Renu Pokharna

Change and its limits

In Corruption, Electoral Reform, Parliamentary Reforms, Politics on January 7, 2014 at 2:09 am

The Aam Aadmi Party has had spectacular success, of that there can be no doubt. But even its most hardened and committed supporters will agree that the government in Delhi will last only a few weeks — at most, a few months. It simply will not have the time or opportunity to prove its capability to govern. Its success has ironically thrown into sharp relief the best and worst of our current political system. It has established the vibrancy of our politics and the maturity of the electorate. At the same time, it has made clear the disjunct between the exercise of individual franchise and the delivery of stable governance. What one must question is the positive of a political system which enables the expression of protest but does not promote a steady and enduring government.

Kejriwal deserves the accolade of “man of the year”. His conviction, tenacity and simplicity are admirable. But compared to another “aam aadmi” who has also had comparable impact, albeit on a much larger scale, his limitations are obvious. Unlike Pope Francis, he does not have the mandate or experience to deliver. This is not his fault, but that of our political system.

Pope Francis was a little known Jesuit priest from Argentina called Jorge Mario Bergoglio. The cardinals of the papacy surprised the Catholic community by electing him the 265th successor to St Peter a month after Pope Benedict had roiled the church by resigning. At the time, the church was engulfed in a sexual scandal, the Vatican Bank was facing charges of corruption, papal institutions had hollowed and parishioners were leaving in droves. Pope Francis could not have inherited a more difficult chalice. His response was “aam aadmi” in character. He rejected the “lal batti” Mercedes and stayed with his clapped-out Ford Focus. He did not move into the apostolic palace but chose a two-room abode. He celebrated his 77th birthday with four poor people and a dog. His every action has exemplified humility and compassion. More substantively, he challenged conventional orthodoxy. He commented that the church was “obsessed” with abortion and contraceptives, and in response to a question on what he thought about gay priests, he replied “who am I to judge”. Further, he sidelined the traditional synod of bishops and appointed his own group of cardinals to advise him on bureaucratic and institutional issues.

The jury is still out on whether Pope Francis will succeed in revitalising the Church, and there is comment that he might be more style than substance. But what is clear is that this “aam aadmi” priest has the authority and tenure to convert intent into policy. He is the supreme unchallenged head of the Church and unless he decides otherwise, he will stay in that position for life. He can change the shape and content of the Church. In contrast, Kejriwal is shackled and will be fighting another election in a few months. The AAP deserves its moment, and whilst no one can or should dilute the significance of its achievement, it must not be surprised if “good” and “honest” people everywhere feel uneasy about the longer-term impact of its leadership in government. After all, it is in for the short haul; avowedly populist; without experience; and its economic programme does not hold up to rigorous scrutiny.

The AAP phenomena will be franchised. Civic groups across the country will be emboldened to take up political cudgels. The electoral response to these new political movements could be disproportionately strong, especially in urban constituencies. This is a healthy trend, as it will shift the contours and narrative of politics. It will upend conventional wisdom. No one in the Cong-ress or the BJP expected the AAP to do so well. Their belief was that the voter would ultimately cast her vote conventionally. The voter would not vote for a party that had no chance to win. “Why waste a vote,” would be the logic. I suspect this is no longer the refrain in party headquarters. The realisation must have dawned that the 60-million-odd new voters are singing to a different tune. They are fed up with the lack of governance and corruption. They do not like the political choices on offer and are looking for alternatives. This is all good. The shake up of old-style feudal politics driven by money and opportunism is long overdue.

At another level, however, this franchisee phenomena does raise some concerns. For two decades now, we have had coalition governments at the Centre, and it has become clear that coalition politics does not allow for statesmanship. It does not give leaders the room to take decisions that pay off in years rather than months. It is also a major reason for corruption. This is because of the required “give and take” and the compulsion to raise finance for the next election, not to speak of the individual impulse to make hay while the sun is shining. The silver lining has been that most state governments have been governed by parties with a clear and decisive majority. This has facilitated clearer (not necessarily cleaner) and better governance. The question, therefore, has to be asked: What if the politicisation of protest movements were to push state governments into the miasma of coalition governance? Would that be in the public interest?

