Good reading

Some really good articles have been penned by both friends and others on the new government in Delhi and the power of free market economics: 

India must promote market competition to eradicate social discrimination

Fighting poverty through markets

Seven sins of hubris of UPA government

Article 370: Answers for a friend

Interesting time, ahead

However, it may be the case for nature to have some or other odd events in the world of Indian economy, but for sure, a very very interesting time is ahead for all of us in India. 

Let's not underestimate a body of man's mind and actions over the nature to do right things in life. Life changes when you change your actions or you simply be in actions, all the time to do right things with one simple tool: commonsense.

The following are some good reading:

The Modi magic: why voters kicked out liberal economics along with cong?

A call to arms: Modi offers window to push liberal agenda by Seetha

• The Swatantra had limited success because the intellectual climate in the sixties and seventies was overwhelmingly leftist. That is no longer the case. 

Salli secularism doses by S.Gurumurthy

PBM's ponderings and musings on history of Indian polity: 

• "The key distinction is between those who wanted a conception of citizenship beyond compulsory identities and those who did not. Many who wanted a united lndia, like Abul Kalam Azad and Gandhi, thought, nevertheless, that India was a collection of distinct communities, which could flourish together. Nehru and Ambedkar wanted to transcend that India. Azad and Muhammad Iqbal may have different implications for the territorial unity of India, but their metaphysics of community identity is more similar. An intellectually underrated figure these days, like Lala Lajpat Rai for example, is actually closer to Nehru and Ambedkar in the way he thinks about finding a conception of citizenship transcending community than his politics would suggest."
• "The compromises of practical politics and opportunism blurred these intellectual lines and created strange bedfellows. This is a heretical thought. But in terms of underlying positions, in any other world, Nehru, Lajpat Rai, M.G. Ranade, Syama Prasad Mookerjee, Ambedkar, perhaps even Jinnah, would have been in a similar party: looking for conceptions of citizenship that transcended traditional community affiliations and created space for individual freedom. They happened to disagree on whether you could do it in one diverse nation. Gandhi, Azad, Purushottam Das Tandon, Deendayal Upadhyaya, and perhaps Iqbal, would have been in a similar camp: the modernist project as enacting community identities rather than transcending them."

Modi: India, Indians and its economy

The new idea of India is here. The 2014 Lok Sabha elections have really changed many usual musings of social scientists in India and abroad, of course for the betterment of India and Indians. During the announcements of the elections results its always very interesting to listen people who have bothered to utter something before the elections and now match with the change if their mind and muddles.

Here are the reactions of some liberals in India:

Towards Economic Freedom

Seven Thoughts on Modi’s Mandate

Modi’s moment alone

The dying light of freedom

We are moving beyond the politics of social arithmetic

What has nearly ended is communist politics. The Left parties managed to obtain only 10 seats, half their 2009 number, and ended their masquerade as a national party.

Congressmen such as Gokhale, Gandhi, Nehru and Patel took the party (and country) beyond sectarian divides

Happy New Year 2014

Dear Friends,

Wish you all a very happy new year.

Let's begin the journey in a new year. The day went extremely great and much more happier than I was in the early morning. Thanks to friends and fellow citizens of India and the world for making the day better.

The biggest good news for this year is the launch of THE NEW ECONOMIST, International Journal of Global Economists. This journal is published from Chennai. I have a small role in helping to make it and have also contributed two articles. One on higher education and other one on skilling youth in India. Hope this new venture grow more and more brings some concrete changes in the peoples mind about the missed ideas of all kinds economic, social and political etc.

The year 2014 is going to be as interesting as the year went in 2009, 2004, 1998 and so on. I am sure you got it. I am talking about the elections in April or May and the fate of the big beasts which have been crying like wolfs. 

The year 2014 is unlikely to record the repeat of the NGOs big shows for public policy drama in the national capital, all in the name of social causes. 

The year 2014 is going to be as unpredictable as in the past as far as the Indian economy is concerned. But the economists and analysts strive to make all kinds of predicts to make headline news. That become a norm now.

