Fear & Loathing in our Soft State

Fear and Loathing in our Soft State

“Nowadays people know the price of everything and the value of nothing.” 
― Oscar Wilde, The Picture of Dorian Gray

We have invented Ahimsa in our time, when India was Bharat, an idea as much as a conglomeration of kingdoms, with its mahaan moments. Later, in the 20^th century, we, via the Mahatma, put non-violence on the map, and to the test, as political weaponry.

But day by day, as 2012 comes to an end, it is apparent, wrapped in inchoate outrage, that India is in a moral crisis.  This is now of endemic and epidemic proportions, threatening to destroy our social fabric, and reduce us to a version of anarchy, unless we have already crossed that border.

People in our country, up and down the ladder, demonstrate little respect for human life. We routinely abuse and kill each other in manifold and bestial ways. We maim, strangle, abort, torture; our men, women, children, and animals. We run over people. We crash cars drunk out of our skulls. We cheat, lie, intimidate, corrupt, and brazen it out. We don’t worry much about consequences, because the way things work here, there are hardly any. Our justice system is outdated, cumbersome, ponderous, over burdened and altogether easy to subvert. Our conscience is dead.

This latest rape case, with its horrendous cruelty, is however only the latest in similar rape and kill outrages that have become routine. There is hardly a law which is not freely broken in India, and very few of the outlaws are ever effectively punished.

The perpetrators of crime and violence in India are savage, sadistic, brutal, super confident, remorseless and belligerent with success. They demonstrate their callousness with increasing audacity. They hold the soft state in contempt as well they might.

Paradoxically, we are quite effective when aroused out of our lethargy, but a nation cannot live at crisis point every day and expect to survive. So, most of the time, we are incredibly vulnerable. In America there have been no terrorist attacks since 9/11. We have seen scores since 26/11, and Mumbai is just as unprotected as it was then.

The powers that be are discomfited and embarrassed in the face of murder and mayhem, public anger and anguish, rather than livid with rage; and this by itself is telling comment. They try to contain the damage, even as they no doubt wish they did not have to defend the indefensible. But you can see it on their televised faces, their infuriatingly dulcet tones, and hackneyed anodyne offerings; that all they are waiting for is the next headline to get them off the hook. And the problem, the latest in an unending procession of unacceptability, gets referred to a committee, and thereby goes into the limbo of self perpetuation rather than solution.

We seem to be committed to protect only the political classes, and not terribly well at that. Rajiv Gandhi would not have been assassinated as an Opposition leader seeking re-election, nor his mother as one of India’s most powerful prime ministers, and some say even his bold as brass brother, if we were any good at protecting their lives.

And this is the fate of what has effectively been the ruling family of the republic. It was also the end game for the Father of the Nation. As for the rest of us, starting from the senior bureaucracy and armed forces, particularly in retirement, to the ordinary citizen, it is a daily story of every man for himself. Our heroes are taken for granted and their families ignored after they sacrifice their lives for us. But our villains strut around untroubled by the authorities.

Rape and death here are first cousins. They often assume each other’s fate. It is not just because of poverty, ignorance, upbringing and degeneracy. The US, across their demographics and racial topography, has at least ten times the number of rapes. They murder with abandon too, with everyone allowed to bear arms; but not necessarily as accompaniment to rape. But still nothing can excuse our statistics, because, after the US, albeit a long way behind, India is still the rape capital of the world.

So, if you count yourself as a “mango person”, you are fair game in the jungle. Not that anyone is safe in a soft state. The Maoists want to infiltrate the cities. Perhaps they need to think again and send in their cadres for training to our metros. Besides, the violence in our land, both urban and rural, does not seem to need any ideological justification. The Maoists and Jihadists may need to brainwash themselves but the rest of us don’t. We are medieval and modern, rich, poor, and in-between; but we are all capable of routine wrong-doing, and at the extremities, almost anything at all. In India everyone is a target. All one has to do is fall between a rock and a hard place to fulfil this destiny.

With a population of a billion and a quarter, and millions more born every year, there is plenty by way of replacements and spares. Besides this is the land of karma and reincarnation. Everything heinous has deep causes and can go beyond one lifetime. After all, it is assumed, the good stuff also does. And all of it in timeless India provides a handy excuse for inaction and acceptance.

What can we do about it? No, summary lynchings, castrations, death penalties and zero tolerance will not necessarily cure us.  These might be deterrents to some, but by itself and in isolation, retribution has never effectively controlled crime. The malaise is in our inability to enforce the law, of which God knows, we have more than enough.

