Swachh Bharat, Delhi Air Pollution, Why Govt fails big time?

It is again that time of the year in Delhi. Monsoon is over, Winter (thanks to changing climate) is yet to come, but the air is slightly cold and foggy. Noise related to pollution has again started to appear on social media timelines – Posts on Paddy stub burning, trucks coming, open construction etc. But the fact of the matter is that the winter of 2017 is going to be as much polluted if not less than the winter of 2016 which was as bad as that of 2015. Before the hidden politician amongst us jumps and starts looking at the performance of rhetoric driven AAP Govt, let us look at the performance of another regime which is also trying to another big problem plaguing India and that is cleanliness in India.

PM Modi launched a drive to make India clean on 15th Aug 2014. Work started on a war footing with words backed by large budgets & media campaigns.  Govt has spent/allocated more than 26000 Cr ($3.5 bn) on Swachha Bharat since 2014 but there is hardly any impact seen on the ground. Despite ‘in your face’ campaigns, large money spending, the situation has not improved at all. Take a stroll in any of our marquee cities like Bangalore, Mumbai, Varanasi, Agra etc and landscape remains as dirty as ever. Earlier there was just garbage all over now there is garbage with hoardings of Clean India! There are campaigns and big talk of toilets being built everywhere but in reality, everything is as it was prior to 2014 except an addition of storage room aka a dysfunctional toilet in every rural household and this futile exercise has consumed close to $ 3.5 bn in hard cash. Now again before we start looking at the failure of BJP and its inability to move things, we need to ponder and need to look beyond parties. It’s not AAP / BJP / Congress failure but a failure of Govt or rather a failure of the way the Govt thinks.

If one looks carefully and analyze the way govt acts it will come out that Indian government rarely thinks in terms of performance, the end result, or NPS score of target consumers/customers but always think in terms of money being spend/allocated and scheme names. This thought process has led to a scenario where whole government thought process is limited to budget/cess/allocations & vanity matrices like 100% literacy, 100% village electrification (If 10% of houses get electricity, its considered electrified for the purpose of govt record) and naming all such schemes after Nehru Ji, Gandhi Ji and now on Atal ji and DeenDayal ji.

If there is any doubt on this line of Govt thinking, kindly look at advertisements released by various Govt under various regimes. It does not matter if the advertisement was released by Jayalalitha or Karunanidhi, Mayawati or Akhilesh, Manmohan Singh or Modi, the template remains same.  Some scheme name, a big photograph of the leader along with data on the quantum of huge crores being spent,  so many families benefitting, blah blah. Suddenly you wonder if there was really a regime change or the same set of people are still running the government under a different set of masks!

Hence If one looks at Swach Bharat campaign from a government perspective, the whole campaign looks super success full with  26,000 Cr allocated, more than 52 million toilets built, India is on way to becoming super clean. But the reality on the ground is totally different. Was there any issue on the Govt intent? NO, Govt was as determined as it can be but core issue has been thought process where Govt can only think from budget outlays. Nobody focussed on fundamental problems related to toilets/sanitation and challenges related to it.

The fact of the matter is that India is neither ready nor can afford western model of toilets. First, there is no sewage system in any of the villages or towns and on top of it, there is hardly any water. In India, the difference between have-nots and haves is just one simple thing – access to clean running water. Only rich and middle class have access to it while resting of the India battles for few liters of potable water every day. With a focus on having toilets,  a person who was using 300 ml water in open defecation earlier,  now needs 3-liter water at his house and this house has no running water no access to sewer lines and no place to build sewage pits. The house in villages is either interconnected or clustered together having no scope to build open pit system. Even if one builds an open system, what to do during monsoon flooding or filling of tanks in 2 years as there is no manpower working in these areas? So if one looks at the constraint on the ground – no water, no waste disposal system, the idea of “Swachh Bharat” by building toilets was DOA ( dead on arrival) however the whole Govt machinery just went ahead with the plan –  as it knows one thing best which is to create a budget and collect money for it. So whole Govt went ahead with 26,000 Cr in hand even without understanding the basic problem of sanitation and challenges related to water, disposal, treatment etc.

So again before passionate hidden politicians jump and start blaming Modi govt. pause and see what happened in Delhi.

