Renu Pokharna

Archive for June, 2012|Monthly archive page

Do Government School Teachers in Tamil Nadu educate their own children in Government schools or Private Schools?

In Education on June 24, 2012 at 3:32 pm

Detailed data obtained from the Tamil Nadu Government on this is interesting and revealing. Mr. T.K. Chandrasekaran, a retired Government official in Tamil Nadu, filed a Right To Information (RTI) application with the Tamil Nadu Government in 2009 asking for the following information:

  • Number of teachers teaching in Government or Government aided schools in Tamil Nadu
  • Number of teachers teaching in Government or Government aided schools in Tamil Nadu who send their own children to Government schools
  • Number of teachers teaching in Government or Government aided schools in Tamil Nadu who send their own children to Private schools

Mr. Chandrasekaran says he has received information from most of the districts over a two-year period. It has taken patient and persistent follow-up with every single District Education Officer (DEO). On occasion, he has had to go to the higher authorities including the State Information Commissioner, before the DEO acted on his request. The whole exercise, he says, cost him over Rs. 40,000. In one instance, the DEO of Kancheepuram district said he would provide the requested information only if a fee of Rs. 4,099 was paid to cover the costs of compiling and sending the information, which Mr. Chandrasekaran promptly did. He later filed a complaint against that DEO with the Tamil Nadu State Information Commission which ruled in Mr. Chandrasekaran’s favour and ordered the DEO to refund the amount to him!

Many DEOs provided the data requested. Some went beyond their call of duty and not only provided the data requested, but also listed the names of the individual teachers and their children as well! A few of the districts are yet to furnished the information, despite repeated reminders. Very little data has been received so far from the Chennai Corporation which runs the Government schools in Chennai.

Although data has been received from many districts, it is unclear if the data provided

  •  includes data on the schools and teachers in every single government school in those districts, or if some government schools have been left out;
  • refers only to Government school teachers or if it also includes teachers in Government-aided schools in Tamil Nadu.

The single-handed effort by Mr. Chandrasekaran, as a public-spirited and concerned citizen, in unearthing this data is most commendable. He has compiled all the information he has received so far and graciously shared it (data compiled by him is available in a spreadsheet). I have also crunched through the data provided by him to come up with district-wise summary spreadsheets  for high school and higher secondary school teacher data and primary and middle school teacher data. Further details can be had from Mr. Chandrasekaran (who can be contacted via email at tkcsekar2009_AT_gmail_DOT_com). He has the hard copies of all the responses received from the districts and communication with the DEOs, if someone is interested in documenting all of it.

Based on the data provided by him, which spans both rural and urban Tamil Nadu, here’re the findings:

Primary and Middle School Teachers in Tamil Nadu

Out of a reported total of 47,030 primary and middle school teachers in Government schools, 36,322 teachers (77%) were reported to have school going children of their own. Of these 36,322 teachers,

  • 27% (9,757 teachers) sent their children to Government Schools and
  • 73% (26,565 teachers) sent their children to Private Schools.

For perspective, there are 214,440 teachers in Primary and Middle Schools in Tamil Nadu including Government Schools, Government Aided Schools and Private Schools (Source: Tamil Nadu Govt. Policy Note on Demand No. 43 School Education, 2011-12 page 10).

High Schools and Higher Secondary School Teachers in Tamil Nadu

Out of a reported total of 50,782 high school and higher secondary school teachers in Government schools, 32,595 teachers (64%) were reported to have school going children of their own. Of these 32,595 teachers,

  • 13% (4,281 teachers) sent their children to Government schools and
  • 87% (28,314 teachers) sent their children to Private Schools.

For perspective, there are 130,000 teachers in secondary and higher secondary schools in Tamil Nadu including Government Schools, Government-Aided Schools and Self- Financed Schools (Source: Tamil Nadu Govt. Policy Note on Demand No. 43 School Education, 2011-12 page p29).

The data obtained by Mr. Chandrasekaran till date amounts to a sample of

  • 17%  (36,322 / 214,440) of all (Govt and Private) Primary and Middle School teachers, and
  • 29% (32,595 / 130,000) of all (Govt and Private) High School and Higher Secondary School teachers in Tamil Nadu.

The percentage sampled would be higher if taken as a percentage of Government and Government-aided school teachers alone and still higher if taken as a percentage of Government and Government-aided school teachers who have school going children of their own. This is a fairly large enough sample for the data to be taken very seriously.

The data clearly indicates that a substantial majority of teachers in Government Schools in Tamil Nadu don’t trust the quality of education in the schools they themselves are teaching in. They are voting with their feet when it comes to educating their own children. If the teachers have lost faith in Government Schools, what about the bureaucrats, politicians and policy makers who are responsible for funding public education as well as making policy decision relating to education? It would be interesting to collect similar data for all our MPs, MLAs and Central and State Government officers across India to find out whether their children and/or grand children are studying in, or studied in, Government schools or Private Schools. If the it turns out to be predominantly Private Schools, as I suspect it will, the politicians and policy makers will have a lot of explaining to do.

We must systematically compile similar data for every other state in India to obtain a nation-wide picture of the preferences of Government and Government aided school teachers when it comes to educating their own children. It would be worthwhile to file similar RTI applications in every state in India to obtain data for those states.

The nation-wide District Information System for Education (DISE) could collect this data as part of the annual national school census conducted by them. Since the 2011-12 school census conducted by DISE is already underway, it may be too late to incorporate it this year.

Data of this kind has tremendous value in helping us think about ways of improving our education system and making policy decisions about it. In the absence of data, inertia and dogma tend to overwhelm the debate on what can be done to improve education in India, resulting in choices and policy decisions which are not optimal, given our past history, current circumstances and national educational goals.

The data unearthed by Mr. Chandrasekaran is extremely important in the context of the debate on the role of the Government and the Private Sector in helping us achieve the national goal of providing a quality education for every single child in India by 2020.


30 Oct 2011,  Education in India

NREGA 2.0: Does it have what it takes to be the poor’s portal to a brighter future?

In NREGA on June 24, 2012 at 3:31 pm

The motley crew assembled at a roadside tea stall in the blazing heat in Kondama Naiyuni Palayam village in Anantapur district, Andhra Pradesh, says the Mahatma Gandhi National Rural Employment Guarantee Scheme has let them down.

In New Delhi, NC Saxena, former secretary of rural development, and member, National Advisory Council, feels NREGA is letting the entire country down. However, that common perception is just about the only thing they share about the largest ever employment guarantee programme in history.

The Anantapur villagers — a snapshot from February 2011 — were rueing the fact that the number of days of employment that one could avail under NREGA were limited to 100 — before that cap became policy in late 2010, many households here in this parched part of India used to notch up much more than 100 days, the minimum guaranteed under the scheme.

So now they have to look elsewhere to eke out a livelihood during the unforgiving summer months in this dry arid zone where the only crop is groundnut. It would have been great, if the scheme could give employment for at least half a year, went the sentiment.

Saxena’s complaint is of an altogether different nature: he believes the scheme is inherently flawed, that it’s a plain-vanilla employment generation scheme where the assets created are of questionable quality. “Such programmes should be deployed only to fend off starvation. For rural development, the government should focus on labour-intensive productive programmes,” he says.

Welcome to the world of NREGA, India’s flagship poverty alleviation scheme that has captured more public imagination than it can ever hope to handle. As it approaches its seventh year, that’s also the biggest take home: it continues to polarise opinion. For some it’s just not enough, for others it’s a waste of time and resources.

The New, New Thing

Jairam Ramesh, minister for rural development, hopes a new set of guidelines and a reformed new shelf of works that are in place will satisfy the critics and give NREGA a new gilded edge. A new performance evaluation report of the programme — a compilation of independent research reports on various aspects of NREGA since 2007 — shows that the pros definitely outweigh the shortcomings.

“Just look at the very scale of the programme, can you expect anything but mixed perceptions?” he asks, leaning across the desk, in a building that the rural department shares with the agriculture ministry. The scale, then, was where the critics attained critical mass first.


NREGA was originally meant for the poorest 200 districts of India, but was soon extended to the whole country after UPA returned to power in 2009. UPA’s victory was ostensibly due to a rural surge in political support for the ruling dispensation thanks to the success of the scheme.

But none of the radical reforms needed mainly at the local governance level were in place when the scheme was forced to go pan-India. Suddenly, panchayats were awash with funds that they were untrained to handle, and tales of embezzlement started spinning out one by one. Not that panchayati raj institutions were untouched by scams until then, but the NREGA funds altered the proportions.

