repressive regime.

Or consider "personal freedom," which encompasses freedom of speech and religion, national tolerance for immigrants and ethnic and racial minorities, and the amount of satisfaction that a country's citizens express with their level of freedom. Once again, India scored far better, ranking 47th, compared to China's 91st.

Indians also demonstrate more confidence in their country's governance. The index measured levels of political participation, citizen approval of elected officials, and popular perception of government integrity and corruption. Again, India outpaced China, ranking 41st - 52 spots higher.

India especially excels in the "social capital" category. The index considered the percentage of the citizenry who volunteered, gave to charities, helped strangers, felt they could rely on family and friends for support, or were otherwise active in community organisations. While China hovered in the bottom third of nations, India ranked a stellar fifth, behind the wealthy western countries New Zealand, Switzerland, Sweden, and Australia.

"A growing economy is necessary, but not sufficient, for national prosperity," concludes the Legatum report. "Without additional factors such as an accountable government, healthy citizens, strong social capital, and respect for civil and political liberties, a nation cannot achieve sustainable prosperity."

China may enjoy economic supremacy over India at present. But given its strong and free political and civil society, India's citizens are much better positioned to enjoy not just marked levels of economic growth, but also a level of prosperity unattainable in authoritarian China.

Note: The 2009 Legatum Prosperity Index will be released on 28 October 2009, at www.prosperity.com.

ABOUT THE AUTHORS
Roger Bate is the Legatum Fellow at the American Enterprise Institute in Washington, DC. Barun Mitra is a founder and director of the Liberty Institute, a non-profit, independent public-policy research and educational organisation based in New Delhi, India.

India media battles China

2009-09-25T14:50:00.000+05:30

Why does the India media blow hot and cold over China, every now and then? I look at this phenomenon in "Breaking news: TV battles China", published in the Financial Express, on 25 Sept 2009.

Apart from any geopolitical factors, there are two plausible explanations for the current focus on the China-India border, particularly on a few TV news channels in India. We are being daily fed with reports of Chinese incursions, China’s aggressive postures, China’s military buildup, China painting rocks red, and then the media is blowing hot and cold over whether the Indian military is capable or ill prepared to deal with any situation that may arise. Indian government has repeated that there is nothing unusual happening on the border. Indian military has said there has been nothing unusual on the border. But of course the media knows better.

I know very little about the Chinese response to the war being waged in Indian drawing rooms. One report in Indian papers quoted Chinese officials urging Indian media to show restraint. Of course no one can restrain the free Indian media, particularly when what is at stake is TRP. Particularly when many are suffering from withdrawal symptoms in a phase when there is no T-20 cricket to keep TV channels focused on the records made, the records missed, and the records that might be made, both on and off the field.

Here is my two cents worth contribution on why China-India border is dominating some TV news channels.

One, China is still relatively unknown to most Indians, quite unlike our other neighbours, and that makes it an easy target. For instance, Pakistan and its many non-state actors are a known devil, so whatever price they make us pay every time we are at the receiving end of their firework, we soldier on. There is very little personal animosity between ordinary people on both sides of the Indo-Pak border. On the other hand, historically and socially, China has always been on the periphery of awareness for most Indians, and the Himalayan range only reinforced that perception. Shekhar Gupta writes in his weekly column in The Indian Express, (September 19, 2009; www.indianexpress.com/ news/stop-fighting-the-1962-war/ 518975/0), that the defeat of the

Indian army in the 1962 war at the hands of the Chinese in the Indian north-east may have scarred the Indian psyche for generations. So today, the little known China, coupled with the trauma of 1962, is casting a shadow over the reality of Sino-Indian relationship in 2009.

Secondly, like the Bollywood films that are forever eager to try and capitalise on any prevailing popular perceptions, there are some in the Indian media who think they now have an opportunity to try and leverage the Chinese dragon. In an economic slowdown, competition among news channels for higher TRPs has become hot, and what better than a T-20 thriller between China and India. The channels had a field day predicting a close election, when it was anything but that. Then the swine flu brought in the running commentary on the disease and death, triggering a panic. Then the monsoon, or its failure, and the media descended like vultures, excited at the prospect of picking at the worst drought in a century. And now it is time for a face-off between China and India, a battle which has been joined, with hardly anyone from the media actually visiting the border. Wait for the next media sponsored breaking news event. Far from being the messenger, the TV channels want to create news! Welcome to the media war in the information age.

Nevertheless, a war of words on TV channels is far more tolerable than any exchange of artillery between the armies.

The media warriors have, of course, attempted to wrap their rhetoric in tricolour. In the heat of battle, they may have missed one small point. Much of the China-India border is disputed by one side or the other, which is why we have the Line of Actual Control. And in some areas, even the LAC is not clearly accepted by both sides. There can hardly be anything but ‘incursions’ by one or the other, if there is no mutually recognised border cast in stone, in the first place.

On the other hand, if we are to accept the LAC as the de facto border, then it would basically mean that we surrender claims on the western sector in Aksai Chin, and China give up its claim in the eastern sector in Arunachal Pradesh. A lot of scholars think that it is precisely this kind of across-the-board settlement which is desirable, possible and doable. But it is the sector by sector, section by section, mile by mile negotiation between China and India that has perpetuated the talks, and held up settlement of the border dispute all these years.

One hopes that from this fog of battle in the media, a little light would shine through, giving impetus to the border negotiations. If the border is settled, the media warriors, of course, will lose one of their favourite punching bags. But that is one casualty from friendly fire that would be worth paying for.

Postscript: While the media goes to battle the dragon, the reality of Sino-Indian relationship goes on. China is India’s largest trading partner. Indian investment in China is growing. Many Indian students are studying at Chinese universities. China and India are working together at G-20, at WTO and other forums. The two sides recently acknowledged their identical positions on climate change. If these are a few of the highs, then as in any relationship, there are many low points too. The war drums in the virtual media cannot overshadow the realities.

When Free Trade Means So Little

2009-08-06T16:08:00.000+05:30

The new bilateral free-trade agreement between South Korea and India is not all it's cracked up to be: there are plenty of exceptions and the package will take 10 years to implement. Chung-Ho Kim of South Korean, and I argue here that fully free trade is the best possible way of recovering from the global slump, in this article titled "When free trade means so little", published in the Mint on Aug 6 2009.

India and South Korea are due to sign an agreement on Friday 7 August that they say will cut barriers and boost trade between our two important economies. But behind the political rhetoric, the reality of the Comprehensive Economic Partnership Agreement (CEPA) is in the fine print. By signing a freetrade agreement that does not actually free trade, our governments are denying us the best tools to fight the global recession.

They admit as much by saying it will pave the way for removing more barriers to commerce in the future, even though this agreement has been in the works for at least three years. It is at least a step in the right direction: With the Doha Round in a coma, both governments are right to seek other ways to boost trade.

But both governments are being far too timid in trade agreements that will not boost trade much at all, such as South Korea's recent free-trade agreement with the European Union and the one India is seeking with the Association of Southeast Asian Nations (ASEAN).

Liberating trade between Indians and Koreans would make a lot of sense: India's massive labour force and emerging globally competitive companies, particularly in information management and software, match up well with a relatively capital-intensive South Korea, whose expertise includes information technology, electronics and automobiles. In 2007-08, bilateral trade was about $10 billion--this pact could eventually boost that by one-third, but it does not go far enough.

