Shoot the Messenger

Along with the Coal scam, the 2G spectrum allocation had put the government in a tight spot but it is fighting back. First it announced a slew of "reform" to distract people's attention, it is now trying to change the composition of the CAG inspite of the constitution not even envisaging a multi-member body as it had suggested for the Election Commission. The government has also tried to destroy the credibility of the CAG since it cannot remove him from service (his process of removal is same as that of impeachment of a judge of the supreme court) and so cannot punish or coerce him. A JPC had been convened, but by sheer strength of numbers, the government has derailing the process and JPC has done little or no work.

Now, it has brought out a new guy R.P.Singh, retired official to rake up an issue and even he doesn't really know what he is talking about. But by creating a controversy and confusion over the issue, the government can bury it and defend itself. The statements coming through are incoherent (some statements say he is only questioning the notional loss figure, some say the CAG mainpulated the figure, some say he was influenced by Murali Manohar Joshi). Even Sonia Gandhi has made a statement- seems the government is fast when trying to cover up its trail of corruption.


The question is only about the magnitude of the loss and the method of its estimation. There are no doubts about the fact that there was a loss and this is important. The CAG is constitutionally the protector of the public funds and so has to point out even the most minute cases of misuse or loss of funds to the public. CAG report is not a fault finding mission nor is it a fact finding mission alone, it is a report meant to correct previous errors and take adequate action to ensure it is not repeated. It is not the responsibility of the CAG to investigate criminal wrongdoings or corruption and to say the CAG has exceeded his constitutional mandate is tantamount to saying that the use of public money shall not be made public and shall not be scrutinised.

The government is behaving as if the CAG report has only mentioned one thing- there was a loss of 1.76lakh crore. While this forms only a small part of the Chapter 5 of the report dealing with financial impact, the government has highlighted ONLY this part of the report and has been attacking it and is pretending to have destroyed the report's credibility. The media has also given enough attention and airtime for the government's brainless banter. The government has also been mum on the other observations of the report. The report speaks about how advice of Minister of Law and Justice and suggestions of Prime Minister to reconsider pricing was ignored. The report also speaks about  issue of licenses to ineligible entities, undue advantage to Swan telecom and non fulfillment of roll out obligations by the new telecom companies (Chapter 4 of the report)

A government that has been reluctant to make any probes into the really serious allegations and obvious cases of its own misconduct, corruption and mistakes is now going to constitute a probe against the CAG. This is blatant misuse of power, arrogance and clear attempt to fool and misguide the people. In spite of all the clear evidence, the government is sticking to one aspect of the report- the notional loss figure presented in the report. Rather than investigating the fact that there was a loss, rather than analysing why the recent round of auctions went awry, rather than cleaning its own house, the government is simply trying to defend itself and throw mud on constitutional authorities that are meant to point out the government's flaws and ensure accountability.

These attempts by the government are a loud declaration that we will not abide by the rules, we are not accountable to anyone and we will do as we please. We will do whatever we can to hold on to power, we will try to fool the people, will never admit our mistakes and will not make any effort to serve the public. We can wake up someone who is sleep, but never wake up someone pretending to be asleep. The government knew what it was doing while throwing away scarce natural resources, we all ought to know why it happened and how it happened too.

But what is beyond doubt is the fact that there was a loss and only the amount of the loss is being questioned. This issue is never highlighted by the parties or by media eager to report on issues (sometimes in a biased manner) and sensationalise them. The loss amount estimate would definitely vary but a 2,700 crore loss estimate is stupid and too low. In the next post, I have explained the CAGs calculation of losses and one glance at it would enable all of us to given an answer to Kapil Sibal's question 'Where is the 1.76lakh crore?'

The details on the CAG report, myths about it, some important info about and government onslaught on the constitutional authority are given in these links-

http://www.thehindu.com/opinion/op-ed/cag-six-answers-to-clear-doubts-and-misperceptions/article2647710.ece

http://www.thehindu.com/opinion/lead/article2568360.ece

http://www.thehindu.com/opinion/lead/continuing-onslaught-on-the-cag/article3929560.ece

http://www.thehindu.com/opinion/lead/article3836708.ece?homepage=true

http://www.thehindu.com/opinion/op-ed/the-government-is-on-the-wrong-wavelength/article4116401.ece?homepage=true

Intelligent Honesty

In the Season 5, Episode5 of TV Sitcom Big Bang Theory, when Howard asks Raj and Sheldon whether it is true that they were sick of him always mentioning his trip to space, Sheldon says yes and Raj says no. Sheldon then goes on to say that they had different approaches as he was going for helpful honesty. Perhaps the world needs a bit more of Sheldon's honesty, perhaps that might solve a lot of communication gaps and arguments and pretence.

I do agree that it cannot happen all of a sudden- certain areas like international politics and diplomacy, our own politics, offices etc might remain so. But what is the need of dropping hints, snide and nagging remarks among friends and in close relationships? This is where honesty should come in first, not to give people a rude awakening and question their own self, but to be better friends and to build stronger relationships based on openness and honesty where each one helps the other and stays with the other.

But it must spread beyond that, not to give others a piece of our minds or to destroy their worlds, but to tell the cold, hard truth for mutual benefit. The obstacle sometimes is our belief in not making a person feel bad and being nice to them. Even a Malayalam proverb says that inconvenient and uncomfortable truths are best avoided. The mother of a friend of mine asked me whether I was good at being tactful and diplomatic since I was preparing for the civil service. She said it would be prudent to be so when handling politicians. This is when I remembered having read that the duty of a civil servant is to give unbiased, objective and fact-based views and opinions to the political executive. But this was thrown away by many and the genuflection and pusillanimity of such civil servants have been severely criticised.