The conditions for a revolution are created when people feel alienated from and disgusted with the institutions of government and the quality of governance. These conditions translate into action when people with passion, leadership and language give expression and meaning to this feeling. The revolution endures if the new political structures and systems reflect and respond to underlying social and economic realities. Take, for example, the American revolution. The people felt alienated from the rule of colonial Britain and disgust at the gap between the reality of social hierarchy and the rhetoric that Americans were “born, the heirs to freedom” for decades before the revolution. They did not, however, take to the streets until George Washington, Alexander Hamilton, John Adams and Thomas Jefferson gave expression and organisation to this discontentment. The principles of the revolution have endured for over 200 years because the political system has in the main reflected and responded to the interests and aspirations of the American people. In similar vein, Kejriwal and the AAP have given language and meaning to the disgust felt by people towards traditional political parties. They have marshalled this disgust into a brilliant movement of protest. The first-past-the-post system of parliamentary democracy has not, however, given them the authority to deliver. The question that the AAP must thus contemplate is whether its impact might not be more enduring and positive if, rather than looking to govern and risking exposure as an emperor without clothes, it was to use its organisational skills to compel a review of the political system and better alignment to the longer-term demands of a pluralistic, diverse, young and subcontinental polity?

Indian Express, 6 Jan 2014

Poetry to Plumbing

In Uncategorized on March 20, 2013 at 2:37 am

Spanish philosopher Maimonides ranked different kinds of charity in ascending desirability: giving money to somebody you know, giving money to somebody you don’t know when they know who gave it, and giving money anonymously to somebody you don’t know. But he believed the highest form of charity was giving somebody a job. It is important to reflect on how much of the gigantic “inclusion” spending in the last decade has given people fish rather than taught them how to fish — another classic Maimonides quip. But money is always welcome and the budget allocation was useful. More interesting than money, however, was the signalled shift in the narrative to jobs in the budget speech and Economic Survey. India transformed into a high-inflation low-growth economy because of government spending authored by the National Advisory Council — mostly individuals who have never created jobs. The new narrative suggests that jobs will be placed at the heart of policymaking and election rhetoric. Has “naukri” become a more potent electoral pitch than “garibi”?

I propose that many solutions to our education, employment and employability (3E) problems lie in praying to one god: jobs. This shift needs innovation more than money; not more cooks in the kitchen but a different recipe. The chapter in the Economic Survey on seizing the demographic dividend is a wonderful synthesis. We need to start action by tweaking five historic regulatory thought worlds.

One, labour laws, unchanged since the British wrote them, make an employment contract irreversible. We get a toxic brew when this labour market equivalent of marriage without divorce combines with the criminalisation of politics and politicisation of trade unions. Our labour laws have huge costs: high informality, poor productivity, sub-scale enterprises (more dwarfs than babies), substituting people with machines, and small low-skill manufacturing (only 12 per cent of our employment but China’s weapon in getting people off farms). About 90 per cent of our workers employed informally do not get leave, minimum wage, benefits or workplace safety. We need to make these four issues non-negotiable but make employment contracts more symmetric.

Two, the Employment Exchange Act of 1959 makes an employment exchange a physical location staffed by civil servants registering job applicants for employers who will walk in the door. But employment exchanges are failing miserably. Last year, they gave three lakh jobs to the four crore people registered. We need to repurpose them as career centres offering multiple products (assessment, counselling, apprenticeships, training and jobs), multi-mode access (phone, SMS, email and web), and make sure they are run by people who place employers at the heart of operations and are punished or rewarded by matching outcomes.

Three, ancient labour laws (1948, 1952, 1976, etc) make it mandatory for employers to deduct 49 per cent of gross salary for retirement, healthcare and insurance. But in a cost-to-company world where benefits are part of gross salary, these high mandatory salary deductions breed informal employment. Hundred per cent of net job creation since 1991 has happened informally because low-wage workers cannot live on half their salary. This is amplified by the poor value for money, bad service and monopolies in employee benefits. We can start with allowing employers to pay their provident fund to the New Pension System (NPS), and health insurance (ESI) to insurance companies.

