Saturday, March 29, 2008

Poverty Survey and Mind Musings (PSMM) by Chandra

The fate of POVERTY INDIA has been number only, no matter who involved in it, is human or any other species. I wonder that how the number is big problems among the crowd of human intellectual animals whose fight is for one likeminded bone! Or number whatever it is. The below one of the article that raises several questions killing the poverty debate!
Don't ask, don't tell by Surjit S Bhalla September 04, 2004
Something I have never understood, but for which I would welcome comments and help, is why there is a large intellectual constituency in India that just cannot acknowledge the progress in the war on poverty.
Any mention of a significant drop in poverty in India is met with derision, contempt, incredulousness, and finally, and invariably, with the comment that "you just don't know what you are talking about".
And then a gentle, friendly comment: "Please travel through India, visit a village for at least once in your life, and then find out how incredibly wrong you are."
Then comes the clincher: "When I visited SEWA (headquartered in Ahmedabad) or Sewa Mandir (headquartered in Udaipur), I was told how the poverty statistics the government puts out just fail to capture the reality of the poor."
Now SEWA, like many other NGOs, has done, and continues to do, laudatory work. So much so that today, the analysis of poverty, (nee the conclusion that poverty is as rampant as ever in India) has taken on a new lease of life.
Well-endowed NGOs, located in regional metropolises, are defining the terms of the debate. These NGOs have become not only the eyes of NRIs and foreigners, but also their computers, able to spit out considerably more authoritative estimates of the magnitude of poverty among a billion people -- and the trend!
For this ingenuity, otherwise reasonable scholars genuflect, and do so regardless of the cost to their reputation. They must feel that there is no cost -- after all, nobody can dare accuse them of not having done proper research because after all, they have talked to the poor; more accurately, talked to people who have talked to the poor!
All of this would not matter if a hundred flowers were allowed to bloom; but the tragedy is that the Indian government is neurotically obsessed with the notion that economic reforms (even and perhaps especially those instituted by the present Prime Minister, Manmohan Singh) have not helped the poor; that a new NGO/Left paradigm of "development with a human face" is the need of the hour, and that those who question those with good intentions themselves have bad intentions.
Large NGOs facilitate large foreign-based researchers, making available to them their local fiefdoms for travel, interviews, field research, etc.
And then this is sold to our over-eager politically correct government as the true underlying reality. There is another aspect to worry about: NGOs cannot get more money for development if they show that their need is less!
Donors would then rather go to Africa, where there is a large demonstrable need, and the Indian NGO will relatively lose out to the African NGO.
Better therefore to paint a gloomy picture -- this way all parties in the exchange are better off. The NGO gets more money, the donor babus make their owners assuage their guilt, and who knows maybe the poor also benefit.
The dilemma of domestic NGOs is exactly the dilemma faced by international NGOs (INGOs) like the World Bank, United Nations, and their "poor" cousins like the Asian Development Bank.
These organisations, bureaucracies, are dependent on "guilt money". If you show to the rich donors that poverty is declining at only a snail's pace, then it means that whatever is going on out there (globalisation, governments, greedy multinationals, etc.) is just not working. Hence more money, for more power, for more bureaucracy to fight poverty, etc.
If instead, these INGOs were to show that large-scale poverty reduction was being made, then how will they raise money? Like everyone else in this globalised competitive world, the INGOs need to raise capital to pay salaries.
And the staff at the donors' shop need to keep their jobs as approvers of money to fight poverty. So the entire chain has a self-interest in preserving the myth that poverty has not declined by much.
Some individual countries, however, take pride in reducing poverty. China, for example, refuses to allow the World Bank, or anyone else, to mess about with her poverty data.
So poverty in China shows a large decline -- and a decline that has caused a large dent in world poverty. So how to show that world poverty remains a problem -- never mind, India is there -- and especially influential interest groups there who want to show that poverty has not declined, perhaps even increased.
If it works for INGOs, it should work for states in India. They are strapped for funds to pay salaries and replenish electoral funds.
And Indian politicians just love to honour the commitment to fight poverty -- so much so that the less a state reduces poverty, the more money it gets from the Planning Commission to fight poverty. Just the same as the domestic NGOs and the INGOs. It never got, it cannot, get better than this (Montek, take note).
I should mention that in all these organisations there is considerable heterogeneity -- and considerable disagreement with the party line.
At a World Bank seminar on India some six months ago, Mr Michael Carter, country director, remarked: "The big unsung story about India is the rapid strides it has made in poverty reduction!" Clearly no guilt money involved with Mr Carter -- but has he checked with his bosses in Washington?
If he did, he would have found that he was not acting in the interests of the World Bank. Its self-produced data show that despite 20 years of growth, Indian poverty declined by only 15 percentage points. Official data show the reduction to be 15 pp; official data corrected for statistical irregularities show the decline to be 22 pp. And in 2000, there was almost three times as much poverty in India as in neighbouring Pakistan (13.4 per cent in 1998).
Perhaps Mr Carter (and the Indian Left) needs to accept the INGOs' "virtual reality": that dictatorship, civil strife, terrorism, and extremely slow economic growth make the best environment for reducing poverty "Big Time".
Poverty figures in India, especially for 1999-2000, are hotly contested, and believed to be a gross understatement of poverty. Data for the next year, 2000-01, can serve as a useful cross-check.
Curiously, but not surprisingly, these data have not been utilised at all by those claiming that the 1999 figures were suspect. The figures for 2000-01 corroborate, in every dimension, the facts yielded by the ostensibly inaccurate 1999 data.
Unfortunately, NSS consumption surveys are problematical for interpreting poverty trends: the mean consumption growth shown by these surveys has been very low, especially in contrast to the growth revealed by national accounts data.
It is growth rates, which determine trends, and it is the trend in poverty decline that is controversial. The NSS consumption growth is at the low end of the range; national accounts consumption growth, and NSS survey growth in incomes, and wage rates, are clustered and close to each other.
In other words, the NSS understates consumption growth, and understates poverty decline. Growth in incomes of the poorest has been much larger than growth in average consumption.
Thus, it is a considerable stretch to conclude that there has been minimal poverty decline in India, as some left intellectuals continue to proclaim.
The reality is just the opposite. The World Bank believes that poverty in India is 35 per cent; official government of India data suggest it is 24 per cent; and if these official data are corrected for definition differences and accurate price data, then poverty in 2000 is only 17.5 per cent, i.e. fully half the figure reported by the World Bank.
Mr Carter is right -- poverty reduction in India is an unsung success story. But he should look within his own organisation, and its ideological associates worldwide, to find out as to why it is so unsung.
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Latenight Globalisation

