CAE of CAB/CAA!!

In the last one week, what was known as CAB (Citizenship Amendment Bill) got passed in both the houses of the parliament and became CAA (Citizenship Amendment Act) when the President put his stamp on it. However, as we have been seeing in the last few days, the CAE (Cause and Effect) of this has been different in different parts of the country and among different sections of the society.

In Delhi and in states like West Bengal, Kerala and even parts of Uttar Pradesh, the opposition to the Act stems from the point that the act is discriminating against Muslims. This was what was being echoed by the opposition in parliament and by and large by liberals in the media. The narrative here is that the Act goes against the “Idea of India” as enshrined in the constitution which is “Secular” in not singling out a religion on any ground.  On this pretext, as expected there is a large resentment among Muslims and of course among political parties who depend upon their votes and among liberals. So we see huge street protests in Delhi, Kolkata and in Kerala. As I write this, the protests have gone violent and turning into a mob fury!

In some states like Tamil Nadu for example, the disapproval to the Act is because, it has only included persecuted minorities from three countries namely Pakistan, Bangladesh and Afghanistan while leaving out Tamils from Sri Lanka who are minorities there. The opposition on this count is less intense and is mostly restricted to TV debates, newspaper columns and not much on the streets.

The third category is how the Act has been seen in the North Eastern states like Assam and Tripura. Here, the reaction has been more virulent with fire spreading on the streets with little signs of slowing down. And the cause for the same is completely different from what it is in say, West Bengal. The fundamental issue is that people here see this Act as going against the spirit of Assam accord by opening up the states to foreign illegal refugees of all religions. The opposition here is more about protecting regional identity and space and less about Nationalistic considerations.

And then there are other parts of the country where the reaction is muted and thereby letting one to deduce that the people are neutral on the Act.

In Engineering and Quality Management, “Cause and Effect Analysis” is an oft repeated technique to look at all possible causes for a particular effect. This technique was pioneered by Kaoru Ishikawa, a Japanese professor who later came to be renowned as a Quality Guru. The corner stone of this technique is to brainstorm with as many relevant people as possible and list up all possible causes (Man/Material/Method…) that could lead to a Quality problem.

In the case of CAB/CAA, at the outset it could be argued that probably the Act was required to correct a historical festering issue. However, from the kind of reactions which have emerged, it is clear that the government has not thought through the ramifications of the Act in different parts of the country. Hence I would conjecture that the government has not done a proper “Cause and Effect” analysis on the issue by involving a cross section of domain experts to list up what could be the reactions to the Bill.  It is extremely surprising that on a crucial move like this, perhaps in the interest of confidentiality, the government did not discuss the bill and its implications enough before bringing it to the parliament.

The kind of homework and alacrity the government had shown when it went about annulling of Article 370 is clearly missing this time. Otherwise, Assam and parts of North East where BJP has its own governments would not be burning today. Today, the home minister is busy assuaging one and all that the government will address all genuine concerns of the North East states.  And I believe that a roll back is in the offing soon as the government goes about dousing the fire.

Loyalists to the government argue that CAB was clearly part of the BJP manifesto and hence now that it has got the mandate, it is only going about ticking off items one by one from the manifesto. While one cannot pick too many holes in this argument, one cannot avoid asking if this was really a top priority at this point in time.

Ever since May 30th 2019 when this government took over the reins for the 2nd time, two ministries have hogged the headlines, for different reasons. First, the home ministry under a very aggressive minister – Amit Shah, has been busy with issues around Kashmir. Annulling of Article 370 and 35A, splitting of the state of Jammu and Kashmir and then handling the fall out of these moves have kept the home ministry under constant attention. Second, the finance ministry under Nirmala Sitharaman has been on the receiving end of the media, opposition and the industry due to the tanking economy. Quarter after Quarter the GDP has been touching new lows, not to mention of other economic indices as well, except perhaps the Sensex!

To be fair, the finance minister who is considered a green horn in the ministry has been earnest. Though she comes across as haughty, truth be told, she has been busy meeting a cross section of opinion leaders in trying to understand what needs to be done to fix the economy. It is perhaps her bad luck that she was thrown in to the circus ring when the Indian economy was on a decline. Some steps have been taken but they have not yielded any visible results.

Having seen the versions of many economists who have been critical of the economy, one thing is clear. The experts are split down the middle as to whether the problems in the Indian economy are structural, cyclical or a bit of both. So, it would be good for the finance minister to first do a detailed Cause and Effect analysis of the Economy on top priority, understand the causes first and then go about fixing them.  If these are not addressed before the next budget time frame, once again the fabled “India Story” will miss the bus as it did many times in the past!

That is why, it is time the government also goes about ticking off the manifesto points on issues related to the economy on SOS basis instead of just focusing on home affairs. Here, I feel that the finance minister needs political heft which can be provided only by the Prime Minister. And it is time he does that. What was that? “Modi hai to mumkin hai”, right???

Pic courtesy: Indiatimes

Book Review – 2019 How Modi Won India!

