Gurcharan Das's Blog, page 14

आप से ज्यादा उम्मीद नहीं

आम आदमी पार्टी को दिल्ली चुनावों में मिली सफलता से तमाम भारतीय नागरिक मंत्रमुग्ध हैं। आम आदमी पार्टी का नेतृत्व 45 वर्षीय सामाजिक कार्यकर्ता अरविंद केजरीवाल के हाथों में है, जो फिलहाल दिल्ली के मुख्यमंत्री हैं। यह पार्टी महज एक साल पुरानी है, लेकिन इसकी अपार लोकप्रियता भारत के दो प्रमुख राजनीतिक दलों-वाम नीतियों के प्रति झुकाव रखने वाली कांग्रेस और हिंदू राष्ट्रवादी भारतीय जनता पार्टी की सर्वोच्चता को चुनौती पेश कर रही है। अपनी तमाम प्रशंसनीय विशेषताओं के बावजूद आप वह पार्टी नहीं है जो अर्थव्यवस्था को वापस पटरी पर ला सके अथवा रोजगार और विकास के संदर्भ में भारत की क्षमताओं को बढ़ा सके। वास्तव में यदि आप आगामी चुनावों में पर्याप्त सीटें जीतती है तो यह प्रमुख प्रतिद्वंद्वी नरेंद्र मोदी के नेतृत्व में एक स्थिर सरकार की संभावना को अस्थिर कर सकती है।बहुत कम समय में आप ने तमाम भारतीय नागरिकों को राष्ट्रीयता के संदर्भ में एक नया और चमत्कारिक नजरिया दिया है। आप ने जिस पारदर्शी तरीके से चुनावी चंदा इकट्ठा किया वह दूसरी तमाम पार्टियों के लिए शर्म का विषय होनी चाहिए। इस पार्टी ने भ्रष्टाचार के मसले पर जिस तरह का कड़ा रुख अख्तियार किया उसने संसद को भ्रष्टाचार रोधी कानून लोकपाल को पारित करने के लिए विवश किया। इस पार्टी के सादगी भरे आचरण ने बड़े बंगलों में रहने वाले और भारी सुरक्षा का तामझाम रखने वाली दूसरी पार्टियों के नेताओं को शर्मिदा होने के लिए विवश किया। युवाओं और मध्य वर्ग की आकांक्षाओं तथा भ्रष्टाचार की महामारी जैसे कारक इसकी चमत्कारिक सफलता के लिए मुख्य रूप से जिम्मेदार हैं।इस संदर्भ में यह भी एक तथ्य है कि नई उम्मीद और आकांक्षाओं से भरा हुआ यह वर्ग रोजगार के नए अवसर तथा अपने बच्चों के लिए एक बेहतर जीवन की उम्मीद रखता है, लेकिन दुर्भाग्य से आम आदमी पार्टी का नेतृत्व भारत के पुराने वामपंथी विचारों में जकड़ा हुआ है। यह भारत को 1991 से पूर्व के उस समाजवादी अतीत में ढकेल सकता है, जब हमारा देश कोई खास प्रगति नहीं कर सका था। यदि आप नेतृत्व अपने समर्थकों की आकांक्षाओं को नहीं समझता है तो पार्टी को बहुत जल्द नुकसान पहुंच सकता है और तमाम अन्य लोकप्रिय आंदोलनों की तरह यह भी अपनी लोकप्रियता खो सकती है।विगत सप्ताह में आप अपने पहले आर्थिक इम्तिहान में फेल साबित हुई। इसने एक गलत धारणा के आधार पर सुपरबाजार में प्रत्यक्ष विदेशी निवेश को इसलिए अनुमति देने से इन्कार कर दिया कि इससे सुपरबाजार में नौकरियां खत्म होंगी। वह इस बात को नहीं समझ सकी कि इसके समर्थक किसी गंदे किराना स्टोर में काम करने की बजाय एक आधुनिक सुपरबाजार में काम करना पसंद करेंगे। वह भूल गई कि विश्व में सभी जगह आम आदमी अथवा कॉमन मैन सुपरबाजार से सामान खरीदना पसंद करते हैं, क्योंकि यहां कीमतें अपेक्षाकृत कम होती हैं। यहां कीमतें इसलिए कम होती हैं, क्योंकि बड़े खुदरा व्यापारी किसानों से सीधे उत्पाद खरीदते हैं और बिचौलियों की भूमिका नहीं होने के कारण बचने वाला लाभ उपभोक्ताओं को मिलता है।सुपरबाजार पर प्रहार करने की बजाय आप किसानों को अपना उत्पाद कृषि उत्पाद विपणन समितियों को बेचने के लिए विवश करने वाले कानून को खत्म करती ताकि फल और सब्जियों के दाम नीचे आते। थोक बाजार को खुला करने से प्रतिस्पर्धा बढ़ेगी और व्यापारी किसानों से सीधे सामान खरीद सकेंगे, जिससे महंगाई घटेगी।