He who pays the Piper

He who pays the Piper

Have you ever heard of a Piper satisfied with pretend payment? The famous one, the Pied-Piper of Hamelin, saw to it that the village that cheated him after he divested it of its rats, lost all its children too.

Deficit financing is a little like pretend payment because it attacks the value of the money itself, degenerates the strength and vitality of the economy, and is, in reality, a waterfall of paper promises against the future, a future, in part actively subverted and pauperised by wanton deficit-financed spending in the present.

It is a Devil take the hindmost kind of economic thinking fuelled by the cynical thought that the perpetrators of the outrage won’t be there when their successors discover the hollowness of their fiscal predicament.

The irony is in the fact that deficit financing has nevertheless become the norm on how to run an economy all over the world. The mellifluous justification from certain economists is that policy initiatives cannot wait for the money to come into the till before it is spent. That kind of timid fiscal behaviour may be alright for the housewife running the kitchen from money stashed in her biscuit tin, but is hardly worthy of finance ministers and planning commissions invested with the lofty business of running the finances of a country.

In the powerful countries of the West, imitated alas, also by the emerging economies, the long-held conviction was that their mountain of debt accumulated with ever increasing audacity would never actually come crashing down upon them. They had good reasons that included the buoyancy of their economies, the prowess of their technological innovation, the sophistication of their financial systems, the strength of their military and the skill of their diplomacy etc.

But  it all fell apart and is testimony to the truism that there is no such thing as a free lunch. Yet, let us remember that as recently as in the Clinton presidency, notable for being free of any major military conflict, the US economy, after his eight years in office, was handed over with a surplus in the coffers and near nil unemployment.

This may well have been partially due to the cyclical dividend of the Reagan-Thatcher years that preceded it. The duo spurred private enterprise on both sides of the Atlantic, combated militant unionism, dismantled the USSR and the Berlin Wall and reduced the sway of big government. Clinton benefited from all this during his watch, but certainly did nothing adverse to stymie the cumulative economic dividend.

Bill Clinton’s performance is all the more remarkable because the Democratic Party is well known for its huge public welfare spending. But of course, he was prevented from executing major reforms in the American Healthcare System by the powerful pharmaceutical/hospital/insurance lobbies. Had he succeeded in this, as President Obama has to a certain extent in a much worse economic environment; it might have shot up Government spending and queered the pitch of his glowing economic report card.

In India, blessed as it is with abundant natural resources, a vast domestic market and a plentiful, young and skilled work force, it probably takes monumental incompetence to have so many million people in the ranks of the backward and poor. This is also the welfarism/ “conscience” argument from the Socialist and Left-leaning thinkers in the Government, Opposition, coalition partners, the NIA and elsewhere; unimpressed as they are by mere growth in the GDP.

This, even as all the GDP baiters rarely acknowledge that it is this very increase in the macro performance that has enabled us to raise our expectations, and amongst the middle class and above, our standard of living. Socialism, our old soul-mate, has given us very little back for all the love lavished upon it.  

But indubitably, if one sees the predicament of our teeming millions of poor people deprived of all civilised life opportunities such as decent health, housing and educational/employment opportunity, the argument to do something substantial for them is most compelling. We have to uplift the masses to remove the dangerous inequality that plagues us. Still the question remains, and is no nearer a solution after 65 years of independence; how do we pay for it?  

In the past, the Government of India rarely thought it necessary to worry about economic viability, harping instead on various Socialist shibboleths of inclusiveness. We are in danger of doing it again but we cannot sustain a combination of deficit financing and inefficient welfare delivery mechanisms riddled with corruption, without visiting ruin upon all our heads.

Our huge number of poor, cheated at every turn by people who make money in their name, evince false sympathy, exploit and manipulate, are not being helped by the Government bankrupting itself and future generations in their name.

The way to uplift the poor is by helping the rest of the economy to make the money to pay for their betterment. And this money is in foreign hands, Western, Middle Eastern, Japanese, Far-Eastern, even Chinese, and very keen to invest in India in most fields given the right laws, business incentives and reduction in our infamous red-tape.

