Now S Gurumurthy Channels Jagadguru

April 22, 2009

The ever-insightful S Gurumurthy writes about black money in the New Indian Express:

That is, in just five years, Indian wealth amounting to Rs 6.88 lakh crore has been smuggled out of India. This gives a clue as to how much Indian money would have slipped out of India in the last 62 years, particularly during the Nehruvian socialist regime when the income tax (97.5 per cent) and wealth tax (almost equal to the income earned on investments) together constituted double the income earned.

It is undisputed that the Nehruvian socialist model forced huge sums out of India. So the amount of Indian black wealth secreted away in the last 60 years — estimated at from $500 billion (Rs 25 lakh crore) to $1400 billion (Rs 70 lakh crore) — does not seem to be wide off the mark. Economists call it flight of capital. This is the people’s money stolen from them.

Mr. Gurumurthy goes on to suggest that the solution to the problem created by Nehruvian socialism is outright communism, and siezing said black money deposits for the use of the government:

See the consequence even if part of it is brought back. A portion of it would make India free from all external debts which is now over $220 billion; India will transform into an economic superpower; some 10 or 15 Indian rupees could buy a US dollar which today 50 Indian rupees cannot; a litre of petrol on our roadside would cost Rs 15 or even less, against today’s 50 plus; the cost of imports in rupee terms would be down to a third or half; India’s entire infrastructure needs can be funded; India will become so energy efficient and costcompetitive that exporters may need no sops at all; India will lend to — not, as it does now, borrow from — the world; Indian housing can be funded at affordable cost; rural poverty can be wiped out… The list is endless.

If only earlier governments had siezed the black money directly before it even left the country, we would not be facing this problem today. Thatz why we need strong regulations.


Chhatisgarh, Not Vidarbha

April 22, 2009

Girish Shahane has a post up about how the Huffington Post is panicking over a mass suicide of 1500 farmers in Chhatisgarh:

So, the Belfast Telegraph, which presumably has no correspondents in India, picks up a news item from who knows where, and tacks on a misleading headline. The phrase ‘mass suicide’ gives the impression of a co-ordinated, cult-like act. Strangely, London’s Independent, which does have reporters based in this country, picks up the Belfast Telegraph piece. Then, Huffington Post links on its home page to the Independent’s coverage, and carries a blog post by Mallika Chopra, wellness-guru Deepak Chopra’s daughter, based on the unverified story.

(Shoot First, Mumble Later)

I think the figure of more than 1500 suicides comes from this India Together report, or the original statistics it refers:

“The figure is not only for this year, but Chhatisgarh has remained at the top of the list every year since its inception. 1593 farmers committed suicide in the state last year, according to the data provided by state police to the National Crime Records Bureau,” I said. It means 4 farmers die every day by committing suicide. Moreover, Durg is just behind Raipur, which tops the list amongst the districts of Chhatisgarh in this infamous list. Last year alone, 206 farmers committed suicide in Durg. 

(India Together)

So the over-1500 figure was the total number of suicides in a year. The sub-editor who wrote the headline at the Belfast Telegraph made it sound like a mass suicide, and the impression then spread over the internet. It’s his or her fault.

This is not the first time the Irish have made a mess of things. Last year, despite express instructions to deliver a bouquet of flowers on the 8th of October, they did so on the 6th of October.

Anyhow, returning to the point at hand – farmers dying in Chhatisgarh – the India Together report contains this depressing bit:

Santosh, sitting next to him, said “There is a case pending on my land so I can’t get a loan from the bank. I have taken a loan of Rs.13,000 from the moneylender. Lakhnu also borrowed from the moneylender because the land is still in his father Beturam’s name.So the bank did not give any loan to him this time”.

We pompous and heartless libertarians often talk about the right to property, how allowing farmers to sell their land will allow them to get credit, and why it is more important to create industrial employment than to force farmers to remain stuck in agriculture forever. And we have wishful dreams about how if only we could spread libertarian ideas among the people in power and reinstate the right to property things would be better.