सभी घरों को 20 किलोलीटर नि:शुल्क पानी देने का विचार बेतुका है। इससे दिल्ली के 30 फीसद गरीबों को कोई मदद नहीं मिलेगी। सब्सिडी की नीति से गरीबों के घर तक पाइपलाइन बिछाने अथवा आधुनिक विकास कार्यो के लिए धन नहीं बचेगा। इसी तरह कैग द्वारा बिजली कंपनियों की ऑडिट से बिजली की आपूर्ति नहीं बढ़ने वाली, बल्कि इससे बिजली क्षेत्र में निवेश और हतोत्साहित होगा। असल में कंपनियों के खातों का ऑडिट पेशेवरों द्वारा होना चाहिए न कि राजनीतिक रूप से अभिप्रेरित सीएजी द्वारा, जो बिजनेस की बारीकियां नहीं समझता। 2002 में जब से दिल्ली की बिजली कंपनियों का निजीकरण हुआ था, बिजली के वितरण में नुकसान और बिजली चोरी 57 प्रतिशत से घटकर 17 प्रतिशत रह गई है। इस बीच जितनी लागत बढ़ी है उतने रेट नहीं बढ़े हैं। 2002 से बिजली की लागत 300 प्रतिशत बढ़ चुकी है जबकि बिजली दरों में मात्र 70 प्रतिशत की वृद्धि हुई है। अगर केजरीवाल ऊर्जा वितरण में सुधार चाहते हैं तो उन्हें बिजली कंपनियों का एकाधिकार तोड़कर उनकी संख्या बढ़ानी चाहिए ताकि आपसी प्रतिस्पर्धा बढ़े। प्रतिस्पर्धा बढ़ने से कम दाम में बेहतर सेवा मिल सकेगी।भ्रष्टाचार में लिप्त अधिकारियों का स्टिंग ऑपरेशन और दिल्ली विश्वविद्यालय में सीटें आरक्षित करने का विचार भी सही नहीं है। भ्रष्टाचार के प्रति कड़ा रुख केजरीवाल की असाधारण विशेषता है। किंतु इससे निबटने के लिए केजरीवाल का प्रमुख उपाय जनलोकपाल सही नहीं ठहराया जा सकता। इससे अधिकारियों की शक्ति घटेगी और प्रशासन, पुलिस व न्यायपालिका में जरूरी सुधार लागू नहीं हो पाएंगे।दुर्भाग्य से आर्थिक मुद्दों पर भारतीय मतदाताओं के पास कोई विकल्प नहीं है। भाजपा के अलावा हर पार्टी का झुकाव वाम की तरफ है और वे खुद को समाजवादी कहलाने में गर्व महसूस करते हैं। दक्षिण की तरफ झुकाव का स्थान रिक्त है। आप के बजाय भारत को एक ऐसी उदारवादी पार्टी की जरूरत है जो अर्थव्यवस्था में सुधार के लिए खुलकर बाजार पर भरोसा करे न कि नौकरशाही और राजनेताओं पर। ऐसी पार्टी को आर्थिक और संस्थागत सुधारों पर ध्यान केंद्रित करना होगा। किंतु यह स्थिति जल्द ही बदल सकती है। प्रधानमंत्री पद के भाजपा के उम्मीदवार नरेंद्र मोदी दक्षिण की ओर झुकाव वाले हैं और फिलहाल देश में सबसे अधिक लोकप्रिय भी हैं। यद्यपि उनकी खुद की पार्टी आर्थिक मुद्दों पर भ्रम का शिकार है, किंतु उनका राज्य गुजरात एक दशक से भी अधिक समय से दोहरे अंकों में आर्थिक विकास कर रहा है। इससे मोदी की निजी निवेश को आकर्षित करने की क्षमता का पता चलता है। वह एक उदारवादी सुधारक नहीं हैं, जिसकी भारत को सबसे अधिक आवश्यकता है, किंतु वह फैसले लेने वाले, व्यापार को बढ़ावा देने वाले और चीजों को दुरुस्त करने वाले व्यक्ति हैं।आगामी चुनाव में किसी भी पार्टी को स्पष्ट बहुमत मिलता नजर नहीं आ रहा है और भारतीय मतदाता किसी नए गठबंधन पर विचार कर रहा है। फिलहाल चुनावी दौड़ में मोदी सबसे आगे चल रहे हैं, किंतु बहुत से लोगों का मानना है कि आम आदमी पार्टी इतनी सीटें ले जा सकती है कि मोदी एक स्थिर सरकार का गठन न कर पाएं। इस प्रकार आगामी चुनाव में आप खेल बिगाड़ने की ऐतिहासिक भूमिका अदा कर सकती है। इसका सीधा अर्थ यह होगा कि देश में अस्थिरता छा जाएगी। पिछले पांच साल से कांग्रेस पार्टी की फैसले लेने की पंगुता जग-जाहिर है।