In this 201st post of mine for this blog, I thought of doing a review of the book ‘2019 How Modi Won India’, written by ace newsman Rajdeep Sardesai which hit the shelves a few days ago. This book is almost like a sequel to Rajdeep’s very first book, which he wrote after 2014 General elections. Titled ‘2014: The Election That Changed India’, it was engrossing from start to finish, peppered with personal anecdotes not just about that election but around events that happened right from the time he started his journalistic career way back in the 90’s. So, it is with heightened expectations that one sat down to read this new book to gain insights into the 2019 elections, hitherto not seen in public domain. At the onset, after finishing the book, I must say that I was not disappointed.

As introduction, Rajdeep gives an overview of how Modi managed to win India in 2019. He attributes the victory to 13 Ms (Modi, Machine, Media, Money, Messaging, Marketing, Mobile, Middle Class, Millennials, Majoritarianism, Muscular Nationalism, Masood Azhar and Mahagathbandhan), 2 Ws (Welfarism and WhatsApp) and a GK (Gharib Kisan). Frankly, I think that many of the factors here are double counted and one can actually put it down to set of fewer unique Ms.  For example, Messaging is part of Marketing. Welfarism is linked to Gharib Kisan. Muscular Nationalism can be clubbed with Masood Azhar. Mobile and WhatsApp are basically the same.

Having setting the context, the usual method is to go about detailing all these factors one by one. Thankfully, Rajdeep avoids that route as that would have been less interesting and by now, we have read quite a bit about most of these factors. Instead, Rajdeep chronicles in detail, with back stories, the key events right from the swearing in ceremony in 2014 leading up to the last day of polling in 2019, which had some impact on how Modi eventually won India in 2019.  I liked the way Rajdeep segues from one chapter to another with a hook to end the chapter to the upcoming topic, a style which he used very well in his first book as well!

In his 2014 book, Rajdeep had shared many conversations which he had with political leaders including Narendra Modi when he was the Gujarat Chief Minister throughout his career, to drive home his points. However, this book is less anecdotal and more of research and reportage. It has very few references of conversations with leaders from the current political regime except for late Arun Jaitley with whom the author enjoyed good chemistry. Rajdeep makes it a point to inform us that in spite of being a leading prime time anchor, he still spends the mornings often at the Parliament and so one did hope to read more personal anecdotes and conversations with key players. But that is not to be.

The author himself admits with a tinge of regret that he has not been able to speak to the Prime Minister since May 2014 and probably he is now become a persona non grata in the current regime. This sort of re-affirms the now touted model of media management of the Modi regime.  That of cultivating its own set of favourites and maintaining a report card on “positive” and “negative” journalists. Rajdeep says this is very much akin to the “Big Boss” TV Serial style where everything and anything is watched and accounted for. Being tight lipped and catching the media unawares of what’s in the offing, most of the time is also part of this method.

As an example, on Demonetisation, Rajdeep candidly admits that he and his team did not have a whiff of what the Prime Minister was going to address the nation on 8th November, 2016. He had actually lined up a few defence experts for the prime time discussions assuming that the address was related to some strike on Pakistan!  There have been other instances too where, the media did not get a wind of what’s cooking within the Modi Sarkar.

In a chapter wholly on media titled ‘Prime Time Prime Minister’, in addition to detailing how Modi and the government ensures maximum eye balls for themselves, Rajdeep also turns into a strident media critique, a hat we see him don often these days! Rajdeep tears apart his own fraternity which he feels has lost its moral compass and yearns for a time when media would not just be a lap dog for the government in power.

If 2014 was all about a one man army called Modi, in this book, Rajdeep makes a distinction. BJP is now not just about Modi but, Modi and Amit Shah, the Jodi No.1 of Indian politics. Even the cover design of this book drives this point featuring both Modi and Shah prominently.

The author credits the messaging strategy of BJP as one of the key elements that drove its victory. Jo Jeeta Wohi Sikandar! So we should take it that BJP’s messaging was on point. However, I thought that compared to 2014 when a single point message of Abki Baar Modi Sarkar was flogged and many micro campaigns were woven around this central message, in 2019, BJP dabbled with different messages lime Modi hai to Mumkin hai, Main bhi Chowkidar and so on even till the initial rounds of elections till it boiled down on Phir Ek Baar Modi Sarkar theme.

In the book, Rajdeep claims that the Prime Minister who has a penchant for coming up with interesting acronyms had come up with another one – JAM to convey the coming together of Jan Dhan Yojana, Aadhar and Mobiles. As per me, the phrase ‘JAM trinity’ was first used by the then Chief Economic Advisor Arvind Subramanian in the Economic Survey report of 2014-15.  This was then widely adopted by the Government and the media to talk about this phenomenon which was bringing a huge change in the livings of the marginalised.

