THE INDIA SHINING STORY (as of 10/10/2013)

Recently, newspapers have been infested with reports of the failing rupee. Rating agencies as well as government agencies are continuously re-assessing their estimates of India’s economic growth to lower figures. Cries have been raised in the political arena as to how the government has completely failed on it’s promise. Internationally, there is much ambiguity about India’s potential as an investment destination.

The Planning Commmission has revised growth rates downwards but continues to be optimistic

The Planning Commmission has revised growth rates downwards but continues to be optimistic

Predictions about India’s future has, so far been the most futile activity political scientists have engaged in. Whether it be the apocalyptic disintegration that should have taken place in the early years of independence or the ascent to the status of world superpower prophesized after the reforms of 1991, neither has materialized completely. Differences among diverse identities based on religion, region, language and caste have often taken violent forms but have never reached to the point of implosion. Similarly, incomes have considerably increased in the last two decades and growth rates have been tremendously high for a long period but the idea of India as a superpower still seems quite distant.

Where is India now?

India has risen to become one of the most important oies in the global arena

India has risen to become one of the most important oies in the global arena

Over the past few months, the growth rate of the Indian economy has halved. Current Account Deficit is at an all-time high of 21.8 billion dollars (4.9 percent of GDP) which is equivalent to the GDP of Luxembourg. Although IT and the service sector have grown tremendously in the past few years, our neighbours in east have done considerably better. India’s GDP per capita In PPP terms, is among the bottom 10 in Asia and 126th in the world. Human development indices are still pathetically low and although social inequality has reduced, economic inequalities are grossly prominent. Now all this may seem to present an unjustly bigoted view of the India story considering the incredible rise in the living standards of people in the past two decades. True it is that India is the fastest growing democracy in the world and despite it’s huge population (majority of which is poor and uneducated), cultural and religious diversity (which continue to often lead to internal hostilities) and lack of natural resources, India has risen quickly to become one of the most important voices in the global arena. But still, there are many vital challenges that need to be addressed and these challenges which relate to basic human conditions in the country and the effect that overall economic growth has on the lives of people, cannot be ignored.

The service sector industry

India is presently standing at a very important demographic juncture.

India's service sector has a share of close to 85% in the overall economic growth

India’s service sector has a share of close to 85% in the overall economic growth

The largest youth population anywhere in the world is in India right now. Many people have been emphasizing on this point since the past few years. But as they all say in the end, this could turn out to be a boon or a curse depending on how the government handles it. Presently, primary education system stands crippled, largely because 70% of the school students study in government schools which are deprived of quality in every possible term one can think of. Even institutes of higher education are finding it hard to keep up with global standards.

Not only does the problem of education retard the potential of our youth population, it has much more far-reaching consequences. Service sector fuels the growth of our economy in today’s times. The reason being the availability of a large English-speaking workforce (comprising mostly of technical graduates) willing to work at extraordinarily cheap wages. Already, NASSCOM has declared in one of it’s reports that 80% of our graduates are unemployable.

Education needs to become the top priority of our growth strategy

Education needs to become the top priority of our growth strategy

At the same time, other countries are slowly catching up with us. Philippines has surpassed India as the world leader in business process outsourcing. Indonesia has surpassed India in becoming the second-fastest growing country among the G20 countries after China. The point is that unlike other rapidly developing countries, our edge does not lie in production of cheap goods. We provide low-cost services in the international market which is responsible in a large way for the upward shoot in our growth trajectory and neutralizing our balance of payments (total exports – total imports). To remain competitive, it is absolutely essential to significantly improve standards of education in India.

The manufacturing sector

A big concern for our economy is the ailing manufacturing sector. If we look at the newly industrialized countries which have done well economically in recent times, almost all of them (including China, South Korea, Mexico, etc.) had an export-oriented outlook towards economic development. Availability of cheap labour was common in all these countries which was leveraged to build an industrial base for cheap, manufactured goods. In this sense, the fact that India has had a nearly stagnant manufacturing sector since the last forty years is somewhat strange.

India's manufacturing sector has been a concern since the past many years

India’s manufacturing sector has been a concern since the past many years

Production of any good may be either for the domestic market or for the international market. India’s manufacturing sector is mostly inward-looking and exports only account for a small share. This being the case, manufacturing sector becomes dependent on domestic demand and the sector’s expansion is mostly associated with the overall growth of the economy. So what is the problem with this? The biggest employer in the world is said to be the United States Department of Defense which employs close to 3.5 million people. The National Rural Employment Guarantee Scheme (NREGS) in India created 25 million jobs in the single year between 2010-2011. Already suffering from major infrastructural handicaps, this scheme could have been quite useful in construction of valuable assets. But the effectiveness of the scheme in this regard has been a big disappointment. To put it simply, it is not prudent to place such a big burden on the exchequer for an activity which is largely unproductive. It is time that India focus on it’s potential of the export industry in the manufacturing sector. But there are many challenges in this direction as well. The regressive nature of the century-old labour laws makes it very difficult for small businesses (where 85% of our labour force is employed) to compete and expand in the globalized market. According to the World Bank, India stands 132nd on the Ease of Doing Business rankings in the world among 185 countries coming below even Pakistan and Nigeria. Also, it stands at 184th place with respect to contract enforcement which means India is the most difficult place to enforce a contract. All this indicates that bottlenecks created or perpetuated by the administration (ranging from infrastructural handicaps to legislative challenges)is largely responsible for an unfavourable business environment in India despite having naturally favourable conditions.

The oil factor

Oil imports are a major cause for the increasing CAD

Oil imports are a major cause for the increasing CAD

Lastly, the oil factor is a growing concern. Economic growth will inevitably lead to lead to an increase in energy requirements. Oil is the biggest import burden and all in all, a big reason for the rising current account deficit (expenditure – revenue) of our country. Oil production in India has been more or less, constant since the last 30 years. Involvement of foreign firms was restricted earlier but after commencement of the National Exploration Licensing Policy (NELP), this has changed. Still, state-owned companies account for more than 75% oil & gas production in India. Now, this would not have been a problem had India been one of those countries with abundant hydrocarbon reserves. But that is not the case. India’s domestic production only satisfies 25% of the demand, the rest being furnished by imports. It thus becomes necessary to build a competitive environment in the exploration & production (E&P) sector. This would ensure that the most efficient and up-to-date technological and management methods are put into practice. But again as pointed out earlier, the business environment in India still need a lot of changes to make it a favourable investment destination. Demand for oil will continue to rise in the coming years. India thus, needs a multi-faceted approach to this problem with increase in exploration activities and export-oriented production to offset the import burden occurring simultaneously.

