Saturday, December 15, 2007
Monday, February 19, 2007
Raining in inflation...
My guess is NO...specially the export bans...taking a systemic view of the problem...inflation is unavoidable with a consumption led growth...the sort of growth that we are experiencing...and reveling in. Unlike the chinese experience, a country with substantially higher savings and investments we are driving growth through consumption - driven largely by a distorted services economy and retail credit.
This phase of spiralling inflation has two distinct characteristics - unabated asset inflation and supply side constraints. Its the chicken and egg dilemma...what came first...asset inflation or supply constraints...unfortunately what we are witnessing is even more complicated...increased supply somehow refuses to upset the asset prices juggernaut as the asset prices are increasingly driven by a new global phenomenon - mispricing of risk.
This global mispricing of risk is what manifests itself into cross border liquidity, capital flows of hitherto unknown amounts, dare-devil takeovers of Goliaths by new world David's and an acyclical asset price increase across all asset categories - equity, bullion, real estate, commodities...
My guess is that there are a few important historical developments playing out and one phrase sums them all up - The World is Flat!!!
Communication, Technology, Globalization, integrated and sophisticated financial markets, accumulated expertise of private sector, a mature geo-political environment (terrorism and the odd military coup is par for the course now) - all these have led to an environment where all investment decisions are increasingly becoming financial decisions alone - the operational, legal and maket related issues can now be handled with near certainity. This is efficient markets at their best - all assets have a price - better still all assets almost guarantee liquidity. As business cycles become compressed and the policy reactions become more and more concerted the chances of an all round global hard landing have become remote. The evidence from the slowdown and recovery after 9/11 also suggests that a truly global world economy has far more depth and breadth today than ever to counter any disruption or cyclical downturn. All these factors combined significantly lower the risk of investors and hence repricing of assets is underway.
However asset inflation also drives up inflation in other sectors of the economy and thus potentially leads to 'runaway' inflation. No responsible government today can let inflation balloon as it hurts the real value of the nation's currency and its assets, investors may lose confidence, industry might find building capacities impossible, earnings on bonds and debt can turn negative and hence the savings in the economy may evaporate...All in all its a very very precarious situation for a growing economy to be in.
Higher interest rates for corporates and moderate interest rates for housing and allied sectors again is not an ideal solution. Investments by corporates should ideally be in productive assets and technology upgrades, exactly the sort of things that improve the supply side, increase efficiency and reduce pressure on constrained resources including labor. On the other hand pure asset inflation driven by speculation and non productive investment does little to improve supply, increase efficiencies or improve distribution of productive assets.
Some people argue and I agree, that stymying growth in the pretext of curtailing inflation is really not the solution especially for growing economies like ours. In the context of mature economies like the US or UK it may be feasible to work out a sustainable growth rate as their resource utilization, both natural and human is nearly 100% and factor productivity will be amongst the highest in the world. A phase of accelerated growth is thus likely to be followed by a slowdown - and if moderated responsibly enough by governments and central banks its unlikely to cause any major economic or social distress with various social security measures in place.
However for a growing economy like ours where a vast majority subsists at the peripheries of economic growth living mostly off urban effluents and a meagre rural output this strategy can stunt our overall economic potential. As a country we need to invest to make this growth structural rather than cyclical as we can not afford a cyclical downturn for years to come. The challenge is how to do that and the answer is also fairly fundamental. We can not overturn the logic of monetary economics but we can indeed look at areas where we are yet to catch up with the mature economies which form the basis of its models. These areas are essentially to augment the supply side and increase efficiency to make demand superfluous rather than constrict the demand forcibly. By focussing on such means that can delay the consumption by introducing another important step - investments - we can do a lot to make our growth story structural and sustainable.
By investing in technology to improve factor productivity and efficiency we can improve our total asset productivity as well and thus reduce demand for scarce assets. By curtailing budgetary deficit, reducing the size of the government, disinvestments and reducing non plan and revenue expenditures we can reduce money supply in the market without affecting interest rates through blunt measures like CRR and SLR. Even the capital expenditure by government if efficiently and scrupulously employed in infrastructure and technology upgradation will go a long way in breaking the cycle of immediate consumption and build supply side capacities to meet higher future demand without inflationary pressures. Unfortunately the government so far is pushing the wrong buttons - increasing subsidies, reducing duties, banning exports- just the sort of thing that preempts investment into capacity augmentation and efficiency improvements. Its time our governments bit the bullet and did the right thing however tough it may be. India today is at a cusp; a structural shift in its development needs more than just passive approval by the government. What we need is a massive revamp of the government sector; just as the private sector has responded to the so-called threat of liberalization and come out trumps, the government sector too needs reform, competitiveness and efficiency...time is running away...so is inflation.
