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."

Thanks 2010

Then the irresistible, enterprising Indian femme fatale, who irresponsibly exposed a few holy cows, besides doing the craft of lobbying considerable harm.

And since 1991 did not merely mark the beginning of India’s modern growth story, but also the final burial of old-style socialism, you can be forgiven for hoping that Sonia’s restoration of Narasimha Rao in the Congress pantheon might mark the first stirrings of a welcome rethink.

In 1985, some six years before the introduction of far-reaching economic reforms, looking out from the highest rooftop in Hong Kong, the area surveyed exported more than three times as much than all of India’s $12 billion. We excused our miserable performance by alleging that Hong Kong was a city state; China in the same year exported $30 billion, but it was a communist state, and so on. Twenty-five years later, the Jalan report makes the same wrong assertion that India is unique. the Jalan report is left with no legs, no arms, and most importantly, no soul.

Eventually, I decided to hear some of the tapes. I found bits of fairly serious stuff interspersed in mountains of trivia, gross unprofessionalism and a tragedy. First the trivia. A columnist writing a piece exactly the way that one of Radia’s client’s would have liked, and giving her a précis before it was put to bed. An über-rich spouse being irked by a write-up on her, and having someone ask Radia to fix it. The connected husband of an adopted daughter and Radia sharing well-known juice about the near-death bankruptcy of a major Delhi-based property developer-qua-nascent mobile player, whose bounced cheques were manifest missiles of the past. Some wickedly perspicacious comments by a retired IAS honcho, now a Rajya Sabha member, involving Shivji ki baraat (various creatures in the Union cabinet); the apparent demotion of the erstwhile commerce minister from glories of the WTO to fixing the nation’s potholes; and the unexpected rise of Anand Sharma and Jairam Ramesh in the post-2009 election dispensation. And conversations with Ratan Tata — including one where Radia spews nineteen to the dozen, while Tata says, “Yeah”, “Uh, huh” and “Um, hmm” 33 times.

Actually, all this is only done for the poor in India. For example, when telecom operators got the 2G spectrum at throwaway prices from the government and then traded them away to foreign partners at ten times the price, the non-poor 2G experts never asked for such foreign sales to be banned. It is true that the government acted like the irrational onion farmer who forgot to ask for a higher price but then our government is not poor. After all, how many poor can suffer the losses made during the Commonwealth Games! And, unlike onions, the poor do not buy 2G spectrum and so none of our millennium development goals is affected by 2G traders buying cheap from the government and selling high to users of such spectrum.

And finally read who read which books in 2010 among.

Jalan and his ceiling

What the market needs is more competition and better regulation rather than less competition and outsourced regulation. The Jalan committee takes us back not just in time but to the Soviet philosophy of 1970s. I hope that the readers of this column, unlike the committee, do not welcome the world of 1980s phone lines which also carried the public utility tag and an eight-year wait in public interest, or the choice of Ambassador and Fiat cars with a 10-year queue — in the national interest. Viva public ‘service’ death to profits. 

Law for votes not for governance

Mr.Bimal Jalan is former RBI Governor and author of The Future of India — Politics, Economics and Governance. I have read this book during my visits to few metro cities in this July/August. Fortunately, when I was in city I attended some of Jalan’s talks and interactions but I never told him that I have been reading his book because I really wanted to know a bird’s eye view of his understanding of India and the world.

When I finished reading his book I really felt that he his more of moderator than a true believer of liberal ideas. Though he often tends to believe readers of his book as he is liberal ideas believer but it does not fully convinced me. But still it seems to me to be that he is of the view of limited democracy is essential! I have read many of his other writings. Here is a bit from his today’s Column in BS:

“There is nothing new about the disappointment of citizens and columnists with the indifferent performance of ministers, bureaucratic inefficiency and widespread corruption. What is new is that, cutting across different sections of media and policy preferences of editors and columnists, there is an emerging consensus that government has become largely non-functional.”

Note: His education at Cambridge and Oxford is not known, probably to many!

Planned chaos of schemes and programmes

What India’s PM has said on last two years of economic development?