It was one of the earlier Essay’s written by me on ‘Globalisation and India’ for a price. After many years, this essay attracts many minds means really interesting what made to write on this topic which is still on fire debate!
One Blogger writes some interesting note on my essay
Globalisation :
While enjoying the benefits of the Foreign Direct Investment, we have to be ready to face the challenges of the globalisation.
Mr. Chandrasekaran Balakrishnan has written a great article "Impact of Globalisation on Developing Countries and India". He says,"Globalisation has intensified interdependence and competition between economies in the world market. This is reflected in Interdependence in regard to trading in goods and services and in movement of capital. As a result domestic economic developments are not determined entirely by domestic policies and market conditions. Rather, they are influenced by both domestic and international policies and economic conditions."
You can also check the full essay from the below! If your mind search for what is on………

The Vote Marketing by the Price of Past Fallacies of Rs. 595 by Chandra

The Murmuring book review by Indian political scientist, also somehow plays his mind game with political marketing games in conducive. It is unreasonable to expect others to stimulate your mind instead you should! After reading the below article, you should ahead of latter, instead a former!

The Word
The Past Isn’t Another Country
Pratap Bhanu Mehta
Posted online: Sunday, March 30, 2008 at 1513 hrs
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My Country, My LifeL.K. AdvaniRupa & Co, Rs 595
Lal krishna advani is that rarest of politician who can claim credit for something unique in the annals of Indian history: starting a social movement that left a deep imprint on the society. Many politicians will claim longer stints in power; others will be better administrators and thinkers, but the privilege of creating a movement that shifted the ideological centre of Indian politics, gave utterance to widespread but suppressed feelings, empowered new constituencies and energised an important political party belongs to a few. The fact that the Ram Janmabhoomi movement and the politics it unleashed was deeply divisive, and in some ways shaded over to a dangerous collective narcissism, cannot detract from its transformative significance. Movements are complicated things, often devouring their founders, but there is no doubt that through this movement, Advani left an unprecedented legacy for Indian politics; a legacy whose effects are still to be worked out.
Successful political autobiographies do at least three things. They connect the personal and the political in interesting ways, shedding light on the motivations and ideas that drove the politicians, and how politics shaped their sense of self. Second, they give a sense of how a politician understood the zeitgeist, the Spirit of the Age as it were, and rode it. Third, they have the ability to stand back from history, and notice its ironies and deeper patterns; or as in the rare case of Charles de Gaulle, they display an ambition to take on history. Advani’s My Country, My Life is partially successful as a political chronicle, full of incidentally interesting stories, and particularly good on his finest hour, the struggle against Emergency, and on the vast complicities and missed opportunities that resulted in the Ayodhya movement. But its narrative and concerns swiftly descend into an ordinariness and present-mindedness that are at odds with the historical importance of the person writing them. The trouble is that the book is written too much with the next election in mind, not the dialogue with eternity that all true statesmen ought to be capable of.
Unwittingly, perhaps, the book reveals a lot about the person and his limits. Advani comes across as an astonishingly likeable person, like the good uncle next door. His commitment is unremitting and earnest, his sacrifice undeniable. He is a man who latched on to a few simple truths like reverence for the motherland. He has an astonishingly simplistic reading of Partition, which takes the view “some bad men did it”. He sticks to his commitments with assiduous sincerity, he can tell you all about movies and interesting books, he is generous in his characterisation of other people, loyal in his relationships, there is no trace of pettiness or opportunism, but no exalted sense of grandeur either. Yet in a strange way, he reinforces the stereotype of a humble RSS pracharak — a vocation he chronicles in affectionate detail. He shows, to use J.S. Mill’s oddly reverential phrase for Jeremy Bentham, “the completeness of limited men”, sticking to a narrow path, refusing to probe deeply or stand back from his own practical predicament to experience the contradictory pulls of history. That makes him a straight shooter, an effective man of action, but also sets limits to what he can conjure up for India.