But Indian policy seems forever split between the past and the present without taking into account that there are vast values waiting to be unlocked and brought into the fray. The fear and insecurity of the political establishment forces it to avoid bold policy steps. The consequent focus on electoral considerations at all times unfortunately runs riot over issues of governance. But, even the politicos need to realise there is no way out, unless we want to collapse into the predicted balkanisation and chaos.

Besides, it isn’t just the plight of the poor pushing us in the direction of bold reforms, but also the demands of an infrastructure completely inadequate for the needs of our massive population. Our armed forces are poorly armed and menaced by a militarily superior China. Our agricultural economy suffers from age old glut and shortage, without the modernisation it is crying out for. Our private sector is starved of bank finance. We need money for every one of these purposes and myriad others but seem to be doing nothing about it.  

We are not in this position because we have no choice. We are not a small country like Greece or Iceland with limited options. We are not growing in double digits right now because we won’t exercise the choices, very many good ones,  that we do have.

Perhaps, early in 2012 as it is, we need to take a cool hard look at our assumptions and commit ourselves to growth as the engine and ladder to achieving the aspirations of all Indians.

(1,109 words)

12^th January 2012

Gautam Mukherjee

Safe House Wellness Retreat - The Facility

Insouciance

Insouciance

Insouciance is a kind of uncaring nonchalance born of smugness. There is a suggestion of wilful idleness about it, a sense of entitlement, and an assumption that one can get away with not delivering on one’s promises.  

And even some twisted thinking that suggests that doing what one says dangerously raises expectations. And should these be met, it only fuels even higher, unreasonable and unwarranted aspirations amongst essentially undeserving, ignorant people, best not encouraged above their station.

And therefore, it is implicitly better to drown such ambition at birth using ruthless subversion. Of course, you will never catch a politician or factotum saying any of this out loud. On the contrary, the average neta or bureaucratic burra sahib will feign horrified protest against such calumny being heaped on his ilk.

This is all the more remarkable because in a democracy which presumes to promote equality of opportunity, it is a patrician/feudal attitude, papered over with egalitarian and pro-people rhetoric. This is all the more ironic because in recent times, many elected representatives do not exactly come from a background of privilege.

But fact is, our common or garden politician and “steel frame” bureaucrat fits the bill for both insouciance writ large, and nonchalance too, though the latter term has a  Dev Anandish charm about it, found, in this context, to be missing in action.

The lesser accompaniments to these exalted personages, including all manner of secretaries, clerks, “officers” and agents at large, are not so humble that they are incapable of aping their masters.

So, for the supplicating public to be nearly squashed under this mountain of hubris is a very natural thing. That it makes them somewhat angry and full of the malice of schadenfreude, that peculiar but oh so real German notion of deriving pleasure at another’s misfortune, is therefore not surprising.

Particularly since now, you have this former army driver in a Gandhi cap and whites, in possession of a very effective wagging finger, that has lit a fire under all this insulation from reality.

Here was the standard issue politician, state, central, in meaner municipal/local government, or even quango setting, comfortable in the belief that he had to only think about his voter near about an election, and not at all otherwise, sanctimoniousness apart.

And suddenly, the former driver and social activist from Ralegan Siddhi, an obscure backwater in usually placid rural Maharashtra, is jumping all over one’s mind space. Mr. Anna Hazare is not only able to capture the media attention, but quite a bit of the popular imagination as well with his relentless Government bashing. People love an underdog going to war and understand one that talks in comfortable sound bytes.

That Mr. Hazare is simplistic is the true delight of the masses, if truth be told. People are sick of being bamboozled and patronised by insincere men and women, some elected to public office, some in unsackable Government jobs, and yet others in political parties and committees, who wield enormous power without being accountable to very many, let alone the public.

And this challenge to the comfortable politician and bureaucrat has been mounted at a time when the ruling classes are seen to have mismanaged both the economy and the political landscape. And brought it down to the point where not only is there policy formulation and implementation paralysis, but also a rapidly developing dire straits in terms of its rapidly depleting coffers.

The Government has choked the economy in the pursuit of lower inflation to the point where it is almost broke itself. Both direct and indirect taxes have fallen, and the need to borrow to bridge ever widening deficits has grown. Though you wouldn’t necessarily realise it if you looked at the ever expanding subsidy raj we cannot afford being thrust upon mute future generations.

