V. Ramani's web I AM, THEREFORE I THINK

A considerable amount of heat and dust (but not light) has been generated in the past couple of weeks on account of l’affaire Alapan. The storm in a teacup (and, Yaas, I am not referring to the cyclone) may have abated somewhat but its reverberations will be felt in the country’s federal architecture and in the bureaucratic structure for quite some time to come. The perennial animosity between the PM and the West Bengal CM has led to collateral damage. As a former bureaucrat who has dealt with general administration matters during his career, I cannot resist offering my two bits on the latest Delhi-Kolkata Mahabharata.

            For over two decades, at the district and divisional levels, I hosted central teams deputed by the Government of India to assess the damage to crops, houses and public infrastructure because of floods, drought and hail. Following a wrap-up meeting with the Chief Secretary and other Secretaries of the state government, the team would submit its findings to the central government and its recommendations on the financial relief to be given to the state. I never saw the Prime Minister visiting my state in this connection. It seems things have changed now, with the hands on approach of the person at the top. But I cannot really fathom how a meeting at the Kalaikunda Air Force Base, without the presence of senior central and state officials, contributes to an understanding of the extent of damage and the financial restitution required. A formal meeting at Nabanna, the state secretariat of the West Bengal government, would have been far more useful.

            Be that as it may, the CM could also have, given the current circumstances, been present for the meeting with the PM. Granted, there were irritants in the form of certain personalities with whom she has had many a verbal joust. And yet, whether to raise the political temperature so quickly after an acrimonious electoral contest is an issue that merits consideration. Choosing one’s battles is also a matter of strategy, keeping one’s gunpowder dry for sterner conflicts that lie ahead.

            However, one would have to conclude that the central government, in this case, used a sledgehammer to try and kill a fly. Granted, the PM may have felt insulted, but his ire could have been vented at the political level. To slap criminal charges was surely overdoing things, especially when the Chief Secretary being proceeded against was carrying out his duties under the same Disaster Management Act. Nor has one heard of a case in the past (except during the recent Bengal elections) when an All India Service officer has been peremptorily ordered to report to the Central Government (rather like a soldier being sent to barracks or a policeman to the police lines), when the officer has not sought central deputation, his state government has not been consulted and no justification for his presence being immediately required by the central government is given.  A strong letter from the Cabinet Secretary to the Government of India, addressed to the Chief Secretary, conveying the displeasure of the central government, would have been more than adequate in the present case, especially since the officer concerned was at the fag end of his civil service career.

            Such moves create dangerous precedents for the future. If the same strategy is applied in future, the central government can requisition the services of the senior most officers of those state governments with which it has adversarial relations and order that they report forthwith to the centre. Not only will this cripple the functioning of the state governments, it will also create a fear psychosis in All India Services officers working in a state that their careers (and lives) can be transformed in a moment by one whimsical act of the central government.

            I have also not understood this prattle in the media about the supposed political loyalty of the Chief Secretary. By all accounts, Alapan was as acceptable to the former CPM government as he was to the successor TMC government. One thing is very clear: an All India Service officer is somewhat like the bahu in a traditional Indian household. She has been birthed by the Government of India (with the UPSC as midwife) but, once allotted a state cadre, she moves to the in-laws (state’s) house. She may visit her parents’ (centre’s) house during her career but, while in the state, she goes entirely by the diktats of the political executive in the state. I have personally worked closely with five CMs of Maharashtra, from across the political spectrum, and have attempted to implement their lawful orders to the best of my ability. At no point in my career were allegations made about my loyalty to a particular political formation and I enjoyed the best of relations with politicians from all the major political parties of Maharashtra. One point bears repetition: while serving in the state, an All India Service officer is bound by the orders of the state political executive of the day, headed by the CM.

            How this newly discovered Raga Alapan, the opening to which we have been privy so far, develops in the days to come will be watched by the bureaucracy and political observers with interest. What should not be affected is the steel framework painstakingly created by that giant among men, Sardar Patel. Securing the independence of and ensuring the efficient functioning of the All India Services is one of the keys to the federal health of the country.