The limits are twofold. First, “My Country” almost disappears from the book, lost in a series of chapters on security challenges that read more like bureaucratic memos than a reflection of the experience of someone who ought to have thought deeply about them; and the future agenda for the country is summarised in platitudinous phrases like good governance, development and security. But apart from chronicling the actions of the NDA, there is very little sense of the profound economic and social transformations under way in India, almost no ability to stand back and ask what India’s great transformation will look like or what its sources are. The reverence for the motherland drowns the excitement of the transformations within it.
Second, the book is a missed opportunity for making something of a coherent ideological statement: indeed, piety again trumps clear thinking. For instance, Advani takes great pride in associating the BJP with Gandhian Socialism, about as unmeaning and false as a phrase you can conjure up for our economic commitments. Whether this is a case of coopting Gandhi or signalling Left in order to turn Right is unclear, it profoundly reveals his inability to wrestle with complex structural transformations.
Advani’s commitment to cultural nationalism comes through over and over. He takes cues from assorted thinkers like Swami Ranganathananda, Aurobindo and, of course, Deendayal Upadhyaya. But again there is no trace of having grappled with complexities of their thought. For both Ranganathananda and Aurobindo, mere cultural nationalism was narcissism of the highest order, unless it was made an instrument of self-knowledge on the one hand and alternative universality on the other. But in Advani there is a reverence to the idea of a motherland that comes untethered from the injunction to rise above one’s own culture.
The oddest part of the book is his discussion on secularism. There is nothing to suggest even the slightest trace of personal prejudice or bigotry, but everything to suggest complete moral confusion. The book overdoes it with attempts to emphasise his reverence for all faiths, and there is something distasteful about the way he showcases how he personally called Narendra Modi to save Muslims from possible mob attacks on two occasions. What is distasteful is this. Despite his critique of pseudo secularism, the degree to which he is unable to use a language of citizenship rather than group identity is astonishing; it is as if categories of “Hindu” and “Muslim” have such a deep hold on his consciousness that he cannot think of citizens. His analysis of the Gujarat riots is the only monumental pettiness in the book. Irrespective of how culpable Modi might or might not have been, it would not have been too much to expect Advani to offer some deep reflections on why the threat of communal riots remains so palpable, instead of platitudes on external instigation and provocation. There have been many provocations; not all provocations result in riots. And it is beneath his dignity to settle this issue by arguing that the Congress has also been responsible for riots. He again takes great pains to argue that not all Muslims are disloyal (what relief!). Yet, the burden of proving loyalty consistently falls on them and you get the feeling it is a test they cannot pass. He has no sense of the way in which benchmarking loyalty is itself an insidious canard. Finally, it is one thing to assert the unity of India; another to ask what concrete work of politics is required to make every citizen at home within it. It has to be said that in proving his secular credentials Advani does not miss any trick. But he does miss the point.
My Country, My Life gives a sense that the commitment and character that sustained this remarkable individual remain; but the ideological moorings that gave it direction seem out of place or plainly confused. It is almost as if the first pracharak is straining to understand his role as a leader and faltering. The most astonishing picture in the book is on the early pages. One page shows all three: Advani, Atal Bihari Vajpayee and Bhairon Singh Shekhawat 56 years ago; another photograph shows them more recently. Despite their huge blind spots, each of them has personal gifts that transcend their ideological limitations: their commitment is undoubted, and each is charming and graceful in his own way. They did their best when they remained true to their personal sensibilities and behaved as genuinely political creatures. Each was misled when they let the rabble of their parties force them into a rigidity or pettiness that was instinctively alien to them. Seeing them age, one cannot help feel a sense of foreboding: that politics, commitment and charm might vanish from our politics, leaving an odd combination of rigidity, opportunism and pettiness in its wake. Advani has a last shot at stemming this tide.