The present slowdown is a global phenomenon

The present slowdown is a global phenomenon

The present slowdown

India’s growth rate has decreased significantly in the past couple of months. But, it is also true that this present slowdown is a global phenomenon. The challenges that we face today are the same ones that we faced before the slowdown. Although the government has been moderately successful in maintaining fiscal balance, it’s failure to bring about effective reforms has been a big disappointment. The Right to Education Act has not materialized in a big way as had been desired. The Food Bill is still stuck in the parliament and although many avenues have been opened up for Foreign Direct Investment (FDI), firms are still not investing in India (which may be probably due to the global slowdown). As the West has now started to recover, we can expect our economy to also come out of the slowdown by next year but objectively, a lot more needs to be done for India to rise at it’s full potential.

Feel free to post any views that you may have on this issue and if you think there is anything that the common man of India should be made aware about, please send your views to:

jagrukaamaadmi@gmail.com

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THE VIOLATION OF BHARAT MATA

The National Crime Records Bureau publishes a very interesting report every year. The title is very simple – Crime in India. The report is interesting for two reasons. One, the entire report only contains numbers and statistics. Considering the magnitude of significance of such a report, it seems very peculiar that the makers of the report have not inserted their own interpretations and inferences that could have been drawn from these 400 pages of numerical data. The reason why they did not do that is the second feature of this report that makes it interesting. The report is a textbook example of the classic adage – the numbers speak for themselves. Going through any five random pages of this report is enough to make one feel completely disgusted.

The NCRB Report of 2011 indicates a 9.2% increase in reported rapes

The NCRB Report of 2011 indicates a 9.2% increase in reported rapes

While you are at it, I would like to recommend a particular section in the report. Under the chapter ‘Crimes against women’, there is a column called ‘Rape’.  You won’t be particularly surprised to learn that in the year 2011 (the report for 2012 has not been released yet), the incidence of rapes rose at a rate higher than any of the previous years. The number of rapes in 2011 stands at 24,206 which is 9% higher than the previous year. This means that on an average, a rape occurred in India every twenty minutes in the year 2011. Even though the situation has been very pathetic since a long time, nothing significant had ever been done about it. The public outrage that broke out after the appalling incident of the Delhi gang-rape has, for the first time brought some serious attention towards this issue in India.

How deep has the blade sunk?

Out of the 24, 206 rape incidents, 7,112 incidents were the ones committed against minors. This means one out of every three rape victims is a child (the children being as young as 3 years old). Also, the top 88 cities of India accounted for 10% of all rape incidents. These are the cities with sound policing systems and relatively open-cultured societies. Think about the 90% incidents which take place in semi-urban and rural areas. These are the kinds of places where women are beaten and harassed for petty issues and then locked up in cowsheds where they are starved and made to introspect upon their sis of being born as a girl. Also, the police in these areas are not as brilliant’ as their counterparts in the big cities. Most of the cases in these areas are never even reported. The pace of our judicial proceedings is also not something we can take pride upon either. At the start of 2011, there were 95 thousand cases of rapes pending in courts. By the end of the year, the courts had come out with merely 4 thousand convictions and still stuck with 80 thousand pending cases for the next year.

The public outrage after the Delhi gang-rape incident was enormous

The public outrage after the Delhi gang-rape incident was enormous

In India, it is not just the act of rape that makes one strongly resent the crime itself. It is the manner in which it is done and to the people to whom it is done that makes one feel thoroughly disgusted. The Delhi gang-rape victim had 80% of her intestines, literally pulled out and thrown away. There are many incidents where on hearing the cries of a girl being raped, people came as rescuers but then changed their minds and decided to join the party as well. Gang-rapes of 4 year olds have also been reported. Orphaned children are very often taken advantage of by their own guardians or relatives. Hundreds of tourists who came to India to explore the country’s rich culture have gone back scarred for life. Even worse is the fact that our Indian society is not built of men who support or welcome rape victims with an open heart. The victims are most often, ostracized and isolated which is the biggest rationale behind the proposition that the actual number of rapes might be much more than the reported figure.

What makes rapes so prominent everywhere in India?

The problem of rapes is now a serious matter of concern in all states. But still, regional variations exist. At least 2% of the population of India became victims of rape in 2011. But, state wise data show variations between 0.7 and 7.1 percent in different states. A single look at these numbers is enough to indicate the inadequacy of the data (actual figure vs. reported figure) and the broad reasons why rapes occur at the frequency that it does in India.

A more efficient policing system is required

A more efficient policing system is required

The first reason is the systemic encouragement that this sort of a crime gets due to the weak legal structure of our anti-rape laws, slow judicial disposal of the pending rape cases and inefficient policing. In order to get justice, the rape victim has to first approach a completely insensitive police which already has hundreds of cases in the queue. Government figures suggest that out of the total number of rape cases with the police, 1 out of every 3 cases is a case pending from last year. Only in 1 out of 20 cases does the final report by the police declare the charges to be true. The cases which go to the court take a further 3-5 years, on average. Only in 1 out of 4 cases is ‘sufficient’ proof produced before the court for a conviction to actually take place. But, now hopefully the scenario is changing in a positive way with a strong Anti-rape Bill already passed by the Lok Sabha and very soon to be put up before the Rajya Sabha as well. Also, fast track courts for rape cases have been introduced which will ensure speedy delivery of justice. But apart from the judicial factor, there is another factor which basically is the root cause of this problem.

Unlike Mr. Chautala's perception, we need to think about moving girls forward not backwards

Unlike Mr. Chautala’s perception, we need to think about moving girls forward not backwards

The second reason is the cultural encouragement that this crime gets due to the parochial gender-based segregation that our society still suffers from. As a result of this, the dynamics of power shifts in favour of the man and leaves the woman in a state of complete helplessness. The atrocities taking place against women in this country are so conspicuous to the extent that they take place in almost every family in some way or the other. Female feticides, domestic violence, dowry deaths, abduction, sex trafficking, are all serious problems that we face even to the present day. These issues by themselves reflect the most repulsive traits of the kind of society in which we live in. Even though a strong anti-rape bill is in the passage of becoming a law, we also need to think about the cultural factor regarding this issue.

