Railway Reforms Or Wrastling A Croc

 

Railway Reform: Bhadralok Debroy Rolls Up His Sleeves To Wrastle A Croc

 To friends of Crocodile Dundee, the tie-me-kangaroo-down outback movie from a few years ago, ‘wrastling a croc’, is just good manly sport.

You catch a firm hold and try not to be knocked senseless by its long and formidable tail. And then there’s the added frisson of sawed-off danger. That of losing a limb, or more, to its extremely toothy pair of jaws.  

To those of us who are not aspiring C. Dundees, this would be a pointless wrestling match indeed, particularly with a disgruntled crocodile looking for lunch. Besides, such field tests of manhood are not an Indian thing, even though, the ghariyal, and several crafty cousins, are as plentiful and abundant in the rivers of India, as the crocodile is, in those of the Australian outback.

But we sub-continentals like to choose our own battles too. That an unassuming bhadralok sort, a meritorious, eminent economist, should undertake to lay the groundwork for a momentous one, is not, on balance, very surprising. Renaissance man that he is, Bibek  Debroy  has recently completed a lucid and unabridged 10 volume rendition of  The Mahabharata that must have taught him a thing or two.

And now, his Railway Reforms Report is to be the basis of a formidable joust with the status quoists, the railway trade unions, contractors, suppliers, other vested interests, all of whom are soon expected to crawl out of the woodwork in opposition.

But this report will be used, with the proper political determination behind it, with a view to restore the Indian Railways, to efficiency and financial health. It is designed to unlock its potential, and bring about unprecedented modernisation in the nick of time.  Prime Minister Narendra Modi also expects this reformation of the Indian Railways, presently India’s biggest PSU, to contribute significantly to India’s economic turn- around, its employment objectives, and its GDP.  

Of course, the Debroy document, previewed in interim form in March already, is only a report, like many others that have been commissioned by the Government of India over the years, and for a variety of reasons.

This one is different though, not only in its strongly reformist suggestions, but  because it was commissioned by the Prime Minister himself, and as recently as last September. Narendra Modi intends to use the Debroy Report as a starting point to revamp, reform, restore and transform the Indian Railways. A dynamic Union Minister, Suresh Prabhu, has already been put in place for the purpose, and will do his part, both to raise investment, and to overcome huge inbuilt bureaucratic resistance to change.  

Debroy has the erudition, the boldness, and the zeal; and his committee/ panel is packed with eminences: a former Cabinet Secretary, a senior think-tank man, the well-known corporate honcho turned pro-reform writer Gurcharan Das, a retired National Stock Exchange MD, and an erstwhile Financial Commissioner from the Indian Railways itself.  

But of course, not everyone at the receiving end is predisposed to agree with the Report’s thrust. The Railway Board, for example, is straining to prevent Debroy’s Report, ready since at least April this year, from being presented formally, at least till the end of June.

The powerful and highly centralised Railway Board is said to be less than enthused about the Report’s suggestions that it be turned into a macro-level advisory, with all of its executive authority pushed down to much lower operational levels.

The Report meanwhile, has been leaking profusely into various media outlets, ever since it was made ready, birthing a series of wondrous pieces on it, describing a very different architecture from the impenetrable monolith we have been used to so far. This more so, because it was preordained by the Modi administration.

The Debroy Committee Report is a thinly veiled manifesto, its stridency in the interim report, diluted diplomatically in the final one, aimed at decentralisation, unbundling, hiving off and unabashed privatisation in parts.

It is bolder than most such documents because it bites the bullet and makes specific suggestions. It dwells on how to generate better revenues, mainly by overhauling the freight handling capacities of the behemoth.

It wants the Railway Budget merged with the Union Budget, within about five years, and the passenger fare subsidies to be borne by the Union and State Governments respectively as applicable, for inter-state and local applications, in a budgeted and transparent manner. The implication is the cross subsidisation of passenger fares by freight is dragging down the entire enterprise, particularly in the absence of adequate capacity to handle more freight, losing it therefore to  the more expensive but plentiful road transportation.

This proposed separation of subsidies will free the Railway finances from its non-standard formats of accounting, and make it far more attractive to potential investors from abroad and the private sector.

The report also calls repeatedly for extensive modernisation of track, rolling stock, and station, of signalling equipment, of accounting practices, of administration. It wants recruitment practices streamlined and standardised, private sector and specialised talent accessed as necessary, monetisation of assets like stations after they are upgraded first, professional catering, out -sourced security, and so on.

That the Railway administration is absolutely byzantine at present is, of course,   more by deliberate design, than by any professional ineptitude or inefficiency. But it needs shaking up, because the Indian Railways have become unwieldy and unviable as it is.