Here are some good reading on the opening account of first blog post in 2014.

Real tonic that a democracy needs

India's known unknown economy

First and foremost, the civic sense of all Indians, which remains woeful

Indian right-wing- "spectacularly self-defeating"

Dr.Anantha has very interesting article in the Mint on Indian liberals and their stand on right-wing arguments on public policy in India. 

While in the piece he quotes a very interesting para from a recent article by Dr.Mehta, before placing his arguments. That para is really worth to read, re-read and ponder. Here is that para:

• “The problem with much of the right-of-centre economic discourse in India is threefold. First, it does not have much of a sense of history. Has any modern society evolved without robust welfare protection? … Second, the right was caught in its own bad faith. On one hand, it wanted to critique entitlements and rights per se, on the other hand, it wanted to embrace direct cash transfers as an alternative. So in the end its arguments against redistribution ended up sounding more like lawyerly bad faith than a principled position… The right has not managed to link its purely economic arguments with an effective moral framework. Third, there was a spectacularly self-defeating political language that smacked of elitism... It is cute to call the bill a vote security bill... But what are we saying in saying this? That politicians responding to what they think voters will go for is a bad thing? ... If the left can be accused of sometimes doing the poor harm in the name of speaking for them, the right can match it by its subtle show of contempt for the ordinary voter. The right will need to change its game considerably.”

A bit from Dr.Anantha's piece:

• "India’s current finance minister, when he was in the Tamil Maanila Congress, used to write a column inThuglak, a Tamil political fortnightly, explaining market economics to Tamil readers. He ceased making the case for liberal economics long ago. Another reformer took the nom de plume Kautilya and used to educate the readers of the periodical India Today on liberal economics and pro-market policymaking. Now, in the UPA government, he helped shut down mining with his environment laws and now he threatens to stop the future of manufacturing in India with his land acquisition law."

On both the cases, I completely agree!

Some links

"India is a vibrant democracy, and as the economic system failed the economically weak, the political system tried to compensate."

Why we still need to read Hayek: Hayek Lecture at Duck by Professor John B Taylor

"He doesn’t want the odium of polarized votes to overshadow his development and governance agenda. At best it should be a collateral benefit. He is smart enough, certainly, to know that young Indians, while deeply religious themselves, have moved beyond wanting to see religion used as a political tool."

"Learned Hand once wrote something that seems like an apt description of the wider context: "A community is already in the process of dissolution where each man begins to eye his neighbour as a possible enemy, where non-conformity is a mark of disaffection, where denunciation, without specification or backing takes place of evidence, where orthodoxy chokes freedom of dissent, and where faith in the eventual supremacy of reason has become so timid that we dare not enter our convictions in open lists." More here.

“He must be prepared to speak about everything, and often about nothing. He is expected to preserve temples, to keep the currency steady, to satisfy third-class passengers, to patronise race meetings, to make Bombay and Calcutta each think that it is the Capital city of India, and to purify the police… If he does not reform everything that is wrong, he is told that he is doing too little, if he reforms anything at all, that he is doing too much.

The State of Indian State

This is a very interesting analysis about the functions of Indian State in the modern era. You can agree or disagree, everyone of us are looking at The State with some special attention musing that IT CAN DO EVERYTHING FOR US! 

The following few para are from a article by Dr Mehta. There is also a interesting lecture titled The Burden of Democracy – India After 65 Years by him. The video is here.

"The architecture of the Indian state is now being seriously contested. Indian practices of exercising power were founded on six principles that are no longer tenable."

• " The first principle was vertical accountability. To be held accountable meant being held accountable by your superiors, not by citizens or other parts of the system. So long as the powers that be did not ask questions, did not prosecute or pursue you, no one else did. This is slowly beginning to change. There are potentially a lot more sites for horizontal accountability within the state. But most importantly, there is a clamour to be held accountable to citizens, not just in some diffuse way through elections, but in terms of the services the state provides."