Four, the Apprentice Act of 1961 is silly and must be replaced. It restricts trades, prescribes durations, does not unbundle theoretical and practical training, artificially caps numbers and mandates a licence for every apprentice. It is why India has only 3 lakh apprentices while Germany, Japan and China have 50 lakh, 1 crore and 1.2 crore respectively. India must recognise apprenticeships as classrooms rather than jobs that complement bookish knowledge with practical exposure. Apprenticeships have the additional upside of learning while earning (most employers are willing to pay stipends), matching (test drive, resume signalling value), relevance (employers decide curriculum) and scale (higher expansion speed limit than traditional classrooms).

Five, many of us working in skills now realise that you can’t teach somebody in six months what they should have learnt in the 12 years of school. We are not asking for the vocationalisation of school education. If anything, schools must focus on broad and strong foundations because of changes in the world of work (Class 10 is already the new Class 8 as a hiring filter). The recent Pratham report reinforces what employers feel. We are not asking for much but are not getting it and we can’t manufacture our own employees. Enrolment ratios are yesterday’s war and shifting the focus of the Right to Education Act from hardware to learning outcomes and teacher accountability is urgent.

A story about Einstein giving an exam has a student asking, “But how can the questions in this year’s exam be exactly the same as last year’s exam?” Einstein quips “Don’t worry, the answers are different this year.” This story synthesises India’s 3E dilemma; the questions in education haven’t changed since the Radhakrishnan Committee (1948), Kothari Committee (1968), National Education policy (1986) and the National Skill Policy (2009). The questions in employment have not changed since the Labour Investigation Committee (1946), National Commission on Labour (1967), Second National Commission on Labour (2002), and the Economic Survey (2013). But the answers are different because 10 lakh young people will join the labour force every month for the next 20 years. And 200 million already in the labour force need retooling.

Policy masquerading as good politics (subsidies, legislated rights, poetry without plumbing) got this government bad economics (high inflation, low growth, weak currency). But jobs represent a unique intersection. Formal sector employment changes individual self-esteem, healthcare, education and nutritional outcomes in a way that no subsidy can. An additional upside is the dua (or blessings) of the individual and her family.

A jobs narrative in politics is overdue, clever, and inspiring. Now all we need is courage and execution.


14 Mar 2013, Indian Express


Is development Narendra Modi’s best defence?

In Uncategorized on January 26, 2013 at 1:22 pm

There can be little doubt that Gujarat is India’s dragon state. The past decade has been the best since Gujarat became a state in 1960. Average annual economic growth, at 10.5 per cent, is two and a half percentage points higher than that of the nation. Achievement on the industrial front is to be expected: Gujarat is India’s workshop along with Tamil Nadu and Maharashtra. The surprise is Gujarat’s agriculture. At 12 per cent a year, it has clocked to a Chinese rhythm, while the whole of India struggles to tick past the target rate of 4 per cent. All this has made the Gujarati richer than the average Indian by about a third.

Gujarat has had 14 chief ministers. Narendra Modi is the longest serving – since 2001. As the past decade coincides with his tenure, he deserves much of the applause. Industry leaders hail him as the Prime Minister India never had. Such encomiums grate on those who see India as a vibrant and compassionate society, not just a thriving economy. Gujarat reflects in abundant measure the ‘Beijing Consensus’, which the Economist described as ‘going capitalist, staying authoritarian’. Gujarat is the wrong place to look for social justice. It has been a schizophrenic society. The rage that burst through the fissures in 2002 was long seething. That explains why a Muslim mob could so readily set fire to a train with fanatical Hindu political volunteers on board and the bestial retaliation against Muslims that followed, probably with state complicity.

While Gujarat’s politics is certainly not a template, there is much that the rest of India can learn from its economic model, allowing for certain unique factors. With 1,600 km of coastline Gujarat has long been a mercantile state. Being at the intersection of the Silk and Spice routes, it has a tradition of enterprise. Surat was India’s principal port till the British shifted their affection to Bombay. This is where the East India Company’s flagship Hector dropped anchor in 1608. Gujarat has a progressive administration, in part a legacy of the British. The princely state of Baroda was equally forward-looking and laid the base for the state’s chemical and pharmaceutical industries.

