Good Thoughts and Good Action

"Resisting the temptation to print money and spend one’s way to growth, the finance minister has opted for incentivising private investment and borrowing abroad."

India's Draft New Education Policy "can, should and will be modified. But in doing so we must put the Indian student and his or her education first, politics later."

"Many reforms are talked about, some of them game-changers: financial reforms, agricultural reforms, judicial reforms, labour reforms, land reforms, educational reforms, administrative reforms, electoral reforms, and the list goes on.

But there’s one reform, which in my view could be the mother of all reforms: it has the potential to lead to the best of reforms in future. If not done, all other reforms will continue to produce only suboptimal results." More here.

Skills vs Jobs

Mr Manish Sabharwal has been writing more than a decade now urging the governments to reform the Indian labour market systems, but its going to be long firefighting before achieving the desire goal.

"after reviewing decades of evidence, Nehru would acknowledge that the nutty economics of the 1955 Congress Avadi resolution and slogans posing as policy like Garibi Hatao kept many Indians in employed poverty.

The 67 per cent-plus turnout in our recent election not only reflect the invisible threads that hold India together but capture an aspiration that breaks with India’s economic past. This dua needs policy to pray to the one god of formal jobs."

Skills for managing State welfare in India

More than what employers wanted from job seekers, it is the job seeker who have to self assess what he can do or cannot do with his right kind of skills identified with confidence.

good reading

New socialism in India

Hazlitt’s Way to Will Power

Let the good times roll

The mainstream remains clueless about F A Hayek in India

the strongest had fenced off plots of land for themselves and forced the weak to acknowledge the right of private property. 

Prof Bibek Debroy on Speculating and hoarding and making them legal by nuuy state

Why more IITs are bad idea for Modi government

Free market is good for dalits

Milind Kamble, chairman of Dalit India Chambers of Commerce and Industries said: 

• Casteand capital can't coexist: "Capitalism dismantles rural societies and feudalism. Capitalism dismantles traditions and traditional cultures. Capitalism produces urban societies, democracy and modernity. India's caste system thrived and survived on agrarianism and traditional culture. Caste is losing its grip over dalits because India is industrializing, urbanizing and modernizing. Dalit capitalism will accelerate that process and will accord a human face to Indian capitalism. Caste and capital can't coexist. One has to give way to the other." 

Also read “Caste and the Market Economy” by Sauvik Chakraverti

• “I suggest Dalit leaders get interested in the Economics of prosperity. We urban liberals dream not just of making India prosperous; we dream of making India obscenely rich.
• The Dalits will gain enormously from open markets, economic freedom and urbanisation. As they claim, in their respective economic niches, a greater share of a rapidly growing pie, and as they mingle with caste anonymity in bustling metropolises, they will find the old caste equations disappearing.”

Chetan Bhagat writes:

• “I have nothing against commercialisation of education. Commerce and business are a good thing. However, when it comes to education, it needs a sense of ethics and quality. Good people must be incentivised to open colleges. Say, by a simple policy fix like allowing private institutes to make a profit……………. These private colleges have played the role of providing students with a chance to earn a degree of their choice. There is nothing wrong in this. It fact, it is even good that the private sector is playing a role in educating our students.”

2000-2010

The past decade was spent by Indian society in a muddled set of values.

The Gandhian Approaches

No doubt, Chetan rightly says that:

• The first trait is servility. At school, our education system hammers out our individual voices and kills our natural creativity, turning us into servile, coursematerial slaves. Indian kids are not encouraged to raise their voices in class, particularly when they disagree with the teacher. And of course, no subject teaches us imagination, creativity or innovation. Course materials are designed for no-debate kind of teaching. For example, we ask: how many states are there in India ? 28. Correct. Next question -how is a country divided into states? What criteria should be used? Since these are never discussed , children never develop their own viewpoint or the faculty to think.

• We see corruption from our childhood. Almost all of us have been asked to lie about our age to the train TC, claiming to be less than 5 years old to get a free ride. It creates a value system in the child's brain that 'anything goes', so long as you can get away with it. A bit of lying here, a bit of cheating there is seen as acceptable. Hence, we all grow up slightly numb to corruption. Not even one high profile person in India is behind bars for corruption right now. This could be because, to a certain extent, we don't really care.

