Monday, August 18, 2014

Outsider PM's success lies in ..... Power & Politics/ The Sunday Standard/August 17, 2014

Outsider PM's Success Lies in How Fast He Demolishes Barriers Built by Insiders

It was a 63-minute speech which elitist India would abhor, even while adoring its deliverer. Flamboyant in royal Jodhpuri headgear, Prime Minister Narendra Modi comported himself like a man with a mandate. His maiden address to the nation from the ramparts of the Red Fort was short on big words but long in outreach. The gifted orator used videshi idiom to unfold a swadeshi road map. He vowed to convert India’s primitive countryside into a digital paradise. But he also made it clear that wireless connectivity would be achieved only through instruments made in India. He said, “When I talk about Digital India, it is not just something meant for big people. It is an instrument of growth for the poor.” The PM adroitly chose the very issues used by the elitist India to stay relevant and connected with the establishment, both at home and abroad. Speaking on gender issues, safety of women and heinous crimes like rapes, he admonished parents, asking them to control their sons instead of shackling their daughters, something no NGO or chest-thumping activist has even had an epiphany about. It is for the first time that a leader made it the responsibility of parents to spend more time in making their sons accountable for their activities than monitoring their daughters with suspicion. He emphasised the need for a clean India, both in body and spirit. His predecessors would unfailingly bleat about reviving big business, but Modi’s intent is to create a phalanx of young entrepreneurs. Refraining from excessive name-dropping of past leaders, including Mahatma Gandhi and Atal Bihari Vajpayee, Modi touched upon almost every issue from communalism to consumerism. Perhaps, it is for the first time that a PM skipped commenting on cross-border threats. The central point of his address was exclusively domestic—ensuring a responsive civil service, engineering economic revival and containing caste and communal strife. Without defining the contours of the coming institutional changes in the government structure, he made his first visible move by announcing the disbanding of the Planning Commission, which had become a roadblock in faster development of states. It was a political message to the states that the PM would like to make all CMs equal stakeholders in the allocation of funds for progress. With a single stroke, Modi silenced his worst critics in the states. Thus the CM-turned-PM also became India’s Pradhan Mukhya Mantri (Prime Chief Minister) and Pradhan Sewak.

Modi also made the shocking revelation that Delhi has many governments within the government. By giving the example of one Union ministry fighting a legal battle against another, he was revealing the nature of the various pressure groups that use their influence to stall government decisions through their contacts with ministers and bureaucrats. Calling himself an outsider, Modi made it clear that he was determined to dismantle the parallel establishment inside and outside the government. As his vocabulary revealed, now that he has taken charge, the PM would start the process of putting in place a genuine Modi Sarkar soon. According to insiders, he has been spending long hours understanding the rules of governance and the hidden multi-layer processes within decision-making. He has successfully aborted the moves of numerous powerbrokers to find their way into his inner circle of advisors. As one of his aides said, “Modiji moved from Gujarat to Delhi without a kitchen. Now many are in the line to join his kitchen cabinet. They don’t forget that he is a much better cook and manager of his own kitchen.” As is evident from the past 75 days of his tenure, Modi welcomes ideas and not individuals with personal agendas.
NaMo has once again asserted that he will follow his own vision and mission. Proving various pundits claiming proximity to him wrong, the PM’s message to the nation was not written by a menagerie of mandarins. As is the usual practice, all ministries were asked to send directly to Modi proposals they would like to be included in the PM’s speech. Since most of these presentations were near-Xeroxes of the ones sent to previous PMs, they went into Modi’s trash can. He avoided announcing new schemes, elaborating only on subjects he was vocal about during his election campaign. All the new initiatives he announced bore the Modi stamp. He didn’t make any promises. It was obvious that he realised over 90 per cent of the new schemes announced by his predecessors were forgotten as soon as they returned to Race Course.
Two most important takeaways from Modi’s address were accountability and delivery. Announcing the launch of Sansad Adarsh Gram Yojna, he advised all MPs and MLAs to use their discretionary funds to develop a model village each in their constituency every year. So far, lawmakers were using taxpayers’ money to oblige their supporters by constructing barat ghars, installing streetlights near their houses or splurging money on projects which were already being funded by other agencies. Modi’s objective was to force legislators to deliver visible assets in their respective areas. Basically, he was telling them to spend less time at cocktail parties and more working in the villages. Modi has realised that it is the growing promiscuity between lawmakers and lawbreakers in big cities that has marred the nation’s growth.
His indigenous narrative was also meant to make India self-reliant by making her a destination for capital creation. His pitch for foreign investment did not come without a rider. He made it clear that foreigners are welcome to establish manufacturing units and not just to invest in financial instruments. None would be encouraged to bring in hot money either. They could come only to make things in India and sell them outside India. He offered investors a range of choices from paper manufacturing to submarine building to minimise India’s dependence on imports.
Modi’s call for change from the heights of the Red Fort has shaken the foundation of the class and caste-ridden establishment. His success would lie in how fast and how soon an outsider like him would be able to demolish the 68-year-old hitherto unbreakable barrier built and protected by greedy insiders and take India to its true destiny.; Follow me on Twitter @PrabhuChawla