If you were Rajdeep and one who felt that you have fallen out of favour with this regime, you would be tempted to write a book that is more of an eulogy of the current regime and in particular of Narendra Modi and Amit Shah. After all, Modi, Shah and the BJP did win the elections with an emphatic margin and there were enough reasons to talk high of. To his credit, Rajdeep does a fine balancing act, commending BJP, Narendra Modi and other leaders where required and equally being critical where he feels so. In fact, you get the impression that he has tried hard to present himself as a “Neutral” journalist, a species which is almost extinct these days. So, in the entire book, the writing yo-yo’s between “on the one hand, on the other hand”, “this and having and said that” format!

Far away from what is shown on TV and social media, the book gives fascinating insights of how the BJP election machinery works. The many faceless back room boys who take up tasks in mission mode and ensure they are accomplished, the many micro programmes which the party undertook at booth level and so on to win the 2019 elections emphatically have been outlined in detail. It is clear that it is these micro tactics more often than not are missed by journalists when they do ground reports during election times because of which they get the extent of the ‘hawa’ wrong.

While on this, I would have liked if Rajdeep had spent a chapter on the whole business and dynamics of opinion/exit polls in India. These continue to be an enigma. Even in the run up to the 2019 polls, media kept saying that it was a “wave less” election and it being “a sum total of 545 individual battles”! Most of the opinions based on ground reports suggested that BJP would be short of majority and have to tie up with new allies to form the government. What happened eventually though was a bigger win than 2019 for BJP and NDA which none predicted!

If you are a news buff and a current affairs watcher, ‘2019 How Modi Won India’ is a must read for not just the political stories but the granular detailing on what goes behind an election win in India!

Post Script: While talking of the many M’s that mattered, Rajdeep prefaces this book with the narration of another M – Madison Madness. It’s more like the author’s Mea Culpa (there you go, another M!) for what happened way back in September 2014 when he got involuntarily involved in fist fights with frenzied Modi supporters in Manhattan! (The “M” Madness doesn’t seem to end!)

2019 How Modi Won India

Rajdeep Sardesai

HarperCollins Publishers India

355 Pages, Rs 699

Onsen mein sab nange hain!

Onsen or Hot Springs are quite common in Japan and Japanese like their hot springs so much that apart from the many natural ones, you now have man –made, indoor ones and even in households. On my 1st trip (on work of course) to Japan way back in 1999, I went to the picturesque city of Nagano which had just hosted the winter Olympics in 98.  The travel from Tokyo to Nagano to cover a distance of about 240 Km took less than 1.5 hours by Shinkansen. Yes, the same bullet train system which is being questioned mindlessly in India, now that the government in Maharashtra has changed!

That evening, after the day’s meetings were over, our host asked us to join him at the lobby at 5.10 pm (as typically it is with the Japanese w.r.t time!) to take us to an Onsen for a relaxing bath. The excitement of having a nice, natural hot spring bath experience vanished completely when our host revealed that as per Japanese culture one doesn’t wear a piece of cloth when inside an Onsen!! We could also see the reservations among a few westerners when they were told of this!

For Japanese though, as per their culture it was quite common to have group baths naked in these hot springs. For, they believed that ‘Onsen mein sab nange hain’! I guess that the popular Hindi phrase – ‘Hamam mein sab Nange Hain’ owes its origin to the Japanese hot spring bath culture. This gained quite a bit of traction In Maharashtra in the aftermath of the assembly elections in October!! With the drama over government formation getting over finally this week, one can safely conclude that none of the political parties involved, came out of the bath covering itself with glory!  This is notwithstanding the virtues being peddled out by journalists of all hue in favour of the parties they endear themselves to!

For the BJP, which took moral high ground and adopted a wait and watch approach initially just when Sena started acting truant, the cookie crumbled when the Sena was about to crack a deal with the NCP and the Congress! By rushing itself to align with Ajit Pawar of the NCP, BJP had egg all over its face, when Ajit Pawar back tracked and couldn’t bring in the required numbers. Even if the BJP had managed to form the government by breaking the NCP, it would have had to deal with the permanent stain of having aligned with a leader who it had dubbed corrupt all along!  Only in Surf ads, Daag Ache Hain! Not in politics. Today, even the most loyal bhakt is questioning the Saturday morning wisdom of the BJP for taking oath in stealth!  Chanakya in his grave must be cursing the BJP for bringing a bad name to him!

For the Congress, which didn’t even take this election seriously, this was an opportunity too good to miss, to just have a crack at shared power! For all its grandiose pretensions of being the vanguard of secularism and the binding force for all secular forces in India, it just needed a few days to shake off all its ideological moorings and tie up with Shiv Sena!  Suddenly we were fed with how Bal Thackeray supported the Emergency and how he liked the authoritarian streak of Indira Gandhi and so on!

As far as NCP was concerned, since 2014, it was a facing an existential crisis. And since the 2019 Lok Sabha elections, not a day would pass without a NCP leader jumping ship either to the BJP or the Sena. In the elections, it came 3rd in terms of number of seats after BJP and Shiv Sena. Its strong hold remained in the Western Maharashtra/Sugar Belt areas.