South Koreans have long understood the value of trade with the rest of the world. In the early 1960s, they suffered living standards similar to those of Ghanaians or Kenyans then. Today, South Korea is at least 30 times more productive per capita than those two successful economies in West Africa and East Africa.

Some 70% of South Korean jobs are now directly related to some form of international trade.
India has taken a lot longer. After a disastrous experiment with self-sufficiency that not even an economy with more than a billion people could sustain, India's liberal reforms, beginning in 1991, have made dramatic improvements. Further liberalization has brought the average import tariff in India down from 32% in 2000 to 15% in 2007, according to the World Trade Organization; in 1991, the average import tariff in India was 115%. India is now the world's 16th largest trading nation overall but sixth largest for trade in services.

In the 1990s, both South Korea and India grew a full 3 percentage points faster than countries that did not open up to trade, according to World Bank economists Aart Kraay and David Dollar.
Trade was the key to growth before the global slump and remains the only sustainable route to recovery.

India's booming automobile sector shows how. After putting up for decades with very few choices in cars--thanks to the government-protected oligopoly, with massive import tariffs on foreign vehicles--keen Indian consumers are buying 9% more cars every year, making India one of the world's fastest-growing markets. Among the many investors that have taken advantage of a more open market is South Korea's Hyundai, now India's second largest car manufacturer.

Through joint ventures with foreign producers and newly gained expertise from trade, Indian manufacturers are becoming globally competitive too.

Despite all this, the flip side to India's booming automobile market is the remaining tariffs on auto components, benefiting a tiny minority who fiercely opposed Cepa and got special protection--at the expense of Indian consumers who pay more for products that could be imported more cheaply or made more cheaply in India with the right investment and with open competition.

The other victim, of course, is the components sector, which will prevent itself from becoming a serious international player.

India has also secured limitations and exceptions in Cepa for other so-called sensitive sectors, such as agriculture and textiles. In other words, India's negotiators are preventing Indians from getting cheaper food, clothes and vehicle parts.

New Delhi continues to insist that coddling India's farmers is the route out of poverty, while constraining their property rights and their freedom to trade even inside India. Opposition to free trade is also deeply rooted among South Korea's rice farmers, who fear competition will erode their 60% grip on their market. Again, it is the consumers who pay higher prices for this favouritism.

Protection for a variety of vested interests means that even the limited terms of this agreement will be implemented slowly, over 10 years. It is great that the two countries have agreed to speed up talks on removing double taxation, on a maritime and aviation agreement, and other stimuli to trade and investment--but why wait to boost two-way trade by (what South Korean negotiators calculate at) $3.3 billion a year?

Both governments will proudly announce CEPA today as an historic achievement, but we should be worrying about the details instead of admiring just another photo opportunity. Let us sign a free-trade agreement that does what it says on the tin: Free trade.

Decriminalising homosexual behaviour

2009-08-02T12:10:00.000+05:30

Repealing IPC 377: Recognising diversity and dissent

Delhi High Court has passed a landmark judgment that severely restricts the scope of the section 377 of the Indian Penal Code. The decision noted, “Respect for human rights requires that certain basic rights of individuals should not be capable in any circumstances of being overridden by the majority, even if they think that the public interest so requires. Other rights should be capable of being overridden only in very restricted circumstances. These are rights which belong to individuals simply by virtue of their humanity, independently of any utilitarian calculation.”

In this article titled, "Recognising diversity and dissent", published in Pragati: The National Interest magazine, in August 2009, I discuss the significance of decriminalising Section 377 of the penal code in the wider political and constitutional context.

The Delhi High Court’s ruling decriminalising consensual adult homosexual acts has not only enabled gays to come out of the closet, but has also revealed many other strange bedfellows. Many leaders of different religions – Christians, Hindus, Muslims, find themselves united in expressing their disapproval. Many others who normally prefer to wear their secular credentials on their sleeves, some seem to have suddenly discovered their affinity to tradition and culture and come out strongly against this judgment, others seem to have discovered that ambiguity and silence are the better parts of valour. The communists, hardly the epitome of tolerance, seem to be the only group among the political class to have welcomed this verdict.

The opposition from the conservatives and the ambiguity among the “secular” political class stems from a failure to distinguish between ethical values and legal implications of this judgment. While laws need to stem from moral values, moral values do not necessarily become laws. Not everything that one disagrees with need to be made illegal. One way to look at this is that while the law provides the floor, the basic framework for individual behaviour in a society, moral values represent the high ceiling, which one should aspire to, but which is well beyond the legal norm. Just as we may endorse the right of smokers or drinkers to pursue the freedom to exercise their choices without actually endorsing many of those behaviours, everyone can endorse the right of homosexuals to pursue their lifestyles, regardless of whether they approve or disapprove of homosexuality. In that context, the Delhi High Court’s ruling to decriminalise homosexual behaviour among consenting adults is a very welcome and long awaited step forward. We human beings have the right to make choices – that is what makes us humans. As Voltaire is famously supposed to have said, “I may not agree with what you, but I defend to the death your right to say it.”

The judgment says, “Respect for human rights requires that certain basic rights of individuals should not be capable in any circumstances of being overridden by the majority, even if they think that the public interest so requires. Other rights should be capable of being overridden only in very restricted circumstances. These are rights which belong to individuals simply by virtue of their humanity, independently of any utilitarian calculation.” This is a lofty and noble idea, and if the Indian judiciary lives up to it, it will be an extraordinary step forward.
The judges relied on Articles 14, 15 and 21 of the Constitution to minimize the scope of section 377 of the Indian Penal Code. A logical consequence of this judgment ought to be decriminalisation of prostitution—same-sex and heterosexual. If, a consensual act among adults of the same sex individuals in private is legitimate, then there can hardly be objection to the oldest profession. That would be a truly historic.

It is also interesting to note that the judgment did not invoke Art. 19(1)(a), and expand the scope of “reasonableness”, although that is what the judgment has sought to uphold by sanctioning diverse sexual inclinations.

The socio-political question is that by making the present HC verdict as a symbol of the change, the gay community may have attracted upon themselves unnecessary attention, and now they may have to prepare to face their long dormant, but reactivated vocal critics. Needless to say that society progresses through such churnings, unpleasant ideas come to the fore, and one has to debate and decide to take sides, but one has to be prepared to pay the price that such churning may unfortunately demand at times.

Law to Legitimacy: Shifting perception of property

The contrast between Section 377 and the right to property could not be starker. Here is a century-old law, part of which had been defunct for all practical purposes. There is hardly a case in recent decades where this section has been invoked to prosecute consenting adults exercising their choice in private. This particular section is largely irrelevant, and could easily be retired. Yet, when the section is read down by the court to achieve precisely that, a fresh debate is ignited around sexual inclinations.

On the other hand, consider the land acquisition act of 1894, another vintage of the colonial era. For decades various governments have been invoking eminent domain, routinely displacing hundreds of thousands of people from their homes, all for the sake of some wider public interest. No court has ruled against the substantive validity of eminent domain so far, upholding acquisition of private property, although increasingly restrained by qualifications. Yet, there is no political authority in the country today that is keen to invoke the law, even as it stands in the statute, to acquire private land any more, increasingly aware of the rising political costs of such endeavours.

The Delhi HC judgment profoundly notes, “The role of the judiciary is to protect the fundamental rights. A modern democracy while based on the principle of majority rule implicitly recognizes the need to protect the fundamental rights of those who may dissent or deviate from the majoritarian view. It is the job of the judiciary to balance the principles ensuring that the government on the basis of number does not override fundamental rights.”