What can we as citizens, do?

The culture factor is the root cause for all crimes against women in India

The culture factor is the root cause for all crimes against women in India

It is true that the anti-rape law will significantly affect the number of rapes in India. But that in itself would not be enough if we want to build a nation where women can walk fearlessly. Just like every other issue in India, this issue also cannot be solved if we only look at the issue specifically. People, especially males should actively participate in citizen movements and NGOs that work in any feminist issues. Violators are more often uneducated or very little educated. This obviously does not mean educated people do not commit this crime. But the fact cannot be ignored that education is a significant factor for many crimes, especially ones committed against women. Citizens should contribute in whatever way they can, to the process of promoting education for children. The very least everybody can do is to ensure that no one from one’s own family and friends become perpetrators of any atrocity against women, big or small. The root cause of any crime against women in India is the inability of men to see women as their equals. The day we get over that would be the day when the Indian women would fully reclaim her dignity.

A culture where education is encouraged needs to be brought

A culture where education is encouraged needs to be brought

For the NCRB report, please click on the following link:

Crime in India-2011

THE STORY OF A STOLEN CHILDHOOD

On March 7 last week, an incident very typical of the Indian parliament occurred in the State Assembly of Madhya Pradesh. A walkout. The issue was about girls being abducted for human trafficking in the state. Official estimates show that since 20008, 4900 minor girls have gone missing in Madhya Pradesh. The home minister very conveniently replied that the situation was not as bad as it looked since in many of these 4900 cases,

In the past three decades, more than 40 million girls have gone missing

In the past three decades, more than 40 million girls have gone missing

the parents simply don’t report to the police when their wards return. The opposition on the other hand instead of suggesting measures to curb these activities, stuck to the old Indian formula of disguising demagogic endeavors into honorable non-cooperation and thus, staged a dramatic walkout of the Assembly.

It has been estimated that on an average 35 girls and women go missing every hour in India. Sadly, only in one out of three cases is the person ever found. The question that arises is: where on earth do these girls go? According to official figures by the Ministry of Women and Child Development, around 3 million women are victims of the flesh trade business in India of which 1.2 million are children as young as 5 and 6 years old.

Kamathipura in Mumbai is the largest concentrated red light district in the world

Kamathipura in Mumbai is the largest concentrated red light district in the world

Even more shocking is the fact the world’s largest concentrated red light areas exists and flourishes in our country. The revenue of the brothels of Mumbai alone has been estimated to be more than $700 million per year and that for the entire country adds up to about $10 billion per year. How did our society come to such a sorry state? There was once a time when India was seen as a moral example throughout the world. Today, commitment has given way to hypocrisy, trust has been crushed by greed and an indifferent society has replaced a rich culture.

The spark that lit the fire

People are migrating in large numbers from villages in search of jobs

People are migrating in large numbers from villages in search of jobs

Three-time Pulitzer Prize winner, Thomas Friedman once in an interview said, “[Sex] trafficking is absolutely, positively the worst possible human rights violation you can think of. Trafficking is abduction. Trafficking is rape. Trafficking is torture, both emotional and physical. Trafficking is murder.” Trafficking is an organized crime. It’s rise in India and other countries is not a random occurrence. Just as the Vietnam War is largely responsible for the colossal rise of trafficking in Thailand, rise in trafficking in India can also be pinpointed. During the past decades, India has experienced rapid urbanization which has consequently led a huge wave of male population from villages to leave their homes and come to cities in search of jobs. Since a multitude of debt-ridden people living in absolute penury existed (and still continues to exist) for whom the only way to avoid the wrath of the money lender was bondage labor, girls were easily trafficked into the major cities and forced into sex slavery. As demand for this industry increased, supply also increased rapidly. Today, the sex market is no more restricted only to migrant population alone. The entire general male population has fallen prey to it’s lure.

The wind that fans the flame

The police do not take any action against traffickers as long as they get their own share of money

The police do not take any action against traffickers as long as they get their own share of money

In spite of the strict Immoral Trafficking Prevention Act and Bonded Labour System (Abolition) Act, the flourishing flesh trade seems like a bizarre contradiction. Also, unlike other crimes, trafficking is not done in secrecy. Despite this, trafficking is carried out openly and fearlessly without any intervention by the authority. The reason being that the police turns a blind eye towards these activities since they get steady earnings through bribes paid by the brothel owners to keep their own businesses running. The story does not end with the decline of integrity in the police department. Since the location and activities of the brothels are always known to the locals, they can easily report to the police or take up collective or individual initiatives to curb these activities. But, this almost never happens. The sheer apathy shown by people towards the plight of these sex workers who are kept in bondage under nightmarish conditions, poses the biggest hindrance in efforts to make progress in eradicating trafficking.

The forest that is burnt

Girls are mad to work since childhood at ages as young as 5 or 6years old

Girls are mad to work since childhood at ages as young as 5 or 6years old

Almost every girl who works as a sex worker has been forced into the business, most often by someone whom they might have known well and would have had trusted. They are abducted or tricked into a fraudulent marriage after which they are sold to the brothel owner as if she was an object of trade. The few who join the business voluntarily are the ones whose financial conditions were so pathetic that they found no other means to support their families other than to sell their own bodies. They are mostly entered into the trade when they are children and as young as 5 or 6 years old. This is because children comply more easily than the adults and are easy to control and most importantly, due to high demand for children from customers. In the last three decades, over 40 million girls and women have gone missing out of which more than 60% have never been found. Just think about it. The number of girls never found is even more than entire the population of Australia. Nobody knows where these women are trafficked to or what has happened to them over time. Girls who have been rescued from sexual slavery describe the conditions of brothels as worse than hell itself. They are given food only once a day and allowed only one shower a week. The customers whose needs are to be served are not people who have come with good intentions either. About them, founder of the Prajwala foundation, Dr. Sunitha Krishnan said, “Men who come to them are not men who want to make you your girlfriends or want to have a family with you. These are men who buy you for an hour or a day and then use you and throw you.” Unprotected sex, beating, burning with cigarettes, putting chilli powder in the vagina, whipping are all very common practices in this business. Many girls take their own lives during the first few days at the brothel and no report to the police is ever made. The life expectancy of a woman working in the brothels is 35 years.