When the war between the Trojans and the Greeks entered its tenth weary year, the desperate Greeks, on the advice of their seer, offered the Trojans a huge wooden horse while seemingly withdrawing from the battlefield. The overjoyed Trojans brought the horse within their fortress, ignoring the prophetic warning of their priest not to accept the gift. His words, rendered in Latin in Virgil’s Aeneid, were “Timeo Danaos et dona ferentes” which, literally translated, reads “I fear the Greeks, even when bringing gifts”. The consequences of this folly are now history: the Greek warriors hiding in the horse emerged at night and decimated the Trojans. Cut to the present day and the shoe is on the other foot: it is the Greeks, who have taken financial assistance from the troika – the European Central Bank, the European Commission and the International Monetary Fund (IMF) – who are faced with the Scylla of an exit from the European Union or the Charybdis of enforcement of unpleasant austerity measures at home. And it is the Europeans who now fear the Greeks accepting rather than giving gifts.

The Greek drama has its share of villains, depending on your ideological sympathies. The free marketer will blame the profligate approach of the Greek government while the left of centre statist will hold “evil” international capital and its institutional handmaidens responsible for the unthinkable situation where a developed country has, for the first time, defaulted on its debt obligations.  As with everything in life, the truth lies somewhere in between. The Greek people, and their governments, spent as though there was no tomorrow.   More importantly, they forgot the prudent maxim of any thrifty householder: don’t spend beyond your means. Running up budget deficits, they resorted to external borrowings to cover their expenses. It also appears that successive governments cooked budget figures to hide the true budget deficits. Enter the IMF, with its usual “slash and burn” policy. Undeterred by the experience of its disastrous handling of the East Asian crisis in  the late 1990s, the IMF prescribed the usual austerity measures, including drastic spending cuts. The carrot for these harsh measures was in the form of financial assistance from the troika. The problem was that far too much of this assistance went to pay private creditors of the Greek government or was spent in unproductive areas like military spending. With the option of currency devaluation foreclosed by its membership of the Eurozone, Greece could not think of spurring export growth to promote industrial growth; nor could it employ monetary policy to kick start the economy and ease the budget deficit. The obvious result of reduced public spending was the adverse impact on welfare  payments like pensions, a sharp deceleration in growth and a rapid increase in unemployment, noticeably among the youth. The resulting anger in these sections saw Greece getting its first leftist government towards the end of 2014. It was only to be expected that a government with a reddish tint would forswear “anti-people” austerity measures. At the same time, the new government knew that it could get no further credit without belt-tightening measures. It, therefore, went in for the masterstroke of a referendum on the austerity measures sought by the troika. This was a win-win situation for the new government; by asking for a vote against austerity measures, it took a populist stand which it thought would go down well with its voters. Expectedly, the people (from whom you can hardly expect a deep understanding of either  economics  or realpolitik) voted against austerity measures. As things turned out, the government has had to subsequently accept even more onerous conditions from its creditors; only, it can now tell its voters “See, we were on your side, but these big, bad Europeans left us with no other option”. The problem, post-referendum, is that Greek citizens, especially pensioners, insecure public sector workers and the growing tribe of the unemployed, are likely to be bitter about their “betrayal”, leading to lack of public support for the unpleasant measures that are to follow.  So the Greek drama ends for the present, with neither the dire predictions of Greece exiting the Eurozone nor the collapse of the Euro currency becoming a reality, at least in the near future.

As a former practitioner and a present student of public policy in India, I am interested in the lessons the Greek episode throws up for India. We went through similar harrowing times twenty five years ago, when the family gold had to be pledged abroad to save our national honour. There are four clear messages emanating from the present brouhaha for our politicians and policy makers:

