Interesting reading

• "The most profound changes in modern Indian society have come not of good intentions, but through market forces, like the steep fall in the price of mobile handsets and call rates. It is in this way that greed is good."

• "It is well known that most Muslim businessmen are concentrated in small, medium and micro enterprises. While their share in the overall population is 9%, their share in SMEs is proportionately far larger at about 22%. Today Muslims in Gujarat don’t face any hassles or discrimination in getting government clearances when they want to set up enterprises in Gujarat. Otherwise Muslims could not have prospered as they have. Modi has a simple formula. All are equal before law. Take your rights as citizens. Don’t ask for this or that because you are Hindu or Muslim, or on the basis of caste or community."

• "My earlier experience of covering various riots as well as conflict situations in Kashmir and Punjab had taught me that media reports cannot be trusted enough to take a definitive stand on such issues since they are often coloured by the ideological prism used by the writer.  Therefore, I refrained from making statements on Gujarat."

• "But if these do not exist 65 years after India won freedom, then it is almost entirely because of an educational licence-quota-permit raj. In keeping with the socialist mindset of free India's early decades, we instituted a system that gave officials enormous powers to interfere in education in a manner that benefited only them. Inspectors can make a lot of money out of their interventions and very rarely is their meddling designed to improve standards of learning."

The forgotten subject

Concluding paras from my latest column in Pragati:

• "Economist Narendra Jadhav once opined that the widespread ignorance of some of the Indian economic thoughts is because of the “intellectual slavery of the Indian society”. The future direction of the history of Indian economic thought depends on how open minded economists broaden the logical thinking with sound reasoning.
• Excluding original contributions made by our own thinkers and economists is unethical and would result in collective failure to draw the right lessons from our antiquity, which is detrimental to the development of the discipline itself. The dynamic political economy of today needs many of the economic thoughts that were propounded by our early nation builders and thinkers to set this nation straight, again. Time will tell us how we move from here."

Key issue and solution

"If we raise the standards of outcomes of our schooling process while also creating a larger environment favouring skilling, certification of skilling, and job incentives for skills, we will have created a wide base for skilling our population with a strong pull. It is on this base that we can build new sustainable institutions and processes for technical and vocational training." More here.

Must read articles

From Dr Ashok V Desai article in The Telegraph. A bit from his article:

• "This is the kind of uneducated point-scoring school kids indulge in. Growth is not an instantaneous function of who is in government. It is a process with leads and lags. The low growth rates under the BJP rule were partly due to a slowdown, which could be attributed to industrial overcapacity resulting from high rates of investment under previous Congress rule and Bimal Jalan’s mishandling of the East Asian crisis as governor of the Reserve Bank of India. Conversely, the high growth under the Congress had much to do with the fact that the BJP refused to protect industry; as a result, industry became internationally competitive, and experienced a spectacular boom in the initial years of Congress rule."

Remember Mr Jalan was nominated Member in the upper house of Indian Parliament.

Friend Harsh and Rajeev has good piece in the Livemint. A bit from their piece:

• "Leading public intellectuals and media commentators feed people the lie that it is now all about “inclusive growth” that would be achieved by redistributing the limitless gains of India’s entrepreneurial capitalism. Meanwhile, the aam aadmi is confused about why India has so many scams and such poor governance, both of which happen largely because the government chooses to enter domains where it has no direct role to play.That socialist era hasn’t quite passed and may be upon us once again—a godmother who professes to give people everything they need can also take away everything they have. Citizens should be wary."

Nation’s cost

Eminent Indian economist S L Rao asks "...will the Wharton gang who got the university to disinvite Modi be consistent if it invites Manmohan Singh, Sonia or Rahul Gandhi, or other top Congressmen to speak at its forums? If Modi is guilty of Muslim deaths and uneven development, so are they. These people carry the blot of the Sikh killings in Delhi and the uneven, non-inclusive, unequal, and poor development of India. The University of Pennsylvania’s reaction was immature and unworthy of a great American university. It brings discredit to the university and the gang who made this happen, not to Modi. He did not deserve the insult of being invited and then having it withdrawn on the plea of a confused and attention-seeking junior teacher." I strongly recommend to read his article in full.