Friday, February 16, 2007
Geriatric dementia...
Problem #1, what did I learn?
Its tough for me to answer or to make up an answer to that question because to be honest, I learnt nothing...nothing that can be attributed to either a single life changing instant or multiple exposures to life changing instants...learning to me is a continuous process - the alternative to acquired intelligence not intelligence itself - the means and not the ends - as is generally believed. Its this belief that makes me resent any attempt to practice, to perfect and to prepare. I had much rather 'evolve' a solution than to 'present' a practiced perfect answer because eventually its the epistemological process that renders itself to continuous adaptation, refinement and radical innovation, not the staid microwave dinner equivalent of what we have come to call as skills.
Problem #2, mistakes?
We all make mistakes, some more some less, guess I have made too many and I haven't learnt my lessons...The bigger problem is that accumulated experience is also like knowledge, and that I have chosen to ignore it, does not make me any less sentient of the possibities of superior outcomes had I chosen not to, if only in retrospect...which unfortunately is too long a sentence and also proves my initial hypothesis as fallacious...
Problem #3, cognitive empathy?
I am an idealist...I am a fatalist...I am a struggler...the former two predicate the latter and rightly so...I am always trying for the ideal while I am fully cognizant of the futility of the exercise...and yet I try...with the process being an end unto itself...hoping that dynamic progression would be much better than discrete states....
Unfortunately what this does is it alienates the inquisitor, particularly the diffident, non participatory, judgemental variety.
To be continued...still...
Friday, October 20, 2006
Thinking in Text
The paradox is that it is no longer the beginning it was intended to be, the intrigue is lost, that shadow in the background is too familiar. But I shall continue like always, I have great veneration for the fundamentals of mechanics (think physics) - the one in effect now is called Inertia.
I knew this guy, relatively speaking - a close friend of mine. He always surprised me with the sheer consistency of his certain, facile hand. I was the only one who was surprised though. "Everything (used in a particularly general way to include the universe of inanimate objects of interest to all animate subjects including themselves)" else was never surprised, they just knew. But what surprised me further was that 'he' also knew!
Prolonged exposure to such surprises is not healthy (anyone from WHO?) because then you attempt to unsuccessfully rationalize and eventually philosophize (comes naturally after you have been unsuccessful). As a result you loose respect for surprises. I concluded from my initial intellections that the non uniform experience of 'surprise' had its genesis in what I started calling 'social adjustment'. By implication that friend of mine was socially well adjusted and I was not. Thats why he is so 'now' and I am so 'nowhere' ...explains everything...well almost.
A new set of observations both temporally as well as spatially displaced, though the subject and the control(that's me) were still the same, revived my experiment. The observations revealed an interesting facet - a aggravated stage of 'social ill adjustment' which I call 'anthropological ill adjustment'. Indeed social adjustment being an evolutionary process rather than a state can be actively replicated across geographies, cultures or generations. Be it the contemporary or the classic, the poetic or the prosaic, the ideals or the mores, politics or economics, individualism or collectivism, a socially well adjusted individual draws his understanding and expectations from cliches and enriches them just a trifle, to be simultaneously exoteric and aspirational.
The 'anthropologically ill adjusted' is the other extreme characterized by conscious, willful dissonance which precludes even accidental alignment with micro niches of all possible combinations of anthropological variables.
Saturday, September 09, 2006
If not you, who? And if not now, when?
(http://www.dzogchen.org)
Letting go, letting be is not an easy path - it demands thought, effort, and discipline. but you can not find yourself without losing yourself, questioning the very assumptions of your being.
Its not contrary to Emerson's prescription of "spontaneous impression with good-humored inflexibility" infact you can only feel detached when you can "trust yourself — not your petty self, but that Self you touch in blissful solitude on quiet walks in the mountains, that Self you feel when you are at your highest best".
The economic social being, isn't it all a plot to make us conform to a certain normative behavior that makes us all productive or shall I say predictable. We can not let go as expectations fetter us, weigh us down - "I am what I consume" and we continue leaping through this illusory circus ring - "a rat on a wheel".