To improve our lot we have to get better at everything, and actually mean what we say, and do what we promise. We need to reinduct some imandari and integrity that seems to have gone missing along the way. Our political classes sound fake to be sure, but the rest of us are no better.

If all this protest over the last few years is to achieve anything apart from a tamasha and televised vicariousness, we need to make ourselves more accountable. The State we have, only mirrors our own Dorian Gray faces.

To get a better handle of governance, civic sense, public spiritedness, cleanliness, truthfulness, professionalism, progress, pride, etc. we all need to chip in. Pointing fingers is no doubt fun, but much of the responsibility for the current state of affairs falls to the venality of every man. The girl in the hospital is paying for our sins, so is the policeman.

(1,103 words)

25^th December 2012, Christmas

Gautam Mukherjee

Look Back in Anger

Look Back in Anger

“That voice that cries out doesn't have to be a weakling's does it?” 
― John Osborne, Look Back in Anger

Looking back at 1991 from 2012, the year the world was supposed to come to an end, according to an addled misunderstanding of the Mayan Calendar; is like looking at a road that one can’t do a U turn on.

We are on a “Travelator” with our feet glued to the rubber, a kind of Changi Airport “slow-mo” through infinity. This is because, despite the vigour of our political discourse, no party or coalition in power has sought to unravel the liberalisation process started by the Narasimha Rao Government. It can be reasonably assumed that in the future too, it may be hard to discern forward movement, but the Indian State is not for turning tail either.

Progress after all, like the proverbial river, is a continuum. There is still water rushing by in that river, as it was in 1991, and indeed for decades, even centuries, before that, but it is not, indubitably, the same water. With changes in courses and droughts, floods and spates, it is debatable if it’s actually the “same” river as well.

This analogy, like all analogies, can’t be stretched too far. In present days of humungous dams and the noxious state of the Yamuna at Delhi, the limitations to the perpetual have become graphically evident. But, if one were to tell pre-1991 stories to a 21 year old today, the disbelief is palpable, just as encountering the Yamuna in triumphant puissance at Yamunotri is. And alongside, is a question in his or her eyes. What was wrong with your generation and the ones that preceded yours?

Why did you and all the fancy folk that fought for our independence, create that absurd world of poverty and shortages and bad technology for those years since taking charge? Weren’t you clamouring to be given a chance to set things right?

Are our chronic bottlenecks in infrastructure, no water, the frustrating power outages, the outdated laws, the stifling bureaucracy, the brutal law and order situation, bad educational and health facilities, crumbling public buildings, wholesale corruption etc. today just a consequence of the sloth and lack of vision of the elders? Are we, today’s 21 year olds, just paying for our pitri doshas?

And are we behind the times because we were completely misguided and callous for the forty-four years from 1947 to 1991?

It is difficult to defend oneself in the face of such sweeping indictment, but self respect demands one must try. What then about the formidable “commanding heights of the economy” philosophy that gave us a backbone of long gestation heavy industry undertaken by the Government in a plethora of PSUs? A lot of countries don’t have that kind of base because of over reliance on the private sector with much shorter perspectives. We can aspire to building our own aircraft carriers and nuclear submarines and frigates too, in our own shipyards, thanks to this backstop to our industrial capacities.

 And those shining IIMs and IITs, praised around the globe, that have turned out the very people that both animate and populate half the IT companies around the world? And the number of engineers, doctors and lawyers we have graduated who are second to none in their abilities? What of them?

If our primary education and healthcare systems are poor they can now be set right. In the old days, there were very limited resources, and one had to prioritise. And no, we have no answer as to why we were and are still so poor in the “inclusive” sense, when we are potentially amongst the richest nations in the world.

But, and not just because of our adequate foreign exchange reserves now, if, in the ordinary sense, we have any money to rub together now, almost all of it has come to us since 1991, and the opening up of the Indian economy.

So what would have happened in we were not forced to liberalise our Socialist ways in 1991 by the World Bank? Which did, it must be admitted, pull us back from the precipice of bankruptcy.  

We might have stayed a Soviet client state, but only if the Soviet Union itself had not collapsed. Russia is not quite the USSR as our new armament deals and security/nuclear cooperation with it reveal. We have also been waiting years for that Admiral Goroshkov/Vikramaditya aircraft carrier to arrive at vastly inflated cost.  

We needed to tilt towards the US for those softer terms of engagement with the West, those accesses, give-aways, throw-ins, subsidies, the inclusion and protection; without diplomatically making it too obvious.