This is an admirable sentiment. For democracy to endure, majorities of the day could not be allowed to degenerate in to mob rule and suppress dissent. The basic feature of democratic functioning is to protect the right of the minority to engage in the debate, and to recognise the prospect that today’s minority opinion may become the majority view of tomorrow if it can peacefully persuade more people.

But how has the judiciary fared amidst constant onslaught on the fundamental right to property? This right is the foundation of all human rights, and there is hardly any right that can manifest without the right to property. The right that the gay community claims is fundamentally a right to use their own body, their most fundamental property, in the way of their own choosing – the right to property, and freedom to express themselves. Why have two pieces of law have generated such diametrically opposite responses? What has changed?

In one there is a ground swell of popular support, in the other, there may be some voyeuristic curiosity, but not much popular support. In one, powerful governments have been brought to its knees. In the other an apparent non-issue has made the powers that be wary of disturbing the status quo. There is a very powerful political lesson in these two contrasting experiences. When the ground shifts, laws either have to reflect the new mood of the public, or become redundant. And without that change in the popular perception, even the most progressive law, may not carry the day. For all these years, the gay community had sought to bring attention to their cause by waving their flag, by standing apart, by claiming to be different. Today, they find themselves largely isolated, the support from the visible and vocal classes not amounting to much politically.

The difference is between legitimacy and legalization. Law is not what is on the statute, but what is perceived to be just. Even in their greatest victory till date, the gay community in India is unfortunately as far from gaining that legitimacy as ever.

The gay community, just like any other minority, need to move away from their sense of collective right as gay, nor flaunt their sense of victimhood. Framing the issue as collective rights invariably leads to pitting one collective against the other, and in such conflict it is not easy to overturn the collective that claims to represent the majority. But the smallest minority in any society is the individual, and his rights need to be protected, so that all minorities may enjoy the same protection, and are treated as equals before the law.

To gain that legitimacy, however, one has to discover the fundamental right, the right to property, which means to recognize and respect that right of every individual human being.
Once society begins to recognise the value of property rights, gays along with the rest of us will find that we can live together respecting each others’ choices and values, even when those values apparently conflict with each other. That would be a victory which all of us would be able to celebrate irrespective of our various identities, status and inclinations. And then the law will not merely be legislation in the statue book, but also legitimate in the popular eye.

India's Big Cats

2009-04-24T11:55:00.000+05:30

The tiger is facing extinction. If the present trend continues, there will be no tiger left in the wild. There is no inherent conflict between commerce and conservation. In India, wildlife is nationalised and is not within the marketplace. The restriction of supply has raised prices and increased profitability of illegal sales. The opportunity to profit will increase supply and eliminate all threats of extinction. My article titled "India's Big Cats" was published in The Asia Magazine on 24th April 2009.

It is generally said that the demand for tiger parts is the cause of the tiger’s plight. Consequently, trade in tiger parts has been banned, and hunting prohibited. But prohibition only increases profitability. When trade is outlawed, only outlaws undertake trade. Not surprisingly, over a quarter century of prohibition has failed to secure the future of the tiger.

Clearly, it is time to ask whether commerce and conservation are inherently incompatible, or whether commerce can be harnessed to promote conservation.

Why does Texas have over 40,000 blackbuck when it allows hunting, whereas there are only 25,000 blackbuck in India where hunting is prohibited? And why are there 15,000 tigers in US, where trade in live tigers is permitted, with websites advertising for tiger cubs as pets while in India, there are only 3,500?

The problem is that Indian wildlife is seen as nationalised property and placed outside the discipline of the marketplace. Today these animals are in the uncaring hands of bureaucrats who are more interested in building their own empires and environmentalists who profit even as the crisis deepens. Everyone but the cat has become a fat cat!

The whole conservation theology imported from Western environmentalists over the past four decades has been to focus on stopping supply. So hunting has been banned, tree-felling in forests has been banned, and wildlife sanctuaries have been created where even entry of lesser mortals have been banned.

Such an approach has contributed to two developments. One, the trade in endangered species has become extremely profitable. Secondly, the local population who live close to wildlife has become completely alienated. As any basic economics textbook will make clear, restricting supply only raises the price.

Conservationists estimate that the worldwide illegal trade in forest products and wildlife is between $10-12 billion, over half of it coming from South-east Asia alone.

It is time to permit the creation of tiger parks to breed tigers, to unite conservation with commerce. In a competitive market economy, with respect for property rights, every demand is an opportunity for investors to improve supply, making for an abundance that will blow away any threat of extinction.

The tiger breeds very easily, even in captivity. Zoos in India are constantly advised not to breed tigers because being large carnivorous animals, they are expensive to maintain. But tiger farms do not have such considerations. Such farms would dovetail very well with deer or crocodile farms which would supply low-cost meat to the carnivores, lowering production costs. There is an international market for venison and the skins of many types of herbivores.

Such farm production will ensure reliability and quality of supply of wildlife, at an affordable price, completely taking the incentive away from poachers who seek tigers in the wild. It will also provide an economic stake to forest dwellers to conserve wildlife through commerce.

A growing tiger population in the wild would further boost the local economy, by opening up more revenue sources. Tourists and professional photographers would happily pay to have their pictures taken with the striped stars. Trophy hunters would be willing to pay many times more for the experience of tracking and hunting the tigers in the wild. For instance, in South Africa, trophy hunters pay Rs 15 to 20 lakhs ($33,750 to $45,000) for the experience of shooting a wild elephant or a rhino.

The tiger has great market value. There is a demand for virtually every part of the tiger. The total value of tiger parts from its nose to its tail could easily come to Rs 20 lakhs. There is also a huge demand for its skin and claws for ornamental uses. The Indian experience till a few years ago provides the best illustration of the tragic consequences of dysfunctional economic regulations. The babus wielded the power, smugglers oiled the wheels, blackmarketeers made a killing and the law enforcers took their cut. The poor consumer bore the brunt, as the economy ground to a halt.

However, market economics greatly favour the tiger. If the Indian Prime Minister would base his decision on economics alone, it is possible to return the king to his rightful place and to secure his kingdom.

'No vote' is no solution

2009-04-01T16:50:00.000+05:30

Months before the general election to the 15th Lok Sabha, there has been a sustained effort by sections of citizens for the 'None of the Above' option in the ballot. At a time, when citizens are to assess the candidates in their own constituencies, and make their choice, this call for the "no vote" seems to be directed at negating the whole democratic process. In this article, "Vote! Because ‘No Vote’ is no solution" published in Pragoti: The National Interest, the monthly magazine in April 2009, I give my reasons against this "No Vote".

In the aftermath of the terrorist strike in Mumbai in November 2008, many people expressed their anger and frustration at the political leadership. An idea that has gained new currency has been the decade-old proposal to introduce a negative option in the ballot – “None of the Above”, or simply the ‘No Vote’, to express lack of confidence in politicians as such. Even the Supreme Court has called for a larger bench to decide on a recent public interest litigation (PIL) filed by the People’s Union for Civil Liberties (PUCL), asking for the introduction of the ‘No Vote’ in the ballot. The Election Commission of India has endorsed the idea too.

