Leaked! Secret letter from Narendra Modi to Rahul Gandhi after the recent elections

A secret letter written by PM Narendra Modi to Congress VP Rahul Gandhi soon after the recent five state elections has been leaked online. Here is the full text of the letter:

13^th March 2017

Dear Rahul ji,

The elections are over, and they have gone largely as per plan. Your efforts were invaluable in Uttar Pradesh. Akhilesh beta never realized that "Hand" is used to stop a "Bicycle", not to accelerate it ! But he is still young, will learn over time. In fact your efforts in U.P. were so effective that there was also a strong rub-off on neighboring Uttarakhand. A big thank you for this! We are also very happy with what happened in Manipur, where we were a big Zero just five years ago! There was a slight problem in Goa, but I admit it was all our own fault. Parrikar ji was not there, and our people were busy fighting amongst themselves. However we have fixed that problem now, so don’t worry. Meanwhile, you are free to imagine that it is the Congress who won the mandate in Goa and Manipur. Victory - after all - is just a state of mind.

We are however not at all happy with what happened in Punjab. This is a serious matter. You should have campaigned more vigorously in Punjab instead of leaving everything to Amarinder Singh ji. It seems you were focused only on Uttar Pradesh. This is sheer negligence. Because of this, deadlines for Project “Congress-mukt Bharat” will now have to be pushed forward to 2022. But it is okay this one last time, we are letting you off with just a warning.

You are now free to resume your foreign holiday. This is a good time to visit Bangkok. It always is! You can plan for a visit to Europe too, but don’t, even by mistake, go to the U.S.! I hope you remember what happened in 2001? Luckily Atalji was able to help you that time, but this time we may not be able to do anything. Trump Uncle is very strict. He may suspect you are there to sell kitchen utensils, Made in Jaunpur, of course. So please take care.

And yes, don’t forget to return for Karnataka elections next year.

Happy holidays!

Warm Regards,

Narendra Modi

What we learn from recent elections in India

In an extraordinary move one fine evening in November last year, Prime Minister Narendra Modi announced sudden withdrawal of 86% of India’s currency in circulation, in what he termed as a crackdown on black money. In a predominantly cash based economy like India, it was an unprecedented move and has no parallel anywhere in the world. While the last word on “notebandi” has not been said yet, several elections – both local bodies and states - since then confirm voters have not been averse to the action. This is in sharp contrast to what was shown incessantly on electronic media during those eventful days of acute currency shortages. Besides a verdict on demonetization, here are some takeaways from recent elections in the country not just in the five states that went to polls last month, but elsewhere as well.

Democracy is flourishing in India as voters demand performance & accountability

The mainstream media has no touch with reality. I wonder how they justify the crores they get as salary. For example, the sheer scale of BJP’s election victory in Uttar Pradesh is mindboggling. Yet, throughout the election campaign, the media painted a picture of a keen contest between the “UP ke ladke” Vs. Narendra Modi, with Mayawati’s BSP thrown in for some additional spice. The media narrative portrayed a largely equal fight, or occasionally an edge to the BJP depending on whom you believed. As if to justify prior coverage, the exit polls also reflected similar trends, with BJP a bit ahead of the rest but not too much. But it all fell flat when the results were declared. This is true not just for U.P. but elsewhere as well. Recall that the non-stop coverage for more than a month of the poor “suffering” in bank queues (some even died!) also turned out to be top class fiction. Clearly, if you are watching too much TV, especially the newsroom debates & “expert” analyses, you are wasting your time. Go, get a life.

There is no substitute for hard work. Narendra Modi’s charisma sits on top of several decades of solid ground level work by RSS & several of its affiliate organizations in the remotest corners of the country. You cannot build a sustainable electoral model without some real groundwork & voter connect at the grassroots. Mulayam Singh Yadav built Samajwadi Party from scratch. He has spent his whole life in the rough & tumble of U.P.’s realpolitik, connecting with people, building relations and nurturing the party to what it is. In the 2012 U.P. State Assembly elections, people voted for Samajwadi Party with “Netaji” in mind. But it was Akhilesh who was made the CM. You can inherit party posts but not the personal touch & rapport with the people. You have to build that yourself. Governing a State & showcasing a couple of projects is one thing, having a grassroots level connect with the people that makes them vote for you again & again is another. It is no surprise that cutting across party lines, one can see that most second generation politicians are failures.

There are no shortcuts to success, no substitute for real groundwork and people connect

Leadership matters. In Uttar Pradesh, Narendra Modi staked his personal reputation at risk and led the battle from the front. There is no doubt that BJP could not have pulled off such a huge success if Modi had stayed away from campaigning or only made token appearances. Ideology has ceased to matter. Choosing your party is no longer a question of ideology you subscribe to. All parties call themselves socialist and secular. Nobody reads party manifestos. Even freebies have ceased to matter, if only because everyone promises a bountiful of them, so the factor gets neutralized. People want forceful, decisive leadership.