There is no such thing as public interest nor public by Chandra

The very interesting questions raised by Mr Abhinav Kumar SP, Crime and Law and Order in Uttarakhand, India is more important for the present day younger generation, to shape their future and thereby the so called society! What the mercy that forced to this police man to write such unwritten laws of questions which stuck his mind to release his freedom of express. Sure the below of his one article is a part of those patronage of mercy’s.
The Other Caste System
Abhinav Kumar
Posted online: Thursday, March 27, 2008 at 0039 hrs
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What’s common between the 6th Pay Commission and the Manusmriti? And why the Indian Police Service must do all it can to hasten its own demise
Abhinav Kumar
The largesse of the 6th Central Pay Commission (CPC) has been announced and I suppose as a loyal civil servant, one is obliged to make polite noises. By and large the reaction among the civil services is that of smug satisfaction, although hard-worked and harassed as we are, we surely deserved a lot more. More objectively speaking, in an era of 9 per cent growth, a mostly soaring Sensex, and record revenue collections, it is hard to deny the case for improving the pay and working conditions of the civil services.
But this silver lining comes with two important clouds. The first and more widely understood issue relates to the recommendations regarding improving the performance of the services that, going by past experience, are sure to be ignored. The second and less understood issue relates to the relative positions of the various services in the pay fixation sweepstakes. Here, it seems that the 6th CPC will henceforth be regarded as the Manusmriti of the civil services, a scriptural source of divine authority giving sanctity and rationale to the iniquities and injustices of a bureaucratic caste system that is perhaps just as damaging to the well-being of modern India as the original caste system has been.
Overcoming misgivings of their colleagues in the Constituent Assembly, Nehru and Patel retained the colonial bureaucracy and fashioned the All India Services. Their hopes have been belied. The IAS and IPS are in no position today to serve as guardians of the public interest, what to speak of their initial role as catalysts for nation building. Over six decades of independence, the IAS has enthusiastically embraced Kipling’s dictum about power without responsibility; the IPS has internalised Tom Stoppard’s observation about responsibility without power.
Today the IAS seems to exist only to deliver the patronage of the Indian state in an organised and legitimate manner to whichever coalition of vested interests comes to power through elections and ensure its own cut in cash and kind, whereas the IPS exists to ensure that the law is used as an instrument of power and the darkest deeds of the powerful are ignored or if they come to light are given a quiet burial.
When did the All India Services begin to fail India? Was it the Emergency in the 1970s? Was it the anti-Sikh riots of the ’80s? Perhaps the demolition of Babri Masjid in the ’90s is a better marker? Or the Gujarat riots? The creation of the Red Corridor around the same time?
Events in 2008 also point in the same direction. Sania Mirza feels compelled to eschew playing in her own country. M.F. Husain will not be given the right to live in the land of his birth without fear of death. Taslima Nasreen must gag herself or be bundled out. Mumbai has no need for Biharis. Jodhaa Akbar cannot be shown for hurting certain sensibilities. And I am not even touching upon the routine failures of the state across the spectrum of government services that are the right of ordinary citizens in a civilised society.
The All India Services were created by Nehru and Patel to prevent such situations from arising, and if they did arise, to deal with them with the full authority of the law, secure in the knowledge that the Constitutional protections accorded to them would insulate them from adverse fallout. And yet if you look at the collective response of the IAS and the IPS to the serious challenges faced by the Indian state in the last four decades, it is clear that the All India Services are now a pitiful caricature of the ideals that inspired Nehru and Patel to retain them in the first place.
It may be a while before the people of India, preoccupied as the majority of them are with their daily struggle for survival, notice our collective non-performance and begin to ask uncomfortable questions about the rationale for continuing with these vestigial elites. Perhaps the original caste system has conditioned them to accept corrupt and incompetent authority as their fate. But their silence cannot be mistaken for consent. Like many other experiments born of the idealism and enthusiasm of the first flush of Independence, perhaps the IPS too is an idea whose time has passed. I can’t say the same for the IAS because that would be contrary to the etiquette of the caste system.
Though it too has completely failed the vision of our founding fathers, the IAS at least has succeeded in reinventing itself. It has made itself indispensable as one of the legs of the triad of the politician, businessman and bureaucrat kleptocracy that presides over our nation today. After 15 years of liberalisation, the politician and the businessman need the IAS today more than ever to shape the rules of the game in a manner suited to their unending greed, while we in the IPS have to manage the volatile and violent consequences of their self-serving decisions.
The 6th CPC now has stated unequivocally the need to perpetuate this caste system. It is curious that while in the realm of economics and business we have since 1991 realised the need for more open, less hierarchical, and merit-driven organisations, in the area of governance we see no need to question a system that substitutes the privileges of birth with the privileges of the UPSC exam. If you are born a brahmin it is enough for a lifetime of privilege. As the 6th CPC sees it, the same logic applies to the IAS.
So if we the lesser born aren’t allowed to serve as officers with professional pride, let us as a professional body request the government that in the interest of the nation and that of the police as a profession abolish the IPS, or at least declare it a dying cadre. Our district policing functions should be amalgamated with the IAS, our para-military, intelligence and national security functions could go to the armed forces, and all residual functions given to academics or management consultants.
The spirits of Nehru and Patel would be restless at the fate of an institution lovingly created by them. But they were realists. They would understand that at the very least the time has come to give their vision of the IPS a formal burial. It is ironical but in the wake of the 6th CPC it seems quite clear that if the IPS as a collective entity is serious about protecting and enhancing the pride and effectiveness of the police as a profession then it must do all it can to hasten its own demise. It may find appreciation and gratitude and dignity in death, the things that were denied to it in life.
The writer is SP, Crime and Law and Order, Uttarakhand

Wednesday, March 26, 2008

What the pity celebrated economists do on US RECESSION

The present US RECESSION is really a live game in the Economics discipline, which no professors teach in university nor any institutions except to watch each other action, what will be the outcome of everyday business, of course BUSINESS RECESSION. On this live game anybody thought off what the Austrian School of Economics is all about in RECESSION!

Though the below article is no in Austrian school of thought, but it has different view.

US recession a solution, not a problem26 Mar, 2008, 0024 hrs IST,Swaminathan S Anklesaria Aiyar, TNN

