Thursday, March 30, 2017

Attacks on Nigerians in Greater Noida are NOT RACIST ATTACKS

And the biased narrative of media begins. In this case, I have the benefit of residing within 3 km of the place where the incidents took place.

The actual story is as follows...

So by now, the whole world knows that a boy had died in greater Noida and there were riots in which African students were attacked indiscriminately. News reports inform us that Africans were accused of cannibalism and there were racist riots. So the story begins from almost two years ago when an auto driver went missing and later on he was found in fridge of Nigerian students in Greater Noida, body parts cut and stored. After that local people were whispering that Nigerians a cannibals. What was the issue with that auto driver nobody knows as media did not cover it and it was treated as just another petty crime. Even today nobody knows what happened to that case in which those students were arrested, if they were punished or not. Most probably this case got lost in police files in India as so many cases get lost. That driver perhaps did not have local backers and hence nobody bothered about him but locally people knew about it and discussed it and then forgot as we know public memory is short. 6000 African students of various nationalities lived undisturbed all this while. People rented them their own houses. No discrimination was happening as such. African students could be seen everywhere in Greater Noida. Now when this fresh case happened when this boy died. Those memories came back. Rumour mills had usual effect as rumour mills are known to have throughout the history across the world. This buy was known to Nigerians. He was seen with them. One statement which none of the "RESPONSIBLE" media outlet carried was of the brother of dead buy. Before he died of cardiac arrest finally he had told his brother that Nigerians had injected him with something and after that he did not remember anything. "Responsible" media thought it appropriate to report just the last part that "he did not remember anything". Now the boy in question was not some auto driver far away from his home but belonged to powerful local "Gurjer" or "Gujjar" people, who are dominant land owning community in this area. They persued the matter and then tempers ran high and they gathered in thousands at Pari Chowk (Main junction in Greater Noida). they started hunting for Africans as they can not differentiate between Kenyan or Nigerian or south African. Things were brought under control, PAC (Provincial Armed Constabulary, a kind of reserve force in UP Police) was called in quickly.

So what we see is crime of passion not racism.
Yes it is fine if media does not add to the rumours of cannibalism but when it turns the narrative towards racism then it is crime on the part of those sections of media.
In fact some of them already started instigating African governments against Indian Interests.
http://www.huffingtonpost.in/2017/03/29/why-indians-need-an-urgent-lesson-in-identifying-its-racism-at-h_a_22016438/