There are no vote banks. The “secular” narrative is dead. Sixty five percent of India’s population is below the age of 35. The median age of an Indian is 27.6 years. The generation which saw Partition has passed away. To a large section of today’s voters, even the Ayodhya demolition is “history”. And voters are no longer swayed by what happened in history. The BJP has successfully shed its “communal” label. Even Muslim attitudes towards BJP are changing. But like an Ostrich who buries its head in the sand, the old generation “secular” politicians - most of them past their retirement age - refuse to see this reality. Even the caste factor is overrated. Just because one can generate caste-wise statistics and blabber some nonsense, it does not follow that voters who cast their vote ‘vote their caste’. Even where a correlation exists between the caste of the electorate & the elected, it does not prove causation. I have not seen a single survey or opinion poll which asked the voters why they voted for a candidate they did, and majority of the voters pointed to caste as the driving factor. No wonder sand it slipping from under the feet of parties who thrived on such narrow agendas. In an article three years back, I called such parties “Dodos of Indian Politics”.  

Voters have become demanding. Television & radio has reached every home. Internet penetration is increasing rapidly. Literacy has improved significantly over the years. People are much more aware of what’s happening in & around them. You just can’t take them for a ride anymore with empty promises. The voters have become demanding, and politicians who fail to deliver get thrown out. This is repeatedly getting proved one election after another, be it in Nitish Kumar retaining Bihar, or the Akalis losing Punjab. 

Despite its recent spate of successes, even BJP cannot rest on its laurels. It will have to deliver genuine improvements to the lives of the people. Otherwise the same fate awaits them.

The Intolerance debate

Intolerance (n.) – unwillingness to accept views, beliefs or behavior that differ from one’s own

Over the past few weeks, a debate about rising “intolerance” has been raging in India. Several writers have returned awards citing “rising intolerance in India”. Talking to India Today TV, film actor Shah Rukh Khan has reportedly said, “There is intolerance, there is extreme intolerance… there is, I think…, there is growing intolerance”. More recently, actor Aamir Khan said that alarmed by recent events, his wife Kiran Rao has suggested that they should leave India. 

I find this whole issue utterly ridiculous.

Intolerance is a subjective term; it means different things to different people. Also, opinions always differ from person to person, and there is nothing wrong in different people having divergent opinions. Beyond a point therefore, the current debate on whether there is growing intolerance in the country or not is futile, it is never ending. Nobody claims that each and every one of 121 crore Indians are tolerant. Nor are all of them intolerant.

The slant in the current debate is that intolerance has increased after the new government came to power in May 2014. For example, Aamir Khan has reportedly said that “…the sense of insecurity and fear has been growing in the past six or eight months”. Coming from Aamir Khan, the statement is all the more surprising, since his film “PK” was considered to be hurtful to the religious sentiment of Hindus and was demanded to be banned by certain right wing organizations. However, the film was not only allowed to be released, but became one of the highest grossing Indian films of all times. 

The so-called “intolerance”, was nowhere on display, neither on the part of the government, nor on the part of majority of the viewers.

No intolerance on display - PK was a big hit

How we decide

On any such issue, a rational person should base his opinions & judgments on two primary sources:

1. Official data
2. Personal experience.

Sources such as newspapers, television are secondary sources and should never be made the primary basis of our opinion and judgment. They can best be used for confirmatory signals when they support what data and personal experience indicates. Secondary sources should be taken with a pinch of salt when they contradict data and personal experience. Further, even while using these secondary sources, care should be taken to differentiate facts from opinions.

Let us say, the TV anchor reports something like this:

“A person was killed because he was selling beef. There is growing intolerance in the country.”

In this,

1. A person was killed is a fact.
2. Because he was selling beef is the suspected motive. It may be proved or disproved after a full investigation is over.
3. There is growing intolerance in the country is a generalization which will need supporting data with a much larger sample size.

When we listen to such news, and form our opinions and judgments based on them, we must be conscious of what we are relying on. When I listen to the above news, I would give 100% weightage to point no. 1 above, 50% weightage to point no. 2 and zero weightage to point no. 3.

Where is the data?

The Home Ministry website has lot of statistics on the country’s crime. None of those who allege intolerance have provided any data to support their thesis. Note that even when data is present, it needs to be analyzed carefully, as raw numbers may prove existence of fact, but not causation. I have often seen that from the same set of numbers, different people draw different inferences. For example, economists differ on whether the economy is doing well, or poorly, though both sides refer to the same sets of data.