Monday, August 11, 2014

Modi Faces Bigger Threat .... Power & Politics / The Sunday Standard/ 10.08.2014

Modi Faces Bigger Threat from Wily Civil Servants Than Political Opponents

It was a missive, totally un-Modi like, since Narendra Modi has won India and taken full control of BJP through trusted and tested aide Amit Shah. But the citadel that awaits to be stormed is the Delhi-based phalanx of babus, who he is yet to Modify. Last weekend, when the PMO issued a 19-point code of conduct after almost 30 years for India’s steel-framed bureaucracy, it was seen as a warning. Modi is perhaps the first PM who has refrained from mass-scale transfers of senior officials. He surprised his colleagues by deciding to give a six-month extension to Cabinet Secretary Ajit Seth, whose only virtue is his invisibility. Modi has retained all key secretaries in finance, defence, HRD, home and external affairs. He enforced the principle of continuity in the bureaucracy even though some mandarins were UPA loyalists. It is clear that Modi wants to govern through bureaucracy. He has taken over from Manmohan but the Modi government is yet to acquire a shape.

The Indian Civil Services is one of the country’s most powerful institutions. A relic of the Raj, it ensured that politicians would never take any initiative without making babus either partners in power or beneficiaries of the system. The over 20,000-member club of All India Services officers comprising IAS, IFS, IRS, IR&AS, IPS etc. are the unelected rulers of India. They get automatic promotions, perks and salaries and create lucrative post-retirement facilities, which even politicians have failed to do for themselves. When Modi advised bureaucrats to be neutral, efficient and honest, it was like telling a tiger to stop hunting. Insiders say there are enough checks on the civil services in place, without the need for new directives. Even the official code of conduct provides summary dismissal of officials found engaging in political activity. They can be sent to jail if guilty of corruption. In one instance, Yashpal Kapoor, the then private secretary to PM Indira Gandhi, acted as an election agent for her. Mrs Gandhi lost her poll petition because she used a government official for election purposes. Rarely is a senior official transferred due to his or her inability to perform duties correctly, because the steel frame hasn’t allowed any accountability matrix for the bureaucracy. Babus can only be moved out if they fail to do the bidding of their political masters.
Modi, however, added a significant provision to his proclamation, which, if taken to the logical end, would break the civil service-corporate nexus. One directive is that all conflict of interest situations must be avoided and resolved. It is evident the PM has placed a premium on the character of a civil servant. It is, in fact, the conflict of interest—or creation of future interest—which has been the guiding principle for taking official decisions so far. Post-retirement, most civil servants joined the very corporations they used to deal with in their official capacity. A study of retired babus reveals that over 80 per cent of senior officials took up highly paid jobs after superannuation in the same sectors they had been handling, all which benefited by their decisions. One of the most dangerous fallouts of economic reform has been mandarins playing the markets. Either