But the road to hell is often paved with good intentions. Thus, despite feeling disfranchised and frustrated by politics as usual, we must say ‘No’ to the idea of the ‘No Vote’. This is an idea that is actually anti-democratic in principle. It is based on a gross misunderstanding of our democratic institutions and electoral politics. Moreover, the implications of the ‘No Vote’ have hardly been thought through.

Democracy is not a system where the majority rules. Rather, democracy is a system where minority views need to be protected so that they have the opportunity and freedom to persuade people and peacefully win others to their side, so that today’s minority viewpoint has the potential to become the dominant opinion of tomorrow.

First, we need to take a look at the rationale for representative democracy. In large countries, and with increasingly sophisticated rules of governance, direct democracy as seen in ancient Greece is hardly the appropriate mode of politics. In a referendum, voters can decide for or against a specific motion; however, when laws are set in a legislative chamber, based on debate and voting by elected representatives, the voter’s voice can only be represented, indirectly, by the legislator. By refusing to vote for a legislator, the eligible voter is, in effect, abstaining from participation in the entire political process.

We saw in the last few years, how people in different countries of the European Union, repeatedly voted ‘No’ on the question of the proposed European constitution. But that ‘No Vote’ was not against the idea of the representative democracy, but a vote against the proposed continental constitution. This gave a clear signal to the elected representatives of the climate of opinion prevailing in many parts of Europe.

A ‘No Vote’ on the ballot aimed at electing the representatives themselves, however, will only undermine the legitimacy of the process of representative democracy itself. Let us extend the argument further. What would be the implications of such a ‘No Vote’ against the candidates contesting in the election in a constituency? Firstly, should the election be cancelled if the ‘No’ wins more vote than the candidates on the ballot? Or should re-polling be ordered only if 51 percent or more of the voters express lack of confidence in the existing slate of candidates?

Suppose a fresh vote is ordered, should the previous set of candidates be allowed to stand again? In case the ‘No Vote’ turns out to be the dominant sentiment of the citizens in a constituency or a country, who would actually bear the responsibility for governance? Should the existing set of politicians just continue in office till the political deadlock over ‘No Vote’ is broken? Or should an unelected bureaucracy or nominated technocracy be asked to take over the reins of political
power?

These are not rhetorical questions. Recently, Bangladesh held its election for the national parliament after a two year stint by a military-backed technocratic government. (The Bangladeshi constitution requires an interim nonpolitical government to oversee the national election within a span of three months.) Both in the media and at polling stations, there were official advertisements and posters, informing people about the new choice on the ballot, the ‘No Vote’. On the day of the ballot, the voters gave a decisive verdict. Over 80 percent of the electorate turned out to vote. The ‘No Vote’, however, totaled a fraction of one percent of the votes polled. The highest tally for the ‘No Vote’, ranging between five and ten percent came in some individual polling booths—not even entire constituencies—in areas where the elite and educated of Dhaka reside.

This was a telling lesson for the Bangladeshi intelligentsia, many of whom had advocated the ‘No Vote’. The verdict of the people only exposed the wide divide between them and the ordinary voters who turned up in large numbers on polling day, in the hope of a better democratic future.
The Indian intelligentsia might not have the capacity to win the confidence of our fellow citizens and win at the ballot. But that is no reason to try and delegitimise representative democracy, or worse, seek to depoliticise political democracy.

Finally, it has been repeatedly said that our democracy has become unrepresentative and unresponsive, our politics devalued and debased. There is a much more than a grain of truth in those accusations. As Winston Churchill is quoted as saying, “It has been said that democracy is the worst form of government—except all the others that have been tried.”

The problems of democracy can only be dealt with even more democracy, and not by short-circuiting it.

Take the argument that Indian democracy is unrepresentative, because a typical representative can get elected with about 35 percent of the vote, in the winner take all first-past-the-post electoral system that we have inherited from the British and made it our own. Indeed, there are instances, when a winning candidate gets less than even 25 percent of the total votes polled. If we assume that in a typical election about the half of those registered to vote actually do cast their ballot, this means it is possible to enter parliament with the support of barely 12 percent of the voters in the constituency.

But is this low threshold a problem or strength of our democracy? Well, it is a strength, and is perhaps the single biggest one. The low threshold gives almost every candidate who wants to contest a hope that electoral success is not an impossible dream. This is perhaps one of the reasons why an increasing number of people contest the elections, and so many parties vie for a place. And this is perhaps also the reason why it is so difficult for sitting legislators to get re-elected. At just over a third, India has among the lowest re-election rate among established democracies anywhere in the world.

If we, the intelligentsia, fail to win the support of even so few or our fellow citizens in our own constituencies, should we blame the electoral process, should we blame the voters for their follies, or should we ask ourselves why are we so disconnected from our own people? Is it really fair to expect our fellow citizens who may spend a few hours to cast their ballot, to actually go to the polling station and cast his vote for the “No”? Do we really understand why so many poor people vote?

Another criticism we hear is that none of the candidates in a constituency may be suitable, because some of them may be tainted by charges of corruption and crime. So a ‘No Vote’ would be an expression of collective lack of confidence about the choices on offer. However, in a typical constituency these days, there are more than 10-12 candidates from different political parties and many independents. It should be eminently possible to support some of these against the tainted ones.

New political parties, and concerned citizens, are free to enter the fray and offer themselves as possible alternatives. With such low entry barriers, it is reasonable to think that if real alternatives are offered to the voters, and imagination of the voters captured, then voters are likely to make an informed choice. So an attempt to reject all the choices on offer is not so much of a lack of confidence in the slate of candidates on offer, but a lack of our own confidence in ourselves to enter the fray, and lack of confidence in our fellow citizens’ capacity to make a better choice.

The citizens of the world’s largest democracy might be much better off pondering why people who vote in such large numbers do take the trouble of voting at all. Why do they hold their cards so close to their chest that even professional pollsters and politicians find it so difficult to decipher the public mood till after the election?

As we head in to the fifteenth general election, rather than calling for the ‘No Vote’, we will do much better if we spend a little effort at understanding the fundamental basis of the largest democracy in the world. We may yet discover the secret of connecting to our people, of ways of reaching out to our fellow citizens with a new political message of revival. If we succeed, then rather than the “No”, we may suddenly find ourselves saying “Yes” to the democratic miracle that is India, and take the political plunge to wash away the ills that affect our system.

India:Urgent Steps Are Needed To Ensure Quality Medicines

2009-03-31T16:16:00.000+05:30

The WHO is trying to fight the huge international trade in counterfeits but faces opposition from India and others, driven by a strange coalition ranging from the far Left to business organisations: this author blows away some of the straw men these people have built up. Barun Mitra says robust trademark protection will give Indian companies a stake in quality and give Indian, and worldwide, patients the guarantees that they need.

My article titled India: Urgent steps are needed to ensure quality medicines was published in The Pioneer on March 31, 2009

Indian pharmaceutical companies are supplying sub-standard drugs in Maharashtra. While the home-grown nature of the problem at least means that a solution lies in our own hands, the Government is sending a worrying signal by blocking the World Health Organisation's efforts to improve drug quality around the world.

Maharashtra's Medical, Education and Drugs Secretary Bhushan Gagrani said that 547 samples of Indian-produced sub-standard drugs were seized there during 2007 and 'we have initiated proceedings against 13 companies in Maharashtra and 97 firms outside the State'. The authorities are having to accept evidence contradicting the Centre's 2003 claims that only half a per cent of drugs in India were counterfeit and less than 10 per cent substandard ó especially as these figures were based on unverified data and small sample sizes, and some States provided no data at all.