Delhi Govt in all earnestness appointed IIT Kanpur to do a study and find out the cause of pollution in Delhi. The report which has its own serious flaws in methodologies / simplistic observations/conclusions,  was still adopted by Delhi Govt but none of the simplistic solutions was implemented by it. Why? The simple reason is that solutions were like 1000 cuts war on pollution rather than any big bang budget approach and to make matter worse the improvement would have shown by 2022 (the election is in 2020). Since there is no big budget allocation, no ribbon cutting, and no big hoardings, the report and solutions have been conveniently parked in a cold storage.

So what is the solution? The only solution to all such problems is one that is delinking budgets from any action. Govt needs to think in form of solutions/ results rather than in terms of budgets and big bang approach.  For example in the quoted IIT Kanpur report, roadside dirt in summer had very high weight. A small team could have taken a cluster of Delhi and implemented changes to see if vacuuming the road and covering construction is creating any localized impact and what could solve this. A lot of A/B testing in startup parlance but with focus on finding a solution rather than big bang talk with focus on election!. Likewise, for Swachh Bharat, It would have been better if Govt had done trials on some select cities like Agra, Varanasi, Bangalore etc and figured out what is working and what is not working. Or in villages, the focus could have been on building community toilets rather than at individual homes.

Executing small projects is not complicated and there is enough talented manpower with the Govt in addition to the large budgets, but then small projects don’t get allocation or gravitas from the top. Further, these projects can’t be run by politicians as they are tied to the 5-year horizon and neither by bureaucrats with transferable jobs. This project needs people with long-term engagement as well as skin in the game with suitable rewards as well as accountability and punishments. Until the existing system thinks in terms of a long-term model with proper accountability and lifetime postings, India will remain refugee to musical chair policy making and will slowly decline to a hell hole in terms of quality of life in no times as policies designed for slavery don’t work in democracy on a long-term basis!
The end

Of Politicians, Bureaucrats and 52 ministerial knots in Ease of doing Business in India

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“Ease of doing business In India” seems to be stuck despite being the focus of present NDA Govt. PM Modi, determined to bring India in top 50 places to do business, has directed ministers/bureaucrats to reduce procedures/paperwork so as to improve “Ease of Doing Business” ranking of India.  However, despite all the push for last 2/3 years, India has merely limped to the rank of 130 from earlier 131( just 1 point) as per Ease of Business report released by World Bank. One wonders why has Govt not been able to solve this not so complex puzzle, despite present dynamic leadership and noble intentions and what could be the reason for such a dismal performance on this count?

Interestingly the answer doesn’t lie in the political leadership of present times but rather curiously designed governance structure of India which has been designed to rule than govern. The complex web of the system which on the face of it, appears to be a solution of all problems but in fact is the root cause of all problems plaguing India today.

Indian Govt as per its official website has 52 ministries, 16 APEX offices, 53 departments, and some 85 commissions, not to count State / Junior ministries, an army of bureaucrats and millions of govt servants servicing this large country (2nd most populous / 7th largest economy). However how many ministries (departments) the USA, an economy which is 10 times bigger in terms of GDP has? Just 15 departments and China, a country much bigger than India in terms of population, area, and size of the economy? Just 20 ministries and 5 APEX offices!!! Probably there lies the secret of governance or rather lack of !! One can fairly conclude given the state of affairs in India vs China / USA that quality of governance seems to be inversely proportional to the size of Govt.

A ministry or department once formed behaves like a living organism. It acquires its own identity, shape, and size where it needs energy (budget/power) to survive, grow and stay relevant. Unfortunately, more budgets are granted only if the ministry is more relevant/visible and there lies all the pain. To stay relevant, ministries draft more rules, notifications and circular so that more work is created and more budgets are allocated which in turn create more hindrance for normal businesses. For example, consider the case of the ministry of labor.