How long and hard will the US recession be, and how badly will it affect India? Analysis of that issue has currently been hijacked by the sensational events in the US stock market, mirrored by gyrations in Indian markets. The markets surged upward in a burst of optimism at the beginning of this week. Yet this froth will soon be forgotten. We have to deal with the more fundamental problem of US household overspending. Reducing this overspending is both desirable and, ultimately, inevitable. And it will be recessionary. Last week, the collapse of one of the biggest US investment banks, Bear Stearns, was followed by its takeover by JP Morgan Chase, brokered and underwritten by the Federal Reserve Board. The immediate stock market reaction was that many more financial stalwarts might go the way of Bear Stearns, and the markets plunged. Indeed, many observers pointed out that the Fed might not be able to tackle the crisis through interest rate cuts and provision of additional liquidity, since the underlying problem was lack of trust. The huge market for mortgage-backed securities and derivatives had suddenly frozen and stopped functioning because many of the biggest traders in the market were tainted with the risk of default. Bear Stearns showed that not even the biggest actors could be trusted to fulfil deals. The stock market slumped at the prospect of more firms going the way of bear Stearns. But soon afterwards, market staged a recovery on hopes that the Fed had fully understood the problem of frozen markets, and was willing to implement highly unconventional measures to solve the problem. Some economists had earlier proclaimed that, to clear the logjam in the market, the Fed itself would have to emerge as a market buyer, and perhaps even become a market maker in some categories of mortgage-backed securities. The rescue of Bear Stearns, with the Fed guaranteeing $30 billion worth of mortgage backed securities, is in effect a step in this direction. The entry of a buyer who cannot default — the Fed can always print notes to meet any financial commitment has the potential to unfreeze frozen markets. By making trades possible and safe, this provides actual prices in a functioning market, in place of guesses about the true price in a frozen market. Of course, the Fed has assumed risks that should really be assumed by financial firms, and so market purists are shocked. But others say the need of the hour is to restore normalcy in frozen markets, so this is a worthwhile short-term fix. Public rescues should be funded by the taxpayer through the US Congress, not the monetary authority. Remember, it was the legislature, heeding the urgings of President Bush Sr, that created the Resolution Trust Corporation that funded the cleaning-up costs of the savings and-loan bust of the 1980s. Something similar may happen this time too. In any event, Congress is already working on Bills to partially rescue both lenders and borrowers in the housing market. Over and above that, Congress has enacted an economic stimulus programme, entailing the posting of cheques worth almost $150 billion to all taxpayers, which should be implemented in June. That will pump a lot of purchasing power into a flagging economy. And so, optimists believe that the worst is over, and that explains why the markets have started climbing again. They hope that the financial crisis is being resolved by both the Fed and Congress, that frozen markets will unfreeze and confidence will return to all markets. This in turn is fuelling hopes that the economy will revive in the second half of 2008. The aim of US policymakers right now is to avoid an outright recession (defined as quarter-on-quarter declines in GDO for two successive quarters), or at least keep a recession short and mild. The political imperatives for this are strong, obviously. Indian policymakers would love to see a quick end to the US financial-sector crisis, which in turn will end the strain imposed by the crisis on the Indian and world economy. Yet this is a myopic approach attempting to sustain the unsustainable. The underlying problem is that US households have for years been spending more than their income. The macroeconomic consequence is a huge current account deficit of $700 billion/year, financed by borrowing from abroad. Burdened now with trillions of dollars of debt, even the richest and most creditworthy country in the world is now suffering a falling currency, causing pain through inflation. US overspending is not sustainable, and will at some point have to be reduced drastically, if not eliminated. Seen in this light, a recession is a solution to US overspending, not a problem. A recession reduces spending and borrowing, and thus helps restore economic equilibrium. The world economy will inevitably slow down along with the US. But countries like India will still be able to attain GDP growth of 7%, lower than the 8.8% of the last four years, but still extremely high by historical standards. Possibly, the Fed and US Congress will manage to keep the coming recession short and mild. They have powerful monetary and fiscal tools at their disposal. But short-term success will simply mean postponing the day of reckoning on over-spending. That will in time lead to new crises and further recessions. Pessimists predict worse outcomes. Kenneth Rogoff, former chief economist of the IMF, believes that the US recession will be long and deep, not short and shallow. An increasing number of forecasters believe that house prices in the US have a long way to fall, and may fall another 20%, over and above the 9% fall to date. That looks too pessimistic to me, but if it happens, it will surely abort any early recovery. In sum, Indian investors should not get euphoric about the latest actions of the US Fed and Congress to unfreeze markets and stimulate the economy. Any success on their part is likely to be partial, and short-lived. The era of mammoth US trade deficits fuelling record growth round the world — including in India is coming to an end. We need to adjust to this new reality.

Future Indian Government Economics in lip service now!

It is an interesting speech delivered by L K Advani on which Bibek Debroy dissminiates his future government ideas. The below para proposal, I really wanted wait and see!

“I can, in all humility, claim that ours is one party that has consistently followed a policy of supporting private enterprise and voicing our opposition to the licence-quota-control regime even in those years when there was hardly any debate on economic reforms. Indeed, the Soviet model of government control was the dominant political fashion and intellectual obsession at the time. Which is why, we unhesitatingly backed the former Prime Minister PV Narasimha Rao and his finance minister Dr Manmohan Singh when they showed the courage to reverse the Congress party’s own previous economic policies. And when Shri Atal Bihari Vajpayee became the Prime Minister, and ran a stable and successful government for six years, we tried to accelerate and broaden the agenda of economic reforms, with results that all of you have seen... Therefore, it has always been our belief that the dharma (duty) of the Raja—or the democratically elected government in our times— is to govern, whereas the dharma of the community engaged in business, commerce, industry and agriculture is to create wealth, generate gainful employment and fulfill the material needs of society. A proverb in Hindi says, ‘Raja bane vyapari, praja bane bhikari’ (King turneth businessman, subjects turneth beggars).”

The full article is here, but the interesting is The Indian Express has published this article without his mentioning of author name.

His economics in three pages
Posted online: Friday, March 21, 2008 at 2256 hrs Print Email