Civil servants need to give honest, straightforward and objective advise. Their opinion must not be circumscribed by values (does not mean it should be completely neglected since the fact-value dichotomy is practical only in theory) since it is upto the political executive to give more weightage to values. But the benefits arising from giving advise that would be considered good or pleasing and the resultant entry into the good books have meant several civil servants become humble servants and sycophants. The really smart ones would give the advice, clothe it in sweet words and would express their views without having to sacrifice their morals and principles and yet not invite grudge or enmity. This type of disguise should be accepted perhaps. So would the disguise needed to correct and convince a team-member/team-mate until the work is done since resentment and ill-will can hamper the work. A threadbare evaluation could perhaps be done after the work has been completed.

What this means is that pure honesty and the blunt truth is more a mark of poverty in creative thinking whereas complete disguise and cover-up signifies lack of moral courage. We need morality and courage which is aided by wisdom and creativity to achieve the full and proper effect. There is no point in using disguises all the time, the truth has to come out. So when all tact, hints and snide remarks fail, I think it is better to just go with the blunt facts. But when it is brought out is as important as the how- when the person is in a good mood, when the work is done and it is time to analyse, when personal safety is assured and the other person's situation is also considered.

But currently, the interest in saving a person's face, fear of retribution along with greed means that honesty takes a back seat. Add to it our general lazyness and reluctance to exert our brains, it is difficult to get honest opinions and analysis. Suppose a person actually gives honest opinions and airs views and criticism independently, contempt and even hostility follows. This not only prevents the person from being honest, but the fear generated also drives others into submission and they easily conform to societal norms. So along with wisdom, courage and creativity, handling society and its criticisms also is essential to honesty.

'Satyameva Jayate' should become more than just our national motto, but also the basis of our government's functioning. It is hard to stay honest, it is even more difficult to begin to be honest and straightforward (I say again, not the naive or blunt honesty, but the sensible and intelligent honesty that I have described above). Still, a beginning has to be made and the best place to do it is with people close to us, they should be able to accept us for what we are and stand our newly found sense of honesty. If this can spread and the world becomes a little bit more honest with itself, inspite of the difficulties, I believe it would well worth the effort because in the end, truth always wins.

High Impact Exams- Analysis and Recovery

For the last 3weeks, there has been little along the productive side except 10days of working out, lot of sleep and most importantly chill out and then freak out about what would happen in the future. I would be lying if I said the exam has not had an impact on me and for sometime, I thought it was just me, that it was just my usual habit of being apprehensive and nervous about everything, but realised that almost everyone who takes this exam is just as scared and apprehensive. It has been difficult to do anything that requires brain work, not because there are no motivations since I have done a lot of things without any motivation. It is only because UPSC civil service exam was high impact and I would like to figure out how and why the hangover is still not wearing off.

I have faced tougher exams with averages around 20%, highest score was near 50% and everyone was swearing at the person who set the paper. We felt they were trying to prove a point, it was almost a vendetta. This has happened a lot of times too. I have also faced exams where I have been downright pathetic (10 out of 75) but there were people who were disappointed they would get only 70  out of 75. There have been exams where the syllabus was simply too vast to cover for a normal human being and yet in none of these situations have I experienced the sort of fear or apprehension that I currently feel.

I have written exams that have determined my future- AIEEE, JEE, BITSAT and I have been pathetic in some, decent in a few and been depressed due to my own failure. I have faced the uncertainty too since results were out only after a couple of months. I had spend two years preparing for these entrance tests and yet nothing compares with the impact that the civil service exams have had. In fact, the dedicated preparation for civil service exams lasted for just 7months. Even though the gap between each stage is only 3months, it adds up to a process that takes well over a year and that nearly exhausts our patience.

Over 4.5lakh people apply for civil service and only 2.5lakh take the prelims and then only around twelve thousand qualify for mains. So the number of people applying wasn't highly significant. One could say that those who qualified for the mains exam were highly competitive and I have not competed with such high numbers. The only similar experience being the battle against 600 batchmates during the first two years in college and a large majority of them were extremely competitive.

Chemistry was a subject that I was very used to and perhaps the only time in college I put my heart and brains into a subject. It did bring a lot of success and happiness to me and so preparing for Chemistry optional paper wasn't a colossal task. The essay paper too was not totally new to me thanks to my habit of blogging, pointless free writing and rambling on about even insignificant issues. But there was preparation practice required for these too, adding to the over all impact.

This how the impact took shape, not on their own or all of a sudden- they added up to form one huge complex force- a huge syllabus, long gestation period, competition, life altering experience and the difficulty in syllabus have not come together at the same time ever before. However, the major impacts came from a few issues that I have not faced before.

The syllabus covered was definitely vast, with General Studies alone enough to drive a person into insanity. The mere fact that it has no specific syllabus except vague statements like issues of current national and international importance, science and technology meant that one had to swallow a lot of information and analyse them. Public Administration was entirely new to me and had to start from scratch here. I was then informed that rbrn those who have been teaching public administration for over 30 years haven't become experts in the field and cannot comprehend it fully. Add to it the issues of Indian public administration, its evolution and the challenging times we live in, the labyrinth made me lose my mind at times. Another challenge was about writing 2 exams of three hours each every day and that too on consecutive days. It was physically draining, but the scheduling made it a bit easier. After GS on the first day, non-evaluative language papers on the next day meant little pressure and the essay paper as the lone exam on the third day gave a little breathing space for public administration two days. Chemistry was a good 10days later and this meant even though the schedule was challenging, it was not a harrowing experience.