All of a sudden, scams involving panchayat secretaries and pradhans in back-of-beyond hamlets started making it to the front page of national dailies printed in English.

While there are no reliable figures to go by, conservative estimates has it that a pradhan candidate in gram panchayat polls spends Rs 10-15 lakh to get elected — against `2-5 lakh earlier — in the post-NREGA dispensation. they call it the bicycle-to Bolero syndrome, insinuating that NREGA has helped the pradhan trade bicycles for a Bolero jeep.

Panchayats 2.0?

Ramesh says all that will be taken care of in NREGA 2.0 which has a provision for certification of panchayat funds. This would be done through a district panel of chartered accountants, which is the first step in auditing.

A CAG audit of the entire programme will be in by November, and the report will be tabled in Parliament by December 2012. But assuming the pilferage is plugged to a certain extent, that still leaves a panchayat system untrained to handle the intricacies of demand-based employment with an added goal of asset creation.

This, the minister says, will be addressed through a unique transfer of funds. Starting this fiscal, the ministry of rural development will transfer 1% of its entire budget of Rs 99,000 crore to the ministry of panchayati raj to impart capacity building and training to panchayat functionaries.

Critics like Saxena wonder about the rationale of one ministry transferring its own funds to another ministry. “Why not increase the budgetary allocation for panchayati raj instead?” he asks, adding that such moves will only help create a patronage network. “Or better still, why not rename ministry of rural development as ministry of finance?” he asks.

The criticism regarding the populist politics of welfare would feel like a nudge when compared to the allegation that NREGA has distorted rural wages to the extent that farming has become unviable. Union agricultural minister Sharad Pawar even called for an NREGA holiday during the agricultural season.

But, at least on the face of it, that seems like an unfair criticism. The average number of days households were able to generate in fiscal 2011-12 was 42 — this was 47 in 2010-11 — which is too little to distort any labour market. Data from 2010-11 suggests that 70% of the works in the scheme have been generated during the agriculture lean season.

Ramesh says the single biggest impact of the scheme so far is in the upward revision of agricultural wages, even in areas where the actual wages are less than the minimum wages. What’s implied there is one of the major ancillary effects of the programme so far: making the concept of minimum wages a reality in the poorest parts of the country.

A report by the Centre for Study of African Economies, Oxford University that looked at monthly data from 2000-2011 for 249 districts across 19 states concluded that since the poorest of the poor are agricultural wage labourers, rural public works like NREGA constitute a potentially important anti-poverty policy tool. The report, released in March 2012, says that on average, NREGA boosts the real daily agricultural wage rates by 5.3 per cent.


But in parts of India where agriculture has been unviable for a variety of reasons, the NREGA wages have added to the misery. For instance, in Palamau in Jharkhand, one of India’s poorest districts, NREGA wages are higher than the actual wages for unskilled labour which are in the range of Rs 60-80 per day.

The ministry’s own performance evaluation report citing independent studies conclude that the agriculture labour shortage is not caused entirely by NREGA. “Trends of reduced labour force in agriculture precede NREGA,” it says pointing out that high non-farm wages is the major cause of labour shortage in the farm sector.

Economists like Pranab Kumar Bardhan, professor at the University of California, Berkeley, say that allegations that high NREGA-fuelled rural income has triggered inflation all around are heavily exaggerated. “NREGA gives jobs to very poor people and when they get more income, they cannot still afford high-value food items … they may eat more rice or they may shift from low quality rice to high quality … but that can’t buy eggs, and most vegetables. The food prices that are going up are those of relatively high-quality foods,” he had told ET on Sunday.

Where’s the Party

But are the new changes that the ministry has brought in too little, too late? Critics like Saxena sure think so. But the proponents of the scheme believe the renewed focus on drought-proofing — 10 out of the 21 new works allowed under NREGA relate to watershed development — and livelihood creation will set off a chain of positive developments in India’s hinterlands.

But the criticism here is that watershed works has to be a five-year-proposition, involving people’s participation. “NREGA and watershed development plans are just not compatible,” Saxena says.

In fact, seven years down the line, people’s participation remains a hard nut to crack. NREGA is India’s first rights-based poverty alleviation scheme, and by its very nature, it necessitates sustained campaigns to make potential beneficiaries aware of the provisions of the scheme.

This should have been the territory of political parties who could have mobilised the poor to take advantage of the scheme, gaining mass support in the process. Not the least in no-go areas under Maoist influence. But that hasn’t happened, and whatever little mobilisation has happened has been thanks to efforts by civil society groups.

“There’s a certain ambivalence among the political class. The whole bogey created in the name of agricultural wages is an example,” says Ramesh. “BJP MPs say they want to scrap NREGA, but their chief ministers Shivraj Singh Chouhan and Raman Singh want it to continue,” he chuckles.

An NREGA implementation programme in tandem with a massive awareness programme would have certainly helped the quality of assets built under NREGA. Villagers made aware of the reasons of their own backwardness would have realised that they themselves have a stake in the road they are making or the pond they are digging. But that’s more of an exception, true only in regions with high civil society activity.

Yet, there are states where the durability issue is being creatively addressed. For instance, in Maharashtra and Madhya Pradesh, NREGA is used to build kuchcha roads which are then black-topped using funds from the Chief Minister’s Gram Sadak Yojana.

In fact, the reluctance of the political class — including Congress and its UPA allies — to own NREGA is accentuating the single-biggest factor marring the popularity of the scheme: delayed payments of wages. Around 50 lakh households who availed NREGA work in 2010-11 turned their back on the scheme in 2011-12, mainly because they had lost faith in the scheme thanks to wage delays exceeding a year.

The NSSO survey on NREGA findings in 2009-10 indicate that in Andhra Pradesh, only about 68% of households received payments within 15 days; in Rajasthan, 10% of the households received payment within 15 days; and in Madhya Pradesh 23% of the households received payments within 15 days.

What this would mean is a reversal of one of the biggest gains so far: mitigation of distress migration out of parts of Bihar, UP, AP and Odisha. The poorest of the poor who undertake such seasonal distress trips in search of livelihood — to the fields of Punjab from Bihar and UP; to the brick kilns of Andhra from Koraput-Bolangir-Kalahandi belt in Odisha — are losing interest in NREGA because there is no guarantee that work would be opened in time, and even if they are, that payment would be made on time.

What’s on the Job Card

The government is hopeful that technology and dovetailing of NREGA with the Aadhar project will address the wage delay issue to a good extent. One stopgap measure on the ministry’s part so far has been to reinvent the wheel: suspending wage payments through banks and post offices, and going for cash on an ad hoc basis.

The ministry feels that all such warts would pale as NREGA emerges as an entry point for a decent future for the less fortunate. Already, 15 days of employment under NREGA will make one eligible for insurance under the Rashtriya Swasthya Bima Yojana.

In NREGA 2.0, one member per each household that has done 100 days under NREGA will be selected for a basic 3-month training in skills like carpentry and plumbing under the National Rural Livelihood Mission, thus making NREGA work as a portal to organised labour.

The aim’s lofty enough: From a backstopping social security net to an entry point to a bright, possibly, urban future. And if that happens, for a rural poverty alleviation scheme that has become the staple of urban cocktail conversation, NREGA would have come a long way.

5 Ways NREGA 2.0 will Address Legacy Challenges

Skill Training: The logical next step, from manual to skilled. One person from each household that completes 100 days of work will be trained under NRLM on a range of skills like carpentry.

CAG Audit: An annual CAG audit — limited to the utilisation of NREGA funds — will help bring in more transparency. This year’s report will be in by November, to be submitted to Parliament by December.

END to Minimum Wage Row: The AP High Court ruling that NREGA payments below state minimum wages amounted to forced labour had put GoI in a quandary. The ministry will now amend the NREGA Act to put an end to the controversy. Safeguards to ensure that states don’t arbitrarily jack up minimum wages will be put in place.

MoRD funds for MoPR: The rural development ministry will transfer 1% of its entire budget of Rs 99,000 crore to the panchayati raj ministry for capacity building and training of panchayats. This, it hopes, will bring in a sea change in NREGA implementation at the ground level.

Rural Sanitation: NREGA funds will be deployed to promote rural hygiene. For every toilet built (estimated cost of Rs 10,000) Rs 4,500 will go out from the NREGA kitty. The mandatory 60:40 labour-to-material ratio will be maintained at the gram panchayat level.

Five Critiques that Often Come the NREGA Way……And a reality check

1) NREGA’s making farming unviable

IN A WAY, YES. But that’s only in areas where the actual agri wages are lower than what the state guarantees as minimum. Available research indicates that trends of reduced labour force in agriculture precede MGNREGA. The real culprit could be elsewhere: high non-farm wages. According to the National Sample Survey Organisation, the decline in agriculture labour as a share of total economic activity trend is since 2004, two years before MGNREGA.