When the results were out, Sharad Pawar kept saying that the mandate for them was to sit in the opposition and would happily sit in the opposition benches. At the same time, NCP was in the forefront of discussions in cementing an alliance between Shiv Sena, Congress and itself. In a small, close knit party like the NCP, it is difficult to believe that Sharad Pawar didn’t have a whiff of the defection being engineered by Ajit Pawar to align with the BJP. Probably, this was plan B for NCP which got aborted when the terms were not in its favour!

This probably explains why there was not a single strong condemnation, leave alone expulsion of Ajit Pawar when he did what he did. Contrast this to what Karunanidhi, the DMP leader did to his son Azhagiri when the latter revolted. Azhagiri was summarily expelled from the party just for opposing the leadership. Here, the nephew does the unthinkable act of breaking the party and still he is welcomed back to the party just in a few days in public display of bonhomie. And it is rumoured that Ajit Pawar may still end up becoming the Deputy Chief Minister after all!

And coming to the last actor in this drama – the Shiv Sena, less said the better. Clearly, the whole drama was precipitated in the 1st place by the Sena. Having gone to the voter with a pre-poll alliance with BJP and got the numbers it eventually did, the Sena did not have any qualms in betraying the electorate. It might have managed to achieve its ulterior objective of having its person on the Chief ministerial chair, but it would be very difficult to shake off this image of a petulant partner in a coalition for long.

We have seen parties fighting against each other virulently during polls and then coming together to form a government through a post poll alliance. Now in another twist, parties fighting under a pre-poll alliance, win the mandate and then decide to separate and align with other parties whom they opposed, to form a government. For the common voter, it is clear that – What you see is NOT what you get! This raises a few pertinent questions. Is democracy just about conducting elections timely and getting people to vote? Is it not ultimately about mirroring what they need? There needs to be a debate and eventually changes in the constitution which will not make voter feel slighted at the end of the election process!  Looking at what has happened in the past few elections, this is a SOS need.

 

On the positive side, my Japanese friends can be now happy to see that in India also – ‘Onsen mein sab nange hain’ just like in their wonderful country!

Coming of age of the Indian voter and a Wake-up call for the States!

This article has been written for the news website Newslaundry and was published on the 4th of Oct, 2019. You may read the same here:

https://www.newslaundry.com/2019/11/04/a-wake-up-call-to-states-its-time-to-invest-in-good-governance-to-win-assembly-polls

The latest season in the continuous cycle of elections in India ended last week, this time the Assembly polls in Maharashtra and Haryana. The dust hasn’t quite settled since Maharashtra still hasn’t seen its next government, even after what seemed like a clear verdict in favour of a pre-poll alliance. It can’t get stranger than this!

However, a detailed look at the results of the state elections before and after the Lok Sabha polls reveals a pattern. It discloses the coming-of-age of the Indian voter. Here’s how, and why.

May 2018: Karnataka state election 

The Congress, which governed the state in the last term, received a clear verdict against the party in Karnataka. At the same time, the Bharatiya Janata Party, while emerging as the single largest party, fell short of majority. However, in the 2019 Lok Sabha poll almost a year later, the BJP got an overwhelming mandate winning 25 of the 28 seats on offer.

November 2018: Madhya Pradesh state election 

The BJP, which had helmed the state for three terms, was unseated by an anti-incumbency vote. The party was pipped by the Congress. Yet, in the May 2019 parliamentary poll just six months later, the BJP swept the state, winning 27 of the 28 seats!

November 2018: Chhattisgarh state election

Here also, the BJP was voted out by a strong “against” vote and the Congress captured the state with a decisive mandate. It’s vote share was just 33 per cent. In the May 2019 Lok Sabha election, the story was different. The BJP won nine of 11 seats with a vote share of 50.9 per cent.

November 2018: Rajasthan state election

Again, the state went against the incumbent party, the BJP, and voted the Congress to power. But in the Lok Sabha poll, the BJP swept the state with a decisive vote share of 58.47 per cent, winning 24 out of 25 seats. Even the final seat went to an ally of the BJP.

December 2018: Telangana state election

The Telangana Rashtra Samithi managed to beat anti-incumbency in the state and retained power with an overwhelming mandate. It got a three-fourth majority and won 88 of 119 seats. The Lok Sabha poll flipped this win: TRS secured only nine out of 17 seats.

May 2019: Odisha state election

The governing Biju Janata Dal returned to power with a decisive mandate, winning 111 of a total of 147 seats in the Assembly. There was no trace of anti-incumbency. In the Lok Sabha poll held simultaneously, the BJD managed to win only 12 of 21 seats. Its vote share also fell by 1.9 per cent.

October 2019: Maharashtra state election

The BJP and its ally, the Shiv Sena, secured 161 seats with a combined vote share of 42.16 per cent. As a pre-poll alliance, they managed to get a majority. This result comes six months after the Lok Sabha poll, where the same coalition had bagged 41 of the 48 seats with a comfortable vote share of 51.34 per cent. What this means is the alliance lost a vote share of 9.18 per cent in just six months!