Ministry of labor in an ideal world, shall look after the welfare of labor and draft rules related to minimum wages (Ironically a state subject), monitor issues related to labor wages and work conditions. However if one just make policies and issue advisory, it reduces the scope of work and in turn, causes a reduction in budget and power. So ministry of labor does not only stop at labor issues but also worry about “Healthcare” and operates hospitals as well. No not ministry of health but it is the ministry of labor which focusses on providing world-class health care to the workers of India. It has a department called ESIC ( Employee State Insurance Corporation) which collects close to 6.5% of wages earned by an employee and use this money to provide healthcare. Are ESIC hospitals best in the country? NO. Are these hospitals really sought after by all workers? well NO. Is there a perfect alignment of interest among hospitals and workers? NO. Needless to say, the condition of ESIC remains pathetic like any Govt hospital with the poor quality of care, zero accountability, and dismal service standards.

So if there is no operational excellence, no benefit or advantage then why Govt needs to run hospitals and force more and more people to the path of ESIC rather than giving them freedom of buying health insurance and choose hospitals? Interestingly Govt rather than reforming ESIC, keep on bringing more and more people under its ambit ( new limit is 21,000 monthly wage) because core issue is not about the welfare of workers but about the power of labor ministry and ESIC. Without this massive operating outlay, the ministries will be faced with budget cuts / reduced power, a scenario abhorred by bureaucrats and ministers alike. This scenario is not limited to the ministry of labor alone. Every day, every ministry/department is busy thinking of the laws/rules which can increase intervention of the state to next level. Recently parliament passed a bill mandating employers to provide 26 weeks of paid leave to pregnant women in order to come at par with Norwegian countries, however little did the well-meaning minister realized that it will make married woman highly unemployable to small businesses and will again create a rush for Govt jobs with all these perks. There is another minister thinking of ways to control portion sizes served by hotels and list goes on!

PM Modi in his address to NASSCOM ( industry body of IT companies) pointed out that the success of the famed Indian software industry is not because of government but rather in spite of it. He said that IT industry grew as Govt had little understanding of the sector and by the time Govt took notice of it, it had become quite big. Unfortunately, despite such astute understanding, Govt continues to meddle in any industry be it hotels, small businesses or any other flourishing industry. One good example of Govt intervention is the launch of StartupIndia in the otherwise flourishing segment.

Startup India program was launched last year with big fanfare and in a year, we have Startup India events, Startup sessions and even a Startup India policy whose main highlight is that now a nodal body can certify startups!! With dept. at work with all ideas on nodal bodies/ministries/agencies, have startups in India taken off?? Well if one looks at data, 2016 was probably the worst year in terms of VC investments ( lowest in last many years) and policy confusion. So much Govt attention has only muddled startup scene as earlier startups like any other company were taxed on profits and now thanks to overactive Govt, they are getting taxed even on investments!! so much so for ease of business and proactive Govt!

This is not the case with the just ministry of labor or Startup India. We still have a ministry of Steel and we also have a ministry of heavy industries. We have a ministry of surface transport and also a ministry of railways. Tomorrow there will be a ministry of LCVs and then ministry of 22 fire trucks. Overall whole governance structure looks like a design lifted straight from famed British comedy “Yes Minister” which in Indian context looks more like Indian tragedy as the number of departments/ministries keep expanding and expanding.

So for a startup or any company, what will be the best ministry to deal with? MSME or DIPP ? or specific functional ministry depending upon core area ( Fin-tech, travel, Steel, Textile and so on so forth). Needless to say, with dozen of ministers / departments working at same matter in their parallel universe and none willing to lose an inch of control, things remain in perpetual gridlock as every ministry in order to remain relevant / powerful keep on adding its own notifications, rules, processes and thus kicking ease of business out of window.

French writer and aviator Antoine de Saint-Exupery once wrote that “Perfection is Achieved Not When There Is Nothing More to Add, But When There Is Nothing Left to Take Away”. Likewise, the ease of business can only happen if there are fewer ministries to deal with and not more and India can only improve its ranking if it reduces 52 ministries to 20 and eliminates the massive rusted bureaucracy ruling the masses in disguise of servicing them. Hence the Govt need to do the massive thinking and withdraw from the majority of areas rather than getting into every area. This needs a paradigm shift where the aim of government shall be to enable rather than to provide. An area which was well understood by PM Modi till 2014.

So the issue is why it is not happening and PM Modi, a firm believer in maximum governance and minimum government, has not able to solve this issue. And with every passing day, the present Govt looks more “House Trained” than ever ( As Sir Humphrey would have pointed out in Yes Minister).

