Category: politics

The Personality Cult

So all business newspapers report that LK Advani had issued a “warning” to Yeddyurappa a while back that he was getting too corrupt. Nevertheless, several BJP “party workers” in Karnataka have been coming out in defence of Yeddy, saying he’s innocent and that he’s still their leader. Some of them have refused to accept the leadership of DV Sadananda Gowda. And some of the leaders themselves are quite silent on the issue, preferring to say that the “law will take its own course”.

This points to a larger problem that is afflicting Indian politics nowadays which is the “personality cult”. First of all, we have several parties (too many to name here) where the only ideology is “absolute loyalty to a certain party leader”. Even in parties that don’t fall under this definition (the BJP for instance), we seem to have several “local leaders” who carry significant weight, and local units of parties that are more loyal to their leaders than to the parties. In fact, if you were to objectively look at it, as a voter there seems to be no escape at all from this cult.

This has several disturbing consequences. One stems from the belief that “loyalty should be rewarded”. Given the loyalty that so many of our “leaders” get from “party workers” it is not surprising that the “leaders”, upon assuming power, accord to these workers plum rent-seeking posts, which will keep them happy. This can result in positive feedback – once a leader has shown that he  will “reward” loyalists, more people clamour to get close to him, and they too must get rewarded. And so it goes.

Another fallout of this personality cult is a dramatic increase in security, with not inconsiderable cost to the public. Given t he power that some of our “leaders” wield, the payoffs of bumping off an opposing leader are quite strong, both in terms of electoral politics and otherwise. Parties which have been built on “personal loyalty” as an “ideology”, upon losing their leaders, will suddenly have no “natural centre” and will tend to fragment. Hence, it is in the interest of all politicians to provide themselves “security”, which comes at the cost of the general public (cue traffic jams whenever there is “VIP movement” in some city, or the fact that our generally under-staffed police force has to spend so much of its effort in “VIP security” rather than other more important policing duties).

Then, we seem to be moving to a situation where parties are bereft of ideologies, and are simply collections of random leaders (who have lots of “followers”) thrown together. I’ll probably address this in detail in another post, but if you come to think of it there is very little to choose between different political parties now in terms of ideology. Yes, the BJP might have the nominal ideology of building a Ram Temple, but take that out and there is little to separate it from the Congress. The regional parties are even worse. The only difference you could probably see there is in terms of the dominant caste or lobby backing each party.

Again, it needs to be pointed out that multipolar politics in India is very young – it’s existed for little more than twenty years. Still, the future of Indian politics is worrisome, and I don’t know how we’ll get out of the rut we’re in.

Sadananda Gowda’s Set-up in South Bangalore

Ever since D V Sadananda Gowda became chief minister of Karnataka not so long ago, we residents of KR Road have been subjected to the holdup of the KR Road-SouthEnd Road signal several times a day. The convoy for which traffic is held up is huge, leading us to believe that it can’t belong to anyone but the chief minister. However, the chief minister’s house is in Milk Colony near Malleswaram, so what is he doing in South Bangalore? We wonder if a chinna veetu exists!

Corruption and Communism

In an article arguing why Kolkata is best placed to be India’s “best city” in another 20 years, Aakar Patel (I’ve started looking forward to his columns in Mint Lounge) mentions that there isn’t much corruption in the governments in Bengal (at both the center and city level). I don’t know the reasoning for this, but I wonder if this is primarily responsible for the long run that the Communists had at the helm in that  state.

I had argued in a not-so-recent piece in Pragati that big governments tend to be bad governments . I had argued that big government means more ways in which government employees can seek rents, and hence one way of reducing corruption is by reducing the size of the government. Now, assume that for some magical reason, a certain section of the population is sincere and incorruptible. In that case, big government need not be bad government. In other words, people don’t really resent the presence of government everywhere since they don’t see any rent seeking by the government officers. And since they are not unhappy with the size of the government, they don’t mind voting in every time the communists, who will keep the big government!

So I wonder if it is the incorruptibility of the Bengali (for whatever reason; I’m drawing this inference from Patel’s article) that has led to the long communist rule there. Incidentally, the one time the government was seen to be corrupt (in discretionary land allotments in favour of the Tatas, Salim Group, etc.) it wasn’t voted back to power!