Perhaps this sugar daddy could have been China, as it remains an ideological mentor to our Left parties, and paradoxically, to the Maoist terrorists and other subversives too. They want to influence and destroy us at the same time, trade with us and menace us too. It is a very interesting dialectic.

This alliance nevertheless could conceivably have happened, particularly if the CPM had actually allowed Comrade Basu to come to Delhi and become PM. And, of course, if Mr. Jyoti Basu had managed to rule for much longer than the mere months that the Janata Government experiment actually lasted.

But, as it happened, we turned to America. It is the same America that bailed us out in our non-aligned heyday, and saved us from further humiliation at the hands of the Chinese in 1962, and starvation too, as it happened, for almost a decade beyond. They sent their US Peace Corps wafting through our countryside, along with the munificence of the “PL 480” programme of wheat, milk and rice gifted by the US to India.

The US has gone on to become globocop and the centre of a unipolar world now with China chafing at the bit a little, particularly in its neighbourhood.

It is therefore no wonder we meekly agreed to the prescriptions of the World Bank in 1991, controlled as it is lock, stock and two smoking barrels by the US.

India had a week’s foreign exchange left at the time, and had to infamously hock some of its physical gold reserves. Besides, look at the chronology. The great Socialist dream had all but died. China was not Mao’s but Deng’s. The Iron Curtain had gone. And the camp followers were of no use. Today’s Socialism is a very different thing. It runs on seas of oil in Venezuela and it pays for Cuba, orphaned after the demise of the USSR too.

Our Socialist days and nights never added up. But oddly, the ruling UPA can’t quite let go of the headiness of asking for votes in the name of the aam aadmi, translated helpfully by billionaire businessman  Mr.Robert Vadra, as “mango people”, rather than development.  

The Republic of India cannot stand alone without a security alliance despite the high-minded rhetoric of the Non-aligned Movement. We can’t, in the absence of a technologically decent military industry of our own, and the financial muscle to fuel it.

This may however come about in the years to come. It is more than likely to happen, not because of our diplomacy or our intelligence, though they too have, and will continue to play a part. This is illustrated by the nuclear deal pulled off in UPA I. But we will essentially grow much stronger because of the voracious appetite of our domestic market, only second to that of China. The world is eager to service that demand and reap the rewards. And that makes us future rich no matter how hard we try to stay poor.

The pre 1991 scenario, the morass of unfulfilled hopes, the hypocrisy of preaching what the preachers themselves do not follow, could perhaps be likened to the hit John Osborne play of 1956, “Look Back in Anger”, also made into a film three times.

It was all about the tensions between the world-view of a working class man married to an upper class woman and her friend, conjoined in a love triangle, loving and hating simultaneously.

It spawned the phrase ‘angry young man”, as the male protagonist railed against the soul destroying inequities of working-class British life just after the Second World War. The Empire was gone. Britain was now a US satellite living on handouts and rations.

This anger against an unjust fate was juxtaposed with a sense of betrayal emanating from the protagonist’s upper-class wife and mistress, not trapped in class angst like him, but with enough dead ends of their own in a changed, more egalitarian world.

In India, the same phrase was applied to a phenomenal new star called Amitabh Bacchchan who smouldered in the Salim-Javed scripted “Deewar” (1975). A film in which the hero emoted against the inequities of being poor and trapped in a Socialist India of the Seventies.

Of course, a commercial super-hit like Deewar did not frame the narrative in these terms, but that is what it was. And like John Osborne’s male protagonist’s upper class wife, Amitabh Bacchchan, scrabbling on the street to make a living, also had a girlfriend who was an upper-class smoking, drinking, sleeping without benefit of wedlock, sort of young woman; played memorably by Parveen Babi.  

And Amitabh Bacchchan, our own “angry young man” built his career on the persona in film after film with Salim-Javed in close attendance. And it resonated with an adoring audience that lapped up every one of his vigilante escapades delivering a rough and ready justice and equity every time.

1991 then, probably gave the Indian back his right to expect his dreams to come true. We may be a long way from Tipperary still, but we can certainly aspire today. We could become a developed country some day. But in the forty four years before 1991, it wasn’t very Indian to want things.

What was promoted by rote instead was a spirit of  Gandhian simplicity and sacrifice. But, like the huge and immensely strong cart-horse Boxer in George Orwell’s “Animal Farm”(1945); one might wonder why it all dissolved into self serving cynicism and intolerance. Wasn’t Socialism meant to be more equitable than Colonialism and the Zamindari System? Then why didn’t it deliver?