October 2019: Haryana state election

Though the BJP emerged as the single largest party, it fell short of a majority. Only with the support of the Jannayak Janata Party could the BJP eventually form the government. Compare this with the Lok Sabha election where the BJP won all 10 seats in the state, implying it lost a vote share of almost 21.71 per cent in the Assembly election.

Only in the northeastern states of Tripura and Nagaland, where the state elections happened in February 2018, the electorate voted for the BJP alliance in both the Assembly and Lok Sabha polls.

What are voters looking for?

Voters know what they’re doing. There are different combinations: voting for the same party in state and central polls; different parties being given the mandate in the state and central polls; or the extent of mandate differing if the same party wins in both elections.

If this trend holds — which I believe it will — this augurs well for Indian democracy. The voter is sending a clear signal that she understands the issues for which she is voting in a particular election. This is different from the general commentariat opinion that voters do not know what they are voting for.

This brings us to the next section of this piece: understanding the different issues voters vote for in the Assembly and Lok Sabha elections. Glancing at the results of the 2014 and 2019 general elections, here’s a quick breakdown of what, perhaps, voters are voting for in the Lok Sabha poll.

– For a face. The Lok Sabha polls are increasingly becoming presidential. Voters like to know the face of the prime minister they’re voting for. If parties do not project a clear prime ministerial face, they start with a handicap.

– For a party whose leader is seen to be strong, decisive and communicative.

– For a party’s stance on nationalistic issues related to India’s defence policies, the way we deal with our neighbours, the way we conduct our foreign policy, and so on.

– For a party’s overarching welfare programmes related to health, education and other issues.

– For an overall image of an honest, non-corrupt and functional government.

On the flipside, a voter clearly expects their state government to deliver on day-to-day issues like living conditions, infrastructure and delivery of the Centre’s welfare programmes.

Hence my hypothesis that the emerging voting pattern must serve as a wakeup call to the states to double down on governance issues. Even if a party receives an overwhelming mandate in the Lok Sabha polls, it does not translate to a resounding mandate in an Assembly poll unless it gets its act together on delivery of governance. States can no longer ride on the charisma of a central leader if they haven’t done their bit on the governance front.

It’s also time the commentariat shifts its focus and scrutinises the governance levels of states. This means analysing state budgets and not just the Union budget, and regularly evaluating a state’s financial health. It implies comparing the appetite for reforms within states, not just at a central level.

I firmly believe next generation reforms, which can make a difference to the economy, lie at the doorsteps of our states. Labour reforms, DISCOM reforms, land acquisition reforms, PDS reforms, agricultural reforms — multiple issues related to the daily livelihood of the poor are in the hands of states. It’s time chief ministers wake up to this and invest in running key ministries at a state level that deliver governance. If the results of the last few Assembly elections haven’t served as a wake-up call to the states — nothing will.

The Dream of a Swachh Bharat!

2nd Oct, 2019 marked the 5th Anniversary of the launch of Prime Minister Narendra Modi’s pet campaign – the Swachh Bharat Abhiyan. And ever since the campaign was kicked off, this is my 5th post on the topic with the central theme being the same which I will come to, just in a while. While launching the program way back in 2014 just after coming to power, I remember Narendra Modi clearly saying that a “Clean India” would be a fitting tribute we would give to Mahatma Gandhi on his 150th birth anniversary in 2019.  Even back then, I had said that the very noble thought notwithstanding, turning India into a Swachh Bharat cannot happen in 5 years.

If one takes stock today, India would not have turned into a squeaking clean nation but a valiant beginning has indeed been made. After the program got launched, within the government a Swachh Bharat Mission was kicked off, breaking down the overarching objective of a Clean India into many, many micro goals with measurable targets. This included stuff like constructing toilets in rural and urban India, making India Open Defecation Free (ODF) completely, achieving rural sanitation, sustainable solid waste management and so on.  The thrust given to this program from a top down push and resources point of view has been unprecedented. Just purely looking at the results from a data stand point they are impressive.

Going by the numbers presented in the budget in May 2019, in the 5 years since the program was kicked off, 9.6 crore toilets have been constructed while more than 5.6 lakh villages have become Open Defecation Free. The Finance Minister had then said, “More than 95% of cities have also been declared ODF. More than 45,000 public and community toilets across 1,700 cities have been uploaded on Google maps, covering more than 53% of India’s urban population”! Now considering the sheer magnitude of the task in hand in India, these are not mean achievements and credit needs to be given to the Government, where due.  And when the Prime Minister on 2nd Oct said that “rural India and its villages have declared themselves “open defecation free” there were the usual sneers and sniggers around the same, questioning if there will not be any person who will defecate in the open from the next day in India!

In spite of all this capacity building and pouring in of resources by the Government, has India become clean? The answer is probably “No”. But from 2014 levels, it has perhaps become cleaner.  People who visited Varanasi, the Prime Minister’s constituency say that the city is much cleaner, the Ghats are approachable and clean. All over India we keep seeing public clicking pictures from Railway stations and posting in social media regularly as to how cleaner they have become since 2014. It is undeniable that many places of tourist interest look much cleaner now than ever before. So far, so good. At the same time, we still see islands of squalor even in urban centres. Garbage is littered all over the place.