The problem with private provisioning of public goods

… is that private players who are providing those goods have an incentive in blocking attempts by the public sector to provide those goods. For the purpose of analysis, let us take the example of Gurgaon, both because I’m reasonably familiar with it and because it has been in the news in the international media thanks to a recent profile of the city by the New York Times.

Now, Gurgaon has a major problem with power supply. It is said that (I don’t have first hand info for reasons you’ll soon understand) the “city” faces about four to six hours of regular power cuts every day. I don’t know the exact reasons for it (surprisingly, Haryana sells power to other states so it appears there is no power deficit per se in the state), but it could be a pricing issue, with free power for farmers and all that. Anyway, the reason for the power cuts doesn’t matter so much.

In reaction to this, apartment societies have taken it upon themselves to provide “power backup” to the residents (for a fee of course). Even in that, there are three grades. I used to live in a DLF complex that had “one hundred per cent power backup”, which meant that I was assured of 24/7 power supply. Every time there was a power cut, the generators would start in a matter of a few seconds, and with “one hundred percent backup”, I could run just about any device on the “backup” power supply. In return, I would pay the apartment association six rupees per unit (as opposed to 3 rupees I pay here for sarkari power in Bangalore).

Then, there as “eighty percent backup”, in which you could use the generator-power supply to run all appliances except air-conditioners and geysers (both extremely important in Gurgaon given the weather). Then, there was another level with fifty percent backup, though I didn’t particularly understand it. The individual houses in the city, though, had no backup, and people living there had to make do with inverters.

Now, suppose that magically Haryana were to become a power surplus state, would the state government be able to provide uninterrupted three phase power supply to Gurgaon? I would think not, for there are several “private players” in that city whose source of profits and wealth is derived from the fact that they provide backup power supply. Think of all those people who invested in DLF flats because they had “one hundred percent power backup”. Now, with power backup not being a distinguishing factor, these flats will lose in value since they cannot command the same kind of premium as they used to (rather, the supply of “apartments with assured power supply” goes up, thus reducing demand for the only ones that offered this luxury earlier). Then, there are scores of generator and inverter dealers in Gurgaon, who again depend on the power shortage for their livelihood. And so forth.

It doesn’t appear as if Haryana has power shortage any more (recently, Karnataka bought power from that state to tide over its power crisis). However, there are enough powerful lobbies in Gurgaon who depend on power cuts (!! ) for their income and wealth, and it appears they have managed to lobby the government there (officially or unofficially) to block the provision of assured power supply. The moral of this story is that once “public goods” start being provided by private players, it is hard to displace them, and this results in a lifetime of inefficiency.

FDI in retail

I’m trying to figure why that is turning out to be a big deal. Given that we have over 5 years of history of “organized retail” in India, and that it hasn’t performed particularly well on a lot of factors, I don’t know how permitting FDI in multi-brand retail is going to make a difference.

In my personal experience, the performance of “modern retail” over the last 5 years has been underwhelming at best. I can’t recall a single time when I’ve gone to one of these chain stores (Big Bazaar/ Reliance Fresh / More) and come back without getting annoyed with the checkout staff. While the variety available at these stores is massive, which is why I go there at times, the stores are all staffed with a bunch of imbeciles. Yes, all of them. They have made an attempt to overcome the unskilled staff by means of “software systems” and that has only added to the problem, rather than helping solve it.

On countless occasions, staff at modern retail outlets have refused to sell me something that I wanted to buy because “the item code wasn’t found in the system”. The other day the customer in front of me wanted to cancel an item midway through checkout, and the checkout staff had to call the store manager to reverse the transaction. I don’t know why the systems have been designed so badly. The fundamental problem with most of these “modern retail” outlets is that the staff there have no real incentive to actually sell you stuff, and the impression one gets is that the only thing staff strive to do is to avoid mistakes. Perhaps their incentives are structured thus. I know of a case from some 4-5 years back, when a family-owned opened across the road from a More outlet and in the course of a year, the latter had shut down.

Given this lacklustre performance of modern retail, I don’t know how much of a difference permitting FDI in the sector will achieve. Yes, it is argued that if Walmart invests directly the “know-how” it has accumulated over the years will be introduced to India. However, there is no reason to believe that this “know-how” has not already been implemented. Major players in organized retail such as Reliance and the Aditya Birla Group (More) have demonstrated in other sectors of their willingness to acquire know-how from across the globe, and implement it better than their global counterparts. Then, most major management consultants in India have established retail practices, which is another route for “knowledge import”. It is also not an issue of capital – Indian investors in various sectors have time and again shown that they are willing to invest in companies with strong business practices.