Learn TRUTH from good people

We need to think over what Gujarat Chief Minister says. A bit from his lecture today at India Today Conclave:

• "After inaugurating Ashoka Hotel in Delhi, Nehru came to Parliament and said 'I am very happy that I inaugurated this hotel today'. To this, Atal Behari Vajpayee, then a young leader, said 'this is the saddest day in my life when the prime minister inaugurates a hotel instead of a hospital': 
• Govt has no business to do business, Modi says disapproving the role of PSUs.
• We are wasting our youth power and our women power. We need to pay attention to that.
• Why can't our rail infrastructure be manufactured privately? 
• The biggest strength of democracy is its grievance redressal system
• The country does not need Act (legislation). It needs action
• Once I was with the PM. He didn't say anything. So I started speaking. What else could I have done"

Week end reading

The more and more I read articles like this I feel that I should reread the beautiful book The Law by Bastiat.

"One little-known aspect of Shastri is that he could have become India’s first economic reformer."

• Shastri saw that clearly when he took charge of the country after Nehru. Nayar says Shastri was never a big votary of planning. P.N. Dhar, one of the best policy minds of his generation and later a close adviser to Indira Gandhi, pointed out in Indira Gandhi, the ‘Emergency’ And Indian Democracy, his memoir: “Lal Bahadur Shastri, the unassuming prime minister who had succeeded the charismatic Nehru, seemed an unlikely person to face up to the (economic) situation. But in his own quiet way he did initiate a series of steps which would have not only brought the economy out of the existing crisis but possibly put it on a high-growth path in the long run. He wore no ideological blinkers; he saw facts as they were in all their starkness. Chronic food shortages made him shift investment from basic industries to agriculture. Roaring black markets persuaded him to make a relative shift from controls to incentives, and the glaring inefficiency of the public sector made him accept a larger role for the private sector and foreign investment. He also took measures to shift the locus of economic decision-making from the Planning Commission to the ministries and from the Centre to the states. These measures reduced the influence of the Planning Commission—which had developed a rigid, almost doctrinaire outlook on economic policies—and at the same time decentralized decision-making.”

"We are bold, and we are right…."

For every reason, there is a need for supporting the recently launched website "Niti Central" for helping us to understand the "if" and "buts" of what is good for our country. Below is a bit from that website's main motive:

• "The Establishment, needless to say, has become synonymous with the Congress. It is this undeclared alliance that guides the interests of our ‘national’ or ‘mainstream’ media which are often indistinguishable from those of the Congress. Contrived Centre Left ideology, really no more than a bogus veneer and as shallow as ‘Breaking News’, serves as a useful cover for mutually shared, and reflected, biases.
•  We believe enormous damage has been inflicted on India and the innate potential of Indians by pursuing policies designed to garner votes. We believe that every year that is wasted in the pursuit of such policies sets us back by many years.
• Worse, missed opportunities and wasted years (for evidence, look at the last eight years) threaten to drag us back to where we once belonged: Nehruvian socialist misery.
• We are not in the business of peddling frivolous ‘Breaking News’ or piffle as profound wisdom. We are not hostage to the Delhi-based bogus Left-liberal commentariat. We are not drum-beaters of the Establishment. We do not believe that any single individual or dynasty has the divine right to rule (as opposed to govern) India."

Of that slow move

"Policy masquerading as good politics (subsidies, legislated rights, poetry without plumbing) got this government bad economics (high inflation, low growth, weak currency). But jobs represent a unique intersection. Formal sector employment changes individual self-esteem, healthcare, education and nutritional outcomes in a way that no subsidy can. An additional upside is the dua (or blessings) of the individual and her family."

Food and BUREAUCRATS

"...a government survey shows that close to 99 percent of Indians say they are getting two square meals a day. This could also beg the question – is there a need for a universal food security legislation, as the UPA seems so keen on legislating?" More here.

Mostly, the laws, rules, regulations etc. enacted by the elected governments makes near perfect sense but lacks in commonsense. You can't ask the dead animal to walk into your door step to serve you for your own sake. I mean read this article by Yamini.