So what has been the problem? While the Government has been doing its bit in running awareness programs around cleanliness, placing dust bins all over the place, constructing toilets, making sanitation accessible so on, we as public have failed the country. Our attitudes towards cleanliness haven’t changed a wee bit.

  • We have not stopped littering in public places.
  • We have not stopped spitting in the open.
  • We have not stopped painting the town red with paan spitting day in and day out.
  • We have not stopped urinating or shitting in the open even when toilets can be found in the vicinity.
  • We don’t clean the dog poop even inside our posh apartment complexes while walking them every day.
  • We have not stopped throwing garbage in all areas except into the dustbins in the streets.
  • We have not stopped mixing wet and dry garbage though the authorities have been requesting for a while now.
  • We have not stopped feeding our pets and others from the balconies.
  • And we have not stopped from wanting the Government/Corporation/Authorities to keep cleaning the filth we create.
  • And finally we have not stopped dreaming about a “Clean India” without putting any effort from our side.

Coming back to my pet theme which I referred in the beginning, if we think that Swachh Bharat is about cleaning, then we are grossly mistaken. SWACHH BHARAT IS NOT ABOUT CLEANING, BUT TO REDUCE THE NEED FOR CLEANING IN THE FIRST PLACE!

It is an oft repeated take that the same Indians when we step out of India change our attitudes towards public cleanliness like “Switched On robots” while in India we behave as “Switched Off Morons”!

Having observed closely how things are in our country and world over, I have come to the conclusion that the attitude towards public cleanliness is not a Rich Vs Poor thing. It is not an Educated Vs Uneducated either. It is not even Urban Vs Rural divide. It has nothing to do with Caste, Creed, Religion and so on.  It is complex function of a combination of things like Awareness, Empathy, Upbringing, Education, Access, Priority, Laws etc. In short, having an empathetic attitude towards cleanliness not just in one’s own private spaces but more importantly in public places!

This is why I am of the opinion that, since transforming attitudes is a generational thing, it will take at least a couple of generations from here for India to be called a “Clean India”. That is about 50 years from now! And the key to make it happen is investing in resources and time in schools to create, nurture and spread the importance of having the right attitude towards Swachata!  While the present Governments at the centre, states, districts and at panchayats continue to work on what they are doing currently, admirably, they and the future Governments must focus on schools at all levels to “indoctrinate” kids at a young age about cleanliness. Investing in the future generations is the only hope we have to achieve the dream of a Swachh Bharat!  Cannot wait that long for a Swachh Bharat? Then we must stop complaining of what the Government is not doing and start reducing the need for cleaning! Basically stop some of the things I have listed above.

Does that mean that the campaign is a failure? Certainly not. The Swachh Bharat Abhiyan has helped to bring “Cleanliness” to the mainstream agenda of the country. Far long, we had neglected such basic issues of Nation building. So, kudos are in order to Narendra Modi for waking up India towards Swachata! Swachh Bharat may still be a dream for us now, but certainly not a pipe dream!

Howdy Economy?

“Howdy” is in the air in India these days! With Prime Minister Narendra Modi set to address the global Indian audience from the NRI platform at Houston, which has been branded as “Howdy Modi”, this American slang has got into the Indian vocabulary!  But, in India, ever since the 1st Quarter poor GDP results were out, the commentariat has been asking just one question “Howdy Economy?” Because, Indian economy is believed to be in ICU where the Chief Doctor was not giving much attention!

In India, the time tested tradition has been to undertake reforms when there is a crisis. Economist and Author Shankkar Aiyyar explains this beautifully in his book – “Accidental India” with back stories behind every single historic economic initiative of post independent India. The bottom line being, we take such drastic steps only when push comes to shove!

It looks like the latest decision of the government to slash corporate taxes drastically in one go from 30% to 22% is one such initiative which will have a lasting positive impact on the economy but which was taken when the answer to Howdy Economy question was very, very feeble. Naysayers notwithstanding, simplifying the tax structure, eliminating the myriad exemptions and having a reasonable low rate is a welcome move. It will make the industry competitive, make it more profitable, attract both foreign and domestic investments thereby have a trickle-down effect on the economy.

I saw some commentary that, this is more of a long term treatment and not an answer to the short term woes. Indeed yes. There is no silver bullet that can get the economy growing at 8% and more. It needs a combination of measures that are short term and long term. My belief is that, irrespective of the condition of the economy, a simple and low corporate tax structure was anyway required to grow the economy from the 8% levels we were couple of years ago, to 10%. With the economy struggling at 5% levels, the crisis like situation galvanised the government into action. Finally, the progressive reduction in corporate tax from 30% to 25% which was promised by the then Finance Minister Arun Jaitley in the 2015 budget has been executed by his protégé Nirmala Sitharaman. She has done it in one stroke and has gone a step further reducing the rate to 22%.