60% of the women working in brothels are HIV infected

60% of the women working in brothels are HIV infected

On an average, these girls undergo abortion 3 to 4 times every year. If they have children, then these children are also sold off in the sex market. 60% of the sex workers are HIV infected. Think about this for a minute. If one does the calculations, 3 million sex workers, 60% HIV infected, serving between 10-15 customers daily and then these men go back to their own families and further spreading the disease. The ramifications are frightening and we are slowly beginning to see them. India has the 8th highest AIDS prevalence rate in the world.

How to put out this wildfire?

Prajwala foundation carries out rescue operations to free women from sexual slavery

Prajwala foundation carries out rescue operations to free women from sexual slavery

At the TED India-2009, Dr. Sunitha Krishnan had said, “My challenge is not the traffickers…..My biggest challenge is civil society. It’s you and me. My biggest challenge is your blocks to accept these victims as one of your own” Truly, the biggest factor that perpetuates trafficking and encourages traffickers is our own indifference to this inhuman brutality. The anti-trafficking laws in India are very strict but still, trafficking continues throughout India. Largely, because of the corrupt and inefficient local police officers who often work in collaboration with the traffickers. While, on one hand, the police needs to augment its integrity level, at the same time, an active citizenry has to get involved in this issue. It is a problem created by the community, carried out in full knowledge of the community and thrives on the demand from within the community. Hence, the solution also needs to come from the community itself. We need to build a society that has zero tolerance for such activities. This can only be brought out through awareness. There is no doubt that a person who has been made aware of what exactly goes on behind the scenes in brothels, would never dare to approve of them. Members of the civil society need to spread awareness among citizens regarding this issue through campaigns, seminars, videos and social networking. Parents and teachers need to be more candid with the children and make them aware of this issue at an early age so as to spread a culture which absolutely outlaws encouragement of trafficking.

Sanlaap foundation works to prevent second generation prostitution

Sanlaap foundation works to prevent second generation prostitution

There is a red light centre in or nearby almost every city in India. The locals have to take up the responsibility to report these places to the police and if that does not work, take the matter into their own hands and stop illegal trafficking in their own areas. Most importantly, we need to make sure as citizens that we do not ostracize victims of trafficking which would completely shatter whatever little of their souls and hopes are left. We should encourage them to come out in the open and tell their heart-wrenching stories to the world which would give courage to other victims as well and also, instigate the general population to take action against the worst form of human rights violation.

Volunteer in your nearest NGOs that work in this direction. For more information about trafficking in India, visit the Prajwala Foundation website:

PRAJWALA Foundation

I would also encourage you to watch this documentary:

The Day My God Died

THE CONSTRUCT AROUND OPENING A STORE

Past weeks in India have been marked by a frenzy of political activity. First, the opposition parties boycott parliament as a result of the coalgate and are continuing to do so since more than a month.

The Trinamool Congress has withdrawn it’s support from the UPA government

Then, there are protests and a full-day nationwide bandhowing to the hike in diesel prices and LPG restriction. The newest sensation is FDI. Whether the farmer will benefit or not and whether the small retailer will be crushed or not, the politicians however are getting excellent publicity for themselves throughout this entire process.

The whole debate about FDI in multi-brand retail sector has been grossly exaggerated by both sides on the political platform. Ten years ago, the BJP had proposed this very same reform with a much more liberalized framework and the Congress had vehemently opposed it.

Dr. Manmohan Singh opposed the coming of FDI when his government was not in power

The timing and magnitude of the present reforms (four major sectors have been opened up for foreign investment on a single day) indicate towards a government which is desperate to redeem it’s reputation as ‘reformers’ among people by putting forward their policies as game-changers whereas the fact is that these reforms have very little potential to bring about any effective change in the economy and in some cases, even in the concerned sectors. On the other hand, the reaction of the opposition indicates an even more desperate opposition that wouldn’t hesitate to take reactionary positions when it comes to the prospect of fulfilling their own interests. Instead of getting caught up in the hype of FDI, one needs to take a closer look at what these policies are capable of achieving and how different it is from the hyperbolic impacts posed by both sides.

Before I start with the actual content of the post, I would like to point out that this is not an economic analysis of these policies. The purpose of this post is to delineate the contradiction between the simple elemental facts and the facts, as posed by the ones who stand to benefit from the outcome of the ongoing deadlock.

Small retailers have not been affected by FDI in China

The truth is that nobody can really predict accurately on what would actually happen given the diverse nature of India’s economic and social conditions in different regions. However, a careful evaluation of the risks and contingencies does provide us a basis for the implementation of any policy. In case of FDI in multi-brand retail, one can look at other developing countries where it has been implemented and surprisingly, there would be an equal probability of concluding in either direction. He could either conclude it will be beneficial for India based on the success achieved in countries like China and Brazil or one could conclude that it would turn out to be explosive for the country based on the fatal effect it has had on small retailers in countries like Thailand or Mexico.

Walmart has taken over almost the entire retail sector in Mexico

Looking at the present situation, the only people who are bound to benefit are the politicians who are right now getting an excellent stage for a pre-election campaign which will definitely play a major role in the 2014 general elections. Thus, every citizen should make it a point not to fall to the rhetoric of the political class and see through the situation with the Indian context in mind.

Whose money is it, anyway?

A very fundamental question that arises is when a foreign player comes to our country and sells a product, to whom exactly are we paying our money when we buy that product. To understand this let us say, for example, Walmart comes to India and sells a calculator for Rs. 50. Now, the manufacture cost in China for a calculator is, let us say Rs. 8. When it comes to India, an import duty of Rs. 2 is imposed.

Walmart has a global reputation owing to human rights’ violations in it’s factories in China

Now, if Rs. 2 per every calculator goes into salary of employees in the store, then half of the remaining amount, Rs. 19 goes to Walmart and the other Rs.19 goes to the Indian firm with which it has partnered. This means that of the Rs.50, Rs. 23 remains in India and the rest, Rs. 27 goes to U.S. and China. Now, this would have been irrelevant had Walmart brought in new technology and management practices which would have improved the quality of retail sector in India or provided an impetus to local production or significantly increased employment. Since none of these happens to be the case (I have written later in the post about why that is not the case), one wonders why such a huge amount of emphasis is being placed on the need and importance of this relatively unimportant policy.

Modernization

Many arguments have been placed in support of FDI in multi-brand retail. One of the principal arguments is that of modernization. It is being said that coming of foreign stores will be accompanied by inculcation of new technology and better and modern management practices in retail. An assertion of this kind not only unjustifiably undermines the level of sophistication and competence acquired by Indian multi-brand retailers but also strikes at the foundation of innovative thinking and originality since it assumes that ideas and innovations are subject to trade and commercialization and that there is only one single correct path of modernization and that the West holds the key to it.