• “Our concern for inclusiveness in the 11th Plan period is reflected in the fact that, in addition to the 9 per cent growth target, the Plan lists 26 other monitorable targets highlighting inclusiveness concerns. These include targets for agricultural growth, poverty reduction, employment generation, school enrolment, reduction in the gender gap and access to clean drinking water.
• We do not have all the data we need to measure progress in these dimensions during the first three years of the 11th Plan, but the document before us presents a reasonable assessment of the overall position in these areas.
• Rates of enrolment in primary schools have increased. Gender gaps in schooling are narrowing. Life expectancy rates after immunisation of children have increased. The percentage of population with access to safe drinking water has also gone up and so has village connectivity and electrification. But, I must add that, while there is progress, we have achieved less than what we need to.
• Our target for reducing poverty is to cut the percentage of the population below the poverty line by ten percentage points during the Plan period. This implies a pace of poverty reduction more than twice that experienced in the past. Our success in ensuring inclusive growth depends critically on how well we do in this dimension of performance.”

In a way these are the standard statement even before the economic reform that was initiated in the 1990s.

Read what other economists have said:

Bimal Jalan on

• “….the prevailing practice of passing several Bills at the end of the day at the discretion of the executive branch, without discussion or actual voting, has to be simply abolished — except in an emergency — to enable Parliament to perform its assigned role under the Constitution.
• I believe that if the above measures are taken, or at least considered by Parliament, the working of Indian democracy by the people would become less oligarchic and more accountable.”

Rajiv Gandhi Index and dud NREGA

Bimal Jalan on The idea of a Rs 1 lakh house

Bimal Jalan on The idea of a Rs 1 lakh house

Long live millions of poor!

A IAS turned economist turned RBI Governor turned nominated Member of Parliament in Indian Raja Sabha (upper house)  Mr Bimal Jalan wrote a piece recently in The Hindu in which he express his concerns on the function of Indian Parliament. 

Some excerpts: 

• “The time allotted to different parties and nominated members is decided in terms of their number as a percentage of the total membership of the House. Nominated members who constitute 4 percent of the total members of Rajya Sabha are entitled to a maximum of only 4 percent of time allotted for debate on any subject. What is even more significant is that their turn comes after all major parties have spoken and the House is virtually empty.
  
• First, the accountability of ministers to parliament has been considerably eroded. We now have coalitions in power with a large number of parties of different sizes. Leaders of different parties can continue in cabinet without any individual or collective responsibility to parliament or, for that matter, Prime Minister. 
  
• Second, in view of anti-defection law, individual members of a party are completely subservient to their party leaders. Interestingly, this law does not apply to small parties which join a government. Thus, there is a built-in incentive for any leader to set up a separate party with even 4 or 5 members. If he or she is the leader of a small party, that person would command a huge premium and would be sought after by dominant parties. Third, the rules of business in parliament can be ignored with impunity without any adverse consequences. Fourth, the overwhelming primacy is given to whatever government wants to be done by parliament, including passage of bills with or without discussion. 
  
•  An immediate priority is to make anti-defection law applicable to all parties which join a government rather than only to members individually. Similarly, changes in business procedures of parliament are required to improve the speaking order and minimum time allotted to individual members who wish to participate in debates. Under no circumstances should a legislative bill be passed without discussion and actual voting. Another priority area for reform is the internal democratization of political parties. 
  
• Let me end with a quote from a note handed over to me by a Member of Parliament who was a distinguished member of a political party: 
  
• “You made an excellent speech and a lot of us totally agree with you. The Anti-Defection Amendment has curbed the consciences of MPs. We have to follow party whips even if we do not agree as in this case of the Offices of Profit Bill. Congratulations.” 
  
• I am, of course, grateful for the above generous remarks. However, it is equally disheartening to note that even if that member were a great “celebrity” and a recognised genius, she would not have been able to express her views. 
  
• It would benefit citizens, if in addition to counting questions and attendance of members in parliament, public-spirited organisations and media were to highlight the urgent need for political reforms to make the working of India’s democratic institutions less oligarchic and more people-oriented.” 
  

We had peoples President, now we have peoples car but we do not know where is our people’s parliament?