• " The second principle was relative secrecy. The state had a great informational advantage over citizens in two senses. The state’s own inner workings were relatively secret. And the state was a primary source of information about our well-being. Both those propositions are no longer true. It would be foolish for any state to now assume that its legitimacy can rest on keeping secrets. But perhaps more importantly, citizens craft a sense of well-being through information outside of the state. A couple of decades ago, you may not have known your water or air was poisoned because the state did not tell you."

• "The third principle of state power was wide discretion. To a degree, all states require discretionary power. But they need to justify its use through an exercise of public reason, where those reasons take into account all stakeholders. In every major decision the government has been involved in, whether allocating spectrum or land, siting SEZs or designing water schemes, it has failed to engage in public reason. It assumed it could get away with shoddy justifications for its actions." 

• "The fourth principle of the state was relative centralisation. Despite the fact that you have so many regional parties that share power, India remains one of the most administratively centralised states in the world. The degree of centralisation, where the Planning Commission micromanages every small rule associated with a centrally sponsored scheme with tragically perverse effects, is untenable in a society as vibrant and complex as India. Local bodies, whether urban or rural, are still not seen as instruments of self-government, as institutions that will resolve local conflicts."

"Let the Liberal Republic emerge"

"Indian liberalism is an embattled species. The right abuses it by confusingly hyphenating it in the phrase "left-liberal." The left abuses it with the derogatory phrase "neoliberal", associated with the privileges of the rich. And centrist parties are confused about its meaning. Few in India call themselves liberal."

Democracy: "Designed to fool you"

"The great Ambedkar identified democracy not with popular sovereignty but with unrestrained debate. He could not have imagined debate being meaningless noise"

‘Fifth Nation syndrome’

The title of this post is taken from Dr A.P.J Abdul Kalam's recent speech. Taking cue from his wise words friend Arvind really goes further digging the Indian economic history and gives many interesting narratives on why we need to go back to our own way of practicing free gold market system for transactions in the society. A bit from his piece in DNA:

• In response, the Swaraj Party demanded that a sound monetary system be put in place and its member Jamnadas Mehta articulated the party’s position on the gold market, “We shall insist in the select committee that an automatic system shall be provided for the expansion and contraction of currency following a free inflow and outflow of gold in a free gold market.” Similar demands have sprung up in the West only in recent times after the occurrence of economic crises in the US and Europe.
• Jamnadas Mehta also rejected the claim that the bank’s board would be elected by an “independent” body of shareholders and stated, “We say that as the executive of the bank owe their existence to the government, they will simply carry out the government mandate in the running of the bank; the directors will have no control whatever.” In the past few decades, his prediction has come true not only in India, but also in other countries where central banks are supposed to act independent of the government.

Here is a very timely analysis by PB Mehta about political economy of India:

• The most criminal example of government mendacity has been its talk on the banking system. During the financial crisis, we patted ourselves on the back for having a prudent approach to banking. Guess what? The government told you lie after lie as the banking system became the main conduit through which crony capitalism flourished. Banks were running Ponzi schemes, giving out loans when there was no rational basis, failing to do due diligence if the borrower was too big to fail, shutting out small and medium enterprises and letting a handful of big players mop up credit at will. Of course, no government will talk the economy down. But no one is being held accountable for the major catastrophe in the making. Banks were put in this position in part because of a prior failure to bring in reforms. Now that they are in bad shape, their fragility is being used as an argument to not diligently clean up the system.

More interesting part is the following lines:

• The central driver of good economics is recognising the problem. Despite the slowdown, government will continue to produce lawyer-like alibis: the whole world is slowing down, the global conditions are adverse, five-and-a-half per cent is not bad. These arguments are patent nonsense. 

A line of thought

Ponder over this lines from Professor Mehta's article in the Indian Express:


"...The terms of the social contract have to be rewritten. Capitalism has to justify itself in terms of social gains, and democracy in terms of empowerment. But at the moment no one quite understands what all of this might mean."

“You don't want the IAS running the country. At the end of the day we want politicians to run this country.”

The Rediff interviewed Prof.Mehta some time back in two parts. If you have not read it, I would urge you to do now!! First Part and Second Part.     