The Railways are India’s biggest employers, but yet is chronically inefficient. It runs hospitals, schools, owns immense tracts of real estate. It moves over 23 million passengers per day, and 3 million tonnes of freight alongside. And this, over a 64, 460 km. network.

It is the 4^th largest railway system in the world, but still well behind the biggest, that is nearly four times larger, and privately run to boot. The American network, criss-crosses that enormous country with 224,792 km of track. It is not for nothing that the American freight train is so much a part of its culture and folklore. And it is freight that can produce the green-field big bucks for the Indian Railways too, as the Debroy Report has identified.

The State runs the Russian railway system with 128,000 km. and  China with 103,144 km. of track, just  as it does in India. But now, there is a compelling case, both because of the huge investments involved and a need for efficiency that the private sector/foreign investment  is brought in. This is also just so in defence production, and all the ‘Make in India’ initiatives.

After all, only these same four nations carry over 1 billion tonnes of freight per annum. India however, is carrying much less than it potentially could, only because it does not have the facilities like dedicated freight corridors, and better quality, faster trains, with the capacity, availability, and the material handling systems that it badly needs.

Where do Bullet trains fit into all this?  Well, let us realise just how many people can be accommodated in an aircraft, in a populous, ever growing country, and you have the answer. The future beckons, and the Indian Railways will not be found wanting, if Debroy and Modi can help it. 

 For: Swarajyamag

(1,184 words)
June 12^th, 2015

Gautam Mukherjee

Consolidation Time

A consolidation in governance towards effecting strong deliveries across the board should be setting in just about any time now. There have been indeed many, and continuous, preparatory moves, scattered across the first year of the Modi Administration.

But now, being able to go into Myanmar, with its permission, in an American style helicopter   borne raid, to eliminate insurgents attacking our Army positions in Nagaland and Manipur, is a thrilling demonstration of the difference of approach. Our armed forces have been unshackled, and given their head by the political authorities after a very long time.

The same Maoist insurgents knocked off  here, ambushed and killed 18 armed forces personnel in Manipur just a few days ago, with plans to kill many more, right across the North Eastern States.  But our swift and effective retaliation, unprecedented as it goes, is a demonstration of the fruits of Modi’s hectic regional diplomacy; and, of course, his much more muscular stance militarily. 

Mercifully, we had no casualties this time.  Our Army decided to generously use its best equipment for a change. It was an operation approved by the PMO. We killed 15 insurgents in a surgical strike, and sent out a strong message that things have changed in how we will handle provocations like this in future.

How long then, before we pursue terrorists from POK across the loC, even as we call Pakistan’s nuclear threatening bluff?  When we chase Pakistani terrorists like this, by land and air, with a view to eliminating them, we will asuredly get some decent results. And, as things stand, we will probably do it with US, Israeli,  Saudi and Russian backing; probably as a full and permanent member of the UNSC ourselves, and possibly - surprise, sursprise, with Chinese tacit support as well!

Back at the Ranch, for now,  we find the corruption at the top has indeed been stymied. The permanent bureaucracy has been reshuffled, somewhat, and tuned up to work for specified objectives in a time bound manner.

Some cobwebby laws have been scrapped, others are being drafted from scratch, and yet others are being revamped/adapted for current relevance. The statist sarkari bent, Kafkaesque in its convolutions, is being reoriented, with even a rationalisation and regrouping of  ministries.

Road blocks, created by impossibly high environmental standards, have been eased. Money has miraculously been found by the Government where it was lacking. Terms of contracts and tenders have been revised to make things go again; and the private sector, has been, and is, definitely being encouraged.

PSU and nationalised bank shareholdings are being diluted. The monetisation and tweaking of national assets are being undertaken. A new broom is attempting to sweep the land clean, and moves are afoot to stop polluting the river waters.

The pledged foreign money, into infrastructure and industry, particularly for roads, power, ports, railways, and defence-manufacturing, will soon start to flow. Defence manufacturing in particular, despite the immense payola and wondrous honey traps that will have to be foregone, alongside an honest to goodness modernisation of the  Indian Railways, will be remembered long after Narendra Modi is gone.

The new job creation platform, touted over the last year and a half, is beginning to show some green shoots. But soon enough, the newspapers and TV Channels will be  quite full of it.

Modi’s duck taking to water foreign affairs thrust, something of a major feature of this administration, is going particularly well, and will become the mainstay of transforming his grand vision into reality.

The world of Narendra Modi may be small-town, but it is as  brash and confident as any Kangana Ranaut.  This is baffling to the established Nehruvian set,  quite at sea from what it has tackled in the past.