Of course, the Indian Government routinely tends to see the light only when it reaches the end of its dark dank tunnel. It is always a rock bottom moment that brings substantive change to us, in a paradoxical, Through the Looking Glass manner. So expect a cut in interest rates and stimulation of growth afresh in 2012. Looking back to 1991, Mr. Narasimha Rao was able to jettison Nehruvian Socialism once and for all only because we had come perilously close to bankruptcy. And most “reform” of our system since has also been with a gun to our heads. We cannot arrive at a political consensus on any improvement without this coercive aspect, and perhaps it won’t be long before future governance learns how to stage a crisis for the purpose!

But as long as the taps of cheaper credit are turned back on, the reportedly Rs. 150,000 crores worth of Non-Performing-Assets (NPAs), consisting of  loans to stalled power sector companies and moribund infrastructure builders, can all be revived. And quick to forgive Indian industry can put the folly of monetary Stalinism behind itself.

And, once again, the politico and bureaucrat will be saved from the consequences of their sins. If you’re a mere member of the public, all you have to do is wait for it, and survive long enough to see the worm turn.

And yet with a report card hovering between failed grades and the bottom most rungs of scraping through, there is no real mea culpa. Instead, there is a pointing of fingers at civil society abrogating to itself the proper functions of our elected representatives. As if it is being done without provocation or cause by a group of misguided and subversive individuals naïve about the functioning and needs of governance.

Let’s face it, there might have been no JP Narayan in his time, launching the political careers of the many towards the bottom of the pyramid then, or Anna Hazare now, gaining traction with the Twitter and Facebook generation many decades his junior, without some due cause.

Of course, as the Lokpal debate proceeds, it becomes more and more difficult to fathom how the wondrous creature is going to function, and be effective, even if, and after, a “strong” bill is enacted into law. A polity free of corruption in the Indian context sounds truly fabulous and unreal.

Of course, a desire to make such a thing come about is laudable. And like the activism of civil society amplified by media coverage, is likely to tone up the functioning of not only Government but the Opposition too, and this not just at the Centre but also in the States.  

As for the economy, even bad cooks cannot totally wreck the effect of good ingredients, despite a chronic laparwai insouciance.

(1,099 words)

27^th December 2011

Gautam Mukherjee

Published in The Pioneer on Edit Page as Leader Edit on 29th December 2011 entitled "Wait for the worm to turn". Also online at www.dailypioneer.com and in The Pioneer ePaper. Also archived under Columnists at www.dailypioneer.com 

Navel Gazing Discontent

Lovely Poonam Kaur

Navel-Gazing Discontent

The current official navel-gazing assessment of our economic situation is stymied by its own in-built limitations. It is now evident that an economy of our modest proportions does not possess the resources to right itself, dependent as it is on investment from the driver economies of the West to do so. This, particularly in the management of our current account deficits, despite our foreign exchange reserves of some $ 300 billion.

We should have realised this before embarking arrogantly on a strict monetarist path, smug in the belief that our growth story was going to survive the abuse to its roots. Instead FDI has dried up, would-be investors domestic and foreign are dismayed, and FII money is leaving in floods, driving the rupee and the stock market down in its wake.

With appalling swiftness, we have gone from an admired BRIC nation that survived the 2008 downturn with finesse, to one in which we have managed to embarrass ourselves to the point of becoming a global disappointment in 2011.

And since some 56% of our economy now consists of the services sector, inclusive of the growth engines of IT; and America happens to consume, or did, some 90% of our IT exports, we are naturally hard hit in that department.  Of course, a lot of this service sector also attends to the domestic market, but the home market has been garrotted in the cause of containing inflation too.

Europe and America  are grappling with an avalanche of debt without growth, even negative growth in some places, that has led it to technical, if undeclared, bankruptcy. They are only staving it off from naked admission by constantly printing more and more notes marked figuratively with an IOU from the future. And of course, the West does have a substantial technological and military dominance and the heft of sheer size that will help it pull through in the end. In past centuries this would have been a good time for them to go to war in order to seize the resources they needed, and some say the military activity in some of the oil and mineral rich regions is precisely that.

Back in our shanty, besides IT, our other brilliant spot consists of small diamonds duly imported, cut and polished, mainly in Surat, before being sent out again. And diamonds, the small and tiny ones which are processed in India, have also been hit hard by the recession in the West.