After the exam, it is the fear and apprehension that remains and the extremely scary worst case scenarios. These too add to the impact through regular aftershocks. Thus, the coming together of a lot of small incremental factors and a few major factors mean that the exam has an impact that does not easily wear off. In fact, I am glad that there is a 3month break before the next stage because for the last few months, it has just been about me- me wanting to do the exam well, me wanting to study a lot, me spending most of my time reading and writing, me being aloof from everything, me giving up a lot of things that I like, me, me and me. I even lost focus of why I want join the civil service in the first and it too was infiltrated by the "me, exam" obsession.

It is time to get back to shape, literally and figuratively, since I have gained not just a few extra kilos. Need to get back to quizzing, novels, movies, but most importantly if I am to get what I want or rather be what I want and do what I can because I deserve it, I have to gain back why I want to do this and only that can make all this effort and hardship worthwhile.

Optionals, Fear and Madness

I have no tales to tell and the tales I want to tell do not want to jump out on to a screen, but they want to appear on paper. It wants to be struck off, over written, torn off and thrown away and then take shape- a poetic way of saying I want to write and not type.But do indulge me for what is to come is far worse than what has been said.

I would like to talk about Public Administration and Chemistry, to be more specifics, the similarities between the two subjects apart from the fact that they were my optional papers for civil service exam. Do not fear a tirade about how my exam went, it is not significant but the level of madness and even stupidity that was the entire venture would be clear if you read on.

Firstly, Chemistry and Public Administration are about developing theories to suit observations. Then, theories explain these observations which were made on the basis of the very same observations. For example, quantum mechanics and its postulates like nodes (areas where probability of finding electron), spin quantum number are theoretical concepts and have little or even no physical equivalents. But they were developed to explain wave functions and phenomenon like paramagnetism. In Pub Ad, ideas like New Public Management, New Public Administration evolved according to needs and aspirations of the people, it was influenced by the situation on the ground and to address these situations, new ideas came forth.

As the observations change, theory keeps changing too and even going back to old ideas- initially administration was about minimal state involvement but this involvement should be organised and formal. But NPA and NPM concentrated on greater government involvement to address concerns of the time and now, it is back to minimalist government that empowers people and reduces the power and discretion in the hands of government. This is true of any science and in chemistry, the formation of a bond is a theory that has undergone "radical" changes- from the simple dot structure to wave functions of valence shells overlapping to now the entire atomic orbitals interacting with each other. This is an example of not just the evolution of the fields and its rapid evolution, but also theory suiting to fit ground realities. Even the concept of formation of activated complexes in the transition state theory was used to explain observations and where later proved
right (similar to the Higgs-Boson hypothesis)

Wilson and Weber wanted to give a proper structure to government administration and initial theorists like Fayol, Taylor, Follett were the first to propose ideas and build fundamentals. They were then discredited as mere proverbs and were then substituted with a more humanitarian view of the field of administration by Simon, Bernard, Argyris and Maslow. In chemistry too theories were built, discredited and then new ones established- right from the valence bond theory to formation of molecular orbitals.

Another one is about organic chemistry where very few reactions follow a general pattern set for compounds of a particular, the reactions are unique and exceptional and depend on the temperature, pressure, concentration of reactants and products, their stability- in short, the environment. This is what F.W.Riggs said about administration too- one must consider the ecology in which the administration works to get a proper understanding of the administration. As the conditions change, the administration also changes.

This is also an example of inaccuracy in predicting the outcome of reactions using theory. Predicting outcomes based on theories is not an accurate process. This leads us to is the bounded rationality theory developed Herbert Simon- we make decisions based on information available to us about conditions, influences, resources, restrictions and also needs and requirements. But the entire information is not available to us which circumscribes our ability to make decisions or predictions in the case of chemistry. This is very true about organic chemistry and public policy making- we do not know how people will react to a policy, we do not know how the markets, industries, agriculture and common man will be affected by allowing FDI in retail and we are not sure whether it is a positive or negative chance. In chemistry too, what factors influence a reaction or even how exactly a reaction proceeds is unknown to us and the best we can do is make predictions. We can accurately solve wave function for only 4systems since it is almost impossible for us to consider the various electron-electron repulsions and electron-nucleus attractions.

Thus, inability to predict outcome based on theory and so having to use trial and error to fix up a particular theory or decision, incomplete knowledge and inability to comprehend influences and events, making theory based on observations and then proving them (which is of course what science is all about), the evolution of this theory (creation, acceptance, destruction and then new theories), importance of environment and very few possibilities of a general cover it all concept are some of the aspects similar to both Chemistry and Public Administration.

I do not say that this is a sane idea, there will be similarities between all fields however insignificant, narrow and far apart they are. But these are the two subjects that I opted for a mind-numbing series of exams and for which I did prepare. This one is more like an answer to a straightforward question- "You have studied these two subjects. Are there any similarities and if there are, what are they?"

As for my assessment about my exam, it keeps shifting each day. Some days I feel I am in with chance, quite reasonable one too. Some days, for no apparent reason I feel insecure, scared and hopeless. This keeps shifting and I feel hopeless about different papers each day- one day it is GS, another day Chemistry. A week later it is Malayalam and then it is Pub Ad. So the next three months are going to be a cycle of this- incessant mood swings, uncertainty and sometimes even fear and depression.