Same Old Centralized Planning

Here is my latest work first published at CPPR. A bit from the piece:

• "It was even very funny, when the Hindi movie “Peepli Live” was screened in the Planning Commission, most of the officials said to be laughed for their foolishness. As news item reported in The Times of India (22-9-2010) an official saying “the movie is an eye-opener for many experts, who have never visited rural areas but have framed many development schemes”. It is pathetic that government elected by the people frames schemes for people without even knowing the situation in which they live."

New Book “Ambedkar Speaks”

New book has been released on B R Ambedkar. Indian economist Dr Narendra Jadhav has done a good work by compiling all speeches of B R Ambedkar in different categories including economics. I had very small role in this book! I did receive a invitation to attend the book release function but could not make it.

As reported in the news the book "has a compilation of 537 of his speeches, which he had given in Gujarati, Hindi, Marathi and English." and as Dr.Jadhav himself said "Of these 301 speeches (which were even translated in English where necessary) are presented in full, with succinct contextualisation and are divided into seven categories which include autobiographical, social, economics, poltics, law and Constitution and guidance to followers,"  

You can see a bit more details about the book here.

Quality education for girls in India

Good friend Harsh and his friends have launched a online campaign for fund raising for girl child education in India. Here is the link Pave the Way for Her Journey to Education.

"at home with liberalism-secularism than the left could be"

Friend Harsh has great piece on "entrenched identities" polity in India. He concludes with the below para:

• "...there are various interpretations of all these loaded "-isms", but the Indian right, unlike the right elsewhere, is potentially more at home with liberalism-secularism than the left could be. India's Hindu majority has no theological mandate against blasphemy, apostasy, homosexuality or abortion, and yet the country was always spiritual enough to never fall for the materialist philosophy of communism, "the god that failed". Indian leftists, self-declared moderates and so-called progressives must realise that their intellectual monopoly will be increasingly challenged by an aspirational, young and yes, largely fair, India."

Here is another great piece on new "colonialism". The "neocolonialism" is something on which I have also written in the Pragati last year. But it was in different context but more of domestic focus unlike Mr Rajiv's arguments. Rajiv's books are great source for finding the rational analysis on neocolonialism in India.

A bit from Rajiv's piece:

• "I am no fan (or opponent) of Modi. What concerns me is the violation of important principles and due process. Such intrusions are reminiscent of the way the British East India Company operated in Indian affairs, supporting one Indian raja (ruler) against another, often citing “human rights violations” as its excuse. It was through these strategic interventions, and not through a conventional military invasion, that they ended up stitching together the world’s biggest colonial empire.
• Ironically, these Indian professors specialise in scholarship criticising colonialism, not realising that now they are serving similar American policies on interventions in India. They are extreme leftists when it comes to protesting against imperialist interventions in places like Iraq, Libya, Syria and other failed states. But they switch sides when it comes to India, and play the same role for America in undermining India’s sovereignty as the sepoys did.
• Though American universities are amongst the best in the world, there also exist many compromised academics that promulgate theories on India which are racist, colonial and downright inimical to India’s interests. Many naïve Indian donors have unwittingly sponsored such scholars. My earlier book, Invading the Sacred, analysed how certain professors at top American schools view Indian culture as oppressive and destructive, using outmoded theories; my next book, Breaking India, exposed the nexuses between such academics and civic groups that are promoting separatist identities and schisms in India. I analyse the long-term trend that I have called “breaking India,” in which many colonised Indian intellectuals are funded to dish out divisive and biased materials on India. Such meta-narratives can put Indian business leaders on the defensive in their international negotiations."

Mr Gurumurthy is known for his critical analysis about political economy of India. His latest piece on Budget 2013-14 is a must read one. Just a line of thought from his piece:

• "Chidambaram himself had faulted the giveaways and had vowed to scrap them in the run-up to the Budget 2007-08. And the Prime Minister backed him."

