More on this book
Community
Kindle Notes & Highlights
Read between
September 20 - September 21, 2020
that ‘“property” has become a dirty word today. “Liberty” will become a dirty word tomorrow.
There is a popular view that after the reforms of 1991, India has already become a free-market capitalist economy. This is not entirely correct, because economic reforms are an ongoing journey.
Ten years after Rajiv Gandhi’s government left office in 1989 and eight years after Pitroda returned to the US following Rajiv Gandhi’s assassination, tele-density in India had moved from 0.6 per cent in 1989 to 2.8 per cent in 1999.
Aga referred to the 1999 NTP, saying, ‘When I read it today, it is still contemporary and comprehensive.’ He characterised the NTP as a ‘watershed event’
Pitroda felt that mobile telephony threatened his work at CDoT, he did not hesitate to use his influence to stop what may have been a better way to achieve the desirable outcome of increasing tele-density.
For example, Vajpayee did not give in to the strike by over 400,000 DoT employees.44 He stuck to his guns, defied the unions, and pushed through the creation of Bharat Sanchar Nigam Ltd (BSNL).
The nationalisation brought banking under political control, with even unviable projects and questionable businesses obtaining bank loans by getting the right people to call the banks’ managers or by greasing palms. Every few years, the government would bail out public sector banks.
The restructuring and recapitalisation helped to transfer wealth from taxpayers to the pockets of a clique of business houses who were close to the Congress party and the Nehru–Gandhi family.
India’s language diversity is one of the reasons why Indian leaders, from Mahatma Gandhi to Narendra Modi, have used symbolism and grand gestures to mobilise the masses.
over 800 million users (about 60 per cent of the population) by 2021.
the price per gigabyte of data collapsed by over 95 per cent,
As writer Hindol Sengupta noted, eKYC ‘brought down the cost of authenticating say, a mutual fund beneficiary identity by 99 per cent
Immigration control that imposes barriers on movement of human capital will be rendered largely irrelevant by the fourth industrial revolution’s virtualisation wave.
The usurious moneylender, the corrupt businessmen (and they are all men), the powerful smuggler, the righteous union leader, the inept police, the likeable thief or dacoit, the stereotyped minority, the pathos-inducing mother, the helpless damsel-in-distress—these have all been recurring characters in popular Indian cinema.
What Akhtar did not seem to have grasped was the reason for the anger. The basis of the rage was systematic economic suppression, with its roots in the supposedly golden era of Nehru’s premiership.
Between 1990 and 2015, India’s GDP per capita (2010 US dollars) grew from $581 to $1,751, more than doubling the Nehruvian era growth rate to 4.5 per cent.
Some VC investors and management gurus praised this approach of doing more with less, but jugaad was more an outcome of limited access to capital, resources and infrastructure than innovation.
Nobel laureate economist and renowned University of Chicago academic Gary Becker’s insight on how competitive markets undercut social discrimination offers an effective policy solution to eradicate discrimination in India.
As Becker and his fellow University of Chicago economist Richard Posner wrote in 2008: An employer discriminates against untouchables, women, or other minority members when he refuses to hire them even though they are cheaper relative to their productivity than the persons he does hire. Discrimination in this way raises his costs and lowers his profits.
Evidence from a field experiment’ published by Nobel laureate economist Abhijit Banerjee and others, it was reported that there was ‘no evidence of discrimination against non-upper caste (scheduled castes, scheduled tribes and other backward classes) applicants’ for jobs in the software industry, one of the most competitive sectors in India. There was also no evidence of discrimination against Muslims.86 That is because the software industry is intensely competitive, and discrimination hurts profits.
Frequently, when there is discrimination in India, there is the predictable clamour for a new law to protect the specific group being discriminated against. Unfortunately, a barrage of such laws has failed to check discrimination.
Today, Dalits who work in hotels and restaurants, and as delivery persons—as well as Dalit entrepreneurs who own and run food establishments—are providing food to customers without anyone enquiring about their identity.
In his seminal treatise Capitalism and Freedom, first published in 1962, Nobel laureate economist Milton Friedman wrote that economic freedom was a necessary condition but not a sufficient one for political freedom.
Palkhivala, despite his distaste and indifference towards the former royals, was against the abrogation of the privy purse on the principle that India should not go back on its word.
Liberalisation and economic development are not the natural instincts of any dynastic party because their effects undercut the legitimacy of the dynasty. This is true for all such parties, whether it is the Samajwadi Party, the Shiv Sena, the Shiromani Akali Dal, the Telangana Rashtra Samithi or the Trinamool Congress party. Such parties may never want the populace to become truly independent and prosperous—that would be inimical to their own political interest and long-term sustenance.
Better than anybody else perhaps, Modi has understood that India needs to have Thomas Hobbes before John Locke and John Stuart Mill—in others words, order precedes liberty and freedom.
The case for internal liberalisation—a bucket encompassing factor market reforms in land, labour and capital, besides improving the ease of doing business, contract enforcement, opening up more sectors to foreign direct investment and generally bringing rules-based capitalism to India—is well established and accepted by all reform-oriented economists and analysts.