He said: 

• “Now you have the National Advisory Council on one track and the finance ministry on another track; the planning commission is on a different route and the Prime Minister's Office is on another track.”

Prof Mehta on M K Gandh and his hagiographies

It is almost as if these evils are so heinous, that every trace we leave on the world, including our own desires and appetites should be in service of combating them. It is often said, with some lament, that Indian’s don’t write good biographies; they write hagiographies or are incapable of the kind of psychological complexity a good biographer requires. Reading Lelyveld’s fine book, however, makes you wonder whether the opposite is true. Indians don’t write biographies because they are so astonished by the strangeness of other lives, that they have to give up the conceit that these can ever be understood from the inside. The surface is all one is entitled to understand; the rest is just plain conceit. One can almost imagine the Mahatma winking at us: you think you can try and understand the nature of the Self; you think you can try and understand me. Think again.

The State makes sure, that order uncut

In this mid’s of agitation and crisis of reality check in Indian politics Prof Mehta writes:

• No agitation focuses on sensible, manageable reform of representative institutions; all agitative energies are premised on bypassing them. 

• To many of us, this proposal seems like the way we approached educational reform: if BA is not good quality, introduce MA; since MA does not work, have MPhil; since we can’t trust our PhDs, have a further NET exam, endlessly deferring to new institutions at the top of the food chain without attending to basics.  

More interestingly he says: 

• The demand that a Jan Lokpal Bill be drafted jointly by the government and a self-appointed committee of public virtue is absurd. Most of us sharply disagree with elected government on matters even more important than corruption. But no matter how cogent our arguments, it does not give us the right to say that our virtue entitles us to dictate policy to a representative process.

In fact, the Indian Express editorial says:

• “The only tiny hope that Hazare and other supporters of the Jan Lokpal draft hold out against this overwhelmingly likely possibility is that the individual at the head will be selected by a committee that will be partly non-governmental in organisation. For example, it will include all Indian Nobel Laureates, and the two most recent winners of the Ramon Magsaysay Awards — hardly a substitute for real electoral accountability. This sort of thinking among the privileged members of civil society, a belief that they alone can speak for “the people” and elected representatives cannot, is dangerous.” 

Manmohan Singh has more shades of the devious politics of Narasimha Rao than we realise

Please read the title of this post keeping in mind what Mr Shouri said during the MPS meeting about Mr.Narasimha Rao!!

Prof Mehta writes: 

• The PM’s responses were artful in many respects. But the timing and content of these responses are likely to leave the country more rather than less confused. 

• The lollipop character of the questions asked by the distinguished journalists suggests buying into the line that the government as a whole does not have much to account for. Not one probing question was asked about this government’s rampant decimation of institutions. Even the one thing the PM directly signed, the controversial appointment of the CVC, was conveniently forgotten. Unless there are fresh revelations, Raja, Kalmadi and maybe Ashok Chavan will be history in a few months, sacrificial goats that will have expatiated our longing that someone pays. The interaction was not designed to clear the air about what happened. It was designed to say: “Calm down, Raja is out, I am an honest guy and guess what, I am an economist too.”

Demystifying the liberalism and multiculturalism

What we as an individual in a society composed by our actions need to do is the following; first understand the core principles of liberalism at individual level, and do not bother and confuse about multiculturalism, because the word multiculturalism is as complicated as the word ‘secularism’; both has inherited problems; do not link with multiculturalism when you try to understand the entity called liberalism; make sure that the foundation of liberal values are established in your thinking by your own way and methods, then move for understanding the multiculturalism but ensure that you are not moving away from liberal values over the period a journey to understand the multiculturalism.     

What prompted me to utter the above words is Mr.Mehta article in today’s IE. Some excerpts: 

• Munich Conference has evoked sharply contrasting responses. Some see in the speech an attempt to rescue liberalism from its counterfeit cousin, multiculturalism. Others see an enactment of the same narrow politics that produced a crisis in many liberal societies in the first place. 