On the other hand, these 21 years of Reform since 1991, such as they are, have been transformational for India. Our possibilities and achievements have leap-frogged ahead compared to the previous decades. This, despite a very slow pace of progress, riddled with protests such as the ones currently plaguing the FDI in multi-brand retailing.

Also, we have certainly not carried the poor along with us in any meaningful manner, but is this a failure of the principle of the free market, or a shabby and sometimes non-existent implementation of its tenets? In any case we are on the Travelator and there are no stops scheduled.   

       

(1,809 words)

December 22^nd, 2012

Gautam Mukherjee

                                                                                                                

The Impending Retail Bonanza

The impending retail bonanza

 

Despite the fuss made in the Rajya Sabha on Walmart’s reported lobbying expenses, the legislative deed on FDI in multi-brand retail is indeed done. It makes the Opposition BJP and the Left look like they don’t want progress, even as the Government won the much clamoured for voting on the issue.

 The Left has always been more committed to its ideology than the demands of the economy, but the BJP’s stand is somewhat inconsistent and inexplicable. Many of the reasons advanced by its stalwarts during the parliamentary debates would most likely fail to convince their own roster of high-achieving Chief Ministers in Gujarat, Madhya Pradesh and Goa.

All three states, among the several the BJP runs with reasonable competence, are progressing much faster than their peers, because of their strong emphasis on market economics. But the BJP central leadership and possibly the less transparent ideological backdrop in the RSS et al, seem to be on their own trip.

Some senior leaders in the BJP have even made bold to say that they will scrap FDI in multi-brand retail if voted to power in 2014. This is disappointing, and hopefully just political rhetoric. Most votaries of right-off-centre economics are not generally happy with the UPA’s mostly Socialist leanings. But now they must be feeling a little orphaned.

This is definitely a modern progressive development that rightly flies in the face of the protectionist instincts of a section of both the populace and its elected representatives. But closed economies, protectionism, suppressed competition, has truly had its day.

Today, this kind of insularity and big-brother-knows-bestism is almost impossible to enforce in a relentlessly globalised world. Demand, when it exists, will be met, by hook or by crook. But this way, at least the smugglers, the grey-marketeers, the profiteering importers, will have to look at something else. And the inefficiencies in the name of the indigenous and timeless bania-bred retailing system with have to upgrade or languish.

A great deal of the kudos for some adroit cross-party management, to make this milestone possible, needs to go to Parliamentary Affairs Minister Mr. Kamal Nath.

He has pulled off not only the voting on this controversial matter in UPA’s favour in both houses, but avoided the sticky logjam that has voided the previous two sessions and piled up the unpassed bills.

Significantly, Mr. Kamal Nath has recently also initiated both the regularisation of New Delhi’s many, running into their thousands, “illegal” colonies; and also the sprawling up-market farm houses, in a pragmatic and people friendly move. A move that is non-doctrinaire for once, and moreover freely points out the unrealistic nature of several of our rules and regulations and the glaring weaknesses of our master planning for the Capital. This, while wearing his Urban Affairs hat, of course.

But the freshly minted FDI triumph, that is still mostly being viewed as a bout of skilled political footwork, has much to recommend it. Not only to the eager customers it will benefit, but also to the global investment community which has at last received a positive signal from India after a number of wilfully regressive ones.

As for the fillip that our farming and manufacturing sectors will receive, inclusive of new employment opportunities, also the advertising and marketing end of the consumer rainbow; the impact is likely to be both uplifting and transformational. It will further professionalises our game and vastly improve our choices.

There will also be tens of thousands of retail industry jobs created in the accelerated urbanisation and penetration into some 200 “A B and C” class cities and towns.  No one amongst the foreign investors is going to take the money and run back to their country. There is, truth be told, nowhere to run to. Europe and America lack unrequited demand, while ours is almost endless. There are more bangs for the buck to be had right here.

And here too, gone are the days of the four or six metro cities thought to be sophisticated enough to receive modernity, surrounded by the darkness of the rest of India. All this is changing, as the statistics on the purchases being made by rural and those 200 cities and towns of India show. It is dawning on the many pundits that the unmet demand for sophisticated and modern facilities is probably the strongest in these parts.

Walmart already knows all this. That is why it has reportedly spent US$ 25 million over the years since 2008 on professional lobbyists to try and influence, among other things, the US and Indian Governments to permit foreign investors into multi-brand retailing in India.

And this US$ 25 million is apparently not a big outlay when you look at their estimates of the size of the Indian retail market. Walmart thinks it is worth US$ 500 billion currently, and likely to rise to US$ 1 trillion by 2020!