Unfortunately, the bit I quoted just now shows that a policy change won’t be enough. Even if the right to property returned, and farmers could sell their land or mortgage it, you’d need a long hard grind of clearing land disputes, rationalising land registration, and making the rural economy independent enough of both agriculture and real estate development that land ownership doesn’t remain as high-stakes as it is. All these are happening, but none of them are happening as fast as is ideal. Whenever there is change, it’s either done on a large but uneffective scale by the government, or on an effective but tiny scale by some madly committed social entrepreneurs.

And then there was this:

He was worried about the loan of Rs.15,000 he had taken from the moneylender. There is an interest of Rs.5 per month on every Rs.100 and he was worried how he would repay it.

The interest rate of 5% a month sounds usurious and provides ammunition to anybody who wants to demonise moneylenders, but let’s look at this in perspective. Indian moneylenders in the Philippines charge 20% a week, and their customers aren’t driven to destitution. In Mexico, Compartamos customers pay an effective interest rate of 100% annually, and the customers are still pouring in and repaying. It’s about interest coverage and gearing, not about how low or high the interest is – look at the subprime borrowers who were defaulting on interest rates of 7 or 8% per annum.

The massive interest rates which the 5-6 Philippines moneylenders or Compartamos charge presumably don’t pinch that much because their customers are mostly urban, and their incomes can’t swing that much. And there’s always the ability to switch to some other sort of casual labour. But in Chhatisgarh, not so much. Not much industry, not much retail trade. 

On that note, I wonder if the lack of opportunities is due to the Naxal tactic of driving out all the “oppressor” employers. The hotspots for suicides – Vidarbha, Andhra Pradesh, and Chhatisgarh are also the ones with a Naxal problem.

So what we have is not just the single sorrow of dying farmers. It’s a tragedy of three wasted opportunities:

  1. The opportunity to enforce law and order and stop the Naxals from running amok
  2. The opportunity to reinstate the right to property, and back it up with a project to clear titles and free land sales and leasing
  3. The opportunity to create a rural financial system that worked

The UPA spent the last five years not giving a shit about any of these, and going by their manifestos and speeches, the NDA doesn’t give a shit either. As Abhishek Bachchan would say, इसे कहते हैं डिमोक्रेसी.

What an idea, sirji.


Taking on the Moral Police

February 7, 2009

I tried very hard to make a quis custodiet ipsos custodes joke in the title, but I couldn’t get a decent one. Anyway.

So after the Shri Ram Sene ran amuck in Mangalore, some other people have decided to stand up either against idiots who think culture gives them a free pass to beat up people, or for people who just want to get on with life and be affectionate without being beaten up. So here’s a quick list:

First, the Delhi organisation of the Jammu-based National Panthers Party has announced that it will hit the streets on St. Valentine’s Day and beat up anyone who is annoying couples.

“The party has decided to oppose fundamentalist and communal elements that indulge in moral policing and don’t allow the youth to celebrate the day of red roses,” said Delhi NPP chief Sanjoy Sachdev.

Apart from issuing ‘beat on sight’ orders, the NPP has also sought police help in protecting those who want to celebrate Valentine’s Day. “If red chillies and pepper fail to scare away the obstructers, our activists will resort to judo and karate tactics,” said Sachdeva, the self-appointed patron saint of lovers. “And this will continue till police arrest the trouble makers,” he added.

(Hindustan Times)

Who’s going to police the moral police? The National Panthers, that’s who!

Hari the Kid would like this to become a pan-India thing, and proposes to start off in Bangalore. If you wish to assist, please let him know.

If you are non-violent, then there’s this: Stand Up to Moral Policing, which wants help and volunteers for a peaceful protest march in Delhi. Unfortunately, there doesn’t seem to be any idea beyond a protest march, but hopefully that will just be a start.

What if you approve of public display of affection, but also are a fan of Our Glorious Culture? Then this is probably what you should be considering: Kamasutra Day – A Truly Indian Cultural Event. On a side note, it would be awesome if xkcd listed the numerical equivalents and baseball positions for all the Kamasutra and Khajuraho positions.