Trivandrum Lodge

Been trying to put finger to keyboard for sometime, but then after having written over twenty five thousand words, just as part of civil service exams, on paper makes one lose the free flow on typing to pour out my mind. I have backspaced atleast a dozen in these three lines and it has taken me well over 15minutes to consolidate what I had to say. But then, I am not sure about what I have to say? Today's movie? About the state of humanity? Corruption?

A movie review is long overdue and the movie that I saw today definitely deserves one not just due to the unreasonable incessant criticism it has faced from many quarters, but also because it is actually a good movie. The recent trend in Malayalam movies has been about adultery, women drinking, free exploration of sexuality and liberal references to swear words and kickstand jokes. This movie is not about that, it is not about a lot of adultery and then projecting it as the new reality or alternative.

This movie is about contrasts, it shows how different things can be, it shows how meaningless some relationships can be, how even some relations that can be frowned upon can have a meaning and also about tributes to some of the most wonderful and memorable characters in Malayalam cinema.

I would divide the relations in the movie into three- the first one involves just merely the physical act of love, lust and desire. It is about just the superficial aspects of it and about fulfilling one's basic needs and changing to suit situations. The characters of Dhwani, the one played by Devi Ajit, the one who gives others the false movie hopes etc fall into this category. This dominates the movie for more than forty percent of its duration. Then comes relations where people are actually good, but circumstances force them into difficult choices, seemingly shady and meaningless lives- in my opinion Abdu (Jayasurya), Kanyaka (Tesni Khan) and Thangal (Babu Nambudiri) portray such characters, the seemingly unholy partnership between Thangal and Kanyaka and the character that doesn't appear, but is actually an important part of the story- the original owner of Trivandrum Lodge, the mother of Ravishankar (Anoop Menon), too would fall in this category. This constitutes another twenty five percent of the movie.

By the time this sixty five percent of the movie was done, I had almost given up hope and felt this was one of those "new generation" stereotypes. But that is when the real purpose of the first sixty five percent became obvious- it is only as contrasts and backdrops for the real love stories- the one between Relton and Peggy Aunty, then the characters played by Bhavana and Anoop Menon, Anoop Menon and his son, this son and his young, innocent love with a classmate.

Perhaps this is the way everything is in life- there are those who do things just for the sake of it, some since they have no choice, some for the wrong reasons and with wrong priorities. But then there are some who do it for the right reasons, due to the right motivations and with the right intentions- a small minority.

The movie pays small tributes to one of the strangest, yet the most powerful driving force characters in one of Padmarajan's movies- Thangal from Thuvanathumbikal makes a brief cameo and is still in his old job. The portrayal of this character in both movies have been nothing short of exceptional and it does require skill to create such a character- acknowledged by borrowing the character full with references to the support received by Thangal in Trichur from Jayakrishnan.


Even the movie's title is meaningful not only because it brings together the characters or forms the backdrop, but it is actually a witness to all these relationships and the people tied together in it. The movie initially seems like a colossal waste of time, full of beeps and expletives and nothing even remotely resembling a story. But it takes on a new life when the story that makes sense of everything appears and gives us a glimpse of true love and if we can identify this play of contrasts and relations, then the movie becomes a truly enjoyable and meaningful one.

PS- If I sounded overly analytical or methodical, I put it down entirely to post civil service exam hangover.

Here's to the Craziest Others

This post is different from whatever I have done in the past and is about some of the maddest, whackiest people I know. Suits my current situation and has nothing to do with current affairs, politics or any of the numbing administration stuff.

Lets start with Vigilante aka Arjun Variar- you would know he is around from a mile away, not just due to the booming voice, but by a trail of smoke rising and people fleeing the area. Perhaps it is my madness that I became good friends with him during our Chemistry CDCs and as collegues and roomies in Hyderabad. One of the whackiest stories about him is this- P.V.Rao walks into his room on April 1st in our 3rd year as Anti was at his usual 'dota playing, keyboard on the lap, oblivious to even an atom bomb near his ass' mode. P.V.Rao also sees an X-Box360 in the room and goes on a tirade about bad effects of gaming and why it is bad for us. Anti then goes on to say that it is not just a gaming console but can be connected with networks and arranged together to form super-computers to perform highly complex calculations because it has a high processing power. He then goes on from there and leaves P.V.Rao flabbergasted to say the least.

This was Anti's version of events, you may choose to believe the story (I do) and that it did happen on April 1st, but then there is something you cannot deny. He told me this during April 2009, and later this news article appears http://www.bbc.co.uk/news/technology-11168150 ... Machu _/\_

Shalini Lahiri- I do not know her well, but I know that she won Oasis single-handedly for BITS-Goa in 2008, was part of Quiz Club, LDC, BITS Herald brought out by DOJMA, DEPP and DOSM and a few others more I have definitely missed out. An extremely talented person, totally whacky and stories are still told about the legendary QotB (Quiz on the beach) she hosted in 2010(I missed it since I was in Bangalore) and she should be rocking in IIM-K now.

Karan Mehta- I really do not know where he is and what he is doing now. But he is the closest I have seen to a hippie. Apart from the punches he threw on Joe Sunny whenever they met or the attempts to hug and call me "Mallu Gunda" or the fact that you could see him walking along the hostel corridors at any time of the night, the designing he did for the Zephyr FashP in 08 was amazing.

Prakash Murali- Genius, bohemian and diogenes of sinope fan- he once said that 'Give me Idly and Sambhar and you shall make my day' or something of that sorts. He could be anything he wants to be- from a high paying software job to a researcher. Oh, wait a minute, he did refuse a job at Oracle and took up research at IIT-KGP after doing his PS at Chennai Mathematical Institute (he could have got PS at one of the high stipend stations too). He also ran the 'Fist of Rice' programme which collected and provided food for orphanages and old age homes in Goa over a year.