Modi is, after all, the quintessential outsider, a provincial politician made good, and the Lutyens Media find it hard to predict what he will do next. Modi, and reigning No.1 female actress Kangana Ranaut  of Bollywood, without benefit of the triumvirate of successful Khans, are small town folk; albeit with spectacular, grand destinies to fulfil. They are both remarkably at ease being alone, and, having taken their knocks- keeping their own counsel.

It is true however that the honeymoon period, if it was ever there for the highly resented Modi, is indeed over. And the euphoria of its supporters, just a third of the electorate anyway, has also ebbed. Everything is now down to actual valuations and hard news. 

The equity stock markets have corrected back to the levels of October 2014, and the Debt Market is volatile and jumpy in anticipation of possible interest rate hikes in the US. But this is all as it should be. We cannot run on hype and empty for any longer length of time.

The many Modi promises must be made to come true, and when they do, the ground rules will have changed forever. This is a Prime Minister and Government that wants to be judged on performance and not ideology.  And its ideology, such as it is,   is not an unheeding Hindutva, as his critics would have it, but to bring prosperity to all, in the shortest possible time.

Many people believe him,  and unanticipated changes are afoot. Lakhs of Muslims have joined the BJP as primary members. Mumbai will, at last, build it long awaited coastal road from end to end, under the present BJP/SS administration. Coal, Telecommunications Spectrum,   Insurance, and sundry other things, have already had their values unlocked, and enhanced for exploitation.

Bangladesh, a Muslim nation within SAARC, has, once more, become a warm ally; even as an unmoved Pakistan, still plays to the old Muslim League script, alongside our own Owaisi and Geelani.  But what will Pakistan do, economically irrelevant as it is in world affairs, when a slowing China finds it fit to do feverish business with India? 

The Bihar Assembly elections are looming, and the Opposition, midwifed by the Congress mother and son combine, has united to try and defeat the Modi/Shah duo. Lalu Yadav, and his now relative by marriage, Mulayam Singh Yadav, have been made to yield pre-eminence to the ambitious and tenacious Nitish Kumar, as presumptive CM, backed, at last, by Congress. 

If this alliance of convenience, which is as yet well short of a merger, fails to stop Modi/Shah from taking Bihar, then it is probably all over for it, even for the general elections of 2019. Modi, sitting pretty though he is, may be consolidating already, but there is a lot of growing up to do, and in the process, he might still be in charge a decade from now.

For: The Pioneer
(1,099 words)
June 9^th , 2015
Gautam Mukherjee

 

Modi's Foreign Policy Churn

 Modi’s Foreign Policy Churn

 Brookings Institute’s Bruce Riedel thinks it is now an India-America alliance  versus a Pakistan- China one. He says Obama’s America is once again showing a preference for India over Pakistan, like in fellow Democrat JFK’s time - in those 1,000 days between 1960 and 1963, nicknamed ‘Camelot’.

It is true enough that we disappeared conceptually behind the USSR’s Iron Curtain for many years thereafter, even though we tried to project ourselves as the champion of the post-colonial nations in the Non-Aligned Movement. But we only emerged, blinking in the free world’s sunlight in the eighties, after the fall of the Berlin Wall, and the dismantling of the USSR.

Riedel quite ignores however, the pressing American desire to contain China  in  2015. And its need to use sizeable and populous India for the purpose,  in the South Asian and Indian Ocean theatre certainly, but also as a soft power globally.

While there may an element of veracity in this scenario, with India and the US each looking at it from their own unique, and not necessarily common perspectives, it is far from the whole truth. India’s adversarial and mistrustful attitude towards China has changed under Modi, who seems willing to leave behind the humiliations of 1962 in the interests of ‘The Asian Century’.

As for the long-standing Western tendency to hyphenate India and Pakistan, and even the needs of SAARC versus those of India; even the US now, more often than not, looks at India and China together instead. The hostility of the West regarding India as a Soviet stooge is now truly gone.

Pakistan, failing, near bankrupt, troublesome, devious, and bristling with terrorists, seems to have disappeared into China’s armpit in strategic terms, particularly after the US pull-out from Afghanistan and more so after China’s recent $47 billion dollar embrace.

And though the Sunni  jihadis/mujahideen in ISIS is threatening the world by saying it is on the brink of acquiring a nuclear weapon from Pakistan, Western intelligence sees it more as a Saudi/Pakistani prompted ploy. A scare tactic designed to retard the normalisation of relations with Shi’ite Iran, and the lifting of cruel sanctions against it after decades.

But this ISIS boast could well turn out to be real, if its supporters go through with their plan to create a true Frankenstein. This could precipitate an unprecedented and sudden nuclear conflict with a savage ‘non-state actor’. But till then, it is a matter for the covert organisations like Mossad, the CIA, MI-6, the successors of the KGB, and others, to head off  the Pakistani ISI and ISIS nexus at the pass. Pakistan itself may have to be quarantined, and its nuclear weapons brought under firm international control.