Administrators like V G Patel and former union commerce minister Manubhai Shah encouraged start-ups by setting up institutes for entrepreneurship training and for providing venture capital funding, even braving disapproval from the Reserve Bank of India. Learning from China’s special economic zones (like Shenzhen), Gujarat allowed development of ports – private and with the state as partner, in the 1990s. A chief minister like Chimanbhai Patel, notorious for corruption, was a practitioner of Chinese leader Deng Xiaoping’s practical philosophy of judging a cat by its catch, not colour. Nikhil Gandhi, the founder of Pipavav port (now operated by AP Moller-Maersk) recalls Patel telling his finance secretary to ‘in a bania state, think like a bania,’ when the official objected to taking a greenhorn like Gandhi, with no previous experience, as a port partner. Gujarat would gain even if Gandhi gave up midway, Patel reasoned; it could complete the project and get a port for half the price.

Modi therefore had a solid base upon which to build when he assumed office He has also been very lucky. There have been a string of good monsoons during his tenure, which is significant for a semi-arid state with a history of uneven and erratic rainfall: dry spells pulled agricultural growth into negative territory in almost half of the preceding 40 years. And even as Modi assumed office, India approved the use of genetically modified cottonseeds for commercial cultivation. From being an importer, Bt cotton has made India the second largest producer and exporter of cotton; Gujarat accounts for a third of the country’s output, most of which is genetically tweaked.

But Modi is also an unabashed liberaliser. When attacked for his port privatisation policy, Modi is said to have remarked that ‘the people of Gujarat are very enterprising and they want minimum government’. Some of Gujarat’s minor ports (as state-domain ports are called) handle more cargo that major ports (owned by the central government), so much so that minor ports are now called non-major ports! Rising from the devastating earthquake of 2000 and leveraging its reserves of minerals, arid Kutch has attracted cement, steel, power and chemical industries. It is a global hub for pipeline manufacture. This is where the Adanis have set up a deepwater port with a large industrial enclave. Drinking water from the Narmada is now being supplied through a pipeline. Work on extending the Narmada canal for irrigation began last year. At one time people were fleeing Kutch. Now they are flocking to it. With 32 per cent growth over a decade, Kutch was the second fastest growing district in the state after Surat, according to the last population Census. It is a metaphor for Gujarat.

Modi can also claim part of the credit for the state’s stellar growth in agriculture. A Supreme Court ruling early in the last decade allowing an increase in the height of the Narmada dam has helped. Modi’s contribution is the ‘Jyotirgram’ program that assures farmers around eight hours of subsidised power at off-peak time for pumps though a separate Rs 1,200 crore electricity grid. Power rationing also conserves groundwater. This has by and large spared rural homes from power cuts, which were frequent when pumps were hooked to the same network.

A vigorous check dam movement provides insurance against weather shocks. This was a fall-out of nasty droughts in the 1980s and 1990s. Social workers provided the impetus. Village folk, who had made it big in Surat’s diamond industry, sponsored the movement and spread the message, memorably though a 300-km mass march across Saurashtra. As chief minister Chimanbhai Patel gave official support. Modi has put the programme on skates by cutting red tape and providing technological support like satellite images to locate the water soaks. He is also keen on converting farmers to drip irrigation. A focus on outcomes, rather than on outlays, decided against housing the scheme in a government department. The Gujarat Green Revolution Company claims considerable success, though figures are not in the public domain.

Similar success is claimed for a five-year Rs 15,000 crore tribal development programme aimed at doubling household incomes among 15 per cent of the state’s population living in hilly and forested areas. The touted gains from drought-resist hybrid corn seeds supplied by Monsanto and farm implements provided by John Deere to work the kerchief-size plots would need independent verification.

Modi has also fixed the agricultural extension system, which is broken in most states. Led by the chief minister himself and braving the May sun, tens of thousands of officials traverse the countryside testing soil, supplying high-yielding seed and exchanging information in a celebration of agricultural outreach during the so-called Krishi Mahotsav (farm festival). It is an exercise that other states should emulate.

Anyone who has travelled in Gujarat would vouch for its roads – only Tamil Nadu perhaps has a better network. The Word Bank, which financed the road-building programme, has compiled its happy experience in a book as a lesson for other states. Easier access to markets and suppliers has flattered both industrial and agricultural growth. Following the example of Malaysia, whose tourism industry piggy-backed on roads laid to promote industrial development, Gujarat is drawing in tourists who are persuaded to take a look in by Big B’s catchy (kuch din Gujarat mein guzariye and Kutch nahin dekha toh kuchh nahin dekha) advertising campaign. M Thennarasan, the district collector of Kutch, says the 38-day festival at Dhordo in the salt encrusted Rann attracted 70,000 tourists last December, up from 32,000 in the year-ago month.