In the present debate, there is no data or survey which indicate how many attacks have been caused by this alleged “intolerance” and whether there is any substantial increase in them after the change of government at the Centre. Besides, let us also not forget that under the constitution, law and order is a state subject. We cannot blame Modi for riots in Gujarat while using a different yardstick for law and order problems in Assam, U.P. or West Bengal or elsewhere. The intolerance argument fails miserably against the “data” test.

Personal experience

My personal experience and observation does not corroborate the intolerance allegation. To the extent I see around myself at home, in office or in my neighborhood, behavior of the people, inter-personal and social relationships and attitudes towards others including towards people belonging to other religions are the same today as they were before May 2014. If your experience is any different, you are entitled to hold a different opinion.  But to me, the intolerance argument makes no sense. 

The only intolerance I see is an intolerance towards Modi.

Four ways of bringing back Black Money

The subject of black money stashed abroad has attracted considerable attention in recent times. It was an important issue in last year’s general elections, and UPA government’s inaction was seen as one of the reasons behind its electoral defeat. Recently, the NDA government has introduced the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill 2015, popularly known as the Black Money Bill, in the Parliament. In a discussion organized by the Moneylife Foundation, Dr. Subramanian Swamy (sorry, he doesn’t need an introduction!) shared his views on the bill, and black money in general. Here is a quick recap of the event. (I have given a more detailed perspective on the black money issue in a previous post, click here)

By some estimates, an amount of approximately Rs.120 lac crores is lying outside the country. Dr. Swamy started by saying the bill falls short of the objectives of bringing back this amout. The bill depends on the assumption that the money is detected or declared by the assessee, but does not have steps to actually bring it back. It is essentially a "tax bill", clarifying how to tax what is already known. It can also be misused, as it gives draconian powers to tax officials.

Dr. Swamy said there are two aspects to this whole issue – first, bringing back the money stashed abroad and second, stopping creation of new black money. On the first, he said there are four ways of dealing with the problem.

The Black Money Bill will not bring back the money, said Dr. Swamy at a Moneylife event

One, exchange of information under Double Tax Avoidance Treaties (DTAA). India has DTAA with several countries. An Indian assessee having income in a foreign country (say, Germany) and intent on avoiding tax tells India he is paying tax in Germany, and tells the Germans he is paying tax in India. Actually, he pays at neither place. Such cases can be detected with exchange of information between the two countries. Most media discussion on the black money subject is centered on this aspect. The UPA pursued only this angle during their rule. However, this is a very small aspect of the overall quantum of black money.  

A second alternative is to obtain details of account holders who are holding accounts abroad secretly and illegally, secretly and illegally! In one instance, Germany reportedly bribed bank officials and obtained information about its nationals holding accounts in Liechtenstein, a tax haven in the heart of Europe. France did the same with HSBC.

A third alternative is to extract information by force, used by the U.S. (who else?) against banks such as Credit Suisse and UBS. The U.S. government charged local branches of these banks with crime, arrested its officials and forced the banks to share information.

Finally, Fali Nariman, a noted Indian constitutional expert and lawyer has suggested that an ordinance can be passed nationalizing all foreign assets lying abroad, and asking all other countries to repatriate the money to India. There is a 2005 United Nations Resolution backing this, and the foreign governments will be forced to comply, irrespective of their bank secrecy laws. This has been done very effectively by Egypt to recover illegal assets of its former President Hosni Mubarak, by Libya against Qaddafi and by Philippines against Ferdinand Marcos.

Dr. Swamy said this last method is the best and the cleanest method to recover the money lying abroad. Incidentally, this is the same one I have mentioned in my previous blog post on this subject (link given above) as “the one I have found the most actionable” quoting an article by India’s National Security Advisor Ajit Doval. 

Besides the issue of bringing back money stashed abroad, a second aspect is how to stop its generation in the first place. In this, he touched upon a number of topics such as the need to abolish P-notes due to its role in facilitating money laundering, abolishing income tax, streamlining excise, bringing in e-governance and quickly & efficiently delivering justice to a few ‘big fish’ caught in the act. He recalled how Bernie Madoff was quickly sentenced to 150 years in prison within just six months of his fraud coming to light. On the other hand, Ramalinga Raju's case, which came to light at around the same time, is still dragging in court. Dr. Swamy also stressed the need for deregulation and simplification. For example, he pointed out that more than 2000 products have excise on them, but 90% of excise revenue comes from just 22 products. He emphasized that honesty needs to be encouraged in society. 

There was a very interesting question & answer session at the end, where he took questions from audience and touched upon several other aspects of corruption and black money. On the whole, a very engaging session!

The ABCD of India’s political landscape

This Republic Day, a basic lesson on the country’s current political landscape...