Why am I always yearning for that utopian reverie or chiselling (in every sense of the word) a distant memory? Why am I always trying? Why am I giving up? It's such a waste of time. The best if it ever happened was when everything just came together - without planning and without effort - like 'magic' really. I have always been atleast dissappointed if not disgusted with my efforts to conform, to make things happen, to create a 'real' me for the 'real' world, trying to put an 'h' before a 'w' but was it at all necessary. I wonder if its really half as profound or just a classical 'have vs have not' arguement, the property in question being the proverbial 'killer instinct' or the infinitely more Gandhian variety - 'initiative'.
Guess my options are between eternally trying to "fit in" or "Be the creative force on the crest of the mighty wave of this very instant".
Saturday, April 01, 2006
Apartheid in technicolor
Government in absentia
Law in abeyance
the digital divide
shades of brown
Monday, February 27, 2006
Are we too balanced?
Sunday, February 26, 2006
Metropolished
Hindustan Times
February 24, 2006
About a dozen years ago, when the Supreme Court and various high courts began to order the executive branch of government to implement existing laws, most Indians believed that they had at last found a means of enforcing accountability upon a bureaucracy that had become a law unto itself. A few of us felt a twinge of unease because we were achieving all this by allowing the judiciary to cross the line between it and the executive. But we suppressed it because in this case the end seemed to justify the means.
Recent developments have shown, however, that the unease we felt in the late Nineties was not unfounded. In the last few years, the judiciary has crossed that line with increasing frequency. As it has done so, the drawbacks of trying to govern a country by judicial fiat instead of through the executive have become more and more apparent. Nothing has brought this home more forcefully than the spate of orders passed by the Supreme Court and the Delhi High Court to bring all urban development within the capital strictly back within the Master Plan. Beginning with the Supreme Court’s order to demolish all unauthorised construction, it has extended to the destruction of shopping complexes in the Lal Dora areas (the original villages that had been left out of the Master Plan), to a ban on all commercial activities in residential districts and, most recently, to running banquet halls and marriage gardens in residential areas and in farmhouses without a 60-feet wide road adjoining them.
The poor at the bottom of the services pyramid live in illegal shanty towns in order to be close to their places of work. These are the people whom an earlier court order brutally evicted a year ago. But in the past decade and a half, as the middle-class has exploded, a new category of service sector establishments has come into being to cater to its leisure and lifestyle needs. This is what the shopping complexes, the strips of shops along the Mehrauli-Gurgaon road, the boutiques, restaurants and small offices in residential and Lal Dora areas have been doing. Together, they have turned Delhi from the joyless, prohibition and permit-ridden city it was 30 years ago, into the vibrant and exciting metropolis that it is today. Tearing all this down will not only destroy close to a million jobs and a large part of the nation’s capital: it will also tear the soul out of the city.
Read the complete article http://www.hindustantimes.com/news/181_1634876,00120001.htm
Tuesday, January 03, 2006
Whose city is it anyway?
A person who has purchased an apartment constructed in flagrant violation of all building laws cannot insist on being served with a prior notice of demolition by the authorities, the Delhi High Court has ruled.
Even as the city crumbles under the bulldozing away of all principles of legal jurisprudence, the hapless victims of sheer abdication of civic planning and enforcement are resigned to such cavalier callousness as spitballed in this observation by the esteemed courts - "those who have decided to ignore the law can scarcely be heard to claim that natural justice has been violated by the authorities".
What kind of civil society would entrust its arbiters of justice with branding citizens as criminals after depriving them of their employment of last resorts? How many of the residents of this city can stake their rightful claim to the utopian pristine state that they foolishly hope to create from this necrosis? Will the malady be cured forever by these sporadic assertions of law and urban governance? Will the deliberate bleeding away of the indigenous means of livelihood of the city and its substitution by transplants of speculative capital sustain the "healthier lifestyles" of its plaining denizens?
The courts in their judicial adventurism have chosen to ignore the genesis of the problem- the artificial shortages manufactured through procedural bottlenecks which are in abject contravention of principles of urban planning.
The western concepts of urban planning that envisage suburban areas with silos of commercial and residential development are unwittingly being thrust upon an unwilling city. The colossal failure of the exercise of urban planning has erupted as excrescences of so-called illegal constructions or unauthorized land use. However to wield the scalpel to cure the city of this acne can not be condoned as a wise decision.