And if you don’t give a damn about culture, there’s The Coalition of Pubgoing Loose and Forward Women.


And While We’re Discussing Knee Jerk Reactions…

December 18, 2008

Masabi has a sooper post up about the ill-conceived Small Change petition.


Also, Ramalinga Raju for FM

December 17, 2008

I have only one question for the people who’re calling for Ratan Tata to be Prime Minister.

Are you fucking idiots?

In the past few years, the Tata Group, with Ratan Tata presiding, has:

  1. spent money buying luxury car brands just months before the world headed for a recession
  2. completed an expensive purchase of Corus, and now has to worry about getting money in the middle of a global credit crunch
  3. started, and then abandoned the ridiculous Chai-Unchai concept of tea bars for Tata Tea
  4. further lost market share in mobile telephony, had to write off years of accumulated losses in Tata Teleservices, and is desperately clutching at the Virgin Mobile straw to turn things around
  5. screwed over small shareholders in the TCS IPO (wait, the Tatas have been screwing over the small shareholder for years on end)
  6. spent money putting up a car factory in Bongland of all places, royally screwing up the land acquisition, walking into a PR disaster, and then running to Gujewland, something they could have done to begin with and saved themselves much grief
  7. and, of course, most recently, cut down on security at the Taj Mahal Hotel a week before it was attacked

With this track record of incompetence, you want to make Ratan Tata responsible for the country. If you have to exhibit your desperation, why not just wish for the British to take over once again?


Stealth Reform

September 20, 2008

The fact that I’ve posted in one day about two separate reforms that aren’t getting noticed suddenly reminds me of Ravikiran’s thesis that the only time the UPA can carry out reform is when the Left is distracted with other things (follow-up 1) like privatising airports when everyone is concentrating on the Tsunami.

The thing is that the Left has now been replaced by the SP, so I’m not sure how far this idea is still valid. But maybe the UPA is now so used to doing stuff by stealth that by sheer force of habit they announced the (limited) liberalisation of foreign media when everyone was distracted by the Delhi blasts, the Delhi encounter, and the I-banking crisis. Again, it’s slightly depressing that carnage and loss of life and livelihood is required before something happens.


Another Unbottled Genie

September 20, 2008

Along with mobile banking, another sector got a little freer this week. Foreign news magazines can now publish Indian editions:

In a significant further opening up of the print media, the Union Cabinet on Thursday approved a revised policy that would allow Indian editions of foreign magazines in the news and current affairs category.

The review of print media policy permits Indian publishers entering into such agreements to include local content and carry domestic advertisements, both of which were forbidden under previous guidelines.

(Financial Express)

Because I am an impractical libertarian I will now find fault even with this welcome opening up. As the Financial Express also points out, FDI is restricted to 26%, which means that the true benefits of foreign money coming in and setting up professional news organisations will be limited. (At this point, my skeptical alter-ego intervenes and points out that what with the currrent financial crisis, and foreign media organisations not exactly sitting on mountains of cash, there wasn’t going to be a huge amount of money coming in anyway.)

Also, the requirement of five years of prior circulation of at least ten thousand copies means that if News Corp decides to launch a new magazine worldwide, they can’t do a simultaneous launch in India. Oy vey.

It’s a start, though.

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The Anandpur Sahib Resolutions

September 12, 2008
SVG version.Image via Wikipedia

Now that the snark is out of the way, let’s look at one of the most interesting documents in the history of Punjabi nationalism or secession: the Anandpur Sahib Resolutions.

The Anandpur Sahib resolutions were the Akali Dal‘s response to being wiped out electorally in 1971 and 1972. They decided to recoup by:

  1. Getting the borders of Punjab redrawn to bring in more Punjabi speakers and Sikhs
  2. Ramp up federalism in general so that the national parties would have less influence in Punjab, which would mean the Akali Dal would have a free run

The end result of this came in 1978, with a document called the Anandpur Sahib Resolution (ASR, for the rest of the post). It’s a fascinating mix of naked gerrymandering, federalism, religious fundamentalism, sound economic policy and terrible economic policy. You can read the whole thing by clicking through, but let’s look at the more interesting highlights.