Inflation, not corruption, will be the key issue in LS polls

In the last assembly elections, the aam admi complained inconsolably of rising prices. TV clips showed voters quoting the prices of potatoes, onions, and dal. Pundits put it down to the ‘usual election whining’, but more than corruption, inflation turned out to be the reason for Congress’ defeat. Even though it has slowed a bit recently, all political parties are warned — the aam admi is not going to forget the pain of inflation in the coming general election. 

Economists have struggled to understand why India’s consumer prices have been rising 10% a year for the past five years when prices in the world have been reasonably steady. Even in poor, emerging economies, prices have risen at half the rate as India’s. Inflation is complex but it has become clear that India’s inflation is the result of the same bad policies that brought down our growth. Huge government spending without commensurate production has meant that too much money has been chasing too few goods. 

UPA II put massive funds into villagers’ pockets. Rural wages thus rose an unprecedented 15% a year in the last five years. Farmers received a bonanza — they got high minimum support prices for grains besides fertilizer and energy subsidies plus loan waivers. Rising wages are a good thing when they reflect climbing demand in a prospering economy. To an extent, this is true of India, which experienced a ‘golden age’ of growth and prosperity till 2011. These rising incomes changed the aam family’s food habits — eating fewer cereals and more protein, fruits and vegetables. But escalating rural wages have also been the result of ‘make work’ jobs of NREGA, which did not create productive assets. Had the same money been invested in factories, roads and power plants, prices would not have risen to this extent. 

The obvious answer to inflation is to revive economic growth. To its credit, the government has realized its mistake, and is desperately trying to approve projects that have been stuck for years in red and green tape. But investments take time to translate into jobs and growth. There are quicker ways to tame food inflation fortunately. One of them is to scrap ‘agricultural produce marketing committees’ (APMC), which function as wholesaler cartels in mandis rather than protecting small farmers. Like most of our bad economic ideas, this is a hangover from Indira Gandhi’s socialist days. 

Freeing wholesale markets will bring competition as traders and farmers are able to buy and sell freely. International retailers will be able to buy directly from farmers, and with their formidable cold-chains, they will also save food from rotting in the fields and mandis. This will result in higher returns to farmers and also lower prices to consumers as supermarkets will pass on the savings from bypassing middlemen. Economists have been urging the scrapping of APMCs for years. Rahul Gandhi has now discovered this idea, and since he has put his weight behind it, it might get implemented in the Congress-ruled states. Powerful local politicians, however, control APMCs — let’s watch if Rahul Gandhi has it in him to take on this powerful vested interest. 

The Aam Aadmi Party’s (AAP) first action should have been to scrap the APMC in Azadpur Mandi near Delhi. It would have brought quick relief to consumers by curbing prices of fruits and vegetables. But it did the opposite. AAP scrapped foreign investment in supermarkets, denying aam admi the potential for lower prices. It did not realize that around the world it is the aam admi who shops in supermarkets because of lower prices. Besides, AAP’s aspiring supporters would any day prefer to work in modern supermarkets rather than in kirana stores. 

Of our three main political parties, only the Congress seems to have understood that inflation can be controlled by APMC reform and foreign investment in supermarkets. The BJP has chosen the trader against the aam admi and opposes FDI in retail. The AAP’s leadership, oddly enough, does not seem to be in sync with the aspirations of its followers. It is trapped in old ‘povertarian’ ideas of the Old Left which ensured that India remained an underachiever. Given the crucial role that prices will play in the coming election, can the Congress convert its advantage into votes?

Book Review: 'An Uncertain Glory' by Jean Drèze and Amartya Sen , 'Transforming India' by Sumantra Bose, The Wall Street Journal, December 13, 2013

Indian reformers did not sell their liberal reforms to the people, who concluded the free market helps the rich alone.