Recent figures are far less optimistic. Last year a survey by the Associated Chambers of Commerce and Industry estimated that counterfeit drugs account for between 20 and 25 per cent of the market in the National Capital Region. In 2004, the Delhi Medical Association sampled drugs from the medicines bazaar at Bhagirath Palace and found 92.5 per cent were fakes. News reporters found exporters who sell the fakes to Sub-Saharan Africa.

It is of course difficult to trace the true origin of drugs in fake packages but the Organisation for Economic Co-operation and Development has estimated that 75 per cent of the world's counterfeit drugs originate in India.

It seems clear that substandard and counterfeit drugs are a huge problem, within India and beyond. India, however, has been opposing the work of the WHO's International Medical Products Anti-Counterfeiting Taskforce.

IMPACT needs to define the problem in order to fight it. Yet the group's new definition of the term 'counterfeit' is opposed by an unholy coalition ranging from anti-market activists to business associations and officials, claiming it would impose stricter patent protection and block the export of cheap Indian generic drugs to Africa. IMPACT is a front for Western ëBig Pharma', they cry.

But IMPACT is mainly run by national drug-regulatory authorities. Moreover, its proposed new definition states that 'patents must not be confused with counterfeiting'. The European Generic-medicines Association supports the definition precisely because it 'puts an end to any confusion with alleged patent infringement products which have nothing to do with counterfeiting'. The International Generic Pharmaceutical Alliance, of which the Indian Pharmaceutical Alliance is a member, was a founder of IMPACT. Where, then, is the ëBig Pharma' patent-enforcing conspiracy?

Whatever happens to IMPACT, however, it will not solve India's problem alone ó IMPACT's remit is primarily to guide countries on how they might protect their citizens from counterfeit drugs. It is a collaborative advice centre. The real action is down to us.

The plan for an India-wide Federal Drugs Authority seems permanently stalled but in any case we should question the instinctive assumption that greater regulation results in better products. There are some 20,000 pharmaceutical manufacturers in India, producing literally millions of drugs ó can a regulator really check every item, or even a reasonable sample?

The US has some of the highest standards of drugs in the world, in spite of vast numbers of packages continually crossing its borders and being traded by thousands of wholesalers. Meanwhile China's authorities continually announce clampdowns, introducing layer upon layer of regulation ó yet China continues to suffer from fakes and from lethally substandard foods and medicines.

An observable difference between the two countries is the existence in the US of trademark laws, upheld by independent courts. Manufacturers and patients can take legal action against the makers of substandard or counterfeit products. Sadly, the Confederation of Indian Industry describes the inadequacy of civil jurisprudence' in India as a reason why counterfeiting is so rife.

Brands are even more important to generics than to patented medicines. Free trade and fierce competition are the most effective measures for increasing quality ó and this relies on trademarks and copyrights being protected, so that authentic generic manufacturers are not undercut by spurious imitations.

New technologies are helping brands guard against counterfeiters. Soon Indian patients will be able to send an SMS text to check if their medicine is genuine. Meanwhile, the Indian unit of an MNC drug-manufacturer is introducing a new tracking system for its products.
These technologies offer great hope but the fundamental problem remains.

Counterfeit and substandard drugs harm the reputation of India's pharmaceutical industry, threatening people's health and even their lives. Competent and honest manufacturers must help cut through the unfounded conspiracy theories in order to defend themselves, the public and the rest of the world.

Anti-defection: A law endangering democracy

2008-08-21T20:56:00.000+05:30

The anti-defection law is suppressing dissent and has only raised the price of switching loyalties. We need to dispassionately understand the real cost of driving political negotiations underground, I write in this article "A law endangering democracy", published in the Mint, on 21 August 2008.

Many were outraged at the display of cash in Parliament, during the trust vote, last month. But far worse was that the Prime Minister could not make his concluding statement, and that even if he had, it would have made no impact. Our anti-defection law has made parliamentary debates pointless, as in the process of substantive debate, if members of Parliament, or MPs, change their mind and defy their party whip, they face disqualification. With debates being defunct, inducements in cash or kind become the necessary tools to sway legislators.

In a parliamentary democracy, numbers are important, but democracy is much more than just a numbers game. Democracy is not just about today’s majority, but also about protecting the smallest minority opinion, so that it has the freedom to become the majority opinion of tomorrow by engaging in informed debate and peacefully persuading people.

Some of the participants’ performance during the trust vote in Parliament was quite commendable. There was candour and compassion, precision and passion, angst and wit in some speeches. Sadly, the debate was a mere formality. The anti-defection law makes a mockery of parliamentary democracy by marginalizing debate, because legislators cannot afford to dissent without risking disqualification from the House, if they differed from the stated party line. Under this law, parties can expel the legislator who defies the party whip, and on complaint from the party, the Speaker has the power to disqualify the legislator from the House itself.

With parliamentary debate turned into a mere numbers game, closed-door negotiations and not- so-hidden inducements take precedence. Disruptions, rather than substantive debate, become the only form of opposition possible. If we are disgusted by this degeneration of political practices, we must allow our politicians to publicly and legitimately debate political ideology, negotiate electoral prospect, and be persuaded by ideas, even cash or kind, if necessary. And we must respect the voters’ wisdom to hold their representative to account at the next election.

Under the Tenth Schedule, any legislator who “votes or abstains from voting in such House contrary to any direction issued by the political party to which he belongs”, can be penalized with disqualification. There have been quite a few instances of disqualification from Parliament, under this law — in 1991, eight Janata Dal MPs for siding with the Chandra Shekhar government; in 1993, four MPs from a faction of the Janata Dal for backing the Narasimha Rao government; and, more recently, three Bahujan Samaj Party MPs for defecting to the Samajwadi Party.

This law was created to try and stop MPs from switching loyalties, and stabilize the polity by purging the “Aya Rams and Gaya Rams”. For the first time, stress on political discipline through party whips was established. But this has come at the cost of the idea of Westminster-style parliamentary democracy. Party affiliation is only incidental in our first-past-the-post electoral system, as elected representatives are obligated to represent all in their constituency — those who voted for their and those who may not have.

Today, the single biggest factor contributing to the desecration of Parliament is the anti-defection law. First, it has not prevented switching of loyalties; only the price may have increased. Second, it violates one of the basic features of our Constitution — democracy. Parliamentary debate itself has, thereby, become largely redundant. Third, it violates the basic element of representative democracy by empowering the party, and undermining the relationship between elected representatives and their constituents.

Ironically, the bigger political parties, which believed this law will help them keep their flock together, have become the biggest victims of blackmail and worse at the hands of the tiny parties and independents. Since merging with a bigger party makes exit so much tougher for individual members, the smaller entities have discovered the advantages of driving hard political bargains by retaining their independent identities.

At the founding of the Republic, B.R. Ambedkar warned: “Constitutional morality is not a natural sentiment... We must realise that our people have yet to learn it. Democracy in India is only a top dressing on an Indian soil, which is essentially undemocratic.” The sentiment may have reflected the then political reality, and a lot of credit for nurturing India on the road to a stable democratic future lay with the founding fathers, Jawaharlal Nehru, Sardar Patel, Ambedkar, Maulana Azad, C. Rajagopalachari and other political giants. The table has turned, 60 years on. The people have adopted democracy. But the political leadership seems hard- pressed to keep pace with their democratic aspirations. And its lack of appreciation of the true meaning of debate and dissent in democracy is at the root of much of our political ills.