1. Stay away from chronic debt:

What applies to families and companies applies to countries as well. You have to be able to service your debt obligations at least to some extent from surplus revenues to avoid falling into a debt trap. An essentially requirement for this is to keep budget deficits down to a reasonable limit. On the one hand, this means that tax collection systems (both direct and indirect) have to be robust and reasonably leak-proof. On the other hand, it also involves adjusting budget expenditures to avoid serious revenue deficits. This is an area where governments generally rush in where wiser men would fear to tread. Governments in India, both at the national and state levels, display a penchant for ill-thought out social schemes. The previous United Progressive Alliance (UPA) government enacted legislation providing entitlements to a broad spectrum of the population in the areas of rural employment, education and food security. The goals are certainly praiseworthy; the schemes, however, involve expenditure estimates that are hazy at best and will go up once implementation across the country is in full swing. There is also the very real danger of well-intentioned schemes being implemented by a disinterested, corrupt bureaucracy, the end result of which would be unproductive use of valuable public finances. This phenomenon of wastage of public money is already evident in the across-the-board subsidies in the power, cooking gas, water and fertiliser sectors, where public resources are being wasted on the well-off sections of society. The touching faith in bureaucratic solutions to every problem has spawned a bloated, inefficient bureaucracy, with guaranteed tenures and no performance compulsions, which constitutes a burden on government finances, especially with decennial wage hikes. There is also the matter of the touching faith of the government (and influential sections of the intelligentsia) in the public sector, which, in the absence of managerial reform, is bleeding government finances. All of which point to the precarious nature of public finances — a sharp economic downturn can derail these and put pressure on the economy. Start borrowing to finance the deficit and you are headed in the same direction as Greece; a number of states in India already live mostly on the largesse of the national government.

2. Be and remain competitive:

Healthy tax revenues and a booming market require competitive industries which can create domestic jobs. In the globalised era, this also means being internationally competitive to avoid being swamped by cheaper competitors. Alas, this is one area where the Indian economy continues to limp along, “Make in India” exhortations notwithstanding. Recent land acquisition legislation makes getting land for any public purpose a Herculean enterprise. Apart from the astronomical compensation cost, there are the bureaucratic hurdles to be surmounted, including getting an Environmental Impact Assessment, a Social Impact Assessment and a Resettlement and Rehabilitation package (this last applies even to land privately acquired) approved by the authorities. At the best of times, land acquisition has been an excruciatingly slow process: add the requirements of public consultation and owners’ consent and you have a process that could drag along to eternity. Archaic labour laws cannot be reformed unless the government is ready to take the unions head on a la Thatcher. The longer this takes, the less the incentive to start new industrial ventures in the country. The cost of borrowings is also much higher in India than in many of its present and potential competitors. The icing on this rather unappetising cake is the lack of ease of doing business, where the World Bank ranks India 142nd in a list of 189 countries. Little wonder, then, that recent years have seen even Indian companies fleeing to safer, more productive investment pastures abroad. With Indian companies already on the lookout for investment opportunities abroad, it would hardly be surprising if foreign private investors too are tempted to try their luck in environments friendlier than India. Indian politicians and policy makes must hear the wakeup call before India gets left behind in this competitive race.

3. The world doesn’t owe you a living:

Indians have been lecturing other countries since the days of Nehru and Krishna Menon. The bubble was punctured by the Chinese invasion of 1962 and finally burst in the mid-1960s when food aid had to be secured from the USA, a country loftily scorned by the Indian powers-that-be during the first fifteen years of Indian independence. Nearly all politicians and most bureaucrats, as well as large sections of the intelligentsia, comprising the media, academia and judiciary, seemed to think (and still think) they were (are) doing private investors a favour by allowing them to bring their money into the country. From my personal experience, I can testify to the reactions of investors around the globe when our team from the Indian Petroleum Ministry was marketing investment opportunities in the oil and gas exploration sector in India in late 1991. Responses ranged from cautious in Houston to sceptical in Singapore and downright hostile in London. Things improved somewhat in the late 1990s and the early years of this century. But the environment has again turned anti-private investment in the last seven to eight years, thanks largely to a lack of conviction at the level of the national government. Whether it is whimsical interpretation of contractual commitments (petroleum sector), ex post facto tax levies (financial sector) or simply reluctance to allow entry (retail FDI/mining), public policy is hostage to domestic vested interests and to a “command and control” mentality that harbours a nostalgic fondness for development through public investment alone, blithely ignoring private-investment driven success stories in the information technology and telecommunications sectors. When push comes to shove, not too many tears will be shed internationally for India’s travails (notwithstanding its position as the “world’s largest democracy”, “promising emerging economy” and “country with large market potential”) if it runs into economic difficulties on account of its inability to provide an environment conducive to private, especially foreign direct investment.