2) Stay home, draw unemployment allowance

Nothing’s further from the truth. NSS data notes that around 19% of the rural households sought but did not get employment from June 2009 to July 2010. Now if an applicant is not provided employment within 15 days of receipt of his application or from the date on which the employment has been sought, he/she is entitled to a daily unemployment allowance. This is a provision that’s honoured mostly in its breach because the onus to provide the allowance is on the state.

3) Assets built under NREGA are not durable

Partly, yes. As late as 2011, the World Bank noted that he objective of asset creation runs a very distant second to the primary objective of employment. The main culprit here is the lack of planning. Yet, there are states that have worked around this. For instance, MP and Maharashtra encourages building kuchcha roads under NREGA. This is then black-topped using funds from the Chief Minister’s Gram Sadak Yojana.

4) It was supposed to make panchayats work, but NREGA has only decentralised corruption

Yes & no. NREGA has transferred unprecedented resources to panchayats but lack of training and zero investment in capacity building has muddled the scene.Vigilance and monitoring committees haven’t taken off. But NREGA 2.0 envisages certification of the accounts of gram panchayats through a district panel of chartered accountants. So there will be a psychological pressure to bring in more accountability and transparency.

5) After 7 years, NREGA has run its course …

No. While fingers point to scams and low-quality assets, few look at the ancillary effects. For one, the concept of minimum wages is a tangible reality in Indian villages, thanks to NREGA. Also, the programme has encrusted the idea of wage parity: In 2011-12, around Rs 12,000 crore was spent on wages for women and around 50% of the total persondays generated have been by women. Caste equations have been altered irrevocably, distress migration has come down


10 June 2012,  Economic Times

Transfer of capital with ‘coercion’ and ‘fraud’

In Corruption, Property Rights on June 15, 2012 at 6:49 am

Naya Raipur, Chhattisgarh’s upcoming new capital and any government’s dream, is being built around discontent on the ground, the main complaint being of land acquired forcibly and without adequate compensation. The Nayi Rajdhani Prabhavit Kisan Kalyan Samiti, an organisation of around 6,000 farmers, has gone to Bilaspur High Court.

The 8,013-hectare township will have six-lane roads, elite housing societies and clubs, a Vedanta Hospital and an international cricket stadium, besides the new secretariat. What is Chief Minister Raman Singh’s dream today was actually conceived during the tenure of Ajit Jogi, the state’s first chief minister. When the Jogi government banned land sales in the project area in 2002, the BJP opposed the project. Chhattisgarh minister Punnu Lal Mohile, then an MP, had written to prime ministerAtal Bihari Vajpayee against it. Today, the Singh government has taken it forward, replacing a Capital Area Development Authority set up by Jogi with a Naya Raipur Development Authority.

There is one other change. A six-lane road takes an abrupt diversion near the capital complex. Had it gone on, it would have passed through 130 acres owned by minister Brijmohan Agarwal and another BJP leader, Satyabala Agarwa. Brijmohan, Raman Singh’s number two, had opposed the project during Jogi’s tenure.


Naya Raipur has 41 villages, in 27 of which the NRDA has acquired over 5,500 hectares: 130ha through compulsory acquisition, 2764ha by transfer of nistar (community) land and 2,724ha by mutual agreement, says S S Bajaj, NRDA CEO.

Farmers say the government drained them of options. In August 2005, the Raman Singh government banned land sales in the 27 villages except to the NRDA. “Where is the mutual consent? Whenever we needed money, we had to sell land at their price,” Kisan Kalyan Samiti secretary Kamta Prasad says.

Bajaj says the price was decided in a meeting with farmers, who claim it was fixed unilaterally. In a July 2006 meeting with then housing secretary P Joy Ummen and Raipur collector Subodh Kumar Singh, now special secretary to the CM, zilla panchayat member Ghanshyam Tandon noted that “the actual market price is more than determined by the collector’s guidelines”. “None of my suggestions was considered,” Tandon says today.

Sales began in 2006 at Rs 12.37 lakh per hectare, including compensation. In July 2009, when the NRDA was offering Rs 14.75 lakh, the government invoked the emergency clause giving the collector powers to acquire land within 15 days of a notice. Villagers in Barauda, for instance, were forced to sell to the NRDA rather than accept the Rs 4.30 lakh per hectare under the clause.

In March 2011, the NRDA bought nearly 80 hectares at Rs 14.75 lakh (all inclusive), days before the rate was raised to Rs 17.90 lakh.

Today, the rate in the 27 villages in Rs 25 lakh a hectare, again including compensation. In many of the other 14 villages, it is Rs 1 crore, leaving villagers hopeful of a similar offer. “Lift the ban, let’s negotiate with buyers,” Kamta says. NRDA chairperson N Baijendra Kumar says the ban is to protect villagers from middlemen.

Bajaj denies coercing farmers while Kumar says: “We have given exemplary compensation, the best for any such project anywhere.”

Farmers allege the NRDA leased their land at Rs 1.14 crore (residential) and Rs 1.82 crore a hectare (retail). Bajaj says any money earned is put back into the project.


The NRDA recently told the court it has provided Rs 772 crore to affected farmers, besides land elsewhere. It has built two small colonies, 20 one-room sets in Jhanjh-Navagaon and 200-odd homes of 400sq ft in Rakhi village. Bodhi Ram, who gave up ¼ acre for Rs 1.25 lakh, lives with his family of 15 in a single room without sewerage or water in the pipes.

Those who sold by mutual consent are given an 8-per-cent relaxation in stamp duty if they buy land in the state. Nearly half the farmers have profited, says Bajaj. A Chhattisgarh Nirman Academy trained some youth into carpenters, foremen and electricians but they are yet to get a job.

Nistar land

Following a January 2011 Supreme Court direction to all state governments not to occupy nistar land, then principal secretary (revenue) Sunil Kumar Kujur issued a circular on March 10, 2011, asking collectors them prepare a list and not to encroach on or acquire such land.

For Naya Raipur, the government transferred 2,764 hectares that included ponds, grazing grounds and graveyards. The NRDA then mortgaged land to HUDCO for a loan of Rs 555 crore.

In Barauda, youths Rakesh, Sandeep and Domeshwar point out their village head’s tomb in a graveyard where a housing colony is now coming up. Through the graveyard at Chicha village, a road runs now.

“In a modern township, the nature of nistar land changes,” says Baijendra Kumar, insisting this does not amount to violation of the court order. “Graveyards are important in a village but in a city they must be developed in a systematic manner. We are providing an alternative.” Bajaj promises nearly 2,500 hectares will be demarcated as nistar.

The court case

The November 2011 High Court petition names Ummen and the Raipur collector among the respondents, alleges coercion and fraud, demands a ban on further construction and challenges the sanctions granted. Farmers say Jogi’s plan had involved barren land but the present plan has acquired mostly agricultural land.

On February 24, Justice Satish Agnihotri stayed acquisition in the area. Court records show the case was transferred the same day to judge Prashant Kumar Mishra, who lifted the stay. Mishra, incidentally, was additional advocate general in the Singh government (2004-07) and advocate general (2007-09) before being elevated as High Court judge.

The transfer of the Mantralaya was scheduled last November, then postponed to April. As of now, trucks still carry construction material to the upcoming capital.

Farmer by farmer

Bharat Lal Chandrakar (above) of Palaud alleges the government ignored the trees and other structure on his land, which should have made him eligible for higher compensation. Government officers inspected the area and allegedly reported that his land has no such structures or trees. The Indian Express visited the spot and found several trees and two borewells.

Bal Mukund Shivnarayan’s land has a road running through it, making it eligible for higher compensation, but the SDM report does not mention it. “We go by what the SDM recommends,” says the NRDA’s S S Bajaj.

Suresh Kumar’s three-acre plot in Barauda had a six-lane road started through it even before the land had been acquired. He says the land is yet to be formally acquired. Bajaj admits Suresh Kumar has not been compensated but adds the money has been deposited with the collector.


14 June 2012,  Indian Express

Tweaking IIT entrance: wrong diagnosis, wrong prescription

In Education on June 15, 2012 at 6:48 am

It began as an in-house debate within the IITs, that students coming through JEE were no longer as exceptional and talented as before. The villain was quickly identified: coaching classes that promote drill and rote rather than thought and creativity. So the government’s policy prescription: let’s underline the importance of the schooling system which ostensibly promotes original thinking, let’s tweak the entrance examination to factor in Class XII marks.