Varun M- Well, he is compared to Sheldon Cooper from BBT and that, I would say is a compliment in many ways. He is brilliant in his reasoning and analysis, knows the in and out of things that he is involved with, whether it be football or quizzing and this makes his analysis even more perfect. When I think about fact-value dichotomy in public administration, he pops up into my head! This is because-
Fact- Test-1 the day after crucible
Value- Doesn't really matter. Test-1 is more important
Fortunately, I was able to convince him otherwise or rather, his analysis somehow said that another fact (rivalry) existed and the rest, as they say, is history. But I would like to recount that history- along with my crazyness, it was his composure under the circumstances that saw us through in TCCQ-2011. It allowed me to be extra crazy and take risks and be on my own rather than try to contain myself. The National Finals at Taj Bombay too was fun in a very nerdy sort of way and it was a really good time.

Ajachi Chakraborty- I first knew him as 'the guy who did not qualify for the junior quiz, but kept shouting out the answers!!' He came to Bengaluru from Goa for two college quizzes (he did win another event and recovered costs I think), returned on the same night to Goa via Londa (had a drunk monk puke on him) to attend another quiz. He is also the discoverer of a restaurant in Chicalim that is now growing in popularity among BITSGians. I think he is also the first person from the quiz club to get a DISCO but more importantly, his shares on DC under the folders 'Do not let thy left hand know what thy right hand is doing' are remarkable due to its name alone and his own movie 'Whatsup' directed, edited, scripted, acted and shot by himself is a work of art rivalling Warhole. He is now working with Tehelka.

These are some of the maddest, whackiest, craziest people I know. Yes, it is biased- only mallus and quizzers, Karan Mehta being the only exception. But these are the people I know and I have met and it is not about the most brilliant or the brightest, but just people who are different and who are regularly called crazy or sometimes even mocked. But as Steve Jobs said, here's to the crazy ones and this post is about the craziest ones I have met.

Good Goals, Wrong Policies, Incremental Implementation

When there are signs of income not meeting expenditure what would we do? Cut down on luxuries, reduce the quantities that we consume and spend efficiently. But what if we continue splurging on movies and beer but cut down on food, education and in case of those with families, their own children's education and health? As if it this wasn't enough, all assets that can produce any income are given away for free and those that produce income are sold in bits and pieces to sustain the family. That is exactly what the government is doing right now. It signs multi-billion dollar defence contracts (a & b), has set up an aid agency with a fund of over 15billion US dollars (c), sells of stake in profit making PSUs and sustains loss making ones (Air India) and throws away resources to crony capitalists. In addition, it is also increasing inefficiency in its spending and is like buying a rickety worn out,leaky petrol vehicle, always filling it to the full and roaming around without going anywhere near the objectives simply because the head of the family is being promised more years at the head by a few loyalists. These loyalists would do the same to any other from the family who is willing to undertake more spending measures.

When considered on their own, these policies have merit. Coal blocks were allotted to increase power production and cement manufacturing, but no one bothered to regulate the pricing of coal and cement produced. Revenue maximisation was not the government's goal, but that was the only goal for several companies who kept hoarding spectrum and coal without exploiting it for prices to rise and sold off stakes in these companies which mean that benefit of low cost access to resources were cornered by these fake companies that were allotted resources. The government's response to the Supreme Court judgement on the Presidential reference related auctioning of resources point to more such instances of resources being available for grabbing by those with sufficient contacts.

Selling shares in PSU is fine- government should keep its head out of business, promote competition and involve only in essential services to the people like public transport, education and health. But government simply wants to withdraw from every such service- 25% reservation for socially and economically backward children is a fine step, but that does not absolve the government of its responsibilities to run and maintain schools to protect the Right to Education. By providing managed care, euphemism for private control of the healthcare sector, it is disregarding its own duties. It should also mean preserving profit making entities and disposing off liabilities. But crippling profit making bodies and then selling them for scrap or pouring money down the drain is not sound economics- the highly profit making routes to the middle east available during prime time was allotted to private carriers. The government also regularly withdraws and cancels Air India services without prior information to this sector thereby stranding passengers and prompting them to distrust the national carrier.

There is little doubt about the dieselisation of motor vehicles and its use by fuel guzzling SUVs and mobile towers, but across the board increase of prices without measures like increased vehicle taxes, compulsory use of renewable energy for mobile towers etc to discourage increasing sales of diesel vehicles is non-effective and only adds to inflation. Even after price hike, diesel price is lower than petrol and so all it does is reduce the fiscal deficit. Tax on non-commercial vehicles, differential pricing and adding renewable energy for mobile towers would have been more effective and would have tackled more issues like environment concerns as well.

By allowing FDI in retail, government has only opened the sector for exploitation by foreing MNCs. Do we not have the capital and technology to track, transport, store and preserve our agricultural produce? Flipkart and dozens of courier services trace all its packages and give advanced estimate of delivery dates. If these organisations, with a fraction of the government's and existing Indian retailer's capabilities and networks can do it, why can't it be implemented by us? The goal can be met by our own efforts. Moreover, why will a foreign investor be interested in helping our agricultural sector if we cannot do it ourselves?