• Even today, most of India votes on one criterion – caste. Dalits vote for Dalits, Thakurs for Thakurs and Yadavs for Yadavs. In such a scenario, why would a politician do any real work? When we choose a mobile network, do we check if Airtel and Vodafone belong to a particular caste? No, we simply choose the provider based on the best value or service. Then, why do we vote for somebody simply because he has the same caste as ours?

• ……we can change one thing – our mindset. And collectively, this alone has the power to make the biggest difference. We have to unlearn whatever is holding us back, and definitely break the cycle so we don't pass on these traits to the next generation. Our children should think creatively, have opinions and speak up in class. They should learn what is wrong is wrong – no matter how big or small. And they shouldn't hate other people on the basis of their background. Let us also resolve to start working on our own minds, right now. A change in mindset changes the way people vote, which in turn changes politicians.

Don’t fool children

Mr.Chetan writes with angry voice:

• Well, given where Indian society is today, i think hard work and talent are wrong qualities to inculcate in our children. Why pretend to them that this is what it takes to succeed? You don't need zeal and drive. You need connections, palm-greasing skills, ability to talk nonsense through accusations and a ruthless ability to fill your pockets. You can do a lousy job, loot public money nothing will happen to you. The CWG looters are still running the show, apparently because the Games need to happen. Essentially, the inmates are running the asylum.

Simply make volunteerism as major force

Chetan writes:

• One suggestion is to use the massive youth student population. A radical move - such as exchange programmes between city and rural colleges - where every city student spends time in the villages, and vice versa, will help a lot. This needs to be done on a massive scale. The city students will spend time in the villages and infuse modern values there, and come back home with a better understanding of rural issues. There can be other similar ideas - incentivising MNCs to base themselves in smaller towns is another one. Sure, there will be lots of challenges but, frankly, there is no other way out. Unless we truly reform the core of our country, things will never really change.

Bail out the hotbed India cities real estates

Says Chetan Bhagat:

Some excerpts

• In Lutyens’ Delhi alone, there’s potentially a thousand acres of land occupied by bungalows, MP residences, various offices and quasi-government entities. Additionally, we also have dozens of ‘thinktanks’, occupying super-prime real estate. These thinktanks presumably add enlightenment to our society, though it is difficult to tell even one or two solid contributions they have made in the past few decades.

• To do quick cost calculation, an acre-sized bungalow in Lutyens’ Delhi sells for around Rs 100-150 crore. A thousand acres, at the low end of the range, is Rs 100,000 crore. Slap on a big FSI, and the number can be ten times as much. Even conservatively, at half the amount, we arrive at Rs 500,000 crore. This is the blocked capital cost of running our wonderful government where MPs claim to make a pittance. Anyway, a replacement complex in Gurgaon, to replace this entire setup, with modern housing, offices (and the fountains for thinktanks) is unlikely to cost more than Rs 20,000 crore, or only 4% of the blocked capital. The remaining amount can be used to reduce our staggering government debt. This in turn leads to saving enormous actual cash interest costs every year. (If the Rs 480,000 crore of debt is reduced, we can save at least Rs 40,000 crore of interest costs every year.

• These are just the possibilities in Delhi. Similarly, every state capital has enormous government land in prime areas kept in sub-productive uses. The surplus railways and defence land is another level altogether. If all that capital is released, the Indian government finances will finally begin to look healthy. The dreaded inflation, a common Indian feature, will also come under control.

• There are other benefits of off-loading real estate as well. There is something wrong about a government servant and his family living in massive two-acre bungalows costing Rs 200 crore in a low income democracy like India. It reeks of colonialism and has no place in 2010. Another benefit would be development of new areas, where the new offices and residences are located. Newer construction also means more high-tech buildings that will improve government efficiency. The move will also release land, thereby easing pressure on real estate prices as well.

And he conclude:

• One could argue against the practicality of this move, but if there is a will, it is partially doable. Frankly, doing this is far more practical than running a 20% inflation economy, which makes the poor and middle class spend their lives chasing inflation and never be able to accumulate real wealth. To sit on assets at the expense of the common people is called feudalism, and we are supposed to have ended that 62 years ago. This move could be inconvenient for the lawmakers for a while, but not impossible. Most importantly, it will be good for Indian people. After all, our politicians are meant to serve us, right?