The entire debate revolves around students who take the IIT entrance: less than 6 per cent of the 8 million students who take the Class XII exam each year. But more of that later, first a story from The Indian Express, reported last month. About 16-year-old Ashutosh, who ranked No 2 in the UP Board Class XII examination. He woke up at 4 am every day, rode his bicycle 3 km from his village to Mohan, a small town in Unnao district. Then he took a three-wheeler to Lucknow more than 30 km away. Then he walked 2 km from the taxistand to his school in Rajajipuram (Lucknow) to reach there by 7.30 am. Ashutosh took the AIEEE (for entrance to NITs), but his real target, he said, is next year’s IIT-JEE.

Consider this: this student, who passed Class X with 79.5 per cent from a government school in Unnao, chose a private school 30 km away in Lucknow for his Class XII. Although he appeared for AIEEE, NITs, and IIT-JEE this year, he appears to have decided that he will try JEE next year again. His father, a tractor spare parts shopowner in Mohan, is likely to use his savings to keep his son out of university and enrol him in some coaching class.

You will find similar stories across more than 65,000 higher secondary schools in the country and these raise key questions: why did Ashutosh prefer a private school over a government school? Why do students and their parents go to such lengths as to exhaust their meagre savings to pay for coaching even after a good Class XII score? Will factoring in Class XII marks change this? The fact is that reforming the IIT entrance is way off the mark when it comes to solving the original crisis: the school system.

First, the data. IIT-JEE aspirants constitute only a fraction of the total number of students taking the Class XII examination across the country. A total of 4.79 lakh students took the IIT-JEE this year. This number includes many who graduated from Class XII last year. So, the number of Class XII students appearing in IIT-JEE is even lower than this number. Even if one assumes all of them are from Class XII, this number works out to be less than 6 per cent (5.79 per cent) of students enrolled in Class XII. All the debate ignores the 94 per cent.

Also, no one spares a thought for the 40 per cent of students who take Class X but simply vanish by the time their cohorts reach Class XII (all data is from HRD records).

Coming to coaching classes. Forget the 40 per cent weight (envisaged under the “one nation, one test” principle), even if Class XII scores get 100 per cent weight, it won’t wipe out coaching classes. For the simple reason that there are too many good students vying for too few seats available in the quality higher education system. It begets anxiety among students and their parents to leave no stone (coaching class) unturned to make it. It is a supply problem. The number of seats (about 10,000 in IITs) falls far short of students (about 20,000 selected for counselling) found suitable to take that course.

The IITs/ NITs/ IIITs, for their part, should not be faulted for being so selective about who they choose. They even go to the extent of differentiating one from the other through separate entrance examinations. They even strive to maintain a hierarchy among them, only to select the best.

Why use “one nation, one test” to demolish the healthy competition between them to attract the best? One can argue that too many tests put too much stress on students. But ask all the Ashutoshes across all higher secondary schools. They might not be sure of getting past IIT-JEE, but they remain hopeful either about AIEEE or about some other entrance exam down the ladder. Many of the students would not like to put all their eggs in one basket.

A more robust solution would be to enhance the supply of quality seats at the undergraduate level, not only in engineering or medicine but also in law, commerce, humanities and social sciences. Take away their (IITs/ NITs/ IIITs) luxury to “select” from the plentiful and force them to compete with others to “attract” the most suitable. This will also iron out the skew that these handful of institutions create.

The institutional response to the hegemony of the IITs lies in creating similar international brands in other streams: humanities, law, commerce, social sciences among others. This will force them to compete to attract suitable students. This, in fact, will revive interest in an interdisciplinary school curriculum instead of the current distortion towards Physics-Chemistry-Math/ Biology. The bottomline is that, first, it is not part of the IITs/ NITs/ IIITs’ mandate to strengthen the school system; second, a change of examination pattern, as is being envisaged, is not going to revive the school system.

The task of reviving secondary and higher secondary education, to give it the weight it deserves, is the biggest challenge to the system today. Tweaking the IIT entrance exam or doing away with marks in Class X is not going to make any difference. It’s not worth Kapil Sibal’s time or effort to lose his sleep over IIT graduates. The 94 per cent need him more.


13 June 2012,  Indian Express

Between govt rates and purchase ceiling, there’s plenty for officials and middlemen

In Bureaucratic Delays, Corruption, Dalits, Poverty Eradication on June 15, 2012 at 6:38 am

Sajivan Manjhi stands in a field and holds his radio set, a gift from the state government, to his ear to listen to the news. One of 70 Mahadalit “beneficiaries” given plots to raise houses in a pond in Pachlova village of Nalanda, he is angry with the government for the very scheme he had once praised.

“Government officials live in bungalows and plan swimming pools and they want us to live in ponds,” says Sajivan, a matriculate who reads newspapers besides listening to the news on the “government radio”, wondering where he will wash with the pond making way for houses.

The Mahadalit Vikas Yojana, launched in 2009-10, was an innovation in social engineering that clubbed 21 Scheduled Castes into a single vote-bank for the first time — 1.20 crore people representing 11 per cent of the population. They went on to help the Nitish Kumar return with a five-sixths majority, sending the caste calculations of Lalu Prasad’s RJD haywire and leaving Dalit leader Ram Vilas Paswan’s LJP almost redundant. The RJD had banked on the 31 per cent Muslim-Yadav vote but Nitish had schemes for minorities, too, besides many for Mahadalits who till then were dismissed as pachpaniyas — people who have some houses here and there.

Today, the flagship scheme is under the scanner, the houses in the pond being one of a number of reasons. There have been Dalits allotted land only on paper. And, as The Indian Express reported, the larger scam involves officials who have bought land cheap and sold it to the government at many times the price.

Scheme and scam

Every Mahadalit family was to get three decimals, or 1306.8 sq ft. Following a survey, the land reforms department shortlisted 2,18,180 families, mostly in Nalanda, Araria, Madhepura, Supaul, Khagaria, Gaya and Aurangabad. Land has so far been distributed land to 1,53,866.

The allotment is made in any of four possible ways, of which three — under the gairmajarua aam and gairmajarua khas schemes and the Privileged Persons Homestead Tenancy Act — involves government land.

The fourth way involves land bought from farmers and given to beneficiaries. It is here that things have not gone as they should have.

The government put a ceiling of Rs 20,000 for every three decimals bought, but it still left plenty of scope for corruption in a state where the government rate for two-crop land, the kind most commonly bought, is only between Rs 1,000 and Rs 3,000 per decimal.

The government has given such land to 29,920 families, and targeted another 27,603.

Circle officers in charge of purchase have engaged middlemen, often small-time real estate agents, in buying land of any kind — low-lying or elevated, near rivers — though the instruction was that it should near areas of habitation and with an approach road. In fact, the state has a dedicated follow-up, Mahadalit Basti Sampark Yojana, for Mahadalit Vikas Yojana beneficiaries.

The middlemen would look for farmers from whom they could buy at government rates or lower, convincing them that it could not fetch a better price as it was of little use with no source of irrigation to draw from.

Cases in point are at Kajra and Bistoria in Araria where, records show, the Raniganj circle officer bought 2.64 acres at Rs 3.63 lakh and 3.56 acres at Rs 4.90 lakh, paying middlemen a total Rs 8.53 lakh, then organised the government purchase days later at Rs 17.60 lakh and Rs 23.60 lakh, a total of Rs 41.20 lakh. The difference of Rs 32.47 lakh works out to 78.81 per cent of the amount the government paid.

There have also been allegations of circle officers conniving with farmers to “share the benefits”. Residents of Malpa, Mahuain and Barma under Guraru block of Gaya have alleged this but admitted there is no way it can be proved.

Point, counterpoint

Revenue and land reforms secretary Hukum Singh Mina has called all this an “eye-opener” but JD(U) national spokesperson Shivanand Tiwari has said there isn’t “any scam”. “It is not easy to run a government. There can be some slip-ups here and there,” Tiwari says.

The Opposition, so far starved of issues, has finally found the opportunity it was looking for. “I have been critical of this three-decimal scheme from the day it started. Why can’t the government give them Rs 20,000 rather than allowing misappropriation?” Paswan says.

Lalu mentions The Indian Express exposé while attacking the government. “How much proof does the government need now? Rather than trying to correct things, they are going for a coverup,” he says. “There is deep-rooted corruption everywhere. Many more scams will come out in the days to come.”

The scheme is one of about a dozen the government has taken up for Dalits, with three departments to take care of them — revenue and land reforms, SC/ST welfare and health. The SC/ST welfare department is in charge of the Bihar Mahadalit Vikas Mission to ensure all schemes are properly implemented (see box).