The problem with modern retail lies not with either know-how or investment. The problem is one of implementation, and I don’t see how bringing in Walmart (who have little idea of Indian markets) can make a difference there. FDI in retail is not going to solve this problem.

The real problem lies in bottlenecks higher up the food supply chain. Various states are yet to repeal the archaic APMC Act which gives certain people monopoly over food trade in certain areas. There are various restrictions on movement of goods across states (though this should be lesser of a problem once the GST (Goods and Service Tax) Regime comes into play). Time and again, the government acts arbitrarily in changing the rules concerning movement, import, export and “support price” of commodities, and this creates uncertainty in the market and scares away investors.

It is reforms higher up the supply chain that are crucial in order to make the food supply chain more efficient and reduce wastage. The government would do well to put the topic of retail FDI on the backburner (especially since it’s controversial) and instead focus on enabling the rest of the supply chain to become more efficient.

Retired politicians

I must admit a particular fondness for former External Affairs Minister Natwar Singh’s biweekly column in the Business Standard. I was not a great fan of him as a politician, and was happy to see him go when he was accused in the Iraq cash-for-food scandal, but there’s a certain freshness and honesty in the column that I’ve learnt to appreciate. Having had a colourful political career, he has a lot of stories to tell, and though some of these are already well-known, there is value in reading the way he narrates them.

This makes me crave for more such pieces, but the unfortunate fact about Indian politics is that there are few retired politicians. Unlike in developed countries where most politicians go out of office before they are seventy, and then hang around making money by giving speeches and critiquing their successors, the people here continue in active politics even after they’re well into the proverbial seventh age. Look no further than LK Advani who, well into his eighties, still harbours the hope of becoming India’s prime minister one day.

While one result of this is that senior citizens occupy all the posts that matter in a country like ours that is so young (in terms of median age), this also means that there are no retired politicians. This means that there are few people who have seen it all, from the inside or the outside, who are now free from any contractual or political obligations, and so can afford to educate us about all that they’ve seen.

Now that makes me think that our political parties are afraid of people who are still around but out of the system, since their personal and party incentives are not aligned any more. Hence, it might be a possibility that political parties give out posts to senior party members as a sort of dole, so that they don’t retire and tell the wider public all that they know.

An Illiberal Society

Every few months or so a bunch of (mostly) Bangalore-based liberals go up in massive outrage all over the interwebs. On each occasion, the trigger for this would have been a bunch of cops raiding some bar, and imposing a new set of rules. The last time this happened, it was about cops randomly checking black-skinned people for drug possession and pushing, leading to pubs banning blacks from entering, altogether. This time, cops have instructed that pubs not play “loud, western music” and banned live music from pubs.

Already, pubs and even restaurants in Bangalore have to close by 11 pm and there is no dancing allowed (again because “dance bars” are banned). A bunch of pub-goers hanging outside a few minutes after 11 is an open invitation for the cops to enter the pub and try collect some hafta. The problems are plenty, but the biggest problem is that there is no political solution in sight.

The problem here is that however vocal and loud the liberals may be, they still don’t make up enough numbers in terms of the city’s population to make a difference. The fact of the matter is that the large majority of the city’s population (even if one were to consider only the middle classes into account) is either not bothered about these pub rules, or actually supports the new rules that the police make from time to time.

Firstly, it is not possible in order to have different rules for different kinds of pubs. So whatever rules govern say Fuga need to also govern South End Bar at the end of my road. Secondly, a large number of pubs are in residential areas, and for good reason – you do not want to go too far when you need a drink. There is some difference in terms of licenses between wine shops and bars (the former can’t “serve” liquor) but most wine shops double up as “standing bars” anyway. Hence, it is likely that you’ll have a bunch of drunks patrolling the residential streets late every night.

Thirdly, and most importantly (though I’d like the “police reforms” specialists at Takshashila to weigh in), the police force in the city is massively understaffed and underpaid. It’s not possible for our cops to make sure that despite the presence of walking drunkards, the streets are going to be safe. It will take a massive political effort in order to change this. Hence, given that it is not really possible for the cops to police the streets effectively, they resort to signaling.