Delhi seems like an orphaned city with no sense of direction and no development plans in place. In the name of developmental plans Delhi has a rather sorry master plan 1971 that has been mutilated beyond recognition even by the government authorities. The courts have assumed the responsibility of "sanitizing" the city on the premise of such antediluvian laws that any success in achieving their targets would set the city back by 30 years.
The city is in dire need of reconstruction and civic authorities need to invest both in terms of planning and action to impart a positive direction to such efforts. So far their efforts have focused on compliance with the orders of powers that be. The apathy of the administrative machinery and its corrupt inefficiency is once again getting off the hook while judicial brutality is skewering the economy of the city with this over simplified exercise in law enforcement and urban deconstruction.
Wednesday, October 26, 2005
Make your own road…
It’s a decision making alternative of defensive investments in a bear market…
You know you will lose money but you had rather loose less, reconciled to the inevitability of loss…corrosion rather. You cede that its not within your capabilities to stem the rot. Its not really giving up but heavily hedged bravado (the contradiction is apparent in the choice of words). You know you will lose money but you will still be game and play but play for far lesser stakes.
These lines by D.H.Lawrence never rang so true in my years and I quote, “Sufficient unto the day is the evil thereof, sufficient unto the moment is the appearance of reality”.
Often, time or rather lapsed time adds a transcendental perspective to the mechanism of making automatic choices that we have grown to call self confidence. Its in the words of Jorge Luis Borges "that bold and legitimate certainty with which we assert our knowledge of a city, without ever having been rewarded with the intimacy of all the many streets it includes".
Time is a rather strange economic commodity, while it is scarce and its economic benefit is incontrovertible but it does not have a spot market only “futures and options”. This moment has just passed. Hope is now reality…hard as concrete. If you haven’t built it well…you no longer have the same choices…its just the next big thing…the dream is now closer to a utopia ..the mirage is just one more step…
You are still the same, only weaker for your age, wiser for your mistakes and humbler for your understanding. You are still at the same crossroad, its just that the world has changed and there is no road less traveled.
Friday, October 21, 2005
Judicial activism - who wins?
The basic structure doctrine, a constitutional serendipity and bench discovery, remained vague, vagarious and jurisprudentially jejune, being the uninhibited product of judicial ipse dixits. Indira Gandhi- in her socialistic legislative populism or finer vision – well meaning nationalization schemes and public sector progressivism that would suffer judgocratic victimization, was seared by possible authoritarian anti-socialism of some senior lordships, now armed with an ill defined, even dubious power to strike down every unorthodox legislative measure, using the arcane basic structure ‘V weapon’, a curial invention no one except the Indian Supreme Court could reveal or use. If the rule of law be vulnerable to judicial ukase, statutory exercises could become the vanishing point of jurisprudence.
In a tragic obiter dictum the New World Economic Order has re-colonized India and compliant governments and other victims of multinational corporations have in the words of Nobel prize winner and firmer world bank policy maker Stiglitz, promoted ‘briberisation’ and demolished the socialist-democratic spirit of the constitution embodied in the swadeshi and self reliant institutions that are undergoing a toxic, traumatic import invasion. The role of the judiciary has aggravated the situation and made the right to life and livelihood an illusion for the masses. In short the court has forgotten the judicial imperative of upholding the socialistic democratic character of our republic. The Indian judiciary’s social philosophy is no exception and power without challenges and accountability tends to make this instrument authoritarian. A non negotiable monopoly of interpretative jurisdiction truncates parliamentary democracy. Arbitrary power is a menace to human rights. No executive can function; no legislature can debate for fear that a writ will undo everything, even if no case pends challenging the offending action allergic to the orthodoxy or class anathema of their ‘Lordships’. The judiciary holds with none to question or correct their pronouncements. When the fundamental law of the land had secret dimensions the highest court incarnates an imperium in robed authority. It’s a rather unhappy imbroglio.
Read the complete article by V.R. Krishna Iyer
Sunday, October 02, 2005
On a wing and a prayer...
God's Own Country... TRESSPASSERS WILL BE PROSECUTED. |
It is what alcoholics call 'Moment of Clarity'.
-Jules Winnfield (Samuel L Jackson in Pulp Fiction)
The inevitable disillusionment with the charades of facile ambiguity has finally sunk in. The predicament is too intractable to be resurrected by sporadic intervention. I have not done enough but then I am a man of limited reserves. With my constrained art and expression it is impossible to converse with the normative super rationality of today's milieu.