First, the gerrymandering. There was this:

(a) Chandigarh originally raised as a Capital for Punjab should be handed over to Punjab.
(b) The long-standing demand of the Shiromani Akali Dal for the merger in Punjab of the Punjabi-speaking areas, to be identified by linguistic experts with village as a unit, should be conceded.

in the resolution itself. But the political resolutions preceding the ASR have this stunning stuff:

The fundamental policy of the Shiromani Akali Dal is to seek the realization of this birthright of the Khalsa through the creating of a geographical entity and a constitutional set-up of its own.

For the attainment of this aim:

1. The Shiromani Akali Dal is determined to strive by all possible means to:
(a) Have all those speaking areas, deliberately kept out of Punjab, such as Dalhousie in Gurdaspur district, Chandigarh, Pinjore, Kalka and Ambala Sada, etc. in Ambala district, the entire Ina tahsil of Hoshiarpur district, Shahabad and Guhia blocks of Karnal district, Tohana sub-tahsil, Ratia block and Sirsa tahsil of Hissar district and six tahsils of Ganganagar district in Rajasthan, merged with Punjab to constitute a single administrative unit wherein the interests of Sikhs and Sikhism are specifically protected.

But the political resolution also has a very strong and unambiguous call for federalism, which is practically revolutionary considering the Indian Constitution:

(b) In this new Punjab (as in all other stated) the Center’s interference would be restricted to Defense, Foreign Relations, Currency and Communications, all other departments being in the jurisdiction of Punjab (and other states) which would be fully entitled to frame their own Constitution. For the aforesaid departments of the Center, Punjab (and other states) would contribute in proportion to their respective representation in Parliament.

2. The Shiromani Akali Dal would also endeavor to have the Indian Constitution recast on real Federal principles with equal representation at the Centre for all the States.
3. The Shiromani Akali Dal strongly denounces the Foreign policy of India as framed by the Congress Party. It is worthless and highly detrimental to the interest of the country, its people and mankind at large. Shiromani Akali Dal shall extend its support only to such policies as are based upon the principles of peace and national interest. It strongly advocates a policy of peace with all neighboring countries, particularly those which have within their borders Sikh population and Sikh shrines. The Akali Dal is of the firm view that the foreign policy of India should in no case be one of playing second fiddle to any other country.

and look, gun rights!

6. The Shiromani Akali Dal is of the firm opinion that all those persons, including women, who have not been convicted of any criminal offence by a court of law should have the right to possess any type of small arm like revolvers, guns, pistols, rifles, carbines, etc., without any license, the only obligation being their registration.

Now the trouble with advocating federalism which is revolutionary in the Indian context is that if you have a ruthless dictator at the helm of things, she thinks you’re advocating secession. And the clampdown after that was so strong that secession actually became the nature of things. But I digress. The federal bits of the ASR itself are:

The Shiromani Akali Dal realizes that India is a federal and republican geographical entity of different languages, religions and cultures. To safeguard the fundamental rights of the religious and linguistic minorities, to fulfill the demands of the democratic traditions and to pave the way for economic progress, it has become imperative that the Indian constitutional infrastructure should be given a real federal shape by redefining the Central and State relation and rights on the lines of the aforesaid principles and objectives.
The concept of total revolution given by Lok Naik Jaya Parkash Narain is also based upon the progressive decentralization of powers. The climax of the process of centralization of powers of the states through repeated amendments of the Constitution during the Congress regime came before the countrymen in the form of the Emergency (1975), when all fundamental rights of all citizens was usurped. It was then that the programme of decentralization of powers ever advocated by Shiromani Akali Dal was openly accepted and adopted by other political parties including Janata Party, C.P.I. (M), D.M.K., etc.