A is for Aam Aadmi Party, the newest kid on the electoral block. Starting out as an anti-corruption movement, AAP sprang a surprise in the Delhi Assembly Elections. The sheer novelty of its approach has now put them at the centre of the country’s political discourse. How well the approach works in the long run remains to be seen.

B is for BJP, the principle asylum of India’s right wing political thought. The party attracts those who believe everything was hunky-dory in the Land of the Rajas & the Maharajas, until the successive invasions of the Moghuls and the Europeans deprived Bharat of her wealth & prosperity.

C is for Congress, the party that has governed the country for a major part of its existence. It has worn different garbs at different times in history, toying with socialism in the 60s & 70s, free market - liberalism in the late 80s & 90s and back to welfarism in the 21^st Century.

D is for - what I call - the Dodos of Indian politics. These are parties other than the above three, mainly regional in existence. Most of them have little economic ideology and depend on narrow populism or chauvinistic programs to sustain their existence. 14 years into the 21^st Century, many of them do not even have functional websites, let alone embrace emerging media and reach out to the voters of tomorrow. As the results of recent State elections show, most of these are facing extinction.

E is for Elections, that grand celebration of democracy that gives the people a chance to speak & be heard. Half the world population does not live in a democracy, and we are proud we have achieved a matured democratic infrastructure that allows for smooth transfer of power.

F is for Freedom, our most valuable possession. Freedom to live our own lives, the way each one of us wants to. It is upon us to use it responsibly and for the benefit of all, without malice and nuisance to others.

G is for Gandhi, the dominant name in India’s politics for the last hundred years. The original one lived a simple life; preached non-violence, truth and honesty. Later came the fake ones, whose contribution is more controversial.

H is for History, that which teaches us our lessons. It is upto us to ensure that mistakes of the past are not repeated in future.

I is for Independence, what India achieved on 15^th August 1947. It means we are now the masters of our own destiny, and cannot blame others for what happens to us. Let us take it upon ourselves to put our house in order and make this a wonderful place for our future generations.

J is for Judiciary. An independent & efficient judicial system is a key pillar of any democratic set up. Despite some ups & downs, Indian judiciary has largely stood the test of time in its independence, though its efficiency leaves much to be desired.

K is for Kursi, the seat of power which is what all the fight is for! It is the magnet that attracts people to this game and can bind even the most disparate group of elements together.

L is for Listening, an ability that seems so short in supply among political class. A Parliamentary debate is in progress? We don’t care. Listening to the people? What is that?

M is for Media. A free & vibrant media is often considered the fundamental proof of an open society. The advent of technology and social platforms has added a new dynamic to this channel in recent times, handing even ordinary people an unprecedented power to be seen and be heard.

N is for Nexus, that invisible thread that binds politicians, bureaucracy, industry and the media together. You cannot see it easily, but know it exists!

O is for Outrage, the only thing which makes our political class sit up and take notice. You need an outrage against corruption, outrage against rape, outrage against terrorist attacks, outrage against anything, if something has to happen. Until then, things don’t move.

P is for the Public, the fools who follow the rules. Come election season, every politician swears by them but soon forgets once elected to power.

Q is for Quotas, supposedly the ticket to electoral success. Create a quota; create a vote bank, so goes the conventional thinking in the political class. Caste, class, religion, age, gender, language, even profession, location and what not - you name it and there is some quota somewhere on that basis!

R is for Rule, that misnomer used to describe what the people we elect are supposed to do. I suggest we use ‘Govern’, which is the right word, as in, ‘BJP governs Goa’, ‘Congress governs Karnataka’, and so on. Not “…rules…”

S is for Scam, that recurring theme in our political discourse. From fodder to satellites, there seems to be one in everything.

T is for Taxes, the legitimate hard-earned money that is forcefully diverted from productive purposes to run the government. What happens to it afterwards remains a mystery!

U is for Unity, Unity which every party preaches, even as it goes around dividing the people.

V is for Vote Bank, that mythical entity that is supposed to keep you permanently in power. But as many are finding out lately, it may not actually exist!

W is for Wealth, what the Gods have bestowed on this nation – a very hospitable climate with an abundance of rain, water, sunshine, air and plenty of natural resources. It is upto us to make the best of it.

X is for the eXception! Once in a blue moon, a boy who delivered newspapers goes on to build missiles and even becomes the President. Untarnished, unblemished by everything around him. That the system allows him to reach such heights is what gives me hope.

Y is for Youth, the ‘demographic dividend’ of having one of the youngest populations in the world. This is the principle strength of India, the youth who will shape its destiny, its future.

Z is for Zero. Zero tolerance for corruption, zero tolerance for mis-governance, zero tolerance for crime. This is what the youth of this country should look for, when they vote in the coming elections!

Happy Republic Day!