Other areas, such as commodities, garments and engineering goods, not our strong suit in any case, are caught in the pincers of very low margins and sluggish demand. But the good thing is that the exports area accounts for only about 12% of the total Indian economy. So the implication is - fix the domestic economy and we’ll be alright. However, this seems easier said than done, as attempts to reform it have demonstrated.

This mainly because, despite the grave economic situation, occasionally given frank voice to by our Finance Minister Mr. Pranab Mukherjee, the powers that be are more interested in controlling inflation which affects the voting poor the hardest, rather than managing growth, which is an amorphous reality not easily understood by the illiterate.

So growth be damned has been the mantra of our Government, let’s control food inflation instead. The good news is that food inflation is at last falling noticeably, partly because it is a seasonal demand-supply thing for farm produce, and partly because of the sharp constriction in money supply engendered by over a dozen interest rate hikes imposed by the RBI.

 In addition, even as Business and Industry have been battered by way of collateral damage by the actions of an unsympathetic and unsupportive Government, observers, at least those that don’t subscribe to endless handouts, are dismayed by the Government’s exploration of more populist measures. These encompass further reckless welfarism aimed at the aam aadmi, such as the pending Food Bill, likely to have very deleterious effects on the finances of the Government.

With indifference writ large on the part of the Government, Indian companies will have to wait to make their own way once the investment climate and confidence improves in the West. We will then stop being buffeted by waves of imported pessimism aggravated by unhelpful domestic policies and circumstances. These include tight money, the Government’s ever growing fiscal deficits, weakening currency values, slowing growth rates, governance paralysis on reforms, chronic political cacophony and weakness and a most disconcerting lack of purpose.

The great hope is in the revival of the much vaunted domestic economy that the whole world also wants a slice of.  Hopefully, what is done is done, and there will be change before we reach the point of no return. In trying to drive out inflationary liquidity over the last 13 months or so, we have lost economic momentum, while succeeding only very slightly in curbing inflation, because a lot of it is automatically imported, via our vast petroleum needs.

So what can we expect next? We do have the wherewithal to ride out this period of distress, as long as we once again pump-prime the domestic economy, reversing the present tight money policies, in an echo of what we did in the aftermath of the Wall Street debacles of 2008. It would have been great to encourage FDI also, but judging from the furore over FDI in multi-brand retail, it may prove to be politically too difficult at present.

But we cannot afford to kill the golden goose entirely. Most analysts of the European and American economic scenario are also casting doubt on their ability to return to prosperity via the rocky road of prolonged austerity. What that would do is assassinate the spirit of all enterprise, and no government can substitute for it, or insinuate anything else to serve in its precious place.

On our part too we need to course correct fast. Perhaps the greater folly has not been the delusion of grandeur occasioned by the navel-gazing.  Nor in the inward looking regard that we were safe as the second fastest growing economy in the world. It is in not recognising our imperatives on how to keep it that way.  We have presumed that the “India story” that we have got used to dining out on, could never slip away.  Now that it is, we must freely admit that our revised self-image of several years now cannot stomach or tolerate being sent back to the third world of basket cases. Let us therefore hope that it is not the covert policy of the Government in a variation of the Communist deification of poverty and privation.

(1,108 words)

15^th December 2011

Gautam Mukherjee

Published as Leader Edit in The Pioneer as "Ahead lies disaster" on December 15th, 2011. Also online at www.dailypioneer.com where it is archived under Columnists and in the ePaper of the day. 

Control and Carpe Diem

Control and Carpe Diem

Control the message and you end up controlling the medium, seems to be the update on Marshall McLuhan’s vision. And this is being practised in a see-saw motion by both the Government and the Opposition.

Witness how Chief Minister of Uttar Pradesh, Ms.Mayawati, has thrown down the gauntlet to the UPA, of which her BSP is also a restive part, by proposing that her state be split into four. UP has long been a grand prize for any political dispensation in its present form, along with Bihar, even after being divested of Jharkhand. UP is vast, ungainly, populous, lawless, backward, communally sensitive, yes, but sends cohorts of MPs to both houses of Parliament. 