• The contest between liberalism and multiculturalism was about the relationship between freedom and diversity. Multiculturalism often fell into three traps in the context of this relationship. First, it ignored the fact that equal freedom for all individuals is the core value.  

• ……instead of saying that your identity should be irrelevant to citizenship and to the goods that the state distributes, multiculturalism made identities the axis of distribution. The more identities become an axis of distribution, the greater the chance of destructive group politics. 

• But liberal politics globally has been curiously susceptible to being taken over by right-wing nationalists.

• This is often because defenders of liberal values end up aligning them with a particular way of life or national identity. In India, for example, the debate over reforming personal laws was often framed as being about “national integration” rather than about values of individuality and freedom.

• Liberals should be worried about any attempt to benchmark national identity; such benchmarking diminishes the force of liberalism. 

• The aspect of the speech that was potentially vague was the use of state power to clamp down on extremist groups. When state power should be used for clamping down is always a challenging question for liberals; a liberal society has to put up with a lot of offensive speech. But the challenge that liberal states face is over their credibility in being impartial. Do prejudgments and prejudice make these states more assiduously pursue groups belonging to some communities than others? 

• In short, the future of liberalism will depend not upon a philosophical statement that all groups engaging in extremist speech be condemned; it will depend upon the impartiality of state practice towards all citizens.

• The truth is that we still don’t fully understand the circumstances under which there is a turn to extremism. In that sense, Cameron’s implicit diagnosis that the turn to extremism was fuelled by state multiculturalism seems quite premature. Multiculturalism has its flaws. But it would be foolish for liberals to suppose that simply because state multiculturalism failed, the answer must lie in a more “muscular” liberalism.

• Liberal values are eminently defensible. But their realisation in practice involves sensibly dealing with complex layers of history, psychology and a sense of self.

Free market: When government discretion and tariffs are sold on the market.

Even more says Prof Mehta that:

• Since language is an inherently social enterprise we will all have to contribute to the reconstruction of our language. But how can one possibly make sense of our times, when words and institutions lose all their meaning? In uttering them, we conjure up merely unmeaning shadows of their former referents. 

But the language with the same letters needs to be painted, and perhaps the spirit is different!!

Societies: Open vs closed

On Saturday I attended the Distinguished Gust Lecture delivered by Professor Kishore Mahbubani. The topic was “Will China and India grow together or grow apart?"

No doubt, the lecture was good one. Because it was amazing in two ways: it was simple words but quite meaningful at large and it was also clear in layman language. Among other things which had discussed, one very interesting thing (at least to me) was he said China is sending different teams to study the functions of democracy in different parts of the world. This is something new to me and I wonder what would be the china’s take on Indian democracy?

I was lucky to get a copy of his 2008 book The New Asian Hemisphere: The Irresistible Shift of Global Power to the East. It is very interesting particularly the first chapter. Read the book reviewed by Sunanda K. Datta-Ray.

But two things remains unquestioned, no matter minor or major that may be.

Mr.Kishore writes in his book and also he has written elsewhere that:

• Indian political scientist Pratap Bhanu Mehta once compared India and China by saying,  “India is an open society  with a closed mind; China is a closed society  with an open mind.”

But I read and heard several times the same words as below:

According to Brahma Chellaney:

• Henry Kissinger once said China is a closed society with an open mind, while India is an open society with a closed mind…

The other question which I consider was not at all touched during the lecture was the planning process adopted in china vis-à-vis in India especially during the process of economic reforms in these countries. Because what makes different to masses is the more realistic and decentralized planning process rather than other way around.

Glimpse of reading

National Skill Development Corporation's CEO says “.....vouchers for trainees may become the big government innovation of this decade.”

The chairman of Teamlease Services Mr.Manish Sabharwal says “Unfortunately, 2010 saw the activation of the poisonous Right to Education Act that will lower school capacity, increase corruption, raise costs, lower competition and increase confusion. It represents a license raj of the 1980s, while education needs a deregulation of the 1991 kind. A bad school is better than no school. The most expensive school is no school. The good is not the enemy of great. An education and training system that does not produce employable children amplifies to low productivity informal employment because it produces low productivity people.”