The Aadhaar Card and our "Identity" crisis

Archana works for an organization that has recently introduced a new device to track employee attendance. At the time of entry and exit, members of the staff press their fingers against a biometric sensor installed in the office. The sensor matches the fingerprints with those in its database, identifies the employee and marks them present. But there is a problem. Female employees have learnt the hard way that on days when they have mehendi on their fingers – a very common occurrence in India, especially during festivals and family events like weddings – the sensor fails to recognize the employee, marking them absent.

Professor Chari is a retired professor who spends his time doing research and freelance journalism. He is a regular visitor at the local Public Library, which has a large collection of rare books that help him in his research. The University has recently ‘upgraded’ its systems, and introduced a biometric reader that scans the borrower’s fingerprints when membership is granted. However, there is a problem. The biometric reader fails to ‘read’ the Professor’s fingerprints, making it impossible for him to enrol. The Librarian says this is a very common occurrence with senior citizens, for which he has no solution.

These two incidents (names changed, stories true) that I came across recently drove me to attend an event organized by Moneylife Foundation earlier this year, on the recently introduced “Aadhaar” card by the Government of India. The event was addressed by Col (retd.) Mathew Thomas, a former missile scientist cum civic activist, and Mr. Jude D’Souza, a forensic expert. At the event, Mr. D’souza gave a demonstration of how fingerprints can be faked, and claimed even Iris scans can be easily tampered with. Col Thomas, in his speech, came down heavily on the Aadhaar project and explained how the project is being pushed ahead despite its lack of Parliamentary sanction, extraordinary high cost and innumerable flaws in conception, execution and  implementation. 

Since then, I have tracked the Aadhaar project closely. The critics of Aadhaar are many, and its flaws are there for all to see - the project has no Parliamentary sanction, its cost benefit analysis has not been done, it uses questionable methods to collect its data, the accountability for breach of data secrecy is vague and unidentified, the card itself is unnecessary and adds no value, and it exposes citizens to a grave risk of identity theft. (Read this, this or this) The card is being mischievously linked to government schemes like subsidy payments, for which simpler solutions such as Electronic Transfers (e.g. RBI's ECS) already exist. It's marketing campaign makes the deceptive claim of being “every citizen’s right”, creating a perception of value and benefit. One can understand a right to vote, a right to free speech, or even a right to subsidies and scholarships (if eligible). But a "right" to an identity card is a laughable statement! And yet, the citizen’s have lapped up the card, as if there was no tomorrow (around 38 crore enrolled at the time of writing!). I am amazed at this craving for another “identity” proof, without giving a second thought to what constitutes an "identity", and why identity cards exist. So let us ponder over it...

Aadhaar - A "right" to get a card that tells you who you are!

My dictionary defines Identity as “the fact of being who or what a person or thing is”. A person’s name and face, appearance and physical features give him his identity. His character, reputation, image give him his identity. His achievements, his work, his thoughts and actions – all give him his identity. "Cogito ergo sum”, Rene Descartes famously said in the 17^th Century. I think, therefore I am. That gives me my identity. People would still have their identities even if there were no identity cards.

Identity Cards exist not because people need identities, but because organizations need to identify people they want to deal with. The Election Commission issues an Identity Card, because it needs to identify voters who are authorised to vote. National governments issue passports because they need to identify people who enter and exit their country. A school or college issues an Identity card because it needs to identify students who have been granted admission. Why the UIDAI needs to identify anybody is beyond my understanding. It is probably the only organization in the world whose sole purpose is to issue Identity Cards!

Going far beyond its blatant illegality and reckless implementation, the Aadhaar project raises serious issues of citizen’s freedom, liberty and privacy that are little understood by a majority of Indians. The government exists for the sole purpose of ensuring law & order, defending the country from external aggression and providing a dispute resolution framework. People are unaware that nobody – not even the government – needs to know more about its citizens than what is necessary. For example, the Motor Vehicles Department seeks information about a person’s age, physical fitness & blood group in its ‘normal’ course of business. The Income Tax Authority does not ask for your physical fitness and blood group, but may seek information about income and assets, because that is in its normal course of functions. The Election Commission seeks information about age & residential address, but not income & assets! But the UIDAI wants to know everything about everybody, and for no specific purpose! 

It should be noted that opposition to Aadhaar is not opposition to technology. From Stone Age to this day, mankind has progressed only because of advancements in technology. The benefits of technology in areas such as bank computerization or railway reservation systems have been there for all to see. In recent times, government departments like the Income Tax or Passport Offices have computerized their operations, bringing immense improvement in the quality of their service delivery. However, Aadhaar seeks to create an integrated database that will hold everything from a person’s name and date of birth, to fingerprints and iris scans, and address to bank account numbers. It  would expose citizens to a grave risk of identity theft, and is a blatant encroachment on the citizen’s right to privacy and liberty. It would grant immense power to anybody who lays his hands on this data, and would be open to misuse (see this, esp. the last para). This includes unscrupulous employees from the related offices, data collection agencies, people with political power, and by consequence their relatives, associates, business partners or anyone else who is interested in obtaining this data for a consideration. 