Friday, March 24, 2017

India's journey from Nehru to Narendra Modi

Nehruvian Socialism to Free Markets and we move on.
When India became independent, Nehru became first prime minister. Initial years were defined by commanding heights of public sector enterprises. There was not enough capital and it was a planned economy. When I am writing this today we are more or less a free market economy. Indian economy was a planned economy on socialist model. Although there were private enterprises and business houses but there were lots of restrictions. Because of these restrictions private enterprises were not allowed to flourish the way they could have. He even toyed with the idea of soviet style collective farming. This situation continued till 1991. That year because of forex crisis India was forced to open its economy. That was 1991 is landmark year in independent India’s economic history.
After Nehru, Lal Bahadur Shastri had brief tenure. It was not long enough to be judged for any visible directional changes.
Then came Indira Gandhi. Her economic policies were even more communist/socialist than Nehru himself. She nationalized all the private banks. There was curb on manufacturing even the common goods like automobiles, TV, radio set etc. There was wait list for buying almost all manufactured goods, so in a way economic growth was throttled. Inefficiencies were tremendous. So many licenses were required that it was virtually impossible to start the business.
Morarji Desai led Janta Party government was a break in between. They were advocates of free market. But it was short lived and many factions of Janta party were socialist in nature. Nothing much directional change happened even during more than two years.
Rajiv Gandhi continued with the policies of his mother (Indira) and maternal grandfather (Nehru). He had huge mandate but it was all the same policy environment.
Short lived governments of VP Singh and Chandrasekhar were fighting for survival most of the time. Reforms were opposed at all levels. Even though strong need was being felt by that time still nobody could bring about those changes.
And then came the crisis of 1991. P V Narsimha Rao was heading a minority congress government. It was a Congress government for sure but it was for the first time that somebody from Jawaharlal Nehru line was not head it. And then started the reforms. It does not matter now how and why these were mandated but yes these were reforms. And it was the beginning of era of moving away from Nehruvian policies. It is ironic that it started by Congress but yes it started and then there was no looking back. Moving away from the tradition PVN choose a technocrat PM to implement the changes which were forced upon India by World Bank and IMF. Although it was forced but it set the balls rolling. Indian market came out of “Quota Raj” slowly. It was painful for entrenched elites in policy circles, government and some crony capitalists. As large masses do not have understanding of the economics beyond welcoming freebies, they did not react to it. But it benefit the economy tremendously which was shackled by “License Quota Raj” till that time. Words like FDI were alien till that time in India and there were lots of fears. By that time fruits of well-intentioned structured reforms were bearing the fruits in China. Hence, acting as inspiration for India, even though we were more cautious. When PVN left office in 1996 it was very much clear that India was moving in right direction after decades of stagnation.
Then came era of political instability 1996-1998 when we again saw two powerless PMs in the form of H D Devegowda and I K Gujral, but it was soon over with BJP coming to power and Atal Bihari Vajpayee became PM.
Atalji continued the reforms in his two terms totaling 6 years. His second term was first full term for a non-Congress government’s full term. By the time India was going to election in 2004, “India Shining” was the reality as Vajpayee continued the reforms started by PVN. For the first time India was set on high growth trajectory. Unfortunately, Vajpayee lost the election in 2014 but it brought to power another Congress government. But this time it was lead by Manmohan Singh. Another Congress PM outside the Nehru family.
In his first term Manmohan Singh continued the reforms. Fruits of what Vajpayee had done during his six years were ripening by that time and India was on high growth trajectory. Manmohan Singh did not halt the reforms but at the same time he did not pursue the same with zeal. He focused more on socialist schemes and squandered a lot of government money. Scams were regular affair. This resulted in falling growth rate. Economy started suffocating.
So when Modi came to power, reforms were generally acceptable because public had seen the benefits, hence not much opposition. For the first time since reforms were started in 1991, there was a majority government at center, hence bold steps could be taken. Socialism has not gone out of fashion totally but it is no longer the norm. We can not say that Modi did not take socialist decisions but those were few. Emphasis had already shifted to skill development rather than on keeping the people poor and feeding them. So, in a way Modi benefitted from the pace set by his predecessors. He is working towards making India manufacturing hub and ease of doing business is focus of the government instead of making capitalist villains. You might not believe it today but in Nehruvian socialism all businessmen were made to look like thieves. We still have a long way to go.

Why did India fail to make necessary economic reforms during 1970's and 1980's while China did

We need to look into the background before I come to real answer. Today when we look back at those times it is difficult to visualize how much world was divided between capitalism and socialism/communism. It was believed that rich people were source of misery of all the poor people. This naturally meant that socialism/communism found favour with poor people across the world particularly in the countries which were ruined by direct colonization (India in this case) or through influence of colonial powers (China). After Second World War colonial power had lost their hold on the colonies and countries were getting independence. India (1947) and China (China) gained their independence and current systems around the same time. Both were following socialist policies because of aforementioned reasons. China was communist where all the resources were with state and India was having “Nehruvian Socialism”, where state was all powerful but private property was allowed thanks to our robust constitution. Nehru dominated Indian and Mao virtually owned China.
India got its chance before China when Nehru died in 1964 but Shastri died soon after and Nehru’s daughter proved to be more socialist and dictatorial than Nehru himself. India got another chance in 1977 when Janta Party came to power and tried to move towards market economics, but again it was short-lived and Indira came back to power in 1980, which meant those same policies continued till beginning of 1990s when P V Narsimha Rao came to power. Although Rao belonged to Congress party of Gandhi Nehru dynasty, he started the reforms, which were more or less forced upon him because of financial conditions of the country at that time.
China got their chance in 1976 when Mao died and in 1978 Deng Xiaoping was elevated to top position. He was the guiding force for next 15 years, which resulted in continuity of the policies. He called for "four modernizations" (economy, agriculture, scientific and technological development and national defense), and announced an ambitious plan of opening and liberalizing the economy. He was visionary and put forward the three steps suitable for China's economic development strategy within 70 years: the first step, to double the 1980 GNP and ensure that the people have enough food and clothing, was attained by the end of the 1980s; second step, to quadruple the 1980 GNP by the end of the 20th century, was achieved in 1995 ahead of schedule; the third step, to increase per capita GNP to the level of the medium-developed countries by 2050, at which point, the Chinese people will be fairly well-off and modernization will be basically realized.
Unfortunately, we did not have that kind of visionary and missed the two chances that we got before China. So China had a head start of at least thirteen years over India. If you go through GDP, GNP, Infrastructure data, you will find that till 1980, India and China were at par with each other.
Another advantage that China had was that of political system. I am not advocating one party system here but our democracy had thrown some roadblocks with unstable governments. Now we are moving in right direction. Even though different political dispensations have ruled in last 25 years since P V Narsimha Rao started the reform process, broad direction has been same under successive governments, may be at slower pace than desired. When I am writing this answer we have a majority government at center for the first time since reforms started in India. One with clear mandate.