through relatives or on their own, bureaucrats have been making a killing buying and selling scrips. It is the cleverest legal way of making illegal money because babus know in advance which future policies of the government would positively or negatively affect various sectors. There is suspicion in some quarters that it is the politician-babu-corporate nexus that has prevented the government from imposing the capital gains tax so far. India is perhaps the only democracy where promoters and relatives in politics and civil services make crores without paying a paisa as income tax. The power of bureaucracy was evident when two decades ago, it prevented the finance minister from revealing the names of babus who were allotted promoters’ shares by companies at concessional rates. Some officials holding the shares joined the same companies as directors or consultants. Even now, there are officials who have mastered the art of writing pro-private sector documents for PPP and demand royalty for it.
Piercing the steel frame has been a big challenge for all leaders for it’s the apparatchik who makes the apparatus. Modi should remember that the “bureaucracy is a giant mechanism operated by pygmies and cowards”. Therefore, his agenda should have been to replace pygmies with giants. If a party needs a strongman with verve and vision, the bureaucracy needs an equally towering personality to lead it. For past three decades, fearless and innovative officers have lost the battle to sycophants and incompetents. India has seen impressive Cabinet Secretaries and principal secretaries like A N Verma, Brajesh Mishra, B G Deshmukh, Vinod Pandey and Naresh Chandra. They led from the front and were au courant with the mind and mission of their PMs. Since they were first-raters, they also chose first-raters to assist in running the government. Now second-raters have taken over and they look for third-raters so that they do not outshine their bosses.
For a change, the steel frame showed signs of cracks after Modi took over. Initially, they cowered perspiring in their AC rooms for the call from South Block, informing them about their transfers. They were relieved they were not relieved of their jobs. Modi preaches and practises delivery. As Gujarat CM, he successfully rode the bureaucracy tiger. He neither set nor amended any rules of conduct for them. Yet his babus exceeded his expectations.
So, when he walked into 7 RCR, the bureaucracy was expecting its achche din of doing no work about to end. It is used to conjuring up new ideas for the new leader, to generate fresh jobs for themselves and escape scrutiny. Babus understood the real message behind Modi’s slogan ‘Minimum Government, Maximum Governance’ well. It meant he would demolish many departments and secretaries to create a lean, mean establishment. Before Modi could implement his vision, they counselled him to embark on the path of ‘advice first, act later’. The bureaucracy abhors initiative and innovation. It despises any exercise which ensures better results. Modi faces a bigger threat from the wily civil servant than from any political opponent. He must keep it in mind that “powers once acquired are never relinquished easily, just as bureaucracies once created never die or vanish”.; Follow me on Twitter @PrabhuChawla

Monday, August 4, 2014

Books by Has-beens is More about... Power & Politics/The Sunday Standard/03.08.2014