The goals are fine, but the decisions taken to implement them are flawed and will not even contribute in the slightest to achieving these goals. In fact, it will only favour a small section of the population, address problems only incrementally and leave out the larger issues of concern. So, since decisive action is absent, what can be done is decisive withdrawal. By simply withdrawing from all activities, in agreeing to the neo-liberal, market-oriented, minimalist state and new public management shibboleths, the government is condemning people to the vicissitudes of economy whereas it provides stability to multi-national corporations through Bilateral Investment Promotion and Protection Agreements(e).

This withdrawal also means policies like withdrawing subsidies and support mechanisms to the people. As I have mentioned in previous posts, many of these subsidies involve high leakages and many who require support are excluded from benefits whereas the real beneficiaries are the middle-men and traders and administration- diversion of grain to open market, black marketing and hoarding facilitated by appeasement of officials. By claiming to cut down, government tries to raise public voice for the maintenance of a system that does little benefit to the public but sustains a huge machinery of corruption. It is a bluff, it would not want to shut down a system that so nicely ensures steady income for many and generates figures that can impress development activists.

But there are no attempts to reform and make sure the benefits reach the targets, set up adequate storage for times of dire need, reduce rotting of stored grain and make sure it is not exported simply because we do not have adequate storage capacity. Right now, huge quantities are rotting due to pathetic storage conditions and millions go hungry. Yet India was one of the highest exporters of rice (f & g) and the drought-like in situation of 2012 could hit rice output. Not possessing adequate storage facilities is used as excuse to export rice which will drive prices up in a critical year and drive millions into starvation.

It is unfortunate that the real issues are not tackled and there are only attempts to attain goals through contorted, incremental measures which rarely benefit the target population. If this continues, it is not just the economy and stock-exchanges that will take a nose-dive, but the many who claim to protect the aam admi while actually fooling them might just find themselves out of jobs.

FDI in Retail- The Grand Game and its Winners

A slew of reform measures announced on Big Bang Friday is still dizzying to some and perhaps that was the intention too. The most contentious has been the FDI in retail which was put into cold storage in November 2011 due to protest from UPA allies and opposition parties. The retail sector in India is worth 411.28billion US dollars in 2011, is still growing and is expected to reach 804billion dollars by 2015. Current proposal aims at opening of retail sector to FDI in 50 cities with a population of over 1million and for stores that have large space requirements, they will be allowed to operate within 10km of cities.

Proposed Conditions on FDI
1) 50% to be spend on back-end infrastructure, logistics, agro-processing- to ensure it promotes development of infrastructure and logistics. This is one of the main reasons to allow FDI in retail as about 1/3 of agricultural produce is wasted due to lack of storage facilities (space and cold storage) and transport facilities
2) Sourcing of 30% of the products of SME sector in India (This might not possible due to WTO rules and so the  30% sector could be sourced from anywhere in the world)
3) 50% of jobs to set aside for rural youth (it says that the stores will be in urban areas and offering job opportunities for rural youth seems ambiguous)

Advantages-
1) Foreign exchange earner (16billion in the next 3 years according to some estimates)
2) Investment in logistics and supply chain will reduce wastage and reduce prices for consumers
3) Better prices for farmers as they can sell directly to stores or engage in contract farming
4) Technology in logistics
5) Lower price for consumers as wastage and middle men are reduced

Disadvantages-
1) Foreign retail giants like Walmart, Tesco, Danone etc have a history of actually leading to unemployment in the neighbourhood as they create price wars and bankrupt nearby stores. Walmart alone has revenues of 450billion dollars worldwide, putting it at around 20th place based on revenue if it was a country.
2) After other stores are closed, they have a monopoly and can jack up prices
3) Due to removal of other buyers of produce, retailers become the only buyers of farmer produce and hence can determine terms of trade
4) Difficult to track the condition sourcing of SMEs and restricting to India might not be possible. Also difficult to track the investment requirement in logistics
5) 16 billion USD is the expected FDI in retail over a period of 5 years. India’s trade deficit is 185 billion dollars and current account deficit is 4% of GDP (almost 78billion dollars) so the foreign exchange argument falls flat
6) Walmart is known for driving up unemployment in areas that it operates by closing down other stores in its neighbourhood

Uncertainties-
1) Since states have the freedom to decide FDI in retail, it respects India’s federal structure. But most of the Bilateral Investment Promotion Agreements (BIPA) provide uniform treatment of all investors across the country and due to this, investors can force states to open up their markets.
2) Kirana stores or the usual stores that we use provide many facilities door delivery, credit and also have friendly relations with customers. Large scale retailers might not be able to replicate this
3) Lack of quality retail space in the large scale format and the high rent for such outlets might reduce profitability and the fact that they can operate only in cities will mean that rents will always be high.
4) Indian organised retailers are suffering large losses currently with Reliance losing Rs.247 crores, More losing Rs.423 crores and so asking questions about the viability
5) Inability of large retailers to turn a profit in places like China also makes their future uncertain
6) India is not a uniform market as tastes and preferences change even within the state and so responding to this would be huge challenge that top-down management of large retailers might not be able to respond to

The impact is limited by the fact that only 9 states are going to permit FDI in retail and restriction to cities with population above 1million. And so, if restricted to current levels, their impact would be minimal. But this is perhaps only the first step to a larger freedom that will be given to FDI in retail as far as geographical spread and investment caps are concerned and if that expansion happens, it will be definitely negative for our neighbourhood stores, farmers and consumers. The simple fact that foreign retailers are highly interested in the Indian market is alone enough proof that they intend use the opportunity and get a slice of the huge Indian retail market pie but whether the pie is big enough for all or not and whether they will add to the pie is something to be seen. In such a situation, for the government, it would have been wiser to let retailers open stores only in a smaller number of cities. Perhaps that is exactly what retailers will do, test the waters first instead diving deep and choking, considering the high uncertainty in the sector and challenges. Due to the cap of 51%, foreign investors would in all probability resort to Joint Ventures with existing organised retailers (Walmart has wholesale partnership with Bharti and Tesco with Trent from Tata). This would provide these retailers with much needed cash, technology and logistics expertise.