Two and a half years ago India was the envy of the world. It had survived the global financial crisis, and its economy was growing at a rate of 9% a year, creating masses of jobs and lifting millions out of poverty. This happy situation was the reward of free-market reforms that began in 1991. As government reduced the regulatory shackles on business, dozens of innovative firms emerged that competed brutally at home and began to succeed on the global stage. India's governments after 1991 kept reforming, if slowly. Even slow reforms added up to make India the world's second fastest-growing economy.But the present government, led by the Congress party, changed course, guided in part by the ideas of the eminent economist and Nobel laureate Amartya Sen. The starting point for achieving prosperity, Mr. Sen argues in "An Uncertain Glory: India and Its Contradictions"—written with Jean Drèze—is an immediate attack on illiteracy and ill health. Such an approach, he says, will produce a healthier and more literate workforce and lead to higher economic growth. Higher growth, in turn, will bring larger revenues for the state, allowing further attacks on illiteracy and ill health.Under the influence of Mr. Sen's ideas,Sonia Gandhi, the leader of the Congress party, and her National Advisory Council—which includes Mr. Drèze—have concluded that India's free-market reforms weren't helping the poor. Asserting a trade-off between growth and equality, the council advised changing the government's focus to spending on welfare. Instead of building roads, for example, it preferred to give away cheap food and energy and waive loans to farmers. Its flagship program was a guarantee of 100 days employment to everyone in rural areas. Approvals to industry for new projects came to a virtual halt, mostly on environmental grounds. As a result, investors lost confidence, and inflation shot up. India's economic growth has now plummeted to a rate below 5%.
Part of what led to this change of course in India was that reformers didn't sell the country's liberal reforms to the people themselves, as Margaret Thatcher did in the U.K. in the 1980s, for example. Hence the broad population got the impression that the free market helps the rich alone and not the common man. India ended up reforming in a furtive or incomplete way because no political party had bothered to explain the difference between being "pro-market" and "pro-business." To be pro-market is to believe in competition, which helps keep prices low, raises the quality of products, and leads to a "rules-based capitalism" and economic growth, a state of affairs that helps everyone, not just the rich. (This lesson and others were brilliantly explained by Jagdish Bhagwati and Arvind Panagariya in "Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries," published earlier this year.) To be merely pro-business, by contrast, means leaving the control of economic decisions with politicians and officials, an arrangement that easily leads to "crony capitalism."In the midst of India's worst economic crisis since 1991, the country's current left-of-center government has just enacted a food-security law, with enthusiastic support from Messrs. Sen and Drèze: It will distribute grains to two-thirds of India at roughly 10% of the market price. This policy has shocked many people because official surveys show that only 2% of Indians claim to be hungry. In any case, past experience shows that less than half the food from such programs reaches the intended beneficiaries; the rest is lost in inefficiency and corruption. A month ago Ms. Gandhi told Parliament that if there was no money for her food-security law, it would just have to be found. And if the public-distribution system was broken, she added, it would have to be fixed. How she did not say. The opposition protested that such policies were a blatant bribe to win votes before elections, but it didn't try to stop them for fear of appearing hostile to the poor.The obstacles to India's long-term prosperity remain political, but Sumantra Bose's "Transforming India: Challenges to the World's Largest Democracy," though offering a well-researched chronicle of India's recent political history, doesn't provide answers either. The book tells the story of democracy's evolution in India from the 1950s and makes the excellent point that, over the past two decades, India has changed from a country dominated by a single nationwide party into a robust multiparty, federal union. The regionalization of the nation's political landscape has decentralized power, given communities a distinct voice and deepened India's democracy. The running of India, as Mr. Bose notes, is now in the hands of the states and the regional parties.With power shifting to the states, strong and decisive regional leaders have emerged in recent years. Many have delivered good governance and attracted investments and jobs. The rise of the regions is spreading the economic boom to distant corners of the land as new consumer subcultures thrive. But it hasn't resulted in local, homegrown voices in support of liberal reforms at the regional level. Instead, crony capitalism has become even more embedded in India's economy.In the end, India's story is one of private success and public failure. Prosperity is indeed spreading, but it is happening amid appalling governance. Indians despair over the delivery of the simplest public services. Where the state is desperately needed—in providing law and order, education, health and drinking water—it performs poorly. Where it is not needed, it is hyperactive, tying people in miles of red tape.While they recognize India's many problems, neither Messrs. Sen and Drèze nor Mr. Bose provides a satisfactory solution. It seems elementary that in such a situation either you must enhance state capacity or limit your ambition; thus it is difficult to understand why Messrs. Sen and Drèze in particular insist that only the state directly deliver food and employment through its bureaucratic machinery; they are even skeptical of cash transfers to the poor that would, at least, not damage labor and food markets. Instead of "make work" schemes, why not create sustainable opportunities for employment creation by eliminating regulation and other impediments?More than even economic reforms India needs reforms for the institutions of the state—the bureaucracy, the judiciary, the police. It needs to become a strong liberal state with the ability to take quick, decisive action, uphold the rule of law and punish the corrupt, and of course make itself accountable to the people. India's hope may well lie with its aspiring young, those who have just entered the middle class or who are about to reach it. They are about a third of the country now and will be half in a decade. They are puzzled as to why their tolerant nation offers astonishing religious and political freedom but fails to provide economic freedom.In a country where two out of five people are self-employed, it takes, on average, 42 days to start a business; the entrepreneur is a victim of red tape and corrupt inspectors. No wonder India ranks 119 on the global "freedom index" (from the Heritage Foundation) and 134 on the World Bank's global measure of "ease of doing business." Two decades after the 1991 reforms, India has still not become a manufacturing powerhouse like China, and its economy is driven by services. How can India hope to provide jobs for the millions of young people on its farms? Sadly, the vast majority of Indians still work in the informal economy, not in legally established companies.The secular, political space at the right-of-center is empty, and none of the existing Indian parties is likely fill it. The answer may well be a new liberal party that trusts markets rather than officials for economic outcomes and focuses on reforming the institutions of governance. Such a party may not win votes quickly, but it would create a demand for reforms. It would also show voters that open markets and rules-based government are the only civilized ways to lift living standards and achieve shared prosperity.—Mr. Das's most recent book is "India Grows at Night: A Liberal Case for a Strong State."

Desire or dharma: Dilemma that is as old as the vedas

Over the past few weeks we have been mesmerized by the tragic story of Tarun Tejpal. He was a moral voice to a whole generation, looked up to for courageous and uncompromising journalism. The evidence of sexual assault against the founder editor of Tehelka suggests that he not only failed a young colleague but collectively all journalists, workingwomen, and his legion of admirers. Millions of words have been written on this story but no one has explained why men in positions of power behave badly. We need to try and understand the nature of human desire in a patriarchic society where male narcissism is an ever-present reality and men believe they are more attractive than they really are.
Desire is instinctual energy deriving from primal biological urges. The Rigvedasays, “The cosmos emerged from the seed of kama, ‘desire’, in the mind of the One”. A primordial sexual act of incest populated the earth, according to the Aitareya Brahmana when Prajapati, the primeval creator, desired his daughter. She ran away and took the form of a doe. He turned into a stag, copulated with her, and deer were created. Then she turned into a cow, he became a bull, and cows come into being… and so on. The gods said, “Prajapati is doing what is not done”. A serial act of rape, sinful and violent, was the “origin of species”—a somewhat more colourful version than Darwin’s.
Human beings are not only governed by instinct. Desire travels from our senses to our imagination, and often gets focused onto a specific person. Society exploited this idea by creating the institution of marriage for the purpose of social harmony. Hence, the Dharmashastras insist that sex is only for procreation. But men and women found a way to communicate their fantasies, and this gave rise to romantic love and the art of seduction. By the Epic period when the first kingdoms were formed, kama also meant ‘pleasure’ and in fact became a trivarga, one of the three aims of life, along with artha and dharma. The elite embraced the courtly ideal of the nagaraka, ‘man-about-town’. Kamasutra taught us the sixty-four arts, wherein Vatsyayana instructs, “If you are kissed, kiss back!” Patriarchy ruled, however, and Draupadi’s disrobing in the Mahabharata is the most celebrated display of male power, and it led to a ghastly war.
Sexual desire did not sit well with the ascetic, however. In the earlier Upanishadic period, our society’s idea of the good life was challenged by the “renouncer”. Rishis like Agastya suffered sexual anxiety over losing hard earned spiritual energy through tapas, which is reflected in the many myths of tempting apsaraswho bring about the involuntary ejaculation of semen. The renouncer countered by speaking adeptly of the loathsome nature of a woman’s body. The object of desire becomes an object of revulsion in the Buddhacharita, for example, which demonizes the feminine ‘other’. The tension between the householder’s act of desire and the ascetic’s conquest of desire reflects the dual nature of human beings—the erotic and the ascetic in all of us—but it did not disturb the unhappy male domination of society.
To try and understand Tarun Tejpal’s actions in the historical context of male power in society is not to excuse his wrongdoing. In a patriarchal society men want to control the reproductive body of women. The man’s viewpoint pervades the Vedas, the epics, and Sanskrit love poetry.  But all our texts also warn against the dangerous nature of human desire and remind us of boundaries. Even Vatsayana cautions in the Kamasutrathat kama must be governed by dharma.