4. Use referendums as a political tool but don’t take them seriously:

Whether Greece or India, democracies the world over are representative democracies, which means that the voters select the women and men who will articulate their interests through legislation and policy making. It is generally a bad idea to decide policy through a referendum. The abortive Greek experience is there before us. Nearer home, the Aam Aadmi Party (AAP) has as much of a fascination for referendums as does the Syriza ruling party in Greece. It conducted one in 2013 to ask citizens to decide whether it should form a government in Delhi with outside support. It plans to hold one more now on the issue of statehood for Delhi. In both cases, AAP lands on the right side of public opinion. In 2014, it could blame the Indian National Congress Party for the collapse of the government; this certainly paid dividends, with AAP sweeping to power with an overwhelming majority in the 2015 elections. It can now again lay the blame for failure to confer statehood on Delhi on the ruling Bharatiya Janata Party dispensation in Delhi. All this makes for politics that Machiavelli and Kautilya would be proud of. However, the mechanism of asking the people at large to take a view on specific issues has two major flaws: firstly, it uses people’s emotions to decide an issue, certainly not the best way to take a dispassionate view and, secondly, it presumes an understanding by voters of the specific issues at hand. Even given their high levels of literacy, it would be ambitious to presume that the people of Delhi understand the implications of statehood, with the increased responsibilities of fiscal management. The lesson for those in power and for those in society who harbour idealistic thoughts about referendums is: by all means conduct them, but don’t think their results can be used to guide policy actions. The unfolding Greek tragedy has lessons for the present day, just as the classic Greek tragedies highlighted the foibles and follies of humankind.

“The God That Failed” is a book that describes the association of six prominent Western intellectuals of the twentieth century, from Andre Gide to Arthur Koestler and Stephen Spender, with communism and their subsequent disillusionment with and repudiation of the communist philosophy. While I am not analysing their motivations in first ardently espousing and then just as emphatically rejecting the charms of communism, the subject set me thinking on the very human need for a greater force (or purpose) to give meaning to human lives and how this impacts and has had particularly earth-shaking effects on human life and conduct, especially in the last one hundred years or so.

What has set off this train of thought has been my own experience of encountering individuals in the course of my life who have moved from the extreme left of supporting a people’s war movement to the extreme right of religious conservatism in the span of a few decades. I entered Delhi University in the fourth year of the 1970s when the pro-Naxalite movement in its elite colleges had run its course and those who had forsaken their college education to work for the cause of the oppressed were returning to the routine existence of university life. There were enough ideologues spouting Marxist philosophy in Delhi University itself; one did not need to turn to the other major university in South Delhi to encounter those who were spellbound by Marxist economics and Communist politics. What has since caused me immense surprise is to find many of those in the vanguard of left revolution in the 1970s ensconced in the camp of staunchly rightist parties with a strong religious ideology by the start of the twenty first century. Now I am not for a moment suggesting that we should be fixed in our ideological views over a lifetime; what I do find interesting and worthy of more detailed analysis are the possible reasons for this dramatic change in worldview.

I will only mention in passing the possibility that the shift in loyalty to a different ideology is occasioned by a cynical calculation of where one’s interests lie. In today’s amoral, consumerist age, the desire for fame and social position may lead one to make conscious choices to espouse an ideology which offers social and economic advancement. Such a person will switch sides with alacrity once he senses that the boat he is on is sinking: just study the recent instances of candidates for elections to the Indian Parliament and state legislatures nimbly party-hopping to secure their electoral futures. Setting aside the cases of those falling in this category, I am more concerned with those who blindly adhere to a specific ideology. What motivates such people and what implications does this have for the evolution of human society, given that this phenomenon pervades all countries and societies?