By forcing all bars to shut down at a certain time, they signal to the population that they get things under control every evening, and there wouldn’t be much nuisance. The rules regarding dancing are an attempt by the police to somehow extract money out of pubs, since dance bars are officially banned (I don’t know why), and they can use the same set of rules to harass the discotheques. Loud music is again to gain credence among neighbours (remember that most pubs are in residential areas) that they’re doing something about the “menace”. The ban on “loud western music” is inexplicable.

This police harassment of bars is not a standalone problem, it’s part of a bigger problem in terms of police reforms. As a stand alone problem, though, given the small proportion of people it affects, I don’t foresee a good solution. What needs to be done is to aggregate all stakeholders who are affected by this – regular pub/discgoers, pub owners (very important), liquor companies, people selling cigarettes and bondas late in the night, and collectively lobby for change in regulation. It’s not going to be an easy battle, considering that a large proportion of the city’s population is conservative, and will be up in arms against any change in rules. It won’t be an easy task either, since liberal but lazy parties like me (who prefer to get wasted at home) will also not lend support.

Government finances versus public interest

In an op-ed in Business Standard (I think) yesterday, Praveen Chakravarti (he’s with Anand Rathi now, used to be with UIDAI when I met him at the Takshashila Conclave last year) argues that fixed price allocation of telecom spectrum wasn’t such a bad thing since it kept prices for customers low and reasonable. As part of his argument, he mentions that due to the auction of 3G spectrum and licenses, prices of 3G services have been really high, way over the reach of the common man. Similarly, after the auction of the 4th telecom license in 2001, mobile telephony prices remained high, and came down only after the backdoor entry of Reliance and Tata Teleservices a couple of years later.

One of the points that the CAG mentioned in his report on Air India a few days back was about the granting of “sixth freedom” rights to international carriers flying from India. For example, twice this year I flew west (once to the US, once to Europe) from Bangalore, stopping over at Dubai. For both trips, Emirates sold me a single ticket (i.e. I purchased a Bangalore-New York ticket, not separate tickets for Bangalore-Dubai and Dubai-New York). The granting of this sixth freedom to carriers such as Emirates, points out the CAG, has resulted in substantial loss to Air India since no one flies Air India for international flights anymore. I didn’t believe it when I read it but one of the recommendations for the CAG was to cancel sixth freedom licenses to carriers such as Emirates. Another report around the same time recommended that “interior markets” (Bangalore, Hyderabad, Ahmedabad, etc.) be made Air India monopolies in order to protect its finances.

Now, there is a fine balance that needs to be achieved between government revenues through grant of licenses, and the economic impact on the general public because of the grant of such licenses. For example, the government (through Air India) may have lost significant amounts of money thanks to the grant of sixth freedom licenses to carriers such as Emirates. That has been counterbalanced with lower fares and easier flying options for travelers from hitherto less connected sources like Bangalore or Hyderabad. The government may have lost significant revenue by granting backdoor entry to Reliance and Tata Teleservices, but that was compensated by sudden drop in charges for mobile telephony, and the subsequent growth of the sector.

Given Air India’s history and performance, the government could have never invested enough to make Bangalore and Hyderabad as well connected with the rest of the world as, say, Bombay or Delhi. In that sense, granting of sixth freedom rights to Emirates was a cheap way for the government to provide international connectivity to these cities. Similarly, it would have been hard for the government to invest in MTNL or BSNL in order to take mobile telephony to the masses. Backdoor entry to two operators was a “cheaper option” to achieve this objective.

So what was the problem with what Raja did, you ask. The problem there was the creation of a playing field that was not level. He blatantly favoured certain players against others, and made hefty kickbacks from the process. That is the real tragedy of a non-auction process – in that there is “consumer surplus” left over with some of the companies after they’ve paid the fixed price for the resource, and some of this consumer surplus can be channeled in the form of kickbacks to government officials. I don’t know the parallel for this in the aviation space so I’m not able to comment on that.