Random reading

1. Are High Taxes the Basis of Freedom and Prosperity? By Sudha R. Shenoy
2. The “Stimulus” Stopped the Recession? Not So Fast! By William L. Anderson
3. Chetan Bhagat: The pretty girl is always right
4. Obama half brother steps into spotlight to tell his own story
5. 'Indian religion is such an untouchable subject'

Values revere syndrome

Chetan on “Where's My Nobel Prize?”- “people designing the system never took talent into account.”

T C A on “Sick men of Asia and the West”- “the EU has deliberately chosen not to have a central government which would soon become dysfunctional, we have started with one and then made it dysfunctional by paralysing it neck upwards politically because of electoral considerations and neck downwards administratively because, as Arun Shourie pointed out, even a section officer can veto a proposal and any joint secretary can sabotage a Cabinet decision.”

2 States just don’t love each other!

In 2009, two Indian states (Punjab & Tamil Nadu) Chief Ministers raised their sons to the level of Deputy Chief Minister. It is not a surprise one, of course the people of these states have hugely wounded. Father marries his sons (no matter how old they are!). Son married none, at least yet. The people of these two states marry their votes once in five years to marry politicians each other!

It is utterly true to borrow Sauvik’s famous often saying of (now days) the ‘Chacha State’, of course he refers in quite different context.

Here the story goes something different. 2 States the story of my marriage is the new book by youth icon author Chetan Bhagat in India. A beautifully narrative (albeit imperfectly: in media he said it’s a true story but in the book it is written as fiction may be for personal reasons) of his love marriage, the key takeaway from this book is many but to be precise. He encourages intercommunity marriage by all means, of course the interstate marriages without any barrier like or a Free Trade Marriage (FTM). He asks the reader to ‘love India’ before loving their state or union territories where they are born. “…these stupid biases and discrimination are the reason our country is so screwed up. It’s Tamil first, Indian later. Punjabi first, Indian later...” He continues, we all marry “National anthem, national currency, etc..still won’t marry our children outside our state. How can this intolerance be good for our country?’

It is not just the parents moody restriction on their children but the mindset that square it doubly with a vested interest and foggy ideas of own-state, tradition, culture, this language or that language is rude, this states or that states is more superior or inferior etc which actually nobody produces out of a centralized planning.

The technology made huge breakthrough in human life in the last century, at last. It was possible to pursue these ideas with freedom to think beyond the earlier generation. Similarly, the change of crude mindset could unleash in huge way in a dynamic economy that dog is underway now in any case! Whether, it is ‘The State’ mindset or the citizen’s mindset. Alas, the former still believe that the population is a burden rather than ‘resource’ and the later has huge cultural nexus which has long way to go. But the price is already huge.

First when I came out of my village (from south India) and travelled for my study as well as to work in central and North India (even went Srinagar) wondered how vast this country is. Chetan concern is as genuine as any one can think “this country, cutting through the states…….these states make up our nation. These states also divide our nation. And in some cases, these states play havoc in our love lives.”

Chetan writes about the change in Indian society in way that is also an order which nobody intended like a centralized planning to make like this or that or forward or backward, left or right. It is quite revealing book. Impact of this book may be seen in the decades to come.

“let’s not worry too much about …subject called History; let’s create a new subject called The Future.”

That was the last line of Chetan Bhagat’s recent article published in TOI on 30 August 2009.

The following are some thoughts that he puts emotionally on his writing pad. Let’s you peddle with it now. Time and again some people write some good things for younger generation but it doesn’t reach targeted age group in a vast country like India.