The basic urge for holding to an ideology is the fear of loneliness of the individual. As a social animal, man seeks to conform to accepted social norms to acquire a sense of belonging. Established religions have shrewdly recognised this urge and created a culture of myths and legends to attract followers and hold them in thrall. Deviations from the accepted wisdom have been severely punished. Many ‘heretics’ perished in the Inquisitions of the Middle Ages. Galileo escaped by the skin of his teeth by recanting on his view that the earth revolves around the sun, though he is supposed to have defiantly muttered under his breath “Eppur si muove” (and yet it moves). Even today, followers of organised religions severely punish what they see as transgressions from the laid-down laws, sometimes with the full concurrence of the government of the day and often in flagrant breach of the rule of law. The victims range from ordinary citizens of different countries to air travellers to, as we saw recently, schoolchildren and cartoonists. In India, religion has fed on a sense of lack of identity and a feeling of victimisation in the majority community, to generate historical grievances which are apparently to be corrected in the present day.

The Industrial Revolution and its aftermath saw a weakening of the hold of religion on the populace. As education spread and the Age of Reason extended its influence, a new prophet appeared on the scene in the shape of Karl Marx. As the old order collapsed with the onset of the first World War, Communism entrenched itself, first in Soviet Russia and then, in stages, in Eastern Europe and, most significantly, China. The promise of equality and a classless society came as a whiff of fresh air to a host of Western intellectuals, disillusioned by the operation of the capitalist system. Not surprisingly, the infection also caught up with restless youth in countries like India, especially when the Nehruvian experiment started unravelling from the mid-1960s onwards. However, the senseless violence of the Naxalite movement and the severe state repression it invited led to rapid disenchantment with ‘armed revolution’ and the idealistic youth were soon engaged in making their way up in middle-class India, in the bureaucracy, academia or journalism.

With ideology in the form of a classless state having lost its charm, more so as the horrors of China’s Cultural Revolution have come to light and as that country itself has abandoned the socialist path, the Indian middle class has now latched on to a heady mixture of the desire for a strong man, coupled with a yearning for an idealised, mythical past. Central to this development is the loss of individual identity in an economy and society buffeted by the storms of globalisation and liberalisation. Weak governance systems have failed to provide the citizen with the comforts that would be taken for granted in a developed country. At such times, there is inevitably the longing for a political messiah who will cut through the slough of despondency and hopelessness and lead the nation to a brighter future.

And so we move from the ideology of religion to ideology in the form of a philosophy, epitomised by a strong party/state and the omnipotent individual.  The twentieth century moved through the absolute domination over large parts of the world, from Soviet Russia to China, North Korea, Kampuchea and Libya, by powerful dictators, whether they espoused a left or right of centre philosophy, or indeed no philosophy at all. But what is it that impels the individual to associate himself so totally with a dominant ideology, party, state or individual? It arises out of the sense of personal insignificance of the individual and his fear of the finiteness of his existence. Religion at least gave the individual solace that there was an afterlife, that wretchedness in this life would be compensated by rebirth, hopefully in happier surroundings. The rudderless individual, confronted by a world that he is unable to deal with, desperately seeks to merge his identity in a larger than life entity to get a feeling of security and belonging. It is here that the tragedy of the Indian intellectual can be clearly observed. The scholar/sociologist Dipankar Gupta in a prescient article last year in the Times of India drew a sharp distinction between intellectuals and ideologues. While the former maintain impartiality and independence in their analysis of affairs of the world, the latter are co-opted into a dispensation which uses their skills of “intellectual” jugglery to bolster its position and gain legitimacy. Some of these ideologues do benefit in terms of social or official positions but the greater benefit lies in the secure cocoon of a political formation that gives meaning to their lives.

Where does all this leave us circa 2015? The continued existence of a democracy is crucially dependent on independent, sceptical commentators who are wedded to the concept of a liberal, open society. They are not against any person or political formation — rather they recognise the truth of Lord Acton’s dictum “Power tends to corrupt and absolute power corrupts absolutely.” The twentieth century has seen enough instances of systems and individuals promising utopia to their masses, only to bring them rudely down to earth. The second portion of Lord Acton’s statement, which is never quoted, is relevant in this context “Great men are almost always bad men.” Lest this be interpreted as a sweeping indictment of statesmen and political leaders, let me hasten to add that the inexorable operations of social and political systems invariably cause even leaders who start with noble intentions to adopt the path of curbing political freedoms to remain in power, ostensibly to attain their lofty goals. The need of the hour, not only in India but elsewhere as well, is for thinking individuals who seek to influence public opinion to critically examine trends in social and political life and ask searching questions of those in power. Ultimately, we should all echo that little child as he beheld the emperor’s new clothes “But he hasn’t got anything on!”