The answer to this puzzle does not lie at the door of political leadership but at the door of Indian governance system design. India ruled for almost 800 years had an administrative system whose main task was to rule / or help rulers rather than providing governance. In 1935, Britishers relented and started giving natives a say in governance issue but the underlying system remained loyal to the masters in London. This system created an anomaly where the front face i.e political class became accountable for everything while back-end ie the bureaucracy controlled delivery as well execution of state powers.

Indian bureaucracy aka the iron frame of India became a behind the scene administrative machinery which on account of being “faceless, formless”  became a formidable supreme power where its members enjoyed all fruits of the power with full permanency and without any accountability (count the no of bureaucrats convicted/ arrested for failure in delivering their duties). The whole situation aptly summed by Sir Humphrey in Yes Minister  “Dear Bernard,  Ministers comes and ministers go. but we remain forever”. So while political class gets judged every moment and face change of order every five years, bureaucrats remain forever to provide continuity in governance. Moreover, the majority of Ministers/politicians remain servile to bureaucracy as politicians being new to administrative set up have minimal understanding of intricacies of governance due to lack of experience as well as due to lack of time (given very high public engagements).

Hence to assume that a politician will come and reform this rusted Indian service delivery system and usher a new era of policy thinking from this same tired, an entitlement seeking, generalist army of experts, is at best a mirage and worst a daydreaming on part of the Indian public. No politician or media or judiciary can do the required change and only hope is that India will get a strong header PMO secretariat/cabinet secretary who decides that enough is enough and he or she needs to reform this massive government rather than just demanding (and getting) more and more privileges for their clan.

History tells us that last time India saw some serious reform, it didn’t come from political class but from bureaucrats. T N Seshan as an election commissioner changed forever the way elections used to happen in this country, a former bureaucrat cut all the rules/regulations in 1991 economic reform and a strong CAG head turned all crony capitalism upside down with same system, same machinery, and same people.

Hence any talk or thought of bringing India among top 50 places to do business is going to remain pipe dream till present political leadership figures out a way to minimize this vast maze of ministries, departments, APEX offices, commissions and what not, and till then God save the king!

The Indian Sahibs

1/ IndianSahibs: A senior bureaucrat is checking at the airport but hold, it’s not him but his protocol officer and a CISF guard, who is checking for him.

2/ IndianSahibs: Custom official has stopped so sahib consort is threatening and name dropping on protocol. There people are busy on full tax payer salary. Incidentally, that means Airlines issued boarding pass without seeing the person – a big security hazard. Now why custom official – It is Indian airlines departure from the international side so the customs guy needs to stamp.

3/ An official abusing powers/ utilizing free man powerfully paid by taxpayers is more corrupt than any black money hoarder and on top of it, he is compromising security big time.

4/ and this tells what is wrong with India. We remain servile to officials while going gaga on small busmen eking out a living

5/ same officials who want salaries at par with world best also guaranteed jobs, ten thousand perks,  gleefully tank every Govt scheme by shoddy execution and blatant corruption.

5/ anyone who thinks there is hope for India is living in fool’s paradise. Our real rulers are not politicians but Sahibs who demand and get more power

6/ Sahibs with more powers, zero accountability, and fixed tenures thanks to sustained demand by the middle class. We got our own Frankenstein

So critical question: why great Indian middle class remains extra servile to Babus/Sahibs & full of contempt to politicians? Racism or what?

Demonetization: recession at gate or GDP at 9%

Update 1: 12 Dec 2015 :

1. 34 days have passed since the announcement by PM Modi and as expected almost all of 14 lakh cr is going to be deposited in line with my prediction. India is a jugged country and people always figure out a way to beat system due to our long history of surviving in a hostile system.

2. I still stand by positive contribution to GDP but all assumptions were based on the idea that the situation will normalize in 10-15 days. As of now, it is not looking to normalize even in the next ½ months and hence impact is going to be negative now.

3. Big lesson – Indian middle class – bureaucracy, bank officials etc will boomerang any big reform and hence its high time output focus on reforming them.

++++++

Demonetisation has happened. 500 and 1000 rupee notes are banned. There are serpentine queues outside banks / ATMs and experts are busy. There are high pitched videos, columns, tweets and Facebook posts by every expert about how poor are hurt and how this will kill the trade. Roll back demands are being made from every armchair economist, citizens dining in five-star hotels but extremely concerned about poor, many chief ministers. Overall air of the nation is thick with not only smog but also with pro-poor and small business friendly experts and politicians.