But broken up into four states, the political imperatives as well as the arithmetic will change, perhaps unpredictably. For the implied manageability, it is nevertheless a good idea chasing its time. Meanwhile, the proposal, and the timing of its propagation, has managed to set the cat among the pigeons. At a minimum, the resolution, passed swiftly by the UP Assembly, has put paid to the pressure being applied on Ms. Mayawati by the higher reaches of the Congress Party.

The UPA, caught on the back foot, has countered with a stirring of the quota politics cauldron. The new mischief is in terms of an 8% reservation for Muslims within the 27% OBC quota. Not to be outdone, the SP has dusted off its old proposal asking for an additional Muslim quota over and above the OBC 27% . The upper castes and Hindus are no doubt being asked to pay for the sins of their forefathers, a kind of karmic pitri dosh.

But all this is essentially political posturing.  As the numbers in UPA 2 are constituted, to get anything passed at the Centre, the UPA needs both the SP and BSP for its numbers, not to mention the DMK and the TMC as well. Likewise, the BSP with its split-the-state-into-four proposal. And provided Parliament is allowed to function long enough!

Some of these trial balloons will be adjudged as too complicated to grab the voter’s imagination, and other ideas will peak too soon. A case in point is the rage about the Land Acquisition norms, wherein what Mr. Rahul Gandhi proposed, post his visits to Bhatta-Parsaul, has been defused by quick political and administrative action as well as by the Allahabad High Court giving out a number of sagacious decisions on the matter.

This land acquisition topic did indeed help Ms. Mamta Bannerjee ride to power in Paschim Banga. But now she’s grappling (ironically) with her former pals, the Maoists, and out-retrograding the Communists by stoutly opposing FDI in retail. For Ms. Bannerjee now, it is a battle for credibility with the much pampered if nearly destitute grass-root voter, whatever the illogic.

Ms. Jayalalithaa, Chief Minister from Tamil Nadu, joins her in the chorus against FDI  in retail from Chennai, for good measure probably, and to avoid any labels of elitism from the watchful and active DMK, smarting from being thrown out of power in the state.

Chief Minister of Delhi, Madame Dikshit’s attempt to control the messaging is less effective. Her big idea is to try and tame the BJP dominated MCD by trifurcating it. The BJP, taken aback at first, has now waded into the fray armed with codicils and amendments. Mrs. Dikshit is carrying on regardless, but with consensus likely to elude her, she has moved on to testing the waters for full statehood for Delhi.

Prime Minister Manmohan Singh, besieged on all sides by corruption scandals, stubborn inflation, persistent terrorism from Maoists/Islamists, bullying from China, artful dodging from Pakistan, a slowing economy, governance paralysis, indiscipline, populism, a clamouring Opposition, global economic meltdown, high commodity prices, etc., has also had his eureka moment. Dr. Singh does tend to get one big idea per term of office that he tenaciously adheres to- remember the civil nuclear power deal from UPA 1?

This time, it has come in the form of a redemptive Cabinet decision to push through majority or wholly-owned FDI in multi-brand and single-brand retail with little or no restrictions, including the kind of babu-bred detailing that makes even a good idea a non-starter.

Suddenly, the 2G scam is old hat, the Opposition stands out-manoeuvred on black money and inflation, and anti-corruption Tsar Anna Hazare is scrambling to get his share of media space. Mr. Hazare may be growing desperate at being upstaged, if his ever more bizarre pronouncements about flogging alcoholics, slapping Mr. Pawar, more fasting, and a resurrected East India Company, is anything to go by.

The fact is, liberalising the retail space is going to benefit millions of farmers to get more for their produce. It already has in Punjab and Haryana, as pointed out by the farmers’ lobby, where the efforts of the desi retailers such as Reliance Fresh have delivered. It will also open up a lot of jobs and other supply opportunities all along the delivery chain and make for a degree of first world sophistication, instead of the waste, unhygienic conditions, sloppy management and general inefficiency that dogs our present efforts.

The Opposition, and various Luddites in the ruling party, are essentially defending, and that too with unnecessary paranoia, an outdated set of ideas. The consumer will also benefit from better prices and a surfeit of choice, as in much else since 1991. Not one Kirana store need necessarily shut down if it wants to work for a living in competition with the big chains. It is competition that has put India on the economic map since liberalisation began, and not protection and barriers to global free trade.