The dialectic of my sputters too is confused, incoherent and indefensible while the succinct reality that immersed my hubris, still rests – true, calm, incontrovertible...crystal. I ventured into the recesses of its semantics, floundering for life, grasping for air and even as my cadaver resurfaced the reality still rests – true, calm, incontrovertible...crystal. My exertions have not even caused a ripple and I have ended up as flotsam. Life relents once you concede. I should have accepted this vegetative state and avoided the embarrassment of dissonance.
Thursday, September 29, 2005
Ab initio...
The purpose of obsession -- eccentricity or perhaps perfection or may be flight from the ubiquitous monstrosity of reality.
Either way it is the sort of escapist knee jerk reaction to life's monotony that’s bound leave you gasping for breath, exhausted, drained and disillusioned…
Fatalistic cession to providence is indeed much more rewarding and conveninent than to exhort every sinew to deprive itself of its vitality and exert it in one last heave to salvage your redemption - your nemesis.
Its like striving for Glory in Death - euthanasia or suicide not being an option – you will not live to see it.
And every moment of your living conciousness , you will rue your survival. Every moment trying to sap that final life breath in trying to earn a good death.
Tuesday, September 27, 2005
Please hear what I am not saying...
Don't be fooled by me. Don't be fooled by the face I wear. For I wear a mask, I wear a thousand masks, masks that I am afraid to take off, and none of them are me. Pretending is an art that is second nature with me, but don't be fooled, for God's sake don't be fooled. I give you the impression that I'm secure, that all is sunny and unruffled with me, within me as well as without, that confidence is my name and coolness my game, that the water's calm and I'm in command, and that I need no one. But don't believe me, please.
My surface may seem smooth, but my surface is my mask, my ever-warying ever-concealing mask. Beneath lies no smugness, no complacence. Beneath dwells the real me in confusion, in fear, in aloneness. But I hide this. I don't want anybody to know it. I panic at the thought of my weakness and fear being exposed. That's why I frantically create a mask to hide behind, a nonchalant, sophisticated facade, to help me pretend, to shield me from the glance that knows. But such a glance is precisely my salvation. My only salvation, and I know it. That is if it is followed by acceptance, if it is followed by love. It's the only thing that liberates me, from myself, from my own self-built prison walls, from barriers that I so painstakingly erect.
It's the only thing that will assure me of what I can't assure myself, that I'm really worth something. But I don't tell you this. I don't dare. I'm afraid to. I'm afraid you'll think less of me, that you'll laugh, and your laugh would kill me. I'm afraid that deep down I'm nothing, that I'm just no good, and that you will see this and reject me. So I play the game, my desperate pretending game, with a facade of assurance without, and a trembling child within.
And so begins the parade of masks, and my life becomes a front. I idly chatter to you in the suave tones of surface talk. I tell you everything that is really nothing. And nothing of what is everything, of what is crying within me. So when I'm going through my routine do not be fooled by what I'm saying. Please listen carefully and try to hear what I'm not saying, what I'd like to be able to say, what for survival I need to say, but what I can't say. I dislike hiding. Honestly. I dislike the superficial game I'm playing, the superficial, phony game. I'd really like to be genuine and spontaneous, and me, but you've got to help me.
You've got to hold out your hand even when that's the last thing I seem to want, or need. Only you can wipe away from my eyes the blank stare of the breathing dead. Only you can call me into aliveness. Each time you're kind, and gentle, and encouraging, each time you try to understand because you really care, my heart begins to grow wings, very feeble wings, but wings. With your sensitivity and empathy, and your power to understanding, you can breathe life into me. I want you to know that.
I want you to know how important you are to me, how you can be a co-creator of the person that is me if you choose to. Please choose to. You alone can break down the wall behind which I tremble. You alone can release me from my shadow-world of panic and uncertainty, from my lonely prison. So do no pass me by. It will not be easy for you. A long conviction of worthlessness builds strong walls. The nearer you approach me, the blinder I strike back. I fight against the very thing that I cry out for. But I am told that love is stronger than strong walls, and in this lies my hope ... my only hope.
Please try to beat down those walls with firm hands, but with gentle hands, for a child is very sensitive. Who am I you may wonder? I am someone you know very well. For I am every man and I am every woman you meet.
Saturday, September 24, 2005
We the people...