Although a leftist ideology, Walmart chains spread a consumerist culture under the shadow of consumer choice, whereas consumers are really left with just an illusion of choice ( http://www.ritholtz.com/blog/2012/05/the-illusion-of-choice/ ).

But it is not just about the actual policy that one must consider. A few questions must be asked about the purpose of such a step. Hillary Clinton met with Mamta Banerji on her visit to India and the purpose of such an act is not yet clear. Although officially nothing was discussed, the US Secretary of State meeting a Chief Minister must have some heavier interests than just congratulating a woman on reaching the post and reading this with the fact that Walmart sought US government help in entering India raises some questions (a, b). The Joint Ventures will also allow large Indian retailers sell off part of their stake in ventures that are loss-making. It will also have to be seen whether this will lead to opening of more stores or just expansion of existing ones and streamlining the process which could actually result in direct job loss through downsizing.

The biggest beneficiaries of the current policy will be foreign investors in the long term, Indian organised retailers in the short term and the government since its shock and awe tactics have diverted attention from the coalgate scandal. The possible losers are farmers who will lose any bargaining power they had, smaller stores that employed a large number of people and consumers who will face higher prices in the long run and who will have to bear the brunt of products forced on their pockets.

References
http://www.thehindubusinessline.com/opinion/article3911207.ece?homepage=true
http://www.firstpost.com/business/kirana-vs-wal-mart-busting-the-big-myths-of-big-retail-459490.html
http://www.business-standard.com/india/news/wal-mart-facts-fdi-lobbyists-may-not-like-you-to-know/183849/on

Smart Politics and Living Under Foreign Rule

What do you do when you have your backs to the wall and you have no way to escape? What would you do when you are facing the truth that you have been corrupt, unfair and favoured the wrong people? You wait for the right time to fight back. That is exactly what the UPA has done and it has displayed some brilliant political acumen in these games.

It didn't make any proper statement in the Coal scam except an excuse of a statement by the PM, allowed Parliament session to be washed out and heaped blame on constitutional authorities and shifted the blame on to states for recommending how to allocate coal mines. It handled 2G by sending A.Raja and Kanimozhi too was in jail on related charges. Kalmadi was in jail on the commonwealth games scam and now they are out and we know that their trials will not happen in the near future. Who knows, they might be excused for lack of evidence or because none of the witnesses or the accused are alive after 30 years and even the report might be missing due to termite action or just corrupted computer files. This is an altogether different issue though.

It waited till the ash and dirt from Coal became unbearable and started the smokescreen with Diesel and added LPG to fuel the fire and inflation too. I admit, some amount of price rise in Diesel and LPG was inevitable but it seems increasing taxes on luxury cars and dual pricing for diesel would just be too harmful for the Society for Indian Automobile Manufacturers who asked the government for support due to falling sales in vehicles ( a ). This is inspite the evidence that SUVs are outselling normal passenger cars ( b ). Gensets, SUVs and mobile towers total to about 22% of diesel consumption and add to it passenger cars and you get the segment of dieself consumers who do not deserve subsidised diesel ( c ). It is transport vehicles that require subsidised diesel especially with State owned Transport Corporations being stressed as it is and yet they serve an important public purpose. Subsidising SUVs owned by the super-rich and Public Transport needed by the masses is not an equal policy, subsidy should be given to those who need it. I have no qualms about LPG cylinder subsidy limit and implementing gas pipeline projects and exploring resources might just stem the price rise here. But maintaining subsidy for MPs and MLAs is unfair, although it really does not matter though most of them do have other under the table sources of income and a puny increase LPG prices will not be of much impact for them in the reality.

FDI in retail is being hailed by Indian corporates, the american investors and the US President. Previously I had suggested that rating agency downgrades, Hillary Clinton's visit to India (d & e) and Obama's speeches (f & g)  were all aimed at only pressuring India to adopt policies favourable to USA. They have got what we wanted but due to the inability or perhaps the vested interests of the powerful in our country, we get nothing in return. A strict visa regime exists, US still subsidises its agriculture heavily, aids Pakistan and sees us nothing more than a consumer.


It seems Imperialism is happening from the inside out, our powers are handing our country on a platter for the world powers to conquer. During the colonial era, we were only a market to source raw materials and to dump their products which destroyed our indigenous industry, agriculture, trade and crafts. The same thing will happen again and we are doing this to ourselves.

The political acumen of this bold ploy is clear when we consider the fact that there is little chance of allies putting the government in trouble. The main allies are Tamil Nadu's DMK, TMC from West Bengal and NCP mainly from Maharashtra with SP from Uttar Pradesh supporting it from outside. The condition of none of these allies are secure except maybe that of SP but already people are not happy with the rule and the difference between SP and Mayawati's BSP was just 3% in vote share, an extremely narrow difference which can shift. TMC is now a joke in West Bengal with everyone who raises a voice automatically becoming a maoist. NCP -Congress alliance in Maharashtra is in trouble as issues like Adarsh scam and farmer suicides have dimmed their prospects. DMK is not in power in TN now and so for all these parties, their only salvation lies in continuing the status quo since a change in it will only mean loss of position without chance of any gains.