In 1991, Mr. Rahul Bajaj was a leading light of the “Bombay Club” lobbying relentlessly to prevent foreign competition with talk of an “even playing field”. Now the same Mr. Bajaj suggested Kingfisher Airlines should be allowed to die if it could not compete. And India, flagging in its growth story and lagging in its Reforms Programme, can certainly do with the dollar billions in FDI investment and the modernisation it will bring.

A similar defensiveness was evident when Mr. Rajiv Gandhi, first started to put computers in to improve the workings of the Government, Nationalised Banks and PSUs in the Eighties. Then too, there were a firestorm of flag-waving and slogan-shouting morchas, all hysterically yelling fear and saying the machines would end up taking those secure Government jobs.  

But remembering that silliness today makes one fairly confident that FDI in single and multi-brand retail cannot be stymied after all, despite the no-holds barred kabbadi match going on at present.

(1,102 words)

4^th December 2011

Gautam Mukherjee

The Phantom Strikes

The Phantom strikes

It isn’t just the Rolls Royce that has made much of its quietness in motion. Much, as in its monikers of Phantom and Ghost and its famous David Ogilvy created advertisement.

The legendary headline to the 1958 print ad said: At 60 miles an hour the loudest noise in this new Rolls-Royce comes from the electric clock. The Subhead line read: What makes Rolls-Royce the best car in the world? “There is really no magic about it – it is merely patient attention to detail,” says an eminent Rolls-Royce engineer.

Of course, the Lee Falk “Ghost who walks” inspired imagery in the Rolls Royce model names, the somewhat horse and carriage reminiscent rounded lines, and the advert that talked of tick-tocking clocks and miles per hour, all belong to a bygone era. One in which the “Roller”, under British ownership, exuded occasional, if nostalgic, whiffs of Empire, despite the dwindling number of its anachronistic takers.

Significantly, this iconic British marque built at Crewe in the Midlands, associated with royalty and the “toff” for so long it seems like forever; still makes aircraft engines on its own. The auto manufacturing however has been hived off to BMW, the German car maker from Bavaria, which also once made aircraft engines but now only has the blue and white propeller on its much admired logo.

But BMW too, while extensively reengineering and restyling the Roller into tank-like toughness and Teutonic performance, has daintily retained the ethereal model names and the je ne sais quoi Greek mythology classicism of the “Spirit of Ecstasy” hood badge, now retractable to elude souvenir hunters, vandals and the gritty cynicism of modern times.

With this combination of old world class and Butch new, improved, performance, the Phantom can outgun several serious sports cars, despite weighing in at over two tons without any armour plating. Likewise, the slightly smaller new Ghost for those who want to drive themselves.

Which brings me to the reclusive billionaire with built-in state-of-the-art stealth features undetectable on most radars, known as “The Phantom of Bombay House”.  I write of Mr. Shapoorji Pallonji Mistry and his long road journey to the takeover of the iconic Tata Group. He too oozes stateliness and good manners while being a proven quantity over decades at or near the top of Indian business and industry.  

Mr.S.P. Mistry has been closely associated with all the major construction emanating from the Tata Group for decades. He has been an inner circle intimate of JRD Tata and an avuncular and consistent presence for his successor Ratan, not to mention all the other Tata satraps. Mr. Mistry has quietly sat on the boards, or in the Chairman’s office, of several Tata companies at the same time, for decades together, in addition to having his own name plate formally and informally at the board table at Tata Sons for just as long. But despite his biggest single private shareholding at some 18.5% in the Tata Sons holding company, Pallon, as his friends call him, has been careful to eschew petty ambition while diligently minding the store.  

Even now, at around 80 years of age, in technical retirement certainly, the elder Mistry is still a major force at Bombay House, despite his innate humility, warmth, human touch and signature low-key style. But underneath this silk and velvet, is a clear cut and long term strategist that has at last executed a plan of action begun in 1930, when his father, the heir apparent Cyrus Mistry’s grandfather, acquired 12.5% of Tata Sons by buying out the then Tata lawyer’s holding.