Gujarat’s strengths in manufacturing have profited from Modi’s salesmanship. Like former Andhra Pradesh chief Minister Chandrababu Naidu, he is an evangelist for industrial investment. The bi-annual Vibrant Gujarat melas are an occasion for Modi to flaunt his popularity among non-resident Gujaratis and to receive tributes in the form of investment pledges. Many of them do not materialise, but the commitments still add up to a lot. Since 1991, Gujarat has received $7 billion in foreign direct investment. It ranks fourth in FDI behind Mumbai and Delhi regions. What is significant is not where it is in FDI rankings, but where it has come from. In the 1990s, Gujarat was low down in the list. But it has climbed up the rungs despite not being known for IT and financial services (that get much of the FDI) and falling short of the frills of life: good schools, non-veg food and booze. Prohibition is official policy, though liquor is available for a price.

By slashing red tape, providing an administration that is said to be low on corruption, making land easily available, and assuring industrial peace (despite occasional strikes as at General Motors), Gujarat has attracted marquee industries. With Tata Motors, Peugeot, Maruti and Ford setting up plant or planning to, Ahmedabad has become an automobile hub like Mumbai-Nashik-Pune, Chennai and the national capital regions. Industrial enclaves, (known as Sirs, or special investment regions) to be set up along the new high-speed Delhi-Mumbai rail line for heavy goods trains, will add to Gujarat’s manufacturing muscle. Transit-oriented development conducive to public transport could make the new cities models of low-energy urbanisation.

Modi’s innovations in administration are also noteworthy. Administrators from the district collector down are encouraged to implement projects beyond their remit – the ambition of these programmes and the enthusiasm with which they are executed allows Modi to size them up. Feedback gathered through monthly grievance redress exercises over video links. An annual retreat brings chief minister and officials together for an exchange of experiences. Modi likes campaigns during elections and between them. There are campaigns to get the girl child in school, stop the killing of female foetuses, promote sanitation, provide nutrition supplements and encourage birthing in hospitals.

Some of these campaigns may be high on hype. During a week long tour of Saurashtra recently, I found the state buses in dire need of a wash (though they run on the hour and take you there). The bus depots were also filthy. Even a prime pilgrim centre like Dwarka had mounds of garbage. The road leading to Dholavira, the largest city in India of the 5,000-year-old Harappan civilisation, was deplorable. This experience is hard to reconcile with the claims made for the Nirmal Gujarat campaign launched in 2008.

Gujarat’s health attainments are way below its level of prosperity. The death rate of infants (under one year) is the same as the national average. There is a yawning gap between rural and urban areas; the death rate being 51 and 30 (for every thousand born). The rate and disparity is much lower in states like Tamil Nadu (25 and 22). This does not mean that economic growth has been futile. Gujarat has reduced the infant death rate by 20 points over the last decade. But Tamil Nadu has done better with a reduction of 30 points.

But literacy is an area of cheer. The latest Census shows that the state has done better than the nation. It has also closed the gap with Tamil Nadu, and done much better than that state in rural literacy.

Even economic success must be tempered with caution. High growth in the farm sector bodes well for the state. The experience of Brazil and China shows that agricultural growth is two to three times more poverty reducing than growth in other sectors. But on the industrial front, Gujarat’s growth is capital intensive, unlike Tamil Nadu, which leads the country in number of factories. A danger to watch out for is crony capitalism that can flourish under a charismatic and authoritarian leader who is convinced of his certitudes.

Last May I met Kanubhai Kalsaria, three times BJP MLA at his official house in Gandhinagar. Nineteen days after a 175-km walkathon from Bhavnagar to the state capital, he was nursing his sore feet with hot water fomentation. The protest was against Karsanbhai (Nirma) Patel’s cement plant, which will lay waste to fertile fields and small industries like onion dehydrators and cotton gins that keep his constituents gainfully occupied. Kalsaria was telling Modi to put people first.

Gujarat is the last refuge of the Asiatic lion. The big cat sits at the top of the food chain.

In his zeal to attract large industries, Modi should not ignore those lower down in the pyramid. That would be a mistake like his failure to take all communities along.


2 Mar 2012, CNN IBN