Kishore Biyani and his Big Bazaar idea are slowly catching up all over the world

So, if you want to modernize, you better open your markets for our ‘prime-movers’ who will bring with them, ‘modern technology’ which you otherwise can never acquire. Over the past years, Indian retailers have successfully modernized significantly. The Future Group, for example has shown an excellent display of modern and innovative management practices and technology. It’s practices in Big Bazaar is influencing many retailers around the world, even in the West. What I am proposing here is not isolation from the rest of the world in hope of indigenous solutions to every problem. What disturbs me is the understanding that ideas can only spread through big-shot corporate agents who will ‘demonstrate’ to us the right way of doing things.

Production

The next argument is that related to production. One of the clauses of the FDI in multi-brand retail policy is that 30% of it’s products should be made in India. This clause is the only slightly comforting aspect of this policy. But here also, it does not mean that it will significantly increase production in any way. Firstly, because 30% here means that 30% share of the final value of the goods should be sourced from India. This means that if I, as a retailer buy a good from an Indian producer at a low cost, even then I will have the liberty to sell it at a high price in which case I will have a situation in which I will have fulfilled the clause and at the same time would have managed to actually avoid sharing the actual amount of production cost with the local producers. The reason why the retailers will be tempted to do this is because manufacture cost in India is relatively high (which is the primary reason for decline in our export rates).

The implementation of some of the clauses like back-end investment seem highly doubtful

However, another clause is also present which talks about 50% share of back-end investment (storage, packaging, logistics, etc.).Though the clause does give the impression that it will benefit farmers since new storage facilities would be set up and investment in packaging and logistics would stimulate local service-providers. But a major concern still pertains to the viability of it’s implementation (how will the government check investment which is spread on such a large scale) and it’s feasibility (paucity of land, bad condition of roads).

Employment

This is by far the most absurd argument that has been given in justification of this policy. The Indian retail sector is the second largest job providing sector in India and employs more than 40 million people at present. How the government aims to create 10 million jobs by allowing some 10 or 15 stores to open up and putting the second largest job providing sector on the line in the process is beyond me.

At present, retail sector is the second largest job providing sector in India

The Vice-Chairman of Planning Commission of India said that the quality of jobs is more important than their quantity on being put the question that statistically, small retailers are always pushed out when a big store up in vicinity. Mr. Ahluwalia should have then been asked that according to him, what is the probability that the uneducated youth (which is uneducated in the first place, precisely due to the government’s apathy on the issue of education) which account for 70% of the youth population and will exactly be the ones who will lose their jobs in small retail shops, ever get a job in a high end foreign retail chain?

The question of national treatment

The most disturbing aspect of this policy which can potentially reduce the entire FDI policy to insignificance and invalidity but still has eluded most of the debates around the FDI issue is the question of national treatment. A very crucial point that needs to be kept in mind is that all the clauses that have been mentioned in the policy like 30% local sourcing, 50% investment in back-end infrastructure, etc. only goes out to the stores with 51% FDI and not to all multi-brand retailers in general.

The question of national treatment poses a serious contradiction

The problem with this is that India is a party to a pact at the World Trade Organization (WTO) which says that all foreign investors operating in a country should be treated as any other national/local investor and should not be discriminated on this account in any way. Now, this is a very serious contradiction and the government and all the corporates are well aware of this. This means that if tomorrow the Indian government finds out that a store like Walmart is not adhering to the stipulations of the national FDI policy, then Walmart can take on the Indian government with the U.S. government and the WTO firmly standing for it’s defense.

Foreign investment in itself is not some sinister idea which needs to be opposed in all forms and in all times. But, the risks and impacts it could create on the local market also need to be kept in mind. A more favorable form would have been it’s advent on an experimental basis on a smaller scale in few areas and based on those results, we should have moved forward. Exactly, what impact it will create in India is largely unpredictable but as of now, the chances of a positive turnaround remain quite bleak.

FROM BRITAIN, WITH(OUT) LOVE

“Facts are facts and will not disappear on account of your likes.” – Jawaharlal Nehru

India’s journey through the ages has been a fantastic one. It’s spectacular demography, diverse geography and an awe-inspiring history converge to form an idea of a nation like no other. India has somehow miraculously achieved the task of binding all it’s people under the umbrella of a single nationalistic identity instead of subjecting them to the seclusion of their individualistic religious, racial or regional identities. Now, this may seem strange coming in a time when minorities are being executed and evicted in large numbers in Assam. But, the best way to sum up our success in fraternizing as a nation would be by iterating our first Prime Minister, Jawaharlal Nehru’s description of independence – Nor complete or in full measure, but substantial.

Thousands of people have been rendered homeless in Assam

The most fascinating attribute of the story of India is the irony involved in it. India has been named after the River Indus which is a river that does not flow in our country. It flows in our sister country, Pakistan with whom we have gone to war thrice in the last 65 years. This country came into being as the result of a partition in 1947 which was done on the pretext of the ‘Two nation theory’ which stated that there existed two nations in this country – one Hindu and one Muslim. But surprisingly, India has a larger Islamic population than the ‘Muslim’ nation that emerged from it. In fact, it has the world’s second largest Muslim population in the world. India is now steadily emerging as the software giant in the world but at the same time, 60% of it’s population does not get through primary school. Where on one hand India ranks fourth in the Forbes’ list of billionaires, on the other hand 3/4th of it’s population still lives on less than $1/day. This post is not about the story of India. It is about the irony involved in it’s most decisive epoch which altered the face of it’s destiny permanently.

Inequality has risen to the levels of colonial times in India

Inequality has risen to the levels of colonial times in India

I have already discussed in an earlier post (THE INEVITABILITY OF THE COURSE) about the inevitability of the British advent and their eventual acquisition of the entire country. True enough, their rule was marked by brutal repression, prejudice and plunder. But, there was something more to it. Decades of unjustified foreign rule set in motion a series of unprecedented events which gave birth to a brand new spirit and ideology which had inherent qualities of India’s rich history along with qualities acquired from a century’s struggle for independence. But delineating these acquired traits has always provoked contention and practically speaking, it would be impossible to arrive at a consensus on this issue. There is no doubt that our gains from the British rule were definitely not perpetuated by the rulers themselves. Thus, I want to make this perfectly clear that my intent throughout this post was never to glorify British rule or justify it in any way. The approach towards writing this post has been completely straightforward and objective.