In the 1930s it was a very different kind of Phantom and Ghost, that rolled around in the heat and dust of princely India, besides featuring anthromorphically in hit films like “The Yellow Rolls Royce”. But undeniably, the Rolls Royce motor car’s survival to date owes much to a nimble evolution from its walnut and burl dashboards and picnic hampers that has cast many of its contemporaries into the outer darkness of museums sighing with times past.

The naming of the 43 year old Cyrus Mistry to the top job at Tatas’ is significant for its signal of an astute and hard-nosed makeover not unlike the one made to the Roller by BMW, signalling both modernisation and continuity, and recognising, as Ratan has done throughout his tenure, coinciding with the beginning of India’s liberalisation, that competition, not protection, is here to stay.

The Tata Group, grown out of the pre-independence ethos, consolidated throughout the Socialist era and brought into its own since 1991, has a long way to go in its transformation into a global behemoth. And this particularly as the balance of power is beginning to shift to Asia in terms of China and India and also to the other BRICS countries. What is certain is that America and the West will have to share a lot of power and pelf in the future.

Cyrus Mistry will have the time, over 30 years per the terms of tenure at Tata, God willing, and given the determination and vision demonstrated by outgoing Chairman Ratan Tata, like JRD before him, he will take it to the heights of achievement and excellence befitting the refreshed TATA logo.   

 Cyrus Mistry has already taken the Shapoorji Pallonji Group, albeit in conjunction with his father and elder brother, into very impressive multi-billion dollar growth, branching out into a conglomerate on its own, embracing manufacturing, services and engineering, from its roots in A grade civil construction going back to his grandfather’s days.

The time has come to continue the kind of dynamism and courage that has marked the latter half of Ratan Tata’s tenure, when he came into his own after successfully subduing considerable internal challenges to his leadership. Cyrus Mistry is lucky to be inheriting this legacy of consolidation. All he has to do now is leverage the considerable strengths of the Tata Group in an era where India itself is destined to become a leading nation and economy.

There are great opportunities in areas that are yet to be thrown open to the private or collaborative joint sectors, particularly in the Defence Industry, but they are coming because of irresistible geopolitical pressures and threats that need urgent action. Such private-public-international collaboration, inclusive of both organic and inorganic growth, as demonstrated in the Corus and Jaguar/Landrover acquisitions, has the potential to catapult more and more companies in the Tata Group into the upper reaches of the Fortune 500.

All Mr. Mistry needs is a hunger and stomach for visionary growth and he has certainly demonstrated this characteristic already, if on a smaller canvas.

(1,100 words)

24^th November 2011
Gautam Mukherjee

Published as Leader Edit on the Edit Page of The Pioneer as "With sleeves rolled up" on November 29th, 2011. Also online at www.dailypioneer.com

Modi as in Deng

Modi as in Deng

Reform is China's second revolution.
Deng Xiaoping

In power terms, political correctness is a reasonably modern phenomenon. In history, the blood and gore of conquest was usually cast in terms of valour, vision and the capacity to rule. It was understood statecraft was not a province for wimps. But another demeanour, far less militaristic, that works nowadays, is that of the doer with a modicum of style.

Chief Minister Narendra Modi recently went to Beijing with a large entourage of Gujarat’s finest business leaders. He went in response to an ongoing Chinese initiative from the Central Committee of the CCP. Another possible Opposition prime ministerial candidate, Mr. Nitish Kumar of Bihar, has also recently been to Beijing on the same invitation format, as have several others, including Haryana’s Mr. Hooda.

Modi however is the only Indian CM who can boast of Chinese rates of growth. Gujarat has an overall figure of 12%, per annum, with even the usually moribund agricultural sector turning in a record-breaking 10% last year. The urban population of Gujarat, at 40% of the total, more closely resembles the demographic in China. Our near inviolate shibboleth is that “India lives in its villages”. That profundity was pronounced by the Mahatma, Gujarat’s greatest gift to the nation and the world, over a half century ago. Unsung as he undoubtedly is, Sardar Patel also from the womb of Gujarat, with a great deal more realpolitik to him if not the greatness, makes up a close second to MAK Gandhi.

Modi, also cast in decidedly heroic hue, is seen by the Chinese as an Indian Deng Xiaoping, himself long on the periphery of national power, but once installed centre stage, the one who took China on its spectacular trajectory to make it the fastest growing economy in the world.  Our NaMo, impressed as he is with Chinese achievements, is not content however, to slavishly ape Chinese growth methods.