Our Government did all this to rid itself of the policy paralysis tag, but none of these commentators, rating agencies, foreign heads of states are interested in the pathetic condition of human life in this country. None of those who hail the reform measures (h) have a stake in that, they are only bothered about themselves and this is a fact that government should realise. Perhaps the government knows this but it easier to hand over everything to private companies, both foreign and domestic, and then say it was forced by market or coalition compulsions. It is easier to let free the animal spirits of those who clamour for reforms for their sake and the so called experts and industry and market voices are concerned only about their growth, profits and share prices. They are not even remotely bothered about the enormous human cost of their growth and accepting this voice as the voice of India is exclusion that no amount of hot-air concepts like participative and inclusive governance and aam admi can compensate for.

This government is for the rich, by the rich and of the rich alone and if it does take steps to address other issues, it is mere tokenism. Take issues like Lokpal, Women reservation, Land acquisition, Food Security which are in pending in parliament. Take issues like child and maternal health- India is nowhere near reaching the millenium development goals (i & j) and our poverty is more than that of sub-Saharan Africa (k & l) . International Food Policy Research Institute's Global Hunger Index ranks India 67th out of 81, worse than Pakistan, Myanmar and riot-torn Sudan (m). It is here that governance deficit and policy paralysis has its greatest impact. This is where the government should act and act without hesitation rather than just signing over everything to market forces.

The government will ride on the wave of these reforms to the next election- 18months away when the impact of these reforms would only have started to be felt but it will bury the issue of scams and corruption, pathetic governance and development for the people and policies tailor made to suit the interests of corporates and made under pressure from foreign governments.

Coalgate- Part 2: Analysis and CAG of India

The previous post talked about the actual facts behind what has become infamous as the Coalgate scam. It is similar to the 2G spectrum as a natural resource was handed out cheaply to private entities who made profits selling it and did not, as the government claims, result in lower price to the consumer and went against governments own declared intentions and goals and there were favours given to a chosen few. The difference lie only in the specifics of how it happened.

The similarity continues in the government claiming Zero loss and blasting the CAG for sensationalising the entire issue. I just do not get it. Don't these people have even common sense required of politicians? The CAG did not announce these in a press conference! He submitted his report, which is his constitutional duty, to the President. Our previous President kept it with her till the last day in office and then placed it before Parliament. Due process was followed and nothing was out of the line and irresponsible comments against a constitutional authority is irresponsible and childish.

There were also claims that the CAG figures are wrong and exaggerated. Let us assume that the CAG figures are wrong to the tune of 99%. So, there was a loss of only 1,860 crore. Cheap money?? It is our money and the government is responsible to us and must explain why it threw away this much money! Another fact is, the CAG has not said that this is the exact loss to the exchequer, this is based on calculations merely to give a sense of the magnitude of the issue and can be off by some margin. Rather than giving a lot of explanations on possibilities, it is the responsibility of the CAG to bring more clarity into the picture and say what is the potential loss and the CAG must be lauded for this work.

Next comes the issue of whether CAG crossed his constitutional mandate. The CAG was called the most important constitutional authority by Dr.Ambedkar and that too for a reason. This is the only institution that scrutinises the governments work, generates over 70,000 audit reports along with Principal Accountant Generals in the states, detects procedural and financial irregularities and in case when financial irregularity is high, detect administrative irregularity as well. It is being alleged that CAG cannot delve into policy matters and he can only audit the accounts. If the CAG is only an auditor who has to ensure the balance sheets match, then he does not have to take an oath to uphold the Constitution and law whereas ministers take an  oath to bear faith and allegiance to the Constitution and work in accordance with the Constitution. The CAG is an independent Constitutional authority and can be impeached only in the manner of a Judge of the Supreme Court. It is highly unlikely that a mere accountant or auditor would require such freedom and high constitutional status.

What separates the CAG from normal auditors is not mere accounting but its audit of propriety and audit of efficiency, economy and effectiveness. This is not mentioned in the constitution but this is the worldwide practice of Supreme Audit Institutions and also the legacy of colonial rule. The CAG can ensure whether the expenditure was necessary, whether it attained its goals and whether it did so at lowest expense. Its reports can also go into whether the governmental action is improper even if it is legal (like arbitrary allocation of coal blocks). Thus, it can go into whether a decision was correct and this has been the accepted practice so far.
(Arora and Goyal, Indian Public Administration Institutions and Issues, Part8,The Accountability System,"Comptroller and Auditor General of India"
http://www.thehindu.com/opinion/lead/article2568360.ece
http://www.thehindu.com/opinion/lead/article2568360.ece )

A popular misconception is that CAG has fixed government's corruption and indicted individuals in the case. CAG reports are meant as a tool of self-correction in departments and to rectify these errors. The hearings of Public Accounts Committee, which uses the CAG report and is assisted by the CAG, are not meant to act as hearings on disciplinary actions or court hearings but meant to fix the system and correct flaws. Therefore, a personal attack on the CAG is uncalled for and if it does happen, it is just like what we all would do when someone points out our mistakes- we go on the defensive and the best defense is to attack the individual.

If the government intended to rectify the errors, it would have recognised the report and accepted that there were errors in the system and we would rectify it. But this can happen only if these were errors in policy and system because accepting these errors would also mean admitting that individuals are responsible for these errors. Therefore, the only viable defense for the guilty is accuse and attack.

These are the facts and these are the issues. I leave it to you to judge. I hope it does more than become a brand building exercise for P&G.

full disclosure- I have been preparing for civil service exams and most of what I have written about CAG come from the books and newspaper articles I have read and from my father who works in the Indian Audit and Accounts Department headed by the CAG