Sexual assault is a crime and it has less to do with sex than with power and male domination. All societies have been patriarchal and it is a tribute to the global women’s movement that the world has begun to change its old paradigm. Governments around the world are instituting legal changes. In India, the new anti-rape law and the Vishakha guidelines on sexual harassment at the workplace are part of this global trend. They must be quickly implemented and we must keep trying to make relations between men and women more equal and less hierarchical.The prize too is a big one—a safer and more civilized India.

Our bullion-dollar troubles can end if India goes for gold

It was a subdued Diwali this year. Gold trading on Dhanteras was down by 50%. Traders blamed it on mostly on the lack of gold supply which was 83% lower than last year. But policy makers cheered. Their draconian policy of restricting gold imports was working. India’s trade deficit had declined and the rupee had calmed. But it is a temporary victory. Gold smuggling is on the rise and will eventually triumph, undermining a great victory of the 1991 reforms, which was to kill the havala market. There is breathing room, however, as gold forecasters expect world prices to fall. Western and Chinese investors are losing interest in gold as their economies pick up, which should also dampen Indian investor interest.

India absorbs about a quarter of the world’s gold, and the finance minister is quite right in wanting to limit its import. A recurring theme of world history is the constant loss of Western gold and silver to India. Two thousand years ago Roman senators grumbled that their women used too many Indian spices, silks and fine cottons, and India was draining the Roman empire of bullion. Pliny the Elder called India the ‘sink of the world’s precious metal’ when he heard that a Roman ship touched an Indian port daily.

The Portuguese similarly complained in the 16th century that their hard won gold and silver from South America was being lost to India. The British Parliament echoed this refrain in the 17th century. But India kept sucking Western bullion because Western consumers hankered after Indian luxuries and Indians were not interested in Western goods. As books had to be balanced, they were balanced with bullion. Only Britain’s Industrial Revolution reversed the flow in the 19th century when Indians finally found something they wanted from the West—cheap, durable cottons from the mills of Lancashire — as handlooms worldwide gave way to machine-made cloth.

Soon after Independence, India’s leaders forgot their grand trading heritage and closed our economy in the mistaken belief that trade had impoverished India. Touting the false mantra of ‘self-reliance’, they adopted an import-substituting path, and India lost out in the great trading boom after World War II. India’s share of world trade declined from 2.2% in 1947 to 0.5% in 1990. It was only after 1991 that India regained its historic pre-eminence in the world economy.

Given the one-way flow of gold over the centuries, a staggering amount has accumulated in India. The World Gold Council estimates it to be over 20,000 tonnes, worth $1.1 trillion or half of India’s GDP. For years economists have wanted to use this unproductive asset for productive investment. And happily, the process has begun. Gold loans, bonds, and deposit schemes are all steps in the right direction. In these schemes owners of gold earn interest by depositing it with banks, which in turn releases part of it in the market, thus reducing India’s demand for imported gold.

The bigger prize is to convince temples to do the right thing and deposit their vast gold stocks in banks and earn interest. Jamal Mecklai, the currency expert, had suggested earlier this year that if Tirupati temple were to deposit a third of its holdings at two per cent interest, it could earn Rs 3,000 crore a year. Tirupati did just that in May, beginning with a 2,250-kg deposit with the State Bank of India. This is a triumph! If major temples follow suit, gold will soon flood the domestic market, imports will stop, the global gold price will fall and the rupee will strengthen.

But this government is shy to go for an all out public campaign. It worries about people’s sentiments and of the opposition playing the religious card. Gold is, after all stridhana, ‘woman’s wealth’. Although a daughter now legally inherits her share of family property, families still insist on giving her inheritance at marriage as gold jewellery. But young Indians today are sensible and they will buy the idea that an inflation-proof gold linked certificate exchangeable for gold is the hip thing to receive at marriage rather than a bunch of clunky sets. So go for it, Reserve Bank. The road to India’s economic future may well be paved with gold.

Secularism or development: Making the right choice

At long last India’s democracy is moving in the right direction in offering voters genuine choices in the upcoming general elections. One of these is a choice between “left of centre” and “right of centre”economic policies — a polarization that exists in many democracies and ends in educating citizens about two distinct paths to prosperity. The two main parties, Congress and the BJP (after Narendra Modi became its official candidate) now reflect this polarity.