And India’s relationship with Russia, though nostalgic about the vanished  alliance with the USSR, has much less going for it now, in a new, multi-polar world, in which India too aspires to become one of those poles.  

And this irrespective of earning a seat as a permanent member in the UNSC, because there will inevitably have to be other inductees such as Germany, Israel, Japan, perhaps even Pakistan,  in addition to the present five. But India is working on its wider responsibilities, even visiting the little staging points in the Indian Ocean to suit.

The expanded UN Security Council, should it happen, promises to become even more factional and unwieldy than it is at present. But the fact that there are multiple new contenders underscores the point that the world has turned de facto multi-polar. This, in the absence of US willingness to being globocop in perpetuity.

Apart from the ideological reservations it may have in this regard, even the US cannot afford the responsibility to keep the ‘free world safe from harm’, with its humungous associated costs; any more  than Britain could   keep up with any more than symbolic commitments to its erstwhile empire in the Commonwealth.

Therefore each nation must work out the terms of its coexistence, and the bilateral relationship is as important as any G-8, ASEAN, SAARC, and so on.

One obvious reason for us not necessarily getting under the eiderdown with America in any kind of tight embrace, is because India today is not comfortable substituting being a Soviet satellite with becoming an American one. There are unfortunately no guarantees in today’s world, even if we were to do so, as Australia under ANZACS and indeed NATO, is finding out.

In reality too, though we may need new friends and allies, we are not keen on playing a tied and hobbled foreign policy game for uncertain reciprocity with anyone.

China, on its part, is eager, now that Tibet is firmly in its grasp, and the erstwhile Middle Kingdom is clear and away the second biggest economic power in the world, to control the irritants of the colonial British McMahon Line. Instead, it wants to ramp up its business cooperation with India. China too hopes to exert a great deal of geopolitical influence on India in the process.

India, on its part, must consider its own advantages along its growth path, forging multiple and overlapping alliances as it does so. To an extent, working with China and Japan simultaneously already demonstrates this outlook.

Meanwhile, India is inching closer to oil rich and Shi’ite Iran, having signed an agreement to develop its Chabahar port at last,  (tacitly approved by the US,  which is doing some removal of obstacles in its relationship with Iran itself),  but much to the chagrin of both Saudi Arabia and Israel. This development will give us a new sea-land route to friendly and mineral rich Afghanistan , and help us pipe in Iranian/Omani gas as well, without involving access via Pakistan in both instances. 

The Indian move to close the gap with Iran has no doubt been noted by China, Pakistan, Afghanistan, the US, Saudi Arabia, Israel, amongst others. But, in today’s geopolitics, it will not get in the way of strengthening bilateral relationships with each country, and others such as Iraq and Oman in the region, as well.

Strategic new beginnings with Australia, Canada, Saudi Arabia, France, Britain, Russia, America, China, Mongolia, South Korea, Myanmar, Vietnam, Bangladesh, Nepal , Sri Lanka, Bhutan, Mauritius, The Seychelles, Fiji and so on, have all been undertaken over the last year. Between Prime Minister Narendra Modi, Foreign Minister Sushma Swaraj,  and other senior officials, a total of 102 countries have been visited.

While some quarters both at home and abroad have failed to grasp the significance of Modi’s great foreign policy churn, others see it as a classic manthan, bound to yield great benefits, not only in the second year of this administration, but for years to come.  

 For: The Pioneer

(1,108 words)
May 26^th,   2015
Gautam Mukherjee

How To Be Green And Prosperous Too

How To Be Green And Prosperous Too

Another World Environment Day will roll around on June 5^th . It will witness an ever more populous India, with major air, water, flooding, drought, avalanche, earthquake, forest cover, flora ,fauna, piscine, and waste management problems.  

The developed world, measuring these things in tradable green ‘credits’, may well focus on India’s shortcomings, having   already tackled many such red-letter issues  for themselves.

Nevertheless, it cannot evade culpability for the complex phenomenon of global warming, the cumulative bill for environmental ravages and neglect since the beginning of the industrial revolution; long after the apparent wounds have healed.

But for us in India, the causes of environmental degradation are not emanating from just industry and infrastructure development, but the pressures of a huge subsistence level population desperate for cheap water, fodder and fuel. Still, an emerging nation, cannot afford to be stymied.  We cannot stay backward paradoxically, because the developed world has gone too far forward!

Most people who champion the environment today, tend to take an adversarial attitude, with a blinkered view. They advocate putting a complete stop to anything that could damage the environment further. But, they rarely succeed in seeing this through, because there is no marriage of developmental aims with environmental objectives.