Interesting line from country's chief economist Mr Raghuram Rajan who says:

•  "A good job is the best form of inclusion. If you can train them up to get that job, they are independent of the government for life and they would be able to carve their own destiny. Can we give them the opportunity? That is, to my mind, the challenge of the next 5-10 years."

End of law-OLD Draft

A G Noorani wrote in 2007. In a brilliant analysis, Ambedkar divided British rule into three stages:

• “The attitude of the British towards India’s claim for freedom has since the Mutiny of 1857 undergone a complete change. There was a time when the British government held the view which was a complete negation of India’s claim for freedom. It was proclaimed by Lawrence whose statue in Calcutta has the motto: ‘The British conquered India by the sword and they will hold it by the sword.’ This attitude is dead and buried and it is no exaggeration to say that every Englishman today is ashamed of it. This stage was followed by another in which the argument of the British government against India’s freedom was the alleged incapacity of Indians for parliamentary institutions. It began with Lord Ripon’s regime which was followed by an attempt to give political training to Indians, first in the field of Local Self-Government, and then under the Montagu-Chelmsford reforms in the field of Provincial Government. We have now entered the third or the present stage. The British government is now ashamed to say that they will hold India by the sword. It no longer says that Indians have no capacity to run parliamentary institutions. The British government admits India’s right to freedom, even to independence, if Indians so desire. The British government admits the right of Indians to frame their own Constitution. There can be no greater proof of this new angle of vision than the Cripps Proposals. The condition precedent laid down by the British government for India’s freedom is that Indians must produce a Constitution which has the concurrence of the important elements in the national life of the country. Such is the state we have reached [in 1946].” (What Congress and Gandhi did to the Untouchables; Thacker; 1946; page 177).

Occupations pass just like-OLD Draft

Dr.Manmohan Singh said in the following words before the Hiren Mukherjee Memorial Lecture 2010 by Professor Jagdish Bhagwati

• “Jagdish has since earned for himself an enviable place in the world of economics. As a trade theorist he is in a class of his own. He has not only influenced international trade theory and become a familiar name in every economics classroom across the world, but he has also helped shape trade policy. He is among the architects of the World Trade Organisation, and continues to guide it. 
• He and Padma were pioneers among economists who questioned the efficacy of the Licence-Permit Control Raj. Their highly influential book became the beacon for policy reform in India . He was among the first to study the phenomenon of ‘brain drain’ and identify its benefits for our economy. 
• Today we in India are experiencing the benefits of the reverse flow of income, investment and expertise from the global Indian diaspora. The problem of ‘brain drain’ has been converted happily into the opportunity of “brain gain”. We are drawing on the global “brain bank” of people of Indian origin world wide. Jagdish Bhagwati is one of the shining stars of that community of global Indians. 
• Professor Bhagwati is a true patriot, a loyal son of our Motherland and a truly liberal and secular Indian. Over the years I have greatly benefited from his expertise and his incisive analysis of the Indian and the state of world economy. He has combined his commitment to academic rigour and discipline with an equally passionate commitment to popular education. He has sought to engage his critics and win them over with his persuasive intellectual skills and his gracious charm and good humour. You will be witness to both his wit and wisdom. 
• I have been a proud member of our Parliament for nearly two decades now. It is not often that I have had the opportunity to welcome a college-mate of such great distinction to these august premises. Today ladies and gentlemen I am truly delighted to have this unique opportunity and honour! I thank you.” 

The full text of lecture is here and excerpts published in the IE is here

Government has never been central to out live-OLD Draft

That is all.

Here is must read article published in today's Financial Express with many insights from Gurcharan Das.

Failure is again a thing-OLD Draft

Dr. Atanu Dey argues in his Indian Express article that "The failure of the Indian education system must count as the Indian government’s greatest failure. Over 90 per cent of students drop out of school by the 12th grade; only 6 per cent go on to tertiary education, to cite just one dismal statistic. We have to understand that the failure is primarily due to flawed policies that the government has consistently imposed on the education sector. Aakash, like its predecessor, the “$10 laptop”, is just another distraction — but a very costly distraction."

"I consider year 2008-09 is the sin year."