Bihar Chief Minister Mr.Nitish Kumar says “I believe that direct cash transfers are the way forward. Give money to the people and give them the choice to buy what they want from the market…. My policy will be to provide mostly cash transfers in state schemes in the future as well.”

Mr.Soli J. Sorabjee writes Chinese sex education: The Chinese have hit upon an innovative way of sex education which allows boys and girls to peep into each other’s bathroom in order to understand gender roles and observe what behavioural differences there are between the two sexes. According to Zhang Meimei, a sex education expert, the bathroom of the opposite sex can be a mysterious place. “I have known a lot of third and fourth grade boys who would sneak into the lady’s room just to see what it is like. Therefore, visiting the bathroom can be a good technique in teaching gender codes to students.” One wonders what is the take of our dynamic Education Minister Kapil Sibal on the Chinese method.

Prof Mehta writes “R-squared variances will replace the close reading of the Mahabharata and Montaigne as the only way to understand human psychology and it is not clear this will be for the better. The kids will be smarter, but perhaps none the wiser.”

Mr.Subroto Bagchi writes “What are the chances that you are an 11-year-old reading this article right now? I would give it one in a billion. And if you are not an 11-year-old, you would not know what it would mean to be 20 in, 2020. As you try and decipher the many strands of thought I have presented in this article, the 11-year-old is stalking the enemy on his device. What he is using will vary from a Nokia cellphone to the X-Box,

Morality vs political economy

Pratap Bhanu Mehta discusses the current political juncture of Indi and the present government. Many of his questions asked below is relevant in both reforming of structural and institutional point of view.

• Can there be any greater denigration of the office when the prime minister does not appear to be in charge of government? The Congress president engages in similar abstractions when she speaks of our shrinking moral universe in the context of corruption. 

• It is a strikingly resonant phrase. But the leader of the ruling party does not have the luxury of an academic discourse on corruption. The shrinking moral universe is not a fact of nature; it is a consequence of decisions taken by leaders. 

• The second rhetorical trope in this repertoire is something to the effect that “we will get to the bottom of this”. This invitation to plumb dark depths is a clear obfuscation. It is inviting us to stare at a bottomless pit of investigations when the basic political questions are clear. Simply put, it is this. Did the prime minister and the cabinet endorse Raja’s actions? If they did, what was the rationale? If they did not, what did they do for two years to curb actions that they knew to be wrong? Answering these questions does not require an inquiry. It will take the prime minister no more than 10 minutes to set the record straight on these questions. The Congress is asking us to look into the depths because it does not want to look us in the eye. The third rhetorical tactic is an appeal to institutions. 

• The opposition may well be playing brinkmanship when it comes to a JPC. But the simple fact is that the prime minister’s demeanour has consistently undermined the authority of Parliament. Even during the well-conducted previous session the prime minister barely spoke in Parliament; he refused to engage in any serious debate or any serious crisis, except the civilian nuclear liability bill. He refused to invest Parliament with the gravitas it deserves. The CVC, P.J. Thomas, may be entirely innocent. But the Congress cannot get away from the fact that it brazenly ignored the one mechanism we have for ensuring that constitutional offices have bipartisan credibility. 

• The fourth element in this rhetorical strategy is to hide behind the poor — or worse still, allow other Congress leaders to flirt with the communal card. The Congress leadership has to get over the idea that just because it has promulgated a few schemes for the poor, it can be absolved of the larger structural crisis they have produced in the economy. Even within the terms of their own paradigm, how do they explain that a pro-poor government is now embedded in a nexus of regulatory arbitrariness that has benefited some corporations at the expense often of honest and genuine small business? What pro-poor policy can explain that it has become nearly impossible to be an honest businessman in this country? The Congress president is insulting the country by implicitly suggesting that the sense of moral crisis and betrayal large numbers of citizens feel is entirely a product of opposition politics. 

• As for the prime minister: his worst failing may not be corruption, it may not even be standing idly by. His worst failing will be that by not coming clean he has undermined any reason to trust so-called good men