There is a view propelled by a gang of astrologers masquerading as economists that demonetization is going to hit the hard economy as cash will be sucked out of system and trade will stop. This hypothesis does ring true if one notices the plugging sales at e-com ventures, lack of crowd in markets and drop in footfalls at malls. No wonder all Captain Obvious is at top of lungs on the incoming slowdown hitting Indian economy due to this demonetization.

History tells us that events rarely follow an obvious path and are shaped by unforeseen and unpredicted. Demonetization is such an event. It is not going to slow down the economy but going to put this economy in the high pedestal of growth. A jump by 2% to 3% in GDP if not more by demonetization is very much possible and for the first time in the world, we will see trickle up effect in the economy than usual trickle down.

The first foremost and obvious effect of demonetization is the elimination of the cash economy and shift towards banking system. Lot of people even without illegal money were not using banks and were saving in cash at home for a variety of reasons. Now all this money will go informal banking channels and will find its way to formal earning mediums like mutual funds, fixed deposits, savings accounts etc. This will create a push and boom as the cash lying idle at home will be at work and will create a contagion effect. Those dormant Jan dhan accounts will now be kicking with life and in a big way. Even if  10% cash lying idle at the household level, translates into 1.4 lakh crore ( $ 21 billion). Now this $21 billion will be available in the banking system and hence available to Govt/ Industry to kick-start new projects / build infrastructure. To get a relative perspective, FDI inflow in India in FY2015-16 was $40 bn while in FY 2014-15  it was $30 bn so the amount coming from dormant accounts to banking system alone is 53% of this year FDI and almost 70% of FY14-15 FDI.

The second kicker to the economy will come from fall in real estate prices. As per experts and general perception, real estate prices are going to fall by 20% to 30% in general (a black component of a deal). In India, in FY 2015-16, if one just takes top 8 cities, $14 bn worth (90,000 Cr) was invested in the real housing ( 3 lakh houses in 8 cities at a 30 lakh average price though in real numbers are much higher). As per experts, real estate prices are expected to crash by 20% to 25%. This drop in prices even if we take 50% drop in a number of transactions will leave more than 9000 Cr ($1.3 bn) money at the hand of these end users in just 8 cities and this amount will be 10x higher if one account for the whole country. This extra cash available with the consumer will go in other discretionary consumption and will either build the saving rates or drive consumption of services as well as consumable goods.

The third and not so obvious kicker will come from the attempt of all back money hoarders trying to convert it in white. As per data released by RBI, India has 14 lakh Cr ($ 210 bn) in circulation in 500/1000 bank note denominator. For a moment if we assume on a very aggressive basis that 50% of it is white and declared income ( fully tax paid), still there is INR 7 lakh Cr ($105 bn) in black money. Now, these cash hoarders will try to use people with low income to transfer 2.5 lakh into account. Now as per financial ministry data, India has opened 25 Cr (250 million) Jan dhan account for poor people as on today. Now if black money hoarder were able to use 50% of these accounts (12.5 Cr) to deposit cash in Jan dhan bank accounts, one just needs to deposit INR 70,000 in each account. So apparently all this cash will flow back in the system in next 50 days without any collateral damage to these money bags. However, the cost of organizing this deposit program will range anywhere from 20% to 40% ( as per the figures being circulated in media/social media). Even if we take a nominal cost of this transaction at 10% being paid to these Jan dhan accounts(against 30%), it will be a commission of INR 70,000 Cr ($11 bn) ( 10% of 8 lan crore) or 8,000 per Jan dhan account (12.5 Cr). This 8,000 will immediately find its way to consumption as this is massive cash for these account holders and even if just 50% is spent, Indian economy will see pumping of $6 bn (40,000 Cr) being spent in next 3/5 months. This class will binge on clothes, consumer goods and will create a massive multiplier effect. However for the first time multiplier will not trickle down but will trickle up as rural or low-cost goods will drive the industry. So in a way, PM Modi has imposed huge wealth tax on the rich people and accomplished direct cash transfer to poor people.