The Congress party’s starting point is an immediate and massive attack on poverty. It focuses on spending on social welfare and on subsidies to the poor. Its assumption is that a better-fed population will be more productive, and this will lead to more inclusive growth. Modi’s BJP, on the other hand, believes in direct measures to induce growth. Some of these are investment in power, roads and ports, cutting red tape, and encouraging entrepreneurs to invest. The resulting investment creates jobs, raises peoples’ incomes, and brings in higher taxes for the state. The higher taxes, in turn, provide the resources to attack poverty, illiteracy and ill health.

Obviously, a successful nation needs both growth and equity in the end but resources are limited and governments are forced to prioritize. The right of centre Modi-led BJP gives priority to economic growth whereas the left of centre Congress gives priority to equity and redistribution of growth. This choice was underlined recently in the much-publicized dispute between India’s two global superstar economists, Amartya Sen and Jagdish Bhagwati.

A second choice before voters is between competing styles of leadership. Modi is a strong, determined leader, who leads from the front while Rahul is shy, reticent, and leads from behind. Rahul is more likeable and compassionate; Modi is dictatorial but with his obsession with implementation, he is more likely to get the job done. Both are reasonably intelligent, but we make a mistake in overvaluing intelligence. Our current prime minister is hugely intelligent but he has failed to deliver results because he lacks determination, which in the end is more important in delivering results. Modi, on the other hand, has shown willpower and purposiveness in trying to root out corruption in Gujarat. Incidentally, business leaders make the same mistake in over-valuing intelligence when they recruit new employees. It is always better to hire for attitude and train employees in skills.

In the past two weeks, both leaders have made welcome moves to overcome their personality deficits. Rahul showed determination in overturning the Congress’ immoral ordinance on criminals in politics; Modi showed concern for the poor and a secular mind-set when he declared “shauchalya before devalya”, toilets before temples.

A third choice before the voter concerns the important issues of secularism and corruption. The BJP is a Hindu nationalist party and is inclined to see the world through majoritarian eyes. The Congress professes to be secular but its secularism often amounts to appeasing minorities in order to win votes. Still, a voter deeply wedded to secularism, will choose Congress over the BJP. When it comes to corruption, the Congress has broken all records and is seen by many to be profoundly corrupt. The BJP too has skeletons in its closet but the voter is likely to be influenced by Modi’s cleaner record against corruption in Gujarat. Thus, there is a third polarization — does one vote for a nonsecular BJP or a corrupt Congress party?

Sharp choices bring clarity to decision making for the confused, middle of the road voter, someone like me. Ultimately it amounts to this: Should one risk India’s precious secular and collaborative traditions for the sake of good governance and prosperity? But by choosing secularism over development, one might deprive millions of young Indians a chance to realise their capabilities, to rise above their lot into the middle class, and the nation a demographic dividend. It is an unappetising choice. It would be easier if Modi were more secular and compassionate, or if Rahul Gandhi showed more determination, gave more priority to growth, and was less tolerant of corruption.

Alas, it is not a perfect world and the best one can hope is to choose the less worse of the two candidates and call it a “wise choice”.

Long-term prosperity vs short-term populism

“Life can only be understood backwards but it must be lived forwards,” says an epitaph from the philosopher, Soren Kierkegaard. It rightly belongs on the grave of this dying UPA government that has destroyed our economy, with the traumatic collapse of the rupee its latest achievement. The epitaph reminds us that we must not ignore history if we want to lead a reasonably predictable life in the future.One of the greatest lessons of history is that only an industrial revolution can make a poor nation prosperous. Every country has done it this way. Only thus can a nation hope to provide jobs for the millions of young people on the farms. But after two decades of reform, India’s economy is driven not by manufacturing but services.Tragically, 90% of Indians work in the informal economy and even Ganesh idols are sourced from China. Our prime minister knew about this structural weakness when UPA came to power, and his government should have focused on making India a great manufacturing nation — by reforming rigid labour laws, investing in power, roads and ports, cutting red tape, and removing “inspector raj”— so that India does not rank 134th in the ease of doing business.Instead, this government turned against industry. It brought retrospective changes in taxes, stopped hundreds of projects through red and green tape, imposed arbitrary penalties on companies and placed silly conditions when inviting foreign investment. Given this very unwelcoming and unpredictable climate, honest business people lost all faith in the system. Only crony capitalists remained faithful. And now, in the midst of one of the worst crises faced by our country, this government has championed two disastrous pieces of legislation.It has proposed a new law based on the dreadful premise that acquiring agricultural land for industry is inherently coercive and bad. Under the new law, it will now take years to acquire land, as the land acquisition proposal even for small projects will have to pass through a hundred hands. This will ensure that India remains disadvantaged against its competitor nations and does not experience an industrial revolution.Secondly, it has enacted a law on the ridiculous assumption that two thirds of Indians go hungry to bed. Hence, the state will now have to provide 80 crore Indians with grain at 10% of the market price when less than 2% of Indians claim to be hungry according to official surveys. Where will the colossal money come from when the nation is teetering on bankruptcy with its rating about to be downgraded to junk status? Two weeks ago Sonia Gandhi told Parliament that if there is no money for the food security bill, it would just have to be found. And if the public distribution system is broken, she said, it would have to be fixed. But how, she did not say.We used to believe that even if India reformed slowly, it was reforming surely and there was no going back. Under this premise businessmen made huge investments after 1991 and this unleashed the gift of high growth, gradually making India the world’s second fastest growing economy. But this government sneered at this gift and has even undone some reforms. Despite some excellent moves by the finance minister in the past year, there is uncertainty and confidence remains low.The coming of Raghuram Rajan at RBI has stemmed the rot somewhat. But it will take time to rebuild confidence that has been recently shaken by the fall of the rupee which brought huge collateral damage to the bond and equity markets. India can still create an industrial revolution if it remembers Kierkegaard’s epitaph. The rupee’s devaluation has once again presented an opportunity for export driven manufacturing growth. But it will require a deep commitment from the next government to create reliable infrastructure and transparent rules.
Meanwhile, the best that this government can do is to call early elections and put an end to some of our misery. Let people decide if they want to take the path of long-term prosperity or the path of short-term populist giveaways. One can never be sure in a democracy about the next government but it is in the nature of the human heart to hope for a better tomorrow.