• “…the post-poll, slow-suicide path the BJP has chosen for itself, is harmful not only for their party, but for the nation. With no credible second alternative, a democracy runs the risk of turning into a one-party monopoly, which may not be good for the country in the long term.
• The reality is that despite its best intentions, the BJP is out of touch with the current generation.
• The strange thing is the media buys into this pointless debate — about Mr Jinnah being good or bad and spends hours discussing it. By doing so, it gives legitimacy to the whole exercise.
• …the young generation fails to understand why do our politicians become so passionate defending these relics of the past? Why don’t they have a fanatical debate about how fast we will make roads, colleges, bridges and power plants? Why don’t people get expelled over current non-performance rather than historical opinions? Why don’t we ban useless government paperwork rather than banning books about dead people?
• Every Indian student learns about the past leaders. We read their biographies, celebrate their birthdays and see them as inspiration. However, what made these people great was the fact that they brought about change for a better future during their time. Do our politicians realize this before they claim to be fans and devotees of past leaders? Or is it simply easier to debate the past than roll up your sleeves and make change happen. This old Indian mentality of non-stop discussion and no action has cost the nation dearly.
• The BJP is not just a Hindu party. It is also a right-wing party from the point of view of economic policy. And right-wing economic policies typically involve higher privatization, lower subsidies, better financial management, focus on growth in business and employment and attracting private capital for national development.
• The right-wing economic agenda is so long forgotten that in India, people associate the right-wing with a communal agenda, which frankly is not what the right-wing is about. Right-wing economic policies can greatly benefit the country but the question is how do we make the young generation believe it. Well, if the BJP can do that, it can bridge the gap in votes and it can hope to come back with more seats.”

Who are we fooling?

Chetan Bhagat has a piece which is reasonable thoughts and great observation. His anger is valid but what to do with that? Will the politicians mind these words, you know for them it’s merely ‘words’. Will the public listen until next election that won’t be possible, but nothing is impossible in free market economics!

For record I am posting his full article below. But what I feel is that the title of this article would have named as MUDDLED ECONOMCIS!

Mandi economics Chetan Bhagat, August 04, 2009 The Hindustan Times

• The shortfall in the monsoon has created anxiety among farmers across the country with several leaders having expressed their concern. In the name of caring for the affected rural poor, cheap rice is being provided in many places. But before I get into that, I want to share a little story.
• The other day when I went to the airport, I was told that the flight was delayed. I felt disappointed but had no choice. As compensation, the airline gave me one sandwich. After three hours, they told me the flight was cancelled. However, this time they gave me two sandwiches. I argued about my missed flight. How would I reach my destination? They said they were a caring airline and so they could give me three sandwiches. The flight never took off.
• What would you want to do with such an airline? Will you call it a caring people’s carrier? No, I am not talking about any particular airline or ranting about my mishap at the airport. It’s merely an analogy pointing to the attitude of the government towards the farmers of India. On the face of it, there are subsidies, loan waivers and cheap rice. However, none of these creates real progress or changes the face of agriculture in India.
• Before we start blaming the rain gods yet again, I want to know why are we so dependent on rain-fed agriculture in 2009? If India is an agricultural country, shouldn’t we have done some massive infrastructure projects across the country? Over two-thirds of our agricultural land is dependent on rains. China has only one-third of its land unirrigated. Developed countries depend very little on rain. This dependence creates high fluctuations in the output year after year. Apart from the volatility, we are not efficient either. China can produce twice the amount of rice for every acre of land as us. Australia can produce five times the rice per acre than India.
• Who are we fooling? The Indian farmer is not cared for. He is on drip-feed in a hospital being kept alive for votes. The cheap rice one-upmanship seems great in the short-term, but will it help close the massive efficiency gap or the rain dependence? And if this gap is not closed, can India ever really progress?
• There are other negatives created by such subsidies. The government has to borrow, which, in turn, leads to higher capital costs for power and transportation infrastructure projects. It also leads to inflation. Yes, we can continue to live like this: constantly rising prices, the rare infrastructure project that is too little, too late, and poverty with attendant problems like poor healthcare and low literacy.
• Yet, this can change. Many South East Asian countries were in a similar situation 20 years ago. However, these countries have implemented sound economic policies, focused on massive, long-term developmental projects (rather than cheap vote-bank politics) and changed the face of their countryside.
• It is easy to blame politicians. However, we elect them. And the fact is that subsidies do result in votes. The intoxication of cheap rice is heady. It makes the voter believe the government is doing something. A lot of people may even think, ‘Grab whatever you can. The government won’t do anything else anyway.’ But can we sustain this? Is this good for the country in the long-term? Do you want to give your children the same India that you inherited? Or want to leave them a better place?
• Famished, destitute people must be fed. (By the way, why don’t we give them cooked rice in specified centres to avoid misuse and re-trading?) However, a leader’s job is to build for the future. I’d like the local panchayats to accept the rice, but demand more from the leaders.
• Talking about development in agriculture, it is not only about irrigation projects and enhancing crop yields. There are many other areas of improvement. In Hong Kong and Singapore, milk and butter come all the way from Australia. If an Indian software company can provide service abroad, there is no reason why an Indian farmer should be denied such a lucrative market.
• We can say we need to keep the milk for our own country. There are two holes in that argument. One, if a farmer makes money, he will invest in more cattle or efficiency improvements and production levels will rise to meet demand in India as well as abroad. Two, we (rightly) don’t force our corporate sector companies to sell their products exclusively in India. Then how can we force the farmer? To cut off a source of income and then offer cheap rice — is that caring for our rural citizens?
• The government and quasi-government entities keep a tight control on dairy and farm produce for food security reasons. However, the fear is over-blown and government involvement has prevented world- class output. Food that wasn’t grown due to poor efficiency is food destroyed. The government is not saving food; it is destroying it. There are global companies who operate across the world. While they are private enterprises, they have benefited millions around the world.
• Let’s demand the same world-class treatment from our leaders.
• Agriculture can be India’s competitive strength in the world, if we become serious about it. The Indian farmer feeds us. We must nourish the nourisher to ensure he will still be around for us and the generations to come.