3 decimals

Or 1306.8 sq ft. what each family gets under Mahadalit Vikas Yojana

2.18 lakh

Families shortlisted

1.54 lakh

Lakh families get land


Of these families get land under the system that involves purchase from farmers, which brings middlemen into the process


More families to get such land

Rs 20,000/3 decimals

Ceiling for purchase from farmers

Rs 3,000/decimal

Maximum Govt rate for two-crop land, range starts at Rs 1,000

More for mahadalits

Mahadalit Basti Sampark Yojana. To link villages to a main road.

Dasrath Manjhi Kaushal Vikas Yojana. For vocational training.

Mukhyamantri Mahadalit Poshak Yojana. Rs 500 a year to each student of classes I -V for uniforms, shoes.

Vikas Mitras. 10,000 Mahadalits, appointed at Rs 3,000 a month, to coordinate with government on schemes.

Mahadalit Shauchalaya Nirman Yojana. Rs 300 to each family to build a toilet. Funds for 2,33,333 toilets disbursed so far.

Mukhyamantri Jivan Drishti Yojana. Rs 400 to each family to buy a transistor set.

Mahadalit Heath Card Scheme. Mahadalit families to get such cards for routine checkups.

12 June 2012,  Indian Express

Want to join AIIMS admn? Will need MBA

In Civil Services Reforms on June 15, 2012 at 6:30 am

In a bid to modernise its services, AIIMS is all set to adopt a corporate model of functioning with the introduction of new recruitment rules for its non-doctoral staff. Hospital authorities have taken the help of private firm Deloitte India to help frame the first draft of its recruitment criteria and promotion requirements for the 300 posts in the administrative and support staff.

If all quarters of the staff give their consent, these draft rules, which make it mandatory for administrative officials and human resource staff to possess MBA degrees, will be brought in force from the next financial year.

Deloitte India was given the task of studying practices in Indian hospitals and abroad and provide the recruitment and promotion criteria best suited to AIIMS. The recommendations of the private agency were evaluated by a committee appointed under Dean of Research at AIIMS Dr A B Dey, and the cumulative draft is now being circulated among the staff for suggestions.

According to a senior official at the institute, “The need for revaluating our recruitment criteria to match the required skill sets at a premier medical institute like ours was felt after the 6th Pay Commission. After pay scales went up, we felt the need to hike expectations from our employees.”

These moves, the official added, were being brought in without affecting the prospects of existing employees. For posts where qualification criteria is being made more advanced than those possessed by incumbents, AIIMS will hold a qualifying or eligibility exam for employees to continue in their existing posts.

IT and engineering staff now need a BE or B Tech or MCA with 10 years of work experience to apply to AIIMS. Accounts officials need to have an MBA, post-graduation and graduation degrees as per their seniority levels. A Human Resource department is being instituted with a staff strength of three. The minimum qualification for these posts is an MBA.

A Public Relations department is also being set up, with posts of PR managers for which post-graduation degrees in communication is required. For the pharmacy staff, post-graduate degrees in the discipline have been made mandatory.

Among support staff, for posts of technical officers in speech and hearing, Dental departments, physiotherapy, radiotherapy and lab medicine, a post-graduation degree and clinical experience in the field has been made mandatory. For laboratory technicians, the cap has been raised from school pass-outs to graduation degrees in lab medicine.

For nursing superintendents and posts of nurses in sister grade II and III, the eligibility has been raised from matriculation pass, to BSc and MSc in Nursing, with a mandatory proficiency in computer use. OT assistants now need at least five years experience to apply to AIIMS.

A mandatory requirement for promotions is production of some research projects, or participation in assignments of continued education, in the respective areas of work for employees. According to the official, “We are trying to incentivise promotions, rather than follow the laid-back approach, characteristic of government set-ups.”

Sections of the staff have expressed displeasure over upscaling the qualifications. “We need to ensure that the existing staff who have been here for a long time do not lose out in this rat race. Nobody denies we need to improve services, but this should not be at the cost of existing employees,” a member of the staff union at AIIMS said.


11 June 2012,  Indian Express

Mixed Metaphors

In Bureaucratic Delays, Corruption, International Relations on June 12, 2012 at 6:59 am

What’s worse: declaring war against a social problem or calling for a Marshall Plan to solve it? Both are enduring and popular metaphors. Unfortunately, both lead to bad government decisions. Public policies shaped by such thinking more often than not result in waste, blind spots, and Manichaean mindsets that limit the search for more effective approaches. Think of the long-running wars on drugs, terrorism, and cancer. The results, all too predictably, have been more confusing than the problems.

In fact, no imitation of the Marshall Plan has ever worked, and no war on a big social problem has ever ended in defeat for the enemy (save, perhaps, cigarettes). But the allure of these spurious comparisons remains as strong as ever. Without any apparent effect, Marshall Plans have been proposed to help Africa, the Middle East, New Orleans, Iraq, and even Wallonia, Belgium’s least prosperous region. Bill Gates wants a Marshall Plan to broaden access to technology, French President Nicolas Sarkozy urges one for his country’s poor suburbs, and the AFL-CIO thinks the U.S. auto industry deserves its own Marshall Plan.

Advocates of war against big problems are just as plentiful. We have been asked to go to war against poverty, drunk driving, email spam, and teen pregnancy, just to name a few. In the United States, liberals denounce the Bush-era “war on science” while conservatives each year mobilize against the “war on Christmas.” And of course, there’s the favorite war of the global chattering class — the war against global warming. “This is World War III,” Barbara Young, then head of Britain’s Environment Agency, declared in 2007. “This is the biggest challenge to face the globe for many, many years. We need the sorts of concerted, fast, integrated, and above all huge efforts that went into many actions in times of war.”

There are many good reasons why declaring war on a social problem or launching a Marshall Plan to help a country or region are such attractive metaphors for politicians. Wars unite countries and stifle internal dissent. Wag the Dog is not just the title of a movie in which a war is manufactured to rally support for a government, but also an age-old political tactic. The war metaphor is also attractive because real wars — those between nation-states as opposed to those against concepts or bad socioeconomic trends — are finite. University of Notre Dame scholar Daniel Lindley has found that the average length of a war is 308 days when the country that starts it wins and 660 days when initiators lose. No surprise, then, that the war metaphor keeps getting deployed: It boosts expectations that in a few years a major scourge — cancer, terrorism, poverty — will be eliminated. “War” also holds the seductive promise of an open checkbook for the politicians who so liberally apply the term; after all, budgetary constraints tend to disappear during war along with all those pesky rules. Wars are for heroes, not for accountants who limit the resources needed for victory.

The Marshall Plan metaphor has been similarly irresistible, with its implications of massive funding and unquestioning public support. But the original Marshall Plan launched by the United States to help Europe after World War II was neither as financially sizable nor as uncontroversial as proponents commonly assume. (Economist Tyler Cowen estimated U.S. aid, which peaked at around $90 billion in today’s dollars, was no more than 5 percent of the gross national product of the recipient nations.) Still, the plan has come to epitomize a bold, massive — and successful — governmental mobilization.

Alas, these good metaphors yield bad policies. The war on drugs, for example, has been more successful in spawning immense bureaucracies and winning big budgets and partisan political fights than in ending drug use. Decriminalizing marijuana for medical purposes is becoming a popular reform in the United States, and 14 states have already adopted it, with more sure to follow. But do we know if marijuana does indeed have the medical benefits claimed by reformers? No. As a result of the mindset — and the policies — nurtured by the war on drugs, medical researchers have been blocked from access to marijuana and unable to scientifically test the claims. Only now, after four painful and futile decades, is the war on drugs losing support.

The same perils apply to the “war on terror.” As former U.S. National Security Advisor Zbigniew Brzezinski famously noted: “The damage these three words have done — a classic self-inflicted wound — is infinitely greater than any wild dreams entertained by the fanatical perpetrators of the 9/11 attacks when they were plotting against us in distant Afghan caves. The phrase itself is meaningless. It defines neither a geographic context nor our presumed enemies. Terrorism is not an enemy but a technique of warfare.” Indeed, the war on terror was even more spectacularly successful than the war on drugs in securing political, legal, military, and financial blank checks for those waging it. But that, too, is changing as anti-terrorism efforts are now more carefully scrutinized, checks are written with more strings attached, and alternative approaches are tested. Recognizing that language is power, U.S. President Barack Obama took a key first step in banning the bad metaphor. At his insistence, the Pentagon was forced to lose its precious GWOT (global war on terror) acronym and the GWOT mentality that went with it. But as many of his predecessors learned, Obama is finding that wars are hard to exit. Once a war against poverty, crime, or terrorism is launched, announcing a unilateral truce is usually political suicide. Instead, presidents get boxed into absolutist policies in which compromise is impossible and victory is the only acceptable outcome.