As such, the Shiromani Akali Dal emphatically urges upon the Janata Government to take cognizance of the different linguistic and cultural sections, religious minorities as also the voice of millions of people and recast the constitutional structure of the country on real and meaningful federal principles to obviate the possibility of any danger to the unity and integrity of the country and, further, to enable the states to play a useful role for the progress and prosperity of the Indian people in their respective areas by a meaningful exercise of their powers.

Now all this sounds brilliant and federalistic. But that’s just resolution 1. The Akali Dal then issued 11 more resolutions which demanded that the Central government do a bunch of stuff, which sort of makes the whole demanding that it stay out of everything except Defense, Foreign Relations, Currency and Communications sort of worthless. But such is life. Some of the interesting demands were:

The Shiromani Akali Dal calls upon the Central government to make an international airport at Amritsar which should also enjoy the facilities of a dry port. Similarly, a Stock Exchange should be opened at Ludhiana to accelerate the process of industrialization and economic growth in the State. The Shiromani Akali Dal also desires that suitable amendments should be made in the Foreign Exchange rules for free exchange of foreign currencies and thereby removing the difficulties being faced by the Indian emigrants.

Capital and Current Account Liberalisation, in the early 1970s. Heh.

The Shiromani Akali Dal also calls for the rapid diversification of farming. The shortcomings in the Land Reforms Laws should be removed, rapid industrialization of the State ensured, credit facilities for the medium industries expanded and unemployment allowance given to those who are unemployed. For remunerative farming, perceptible reduction should be made in the prices of farm machinery like tractors, tubewells, as also of the inputs.

This was long before farmers were dying in Vidarbha.

This session seeks permission from the Government of India to install a broadcasting station at the Golden Temple, Amritsar, for the relay of Gurbani Kirtan for the spiritual satisfaction of those Sikh who are living in foreign lands.
The session wishes to make it clear that the entire cost of the proposed broadcasting project would be borne by the Khalsa Panth and its over all control shall vest with the Indian Government. It is hoped that the Government would have no hesitation in conceding this demand after due consideration.

I find this one particularly fascinating. It’s a mix of public goods financing, overwhelming licensing, and the inadequacies of technologies then – now, of course, this could be accomplished by just having a satellite uplink from the Golden Temple. Or even a webcast. The fact that technology, government control of broadcasting, and the particular politics of the period made this impossible is particularly poignant.

This mammoth gathering of the Shiromani Akali Dal strongly urges upon the Government of India to make necessary amendments in the following enactment for the benefit of the agricultural classes who have toiled hard for the sake of larger national interests:
1. Hindu Succession Act be suitably amended to enable a woman to get rights of inheritance in the properties of her father-in-law instead of the father’s.
2. The agricultural lands of the farmers should be completely exempted from the Wealth Tax and the Estate Tax.

Honestly, not sure how this would impact on the ground – I’m unaware of the debates surrounding inheritance law. But again – fascinating.

They had demands that make me cringe too:

The 18th session of the All India Akali Conference take strong exception to the discrimination to which the minorities in other states are being subjected and the way in which their interests are being ignored.
As such, it demands that injustice against the Sikhs in other states should be vacated and proper representation should be given them in government service, local bodies and state legislatures, through nominations, if need be.

The Congress government is called upon to vacate the gross injustice, discrimination done to Punjab in the distribution of Ravi-Beas waters. The Central government must also give approval for the immediate establishment of six sugar and four textile mills in Punjab so that the State may be able to implement its agro-industrial policy.

The Shiromani Akali Dal emphatically urges upon the Indian government to bring about parity between the prices of the agricultural produce and that of the industrial raw materials so that the discrimination against such states that lack these materials may be removed.

The Shiromani Akali Dal strongly feels that the most pressing national problem is the need to ameliorate the lot of millions of exploited persons belonging to the scheduled classes. For such a purpose the Shiromani Akali Dal calls upon the Central and State governments to earmark special funds. Besides, the state governments should allot sufficient funds in their respective budgets for giving free residential plots both in the urban and rural areas to the Scheduled Castes.