The Columbia economist Arvind Panagariya, an authority on free trade and widely regarded as the foremost expert in the world on India’s economy, critiqued the Modi government for ‘erecting the wall of protection all over again’.100 As Panagariya has correctly pointed out, the danger with such protections is that instead of being limited and temporary, they become more extensive and permanent.
In 2014, India had two mobile phone manufacturing facilities, and by 2018 the number had increased to 268.
Not only that, as a country with low per capita income, India must industrialise or stagnate. A smaller nation such as Paraguay or Kenya by itself may not be able to put up auto or electronics tariffs and industrialise, as foreign manufacturers would just skip the country. In the post-Covid-19 world, as the US and China enter a new cold war, global just-in-time supply chains may anyway be disrupted by trade wars and geopolitical rivalry. This does not mean that India should avoid international supply chains, but it is worth remembering that the domestic market as a springboard for exports may
...more
Even if we adjust for population, consumption, inequality and cost of living, the ordinary Chinese person still earns about twice that of his or her Indian counterpart.
The Jurchens, the Mongols and the Manchus were largely sinicised—the same kind of assimilation cannot be claimed for the Turks and the Mughals in India.
As Thomas Hobbes wrote in the Leviathan, ‘during the time men live without a common Power to keep them all in awe, they are in that conditions called Warre.
Yet, in the long run, without an effective State, growth is impossible. A strong State is a necessary but not sufficient condition. For growth to be sustained, the State has to be restrained while still being effective in specific areas.
Less dramatically, the Indian State, while avoiding mass famines, caused a lot of misery and millions of early deaths because of its socialist and overly interventionist policies for many decades, not to mention a lack of focus in the areas where a State must be strong—namely national defence, internal security and provision of public goods such as basic education, public health and good roads.
India’s problem is having ‘State flab’ in the wrong places in the government and no muscle in areas that matter.
The Indian bureaucracy is too generalist and an average IAS officer usually does not spend enough time in a particular ministry to develop any real expertise.
Moreover, that ‘the annual intake into IFS [Indian Foreign Service] tops off at 35 officers tells its own sad story’ as the hawkish analyst Bharat Karnad correctly mentions.
Not only should India ramp up its diplomatic strength, the selection process too needs to be revamped with a separate exam to select foreign officers, assessing them on ‘parameters such as international aptitude, curiosity about the world, knowledge or demonstrated interest in foreign affairs, communication skills’ as recommended in the report by the Parliamentary Standing Committee on External Affairs chaired by Congress MP Shashi Tharoor.
In February 2020, External Affairs Minister S. Jaishankar implemented a comprehensive restructuring of the ministry, initiating long-overdue administrative reforms necessary to align it with the changed trade and security objectives of India. For example, the administrative and consular work of the ministry was consolidated and separated from its diplomatic work.
On top of this, the government is reducing civil services intake each year. It has fallen from a high of 1,291 candidates in 2014 to 782 in 2018—similar to the intake in 1996.
As for police forces across the country, over five lakh posts are vacant, with the highest—around 1.80 lakh—being in Uttar Pradesh.
After selection, there needs to be specialised training in public administration and public policy (for the IAS), law and policing (for the IPS), diplomacy and international affairs (for the IFS) and so on. Once in the service, there must not be any automatic promotions—they must be performance based.
The argument that the bureaucracy acts as a check on the whims and fancies (even corrupt proclivities) of the politicians isn’t sound. That’s not their job, but that of other institutions entrusted specifically with the task of maintaining transparency.
only 7.9 per cent of the IAS officers remain in one post for more than two years.
Such a system, based primarily on generalists, does not allow officers to build domain expertise and is highly detrimental to the administrative efficiency.
suboptimal. Writing about the rationale for the railway administrative reforms announced on 25 December 2019 that turned the Indian Railways into a more functionally oriented unit, Aashish Chandorkar observed: To understand why these reforms were necessary, one needs to understand the existing work process of the Indian Railways. The organisation still carries the British legacy of departmentalisation. The eight key departments—accounts, civil, electrical, mechanical, personnel, signal and telecom, stores and traffic—are integrated vertically, and have their own hierarchies. Each department
...more
This disproportionately high pay granted to lower levels compared to the market rate for similar jobs distorts the labour market. It wastes the youth of tens of millions of people who keep trying their luck to somehow land a government job with its lifelong job security and multiple non-cash perks.
required. An October 2015 study conducted by IIM Ahmedabad that was commissioned by the Government of India found that ‘Government is paying higher salaries compared to the private sector … for jobs at the lower levels of skill requirement and hierarchy (but) salary in government is relatively lower compared to the private sector, particularly in later years, for some highly skilled jobs.
‘No person who is a member of a civil service … shall be dismissed or removed by an authority subordinate to that by which he was appointed.’ Since the President of India appoints the civil servants, he alone can sack them. This needs to change.