The UIDAI claims the data is encrypted at the point of collection. But we know that adding a layer of encryption does little to deter a determined hacker. Everything from bank websites to email accounts, defence networks to even nuclear establishments have been hacked. No wonder UIDAI doesn’t even reveal whether the country’s top politicians own an Aadhaar Card!

To me, Aadhaar is nothing but part of a grand scheme to create a Surveillance State. Its other elements includes the Central Monitoring System (CMS), the National Population Register (NPR), the National Intelligence Grid (NATGRID), countless CCTVs at every nook and corner of the country, and every other instrument of state oppression that is used to track every step a citizen takes. Much of this is often justified on the grounds of 'national security' – in other words, the government’s own administrative failure of securing our borders and making the country safe. Governments exist to serve its people, not to control them. Unfortunately, schemes such as these do not face popular resistance, because a majority of the people feel they have nothing to hide. But once such an infrastructure is created, it can be misused to intimidate and subjugate people, and create a regime of oppression and injustice.

No wonder the government is desperate to give you an Aadhaar card. Why are you desperate to take it?

Beyond the obvious

Is allowing FDI in multi-brand Retail good for the country? What is the true impact of raising diesel prices or restricting LPG subsidy on the people? Should telecom spectrum and coal mines be auctioned to the highest bidder, or should they be allocated cheaply so that the price paid by the ultimate consumer (for telephone services and electricity) is kept low? Should rail fares be raised? Should the Central Bank reduce interest rates to stimulate industry and make loans cheaper? Should the government act against airlines who fleece passengers by charging exorbitant fares during peak season? Should the government explicitly promote export oriented industries that earn precious foreign exchange? Should cheap imports from countries like China be banned to protect domestic industry? Is the government right in spending thousands of crores on welfare schemes like MGNREGA? Questions such as these are debated daily, and are of interest not only to politicians and bureaucrats who decide on these, but also to citizens whose lives are affected.

How does one take a stand on all these? How does one decide what is right and what is wrong? How does one assess the impact of these decisions – beyond the immediate fallout that we can see (such as, for example, that one would pay more for diesel if diesel prices are raised)? Do these decisions have implications that are beyond the obvious? How do we know what will work out best for us in the long run?

“Economics in One Lesson” by Henry Hazlitt is a remarkable book by any means. Written in such a simple language that even a layman can understand, Hazlitt unravels the mysteries of economic decisions and their long run effects on the health of the economy and welfare in general. Hazlitt explains how markets work, how people behave, how governments decide and what they do to the very people they seek to assist. Hazlitt gives a framework that enables the reader to analyze the long run impact of such decisions, including that  which is not so obvious but nevertheless very important.

Hazlitt's remarkable book should
be compulsory reading for all

The book is divided into twenty five chapters, each dealing with a distinct topic such as taxation, effects of mechanization, import tariffs, export promotion, government price fixing, inflation, and so on. Hazlitt explains the basic principles underlying these actions and the impact of these on the economic activity as a result. Hazlitt uncovers not only that which is seen, but also that which is not seen. In Hazlitt’s own words, “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely on one group but for all groups”

It is amazing how much ignorance about economic issues is prevalent even among the policymakers today. Take the following paragraph from the chapter on government price fixing, for example. You might want to read it in the context of the current mess in India’s Oil & Gas sector, but keep in mind that Hazlitt’s small book was written in 1946!

Hazlitt writes, and I quote, “We cannot hold the price of any commodity below its market level without in time bringing about two consequences. The first is to increase the demand for that commodity. Because the commodity is cheaper, people are both tempted to buy, and can afford to buy more of it. The second is to reduce supply of that commodity. Because people buy more, the accumulated supply is more quickly taken from the shelves of merchants. In addition to this, production of that commodity is discouraged. Profit margins are reduced or wiped out. Marginal producers are driven out of business….if we did nothing else, therefore, the consequence of fixing a maximum price of a particular commodity would be to bring about a shortage of that commodity. But this is precisely opposite of what the government regulators originally wanted to do…. Some of these consequences in time become apparent to the regulators, who then adopt various other devices and controls in an attempt to avert them. Among these devices are rationing, cost-control, subsidies and universal price fixing.” Hazlitt then goes on to systematically demolish each of these.