The Promise of political empowerment
The discourse on political empowerment as an instrument of radical social transformation is rooted in the contradiction between a hierarchical social order and a democratic political system. In the 1930s, under the British rule, Jawaharlal Nehru described India's situation as: "A servile state, with its splendid strength caged up, hardly daring to breathe freely, governed by strangers from afar; her people poor beyond compare; short-lived and incapable of resisting disease and epidemic; illiteracy rampant; vast areas devoid of all sanitary or medical provision; unemployment on a prodigious scale, both among the middle classes and the masses."
An overwhelming concern for poverty and human deprivations, the focus on freedoms, expansion and equal distribution of opportunities are fundamental to development. In building the edifice of the new India, our constitution makers relied on time-tested principles of democratic governance and statecraft. However, India’s antiquated and ponderous social hierarchy is markedly at odds with its present political system. Democracy, according to the classic formula, is government of the people, by the people, for the people. The experience of Indian democracy in the last 50 years has brought into sharp relief a feature of modern democracies everywhere: the gap between formal political participation and effective political control. Universal adult franchise came as a revolutionary turn in the country’s history. The ordinary people of India – rich and poor, rural and urban, Brahmins and harijans, Hindus and Muslims, men and women – have by now voted governments into power, and voted them out of power.
Empowerment has three basic elements: civil, political and social. The civil element is composed of the rights necessary for individual freedom; the political element consists of the right to participate in politics through representative institutions; and the social element comprises of certain basic rights to economic welfare and social security. The constitution of India attempted to address all these by instituting fundamental rights, directive principles of state policy and democracy as the building blocks of the new republic.
The preamble of the Indian constitution evinces India as a sovereign, socialist, secular, democratic republic aiming to secure to all its citizens social, economic and political justice; liberty of thought, expression, belief, faith and worship; equality of status and of opportunity; and to promote among them all fraternity assuring the dignity of the individual and the unity and integrity of the nation. Barring some ambiguities on issues like reservations, uniform civil code etc where community sentiments are accorded more legitimacy than the spirit of the constitution, the Indian constitution is a stellar enterprise in modern nation building, exceeding its predecessors in terms of constitutional guarantees of citizen’s fundamental rights, universal adult franchise and egalitarian development. The constitution-makers attempted to reconcile individual liberty with the state's interventionist role in transforming society. The doctrine of reasonable restrictions and the provision for judicial review effectively protected citizens from the traditional tyranny and depredations of the Indian state. At the same time, the Directive Principles of State Policy were enunciated and they were declared to be fundamental in the governance of the country and a duty was cast upon the state to apply these principles in making laws. The Directive Principles attempted to give expression to the aspirations of the people and to the ideals of the freedom struggle through control, regulation and reform of the Indian Society.
Moving beyond the constitution, all institutions of the state and every major policy and plan document have expressed such a perspective and concern. The First Five Year Plan (1951-56) stated, "The central objective of planning in India is to raise the standard of living of the people and to open them opportunities for a richer and more varied life." Successive five-year plans continued to emphasize poverty eradication and the attainment of economic equality and social justice as key objectives. Given such a strong concern for human development and a promise to eliminate the worst forms of human deprivations, what has been India's performance on these fronts?
Indian democracy – need to introspect?
Compared with other post-colonial political systems India’s achievement is not insignificant. This cannot disguise serious shortcomings with regard to the quality of representative democracy, the accountability of the institutions of the state to elected representatives or the protection of civil liberties in India.
The caustic experience of delivering the nascent nation from the throes of partition has led to a quasi-federal democracy where the federal dialogue with the states is often predicated by the Union Government's administrative and policy-level decisions. Article 356, Imposition of emergency, arbitrary central discretion in devolution of funds and flagging Panchayati Raj implementations by successive state governments only point to this deeply feudal polity. Democracies should continue to democratize; else given the elite bias of virtually all newly formed democracies they will become majoritarian. India’s political process is laboring towards the ideal of not only being able to conduct free and fair elections, but also continuously democratizing the political sphere with competitive mobilizations. This process is unfolding largely at the regional level, and may well have been strengthened by the recent electoral outcome.