He sees the business opportunity more as a Chinese one, and asked his hosts to desist from egging Pakistan on to make trouble for India, inclusive of the Chinese presence in POK. He also referred to the brandishing of Chinese maps that include large tracts of Indian territory such as Arunachal Pradesh and Akshai Chin on the Chinese side of the fence.

Modi does not think such essentially hostile attitudes are going to help Chinese companies get lucrative Indian contracts in infrastructure, telecom, and energy, amongst other things. Hardly the talk of a supplicant, and to give credit to his hosts, they took such pointed remarks on board without demur.

But even if China sees Modi as a possible future prime minister of India, they don’t have to fight through the thicket of rivals and detractors that NaMO has to tackle. Of course the matter that most stands in Modi’s way towards power at the centre, is the perception that he either caused, or colluded, with mob fury, during and in the aftermath of the Godhra riots that took some 3,500 lives. While technically and legally it may be very difficult to lay any such blame at his door, the damage has already been done.

The irony of this situation is that this country itself was born in the grip of communal violence, with perhaps a half million lives lost in the process. But it did next to no damage to the subsequent political careers of the principal beneficiaries, Mohammad Ali Jinnah and Jawaharlal Nehru.

Mr. Jinnah of course coughed his last soon after, but you could hardly blame his tuberculosis on his politics. The third beneficiary in glory, if not in pelf and power, was the beribboned Lord Mountbatten of Burma, but when he was finally blown up in a fishing skiff many years later, it was the IRA that did it, and not any part of the Hindu-Muslim diaspora.

In recent history, there was Mrs. Indira Gandhi’s invasion of the Golden Temple at Amritsar, that bizarre use of tanks through narrow lanes, and that of the regular army.

There were about a thousand casualties around the lanes, rooms, pools and terraces of the temple. The net effect was one of desecration and sacrilege. The martyrdom of Bhindranwale, when a judicially sanctioned noose would have been infinitely better was a corollary, and deeply wounded Sikh pride, a consequence. And then, there was the whispering from the shadows, echoing with the ghosts of Jallianwala Baug, located just a few alleyways away, in the same city.

Later came the Shakespearean aftermath, that of Mrs. Gandhi’s murder at her wicket gate, and the 4,800 Sikhs butchered in the Capital in swift retaliation. The

carnage organised, it is maintained to this day, by prominent members of the Congress Party, over four days of barbarity.

And yet it is Godhra, where the first provocation involved the deliberate burning alive of  scores of  Hindu pilgrims inside locked railway carriages, and Ayodhya, wherein nobody was killed during the demolition of Babar’s mosque; which are held out as prime examples of communal intolerance in this country.

Having the bountiful money tap of Government advertising is a good way to control the flow of news and analysis, even allegedly third-rate analysis, as certain judges with extra-curricular views have it. It is a classic case of the pot calling the kettle black, if one only casts a glance at the state of our judiciary and the functioning of our legal system. But casting stones at others is the sub-continental idea of free speech. Though we have never been much good at taking what we love to dish out.

Coming back to Mr. Modi and the great neo-liberal cant about his unsuitability for the top job because of his communal credentials, and coming, as he does, from that “communal party”, is so much talk that can harm our national progress.

The importance of NaMO is that  there is practically no one from any party with his development record. And as for his communalism, even if it is taken on face value, it cannot be seen to be any worse than that of any other politician, including Mr. Rajiv Gandhi, who justified the Sikh killings in Delhi circa 1984, in philosophical and arboreal similes. 

Deng the doppelganger was purged twice by Mao, but managed to upstage Mao’s designated successor Hua Guofeng. He then took control of the second generation reform that has catapulted China to its present prominence.

Modi has similar potential, albeit in a different political context and discourse, and this has not been lost on the Chinese. As for NaMo himself, he prepared for his visit carefully and made his presentation on Gujarat in correct Mandarin. 

 (1,105 words)

13^th November 2011

Gautam Mukherjee     

Published as Leader Edit on the Edit Page of The Pioneer as "Modi could be India's Deng" on  15th November 2011. Also online at www.dailypioneer where it is also archived under Columnists.