Books by Has-beens is More About Rediscovering Their Imaginary Legacies

G K Chesterton, known for his adept turn of phrase, wisecracked, “A good novel tells us the truth about its hero, but a bad novel tells us the truth about its author.” Former Gandhi loyalist-turned-Brutus Natwar Singh’s new book is not a novel, but fiction stranger than fact. His only claim to fame is the close access he once enjoyed to the Nehru-Gandhi family and its accompanying advantages. He doesn’t lose any opportunity to boast about his encounters with world leaders and how Indira Gandhi trusted him more than any other where diplomatic ventures were concerned. Predictably, his book reveals more about himself than his former benefactor, mentor and promoter, Sonia Gandhi. But for Gandhi Parivar’s indulgence and munificence, Singh would be spending his sunset days in some village of Rajasthan like many of his former colleagues. I haven’t read the book, but have read enough and heard his utterances regarding his interpretation of events, which is aimed at demolishing the already marginalised Sonia.
Natwar is a herald of hindsight; he has expounded anything and everything about Sonia’s style and substance, which he now finds dictatorial. The acolyte who revolted against former PM P V Narasimha Rao for Sonia’s sake, has now become her worst enemy. Modesty has never been Natwar’s virtue. Like many retired, tired and fired civil servants and politicians, he has followed the formula of hawking wisdom by writing selective memoirs. During the past decade, many retired babus and advisers have penned experiences, receiving much media space. All of them, perhaps, believe that public memory is short. It isn’t. Natwar, like many other authors before him, has been uncharitable with the truth. While some, like former President Venkatraman and BG Deshmukh, former principal secretary to Rajiv Gandhi, refrained from making political statements or embarrassing disclosures, others like T N Seshan and P C Alexander used privileged information to seek publicity or favour from the new establishment. 
Natwar has the advantage of both degree and pedigree. His ‘damning revelations’ would have made sense if he had dealt with Volcker Commission’s Report on Oil-for-Food scam. His close aide implicated him. It was only after massive protests in Parliament that he lost his job as foreign minister. When India Today carried it as a cover story and followed up with a series of debates on Headlines Today, Sonia was forced to jettison Natwar. To be fair to her, she resisted all pressure to act hastily after the story hit the headlines. First she divested Natwar of his portfolio and asked him to resign only later. But Natwar seems to have glossed over this chapter, which marked the end of his relationship with the Congress and Gandhi Parivar. Trained in the bureaucratic and political tradition of compromise, he cleverly evades his and the Congress’ association or role in the scam.
Both Natwar and Congress were listed in the report as “non-contractual beneficiaries” of Iraqi oil sales in 2001. Natwar was mentioned as the non-contractual “beneficiary” in connection with four million barrels of oil routed through Masefield AG, named as the contracting company. The report also claimed that Congress also benefitted through the same company, a charge denied by both Natwar and the party. Surprisingly, after his disgraceful ouster, Natwar kept schtum for almost six years. He even let his son Jagat contest an Assembly poll on a BJP ticket.