Over the past fifteen years, groups of low status in the traditional social order have increased their political role substantially, forming parties based upon lower-caste identity that in some regions capture large portions of the popular vote and form governments at the state level. Some, though not all, of these parties have now found a place at the apex of Indian politics as partners in the United Progressive Alliance government that has assumed power in New Delhi under the leadership of Prime Minister Manmohan Singh. The new class of leaders who have come up as a result of the churn of electoral politics have emerged from the grassroots, perfected the art of governance out-witting and outmaneuvering the sophisticated class of urban leaders.
Consider Mr. Laloo Prasad Yadav, RJD President, union minister for Railways. He has not only graduated in politics but has also virtually outfoxed the upper caste leaders in the power game in Bihar and now at the centre. As Lord Acton observed so wisely, power tends to corrupt, and absolute power corrupts absolutely. He was very much involved in the fodder scam and all other malpractices, characteristic of politicians in the country. Take the case of former UP Chief Minister Mayawati, a Harijan leader. She symbolizes the new hope of the Scheduled Castes, the Scheduled Tribes and other backward classes. Her deification is a political paradox that thrives on contradictions and sharp variations in socio-economic gaps of the poor and the rich and the haves and the have-nots. Current chief minister of Uttar Pradesh and former defense minister, Samajwadi Party (SP) leader, Mulayam Singh is from the non-elite Yadav caste. In the late 1970s, Jagjivan Ram, who hailed from a caste even lower in the traditional status hierarchy than the Yadavs, held the office of the prime ministers. But Jagjivan Ram had spent almost his entire career within the Congress Party - a powerful leader, to be sure, but still largely a token, subjected to the discipline and constraints of a party dominated by upper-caste bosses and an ideology hostile to lower-caste militancy. The crucial difference between then and now is that Mulayam Singh Yadav, heads a party explicitly devoted to furthering the interests of what in Indian political (and juridical) parlance are known as the “other backward castes” (OBCs), groups not quite as oppressed as the ex-untouchable, or Dalit, castes, but underprivileged nonetheless. The SP and other parties of its ilk do not want mere representation. They want power and the spoils of office. Possessed of impressive grassroots organizations - and in some regions as much “muscle”, if not money, as the main national players - they are not only willing but also able to withdraw support to any coalition partner that fails to deliver on its promises. They are placing additional demands on a political system, and an economy, already seen as suffering from “demand-overload”. Indeed, the riddle of democracy, in India as elsewhere, is not simply whether democracy can generate continued democratization, but whether democracy itself can survive democratization.
Noted economist and former US Ambassador to India, Prof John Kenneth Galbraith, once dubbed India as a functioning anarchy. Discipline is the antithesis of what is rightly known as the world's largest democracy. All the same, Indian democracy moves on merrily. India’s third “hung parliament” in a row signifies more than a political realignment taking place in party politics. Not of India as a unified political entity or apparatus of administration, but of the social bases of Indian politics. Democracy has taken deep roots as people begin to assert themselves. The symbolic assertion is evident in the dynamic realignment of social-political equations in each general election.
Changes have also taken place in the social sphere - with affirmative action for disadvantaged communities, with the weakening of untouchability and caste discrimination, and with women enjoying by and large more freedoms than ever before. Between 1951 and 1996, per capita income more than doubled, food grain production increased fourfold, and the index of industrial production went up 15 times. Still some 36% of the country's population lives below the poverty line - defined as access to minimum calories needed for healthy living. The country has achieved self-sufficiency in food grain production, it has built up a good safety stock of food grains, and famines have been virtually eliminated. Life expectancy nearly doubled to 61 years and infant mortality was halved to 74 deaths per 1,000 live births during 1951-95. Despite the narrowing of gender gaps along several fronts, India is one of the few countries where there are fewer women than men - 927 females per 1000 males - a reflection of systematic deprivation and strong anti-female bias that pervades society. India today remains a country of stark contrasts and striking disparities. Some states and districts of India report levels of social advancement similar to leading industrialized countries. Other parts of India report achievement levels that are worse than the average of the poorest countries in the world. While only 24 countries had a higher rate of infant mortality than Orissa. Less than 15% of adult women are illiterate in Kerala, 75% or more women are illiterate in Bihar, Rajasthan and Uttar Pradesh. The total fertility rate is 2 or less in Kerala, Tamil Nadu and Goa. It is however 4 or more in Bihar, Haryana, Madhya Pradesh, Rajasthan, and Uttar Pradesh. If all of India was to have Kerala's birth and child death rates, there would be 10 million fewer births and 1.5 million fewer infant deaths in the country every year - and a dramatic reduction in population growth with 13 million fewer births. A computation of the Gender-related Development Index (GDI) for Indian states reveals not only the low levels of human development and the extent of gender inequalities within India, but more importantly, it provides a measure of how badly Indian states are doing vis-à-vis other nations of the world.