Besides, much of the alarming statistic and argument used by such organisations incite and outrage irresponsibly. Their conclusions tend to extrapolate too wildly from sample data, and are sometimes based on inaccurate hypotheses.

For example, even though nuclear power is clean, some militant environmentalists use the few leak or accident instances globally, to oppose further nuclear power plants anywhere, no matter how advanced, and how much better secured against accidents.

And again, a country like India with ample coal cannot wilfully ban its mining and use to generate much needed electricity. But modern mining techniques and scrubbing technology have come a long way, and can, if used, largely solve the problems.

Top end automobile companies too have improved their engines to drastically reduce fuel consumption and pollutants. So much so, that they have put a crimp in the commercial viability of the new-age battery operated vehicles, still in the early days of their own technology cycle.

India’s forest cover, after going downhill from 1947 to 1995, has started to reverse the trend. It has improved some 7% since 1995.

There is also a renewed emphasis on solar, hydro and wind energy. In myriad small ways too greater awareness and legislation is playing its part. There is mandatory water harvesting, ground water recharging and the like. Our garbage management is still poor but improving slowly.

And this Government, with its toilet building programme, and Swacch Bharat campaign, is also determined to finally stop polluting the arterial and culturally potent Ganga. It also plans to dredge it for use as a thriving inland water way.  There are also advanced plans to link up the major rivers to provide more irrigation and prevent floods. Implementation, of course, is the key.

The current Environment Minister Prakash Javdekar has been frenetically declogging many projects held up for want of environmental clearance under the UPA. Some involve national security, others are vital to the nation’s infrastructure or commercial needs, but these fly in the face of environmental orthodoxy. But surely, where a road, a port, an aerodrome, an industrial corridor, or one for railway passengers/ freight must go through a certain execution path, it must.

The damage to the environment, precious as it is, must be compensated by turning a corresponding, or larger, amount of wasteland or desert into an appropriate sanctuary. Every state could build new protected wildernesses covering thousands of square miles in aggregate under such programmes. 

We are by no means doing all we can for the environment, but it cannot be used to act as a developmental road block.  And so, as the impresario said to the songstress, filthy or clean, the show must go on.  

For: The Quint

(647 words)
May 25^th, 2015
Gautam Mukherjee

The Task Ahead

 

 The Task Ahead

 Now that the first, foundational year of the Modi Government is done with, what is the task ahead? Is the economy, which must enable and drive the desire for Vikas and transformation at tipping point yet?  But what does this mean, what level suffices?

Is the economy fulfilling its promise when it grows from a low of 4.4% of GDP, at its nadir under the UPA, to a near-time zenith of 7.4% this year, and on to almost double digits over the remaining four years? Is too much being made of the tag of having the fastest growth rate in the world today, when the rate itself, and indeed, the present overall size of the economy, is vastly inadequate to address our needs?

Is this 7.4% headed towards 9% of GDP, rosy as it sounds, enough to match the very grand ambitions projected for India? No, actually we need a much more explosive growth engine, a brute of a sports car as opposed to an elegant sedan, that must rocket ahead in double digits for the next two to three decades. Then, and only then, given our gargantuan population and rate of population growth, can we become a notable developed country, and decisively eliminate at least the most grinding poverty.

Another modest inflection point of sorts, a beginning, may indeed have arrived already, as we may see a soaring take-off in infrastructure and manufacturing projects in year two. This will be fuelled by billions in foreign investment, coaxed out of 18 foreign state visits made by Modi in year one. But will Modi’s far less energetic Government be able to iron out the wrinkles as promised, and in time to receive such intended largesse?

The present pattern of   incrementalism and gradualism is simply not good enough, except in comparison to a catatonic UPA between 2010 and 2013. It is at great variance to the bold promises routinely made by Modi that make us expect a lot more.

For a government with a historic majority not seen in 30 years, it has been dithering and unsure in practice, over cautious, diffident, and slow on every front, even as it hesitantly grapples with a tumultuous Opposition in Parliament. An Opposition that should have remained thoroughly demoralised if the Modi Government had hit the ground running.

The question is not whether this Government is making steady progress, as the one year celebrations are at pains to point out; but what great systemic changes can Narendra  Modi bring about, because he has not  done much on this front so far.

Not a lot, that is, beyond easing the logjam somewhat, and passing some key and long pending legislation, conducting some well-run auctions of national resources and getting things moving on the defence preparedness front. This is better than predecessor Manmohan Singh and the UPA, of course, but that is not saying very much.

Modi has, after all, systematically and wilfully fired the imagination of this nation of 125 crores of people, but delivered a damp squib in comparison. Where is the daring expected from him administratively, except in a few infrequent but characteristic flashes?