Just one hour a week is the answer to our political discontent

Democracy is as depressing in practice as it is uplifting in theory. There have been so many corruption scandals in the past few years but political parties refuse to learn. In Uttar Pradesh, which always leads the country in bad behaviour, workers of the Samajwadi Party are back to their crooked old ways while they settle scores against Dalits. At the centre, the UPA has pushed through a dreadful food security law via an ordinance in a desperate move to shore up its popularity before the coming elections, knowing full well its potential for fraud and waste.

The new food law comes at a gigantic cost to a nation that cannot afford it. It will not solve the problem, which is malnutrition and not hunger. But it will undoubtedly result in a colossal scam when a large part of the grain mountain is diverted into the black market. Instead of improving delivery of the current PDS system, we have burdened a weak, corrupt institution with a massive new mandate. When institutions cannot implement existing laws, it is madness to create new ones. It only widens the gap between aspiration and performance, damages the nation’s moral character, and undermines the trust between rulers and the ruled.

Anna Hazare’s movement has proven that crowds may awaken people but they do not achieve the goal, and Arvind Kejriwal is discovering that it is not easy to turn a protest movement into a political party. What then is the answer to our democratic discontent? The key lies with decent individuals to move out of the dogged pursuit of material comfort and engage with politics. The right place to begin is one’s neighbourhood. When public spirited individuals engage in the community they help create new ‘habits of the heart’ in society. This was the great insight of Alexis de Tocqueville who wrote, Democracy in America, perhaps the best book on democracy. What impressed Tocqueville about Americans almost 200 years ago is that they were ‘joiners’ and engaged in volunteer activities for a few hours a week. By joining local clubs and social activities, they connected with neighbours. And when neighbours meet, what do they talk about? They discuss the condition of the roads, the schools, garbage collection and so on. Thus, civic life and ‘citizen’ are born.

Between 1947 and 1949 a diverse assembly of deeply principled men and women worked selflessly to create the concept of ‘citizen’ through a fine Constitution. It was one of the great moments in our history. India was blessed with an amazing first generation of leaders who thought of politics as the noblest of endeavours. In the Mahabharata, Bhishma returned from his deathbed to give the same message to Yudhishthira, who wanted to renounce the throne after the bloody war at Kurukshetra. Sixty five years after independence the nobility of politics has been replaced by criminality. The best spurn politics, leaving it to the worst. If decent men and women do not take the plunge, criminals will take over entirely.

What inhibits decent people from entering politics in India is black money and political dynasties. A talented, high minded person will not join a party without inner democracy where merit is not rewarded. Fortunately, a new generation of political leaders has begun to realize that a young India is waking up politically and it will not tolerate the old sycophantic politics of ‘rishwat’ and ‘sifarish’. Political parties will have to learn to value talent the way India’s companies’ do, and a party with inner democracy and meritocracy is bound to gain competitive advantage in the end. Dynasties are thus warned.

All of us struggle to give meaning to our lives. The standard Indian solution is to turn inwards and seek liberation from human bondage through meditation. But there also exists in our tradition the path of action, karma yoga, which means to leave the world a little better than we found it. The answer to our democratic discontent is thus to dive into one’s neighbourhood and assume the duties of a citizen. Don’t worry about the corruption of 2G, Commonwealth Games, or Coalgate. Act instead against the sleaze in our locality. Just one hour a week in the neighbourhood is the best way to reciprocate the compliment that our founding fathers paid us.

Waiting for inspiration, sirji!