We need to dispassionately understand the real political cost of the anti-defection law, and the price of driving political negotiations underground. Politics is the most noble of occupations which nurtures free and open societies. By bringing politics to the open, respecting dissent and revitalizing debate, we will help restore the majesty of democracy.

Serial blasts fail to shake the people's resolve

2008-07-27T23:33:00.000+05:30

The serial bomb blasts have failed to shake the popular resolve not to be provoked. Tragically, the political consensus necessary to fight the perpetrators of terrors have failed to crystallise so far. It is clear from these attacks that the intention of the terrorists were to provoke a wider flare up among different sections of society. By refusing to get provoked the common man on the street have risen to this challenge, therefore, defeating the very purpose of these cowardly attacks on innocent people. I wrote this article in the aftermath of the serial bomb blasts that rocked Jaipur and Ahmedabad on 25th and 26th July 2008, and this was after the blasts in Jaipur in May.

Serial bombs fail to shake popular resolve, yet political consensus to fight terror elude

In the 16 serial blasts that rocked Ahmedabad city on Saturday, 49 lives have been lost so far. On Friday, nine explosions in Bangalore in the afternoon had killed two, and injured quite a few. With these two latest series of bombs in public places, we have had 11 serial bomb attacks in different Indian cities, beginning with one in Delhi in October 2005.

While the tragedy of these attacks have failed to shake the popular resolve not to be provoked, the political consensus necessary to fight the perpetrators of terrors have failed to crystalise so far.

While the deaths and destruction from each of these tragedies have varied, there is a common thread. From the nature of these blasts, it is clear that the effort has been not just to cause death and destruction, but primarily to cause panic, and provoke a wider flare up among different sections of society, particularly the Hindus and Muslims. But the common man on the street seems to have risen to this challenge in a spectacular manner. There has not been any general breakdown of law and order, and no reports of riots or retaliatory attacks on any community have broken out in the aftermath of these serial blasts.

The frustrations of the perpetrators could be best seen in their attempt to place their explosives in or around Mosques (Malegaon, Hyderabad, Ajmer) and in temples or around Hindu festivals (Ajmer, Delhi and Jaipur), in the desperate hope of provoking a wider reaction. The cowards behind these heinous attackers have failed miserably in their basic objectives of causing chaos and social breakdown, so far.

Unfortunately, the intelligence agencies have failed to get any information about these attacks, and the police investigation have failed in virtually each of these instances, to identify and apprehend the perpetrators, and prosecute them in courts of law.

The question, therefore is, will the political leadership and investigative agencies will rise to this challenge, rather than shirking their basic responsibility to protect life, liberty and property or engaging in political rhetoric or perpetuating the blame game, and meet the expectations of the public who have so far done everything in their capacity to demonstrate their capacity to absorb the shock of these blasts, and resolve not to fall for the provocation.

Chronology of serial blasts in India

PTI on NDTV, 26 July 2008

26 July 2008: Serial blasts in Ahmedabad killing at least 49 people and injuring more than 100.
25 July 2008: Nine explosions in Bangalore create terror killing two people and injuring twelve.
13 May 2008: Eight serial blasts rock Jaipur in a span of 12 minutes leaving 65 dead and over 150 injured.
11 October 2007: 2 killed in a blast inside Ajmer Sharif shrine during Ramadan.
25 August 2007: 42 dead, 60 hurt in Hyderabad 'terror' strike.
18 May 2007: A bomb at Mecca mosque in Hyderabad kills 11 people.
19 February 2007: Two bombs explode aboard a train, near Panipat, bound from India to Pakistan, burning to death at least 66 passengers, most of them Pakistanis.
7 September 2006: 30 dead and 100 hurt in twin blasts at a mosque in Malegaon.
11 July 2006: Seven bombs on Mumbai's trains kill over 200 and injure 700 others.
7 March 2006: Three bombings at a train station and two temples in Varanasi kill 20 people.
29 October 2005: Three bombs placed in busy New Delhi markets a day before Diwali kill 62 people and injure hundreds.
January 2008: Terrorist attack on CRPF camp in Rampur kills 8.
August 2003: Two taxis packed with explosives blow up outside a Mumbai tourist attraction and a busy market, killing 52 and wounding more than 100.
September 24, 2002: Militants with guns and explosives attack the Akshardham Hindu temple in the western state of Gujarat, 31 killed, More than 80 injured.
May 14: Militants attack an army camp near Kashmir's winter capital, Jammu, killing more than 30, including wives and children of soldiers.
December 13, 2001: More than a dozen people, including five gunmen, killed in an attack on parliament in New Delhi.
October 1, 2001: Militants storm the Jammu and Kashmir state assembly complex, killing about 35 people.
March 1993: Mumbai serial bombings kill 257 people and injure more than 1,100.

Market reform in politics

2008-07-22T23:11:00.000+05:30

One reason why politicians have fallen in public esteem is because they are not seen to be operating in an open market, I argue in this article, "Market reform in politics", published in the Mint, on 22 July 2008.

The run-up to the trust vote has been as exciting as a Twenty20 (T20) game of cricket. Fortune is fluctuating every hour. It is a cliff-hanger!

But rather than enjoy the political game, commentators are lamenting that high principles of parliamentary democracy have degenerated to lowly bazaar bargaining.

It’s time our politicians took a leaf out of the T20 experience and created a legitimate market for politics.

Indian Premier League’s success was not in the T20 format. Beginning with the private ownership of teams to auctioning of the players, branding and marketing, cricket was commercialized as never before. It produced quality entertainment for the paying public and unearthed new talent.

In contrast to cricket, parliamentary discourse is handicapped by accusations of horse trading as if hard-nosed political bargaining is somehow unparliamentary.

One reason why politicians have fallen in public esteem is because they are not seen to be operating in an open market. This is in contrast to a regular scene of a street market, where the rich and poor rub shoulders, bargain over a product and go their separate ways without rancour.
If only politicians could operate in an open and competitive market-like environment, Parliament would be able to redeem itself.

If we are disgusted by closed-door political dealings and rumours of cash for votes, then we must allow our politicians to publicly and legitimately bargain over political ideology, negotiate electoral prospects, and be allowed to be persuaded by cash or kind if necessary.

When politicians are free to debate matters of ideology and strike bargains over public policy, the quality of parliamentary debate will enrich the country. But for this to happen, we have to scrap the most undemocratic element of our Constitution, the anti-defection law, which has stifled debate and endangered democracy itself.

In the marketplace, offers of cash or kind are tools for influencing potential customers. So, if a politician believes that ideology or policy is not adequate to further his political interest and, by extension, of his constituents, he should legitimately open himself to political auction.

Transparent and public bidding will remove insinuations of cash stuffed in suitcases. Since politics is an important way of organizing and sustaining free society, the amount raised by political auctions or contributions should be tax-free and without limit — the condition being that it be open to public audit.

If an MP were to auction his vote for Rs100 crore, his voters would legitimately ask for a share of the windfall. If unsatisfied, the voters could remove the leader at the next ballot. A political leader who can’t get elected is unlikely to command a high price. Then it will dawn on all that while money is necessary, it is not a sufficient condition for getting elected. Party, policies, performance, too, are required.

These two reforms in politics — marketization and transparency— will drastically reduce corruption and improve the quality of political discourse and unleash new talent.