Originally written for Quora
https://www.quora.com/Policy-question-Why-did-India-fail-to-make-necessary-economic-reforms-during-1970s-and-1980s-while-China-took-full-advantage-of-the-opportunity

Monday, March 13, 2017

Can 21st century be India's century?

It might happen. We can not say for sure that it will happen. There are so many variables, so many forces acting simultaneously. If Indians plan it well, nobody can stop India
Historical Background –
As per studies by renowned quantitative macroeconomics analyst Angust Maddition India was the largest economy in the world from 1 AD to 1700 AD in most of this period contribution of India in world GDP was 24-32 percent. At the beginning of 1800s India was still larger economy than US, UK, Germany and France put together. Post colonization and industrial revolution in west, share of India in World GDP fell drastically. India used to be home to finest cities in the world, testimony about Rajgir and Vijaynagar stands out in history. By the time of independence our share in world GDP shrank to 3.8% and obviously India became home to largest number of poor people living in ghettos, Dharavi still hold the distinction of being the largest slum in the world.
Father of economics, Adam Smith explained how relative position of country in value chain affect the prosperity of the country. India lost out to west during Industrial Revolution. Post liberalization we are making continuous gains and today stand as 3rd largest economy in the world in terms of real GDP.
Unique Advantages-
2.1  All Agro Climatic Zones
This gives us advantage of producing everything. India has largest cultivated land in the world. Almost half of total land available is under farming but productivity is low. We can use different zones for most suitable produce using scientific methods.
2.2 Demographic Dividend – While World Is Ageing Demography – Most Opportune Moment
Today 41% of population in India is below the age of 20 while almost 50% is between 20-59 years of age. So we are huge young country. While most of the world is ageing, we are still young, but this opportunity will be lost if we do not encash this opportunity. Such huge population if productively employed can create tremendous value and will be one of the largest market in itself.
2.3 Cheap Labour
Owing to large population we have relatively cheaper labour. Development pattern all over the world has followed the path of Agriculture to Manufacturing to Services (Europe, US, Japan, South Korea, Taiwan etc). Till now we have not sufficiently focused on manufacturing part of it. While agriculture is helping the people survive we can move the people to manufacturing without causing any disruption.
2.4 Large market
Geographic spread and large population makes us huge market. We need to use ready availability of this market to expand the growth.
2.5 Tourism
Every state in India has unique potential for tourism. We can develop infrastructure and make it easy for tourists coming from outside the country. It brings in foreign currency and provide jobs for local population. Potential for internal tourism is also huge. Cultural and religious tourism is also having huge potential. When income levels of the people increase it will increase exponentially.
2.6 Medical Tourism
Lot of people come to India from middle east Asia and African countries. We have relatively cheaper healthcare and expertise. Although we have one of the lowest number of doctors per capita, but we have highly specialized hospitals. Increasing income from outsiders will help us further increase in medical colleges and training of more doctors, it will improve public health and productivity of population in turn. We can learn from countries like Cuba.
2.7 Advantage of English language
We have second largest English speaking population in the world after USA. Today English is language of communication and trade all over the world. Our IT and ITES industry has benefited from this. We can take advantage of it in furthering the economy and trade. Most number of research papers are published in English language and that gives us easy access to scientific knowledge and development across the world.
2.8 Culturally liberal society entrenched in democratic traditions
Historically we accepted everybody, our people believed in वसुधैव कुटुम्बकम (Vasudhaiv Kutumbakam = THE WOLE WORLD IS A FAMILY), accepted the change throughout the history. Our merchants traded throughout the known world, we have Indian diaspora in most of the countries. This gives us a unique advantage in globalized world.
2.9 Availability of all types of raw materials
Theory of critical mass can be implemented. We can develop the industry in and around the areas of availability of raw materials. We have almost everything from salt to thorium. For example huge Thorium reserves can help us in our energy needs of the future and development. We need to develop the knowledge of processing where it is required.
2.10 Critical mass available for almost any business, trade, research
Critical mass is important for any business or trade. It is also needed for pumping sufficient funds in research and development.
What we can do-
3.1 Identify areas for different products
Different part offer unique advantages for different industries and produce. Mostly we are aware of these. We just need to focus on right mixes.
3.2 Focus on Education and Industrialization
Till 1985 India was ahead of China (which is going to be our closest competitor in near future) in per capita income as well as real GDP. Today Chinese economy is 4 times the size of Indian economy. China leapt ahead in 80 because of education and industrialization. We can lear from the experience of Europe as well, they took lead earlier with Industrialization. Roman used to complain that we do not have anything to export to India, we can again achieve that distinction
3.3 Infrastructure development – examples of Canada and Australia
Infrastructure is most important for development of any country. There is huge infrastructure gap in India. It helps at all the level. Manufacturing, tourism, transport of goods and economic efficiencies are achieved through Infrastructure. We can learn from the experience of Canada and Australia in this.
In India infrastructure development will be different from the models followed in other countries. We need to provide infrastructure in rural areas so that small industries and enterprises can work from the rural areas. As of now they have to move closer to cities.
3.4 Sustainable development model and push to the eastern part
Today whole world is aware of climate change and sustainability is most important aspect of development going forward. We have huge untapped potential for clean energy which is not only sustainable but saves precious foreign exchange that we spend in buying petroleum and reduces our dependence on global factors.
Eastern part of the country has not yet tasted the fruits of Green Revolution. Now with new studies showing that organic produce can have equally high yields we can do that on war footage in eastern parts of the country. It fetches premium as well along with being sustainable.
3.5 Invest in R&D
To achieve this all we need new and available technologies. All studies shows high correlation between development and spending on agriculture.
  • Small countries like Switzerland have huge share in scientific work and that is the basis of their development and high value products they produce.
  • Story of Chinese economic development is also the story of increase in share of China in scientific papers produced from 3 to 11 percent between 2001 and 2011.