What images does one associate with Lal Krishna Advani? Organisational capabilities, the Rath Yatra and Ayodhya, Babri Masjid demolition, strong views on terrorism and Pakistan, views on Jinnah, Bharat Suraksha Yatra. LK Advani is BJP’s Prime Ministerial candidate for 2009. What’s going to happen in 2009 is anyone’s guess. However, if a BJP-led government were to return, the contours of India’s economic policies and growth will be shaped by Advani. Since 1991, whenever liberalisation has received a push, the PM and PMO have been the catalyst, not North Block. That’s true of every episode of reforms across the four governments we have had, not counting the temporary NDA one. Consequently, it’s useful to know what Advani’s economic views are, transcending political views (Presidential form of government), or those as home minister, Deputy PM or leader of the opposition. This is not to deny that once catapulted into high office, PMs are known to change their earlier views, political expediency and coalition politics providing a convenient scapegoat. Notwithstanding this, it’s remarkable how little we know of Advani’s economic mindset. Had he been a practising lawyer, we would have known more. But he hasn’t been one and his 1974 appearance before the Supreme Court was on a technical issue.
All we know is Advani’s praise (2005) of the Modi model of good governance in Gujarat. As if building on that, we also have his speech delivered at Ficci on February 15, 2008. This deserves citation, as there seems to be a repositioning of Advani, the PM-designate. “I can, in all humility, claim that ours is one party that has consistently followed a policy of supporting private enterprise and voicing our opposition to the licence-quota-control regime even in those years when there was hardly any debate on economic reforms. Indeed, the Soviet model of government control was the dominant political fashion and intellectual obsession at the time. Which is why, we unhesitatingly backed the former Prime Minister PV Narasimha Rao and his finance minister Dr Manmohan Singh when they showed the courage to reverse the Congress party’s own previous economic policies. And when Shri Atal Bihari Vajpayee became the Prime Minister, and ran a stable and successful government for six years, we tried to accelerate and broaden the agenda of economic reforms, with results that all of you have seen... Therefore, it has always been our belief that the dharma (duty) of the Raja—or the democratically elected government in our times— is to govern, whereas the dharma of the community engaged in business, commerce, industry and agriculture is to create wealth, generate gainful employment and fulfill the material needs of society. A proverb in Hindi says, ‘Raja bane vyapari, praja bane bhikari’ (King turneth businessman, subjects turneth beggars).”
This claims the economic reform space back, which was always one the BJP’s antecedents had identified with, and has been vacated by the UPA. But what about the India Shining faux pas? “Sometimes, I wonder if economic reforms have changed anything at all for the Small Indian—for the small kisan, for the small artisan, for the small service provider in our cities and villages. They constitute the bulk of India’s population, and indeed our workforce... Therefore, when I think of the future challenges before any government in India, I am convinced that the greatest task is to make the Small Indian a beneficiary of, and an enthusiastic partner in, India’s progress. Speaking for my party and the NDA, we have identified three imperatives which will reliably address the needs of both the country and the common man, both in the near-term perspective of five years, but also in the long-term perspective of the coming decades. These three imperatives are: good governance, development and security (security is interpreted in the speech in a broader sense of economic security)... Against this backdrop, the most significant aspect of Shri Modi’s victory in Gujarat in 2007 is that it signaled the triumph of good governance, development and security over the politics of votebanks... If my party and the NDA do win the mandate of the people in the next parliamentary elections, it shall be our firm resolve to make good governance, development and security the trinity encapsulating our common minimum programme.”
Though there are always differences between what is preached and what is practised, this is a more heartening definition of a national common minimum programme (NCMP) than the present one. For the pink press, I find this speech more interesting than the brouhaha surrounding the release of My Country, My Life. Kandahar, Jinnah, Agra Summit, relations with the RSS, Brajesh Mishra, Manmohan Singh and Narendra Modi’s possible resignation may be of salacious interest. But they are about history, even if that history spans 1,000 pages. The Ficci speech, hardly three pages long, is about India’s future, and it can’t entirely be Sudheendra Kulkarni at work.

The author is an economist. These are his personal views

Subhuman plays with words wihtout sense

The absurdly article that I read in the recent past is written by Sreelatha Menon in the Business Standard on March 23, 2008, New Delhi. But I think these writers are wounded by the socialist and dogmatic communist ideas that prevent them to accept the liberal ideas. I can not recommend anyone to read her article but you can just observe that how stupid quoting are added!

(link via-Jayakamal)

Sreelatha Menon: Sop opera in schools

State governments are launching populist schemes like free education vouchers to students. But the caste system and poverty barriers have been undoing a lot of such schemes.

An STD booth approach towards multiplying and universalising services seems to be infecting all spheres.

Whether it is providing rural connectivity, insurance cover, credit , health care and even education, social franchising is the name of the game.

The Rajasthan Government has in its latest budget announced education vouchers to students, echoing the 11th Plan objective of promoting this system.

These vouchers would be valid only in schools that are set up by unemployed trained teachers.

The government would help the teachers with free land or hand them an existing government school, envisaging a network of schools run by these teachers privately.

What the teacher would have to contribute is not clear.

This scheme anticipates teachers to get entrepreneurial and prove their capacity to make a school run and the students to attend.

The more students he or she manages to attract, the more money comes in his hands. That should goad him to use his imagination to make education attractive to children, who are otherwise put off by the poor or no teaching, and worse treatment meted out to them in government schools. All that would be fine if only schools were like STD booths.

Schools are not about spending two minutes but the most formative period of an individual’s life. It is about building a being and not just delivering a mercenary service.

And caste system and poverty are barriers which the vouchers may not help cross for thousands of children..says educationist Vimala Ramachandran. .

In Delhi despite mandatory court orders to keep 25 per cent seats for poor, how many schools do it? Asks Ramachandran.

She finds the vouchers a big shame unless there are built-in conditions about the kind of children the schools admit.

And what about teachers training which the government institutions like DIET deliver and the expenses for uniform, books, etc which only deep pockets can afford? The vouchers in any case meet only partial expenses for a child’s education, she points out.

Poverty, lack of access and poor teaching drive away children from public schools, says Neelima Khaitan executive director of Seva Mandir the Udaipur based NGO which runs its own 200 special primary schools.

It would be like laboriously reinventing the wheel Rajasthan has witnessed a revolutionary programme involving the community in education earlier called the Lok Jumbish.

It was not replicated. Instead the Government got in the centralised Sarva Siksha Abhiyan.

Now there is competition to government schools run under SSA in the form of the STD schools.

And an unequal competition at that. The government schools get nothing if they work well and attract students.

Of course they will run the risk of closure if they lose existing children to a private school.

Is slow death the only remedy for public schools?