Given the range of discretionary power in the hands of the government over a large number of economic issues, it’s possible that despite these political reforms, there could still be some element of undercover dealing in exchanging favours.

Having reduced the scope of political corruption, we will greatly enhance the capacity of law enforcement agencies to vigorously pursue the remaining instances of corruption. With increased competition and prospect of change of governments, the fear of getting exposed by rivals will act as a deterrent.

The true strength of a democracy lies in its people. With increased transparency, information about political leaders will freely flow. Empowered with information, citizens will be able to hold their elected representatives accountable. With economic reforms, we have begun to enjoy the benefits as consumers. With market reforms in politics, we the people will finally begin our reign as sovereign.

Economic climate casts a shadow on climate change

2008-07-17T21:53:00.000+05:30

The politicos at the G8 summit in Japan, seem to have drawn their lessons from the Kyoto Protocol, two decades earlier, when they burned their fingers by accepting short-term goals of emission cuts by 2012. The hard reality is that the political leaders can no longer afford to sacrifice the poor today, at the altar of climate change, for the sake of the rich tomorrow. India can legitimately play a leadership role and change the climate of discussion on climate change, I write in "Economic climate at G8 overshadowed talk of climate change", published in the Mint, on 17 July 2008.

“It is the economy, stupid!” The economic and political concerns dampened the desire of world leaders at the Group of Eight (G-8) summit in Japan to ride the hot air balloon of climate change. That’s no surprise. In any contest between a present crisis and future threat, the present always wins. The G-8 leaders are hardcore politicians and recognize that in hard times, politicians must not get carried away by the future. This explains why they agreed to a future goal: 50% reduction in carbon emission by 2050, without any signposts towards that goal for the present.

The politicos seem to have drawn their lessons from the Kyoto Protocol, two decades earlier, when they burned their fingers by accepting short-term goals of emission cuts by 2012. Those targets will, of course, elude most signatories. And so, the leaders at this G-8 meet expressed a desire to reduce emissions by 2050, when few can be held accountable.

Clearly, it suited all not to push the agenda too far. With the economic slowdown, funding for new investments in alternative energy and desire for technology transfer will inevitably get squeezed. Consequently, there is little inducement for major emerging economies to even consider climate goals. This prospect was not lost among the climate change community. As the G-8 leaders were gathering in Japan, the Intergovernmental Panel on Climate Change (IPCC) made a pitch to the European Union to take the lead role. A group of senior corporate executives publicly appealed for funds to facilitate the development of energy- and emission-related technologies. It was clear that, in hard times, everyone could do with some spare funds!

The National Action Plan for Climate Change (NAPCC) that Prime Minister Manmohan Singh released a week before he left for the G-8 summit seems to have accepted this political reality. And so, India found itself in a comfortable situation at the side meetings at G-8; none of the core points of NAPCC was questioned.

With oil prices at record highs, it is natural that NAPCC will be seen more in the context of energy security, not just climate change. Virtually all the eight missions of NAPCC are policies identified much earlier, but progress has been mixed. NAPCC talks of benchmarking certain energy-intensive sectors. But some of the sectors that have seen dramatic improvement in energy efficiency are those that experienced greater global competition. So the lesson is that, rather than setting industry-specific benchmarks, deepening the reforms process can greatly help in improving industrial competitiveness and efficiency.

Perhaps, it is this relationship between economy, energy efficiency and emissions which made Singh assert that India is unlikely to cross the per capita energy consumption and emission levels of richer, industrialized countries. Increased commerce and competition will motivate Indian companies to leapfrog to higher levels of efficiency with increased access to global technologies.

However, it has dawned on policymakers that there is a real and rising threat of using climate change arguments to restrict commerce. With economic slowdown, the political climate could easily turn protectionist in the richer countries. Thus, it is even more important for India to identify and argue for the economic and environmental benefits of liberalization and free trade.

A key element of India’s position is that the developmental aspirations of its people cannot be sacrificed for emission targets. India’s per capita emission, at 1.2 tonne, is far lower than the world average of 3 tonnes-plus, and a fraction of that in rich countries. Besides, the “historical responsibility” for the anthropogenic greenhouse gases (GHGs) in the atmosphere lay squarely with the developed world. NAPCC also questions the role of man-made GHGs — it observes changes in climatic behaviour in India, such as a 0.4 degree Centigrade increase in surface temperature over the past century or about 1mm per year sea-level rise in northern Indian Ocean or wider variation in rainfall patterns. Yet, it affirms that no firm link between documented changes and warming due to anthropogenic climate change has yet been established.

This vital question needs to be read along with the last of NAPCC missions, which talks of the strategic knowledge sharing platform to identify challenges of, and response to, climate change and funding for focused research. This can help open the debate to more critical scientific scrutiny and generate more creative policy responses.

IPCC’s repeated assertion that there is a scientific consensus behind its reports and policy prescriptions reflects its own unscientific foundation. Science progresses by continuously questioning existing orthodoxy. The earth’s climate may or may not be changing, but the global economic slowdown and the rise of India among the emerging economies have opened a window of opportunity to change the climate of discourse, by grounding it to real-world concerns.

Ultimately, the hard reality is that the political leaders can no longer afford to sacrifice the poor today for the sake of the rich tomorrow. India can legitimately play a leadership role and change the climate of discussion on climate change.

Patents are not the problem

2008-04-21T23:12:00.000+05:30

Patents are often blamed for most of the problems afflicting the health care system. In this article published in the Montreal Gazette, on 21 April 2008, I point out that "Patents are not the problem". By focusing on patents rather than the wider ills that seriously affect healthcare service to the poor, we will not help improve the lot of the ordinary patients.

Thailand's health minister recently announced that the nation's state-run drug manufacturer, the Government Pharmaceutical Organization, would continue to violate the patents on four key cancer drugs. Health activists around the world applauded the move, apparently believing that intellectual property rights are an obstacle to bringing medicine to the world's poorest and sickest citizens.

But drug patents and drug prices aren't the main obstacle to Third World patients seeking treatment. The truth is that even if medicine were completely free, most developing nations lack the infrastructure to deliver it effectively. As Kevin De Cock, HIV/AIDS director at the World Health Organization, explained to Reuters last year, "You have health infrastructure that is dilapidated, and supply chains that don't exist."

For instance, cold storage is essential to preserving the effectiveness of many drugs. It's estimated that about 50,000 people die annually in India from snake bites, primarily because the anti-venom serum cannot be stored in most rural clinics because of a lack of refrigeration, thanks to an extremely unreliable supply of electricity.

Diagnostic facilities are also often ignored. It was recently estimated that of the 22 million pathological tests carried out across India each day, only 1 million may be done at accredited laboratories. In addition, there is very little information about the validity and reliability of many of these tests.

Regularly, drugs are not administered safely in hospitals. In India, the government admitted recently that nearly 70 per cent of the injections patients get might be unsafe. Often, patients stay away from hospitals - even when sick - out of fear that they might get infected with diseases like AIDS. Indeed, a 10-year-old boy from a poor family in eastern India was infected with AIDS at one of Delhi's premiere hospitals.

This is one reason why the Indian government failed miserably in its efforts to increase access to medicines even after abolishing product patents in 1972. Thirty years later, when the debate began as to whether India would be better served by re-establishing patent rights, less than 10 per cent of the nation's estimated 3.5 million AIDS patients were receiving any treatment whatsoever.