Why Wharton is wrong in disinviting Narendra Modi By Manish Sabharwal

Some measures may still lessen India’s economic problems by Ashok V. Desai

Interview of Mr Yashwant Sinha: ‘We’ll fight under non-dynastic ruler’

"The only person who meets the bill is Chidambaram. He alone has the seniority and the track record to take on Modi."

Seven sins of highly effective people in India.

Two great men passed away in different world

Today I wanted to write about two great men recently passed away in two different world. Both passed away last month. Both are strong believer of free market principles like limited government, rule of law, private property right etc. Both are great teachers in their own field. One taught economics and other man taught engineering subjects. I am talking about Prof P V Indiresan and Prof Armen A Alchian.

Professor P V Indiresan who passed away on 24th February, 2013 in Pune where he was about to chair a Session on " the Election Commission’s technical committee meet on electronic voting machines."

When I first heard the news I was terribly saddened. Though I was in office at that time and could not do anything except to simple sit down  and pray for his peace. Two things connects me. First, I have been reading his articles at least since 2002 and secondly, I had the opportunity to meet him in 2012 and freely discuss things that interest us. He wrote his last India 2020 column in The Business Line on 22nd February, 2013. 

I am sure he would have written a great piece on this year budget if he were to alive today. His column use to appear on Saturday. You can read all his BL columns here. He also written regular columns in The Hindu newspaper long ago, some are available in the website but one need to do some technical search to get the article. He has also written a column in The Indian Express. The most interesting thing about Prof Indiresan is that he could easily yet lucidly about economics even the economists in India cannot think of such ideas. I am referring to his articles on differential interest rates of RBI.

Here are news item/articles on his passing away:

• "Kalam was a passionate votary of Indiresan’s pet programme PURA (Providing Urban Amenities in Rural Areas), which he felt was the only way to decongest our cities. "

• “Years ago, I was sitting with legendary IIT professor and former director of IIT Madras, P. V. Indiresan. ‘Let’s face it,’ he told me bluntly, ‘Most teachers in the IITs are inferior to the students.’” Also read this.

• PM condoles the passing away of Prof. Indiresan

Very recently only I was introduced to Prof Armen Alchian. Good friend Vipin gifted me the two volume of collected works of Prof Alchian by gently saying "Alchian is equally important economist as Prof F A Hayek was" on decoding the private property right and many other issues. Here are some good links to get quick understanding about his works. See 1,2,3,4.

Budget Reading

I have never commented on the India's Railway Budget. But I wanted to say something on this year's Budget. This year's Railway Budget has missed a great opportunity to open the railway sector for private sector investments in a more focused manner. Just one example, nothing has changed at Nizgamuddin station in Delhi in the last ten years in terms of modernization or cleaning the dirty things in and around the Station. Secondly, I have been hearing increasingly that you will always find uncleaned platforms in northern region railway stations compared to southern and western region railway stations. I really wonder is there something culturally wrong or right?

Come to the general Union Budget.

All kinds of 'if' and 'buts' are there everywhere both in the print media and electronic media and not to miss the social media.

One must at least the following articles to understand the useful for this year budget. However, I must add, the most sensible article I have read so far is the one by economist Laveesh Bhandari. Some may think there is nothing new in his arguments but the fact is that few opening para is suffice to say at least according to me because not many people think in that way. 

The other article not very interesting but one should it. Its by economist Ashok V Desai. Just a bit:

• But the results are dire; nine years of Congress rule have seen the budget getting utterly cluttered with dozens of populist schemes for people young and old, male and female, rural and urban; people are cut up into interest groups, and each is rewarded with schemes named after members of the Nehru family. Chidambaram did not eschew this approach entirely; he had to come out with a proposal of a women-only bank. He did not disclose whether he would be inaugurating it, what he would wear on the occasion, whether men would be allowed to enter the bank, and up to what age boys would be allowed to accompany their mothers into the bank.

Other article is by Manish Sabharwal. Unlike the previous budgets, he is very happy this time after seeing the funds provided for the skilling things.  

And lastly one should carefully between the lines in this article by Shanmuganathan.