The imperial age saw the emergence of a brand new ideology

Clearing the mist

Before we start with the actual gains during the British rule, we need to clear the mist of myth that surrounds it first. Unfortunately, these perceived gains form majority opinion instead of the actual gains.

Modernization is not equal to westernization

The biggest myth is the one related to modernization. It is widely believed that India would never have modernized had the British not come. This argument is often put up by those people who consider westernization and modernization to be synonymous. Engineering marvels were built in India much before British got the hang of it. India’s indigenous culture in medical care supersedes the Western ideas in terms of practice and efficiency and continues to attract people from all over the world till date. In the field of education, India’s Takshashila University and Nalanda University used to be the largest universities in the world of their time where students from all over Asia came to acquire premier education in medicine, engineering and philosophy. Even in the field of ballistics, India was also no less competent. The Congreve rocket that the British used against Indian rulers back in the eighteenth century was designed on the model of the Mysore rockets of Hyder Ali, the Sultan of Mysore. But unlike western ideas, these Indian ideas were never disseminated outside India in the west owing to one single exasperating reason. It was believed in Hinduism that one would lose his caste if he ever crossed the sea and hence no Indian ever ventured to the west to spread these ideas.

Statue of Susruta who was a principal contributor to Indian medicine in the nonth century BCE

The social reforms were despite the British, not by the British

Another popular belief is that the British were responsible for the much-needed social reforms in the Indian society. This argument seems preposterous in context of the fact that the British ruled India along the lines of a feudal system of administration. Their policies only widened the gap between the rich and the poor and thus, further aggravated the class hierarchies of the Indian society. In the 200 years of their rule, not a single policy was formulated to encourage participation of women in public life. But in the nineteenth century, these reforms were initiated by the likes of intellectuals such as Raja Ram Mohan Roy, Syed Ahmed Khan, Swami Vivekananda and Jyotiba Phule who advocated for social reforms by condemning women oppression, caste system and other such practices. The indignation caused by British oppression compelled these intellectuals to introspect on the weaknesses of their own society. In the twentieth century, Mahatma Gandhi was the pioneer of social reforms in India. He preached that these social reforms were just as necessary as independence itself since our society would never truly be free unless we get rid of these archaic practices first. It would be befitting to say that social reforms were thus, a consequence of British rule but not an initiative of the British rule.

Raja Ram Mohan Roy was one of the first social reformers of India

The real gain

What we actually gained from the British forms an integral part of India as we know it today. It is true that British rule was the most depriving period in the entire Indian history for the Indians but at the same time, this period also provided us with our biggest assets

A Nation

In 1828, Raja Ram Mohan Roy said that the social divisions inside India had deprived Indians of any patriotic feeling and disqualified them from undertaking any difficult enterprise. A hundred years later in December, 1928, a resolution was passed in the annual session of the Indian National Congress (INC) that if the government did not bring about constitutional reforms by the end of the year, the entire nation, every person from every corner of India would unite for a civil disobedience movement (which it did in 1930). What had changed the situation from utter hopelessness to bold determination in a century? Before the British came, there was no India, there were hundreds of kingdoms and rulers, all fighting among themselves. A person living in one corner of India had no reason to share a patriotic feeling with another person living in another corner – no common language, culture, race or religion.

A few individual officers like William Wilberforce did campaignfor social reforms in India but were never backed by government

But 200 years of British rule put them on a common ground. Their resentment towards British rule united them and determined them to fight back for a common cause – independence. It is difficult to conceive any situation different to the one in the Balkans (perhaps, even worse) for India where we would have been caught up in the vicious circle of endless conflicts amongst each other had the British never intervened in our affairs. When the British left India in 1947, they did not leave behind just two nations. Instead, the British gave independence to more than 500 autonomous regions. But till that time, the patriotic feeling in people had been fully awakened and one by one, they coalesced into a single nation.

Gandhi and Jinnah together itself represents the will to unite for a common cause

The world’s largest democracy

British rule had instilled in the people of India a deep desire for Swaraj (self-governance). Their dream was fully realized when India became a republic in1950. The nation sands upon the democratic principles of the west and it’s administrative structure is almost a complete adaptation of the English model. In fact, many British civil servants stayed in India even after independence and toiled side by side with the Indians in preserving administrative stability and building a nation. The greatest gift that the British gave the Indians is indisputably, that of democracy. This can be best explained by taking the example of Thailand.

Democracy is the biggest gift from the west to India

The only two countries in Asia which never became European colonies were Japan and Thailand. Japan did not become a colony because it modernized in time bringing western technology of warfare to their country enhancing their competence to a level which was sufficient to keep the Europeans from invading their lands. Japan since beginning has been outward-looking and open to useful western ideas. Thailand, on the other hand was more like India – inward-looking, isolated from the west and oblivious to the rapidly changing world. The reason Thailand never became a colony was a result of a deadlock between the French and the English where in the end, both of them decided to leave it alone. Thus, western influence was restricted in Thailand unlike the other countries of Asia.

Thailand, even to this day is ruled by a monarch.

Thailand continues to be ruled by a monArch The photo is that of the pResent king, Bhumibol Adulyadej

THE FLAME OF ‘BLACK GOLD’

The CAG reports have opened people’s eyes and made them more conscious towards India’s problems

Once again mind-boggling figures have instigated an eruption of political sentiments in the world’s largest democracy. As India sits back to witness it’s history’s biggest scam (so far atleast!), our leaders have once again resorted to their mechanical activity of maligning their rivals. A critical analysis of governance of the country is an integral part of any democracy. But when the sole purpose of impeachment reduces to a mere motive to destabilize the ruling party, then it becomes a blatant abuse of the democratic institutions of a nation. The need of the hour is for all parties to collectively ponder upon the mining policies in India and take speedy action to implement reforms that would revive the sorry state of mining sector in India. But that doesn’t seem to be the case right now.

Protests against mining activities are on the rise

Before I actually start with what I have to say, it is important to point out that the ongoing situation in mining industry poses a major threat to the development of our nation and thus needs to be carefully comprehended in a holistic and unbiased manner. I would encourage you to go through the post without any reservations in your mind for any particular political party, bureaucracy, public or private enterprise or any particular section of the society. The whole affair of corporate assisted scams is a relatively new trend in India. But this shift in the nature of top-level corruption is not arbitrary. These scams have been very consciously nurtured in an ecosystem of obsolete government policies in vigorously changing times.