The irony is that even after writing highly sensational prose, Natwar admits he hasn’t revealed all he knows. It is evident that the predominant objective is to establish his honesty and give a bad name to his former mentor. His attempt appears to expose as myth Sonia’s decision not to become PM by heeding her “inner voice, and that she did so because Rahul felt that she, too, would be assassinated like his father and grandmother”. Such rumours did appear in the media in 2004. Natwar’s details about the events tell more about the quality of the author’s wisdom than the heroine or villain of his labours. Evidence is scarcer than truth: like, an ex-adviser of a former PM, Natwar also mentions that official files were sent to Sonia for approval, but doesn’t offer any proof. I am positive that Natwar himself was sharing much sensitive information about his ministry with Sonia, but wasn’t significant enough to be appreciated by the Congress president.
If Natwar decided to give vent to his anger against the Gandhis, others have churned out volumes only to enshrine their virtues. For example, when Seshan, former Cabinet Secretary and later Chief Election Commissioner, wrote A Heart Full of Burden, he simply forgot to disclose his relationship with former PM V P Singh and the reasons that led to his removal. He also abjured any explanations for his decision to postpone the second phase of Lok Sabha polls after Rajiv Gandhi’s assassination. Seshan, in fact, claimed that he consulted former PM Chandrashekhar before taking the decision, who flatly refuted this. Even Alexander never revealed the real reason for his ouster from Indira Gandhi’s office in his three tomes. He was asked to leave after the discovery of a functionary in his office embroiled in an espionage scandal.
A great example of a sunshine memoir is My Presidential Years by former President R Venkatraman. Contrary to general perception about his cloudy relations with Rajiv Gandhi, he revealed a few disagreeable facts. In one of my meetings with him, Venkatraman mentioned his problems with Rajiv, who he claimed came to meet him only to discuss the colour of Rashtrapati Bhavan curtains. Based on my interaction, I wrote a story in India Today. Soon after it hit the stands, he cancelled my scheduled meeting with him.
It is evident that the competitive urge to write books by has-beens and forgotten time-servers about their official roles seems to have more to do with positioning themselves as advisers-on-call and rediscovering their imaginary legacies. As a powerful personage in the current dispensation puts it, how come wisdom and truth dawns on babus and leaders only after they are sacked or retired? To paraphrase Sonia’s literary promise, I will disclose the truth when I write my encounters with untruth.; Follow me on Twitter @PrabhuChawla

Monday, July 28, 2014

Brand Rahul will need..... Power & Politics/The Sunday Standard/July 27, 2014

Brand Rahul Will Need More Than Just Bloodline to Acquire Political Market

For a sinking galley, even a floating straw offers the hope of succour. Inbuilt in each failure is the opportunity for redemption. Such is life for the highly demoralised 128-year-old Congress party. For the past few weeks, Gandhi Inc was running around like a headless chicken. It lacked leadership. It existed sans a mission. It had lost all of its aura and visibility. Both its admirers and detractors had dashed off its political obituary, though there remained loyalists who felt that the Congress may be bruised and dented but the idea and ideology of the party was immortal and capable of surviving any political tsunami, hurricane or tornado.