The spot fixing scandal in the Indian Premier League of cricket is only the latest disgrace in the sickening, never ending saga of moral failure in our national life. We have got so used to blaming governance and the institutions of the law that we forget that our pathetic education system is also responsible. And yes, parents too are guilty, for the home is the crucible of the moral life. However, one inspiring teacher can make all the difference in moulding the values of young human beings. This is one of the findings of the 33-year-old Harvard economist, Raj Chetty, who recently won the prestigious Clarke Medal which is second only in status to the Nobel Prize.Some of us were lucky to have had such a teacher when we were growing up. She incited and fed our curiosity and when we did wrong she gave a little nudge in the right direction. That course correction resulted in a new action, which when repeated became a habit, and the habit in time became our character. As we grew older we reaped the consequences of our character, which is another way of expressing the old idea of karma. The development of the intellect and moral character are related. Just as there is an order in nature and in the realm of numbers, so too is there a moral order that gives coherence to our lives. A good teacher is able to transmit this order, not by exhortation but by becoming a role model.About 20% of India’s children today receive a decent education, but for the rest it is a depressing story. On the positive side, 97% of children do enter school. However, after a year only 43% can recognize letters. By class 5, half the children cannot read a class 2 textbook and three quarters cannot do simple division. By class 10, Indian children rank second last, aboveKyrgyzstan, in a test recently given by the Program for International Student Assessment in 74 countries. This is tragic! Our education establishment is, however, in denial and the Right to Education Act is totally silent on learning outcomes.The weakest link in our appalling system is the tired and cynical teacher, who lost his spark decades ago if he ever had any. Too few teachers think of teaching as their dharma. How many wake up in the morning, look at the mirror and exclaim, “Today, I shall inspire one child in my class!” Yet not one of our political leaders has the guts to say bluntly what President Obama did on American television a few years ago: “Bad teachers should be fired”.In this dismal scene, however, there are green shoots of hope. Teachers’ salaries have risen in recent years. This means that the right sort of persons will be attracted to the teaching profession. Technology also offers lots of possibilities. Children can now watch the world’s best teachers teach online, even on their mobile phone. The amazing ‘Teach for India’ programme, modelled after ‘Teach for America’, selects outstanding college graduates and offers them a chance to teach in poor schools where they soon become role models of change. Cities like Mumbai have begun to turn over failing municipal schools to NGOs who have quickly brought in the world’s best practices. Who knows, one day we may again produce legendary teachers, such as the one in Dharmapuri district in Tamilnadu, who bicycled 20 km in rain and shine to his village school for thirty years and produced a whole generation of great leaders.Obviously, we cannot wait for an inspiring teacher to fall from heaven. Neither is there any point in complaining about corruption in high places. The moral foundation is laid at home and parents must take responsibility to teach moral reasoning to their kids. But parents must also get involved in the school. Studies show that where parents take an interest, the quality of the school improves. Even poor parents can make a difference. Although the Right to Education Act provides for parents’ involvement via school committees, this is not an easy task in a callous system of rapacious unions and uncaring bureaucrats. But it has to be done.

Narendra Modi: temptation of the middle class

The sudden ascent of stocky, 62 year old Narendra Modi as a serious contender for the nation’s leadership has taken people by surprise. The general election is still a year away but the average, open minded, middle-of- the-road Indian wonders how to think about the polarizing chief minister of Gujarat. Either you love him or hate him, which is precisely why one must not react with a knee-jerk but try and go beyond the shallow surface of a flawed but remarkable human being.
India today is discontented and troubled as a result of corruption scandals, high inflation, declining growth, and a government in denial. Sick of the drift and paralysis, people desperately seek a strong leader, and insistently ask if Narendra Modi might be the one. Clearly, he has proven the ability to build a vibrant economy and usher in corrupt free governance. Could he be India’s best chance to ungum the bureaucracy, tackle corruption and restore the economy to health? But Modi also has a clear downside: he is dictatorial with communal tendencies. Should one risk India’s precious secular and collaborative traditions for the sake of good governance and prosperity? It is a dreadful moral dilemma between equally important values--a classic dharma-sankat.
No Indian leader in recent times has spoken with such passion about ‘governance’ and ‘development’. His talk of ‘less government and more governance’ resonates with the aspiring young middle class. He has changed the language of politics with words like outcomes, accountability, and unbureaucratic service delivery. Visit a municipal office, he says, and you will only see clerks; but an urbanizing nation needs technical people to solve sanitation, transport and infrastructure problems; so, he hired engineer interns and gave them an opportunity to solve municipal problems in Gujarat. Implementation is his obsession and he compares two canals of equal size--the Sujalam Sufalam Yojana, which hecompleted in two years while the old Sardar Sarovar canal from Nehru's days is still incomplete.
Every country must protect its environment, he argues, but none stops 750 industrial projects and delays them for years. By covering Gujarat’s canals with solar panels, he is conserving water and has made Gujarat a model ofsolar power.India’s schools face a serious problem of quality, and the Right to Education Act refuses to measure outcomes; so, he plans to make Gujarat’s schools accountable through continuous, quality testing. He inspires young people, saying ‘IT + IT = IT’ (Indian Talent + Information Technology = India’s Tomorrow.) Not since Jawaharlal Nehru has a politician given people such a sense of possibilities. They see in Modi an underdog, a David challenging the Goliath of the Nehru-Gandhi dynasty.
But every temptation has a price. Modi is considered anti-Muslim and many cannot forgive him for the events in Gujarat in 2002. He may not have actively connived in the violence, they say, but why doesn’t  he show remorse? After all, it happened under his watch, and he is responsible. By polarizing the country, people fear he might alienate India's Muslims and this might enhance the risk of domestic terror. The temptation to vote for prosperity and good governance must be tempered by the imperative to keep the nation unitedand secular.
Those who dismiss the middle class’ impact on elections forget that a new generation of voters has joined the middle class after 1991, and it is in a rage over violence against women and children and longs for a leader who is tough against crime. But it also does not want an Indira Gandhi who will subvert the institutions of democracy. Modi is not likeable--Rahul Gandhi is far more affable--but people today seek an effective, not a friendly leader. India's dilemma is that Modi is the most likely candidate to provide corrupt free governance and restore the economy to high growth, create masses of jobs and lift millions into the middle class. But his communal past is a threat. In the end, each voter will have to choose in 2014 between several imperfect candidates and make a trade-off. Those who think corrupt free governance and prosperity are more important will vote for Modi. Those who worry about communal harmony and domestic security, will not vote for him. It is an unhappy but unambiguous choice.