As we all know, relying on the promise of deregulation, billions of dollars were spent on all stages of the oil & gas value chain in India, from exploration to refining to pipelines to storage & distribution. But the country still doesn’t have enough of what it needs. Most of the capacity in the private sector has been shut or is on the verge of closure, the public sector survives on huge doles of support from tax payer’s money. People don't have enough of what they want and the private producers have all but fled, all because of faulty price fixing.

It is remarkable that such a storehouse of knowledge can be crunched in such a small book and explained so lucidly. This book should be compulsory reading for all the lawmakers who decide our future, and for all of us who choose them.

Me Mumbaikar

On 26^th April 1986, The Times of India carried a cartoon depicting a khadi-and-Gandhi-cap clad politician cautiously touching a sleeping tiger. The tiger roars back, taking the neta by surprise. “He’s alive!”, the neta exclaims, while the common man watches on. It was the story of the 1985 BMC (Bombay Municipal Corporation, then) elections, whose results had just been declared and a seemingly dormant Shiv Sena had scored a surprise victory. A picture is worth a thousand words, and so was this R.K.Laxman cartoon.

Though the Shiv Sena had been formed nearly two decades earlier, it had largely remained on the periphery of the State’s politics until then. With this victory in the BMC, the Sena saw a strong resurgence, and Bal Thackeray quickly capitalized on it, swaying the local Marathi youth, hit hard by the influx of migrants and the devastating textile strike by Datta Samant in 1982. The Sena has almost continuously controlled Mumbai since then, and when in 1995, Manohar Joshi was sworn in as the 15^th Chief Minister of Maharashtra; Thackeray’s power reached its peak. (The term ‘remote control’ first came into political parlance with this very arrangement)

Among his detractors, Bal Thackeray evoked extreme reactions. His contempt for democracy, anti-Muslim rhetoric or use of strong arm tactics made him a soft target of the pseudo-secular intelligentsia. But there is one thing Bal Thackeray could never be accused of – hypocrisy. Thackeray spoke what his heart said, and it was this very forthrightness that endeared him to his masses.

Thackeray’s success came, not because of, but in spite of, an unfriendly media. It has rarely been reported that the Shiv Sena runs one of the largest ambulance networks in the country. Its Sthaniya Lokadhikar Samiti provided jobs to hundreds of jobless youth in the 1980s and early 90s, literally pre-empting them from joining the underworld during the heydays of Mumbai gang wars. At the peak of the Mandal Commission controversy, when even the supposedly upper caste parties like the Congress and the BJP dithered, Bal Thackeray launched a scathing attack on caste based reservations, risking his political career, but staying true to the principles he believed in.  Long before Vajpayee’s Roads Revolution, the Sena – BJP government built a network of more than 50 flyovers in the city, without which city traffic would have come to a standstill today.

In later years, Thackeray tried to expand his base outside Maharashtra, shedding his pro-Marathi stance and embracing the Hindutva agenda. This earned him a large non-Marathi following within Mumbai, but the Sena could not make any meaningful dent outside Maharashtra.

Today, Thackeray leaves the Sena in a precarious state. As corruption dominates the political discourse, the Shiv Sena finds itself on a sticky wicket. Raj Thackeray’s MNS (Maharashtra Navnirman Sena) has split his Marathi manoos voter base down the middle. How Uddhav takes up these challenges remains to be seen.

While most of Maharashtra’s politicians come from regions such as the Konkan, Vidarbha, Central Maharashtra or the sugar belt, Thackeray was the only leading political figure who had his roots in Mumbai. Till the very end, Thackeray remained in Mumbai, trusting his life to doctors who belonged to the very faith he was accused of targeting.

He loved Mumbai and fought for Mumbai. For this and this alone, Balasaheb Thackeray will be badly missed.

India awaits freedom

History has it that Kamsa was a cruel and unjust ruler of Mathura. Kamsa was greedy and cunning, and imprisoned his father Ugrasena to become the King of Mathura by deceit. Kamsa aspired to rule the world, and his frequent war mongering left the peace loving people of Mathura harassed and exploited. When he learnt that the eighth son of his sister Devaki & Vasudev would kill him, Kamsa imprisoned them both and killed each of their children as soon as it was born.

But the eighth son, Krishna, survived.

It is said that when Krishna was born, the doors of the prison where Devaki & Vasudev were kept opened automatically, and the guards fell into a hypnotic sleep. It was midnight and raining heavily, but a Sheshnag appeared from nowhere and protected Baby Krishna from the heavy rain. The raging Yamuna calmed down almost by magic, and made way for Vasudev to pass to the other side of the overflowing river. For the next few years, as Krishna grew up in Gokula, Kamsa spent all his time searching for Krishna. He lost his appetite and slept poorly at night. He could see his dream of conquering the world fade away. He got obsessed with the thought of killing Krishna, but all his attempts to assassinate Krishna went in vain. The poisonous Putana could cause no harm, and Trinavarta, the ‘whirlwind’ demon was blown away. Arishta, Keshi, Kaliya and many others fell like ninepins before the might and magic of Krishna. Krishna was unstoppable, Krishna was unbeatable. Krishna was the Supreme Being.