While the reduction in corporate taxes is a supply side reform, steps are required in the demand side as well. With the transition to the GST regime, the government has less flexibility to announce stimulus like in the past where excise duty or Sales tax cuts used to be announced to boost demand and consumption. In the present GST regime, the GST council has to take a call on the same and make those adjustments. Some of the announcements on GST rate reduction on hotel tariffs are in this direction.

With the reduction of corporate taxes, there is a loud clamour for reduction on the personal taxes front. Experts keep saying that this will put more money in the pockets of the salaried class which will make them spend more. I am not too sure of this. In the past, whenever there has been some personal income tax slab changes and effective rate reduction, we hardly came to know of the savings or reduction. And I don’t think anyone then consciously went to spend the money saved! Of course, it is more of a mood lifter and gives a feel good effect to the salaried class. Beyond that, I am not sure if a personal income tax rate reduction will boost the consumption in the short run which is what experts claim!  Nevertheless, as I have opined in the past, simplification and reduction of tax rates is essential.  This will also remove the peeve that there is now too much gap between the corporate and personal income tax rates!

One positive signal from the last few weeks is that the Government is listening.  In today’s world, any government of the day can choose to ignore the mainstream media. However, it cannot afford to ignore popular opinion which manifests in social media. As someone said, in India, we have as many economists as we have cricket experts! But the good part is, thanks to social media, apart from the secluded voice of the commentariat, there is an opening for “People like us” to give our opinions.

Ever since the tax cut announcements, there has been much discussion and debate as to whether it is right, whether it is sufficient, whether it is too little – too late, if it is pandering to corporates and so on. And if things can turn around quickly? With the festive season coming up in India, it is all about signalling and lifting the spirits and mood. When there is bad news which usually reaches us through the media, even if we are not directly connected to it, we all start talking about it, isn’t it? I refer to this as the economy suffering from “Headlines syndrome”! So similarly, when there is positive cheer emanating from even a single but important decision like this, it has a ripple effect. So, I hope this corporate tax cut move leads to such positive ripple effect in the coming days! And the answer to “Howdy Economy?” becomes loud and cheerful in the coming days!

Postscript:  In my earlier posts, I had said,

As a purely short term stimulus, any capacity building in manufacturing industry by way of new factories, expansion of plants,.. should be provided with tax relief”

And

With respect to taxation, “In simple terms, the mantra should be lower tax rates with no or very few genuine exemptions

Glad both these found resonance with the government and have been implemented!

Turning the GDP (Gross Disappointing Product) tide!

Many years ago on my visit to China, I found most of the newspapers there giving a lot of attention in their front pages to decline in GDP, tapering of FDI into China and other such economic issues. In a blog post that visit, I rued that in India, our media doesn’t still focus on economic Roti, Rozgaar issues but spend disproportionate amount of columns on mundane political news and views. For the past few months, it has been good to see in India too, the media at last waking up to the slow down blues in the economy.  For more than a year or so, the entire country was pre-occupied with the Modi re-election issue and everything else did not matter.

Since the re-election of Narendra Modi and his government that too with a majority better than last time, the euphoria and the resultant expectations have been very high.  However, the party has been cut short by the bad news coming in on the economic front, day in and day out. There was a great opportunity for this Government with a new face as the Finance minister to have seized the opportunity when she presented the Union budget on the 5th of July and fire the economy. The budget was a decent one but one that was devoid of Out of box, bold ideas which would set the economy on fire. In doing away with the brown brief case and opting for the bahi kaatha, Nirmala Sitharaman’s budget was a ritual breaker but, was not a path breaker! Hence, ever since the budget, there has been quite a few negative reactions as manifested in the tanking of the markets, depreciation of the rupee and a massive FPI pull out!

The initial reaction of the Government to these reactions were in expected lines that our economy was still resilient, one of the fastest growing and hence no need to panic. However soon enough, with bad news emerging on the Automotive sector first and then even on FMCG, the Government was forced into action and from then on we have been seeing a slew of measures, cabinet decisions and sops to revive the economy. Q1 GDP at 5% turned out to be the last straw.  Coinciding with the Q1 GDP results, the Government announced the merger of PSU Banks as a way forward in banking reforms. Economy was finally on top of the news cycle and the Government’s attention, Kashmir notwithstanding!

It was widely expected and hoped that some of the important initiatives of the Modi Sarkar in the 1st term like the thrust on Highways construction, massive investments in improving Railways infrastructure, improving air connectivity to the smaller towns, making electricity available to the last village and so on would start yielding results in terms of improving economic activity and fuel growth in the country. Added to this, Modi Sarkar has been constantly increasing outlays on MGNREGA in every budget. Why these measures have not started yielding results on the ground both in terms of economic growth and job creation is mysterious. It may be a good idea for the Chief Economic Advisor to come out with a White paper on the outcomes achieved for the massive outlays in Modi Sarkar 1.0.