The loyal voting public that still gives him a minimum approval rating of over 60% in recent opinion polls, believes NaMo is a tall leader, a historic man of destiny, much taller than his Party and RSS backers, raised to the top job to realise India’s true potential at last.

The voting public, that third of the polity on average that is the solid Modi supporter, instinctively feels he can lead this country into an unprecedented renaissance, comparable only with Bharat’s legendary past. This lot is impatient with democratic process, and wants swift action to deliver prosperity and jobs.

But for this to come about, Modi has to show his true colours, assuming them to be that of a committed free-marketeer. The erstwhile dynamic Chief Minister of Gujarat seems to be somewhat lost in South Block and Race Course Road, and his team of cabinet colleagues appear to be inadequate to their tasks, thoroughly dominated by an ancien regime bureaucracy.  

Modi’s own  supposedly clear-cut and mercantile touch is missing from his governance across the board, all except for his personally superb handling of foreign affairs. In this, in a very short time, he has raised India’s profile around the globe as a place ready to do business and grow for mutual benefit. And this, without the constraints and ideological timidity of the past.

If this were a totalitarian system like China’s, Modi could perhaps have rammed his vision through, as Deng Xiaoping in his time did, giving China three decades of over 10% growth that continued year on year well after Deng’s death. President Xi Jinping of the present tense might be able to do the same too, despite the dictates and greater complexity of changed circumstances, and a very different geopolitical scenario.

But in a vibrant democracy like India’s, the undertow of the past, particularly  rich with the emotional rhetoric of a long running socialist script, the way forward can only come with an abrupt turn.

What Modi must do when he finds the political courage, is become a Kemal Ataturk style figure. He must engineer a veritable lurch to the right. A turn that is so profound, as to catch the entire political class by surprise and leave them scurrying to catch up to the brave new world of possibilities he opens up.

Instead the Opposition today has once again grown comfortable in mining its old shibboleths, its rhetorical accusations, hollow though they are, of a ‘suit boot Sarkar’ working only for its rich cronies, while the corrupt and disgraced Congress Party shamelessly affects to bleed afresh for the poor and the under-privileged!

The rump of a Congress presence has revived because of a mysterious hesitation in the Modi Government. Why is this? Is it afraid of being anything other than Centrist with a tinge of the Left based on political calculations for important Assembly elections coming up shortly? But will this wolf in sheep’s clothing act help it in Bihar and beyond?

Perhaps the hesitation is doing more harm than good, as the Modi Sarkar is looking lost and uncannily like the UPA extended, without, that is, the corruption and the paralysis. It needs to make dramatic moves however, because that is why it was elected, and attempting to be too much of all things to all people will not help its cause.

There must be drastic changes made in order to deliver second stage structural reform. Changes such as booting out the multi-layered taxation regime, gutting it to match the lowest levels of taxation in the developed world, and that too in  one fell swoop. Cutting, interest rates, not at the rate of a pathetic 25 basis points at a time, but lowering  it dramatically to 4% or lower at one go, right now. Not dithering on the side of a sterile caution that has served to only leave us behind, but making the rupee fully convertible this year.

The Government needs to eliminate restrictive labour laws in their entirety and let market forces prevail. This will signal the arrival of a bold and confident new India to the foreign investor and encourage it to take the plunge. Doing away with the concept of land acquisition and ‘land use’ as such, and buying land at market rates instead, based on demand and supply. Avoiding protectionism wherever possible. Cutting all subsidies and letting global commerce make up the difference.

Moves such as these, made en masse, will mean such a profound departure from present practice, that there will be no way back to the socialism of yore. This,  just as there has been no going back after the first stage reforms of 1991.

But even as things stand, the Land Bill, despite the lightning and thunder it has provoked as a flash in the pan, will pass in parliament very soon. So will GST and every other piece of legislation this Government proposes in future. This is because of the NDA’s combined strength in both houses in a joint sitting, enough to give it a comfortable majority, as long as it carries its own flock.  

In addition, the fact that it is working on both the AIADMK under Chief Minister
Jayalalithaa, and the TMC under Mamata Banerjee, is also of considerable significance going forward. And the Modi Government, keen on consensus and mindful of democratic traditions, is insisting on going through the niceties of building an accord with other elements and fragments of the Opposition too. This includes the BJD, the SP, and the BSP. The aim is to isolate the envious and contentious Congress in the process as well.

So, at a minimum, as we go into year two, the  Government knows that its  legislative agenda will pick up speed. This too is bound to make it more assertive in future as it listens to the clamour for delivery from all quarters.