Going postal over verification

Sometime in the recent past, I had to go to the post office to claim some money (some deposit my late mother had made there). As in other government offices, they needed my “address proof and ID proof” before they gave me the money. While my driving license was enough proof of identity, they being the post office got their address proof in a unique manner. They asked me to write down my address in some form, and sent a letter to that address. All I had to do was to produce that letter the next time I went there and my address had been verified.

So here’s how I’d adapt this process relative to the UID Aadhaar card.

  • When you apply for Aadhaar, you apply simply with an ID proof. Address proof not required. You simply fill in an address in the required column.
  • The Aadhaar organization sends a letter to this address. You need to pick up this letter and go to the office again, and now your address is “verified”.
  • Now that your address is “verified”, your unique ID is now mapped to this address (note that this function need not have an inverse)
  • If you change residence, all you need to do is to go to the Aadhaar office and submit a new address. They send a letter to this new address which you pick up and take to them, and thus “verify” this address. Now your ID is mapped to this new address. Aadhaar can charge a fee for this “address change” service.
  • The next time you need to prove your address somewhere, you go to the Aadhaar office and ask for an “address proof certificate”, and it can be a simple automated process for them to produce a printout verifying the address you’ve registered with them.
Now, you need an address proof to apply for Aadhaar (if I understand it right), in order to prove that you exist. I understand that a lot of people, especially at the bottom of the social strata, don’t have a proof of address, and that is holding up the spread of the UID process. And I also realize that this address proof requirement is so that the same person cannot have more than one UID card. Isn’t there any other way to prevent duplicate issuance of the UID? What does the Income Tax department do in order to prevent multiple PAN accounts?
If this duplicate problem is fixed, then Aadhaar-as-address-proof will simplify several of the problems we currently have. All that needs to be done is to “go postal” for verification!

Name mutilation

Like Bangalore supposedly became Bengaluru a few years back (when HDK was cheap minister), West Bengal is going to change its name to “Poschim Bongo” or some such thing. Now, unlike Bombay-Mumbai or Madras-Chennai, the thing with these name changes is that they are merely globalization of local names. Let me explain.

Bombay (bom bahia or good port in Portuguese) and Mumbai (of Mumba Devi) are fundamentally different. Madras (mad race? ) and Chennai (beautiful) are again fundamentally different. While I disagree with those name changes and still prefer to call those cities by their former names, I see that the change in those names at least has some merit. They wanted to get rid of their colonial British-given names (and i’m sure Tams wanted to prove they aren’t a mad race, though they might have achieved the opposite through this action) and chose local names in the local language.

When Bangalore’s name was supposedly changed to “Bengaluru” a few years back, Kannada newspapers (I used to subscribe to Vijaya Karnataka back then) had a tough time explaining the name change. Because Bangalore has forever been known as “Bengaluru” in Kannada. Even now, when I speak in Kannada I say “Bengaluru” but I say “Bangalore” when speaking in any other language. While it might have been a noble intention by HDK and UR Ananthamurthy and others behind the name change to get the non-Kannadigas to use the Kannada name, the effect has been completely counterproductive.

Till date, I’m yet to meet someone who is not conversant in Kannada to pronounce “BengaLuru” correctly. First of all, most people can’t say the “L” sound and instead pronounce it as “l” (in Kannada that can make a profound difference. for example “hELu” is “tell” while “hElu” is “shit” ). Next (this is the problem with most North Indians), people have trouble pronouncing the short ‘e’ sound. Finally, it’s hard for people to figure out that the first U in Bengaluru is to be pronounced long and the terminal u should be pronounced short. The combination of all these means horribly messed up pronunciation, which makes one wonder why they bothered to “change” the name at all.

West Bengal doesn’t seem to have learnt from this experience of Bangalore. They want to call themselves “Poschim Bongo” it seems. Not being a bong, I’m going to have major difficulty in pronouncing that name, and I might end up pronouncing it in a way that makes most bongs cringe. I really hope they see sense before they make this name change official and opt for a saner name, if they want to change their name at all that is.

One thing they could try would be to knock that “west” off their name (I believe the Times of India has been campaigning for this). West Bengal was the primary reason that I got my directions and geography horribly wrong till I was some eight years old. I used to assume that “West Bengal” was at the western edge of India! Especially since Bangladesh is no more called “East Bengal”.

Given that they are mostly commie, one thing they could try is probably to go the East Germany or North Korea way, and name themselves “Democratic State of Bengal” or some such thing.