We still buy mobile phones and laptops from outside. Our productivity in agriculture is very low (less than half in most of agriculture products) in comparison to developed world. Our own experience in space technology and nuclear technology is similar.
3.6 Invest in people
People can be productive when they have proper skills. Most of our population is involved in unskilled or semiskilled work. To move up the value chain we need to invest in our people to develop the skills. Here we can learn from the examples of Japan and Scandinavian countries.
3.7 Environment and policies to enhance productivity to be created
  • “Red Tapism” is biggest hindrance for budding entrepreneurs. We need to reduce the regulations to extent possible.
  • Technology can be used to shake the corruption and accountability can be ascertained
  • Archaic laws – how ease of doing business is improving and can be improved
  • Development and cleanliness go hand in hand. Nobody want to live in dirty environment, as we enable our people to have respectable living standards, cleanliness will follow automatically

Risks:
While doing all this there are potential risk factors which we need to address continuously.
- Population can be burden
High population does not mean high production and high demand automatically. An unskilled poor population can become burden on society.
- Division of labour degraded into caste system
According to Adam Smith as skills become more complex then economies need to have specialists. India was one of the first country where division of labour was achieved thousands of years ago. Later on it degenerated into caste system and untouchability.
- Corruption is deep rooted
All welfare and development schemes must be implemented in targeted fashion and last mile delivery must be ensured otherwise resources will be squandered without any benefits.
Conclusion:
At present we have become fastest growing economy in the world. We are moving in right direction but there are lots of things that can go wrong. World is moving very fast, technology gap that made the most skewed world in late 19th and early 20th centuries is reducing, still we need to close that gap. We have resources, base and demography on our side, momentum is built up. Now it is time to bank upon it.