Foreign investors pumped $10 bn in 20 months in Indian startup which put India on the world map as a top 3rd country for startups and changed the whole mood of the nation while creating many multi-billion enterprises. Payout of $6 bn in arrears to Govt employees in 2008 as per sixth pay commission, triggered a consumption boom in India and insulated it from the economic crisis which impacted every country. Hence this total amount of $40 bn hitting the banking sector/consumption in next 3/6 months is not just going to finish the black economy but going to put India on an autobahn of economic growth.

PM Modi in his usual total out of box thinking, has just put India on growth orbit of a different level where a minimum jump in GDP by 2% to 4% is not ruled out.

Gear up, the age of India has arrived.

Namo Namo

This article appeared at Times of India here.

GST and the end of hope

“Road to hell is paved with good intentions.”

GST – good and service tax, summed as India’s biggest tax reform in the last many years, is finally here. GST empowered committee in one of their last meeting, finalized rates on pending items with Gold getting taxed at a new rate of 3%. The empowered committee other than creating an additional layer of tax also proposed to impose levy/cess etc beyond specified 5 slabs of taxes.

Multiple tax rates, levy, cess, additional taxes!! It seems that somewhere the present Govt just lost the plot and caved into interested parties by enacting the same complicated rules as they were there before GST. Somebody summed up the situation correctly saying that it would have been better to rename the existing taxes as GST rather than going through this administrative nightmare.

If the multiple rates are not enough, Govt has gone ahead and created, even more, confusion by having multiple rates within a single service i.e. look at multiple tax rates at hotel rooms. Zero tax for rooms up to INR 1000, 28% on rooms above 5000 and few more slabs in between. These multiple rates are going to create litigation, an opportunity for corruption and money laundering. For example, a room priced at 999 for two people, get triple occupancy and now move to 10% tax bracket. The customer not willing to pay additional tax will force hotelier to adjust and hotelier, in order to not lose business, will accommodate and end up doing a crime which was not needed.

Adam Smith, the revered economist said that for taxation to be helpful in building nation-state, it needs to have three things in place. First, tax rates shall be reasonable. Second, it shall be easy to pay taxes and the third penalty shall be severe in the case of noncompliance.

If existing tax regime in India was the antithesis to all of three preambles of an efficient tax structure, GST has made it even worse. Multiple tax rates, the filing of tax report every month and on top of it almost draconian powers at the hand of tax officials.

It seems Indian govt is not working to create “ease of business” but is rather trying to ease out small businesses. For example, a trader has a turnover of 30 lakh will come under the ambit of GST and will have to do all compliance including having service of some CA firm which seems reasonable. However, a turnover of 30 lakh will hardly generate a net income of INR 30,000 to 40,000 even at 10% net margin. Can a person earning 30,000 per month, afford all IT infrastructure and have the mental capability of accounting for multiple rates, adjustments, input credits? Can he or she afford the services of a qualified CA to do all paperwork? While life becomes massively complicated for small vendors, it becomes a nightmare who is operating in multiple states. If a company was filing some 15-20 returns a year, it will be now filing 400 returns a year!!

Probably this explains as to why Business papers / Indian Inc, leading consulting firms and Share market are going gaga over such complicated GST regime. GST by virtue of complex compliance regime will wipe out small/informal business in one stroke and will shift all the market to big organized firms while at the same time simplify business/tax rates to a great extent for big businesses. This will boost the income of organized sector, will create more wealth for big players and boost GDP for sure but will also render all small businesses out of circulation. We might see a replay of the present scenario where SENSEX is creating new record every day and India is among the fastest GDP growth nation but there are no jobs!! This push by present complex GST system will create massive unemployment and will open India to global shocks as the informal business will not be there to absorb millions of youths looking for jobs every year.

Hence one wonders what is the intention of Govt behind GST? Off course one aim was always to plug the leakages, collect more taxes (8th Pay Commission is due) but why no attempt or thought to simplify life for small businesses.

Conspiracy theories among us will jump and say that it has been planned by big business to rob the informal sector etc. However, it seems that it is more a case of Hanlon Razor (Never attribute to malice that which is adequately explained by stupidity) than anything else.