In the back of all these, the question becomes, are the measures so far announced by the Government enough to resuscitate the economy? The reversal of some of the proposals in the budget are certainly welcome moves but those just contain the damage.  And the other measures like opening up of FDI and so on are necessary but not sufficient to get us back to where we were last year (8%) and then hit our dream goal of 10% GDP growth which increasingly is becoming a pipedream.

During Modi Sarkar 1.0, the Government leveraged well on the windfall it had from the crude prices and not passing on the entire benefit to the consumer to “manage” the economy with heavy public investments. The hope was that gradually the private investments will pick up once the sentiments change. But unfortunately, due to the NPA and the overall banking crises, it did not fire up the economy so much but, just kept the wheels of the economy going. Now, under the current circumstances however, continuing of public expenditure alone may not be sufficient. The recent red herring on the increasing debt of NHAI may in fact become a dampener here. For India as a country, the next few months are supposed to be very high on economic activity with the impending festival season. And the fact that the monsoons have been bountiful for most parts of the country notwithstanding the floods in some parts, there is still hope even for this year.

So, in order for the economy to fire up, ways and means have to be found for increasing private investments and individual spending/consumption. I am no economist but here are some thoughts:

To get private corporate investments going:

  • Modi Sarkar should bite the bullet and announce 100% FDI in Multi Brand Retail. Though India as a country missed the retail bus 10 years ago, it is still not late. Some of the global retail majors may not be as bullish today as they were a decade ago on India due to our policy flip flops and the current industry shift to E-Commerce. But still considering the country’s size and the potential it offers, India is still an exciting market for say specialised vertical retail stores. In announcing this, we should do away with the myriad sourcing conditions and allow the retail water to find its own level. Retail gives fillip to low end jobs, manufacturing industries as well as commercial real estate.
  • Copy the STPI (Software Technology Parks of India) strategy that helped in boosting the software industry in India in the 90s and come up with a similar framework for boosting Electronic hardware manufacturing in India. This will help India in becoming a preferred country for those who are looking at alternatives to China. Again we are late in this game and today Vietnam has emerged as an alternative to China for low cost manufacturing. But still considering the long term view, I believe we still have opportunities here.
  • Every Government recognises the potential of Tourism as an industry to provide jobs and improve economic growth. However, to unleash and unlock the true potential of India, we need massive capacity building in hotels, recreation facilities, connectivity and infrastructure. Government should provide time bound tax cuts for investments to private sector in this area to targeted locations in India which need infrastructural boost. The tax cuts must be linked to time bound completion of projects.
  • As a purely short term stimulus, any capacity building in manufacturing industry by way of new factories, expansion of plants,.. should be provided with tax relief.

To improve consumption and spending:

  • Holiday season is upon us. Provide relief on Income tax to individuals for money spent on holiday travel and stay in select locations in India which require boost on tourism (Uttaranchal, North East, Leh for example) with a cap of say Rs. 1 Lac. This will motivate public to take vacations and boost tourism in certain locations which have potential, decent infrastructure and connectivity but are untapped. Usually this has a spiral effect. When more people throng these places, automatically investments start pouring in for development.  For every 3 years, the locations can be changed in order to make it widely spread.
  • On the real estate front, today the supply is high and the demand low. This is mainly because the property rates are artificially pegged high and the home loans still high. This jinx needs to be broken. Though I have seen the Government announcing a slew of measures in the past few years, the housing market has not taken off. Considering the fact that the private real estate lobby is not going to cut prices ever, there is a need for the Government to intervene and disrupt the market. Like in countries like Singapore, Malaysia,.. Government must float either own companies or joint ventures to construct affordable housing in a massive scale and allot to citizens who do not own a single house in a transparent manner. The Government can offload its equity and then exit after say 20 years from these companies once the overarching objectives are reached. This will also disrupt the existing real estate industry and make it fall in line in terms of pricing and best practices, both of which are found wanting in the current scheme of things.

To revive the “animal spirits” in the Indian economy. Animal spirits are related to the points mentioned above i.e. both consumer and business confidence. I have put this separately as there are some low hanging fruits here which can be taken:

  • Sell Air India as of day before yesterday!
  • Get going on “Actual” disinvestment of Public Sector units already identified as non-strategic. Identify another Arun Shourie to make this happen in this term!
  • It is not enough to merge PSU Banks but to offload equity, get professional management and turn them to “HDFC Banks”!
  • Today many of the Government’s grand projects are stuck or going slow due to land acquisition issues. Identify the issues and fix them by bringing about the necessary changes in the Land bill!
  • Use the current crisis of job loss to build consensus around Labour reforms. Adopt the “GST council” approach for labour reforms. Today all state governments will eagerly come on board considering the pressure all states have on generating jobs.

As I write this blog, I am seeing that the Finance Minister is addressing a press conference. This is her 3rd one in the last 2 weeks. Glad to see the Government demonstrating the needed sensitivity to the economic situation and willingness to take steps. Our only urge is that instead of incremental small steps, we need big leaps.

Only that will ensure we turn the tide over Gross Disappointing Product and achieve real Gross Domestic Product rates quickly!