Last Friday, a small miracle turned into an organisational windfall for the beleaguered dynasty. When it won all the three Assembly by-elections in Uttarakhand, the entire Congress leadership went into frenzy as if it had recovered some long lost glory.  From Sonia and Rahul Gandhi to CM Harish Rawat, as well as some middle-level leaders, none of them lost any time in terming the victory as the waning of Modi wave which demolished the Congress in the Lok Sabha elections. The Uttarakhand win was much more than just an electoral triumph. Some influential Congress leaders saw it as a vindication of Rahul Gandhi’s policy of trusting the local leadership which had thwarted all attempts to destabilise them. Soon after the Congress lost all the five Lok Sabha seats in the state to the BJP with huge margins just a few months ago, there was clamour to replace all the CMs of those states in which the party’s performance was pathetic. Replacing Rawat was one of the demands of the dissidents because even his wife had lost the elections. But Rahul stuck to his guns. As one of his trusted aides said jokingly, “Rahul follows the principle of leadership enunciated by Napoleon Bonaparte that a ‘leader is a dealer in hope’.” Rahul firmly believes in hope and therefore has ignored all protests and machinations. It is rare for a ruling party in a state to win by-polls within two months of losing in the national elections. Rawat had been given a free hand. As a result, not only had he himself won with a huge margin of over 20,000 votes while convalescing in hospital, the other Congress candidates  defeated their saffron rivals impressively. The Congress snatched two Assembly seats from the BJP; one of which was vacated by former BJP CM Ramesh Pokhriyal Nishank.
The Congress is obviously celebrating its marginal recovery in Uttarakhand. But it also means that the Rahul line will prevail in the party. Sonia has always practised the policy of not disturbing CMs in adversity. She had allowed Sheila Dikshit, Bhupinder Singh Hooda, late YSR Reddy, Tarun Gogoi and others to continue in office even after electoral reversals. Of late, however, powerful voices have been seeking the replacement of CMs like Hooda, Prithviraj Chavan, and Gogoi. Historically it’s shown that when the Congress is not in power, it acquires much more ferocity in opposing itself rather than the party ruling in the state or at the Centre.  It rules united but fights its opponents divided. Ever since it lost the elections, both the anti-Rahul elements and conniving CM aspirants have been running relentless campaigns for a change of leaders. Some of them even threatened to leave the party and join the BJP. For example, in Assam, 28 MLAs, including a couple of ministers, even went to the governor with a letter expressing no confidence in Gogoi’s leadership. In Haryana, a former Union minister considered close to the AICC boss and a former State congress chief revolted against the CM. In Maharashtra, it was not just its ally, the Nationalist Congress party, but also prominent Congress ministers like Narayan Rane who  demanded that Chavan should be replaced pronto if the Congress wanted to put up even a symbolic fight against the mighty Shiv Sena-BJP alliance.
For a while now, Rahul has been under fire for the party’s worst-ever performance since Independence. Pressure was mounted on him to change his non-political (so called) Rasputins  in his kitchen cabinet. None of them had any political experience and a few of them had left lucrative assignments abroad to join the young scion. But instead of yielding to pressure, he took a brief sabbatical and returned to active politics with aggravated aggression. It is the new Rahul Congress which has been taking on the Modi government inside and outside the government. Mr Gandhi contemptuously dismissed every suggestion to sideline C P Joshi and Madhusudan Mistry, portrayed as the villains of the Congress’s debacle. The Congress decision to go after Madhya Pradesh CM Shivraj Singh Chouhan and disrupt Parliament on any and every issue is part of Rahul’s strategy to keep the limelight on the Congress.
For both PM Narendra Modi and his Enemy No. 1 Rahul Gandhi, the upcoming Assembly polls in Haryana, Delhi and Maharashtra are deemed crucial. If a defeat in these states, currently ruled by (barring Delhi) the Congress, would dent Modi’s armour of invincibility,  it will also strengthen the anti-Rahul forces within the Congress. Rahul has placed full confidence in all the three CMs who are in trouble. After dithering for couple of weeks, it was he who decided to let both Chavan and Hooda lead the Assembly elections. For Assam, Rahul even ignored Mallikarjun Kharge’s report suggesting a review of state leadership. He has scrupulously kept himself away from his party’s desperate bid to acquire the Leader of the Opposition status in the Lok Sabha.
Though Rahul doesn’t have the powers of the party president, he seems to enjoy veto power on all crucial decisions. Perhaps Rahul is still undergoing an apprenticeship for leadership. But he must keep in mind that leaders are not born; they are made. On the face of it, he seems to possess a single leadership trait—saying no and saying yes is the easiest option available to any leader. He has been in politics for over a decade. He was lucky to be born a Gandhi. But his evolution as a leader has been rather slow so far. His promoters have always credited him for the party’s successes and passed over the blame to others for the failures. His excessive political engagement during the past few weeks may reflect his resolve to stay in politics. But he has a champion challenger in Modi. In the coming war for retaining and acquiring political markets, Brand Rahul will need more than just bloodline. Modi has a mission and a model. Rahul badly needs both, and even in a better packaged avatar. An accidental win in a tiny Himalayan state can’t be the starting post for the campaign to recapture India.; Follow me on Twitter @PrabhuChawla