Chetan Bhagat’s latest book is The Three Mistakes of My Life

No need for herd-mentality

Chetan Bhagat has story on India’s higher education, in this story he writes a mini letter to HRD minister, of course it is fiction one but there is no much difference in reality, either.

“Dear Education Minister,

I hope you are doing fine and the large staff of your massive bungalow is treating you well. I won’t take much of your time.

I’ve passed out of class XII and I’ve decided to end my life. I scored ninety-two per cent in my boards, and I have a one foot high trophy from my school for scoring the highest. However, there are so many trophy holding students in this country and so few college seats, that I didn’t get into a college that will train me to the next level or open up good opportunities.

I know I have screwed up. I should have worked harder to get another three per cent. However, I do want to point out a few things to you. When my parents were young, certain colleges were considered prestigious. Now, forty years later, the same colleges are considered prestigious. What’s interesting is that no new colleges have come up with the same brand or reputation level. Neither have the seats expanded in existing colleges fast enough to accommodate the rising number of students.

I’ll give you an example. Just doing some meaningless surfing, I saw that 3.8 lakh candidates took the CBSE class XII exam in 1999, a number that has grown to 8.9 lakh in 2009. This is just one board, and if you take ICSE and all other state boards, the all India total number is over ten times that of CBSE. We probably had one crore students taking the class XII exam this year.

While not everyone can get a good college seat, I just want to talk about the so-called good students. The top 10 per cent alone of these one crore students is ten lakh children. Yes, these ten lakh students are their class toppers. In a class of fifty, they will have the top-5 ranks.

One could argue that these bright kids deserve a good college to realise their full potential. Come to think of it, it would be good for our country too if we train our bright children well to be part of the new, shining, gleaming, glistening or whatever you like to call the globalised India.

But then, it looks like you have stopped making universities. Are there ten lakh top college seats in the country? Are there even one lakh? Ever wondered what happens to the rest of us, year after year? Do we join a second rung college? A deemed university? A distance learning programme? A degree in an expensive, racist country?

Your government runs a lot of things. You run an airline that never makes money. You run hotels. You want to be involved in making basic stuff like steel and aluminum, which can easily be made by more efficient players. However, in something as important as
shaping the young generation, you have stepped back. You have stopped making new universities. Why?

You have all the land you want, teachers love to get a government job, education funds are never questioned. Still, why? Why don’t we have new, A-grade universities in every state capital for instance?
Oh well, sorry. I am over reacting. If only I had not done that calculation error in my math paper, I’d be fine. In fact, I am one of the lucky ones. In four years, the number of candidates will double. So then we will have a college that only has 99 per cent scorers.

My parents were a bit deluded about my abilities, and I do feel bad for them. I didn’t have a girlfriend or too many friends, as people who want to get into a good college are not supposed to have a life. If only I knew that slogging for twelve years would not amount to much, I’d have had more fun.
Apart from that, do well, and say hello to the PM, who as I understand, used to teach in college.
Yours truly,
Gautam
(Poor student)”