Every year Govt leaders/bureaucrats tour developed nations showcasing India and pleading for investments while offering many sops to companies and one wonder why not same sops to SMEs in India? Free industrial land, no inspector raj, freedom from onerous compliance and one window scheme for starting the business?

Rather than simplifying life for small businesses, every move of the Govt is aimed at creating more litigation, collect more taxes while doubting every step of small businesses with zero trusts? Why a democratic govt chosen by popular vote, would like to make life more traumatic for the majority of its citizens (share of the small business / informal economy is far more bigger in India compared to OECD countries)?

The answer does not lie in NDA or UPA but is hidden in India’s history. India which was ruled for almost 1000 year by foreign rulers always had laws which were designed to rule and not to govern.  The rulers (foreigners with no empathy for local population) wanted to collect maximum taxes to fill their coffers ( look at growth in British GDP and decline in Indian GDP from 1800 to 1947 or wealth of Mughals who came on a bare horseback to India). Moreover, the rulers and their agents have a very low view of natives and minimal trust ( all are thieves).  This led to the creation of a governance model which was heavily rule-driven with an idea to plug any possible loophole with maximum power at the hand of the government servant.

Unfortunately post-independence, rather than building a nation for Indians, the new government just continued with the traditions/rules of Britishers (that was worst crime of Pandit Nehru) and maintained the same thought process of the rule rather than governance. This policy ensured that Indian businesses crawl only with the burden of compliance/bureaucracy/inspector raj sitting on its head.

In 2014, the election of Narendra Modi who had no baggage of Western training led to a faint hope that India will finally see freedom from the British rule in theory and practice. The shackles of bureaucracy will be broken and laws will be made with a focus on governance rather than the rule. Unfortunately, rolling out of GST in its present format has shattered all the hopes. If a Right-wing party led by a strong PM almost with Superman image, cannot tackle bureaucracy and can not usher Regan era in India, then no will.

Hence the hope that India will be able to cut its past of 1000 years of slavery, move forward and join the league of big nations has dashed against reality.

GST in a simpler form would have ended the tyranny of tax officials/bureaucracy, unlocked the real potential of Indian business crippled by inspectors raj and would have taken India to another level of prosperity/wealth while creating millions of jobs and boosting consumption.

Sadly, the hope has ended, God Save the King.

JNU, Rohtak and Crisis of Democracy

India is in rage these days and seems very united against the threats to its unity. Countless messages related to teaching lessons to anyone who dares to attack or break India are getting posted and shared on social media. Yes – as a Nation, we are ready to crush any voice, which attacks the integrity of India. However, this steel-like resolve faced its first encounter with reality and chose to look away when Haryana violence, not very far from JNU, happened and failed to shake anybody except the people who were at the receiving end.

A section from Jat community decided that they have to be treated as a backward class and chose to convey the message in the form of protest but without the usual ways of shouting slogans or doing a foot-march in the Gandhian way. Jats, who are classified as one of the martial races in India, chose to do the protest in their own style, which is a lot of force and show of strength. And the result was indeed something significant, as around 30 people died, a business worth INR 34,000 Crore was destroyed, and much murkier details of mass rapes, violence and arson started emerging from the shadows as the dust settled down. The impact of this event was 100 times more negative than the Pathankot attack or the JNU anti-India shouting or the 26/11 attacks in terms of massive disturbance to society and the common citizen. However, these powerful events were met by equally deafening silence. Photo-shopped planted messages regarding our motherland stopped appearing. All social site activists, who were proclaiming to tear anyone into small parts in case of a threat to the motherland, started forwarding stale jokes again.

In Organisation Building, one of the most important rules is “Hot Stove” rule given by Douglas McGregor. The hot stove never discriminates on the basis of status, rank or caste, and follows a simple rule – “When you touch the hot stove, you burn your hand.“ An effective organization needs to be like a hot stove, which is to treat every employee on the same terms in order to install a sense of fairness and justice. Any organization, which is not fair to its employees, falls apart over a period of time. Organizations constantly face this dilemma about being fair or being subversive to power groups. Nations being a superset of organizations also go through the same dilemma.

India, touted as world’s largest democracy, really falls apart when it comes to the matter of fairness and providing equal rights to all. There are millions who are languishing in jail without any bail or hearing on the most flimsy of cases while the powerful ones don’t even appear in court, let alone be arrested – be it RK Pachauri or Supreme Court judges accused of molestation. India really follows the principle of animal farm where all are equal and some are more than equal.