Then there is the issue of greed - not so much of the patent-holders, but that of many governments in poor countries.

Kenya, one of the world's most vocal proponents of the patent-is-the-problem-for-patients notion, levies a 38-per-cent tax on imported medicines - enormous markup that needlessly makes drugs too expensive for many sick Kenyans. Morocco and Tanzania tax medicines at a similar rate. Brazil, also a habitual offender of intellectual property, imposes a 28-per-cent tax. Peru's tax is 29 per cent.

In Thailand, the former government turned down an offer from the Global Fund (an international philanthropy) that would have provided resources to purchase generic medications certified by the World Health Organization - preferring instead to produce the drugs domestically.

The reality is that regardless of whether a nation respects drug patents, someone somewhere must pay the high research and development costs of the pharmaceutical industry. Otherwise, drugs cannot be developed.

Right now, American patients pay for most research costs through high drug prices. It's estimated that it costs $800 million to develop a new drug today. Many drug makers already sell many medications at much lower prices to poor countries. If the use of compulsory licences increases, they'll have little choice but to reduce humanitarian drug sales or increase prices in poor nations - as they would have to find a way to recoup that lost revenue.

The health activists who are urging a number of governments that are systematically confiscating patents from international drug companies might have good intentions. But if governments continue to expropriate patents, they will essentially kill the goose that lays the golden eggs - and along with it, the hopes of hundreds of millions of the world's sick who await tomorrow's cures.

By focusing on patents rather than the wider ills that seriously affect healthcare service to the poor, we will not help improve the lot of the ordinary patients.

Should India remain a socialist republic?

2008-02-05T23:45:00.000+05:30

In the constituent assembly in 1948, Dr B R Ambedkar, the chairman of the drafting committee, had clearly reasoned why no political ideology, socialism or anything else, should be included in the Constitution, binding the future generations. But in 1976, under her emergency rule, Prime Minister Indira Gandhi introduced the 42 amendment which among many other things, also introduced "socialism" in to the preamble. Now, 0ver fifteen years since India began to liberalise and reform our economic system, and began a slow journey moving away from the socialist policies that had strangulated the economy, "Should India remain a socialist republic?" I ask this question in view of a recent PIL that raised the same question in the Supreme Court, on 5 February 2008.

Last month, the Supreme Court issued notice to the Government of India and the Election Commission in response to a petition questioning the constitutionality of India being a socialist state. The judges wanted to hear about the practical and legal implications of having a socialist intent in the preamble which has led to the changes in the Representation of People Act, making it mandatory for all registered political parties in India to affirm to socialist ideals.
In 1976, the preamble to the Constitution was amended to make India a "sovereign, secular, socialist, democratic republic". Thirty years later, a new generation of Indians, want to undo that historic mistake.
Dr. B. R. Ambedkar specifically explained the reason for the non-inclusion of the word "socialism", when it was sought to be inserted into the preamble by another member. He stated in the Assembly on 15th November, 1948:

"What should be the policy of the State, how the Society should be organized in its social and economic side are matters which must be decided by the people themselves according to time and circumstances. It cannot be laid down in the Constitution itself, because that is destroying democracy altogether. If you state in the Constitution that the social organization of the State shall take a particular form, you are, in my judgment, taking away the liberty of the people to decide what should be the social organization in which they wish to live. It is perfectly possible today, for the majority people to hold that the socialist organization of society is better than the capitalist organization of society. But it would be perfectly possible for thinking people to devise some other form of social organization which might be better than the socialist organization of today or of tomorrow. I do not see therefore why the Constitution should tie down the people to live in a particular form and not leave it to the people themselves to decide it for themselves."
[Source: Constituent Assembly Debates, Vol. VIII, pp.401-402]

In 1950, when the people of India adopted the Constitution, the Preamble read:

"We, the people of India , having solemnly resolved to constitute India into a Sovereign, Democratic Republic and to secure to all its citizens:

Justice - social, economic and political;
Liberty of thought, expression, belief, faith and worship;
Equality of status and of opportunity before law."

A quarter Century later, the Congress government under Prime Minister of Mrs Indira Gandhi, during the dark days of emergency rule, passed the 42nd Amendment to the Indian Constitution in 1976. Among many other things, the Preamble to the Constitution was amended to include - secular, socialist, - to state India to be a "sovereign, secular, socialist democratic republic".

The purpose of the amendment to include "socialist", was stated in the Statement of the Objective -

Addition of the word 'socialist' indicates incorporation of the philosophy of socialism in the Constitution and may enable the courts to lean more and more in favour of nationalization and State ownership of industry.

Thirty years later, a PIL is seeking to question the constitutionality of amending the Preamble. There are major legal grounds for such a question.
1. Inclusion of "socialist" in the Preamble is against the original intent of the founding fathers
2. By including socialism, democracy, which has been accepted as one of the "basic features" of the constitution is being violated.
3. Democracy gives the people the freedom to choose the nature of social organisation of the state under which they want to live, and change that order if they deem necessary. So it unconstitutional to tie the future generations to only a particular type of social organisation - socialism.
4. If the objective of the 42nd amendment is to be accepted, then either the Indian state, which over the past two decades, has been trying to withdraw from many economic activities, is no longer following that socialist objective; or that times have changed, and that objective is no longer desired by the people, and has become obsolete.
5. All most all the major countries of the world, which had incorporated "socialism" as the only political ideology of the state, had turned in to one party, dictatorship. This could not be the goal of the world's largest and most vibrant multiparty democracy.

This is no longer an issue of political semantic. If the preamble was a mere statement of intent, without any particular legal force, one could perhaps ignore this aspect. Many people have legitimately different perspective on different aspects of the Indian constitution, yet the basic structure of the constitution is acceptable to most. But the socialist intent of the preamble has been extended as a law in to the Representation of Peoples Act, 1951, through an amendment in 1988 by the Congress government under Rajiv Gandhi, which enjoyed unprecedented majority in Parliament. The bill was passed without a single dissenting vote.

Section 29A of the RPA, requires that any political association that seeks to register itself with the Election Commission of India, needs to file an affidavit affirming to socialism. This in effect means that only political parties with socialist ideology can undertake legitimate political action, and campaigns in India . On the other hand, independents and non-registered political parties can promote any ideology, and if elected, can join the ranks of the legislators.

This provision in the election law could easily be found to violate of the freedom of association, as well as freedom of thought and expression, some of the fundamental rights guaranteed under our constitution. Clearly, this affirmation to socialism goes much beyond the "reasonable restriction" doctrine that circumscribes the fundamental rights.

An historic opportunity has come our way to focus the spotlight on the political ideologies and principles, one of the legitimate purposes of democratic governance. Even more importantly, this is an opportunity to appreciate our constitutional structure that provides legitimate space to all ideologies to compete for the attention of the people, without legally restricting that space to any one preferred political theory.

A time comes for every generation when they have to face test of history. Sixty years after India gained its Independence from British colonial rule, We the People, have to decide, whether we want to be in the dustbin of history by continuing to align ourselves with a failed political ideology, or be shown to be hypocrite declaring a principle, and then rejecting it in practice. Or, do We the People have the freedom to chart our own destiny in the democratic miracle that is India. Today, We the People need to judge our past, so that we can come out with our heads high, when the future generations sit on judgement over us. On the sixtieth anniversary of our Independence, this would be the most appropriate reaffirmation of our faith in constitutional democracy.