But no matter the complications, these wars aren’t going away — they’re just too politically convenient. It took only a few hours after Haiti’s terrible Jan. 12 earthquake for pundits to call for a Marshall Plan. One thing by now is certain, however: Although aid will materialize, a Marshall Plan will not. As we all know but the metaphor users routinely and conveniently ignore, the Marshall Plan’s success was driven by the hard-to-replicate conditions in Europe after World War II, with its highly educated populations, well-developed private sector, and relatively efficient public bureaucracies.

So: Beware the metaphor. All these wars and Marshall Plans are getting the world nowhere. But their frequent use does have a silver lining: At least you’ll know that whenever they are proposed, bad policies will soon follow.


Apr 2010,  Foreign Policy


Book-cooking guide

In Bizarre Laws, Civil Services Reforms, Corruption on June 12, 2012 at 6:52 am

ONE of the best things about being a government is that nobody audits your accounts. Politicians have huge leeway in drawing up and presenting their budgets. Hans Hoogervorst, the plain-speaking chairman of the International Accounting Standards Board (IASB), has referred to public-sector accounting as being in “a stage of primitive anarchy”. A new IMF paper offers a helpful taxonomy of government-accounting gimmicks*.

The simplest wheezes push spending into the future. Classic forms of deferred spending that do not show up on balance-sheets until later include pension promises and public-private partnerships, where governments pay companies for infrastructure after construction is done. America met a 1987 deficit target by simply delaying military pay and Medicare payments.

Hidden borrowing is a favoured euro-zone tactic. Portugal reduced its deficit in 2010 and 2011 by taking over pension assets from private companies without recognising the new public liabilities. Greece was not alone in buying derivatives that flattered public-debt levels.

Governments can also bring future revenue forward, by selling assets or the rights to future cash flows; or avoid investment costs altogether by letting firms collect toll revenue after building infrastructure. Spending by non-governmental public entities is another way to keep liabilities off the books. Greece’s debt figure shot up by 7.8% of GDP in 2010 when Eurostat, the EU’s statistical agency, reclassified bus, railway and other public companies in the government accounts.

Some of these measures are legitimate in their own right: the private sector can often manage assets better than governments, for example. And not every public-accounting flaw is to the benefit of governments: their right to tax is not recognised on balance-sheets, for example. But trickery causes damage beyond simply obscuring the true fiscal position.

When markets are risk-averse few will take a chance on dubious public-sector accounts. There is a correlation between the amount of creative accounting that went on in the euro zone in the decade to 2003 and government-bond yields now. Ian Ball of the International Federation of Accountants (IFAC), the body behind a set of non-binding accounting standards for the public sector, says that “transparency is a prerequisite for confidence.”

The IMF has a helpful laundry list of ways to keep sneaky politicians in check. Accounting measures should follow the movement of economic value, not cash, so that delaying pay packets until next year (or retirement) has no effect. Governments should publish net worth, which encompasses assets and liabilities, so taking over pension schemes is less appealing. Budgets should forecast up to 50 years out, so the full effects of policy are clearly seen.

These measures would not be needed if governments followed private-sector accounting rules. The IASB and the IFAC signed an agreement in November to encourage harmonisation between public- and private-sector accounting standards. Don’t hold your breath.


7 Apr 2012,  Economist

This is how economic reforms have transformed India

In Business, Macroeconomic Policy, Poverty Eradication on June 8, 2012 at 2:08 pm

Perhaps the most appropriate tribute to the memory of the illustrious parliamentarian, Professor Hiren Mukerjee, would consist in the celebration of Indian democracy of which the Lok Sabha itself is the chief symbol.

India was for decades unique in her democracy among the post-colonial countries that had gained Independence. Today that uniqueness has thankfully disappeared as several countries around the world have followed in India’s footsteps.

But our embrace of democracy from the outset does set us apart from, and puts us in a higher pecking order relative to China whose egregious denial of democratic and other human rights detracts hugely from admiration for its stellar economic performance.

India has not just the Lok Sabha and elections; it also has all the elements of what we now call a ‘liberal democracy’. I must add that our democracy has been a source of immense gratification, not just to elites, but also to the common man.

It is easy to slip into the fallacy that the masses yearn for economic gains, not for political rights. I have long argued that economic betterment, in a country with an immense backlog of poverty, inevitably takes time.

Even bitter critics praise India’s boom

But let me to turn now to the central question that I wish to address today: the question of economic reforms, what they have accomplished, and where we are and should be headed.

On what we have accomplished so far, what I call the ‘Reforms Yesterday’, there are two conflicting ‘narratives’ that we find currently, one adoringly celebratory and the other hypercritical and condemning.

Perhaps the most dramatic, optimistic view of India has come from the once sceptical magazine, The Economist, which famously wrote nearly twenty years ago that India was a tiger that was crouched for long but unable to leap; the danger was that rigor mortis had set in.

But the magazine wrote a raving cover page story on September 10th, 2010, abandoning its reservations and arguing that India’s steadily accelerating growth rate since the 1991 pro-market, liberal (or ‘neoliberal’ if you wish to make them sound sinister) reforms was not a flash in the pan.

Apparently throwing caution to the wind, it speculated that India’s growth rate ‘could overtake China’s by 2013, if not before’.

Some ‘non-fiction’ on India’s growth

But then, the naysayers, among them the socialists in the currently ruling Congress Party, have rejected the ‘miracle’ produced by the reforms by asserting darkly that the growth ‘lacks a human face’, that it is not ‘inclusive’, that the gains have accrued to the rich while the poor have been immiserized, that inequality has increased, and that India stands condemned before the world.

Perhaps the most articulate critics are the ‘progressive’ novelists of India, chief among them Pankaj Mishra whom the op-ed page editors of The New York Times regularly and almost exclusively invite to write about the Indian economy, a privilege they do not seem to extend symmetrically to American novelists to give us their profound thoughts on the US economy!

Mishra’s latest Times op-ed on October 2, 2010, writes of the ‘alarmingly deep and growing inequalities of income and resources in India’, ‘the waves of suicides of tens of thousands of overburdened farmers over the last two decades’, ‘a full-blown insurgency . . . in central India’ to defend tribals against depredations by multinationals, ‘the pitiless exploitations of the new business-minded India’, and much else that is allegedly wrong with India!

While economic analysis can often produce a yawning indifference, and Mishra’s narrative is by contrast eloquent and captivating, the latter is really fiction masquerading as non-fiction.

The fact is that several analyses show that the enhanced growth rate has been good for reducing poverty while it has not increased inequality measured meaningfully, and that large majorities of virtually all underprivileged groups polled say that their financial situation has not worsened and significant numbers say that it has improved.

Abysmal growth prior to reforms

The enhanced, and increasing, growth rate since the reforms follow a period of abysmal growth rates in the range of 3.5 to 4.00 per cent annually for over a quarter of a century, starting in the 1960s. The cause had to do, not with our efforts at raising our investment rate, but with the fact that we got very little out of the investment we undertook.

The reason was that we had a counterproductive policy framework whose principal elements were:

1. Knee-jerk intervention by the government through a maze of Kafkaesque licensing and regulations concerning investment, production and imports, prompting the witticism that Adam Smith’s Invisible Hand was nowhere to be seen;

2. Massive expansion of the public sector into many areas other than utilities , with occasional monopoly granted to public enterprises by excluding entry by the private sector, with predictable inefficiencies that multiplied through the economy; and

3. Autarky in trade and inflow of equity investment which was so extreme that the Indian share of trade to GNP had fallen while it had increased in most countries whereas the inward flow of equity investment had been reduced to minuscule levels.

Policy changes not imposed by US

This policy framework had been questioned, and its total overhaul advocated, by me and Padma Desai in writings through the late 1960s which culminated in our book, India: Planning for Industrialization (Oxford University Press: 1970) with a huge blowback at the time from virtually all the other leading economists and policymakers who were unable to think outside the box.

In the end, our views prevailed and the changes which would transform the economy began, after an external payments crisis in 1991, under the forceful leadership of Prime Minister Manmohan Singh who was the finance minister at the time.

It is often suggested that the Indian policy changes were imposed from outside, reflecting what has come to be known by ill-informed observers as the Washington Consensus in favour of liberal reforms at the Bretton Woods institutions.