The Genesis

Mr. Sukh Ram nowadays delivers speeches on Ganshi

The present trend of scams in India began in 1994, just 3 years after the economic reforms. The protagonist being Mr.Sukh Ram from the Congress camp who was caught with Rs. 3.5 crores under his bed during a C.B.I. raid and thus became the first Cabinet minister to be arrested in 1996.From then on, a wave of corruption swept the telecom ministry. In the name of ‘market-friendly policies’, the ministers filled their own coffers and thus inflicted huge losses to the exchequer. Such was the frenzy in telecom industry that every conniving minister sought for the prime position in this ministry. A clear indicator of this is that over the period 1996-2007, the ministry has been headed by eight different telecom ministers. Another point worth mentioning here is that Rs. 1.76 lakh crore is an estimated loss given by the Comptroller and Auditor General (CAG) for only one particular spectrum allocation. The total loss has been estimated to be over Rs. 5.2 lakh crores from 1999-2008.

The era of PPP scams

Mr. A. Raja has been granted bail on 15 May, 2012

Public Private Partnerships have not enjoyed much industrial success in India. But, when it comes to scams ‘public private partnerships’ have worked out very well. Disinvestment has been a major strategy in the post-reform era. The aim principally was to gradually withdraw government’s hand in the industrial sector and encourage private enterprise through policies that would end the 40 year old license-permit raj in India. Unfortunately, these policies failed miserably to achieve it’s target to the extent that it was intended to. Numerous licenses, clearances and permits were still required to legitimize one’s enterprise. No person could obtain these without facing a significant delay and without bribing officials at every level of the concerned department. Hence, the opening of opportunities on one hand and the persistent tedious pursuit of licenses and permits on the other hand at the same time led to another sinister effect-political lobbying by corporates. Now, the top governmental officials worked in collaboration with private corporates to procure contracts and clearances. Thus, the level of corruption rose from bribing the local babu for a few lakhs of rupees to the present day scenario of bribing top-level ministers for thousands of crores of rupees.

Pertinence to the mining sector

Parliament has been completely disrupted due to turbullence caused by the coal scam

The mining industry has always been more controversial than any other sector in India. Unlike telecom industry, not only has mining industry’s role been challenged on economic basis but has also been subject to condemnation on lines of social and environmental issues (mass displacement, environmental and forest degradation, etc.). Since covering all these issues and do justice to them simultaneously is not in the capacity of a single post, only the political aspect of the whole crisis has been taken up. I believe that the economic, social and environmental issues can only be resolved through policy changes which in turn can only arise through political will. But unfortunately, when it comes to putting these changes in practice, successive governments have clearly manifested their hesitance. The State as well as the Centre, the ruling coalition as well as the opposition, all are equally responsible for the present situation. Recent events have thrown light on atleast one fact. There is one issue pertaining to the mining sector that needs to be resolved first – political

Why change policy?

Jharkhand, the coal centre of India has been headed by the likes of Shibu Shibu Soren and Madhu Koda

The present mining policies in India can only be categorized as archaic and obstructionist. Contrary to popular opinion, mining sector is not a battle between the rich & the poor, master vs. slave, private vs. public or capitalism vs. socialism. The resources of a nation belong to all it’s people and no particular person, firm or even any particular a government can hold complete and unchallenged jurisdiction over it. The firm that takes over a mine and the people whose lands are taken away for this purpose, both are suffering in the present regime. The poor lose their lands, livelihoods, health, culture, everything as a result of a 19th century land acquisition policy (Land Acquisition Act 1894, to be precise) that is continuing till date.

It is not a coincidence that Naxalites are present only in the mining regions where they dwell on the fear and insecurities of the locals

On the other side, the firms that overcome the herculean task of getting statutory approvals which take an average time of atleast 60 months (40 month.s for environmental clearance and at least 60 months for forest clearance) and land acquisition, have to face infrastructural handicaps like inadequate transport and power facilities. These inadequacies arise because these mines are located in the poorest regions of the country and are governed by the most corrupt ministers. This inevitably pushes the cost of production and subsequently also it’s final price. Another poignant characteristic of these policies is the aspect of resettlement & rehabilitation. The owners of the land on whose ancestral property, thousands of crores of rupees worth minerals are excavated are left to rot in eternal deprivation in an unknown land in hope of a ‘rehabilitation package’ that never comes their way.

The Nemesis

The Prime Minister’s resignation is being demanded by the opposition

Instead of pursuing the larger issues, the Parliamenthas taken to a pointless cock-fight

The result of this whole affair has been disastrous for India. The government has accepted that of the 90 thousand mines in India, only 8 thousand mines are legal (approximately 9%). This means that the estimate of losses shown by CAG reports (Rs. 1.86 lakh crore) is only a small part of the actual figure. Since independence, more than 3 million people have been displaced by mining activities. Apart from this, an unquantifiable amount of damage has been and continues to be inflicted on the environment. Due to inexpediency of our export policies, India has already exhausted all it’s high grade anthracite coal reserves and in spite of having the world’s third largest lignite reserves, our power sector continues to suffer due to disruptions in coal supply. The Coal Mines Nationalisation (Amendment) Bill has been pending in the Parliament since 12 years. The Mines & Minerals Development and Regulation (Amendment) Bill has not even been reviewed by a Parliamentary Standing Committee till date. It is now a week since the opposition has not participated in the Parliament. The ruling party has concentrated all it’s efforts in rebuking the CAG for it’s reports. Politicians continue to place their own interests before the nation’s good. Instead of mutually acknowledging the crisis and engaging in remedial action, the Parliament stands now in a political deadlock with neither party actually pursuing the bigger question of policy reforms. Unless that happens, coal will continue to burn the social, economic and environmental landscape of India.

THE SISTERS’ DILEMMA

Before you read this post, I want you to go through a small exercise first. Try naming all the Seven Sister States of India. Did you get all of them? Can you locate the ones you could name on the map? Congratulations if you could at least name all the seven states in which case you are among the 13% of the Indian professionals who can do that (mind you13% of not the general population but the well-educated, smart and sophisticated Indian professional class).