The Rajasthan government has also announced a programme called Gyanodaya to incentivize private and charitable institutions to establish senior secondary and secondary schools at panchayat headquarters. On the other hand it has been raining sops for public schools like regularising all para teachers, workers of Lok Jumbish and so on.

Seva Mandir had success in getting kids to school but they drop out as soon as they confront government apathy at the secondary level, says Priyanka Singh who heads the NGO’s education programme.

Pradeep Ghosh who runs another model of education in Bhopal which totally does away with infrastructure and textbooks could benefit if such vouchers were to be given to children in his state. But he says quantity is never an issue. Will the vouchers make the quality and methodology change? He asks.

Besides a 12th grade pass student of the village will remain neither of the village nor city. Choice of subjects should be there from the beginning and that needs a personal attention to students that is missing in schooling.

The only way ahead as Ramachandran says is to improve the existing schools than to strangulate them.

Tuesday, March 25, 2008

Supreme Court begs at rascal socialism legs!

The unwritten order of questioning socialism comes from great Indian born liberal economist Deepak Lal. Read his article published in Business Standards.
Socialism and Liberty: Taken to court by Deepak Lal
21 March 2008
The suppression of political and civil liberty is an essential part of socialism of various kinds.The public interest litigation (PIL) filed by an NGO challenging the 1976 insertion of "socialism" in the Preamble of the Constitution, and the 1989 amendment of the Representation of the People Act making it incumbent for political parties to pledge allegiance to socialism, brought back many mixed memories. In 1973, I spent a year at the Planning Commission helping Lovraj Kumar set up a Project Appraisal Division. At the time I was a child of my Indian background and education in the PPE school at Oxford: a social democrat, a Keynesian and a believer in planning (albeit through the price mechanism). That year turned out to be a formative year: making me question both my previous assumptions about the benevolence and public spiritedness of bureaucrats and politicians, and the very intellectual basis for planning and government intervention.It was also a formative year for India. After her "Garibi Hatao" election and victory in the Bangladesh war, Indira Gandhi turned leftwards, promoting the policies advocated by many Communists and fellow travellers in her coterie: nationalising mines, banks and the wholesale grain trade. It seemed that the Fabian socialist nirvana her father unsuccessfully sought to promote was at last to be delivered.
But, as with so many of her actions, appearances could be deceptive, as the Left soon found out with her declaration of the Emergency in 1975. (Raj Thapar's excellent memoirs provide a vivid account of the raising and dashing of these socialist hopes.) The 42nd Amendment, passed during the Emergency, was partly window dressing, to appease the disillusioned Left and a potential instrument to thwart her political opponents -- a purpose achieved by her successors with the 1989 amendment's requirement for every political party to swear allegiance to socialism.The Supreme Court has rightly allowed this 1989 amendment to be challenged by the PIL, which claims it is "a grave breach of the liberty provision of the Constitution". But, its summary rejection of the plea to declare that socialism is not part of the "basic structure" of the Constitution has prevented it from discussing the relationship between socialism and liberty, which Dr Ambedkar, the father of the Constitution, saw clearly in opposing the inclusion of "socialism" in the Preamble. He said: "If you state in the Constitution that the social organization of the State shall take a particular form, you are, in my judgment, taking away the liberty of the people to decide what should be the social organization in which they wish to live."Revealingly, the Chief Justice in dismissing the petition to delete "socialism" from the Preamble, stated: "Why do you take socialism in a narrow sense defined by the Communists? In a broader sense, socialism means welfare measures for the citizens. It is a facet of democracy. It hasn't got any definite meaning. It gets different meaning in different times." This raises a number of points.First, words do matter. If a word has no definite meaning it has no place in a Constitution. Second, socialism does have a meaning. All the various socialist sects share a belief in egalitarianism. The major difference between the Communist and Fabian versions is that, the former seeks to promote egalitarianism by socialising the means of production, the latter by seeking to socialise the results of production. Third, there is an alternative set of political beliefs, classical liberalism, which promotes liberty but eschews egalitarianism. It, however, accepts the need for the State to help the deserving poor and to finance merit goods like health and education for those unable to pay for them (see my Reviving the Invisible Hand). This is close to the Chief Justice's definition of "socialism". But he seems confused about the two different political philosophies, which both accept "welfare measures" but with different ends. Socialists wish to promote equality, classical liberals liberty.

Classical liberals eschew socialists' egalitarianism because (as Nozick demonstrated) "equality" conflicts with "liberty". As he wrote: "The socialist society would have to forbid capitalist acts between consenting adults" (Anarchy, State and Utopia, p. 163). Fourth, egalitarianism as a moral belief is part of the cosmological beliefs of the monotheistic religions, and not part of those set of moral beliefs, including Hinduism, which accept what Louis Dumont called Homo Hierarchicus (see my Unintended Consequences). Fifth, socialism is a modern instrument of control of the Predatory State.This last point needs some elaboration. It is now well recognised that the suppression of political and civil liberty was an essential part of the Communist version of socialism. But it is equally true in a different form of the softer variety of social democracy. Fabian socialists have always been in favour of the Nanny State, because as Douglas Jay memorably stated, "The gentlemen in Whitehall know best" what is in the housewife's interest. This strand of socialism has now taken a new lease of life in England, with many socialist thinkers advocating State interference in the previously protected privatesphere on the grounds of aiding the virtuous half of a postulated divided individual self. In support, using Mill's arguments against slavery (in On Liberty), they claim that he would not have objected to this form of paternalism in the private sphere as going against his principle of liberty. This of course is a complete travesty of Mill, who explicitly discussed and dismissed similar paternalistic arguments against the use of alcohol and opium (see for Feb-Mar 2007 for an article by Amartya Sen, my letter in response and subsequent letters on the smoking ban in England).This new social paternalism is a continuing attempt by socialist thinkers to amalgamate notions of "negative" and "positive" freedom. As noted in an earlier column ("Freedom versus Liberty", August, 2004), this arises from the ambiguity in the word "freedom", which as it implies not having obstacles placed in the way of individual actions, allows confounding being free to do something with being able to do it. It is therefore unfortunate that the rejection of the PIL's plea to remove "socialism" from the Constitution's Preamble has prevented our highest court from the essential debate about socialism and liberty.