So the ASR as a whole is utterly fascinating. It starts out as a call for federalism – something I sympathise with hugely – but then reverses direction and starts demanding that the Central government do something. The two aren’t necessarily incompatible if you’re transitioning to federalism and still want to get Central support until you achieve ‘true federalism’ – but the ASR is a reminder of one of the biggest obstacles to federalism.

This is that states aren’t just competing with the Central/ Federal government for resources and power. They’re also competing against each other – for investment, for taxpayers, and for resources which the other states might have a hold on.  Which means that states are always going to have an interest in maintaining a federal government which they can milk. It’s comparable to the Prisoner’s Dilemma problem – everyone would be better off with no federal government interference whatsoever, but each state would be even better off if it manipulated the federal government into favouring it over the other states. This will play out in Tamil Nadu  – Karnataka disputes over the Cauvery, Punjab – Haryana disputes over Chandigarh, and Maharashtra – Karnataka disputes over Belgaum.

So states coming together and demanding power from the Centre will always be hijacked by one state which would rather have a powerful Centre to fall back on. And of course the Centre could cut quid-pro-quos; so that even something where there was no inter-state conflict like law-and-order could be bargained against infrastructure or tax sharing. Or plain old horse trading. So even if Narendra Modi is serious about making himself the saviour of the states and getting more power from the centre (can’t find the link anywhere, sorry), it’s not going to happen until a whole bunch of things get sorted out between the states first.

The gradual decline of the national parties will mean things will become even more complicated. Either things will be as they are now, even more so, with each regional party determined to prop up the centre in order to extract concessions from it, or a bunch of regional parties will get together and decide to emasculate the centre altogether and start transferring power to the states. I’m not sure how many regional politicians there are today in India who would actually think long-term enough to go after federalism – but it might just arise.


Microfinance in Pragati

September 2, 2008

I have an article in this month’s Pragati (PDF, 3.8 MB) about microfinance. I’ve written about how there’s more to microfinance than microlending, how broadening access to savings accounts and small insurance is much more important than lending, and how the most significant impact of microfinance so far is not necessarily the financial bits but the organisational bits.

If, as is likely, you find this incredibly dreary and boring, do read the issue anyway for Harsh Gupta’s excellent article on liberal solutions to protests in Kashmir.


I Refuse to Make an ‘in a jam’ Joke

September 1, 2008

Hari the Kid has an article in Citizen Matters about how Bangalore’s musicians don’t have any dedicated place to perform where they aren’t dependent on corporate sponsors, or tickets or entry fees from listeners. But this will require the police to give them permission to perform in public spaces:

It had been smooth sailing all along until June 2008, after which the corporate sponsor decided to divest itself from the Sunday Jams, thereby raising questions over their very existence. In the absence of sponsorship on a continued basis, it would not be possible to arrange for a musical venue and a sound system (collecting a token fee for performance from the participating bands being out of question as it would go against the tenets on which this movement was founded).

In order have a place within the city where musicians could perform, without being under corporate mercy, the Sunday Jam movement staged a protest near the MG Road statue on the 13th of August. They wanted their music strip at Cubbon Park back, to make it a place where musicians could gather on a regular basis and perform, just like in the 80s.

(Citizen Matters Bangalore)

I personally feel that the Bangalore administration will be as unreliable as the corporate sponsor, if not more so. After all, this is a city where the police deals with the menace of rising crime by banning live music and dancing. Even if the Bangalore jammers get the Cubbon Park music strip, one complaint from a curmudgeonly thathappa or one protest by Vatal Nagraj types will be all it takes to get the strip yanked away again.

I know these guys don’t want to charge entry fees or tickets, but maybe they should consider doing what Manchester United did in their early history. When they went bankrupt, they held a charity bazaar to raise funds and just went about collecting chanda from their fans to pay off their debts. If the organisers, musicians, and fans got together, chipped in money and set up a formal organisation which could rent places, that could work out. Relying on corporate sponsorship isn’t as risky if the corporation (or co-operative, or trust, or partnership) is your own.