Violence has broken out in Assam along ethnic lines

Of late, Assam has suddenly taken centre stage in the minds of Indian people. On the surface, it seems that illegal immigration from Bangladesh is the cause of the violence. Rightwing parties in particular, have been at the forefront of the perpetuation of this rather parochial argument. This logic not only veils the complete picture but is also a cruel and blatant display of indifference towards the millions of people who have been living in this country since decades. It’s repercussions are now surfacing in the major cities of India in forms of communal violence in Mumbai, Allahabad and Lucknow.

Manmohan-Singh, the Prime Minister of India is actually an MP from Assam

Attributing all accounts of disturbances in Assam to illegal influx from Bangladesh evades the larger question of administrative instability in these areas. The Armed Forces Special Powers Act (AFSPA) has been in place in North-eastern India since 1958. Since the establishment of North Eastern Council in 1971 comprising of the 8 states of North-east India, it has been mandated that “at least 10% of the Budget(s) of the Central Ministries/Department will be earmarked for the development of North Eastern States”. Thus, the per capita expenditure in these states becomes significantly higher than the national average per capita expenditure.

Irom Chanu Sharmila has been on a hunger strike since Novembe, 2000 demanding repeal of AFSPA in North-east India

In spite of all these measures, internal security has still not been restoredin these states even after 54 years of the enactment of AFSPA. Four out of seven of the Sister States have witnessed major secessionist movements. Human rights’ violations have become commonplace in these areas. The Army which was in charge of people’s security has now become the biggest source of their insecurity. Higher expenditures have not directly equated to higher development rates. On the contrary, development in these states is significantly lower than the national average. The much necessary infrastructure development in these states cannot be called anything more than a sham.

So, what are the reasons behind this paradox? The reasons vary from region to region but even though these reasons may be quite subtle, there are broad, discernible trends that can be identified as the major reasons for the present state of affairs.

The red circle shows that only a narrow strip connects it with the rest of India

Firstly, geographic isolation is a major handicap in these areas. The eight North-eastern states of India together form a landlocked region bounded by Nepal, Bhutan, China, Myanmar and Bangladesh on three sides and only a narrow strip of land connecting it with the rest of India. Apart from this, the entire region is covered by hills which make infrastructural development very difficult as well as necessary at the same time. In India, railways is the most popular means of transport for both people and goods due to it’s low price and excellent network throughout India. But the North-eastern terrain makes construction of railway lines impossible in these parts.

Roads take a bad hit during the rainy season

Secondly, this region experiences the most extravagant rainfall pattern in the world. Both the places of highest annual rainfall and highest monthly rainfall are in the small state of Meghalaya (the name itself means ‘abode of clouds’). For four months, the entire region slips into a standstill. All activities have to be suspended for 1/3rd time of the year which further degrades an already deprived economy. Since, there are no railways, the only means of transport are roadways and waterways. Both of these take a bad hit during the rainy season. Roads are badly damaged and rising tides of Brahmaputra River makes transport of goods and commutation extremely difficult.

Right-wing party leader, L.K. Advani says immigration is solely responsible for violence in Assam

Before I move on to the most vital reason that is causing the present-day animosity in North-eastern parts, there is a particular misconception that needs to be wiped out first. Some narrow-minded people have often cited ethnic differences as being the major reason for insurgencies. Such jargon should never be treated more than mere rubbish that comes out as a product of an intellectually and ethically bankrupt mind. These reactionary views lack even the most pathetic levels of comprehension of the idea of India. Whenever such views try to invade into public discussions, they should be strongly condemned and shunned down. India has always been a heterogeneous society and this character has been it’s biggest asset. The cohesiveness of the Indian society stands threatened not by the differences itself but by those who try to spread such views. The real reason is something much different and much simpler.

Manipuri women protesting against the atrocities of AFSPA

For years, the North-eastern states have undergone very little development. The violence occurring in Assam is not a direct consequence of illegal immigration. It is in fact, a ramification of the failure of the government in providing opportunities. High unemployment and deprivation has led the natives to believe that immigrants are taking away their land, jobs and opportunities. What one needs to understand is that it is not any particular community that suffers from this lack of opportunities, but the entire society as a whole which is affected by it. This is not a social problem. It is one that has arisen from administrative incompetence. So now, the question is what are the reasons for underdevelopment in these areas? Apart from the two reasons already specified above, historical background is also a prime determinant. The North-eastern States became a part of British-India during the 19th century. The natives fought fiercely with the British but were defeated in the end. The British respected and feared the natives’ will and fierceness and never tried to force their rule on them. Thus, these parts experienced an autonomous state till independence. After independence, these states formed part of a single state of Assam and thus came under one common leadership and control. Seeing their autonomy under threat, a few people rose in protest in Nagaland and started demanding a separate country. These protests slowly turned violent and eventually took the form of guerilla-warfare. What needs to be kept in mind is that these protests never manifested majority opinion and worked on the lines of invoking terror among the masses and misleading them to rise against the government (exactly what the present day Naxalites do).Thus, Enter the Indian Army and AFSPA. Instead of pacifying the situation, they transformed a minor disturbance into a horrible nightmare. They turned out to be worse than the guerillas and openly used tyrannical means to exercise control over the region. Men, young or old used to be arbitrarily held and shot or tortured or sometimes, both. Women were raped openly and brutally. There is no doubt the Army aggravated an already sensitive but controllable situation. Owing to these events, the political situation in North-east never stabilized and the administration and economy, as a consequence decayed for decades.

Assam accounts for the supply of 25% of India’s petrol needs

The north-eastern region accounts for a major share of India’s natural resources. Assam alone accounts for the supply of 25% of the petrol needs of the country. It is also one of the richest regions in biodiversity in the world with Kaziranga and Manas being in the list of UNESSCO’s World Heritage Sites. Swami Vivekananda said that this was the most beautiful place in entire India that could fall second only to Kashmir. All the more amazing are the people of this region. Apart from possessing and preserving one of the richest cultures of the world, their entire value system and moral culture is an epitome of perfection. Three of the four states that have banned alcohol are in this region (Manipur, Mizoram and Nagaland). Honesty and sincerity are effortlessly put to practice in the daily lives of ordinary people throughout North-east India.

The beautiful Nohkalikai Falls in Meghalaya

These North-eastern States together not only form a vital part of the Indian union but is also the conscience of the nation itself. All of India’s wars against environmental degradation, human rights’ violation, social & economic disparity and militancy will be won or lost here only, in the beautiful and bloody Seven Sister States of India.