“Patronised, condescended to and often robbed by a state whose minions at the interface of poverty are brutally predatory and criminal”-Mantra over 1,

Percy S Mistry had two insightful articles in the Financial Express yesterday and day before yesterday. Its interesting bites but nothing new for liberals who have been arguing all these things ever since independence but at the same time it is worth to reminding people, but you know that become a norm now when the Indian society accept an idea it will be delayed or denied for long let’s face it.

From first article titled “How to change the country in 1700 days-I”

• “America, Europe, Japan, Singapore, Korea and China have clocks and watches. But India just has time—all the time in the world!
• It is taken for granted in UPA-2 officialdom that the Indian boat cannot be rocked or be allowed to sail at more than 2-3 knots. It might capsize. This is conveniently perceived fragility. India is a robust, resilient and adaptable country. It is not shaken or destabilised easily. It hungers for more rapid change. The alleged fragility that is a perennial excuse for going slow on reforms is unacceptable to India’s impatient young globalised population. The real reasons for slowing reform down are different.
• In this day and age it is impossible to assert rationally that the Indian state has to own Air India, BSNL, MTNL, Coal India, GAIL, SAIL, banks, insurance companies and a plethora of other PSUs to serve the public interest. These could all be run better by private domestic and foreign shareholders and managers (not just the politically connected). Then they would make fewer demands on the exchequer. More likely they would contribute far more to it by way of taxes on profits. Their privatisation would result in massively increased inward foreign investment. They would become far more efficient. Some would be made extinct. But in total such reforms would, for example, accelerate broadband and financial services penetration and provide far better services to the public and especially to the poor. Moreover, their sale would enable the Indian state to reduce its burgeoning public debt that is becoming perilous. Contrary to UPA leadership opinion, the crisis of 2008 does not prove otherwise. We lost a decade learning the wrong lessons after the Asian crisis of 1997-2000 and pulled our horns in at the wrong time. We may repeat that colossal mistake yet again.
• Some PSU outfits like Air India are buckets with no bottom into which money must keep being poured. The airline flies more for the convenience of its ministry, staff, and political owners than for the travelling public. It is overstaffed and uncompetitive. It is no longer needed. It would be better off being run by Tata, Mallya, Goyal or Branson. Must the state keep pouring money into it ostensibly to protect the interests of the public and the poor? The contention is laughable. Those are the two interests most compromised by state ownership, management and control. In India it is a mistake to equate public ownership with public interest. What history has shown with remarkable clarity is that public ownership in India means taking care of the private interests of those elected as well as those hired professionally to govern or to run and work in PSUs. It does not benefit the governed. The public does not even figure in their thoughts except as a nuisance.”

From the second article titled “How to change the country in 1700 days-II”

Equally interesting and worth to read with understandings some bites here:

• “The history of post-independence India makes it clear that the state’s involvement in PSUs—through the misguided Nehruvian policy of capturing the ‘commanding heights’ followed by the even more misguided policy of entrenching a state-dominated financial system—has led to an egregious waste of resources. It resulted in the proverbial Indian socialist rate of growth of 0% per capita before reforms began in earnest. Sadly it has also contributed to the progressive erosion of the Indian state’s capacity to govern properly. A secondary function of government, legitimised by questionable Fabian economics of the mid-20th century, which most of our present generation of leaders were weaned on, has corrupted and vitiated the primary one.
• To his credit, Rajiv Gandhi saw that the choices made by his ancestors had led India to a dead end. In India, of course, it is never acknowledged that anyone in power could possibly make the wrong decision or choice. The textbooks always attempt to rationalise such choices as the best ones in their circumstances and time. We need to break that absurd habit. Rajiv began changing that state of affairs in 1985. That was when he beguiled some of India’s best and brightest to re-migrate from Washington, DC to New Delhi. Surely it is in the interests of those who want to protect any Nehru-Gandhi legacy to continue on the path Rajiv paved to reform, rather than glorify the unjustifiable by lauding his forbears’ woeful lack of economic wisdom.
• f India were Singapore such arguments might not hold. One would be hard pressed to argue that Singapore Airlines or DBS should be privatised. They are run better than most of their private counterparts worldwide. But like it or not Singapore is a corporate state. That small island country is run as if it aspires to be the most efficient transnational conglomerate on earth. Standards of governance in Singapore are on a different planet. The likelihood of India emulating those standards in conscionable future, given the nature of its politics and the proclivities of its bureaucracy, is remote. So ideology is not the issue. Pragmatism is. India needs to deploy its resources as efficiently as possible. Right now it is not doing so. And to progress and grow at 9-10% it must.
• The public and the poor will benefit more by the extended activities of a private sector encouraged to profit from the bottom of CK Prahalad’s pyramid; far more than being patronised, condescended to and often robbed by a state whose minions at the interface of poverty are brutally predatory and criminal.
• The Indian state has had 63 years to deal decisively with poverty. The garibi hatao slogan was in vogue in the 1970s. So was The Emergency. Yet what the state has actually done is aggravate, exacerbate and perpetuate poverty. It has certainly not alleviated it. Far too many politicians responsible for running the state in India have engorged and enriched themselves at the expense of the poor. Almost everyone in Indian politics has assets grossly disproportionate to known and declared sources of income despite laws to the contrary. In many instances their submissions to the Election Commission on their net worth are pure fiction posing as unbelievable fact. The exceptions could be counted on one’s fingers and toes. Their championing state intervention in the name of the poor is rank hypocrisy to ensure that their own private coffers never stop overflowing. For that reason if no other the legitimacy of state ownership of anything other than good governance needs to be looked at askance by all Indians.
• Inevitably, the type of reforms that India needs will transform the role of the state from its current default setting of ‘command-and-control’ over every aspect of Indian life. Such reforms must transform and cure the multiple personality disorder that the psyche of the confused and overstretched Indian state so obviously suffers from.
• It is not that the state and its apparatus are inherently malign or incompetent. Often, it is to the contrary. Some of the most capable people on earth are in the IAS. Many (but not all) managers of PSUs and PSU banks could hold their own in managing any equivalent enterprise anywhere. But those are exceptions drowned in an ocean of mediocrity enforced by public rules on recruitment and quotas. Unfortunately the system for which they work converts their inputs into some rather ridiculous outcomes.”