 For:Swarajyamag

(1,496 words)
May 24^th, 2015
Gautam Mukherjee

Roll Over Or Make Over

 

Roll-over Or Make-over?

 

A year into Modi’s first term, the paralysis is gone. The main emphasis has clearly been on garnering billions in foreign investment to transform India. This even as all plans, tone, tenor, perspectives, indicate an ambition to stay on for at least two terms. Sadly, there are few green shoots visible as yet.

The GDP may be up, pulsing higher than a slowing but much bigger China, but it does not show. At best, its gone into the foundations. The improvement in the Gross Domestic Product (GDP), the Current Account Deficit (CAD), even the rate of inflation, is thought to be primarily because of an international halving of oil prices.

The captains of Indian business and industry however are murmuring their satisfaction. But this is praise from the patricians, always a dangerously elite demographic.

Foreign investors agree, and will certainly be the leitmotif of the first term when we look back in 2019. They are listening carefully to who is saying what, lining up their joint venturing strategies for the cornucopia to come.

There is defence manufacturing, railways, industrial corridors, ports, power, major infrastructure development, next stage farm modernisation, food storage and distribution back bones, nuclear power plants, a revamped equity and debt market, vehicles, solar, hydro and wind, electronics, software.  The list goes on.

The projected numbers are in billions, even trillions of dollars. India is the biggest potential opportunity on the globe today. But Modi must deliver: the land, the labour defanged, the environmentalists checked. He must buck the tide of an established socialist world-view.  

We do not need 60% of our population on the land. America grows more food than any other country using mechanisation, science, and just 5% of its much smaller population. But, much of our rural population have to be retrained and gainfully employed elsewhere. There is an obvious cart and horse conundrum here.

The ‘captains’, meanwhile, are amplifying Modi’s message better than the Government, saying that a very different outlook is now in power, and it is engaged in the formulation of far-reaching, unprecedented, change.  To the ordinary citizen, they are saying, in the face of a furious Congress - support Modi, be patient.  

But unfortunately there are go-slowers and doubters within as well. The RBI Governor Raghuram Rajan,  preaches a very unpopular caution in the face of an enormous pent up demand for roaring growth. Finance and I&B Minister Arun Jaitley, the virtual number two in the Government, could have been P Chidambaram because of the similarities between them. A bridgehead between the old Advani led BJP and the new Modi dispensation,   Jaitley is, of course, very familiar with the former  Government.  He is also full of a puzzling caution, bureaucratic  exceptionalism, and a damning continuity. 

Taxes continue to be high and foreign investment unfriendly. The Government’s messaging is feeble in comparison to the Opposition’s. The CBDT seems untethered and unsupervised.  In short, Modi’s much bolder economic vision appears to be subverted by his own Government.  

The public meanwhile has seen neither bread nor circuses over the year, and is definitely not amused. The opinion polls may still give Modi over 70% positive ratings, but the public is a little angry for perhaps being played for fools.  

The mangled Congress has seized upon this disconnect for dear life, taunting the Modi Sarkar for being anti-farmer ( big potential votes in 2019), promoting suited-booted pro-crony capitalism ( no impact on votes, but very important job creators),  being a manic global traveller with nothing to show for it, and running a Government  of One.

Whatever has passed the legislature or administrative muster on its way to implementation, are claimed to be UPA initiatives. But nobody is willing to give  Modi marks for shifting the logjam and setting the stage for deliveries in year two. So, undaunted, the Modi Sarkar is getting set to blow its own first anniversary trumpet very soon.

For: The Quint

(647 words)
May 21^st, 2015
Gautam Mukherjee

 Gautam Mukherjee, entrepreneur and former corporate executive, is an incisive economic and political commentator.

The Chinese Fandango

 

The Chinese Fandango

 As Prime Minister Narendra Modi goes on his much anticipated Chinese return State Visit, is China in the process of informally annexing Pakistan, in a sort of neo-USSR embrace? Are they building a dragon patterned Chinese Screen, to replace the old Bamboo Curtain of the Cold War years?

This, even as there is great potential of the India-China relationship being ramped up to unprecedented highs, involving billions in Chinese investment and infrastructure know-how. India is also simultaneously cooperating with Japan with equal ardour, ignoring long standing Sino-Japanese antagonisms. She is also joining hands with both Russia and America wherever possible, particularly on her ‘Make in India’ initiative. On this very trip, South Korea too may also get involved with helping India build warships.

In fact, the Modi foreign affairs doctrine that has emerged over the year, stresses bilateral progress with all who can be mutually benefited. This includes Australia, Canada, France, Israel, the UK, and Iran; the SAARC countries on our doorstep, even Pakistan, if only common ground can be found.