Monday, July 21, 2014

Modi must find formula..... Power & Politics/ The Sunday Standard/ July 20, 2014

Modi Must Find Formula to Dismantle Monstrous Diplomatic Machinery

In technical jargon, Track II always runs opposite to Track I. Moving parallel, they never meet. These trains of thought also end up at different platforms of the same station—precisely what has been happening with Indian diplomacy for the past few decades. Why and by who was Track II invented is anybody’s guess. While changes occur in governments, Track II members, promoters and financiers remain unchanged. In fact, it has become a sinecure for retired, tired and fired civil servants, diplomats, opinion-makers and recovering journalists. Last week, when the country was outraged over the flirtatious rendezvous between former hack Ved Pratap Vaidik and proclaimed terrorist Hafiz Saeed, questions were raised over the motives and intentions of Track II diplomacy. Vaidik may be justified in meeting Saeed as a former media maven, it was undeniably inappropriate for him to make out a case for J&K as an independent country.
His two-week undisclosed cross-border visit brought the spotlight on not just his hosts but also Indians who have been granted multi-entry visas to Pakistan. The Pakistan institute is run by former military officials, including a few from ISI. It has been inviting liberal and secular Indians for promoting peace and dialogue between India and its duplicitous neighbour. Some of them genuinely feel that India should engage Pakistan in a dialogue even if Pakistan-sponsored terror groups continue to kill innocents in India. On other hand, it is not a coincidence that those opposed to the idea of ‘Paki-Hindi Bhai Bhai at any cost’ are denied visas to visit even relatives or places of birth. ISI is so powerful that it can defy its heads of state or government when it comes to granting visas to independent journalists.
Instead of working towards a single mission, there has been a serious dissimilitude between Track I and Track II over the past decade. If the official line is to demolish terror camps working within Pakistan, Track II interlocutors have been espousing liberalising the visa regime and to give Pakistan free access to Indian market. PM Narendra Modi has been hinting at possible military intervention if terror attacks don’t stop, but India’s peacenik perambulators have been pleading for restraint so that they can grab more airmiles to Lahore for red carpet welcomes followed by biryani and bootleg Scotch. In fact, the new government is now examining the number of visits made by members of various think tanks to Pakistan and other countries, as well as their presentations. The idea is to ascertain whether these self-appointed ambassadors have taken a stand at variance with official policy. An analysis reveals that at none of the conferences or seminars in Pakistan did any of the Indian participants raise the issue of closing down terror camps. Strangely, many of these talking heads have much in common—conflict resolution, peace initiatives, terror and unknown sources of funding. The NDA government has started the process of identifying their financing patterns and ensuring that government funds are not being diverted through devious methods. They acquire legitimacy because Indian missions are obliged to organise receptions in their honour and even facilitate meetings with kindred souls in Pakistan. What has baffled senior ministers is that even after the change of regime in New Delhi, none of these interlocutors make it a point to brief the government before or after their visits, unlike their Pakistani counterparts.
Another revelation is that the number of these think tanks rose during UPA regime. Though it was Brijesh Mishra, a former diplomat and Principal Secretary to Atal Bihari Vajpayee— one of the most powerful ever—who encouraged Track II, the UPA under Manmohan Singh patronised legions of the intransigent interlocutors. Most were promoted by former diplomats and military officials, since serving officers who worked under them make it a point to oblige their former bosses by creating opportunities to indulge in non-stage diplomacy. This has dangerous implications. These retired diplomats get informal access to sensitive information from their colleagues in the government. There are many examples of individuals working as go-betweens for decades after their retirement—even after governments changed. The Track II establishment is so powerful that it can influence any government to follow its advice and ignore views of its ministers. Surprisingly, the composition of Track II phalanx defies any logic. It consists of individuals from all parties who are known for defiance of party or government line. Their only virtue is their consistency in keeping their honeymoon with Pakistan alive. They are found haunting residences of the Pakistan and UK High Commissioners and ambassadors of the US and China. They include senior media personalities known for their soft approach to Pakistan. But it is not that these think tanks are working only for a dialogue with Pakistan. Some have taken upon the responsibility of disarming the world by fighting against nuclear proliferation. Their only mission is to discourage India from becoming a nuclear power so that Western nuclear equipment manufacturing companies can capture Indian market. No wonder, their membership comprises those who share the doctrine of ideological junketing.
Surprisingly, these intellectual itinerants of both India and Pakistan are like MACs ( Mutual Admiration Clubs). They invite only those from each other’s country who are ideologically, culturally and politically compatible. For them, any change of government hardly makes a difference. An analysis of their writings or presentations reveals that all of them follow the same line of argument even if they come from different parties or outfits. They are so organised that if any non-MAC member makes a contrarian move, they move heaven and hell to gag the disagreeable point of view using their connections. Modi’s challenge is finding the right formula to dismantle the monstrous machinery, which has destabilised and undermined South Block with fraternal finesse. He has to take a call to merge both Tracks so that national interest prevails over culinary and travel preferences of retired apparatchiks who try to transcend oblivion with undying ambition.; Follow me on Twitter @PrabhuChawla

Monday, July 14, 2014

Jaitley's next Budget should be with a difference..Power & Politics/The Sunday Standard/July 13, 2014