At the top of the list of Indian states is Kerala with a GDI value of 0.597. There are only 13 countries in the world with lower GDI values than Bihar and Uttar Pradesh. Twice as many people live in Uttar Pradesh and Bihar (combined population of 225 million in 1991) in such abysmal conditions of human deprivation than in the 13 countries that had lower GDI values. Similarly, disparities exist between and within communities in India. For instance, communities classified as belonging to Scheduled Castes and Scheduled Tribes have significantly lower literacy and higher child mortality rates than the rest of the population.
Besides income poverty various other forms of human deprivation are loud and visible - child labor, illiteracy, damaged environments. Others are largely silent but visible - caste discrimination, discrimination against women and girls, and child prostitution. Different degrees of power are sustained and perpetuated through social divisions such as gender, age, caste, class, ethnicity, and race and through institutions such as the family, religion, education, media, the law, etc. The economic, political, legal and judicial institutions and structures set up and mediated by the state tend to reinforce the dominant ideology and the power of the dominant groups within it, even though their stated objectives and policies may be superficially egalitarian.
Perhaps the most serious fault of parliamentary democracy, from the point of view of democracy itself, is its inherent tendency toward centralism. The local bodies that may exist have (a) little self-government powers, and (b) no direct or indirect influence on the nation state. A natural outcome of centralization of power and administration is bureaucracy. Collusion between those who are responsible for performance and those who are charged with their oversight, arbitrary political control and asymmetry of information, prevalence of corruption are among the factors that have made bureaucracy the albatross around the neck. Governance has been a major casualty in this process. Indian bureaucracy has notoriously resisted or blunted such public accountability measures as the right to information act.
We are often confronted with another serious defect of parliamentary democracy – demagoguery. Hardly any issue of public policy is presented to the people in its true light; partisan demagoguery distorts everything. The ever-rising expectations on account of irresponsible rhetoric and competitive populism, satellite television, breakdown of rule of law and public order, rising political and social conflicts on account of rapid and uneven growth of population, and the death of ideology and conversion of political parties into cynical instruments of power game with no other higher goals - all these mandate a fundamental change in our governance.
The Challenge
A balance is needed between economic growth and an expansion of social opportunities. A balance is needed between the assurance of economic rights and political rights. A balance is needed between expansion of physical infrastructure and basic social infrastructure.
The priority has to shift to basic education, to preventive and preemptive health care, to assuring basic economic security and livelihoods. The state in India often achieves what it sets out to do. For example, the state has shown dynamism in reducing controls, liberalizing the economy, and opening up the economy. The recent Constitutional amendment to ensure women's participation in local governments displays an extremely progressive and proactive face. On the other hand, the state's effort at abolishing child labor, preventing child prostitution, and until recently, addressing the problem of AIDS reveals shocking recalcitrance. Similarly, its unwillingness to make primary education compulsory, despite the affirmation in the Constitution of India, reveals inexplicable reluctance.
Opportunities must be created and expanded for women to participate more fully in economic and political decision-making. The human development experience from Kerala and Manipur suggest that society's well being improves when women enjoy greater freedoms - economic, social and political. The overall gains to society increase many times when men and women contribute equally. However, to achieve this, changes are required in the way people think and behave, in the way society perceives the role and contribution of women.
Economic growth has to be participatory. First, the official stated policies for poverty eradication reflect human development priorities. Opening up democratic participation is. This is not just through local governments but also through people's organizations, and in particular women's groups that are frequently organized around credit, economic activities and social empowerment. The pressure to pursue state minimalism is leading to an abdication of state responsibilities - as the pressure to privatize is beginning to affect people's access to basic health and education.
Mahatma Gandhi had remarked in Confessions of Faith: "India's salvation consists in unlearning what she has learned during the past fifty years”. Dramatic changes are now required in thinking, in living, and in cultivating a genuine public spirit. While the state can not abdicate its role in the name of participation, excessive reliance on the state has not worked so far. India needs sustained public action like the "Janaagraha", involving civic groups in Bangalore to create rudimentary public works budgets for their areas by putting pressure on the elected representatives, to reaffirm its human development priorities.