But that is no more true than to argue that the Soviet perestroika under President Gorbachev and the Chinese economic reforms starting in the late 1970s were imposed by Washington.

Why the transformation came about

In all three cases, the driving force was endogenous, a realization by the leadership that the old, counterproductive policy model had run their economies into the ground and that a change of course had to be undertaken.

The early reforms were primarily focused on dismantling the licensing regime (known popularly as the ‘permit Raj’) which freed up the animal spirits of the private sector.

The economy was also steadily opened up: the average import tariff on manufactures, at virtually 113 per cent in 1990-91, was reduced steadily, avoiding the folly of ‘shock therapy’, and now stands at 12 per cent.

While privatization would prove politically difficult, its intended effects in terms of efficiency of management were often achieved by opening up entry by private firms into sectors hitherto reserved for public sector enterprises: the entry of these firms, plus unwillingness to provide ever more subsidies to absorb losses, was like a pincer movement that meant: shape up or ship out.

Competition mattered

I remember how, on a flight of Indian Airlines from Mumbai to Delhi, the stewardess had brought breakfast with the tea already made Indian-style: one part tea, four parts milk, and spoonfuls of sugar. When I complained, she answered: that is the way we serve tea (and, under her breath: if you do not like it, lump it).

After the growth of splendid new private-sector airlines such as Jet Airways and Kingfisher Airlines, Indian Airlines changed: competition mattered.

The old policy architecture could not be demolished in one fell swoop. The leadership had to negotiate minefields of ideological opposition, bureaucratic intransigence, and the lobbies (called ‘interests’ by political scientists) that had fattened on the rents (i.e. monopoly profits) attending sheltered markets that they were earning.

The three I’s — ideas, institutions and interests — of the old regime had to be confronted. Then, again, the post-1991 reformers felt that their task was akin to cleaning up after a tsunami. Hastening slowly was their only choice.

Substantially enhanced growth after the reforms

Still, as the reforms gathered steam, the effects on the growth rate were palpable. The growth rate, rising to roughly 6 per cent, nearly doubled in the 1990s and increased still further in the next decade and has recently been close to 9 per cent.

The sense that India was now an ’emerging superpower’ was a heady experience for Indian elites who had seen their country marginalized by policies that had become a laughing stock in the world while smaller nations in the Far East had emerged as the much-admired star performers.

The poor and the underprivileged have also benefited. But are the opponents of the reforms right to complain that the reformers have been focused on growth to the neglect of the underprivileged; and that the latter have been bypassed or immiserized?

It has become fashionable to say that this must be so because the Human Development Index, produced by the UNDP, puts India at the bottom, at 135th rank, in 1994.

But this is a nonsensical index which reduces, without scientifically plausible weights, several non-commensurate elements like literacy and health measures to a single number.

Media helps bad science gain traction

It is a fine example of how bad science gains traction because of endless repetition by the media: it must be dismissed as rubbish.

There is no substitute for hard, scientific answers to the questions concerning what has happened, during the period of reforms and enhanced growth, to the poor and the underprivileged: and these answers, as I will presently sketch, are more benign.

To begin with, however, let me remind you that the common criticism that Indian policy was interested in growth for itself is not even true if we go back to the early 1950s when planning took formal shape.

In fact, my first job in the Indian Planning Commission half a century ago was to devise a strategy to bring the bottom 30 per cent of India’s poor above the poverty line so they would enjoy a ‘minimum standard of living’; and we came to the view, often expressed by the leaders of the Independence movement, that we had to grow the pie to do so: redistributing wealth in a country with ‘many exploited and few exploiters’ as the visiting Marxist economist Kalecki put it graphically in 1962, was not a strategy that could produce sustained impact on poverty.

Growth was therefore regarded as a principal ‘instrument’, a strategy, for pulling the poor out of poverty through gainful employment, not as an end in itself.

Growth was seen as what I have called an activist, radical ‘pull up’ strategy, not as a passive, conservative ‘trickle down’ strategy, to reduce poverty.

The growth strategy to pull the poor up from poverty, however, did not work because growth itself did not materialize because of the counterproductive policy framework that I sketched above.

But now that growth has actually been produced by the post-1991 reforms, what can we say about the wisdom of the growth strategy? Let me sketch some of the studies that suggest an affirmative answer.

After a considerable debate, it is now generally accepted that the enhanced growth over nearly 25 years year was associated with lifting nearly 200 million of the extreme poor above the poverty line.

By contrast, consistent with commonsense, the preceding quarter century with abysmal growth rate witnessed no perceptible, beneficial impact on poverty.

Then again, at a narrower level, the political scientist Devesh Kapur and associates have studied the fortune of the Dalits (untouchables) in India’s most populous state, Uttar Pradesh, between 1990 and 2008, to find that 61 per cent of those surveyed in the east and 38 per cent in the west said that their food and clothing situation was ‘much better’.

Most striking is the finding of the political scientists Al Stepan and Yogendra Yadav, drawing on polling data produced by the Center for the Study of Developing Societies in Delhi, that for every disadvantaged group including women, the response to the question ‘Has your financial situation improved, worsened, or has remained the same’ posed in 1996 and again in 2004, shows that every group has overwhelmingly remained the same or improved: those who claim to have worsened are invariably less than 25 per cent of the respondents.

As for the relative economic outcomes of the disadvantaged groups, the economist Amartya Lahiri and associates have studied India’s ‘scheduled castes’ and ‘scheduled tribes’, two particularly disadvantaged categories, and conclude that the last twenty years of major reforms ‘have seen a sharp improvement in [their] relative economic fortunes’.

Then again, using household expenditure data for 1988 and 2004, the Johns Hopkins economists Pravin Krishna and Guru Sethupathy conclude that inequality, using a well-known measure invented by the Dutch econometrician Henri Theil, while showing initial rise, had fallen by 2004 back to the 1988 levels: a straight rise in inequality cannot be asserted.

I should also add that many reforms help the poor more than the rich because the rich can cope with the results of inefficient policies better than the poor.

If the public sector generation and distribution of electricity is inefficient, and the electricity goes off in the middle of the night in Delhi’s summer, the rich turn on their private generators and their air-conditioners continue working.

But the poor man on his charpoy swelters as his small Usha fan is not working. Those who object to letting in Coke and Pepsi forget that the common man derives his caffeine from these drinks while the well-off critics get theirs from the Espresso and Cappuccino coffee in the cafes.

The most interesting political implication of the success in finally denting poverty significantly, though nowhere enough, is that poverty is now seen by India’s poor and underprivileged to be removable.

India is witness finally to what I have called the Revolution of Perceived Possibilities. Aroused economic aspirations for betterment have led to political demands for the politicians to deliver yet more.

This suggests, as my Columbia University colleague Arvind Panagariya and I have hypothesized, that voters will look to vote for the politicians who can deliver growth, so that we would expect growth before the vote to be correlated with vote now.

In an important paper, Poonam Gupta and Panagariya have recently tested for this hypothesis and indeed found that it works. So, this implies that politicians should be looking to augment reforms, not reverse them as misguided anti-reform critics urge.

So, politicians would do well to strengthen the conventional reforms, which I call Stage 1 reforms, by extending them to the unfinished reform agenda of the early 1990s.

In particular, further liberalization of trade in all sectors, substantial freeing up of the retail sector and virtually all labour market reforms are still pending. Such intensification and broadening of Stage 1 reforms can only add to the good that these reforms do for the poor and the underprivileged.

But these conventional reforms have also generated revenues which can finally be spent on targeted health and education so as to additionally improve the well-being of the poor: these are what I call Stage 2 reforms.

When ‘progressive’ critics argue that Stage 2 reforms must replace Stage 1 reforms, because they appear superficially to be more pro-poor, they forget that Stage 2 reforms have been made possible only because Stage 1 reforms have been undertaken.

How to get the most bang for the buck from programmes under Stage 2 reforms is where we have to turning our attention as well. As it happens, Stage 2 reforms involve ‘social engineering’ and are inherently more difficult than Stage 1 reforms.

Thus, except for political difficulties, it is easy to reduce trade barriers: you just slash them. But if you want to improve education, for example, you have to worry about the best classroom size, the issue of teacher absenteeism, the question of how to get poor children to the school when their parents might want to have them work instead, whether you want to use school vouchers, and so on.

There is little doubt however that, once we have put our minds to work and our shoulders to the wheel, we will move ahead on both Stage 1 and Stage 2 reforms.

Many of the reforms require good governance and indeed necessitate a role for the government in some areas (in the appropriate provision of health, for instance) even as they require withdrawal of the government from others (as with inappropriate labour laws). Can we do this?