This method of selective governance has served India’s ruling elite very well so far. The State rules not only through police and judiciary but also by managing media. However, the recent advances in social sites and crowdsourcing of news are disrupting this power equation. Hence, the sense of fairness becomes more critical and important in these uncertain times.

There is no way one can condone the shouting of anti-India slogans and talk of breaking India at an Indian university and it does deserve suitable punishments, but so are the rioters who raped, killed and looted with no worry about consequences. Unfortunately, not a single political party condemned or raised the issue of Jat violence even when parliament was in session. Vote bank politics or sheer contempt for justice?? While Govt machinery was in full motion in chasing and arresting students, it was holding peace talks with the group of Jat leaders showing total oblivion to the violence, which the same group had inflicted on others in the name of Reservation.

If one sees the chain of events and reflects, it becomes very clear as to why a certain class of citizens of India suddenly feels very alienated and persecuted. Would there still be same silence if this kind of looting/arson/rape and goonda-ism was committed by a section of Muslims? Or by a section that is not large in number and politically insignificant? Will we still be forwarding jokes and ignoring violence while going ballistic over some slogans!!

India is facing its moment of crisis and this crisis didn’t start with PM Modi. It started much before when India started to get ruled by a set of people whose moral compass was shorter than a tiny insect! When Indian judiciary tucked in its comfort zone chose to look sideways and focused more on control of its privileges than dispensing justice! When government executives forgot that they have taken an oath to the nation and not to a political class or ideology, and when the ruler sitting on the chair of governance forgot the need to give equal justice to all. The culmination of all this decay for last 60 odd years has created a situation where a statement like “law will take its own course” is met by bored yawns – by the guilty and the victims alike. Supreme Court’s statement that destroying of public property shall be recovered from hooligans is met skepticism since we don’t even remember as to when was the last time justice was dispensed to common people. Nirbhaya rape? Union carbide? Or when?

The authorities of this country shall be worried that victims of rape in Haryana chose to go silent than come to State for redressal. If the role of State gets reduced when it comes to security and application of the law, the mere existence and validity of State may become questionable in near future? If the State failed to provide security, food, health and sense of justice, the reason for its existence itself becomes very tenuous.

We may dismiss the Haryana incident as one of the random events. However, another random event, i.e. Gujjar agitation, happened just two years back! So a series of such random events shall be taken as a harbinger of a trend rather than a lone star. Hence, we shall see the occurrence of similar events with higher frequency sooner than later, since declining farm income and jobless growth coupled with hyper media connectivity has created a scenario where expectations are high and patience is very low.

While these agitations are worrisome, authorities shall worry more about the nature of these protests, which are going more & more violent and damaging than anything India has seen so far.

Elites / intellectuals in India have generally dismissed the possibility of a Class War in India on the fact that none has happened so far despite so much victimization of backward classes and scheduled castes. However, the reason is very different this time. The upper class in India maintained their supremacy on the lower strata of the society with sustained violence and constant push down ( social discrimination, violence). Barring entry from temples, forcing to sit on ground and probability of heavy violence in case of any rule violation, etc., for last 1000s of years has created a muscle memory in the lower strata of the society which makes then unable to raise a revolt in such a manner. However, the sudden economic shift has changed the game. Poor returns from agriculture and emergence of cities have turned social equation upside down. The earlier upper class is suddenly in the lower strata of society due to changing economic conditions. Given the historical reasons, they are not able to stomach this sudden change in their status. Hence, the revolt by forward class will be more violent and dangerous as there is no muscle memory. Further given the total lack of justice in India legal system, there is a sense of moral hazard where people no longer care about any rule of law or fear any possibility of punishment. This has created a disturbing trend and hence its even more important that a sense of justice is created and guilty are punished irrespective of vote bank, caste or religion.

India is staring at an era, which is going to become more violent, more chaotic if the powers at the helm don’t see the signs and sense of justice and fairness isn’t installed. Rather than these being some rare events, these protests are going to be more of routine! Beginning of so called civil war at a road near you?

Be afraid, be very afraid!

This article was originally published at “Swarajya Magazine” at this link.