It’s been literally ages since I stepped into a bookstore…No, I haven’t given up reading, it’s the entry into my life of that phenomenon called flipkart.com. Tom Sellers talks in his book “Liberation Management” of the WOW experience. We in India experienced that feeling with the introduction of ATMs and the railway online reservation. But one of the most recent enthralling experiences has been the online purchase of books, which, in the Flipkart case covers the purchase in addition of a wide variety of products, ranging from books to mobiles, computers, etc. Right from the point where one selects a book (or any of the other products marketed by Flipkart), a series of clicks and some minimal typing completes the entire purchase process. Enter your mailing address and the product is in most cases ready for shipping. The “Cash On Delivery” (COD) system enables the customer to pay the courier on delivery of the product; where this facility is not available, online credit card payment facility is provided. An SMS/e-mail from Flipkart informs the customer of the number of days within which the product will reach her. What is more interesting is that in the event of any delay in the shipment by the courier, a representative of Flipkart contacts the customer on mobile phone to ascertain whether the shipment has reached. If it has not, Flipkart pursues the delivery with the courier company (I can personally vouch for this in the case of one delayed delivery by the courier).
But this article is not intended to be a eulogy to Flipkart, though I humbly doff my (non-existent) hat to them for their fantastic marketing strategy. It is rather aimed at oil marketing companies which sell cooking gas to the vast Indian market. Rare is the location where the public does not have grievances against the irregular and unpredictable supply of gas. The oil companies, IOC, HP & BP, need to take not a leaf but the whole book from the Flipkart method of marketing their products. They have a spread of retailers over numerous locations in India, each with their set of customers, each of whom has their unique voucher numbers. Why not visualise a future scenario like this? The customer phones, sends a sms message from a pre-approved mobile or landline number or goes online to register for a gas refill from an email address registered with the company. The order goes to the concerned company, which then passes on the order to any one of the dealers within easy proximity of the customer. The order will go to that dealer who has the most comfortable stock position at that point of time. Based on the delivery schedule of that dealer, a sms message/e-mail will be sent to the customer giving a identification number and intimating the likely date of delivery. In the case of an order placed on phone, a token number will be given to the customer: enquiries regarding the delivery date can be done on phone or through interactive voice response systems. The Cash on Delivery system will provide for payment by the customer at the time of delivery of the gas cylinder. Once the cylinder has been delivered, the delivery person will record the fact of delivery and credit the amount realised from the customer once he returns to the dealer.
What are the likely attempts to tamper with this system and how are these to be tackled? The obvious one is the practice of a gas agency to sell gas cylinders at a premium to either non-gas owning household customers or to industrial consumers, while showing the sale as having been made to a bona-fide household customer. The linkage of the supply with a unique token number should reduce the chances of a bogus delivery. A random daily verification of a certain proportion of deliveries by a third-party agency (to which the company outsources this function) should act as a further check on underhand dealings. The company can also monitor the frequency of refills being ordered by a particular household to check any unusual pattern of repeated refills at periods more frequent than would normally be expected and carry out actual on-site investigation where there are grounds for suspicion. Most importantly, the gas agency will not be able to exercise any discretion regarding when it will supply the cylinder since its delivery schedule in relation to its stock will be subject to online monitoring by the company. Agencies which show tendencies to cheat the customer should have their licences cancelled.
Of course, the above measure is being suggested in a scenario where there is still no genuine competition in retail gas supply. Should the winds of change sweep through the oil and gas marketing sector, as they have through the aviation and telecom sectors, the customer will find that it is the companies supplying the gas which are chasing him for their custom rather than the other way around. Till that happy day arrives, I commend the above solution to the oil companies for easing the woes of the ordinary housewife. She will even be willing to pay more for a cylinder (though that may change in an environment of greater competition).