It is easy to get despondent today about the deterioration in governance because many seem to surrender much too easily to the notion that we have become hugely corrupt and that this is irretrievably so.

Thus, Transparency International’s index of corruption ranks us high on corruption. However, this index is wholly arbitrary, depending on subjective evaluation of the chosen respondents.

But in India, public figures are considered to be corrupt unless they prove to you otherwise. A blind man will tell you how he saw ‘with his own eyes’ a bribe being given and accepted!

A most distinguished Indian bureaucrat once told me that his mother said to him: ‘I believe you are not corrupt only because you are my son’.

Equally, it is wrong to think that we cannot think of institutional reforms that can reduce the corruption we do have. The abolition of the permit raj, of course, eliminated that important source of corruption.

But that also means that we have removed from our system the way in which politicians could raise money for their campaigns which, while not as expensive as in America, are still large enough to matter.

This means that other forms of corrupt ways of raising political funds have proliferated. We need therefore legal ways to raise campaign finance. Americans have done this; we need to do so as well.

Then again, we can use science to get at corruption in several areas. Thus, Nandan Nilekani is engaged in arguably the most important innovative reform in recent years by creating a national database of identity details of Indian citizens.

This should take the political corruption out of the Public Distribution System and in the Employment Guarantee Scheme, for instance, and will also reduce bureaucratic corruption by bypassing the low-level bureaucrats who refuse to give you what you need unless you grease their palms.

In fact, what Nilekani is doing additionally is demonstrating anew how science is integral to our assault on poverty and other ills in our society. The enormous potential of science is variously manifested.

To take just three examples:

1. The invention of the cheap laptop by Media Lab at MIT and later by Intel, has almost made it possible financially to put a laptop into every lap;

2. The latest invention of Embrace baby warmers for the millions of premature and low-birth-weight babies born each year; these are slated to sell at a price that is 1% of the traditional incubator; and

3. The invention of BT Brinjal and other GM crops makes it possible to have a second round of the Green Revolution that we need so badly if we are to increase productivity in agriculture; but the government has to deploy scientific evidence and argumentation against the naysayers who have objected to these as Frankenstein foods and instead have been allowed to halt their use on flimsy, virtually unscientific grounds including assertions of ‘agricultural suicides’ that have been exposed often as unrelated deaths.

Perhaps we need to recall what Prime Minister Nehru said eloquently: ‘It is science alone that can solve the problems of hunger and poverty, of insanitation and illiteracy, of superstition and deadening of custom and tradition, of vast resources running to waste, of a rich country inhabited by starving poor. Who indeed can afford to ignore science today? At every turn, we have to seek its aid. The future belongs to science and those who make friends with science.’

Reflection on what I have said today should provide the agenda that the impressive young Members of the Lok Sabha, who clearly seek new perspectives and aim to accept fresh challenges, can embrace to take India to what Jawaharlal Nehru called our ‘tryst with destiny’.

After sixty years of Independence, surely it is high time for his vision to turn into reality.

3 Dec 2010,  Rediff


Disassembling dynasty

In Politics on June 8, 2012 at 5:09 am

Dimple Yadav’s likely win in UP brings back an old question: what is it about the organisational and institutional environment in India that encourages political dynasties?

Dimple Yadav, wife of Uttar Pradesh Chief Minister Akhilesh Yadav, will win the upcoming by-election for the Kannauj Lok Sabha seat virtually unopposed. With a powerful father-in-law in Mulayam Singh Yadav and an equally powerful husband, Dimple Yadav’s inherited political capital is at an all-time high. The biggest testimony to this is that two major parties — the Congress and the Bahujan Samaj Party — have decided to not field an opposition candidate to Dimple Yadav.

The recent assembly elections in Punjab and UP were also battles between political dynasties. Three of the five parties that contested elections in these states — the Akali Dal, the Congress and the Samajwadi Party — are now in the hands of leaders who are euphemistically termed “princelings”. This by itself is no surprise. Political success in India often depends on family ties of candidates. At least two data sets, independently compiled by Patrick French and by us, suggest that dynastic ties are important in Indian politics. Others have commented on the rise of the “bahu-beti” brigade, signalling that women with politically powerful husbands, fathers, brothers or in-laws are more likely to be taken seriously as electoral candidates.

There is, however, widespread criticism of dynastic politics and an obvious incongruity between the idea of democracy and dynastic parties. We find that there is a representation deficit when it comes to dynastic parties. In those areas where dynastic parties compete, voters are far more likely to say that the politician (MLA or MP) does not look after the interests of anyone in the constituency. It should come as no surprise, then, that dynastic politics is also associated with the vast number of political parties and electoral volatility that mark contemporary Indian elections. Our research shows that in those states where the two main political parties are dynastic, there are greater vote swings for a party from one election to the other, with the average vote swing reaching 7 per cent. Second, we find that independent candidates are more likely to be elected and win votes. The percentage of independent candidates winning moves from 10 per cent under non-dynastic competition to 14 per cent under dynastic competition. Finally, there is a proliferation of political parties, with the effective number of political parties moving from less than four to more than four.

In addition to voter discontent, there are other reasons for these effects. In a dynastic party the top spot is limited to members of a family. For ambitious politicians who want to rise to the top spot there is only one option — to form their own political party or to switch allegiance to another party that will give them a higher position. This leads to larger number of parties competing for votes and/ or greater vote swings.

We understand a dynastic party to be one where the top leadership comes from within one family, or the successor is appointed without an organisational election (like Mayawati’s appointment by Kanshi Ram). In India, the number of dynastic parties is too large to list. The Congress tops everyone’s list. The highest leadership position has stayed within the Nehru-Gandhi family, starting with Nehru himself and flowing to Indira Gandhi, Sanjay Gandhi, Rajiv Gandhi, Sonia Gandhi and possibly Rahul Gandhi. Many regional parties are also dynastic: the Akali Dal in Punjab; Shiv Sena in Maharashtra; NCP of Maharashtra; the DMK in Tamil Nadu; the TDP of Andhra Pradesh; the BJD in Orissa; and the SP in UP.

So why do dynastic parties choose leaders from a particular family? The simple answer is that there is nothing to stop these leaders from selecting their successors. If a party has a party organisation where other contenders to the chief post can form their independent bases of power or lobby groups within the party, it may be harder to sustain dynastic parties. This was the case with the Congress in the 1960s when a strong organisation could discipline the ruling Congress party. The CPM, a non-dynastic party, has a massive cadre-based organisation.

Second, if a party has strong ties to a civil society organisation that constrains the party leader from appointing kin as successor, the party will be non-dynastic. The classic case is the BJP. The RSS (in which the BJP is societally rooted) exercises enough influence over the choice of leadership to ensure that it is non-dynastic.

Third, and most important, is party finance. As long as politicians raise their own campaign finances illegally, their best insurance against disclosure is to keep the money in the family. If all politicians in India raised funds independently and openly (as they do in the United States) individual politicians could challenge the party leadership. In India this independence is discouraged and substantial campaign contributions are undisclosed or “black” and collected centrally. This centralisation of finances is essential to avoid detection. As many have observed, the bulk of the money for the 2009 election campaigns of various parties was allocated to Lok Sabha hopefuls by the central command. This gives the central party enormous control and the party leader is influenced by incentives that encourage keeping it all in the family.

Our research shows that political dynasties are found where they provide risk insurance for politicians. Even in stable political systems like Japan, dynasties are common. As Fukui and Fukui observe, in the 1990 general elections, 170 second-generation members ran for election to the Diet and 125 were elected. They attribute this to the electoral rules that led candidates to develop “highly individualistic campaign organisations built by and for particular Diet members and aspirants” and that since these organisations are “expensive to build, in terms of both money and effort invested, these organisations are valuable assets that are closely guarded by the incumbents and, upon their retirement or death, often passed on to their heirs, usually relatives or staffers.” Not surprisingly, then, dynasties have been seen in parts of the US, in Costa Rica, El Salvador, Nicaragua, the Philippines and Colombia.

The existence of political dynasties in democratic India is not a result solely of a larger social context in which dynasties and family ties are acceptable and important. The key to understanding why dynasties exist lies in party organisation. In India, and elsewhere, if a political party does not have a cadre-based organisation, is not rooted in an independent civil society association and has centralised financing of elections, it is much more likely to be dynastic. Understanding the organisational and institutional environment that encourages the persistence of dynastic parties allows us to begin thinking in terms of scuttling dynastic politics by enacting rules and regulations that can limit the power of central party command structures.


8 June 2012,  Indian Express