Jaitley's Next Budget Should be with a Difference, in Taste, Tone and Tenor

Union Budget 2014 is just like a three-star Michelin course. The chatterati waits for it to be arranged and displayed in the proper ambience. Corporates expect it to be served in fine China tableware. And the media, opinion-makers and political leaders enjoy its flavours according to nature of their palates. Whether it serves its intended purpose or not, the budget has become the talk of the town. All TV channels paraded exclusive panels of experts, spent lavishly on sending reporters out to get voices that mostly supported the budget, with a few contrarians thrown in for the sake of balance. Like all food, the freshness lasted for a few hours, after which people looked for a different cuisine to savour. Since 1947, 25 finance ministers have read out 86 budgets, with C D Deshmukh making the shortest speech and Arun Jaitley breaking the record—with a short break—by speaking for 130 minutes. Barring the Congress talkathletes and the usual BJP and RSS baiters, few found fault with his logic or schemes. Jaitley has something for everybody. The budget proposals, however, resemble the menu of a roadside dhaba, which serves everything from Punjabi-ised pasta, desi pizza, Indian chow mein to even lamb chops for snooty Anglophiles.
For Jaitley, crafting the budget was a class and caste dilemma. His heart was with market reforms, which benefit more the types whose habitat is Lutyen’s Delhi, South Mumbai, upmarket Chennai as well as those who direct the markets in Shanghai and New York. But he was constrained to expound on fiscal deficits, subsidies and the interest regime, which only a few sitting in boardrooms would understand. His original constituency comprises middle class traders, unorganised labour, Swadeshi propagandists and lower middle class urban voters. It wasn’t surprising, however, that he let his heart down and used his mind instead to present a please-all budget, hailed not just by those who gained but also by those who gained even marginally. He didn’t get plaudits for presenting a bold, a dream or a super budget, but Modinomics, which brought the party to power and made him the finance minister, was not lost in translation.
Jaitley’s budget might probably join the myriad forgotten documents in the dusty archives of the finance ministry. But the question remains whether it resolves the fundamental problems ailing the economy for the past 65 years? The finance minister took a bold step by opening up defence and insurance sectors to Foreign Direct Investment (FDI). He magnanimously announced 20-odd schemes of `100 crore each. He reiterated Prime Minister Modi’s resolve to launch a bullet train and create IITs, IIMs and AIIMS in almost every state. He also humoured the Sangh Parivar by providing liberal outlays for cleaning and developing the Ganga and pilgrimage tourism. But can just opening elitist educational institutions and inviting FDI in remunerative sectors lift India from the bottom ranks on various social indicators? Undoubtedly, the budget is not an instrument to abracadabra any magical mission to make India a prosperous and healthy nation. Jaitley has been able to provide something good out of the worst situation he has inherited from the UPA.  But providing a paltry `500 crore as a palliative for a permanent plague like inflation appears to be a non-starter.
In a nation where every third person is living below the poverty line, fiscal and monetary policies should aim at providing each wholesome food and shelter. In India, real disposable income has just grown by 2.8 per cent over 2004-05. More than half of the country’s 1.2 billion people have no toilets in their homes. Surprisingly, they have mobile phones. In the age of modernisation, a single Indian consumes just 52 kg of steel a year as against the global average of 203 kg per person. Even after 65 years of Independence, the average citizen gets only 734 kWh of power (500 units a month) vis-à-vis the worldwide average of 2,782 kWh. If that isn’t enough, only half a bed is available per 1,000 Indians in government hospitals. Poor Bharat is afflicted with all categories of poverty, which vary from water poverty, healthcare poverty, education poverty, housing poverty, sanitation poverty and even transportation poverty in the form of a pathetic road network.
Amazingly, India still remains a rich country inhabited by the poor. From 1991, when extraneous pressures forced it to take a right turn from a mixed economy to a World Bank-imposed reform mechanism, only the rich have benefitted from budgetary exercises. India is perhaps the only developing country where 64 per cent of the GDP comes from the services sector, which provides hardly any facilities to the poor but definitely offers luxurious services to the rich. Both manufacturing and agriculture, which contributed over 70 per cent of the GDP in the ’80s, now account for less than 40 per cent. Over 50 per cent of the population still depends on agriculture for livelihood, but have been left out of the growth miracle. Yet, our fiscal policies are aimed at attracting FDI only in services. Will FDI in
defence and insurance solve India’s unemployment and poverty problems? Foreign investors have been investing in captive markets or high yield sectors. For example, the percentage of FDI in trade, hotels and restaurant business has grown from 14 per cent in 2001 to 24 per cent in 2014. Foreign funds (belonging to invisible Indians as some suspect) investment in financing, insurance, real estate and business services rose from 14 per cent to almost 18 per cent during the past 12 years. Evidently, FDI sponsors have taken more money out of India through tax-free dividends and sale of their shares than they have actually invested. They haven’t created any tangible assets in India. Instead, they provided plum jobs with stratospheric salaries to those who influence policymakers. Modi is under no obligation to give more opportunities to those whose sole aim is to earn more miles and munificence from their foreign promoters.
Sadly, successive finance ministers from Manmohan Singh onwards have been guided more by endorsements from markets than from masses. The colour of the budget and its prose, along with the sartorial elan of the finance minister, get more premium and publicity than its content. For Modi and Jaitley, the time will arrive soon—in eight months—to present the next budget with a difference, in taste, tone and tenor.; Follow me on Twitter @PrabhuChawla