And all this, without the traps of Nehruvian non-alignment, and the geopolitical blocks it had created in the past. India is, under Modi, deliberately and pointedly side-stepping the bilateral antagonisms that may exist between some of our re-engaged friends and seeing its own way clear.

But, yes, a big brotherish Chinese move to become the dominant power is afoot in Myanmar, Sri Lanka, Nepal, Bhutan, all part of a sinuous, metaphorical, new Silk Road dreamt up by President Xi Jinping. All roads do lead to the erstwhile Middle Kingdom.

Could India fall to becoming a Chinese client-state too? It seems highly unlikely, despite massive Chinese competitiveness, because of our size, our engineering and software prowess, our geopolitical importance to others, and the maturity of our democratic systems. We are militarily much weaker today than China, but may not remain so in the decades to come. And our GDP growth rate may be second to none for years going forward.

With Pakistan, there is no contest between itself and China. It has long been the recipient of Chinese largesse by way of infrastructure, nuclear and military hardware, and ‘most favoured nation’ treatment. This, even when it was partnering the US in the Afghanistan theatre.  

But what is the risk involved in an informal annexation of a country bristling with Islamic radicals?  It is one the Chinese seem willing to take, with the newly announced $ 47 billion investment corridor going right through the country in an explosion of fraternal affection. It boldly traverses Pakistan from China’s own restive Xinkiang Province, via POK, the capital Islamabad, and on, across, all the way to  Gwadar Port in Baluchistan, on the Arabian/Persian Gulf.  

The Chinese have earlier, already developed and modernised Gwadar Port to serve as their access to the oil rich Gulf region. And they are also mining for minerals in natural resource rich Afghanistan.

Is this massive ambition only fair and appropriate for a nation like China, with trillions in investible reserves, a slowing domestic economy and manufacturing export market? Why should it not build up its regional and strategic footprint when it has such a compliant ally in Pakistan?

Pakistan, which many call a failed Islamic State, besieged by its own radical fringe,   ever ready to be used for a price, long dependent on hand-outs from both the US and China, will receive vital economic life support, along with the implied military security from this investment.

India is seen to be not protesting the matter, partially because it would be futile. And partly because a Pakistan which is, in any case a semi-formalised satellite state of China’s, brought into a closer embrace, will probably make for a more stable neighbourhood.

It is even likely China will get Pakistan to behave if its India relationship demands it, though it is also free to use it as a pressure tactic, its cat’s paw, as always, through our being part of the Soviet block years. Isn’t North Korea serving a similar purpose for Beijing too, and what can any other country, including the mighty US, do about it?

Pakistan, despite its ever increasing nuclear arsenal, will not want to engage India in formal military confrontation. But it can be an influencer and conduit, even a proxy player in the West Asian region, smarting at the geopolitical shift of the US once again towards Iran, amongst the reduced clout of the oil rich region. The sulking is evident from the reluctant attendance at the forthcoming Gulf Cooperation Region Summit to be held in Washington and at Camp David.

The abiding worry and threat in Xinkiang and Pakistan alike, that won’t dissipate just because China seems undaunted by it, is from domestic, home-grown Islamic terrorism.

In Pakistan it seems to be growing wings, recently bringing down a helicopter with shoulder held missile launchers, downing two Ambassadors in the process. The target however was no less than the Prime Minister Nawaz Sharif himself.

These terrorists, grown powerful under Pakistan’s ‘non-state actors’ policy, are now Frankenstein monsters, with many sympathisers in the Pakistan political, armed, and intelligence establishments.

How long therefore, before these people get their hands on a nuclear weapon? And what will that mean for the Pakistani State and its Chinese patrons? India may be a declared target for being infidel and idolatrous, but it is not really the jihadi’s obstacle on the road to power and influence. And neither is the hoary- bug bear of Kashmir.

The highly militarised Pakistani State and its excellent intelligence organisation, the ISI, has long liked to believe it can use the Pakistani Taliban, the LeT and its affiliates, in Pakistan, across the border in India, and internationally, as a fifth column and to great effect. They are useful, per Pakistani covert policy, to wage guerrilla war and foment subversion wherever they want.

But, increasingly, as the terrorists have gained strength, they are less amenable to being controlled. The Pakistanis and their Chinese masters may be making a very big  conceptual and strategic mistake with regard these non-state actors. They are not bound by any code or protocol.

Kashmir is the flagged issue that these neo- jihadis are happy to keep alive, because it gives them freedom, money, arms, training, and political clout. But, as the time goes on, it is control of the State itself that they want. It is the bigger prize by far, a nuclear armed Pakistani State, won, not via the ballot but by the jihadi bullet; with the infrastructure building Chinese as partners by default.

For: The Pioneer

(1,091 words)
May 12^th, 2015
Gautam Mukherjee