The Vote motive of UPA Loan waivers

The best ever written with true concerns on India farmers comes from India liberal Economist Mr Sauvik Chakraverti. Read the full article and vist his own blog at
Or How Public Money Disappears Over Rural India
Sixty thousand crore rupees is being spent by our government to waive the loan outstandings of our rural brethren, small and marginal farmers. Just how huge a sum of money this amounts to is apparent if you consider this: if you spent eight lakh rupees each day, every day since the birth of Jesus Christ, the total sum spent would add up to 60,000 crore rupees in a few years from now. This is very big bucks.But what is the money going to be spent on? Writing off bad debts is not the same as productive investment. Rather, it is a condoning of malinvestments. There is no reason why any section of the population should be indemnified thus. If this is a political gimmick to buy votes, then surely I can win elections in any Indian city promising to write off car and motorcycle loans. What makes it more ethical to write off the loans of poor farmers but not the loans of poor traveling salesmen?Indeed, ethics and justice demand that the government put its weight behind all debt contracts: All must pay their debts, without exception. That is what 'the rule of law' means. This would be the natural course of events if money and banking had been retained in private hands. However, with both money and banking in the hands of the State, there inevitably ensues the blatant misuse of power for personal, political ends. And, what is worse, it is somehow deemed 'legitimate' in our intellectually corrupt country that those who command the State can nakedly attempt 'to purchase the public affection through gratuitous alienations of the public revenue'.Yet, this is but a vain delusion. You can certainly buy individuals, but you cannot buy the votes of large masses of people in this way. The 60,000 crore rupees will soon vanish over the parched soil of rural India and not a single Indian will experience even the slightest improvement in his condition. Another government will come and another government will go. They will all perform other such vanishing tricks with 'rural development' in mind. But I bet my bottom dollar that the plight of the peasant will only worsen – especially because of the consequent inflation.Let us not forget our recent history. Every "big idea" of the Manmohan Singh government is a very old Congress idea. They started 'employment generation programmes' more than 30 years ago. Are peasants better off today because of all this spending? 'Loan melas' were another Congress idea: the result of political control over money, banking and credit. Was a single such loan productive? – in the sense that it generated employment, profit and paid back the principal with interest? Certainly not. Of course, with all this spending, client individuals and groups were cultivated and maintained, as they still are today – but nothing was achieved in the larger interest. And certainly not any improvement in the human condition in either rural or urban India.In the ultimate analysis, 'rural development' is the greatest hoax ever. No development has occurred anywhere in rural India because of this. Yet, in the same period, every city and town throughout India has been systematically destroyed. Further, during the same period, vast hordes of the rural poor have migrated to cities and towns. Most farmers today want their children to escape farming and set up shop in a city. Yet, a government that so easily throws 60,000 crores away on the rural poor cannot find even 10 percent of that amount to spend on 'urban development'.Throughout history, great kings have been 'builders of great cities'. Our latter-day rulers are destroyers of great cities – not that they are builders of great villages either.What should be done? First and foremost, get the Law and Economics theories right, so that the rule of law prevails, and all debt contracts are honoured. Privatize the banks as well as the money so that political tinkering with money, banking and credit can never be attempted by any government in India again. Then, institute free trade with sound money: end both protectionism as well as inflationism. With complete economic freedom added to this, all the right conditions would exist for all the people, especially the poor, to work hard towards improving their own condition.Next, the voice of the people must be heard. Vox Populi, Vox Dei said the Romans. What are the people crying out for? Are all the people all over the country crying out for loan waivers? Are they crying out for daily wage employment guaranteed by the State? Certainly not. They are all crying out for bijli, paani, sadak – so much so that the acronym BIPASA has been coined to reflect these political demands. Now, bijli must be privatized. Paani too. What the government must step in to provide are roads. By which I mean good, motorable roads. Every village must be meaningfully connected to every single city and town in its neighbourhood. With free trade in used cars, this revolution in transportation will fuel an aggressive urbanization: the winds of urban commerce will fan over rural India. It can never be the other way around – as surely Manmohan Singh and his caucus of central planners should have realized by now.Today, all the public money is being uselessly spent on things that the people did not demand, but politicians (and the 'spending bureaucracy') did. And it is a lot of money. Miles and miles of good roads could have been built with this money. That is the 'opportunity cost' of bad Economics. False ideas are draining away our national wealth. And these false theorists control 'education'. Give me hope, Joanna!

Friday, March 21, 2008

Need Honest Observation

Comment by Deane (

Mr (s) Deane,

The meaningful theory is primarily based on the argument of Proofs of reality, on which the TOI paper lost its credibility not by ignorant, to forgive, in fact one can forgive the child in early age for a mistake, but it is not tradition to forgive for life long! Mistake is mistake, it has to be accepted and make corrective action not correction of mistake.
The same TOI carried a lead article in the end of 2007 saying that the writer is an Economist by not mentioning the writer name, than the question comes, how much the news paper is transparent to its readers, forget about others.
Honest observation is important particularly for the younger generation
I fully agree with sauvik but disagree with Deane