That magic figure of US $ 1 trillion is more or less the size of the official Indian economy, all of it, at present. And it took us 65 years to arrive at, or very near it, since independence in 1947.

 So, even at present, Walmart’s take on the retail tally and the consumerism it represents, is about half of the official economy, and perhaps a quarter or 20% of the entire Indian economy, with the cash-and-carry-without-benefit-of-banking part of things included.

 Mrs. Shiela Dikshit’s Government of Delhi State has been first off the blocks in its effort to implement the FDI in multi-brand retail. Her Government’s only fear is the misstep that could brings the political hornets buzzing angrily in its wake. But carefully as it comes about, FDI in multi-brand retailing will be most welcome.

And the Prime Minister is not lagging behind in his overtures to the farmers of his ethnic home state of Punjab, to welcome the opportunities that FDI in multi-brand retail is expected to bring to them. Punjab, as usual, will not be found wanting. The State is full of progressive farmers not scared of risking their arm.

And while there is much trepidation in the hearts of some that it will swamp our farmers, middle-men, small shops etc, and ruin, through unfair pricing, our none too robust manufacturing; there is little hard data from elsewhere to support this apprehension.

How are higher wage economies to compete with us? Won’t it be much more lucrative for the foreigners to manufacture here for other markets too? How much dumping is sustainable over time? No, fear-mongering apart, we are likely to see greater choice, better prices and quality because of the open competition.  

 (1,097 words)

December 11^th, 2012
Gautam Mukherjee

The Indian Fiscal Cliff of GNPA

The Indian Fiscal Cliff of Non-Performing Assets

India’s public sector nationalised banks, often directed by the Government to lend money to commercially unviable borrowers, are burdened by huge gross non-performing assets (GNPA). This, along with the huge borrowings of the Government, and the ever-widening fiscal deficit, are seriously eroding the strength of the economy as a whole.

The alarming rise in GNPA was made evident by Minister of State for Finance Mr. Namo Narain Meena in a written reply to a question in the Rajya Sabha recently. The Minister’s reply sought to take refuge in the reduced percentages in the 6 month period till September 2012, in comparison to the full year figures for the previous financial year till 31^st March 2012, but taken on a pro-rata basis. This might amount to sleight-of-hand at the half-yearly mark, using incomplete figures.

 The fact is, the total quantum of lending in the top PSU and Scheduled Commercial Banks has increased this financial year, and the NPA too have risen alongside in absolute terms. This, even though there has been a decrease, or apparent slowing in the pace of increase of GNPA in percentage terms, over the previous fiscal, at least up to the half-yearly mark.

The total GNPA quantum nevertheless spread over all Public Sector Banks (PSB) and Scheduled Commercial Banks (SCB) till 30 September 2012 stood at Rs. 62,602.57 crores, but this is declared only on a provisional basis. The amount for the last fiscal full year was Rs. 56, 332.30 crores, so yes, the GNPA has increased at a much slower pace, based on the face value of the figures released by the Minister.

There are also multiple directives from the Reserve Bank of India the Minister cites, towards tightening loan recovery policies and procedures, which nevertheless are silent on the credit risk assessments and collaterals taken before such loans were given.

The effort of the RBI to smarten up recovery processes, procedures and time-frames are not very likely to yield substantial results once the loans have already gone bad. The horses may well have bolted, having found the paddock gates open. The RBI may be seized of this possibility too, because it has also touched on the matter of cleaning up the books by effecting write-offs of some of these GNPAs on a “prudential” basis.

Another worrisome fact, less so in the case of PSB and SCB of course, because they can be propped up by Government executive action, broadly unlike the private sector, is the probability of  the GNPA outstripping the capitalisation of many of these lending institutions. And this includes the substantial State Bank of India Group.

The Government, including the RBI, may well want to have the PSB and SCB to cultivate a better portfolio of assets, but this laudable objective is often in conflict with politically inspired lending that tends to be more interested in pleasing and catering to target groups. The ultimate risk however in such a scenario is to the fiscal health of the entire system.

A country without fiscal discipline cannot create the right environment for investment and growth. The question is, are these GNPA figures accurate, or optimistic?  Are the percentages and absolute quantums declining truly, or is this a consequence of redefinition of what constitutes a GNPA? Our long history of Soviet-style jugglery with statistics does not necessarily inspire confidence. Nor does the Leftist tendency to spend money that the country does not have by either increasing borrowings or printing more money, or both. When a banking system flirts with bankruptcy, inflation may be the least of our worries.

(593 words)

1^st December 2012

Gautam Mukherjee