Krishna was an idea whose time had come.

Today, five thousand years later, India again awaits an idea whose time has come.

Why Socialism fails

Came across this interesting and instructive story recently:

An Economics Professor at a local University made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that socialism worked and with socialism, no one would be poor, and no one would be rich, a great equalizer.

The professor then said, “Ok, we will have an experiment in this class on the socialism principles. All grades will be averaged, and everyone will receive the same grade, no matter how one actually performs in the exam"

After the first test, the grades were averaged, and everyone got a “B”. The students who studied hard were a upset, and the students who studied little were happy. As the second test rolled around, the students who studied little studied even less, and the ones who had studied hard earlier took it easy too. The second test average was a “D”! No one was happy. When the third test rolled around, the average was an “F”.

As the tests proceeded, the scores never increased, as bickering, blame and name calling all resulted in hard feelings and no one would study for the benefit of others. By the end of the year, all failed.

The professor told them that socialism would ultimately fail because when the reward is great, the effort to succeed is great, but when the reward is not yours, no one will try or want to succeed.

Could not be any simpler than that.

Sachin as a celebrity MP

Sachin Tendulkar’s decision to accept nomination of Rajya Sabha has come in for heavy criticism from the public. Soon after the news was reported, the Twitter world went berserk, and hashtag #UnfollowSachin was trending Worldwide. Opinion polls such as those on The Times of India website indicate three - fourth's of the people disapprove of the development.  Media reactions were more restrained, trying to balance criticism with respect for Sachin the cricketer. Journalists writing in the print media used euphemistic tones, “cautioning” Sachin about the “challenges” that lay ahead. The electronic media did what it does best – organize debates without adding anything of value. Political reactions were of course, the worst, ranging from purely hypocritical to downright ridiculous. The Communist Party of India (CPI), for instance, demanded that Sourav Ganguly should also be nominated to the House, as if they are building a cricket team in Parliament.

But is the pessimism surrounding Sachin’s nomination justified?

Performance data of Members of Parliament (MPs) is now available online. The data assesses performance of all the MPs along parameters such as asking questions, participation in debates, including raising important issues, introduction of Private Member’s Bills and attendance in Parliament. I downloaded the data and looked for how celebrities have done. Data indicates that performance of celebrities in the current Lok Sabha is mixed, and generally ranges from poor to below average.

Performance of celebrities in the current Lok Sabha (till 31^st March 2012)

Name	Debate	Pvt. Member’s Bills	Questions	Attendance
Jaya Prada	19	0	366	32%
Kirti Azad	17	0	140	92%
Navjyot Sidhu	3	0	99	29%
Shatrughan Sinha	3	0	66	74%
Azharuddin	2	0	5	77%
Raj Babbar*	1	0	0	70%
National Average	23	0.4	177	78%

(*Term started on 10/11/2009, for all others 18/05/2009)

(Source: www.sansadratna.in)

Jaya Prada, for example has recorded only 32 percent attendance in Parliament, though has asked a lot of questions. Kirti Azad has been present in Parliament 92% of the time, but has scored slightly below the national average in participation in debates and asking questions. Sidhu has neither attended Parliament much nor taken part in debates, while Azharuddin and Raj Babbar have been little more than spectators.

Of course, the above metrics may not be perfect. For example, ‘attendance’ only means signing the Attendance Register for the day and does not mean the member was present for the whole day and listened with rapt attention to what was going on. There can also be other parameters on which an MP can be judged, but this is the best data that is currently available.

In another article, The Times of India has also drawn the similar conclusions about nominees to the Rajya Sabha, though it only quotes the attendance record in its support.

Attendance record of some celebrities in Rajya Sabha

Name	Sittings Attended	Total sittings	Percentage
Lata Mangeshkar	6	170	3.53%
Mrinal Sen	30	170	17.65%
Shabana Azmi	113	170	66.47%
Hema Malini	50	127	39.37%
Dara Singh	76	127	59.84%

(Source: The Times of India)

Personally, there would be nothing wrong if Sachin Tendulkar is entering politics. In fact, Sachin can do a lot of good for the country if he wants to, and only time will tell what he actually does. But his accepting the post even before retiring from active cricket has certainly not gone down well the people. It indicates he treats the post  merely as an ornamental one. The carefully orchestrated Bharat Ratna media campaign may also get punctured, as Sachin accepts a government largesse which is seen as significantly below his demi-God stature. And then, there is this whole issue of legality of his appointment.

This just isn't cricket, Sachin. Very disappointing.