Are we hurrying things up or are we massively delayed?

Mamta's yesterday statement - "I have just come to know through media that Central Government has notified FDI in retail today. Is it ethical, moral and democratic for a minority government to issue Government order forcefully and hurriedly, when massive protest against it is taking place across the country?"

Mamta says government is going about notifying FDI in retail in a hurry. Oh really! I thought we are already delayed by many decades. What other Asian countries achieved many decades earlier, we are still struggling to get to, and she says we are hurrying it.

We can't wait another 10 years for next set of economic reforms, we are already late. We will waste an entire generation, if we continue to deliberate and dither. Think of a young woman of 20 yrs, graduating from college this year, if new opportunities are delayed by 10 years or even 5 years, those opportunities are lost for her. 

I remember in early '90s, when we were still studying, computer adoption had just began. Anti computerization protests were regular, organized by public sector bank employees, unions, other government establishments, actively supported by the then political outfits in opposition.Imagine if we had succumbed to the pressure and software /IT had not taken its roots in India, where each one of us would have landed. That opportunity, even if it had come 5 years later, would have been a lost opportunity for my generation, because we would have gotten into different jobs, whatever other jobs were available at that time.

Life is constantly moving, we have to move faster than that to make some visible improvements to the present lives of the people vs being ok bringing the progress over many lifetimes. I don't think notifications are hurried, on the contrary, I think they are already way too late.

Cutting the nose to spite the face

If there is one word for the phrase "Cutting the nose to spite the face" it is "Bandh".  Who loses the most - the weakest in the society - daily wage earners. They just won't earn anything on this day. They have to depend on their savings, if any, to scrape through. Common man is the next, as the factories shutdown, they produce less and the produce gets costlier, we don't feel it immediately, but that is the net effect. However, Bandhs do not just mean stopping activity, it is in fact a license to destroy what we have. Bandhs are not considered successful until, a few buses and trains are burned, few shops are looted,  pitched battles are fought with the police, a few firing incidents happen. Band is historic when a few die! Netajis on their part court arrest. They are very respectfully taken in special police vehicles and put behind bars. They are fed and then given a drop to their residences before their favorite prime time serial starts in the evening.

Government registers a case of sedition against the cartoonists for disrespecting the national symbols. What about the netas and political establishment that disrespects the humans and takes away from them their lively hood.

Estimated loss to the economy because of today's Bandh - Rs2000 crore. If we add up all the losses that the country has suffered because of negative political activism till date, it will put to shame all the losses from all the scams put together. 

Mamta Vs Manmohan - economically speaking

When it comes to politics, Mamta wins hands down. 

I watched her press conference announcing withdrawal of support to UPA. Trigger for the decision, as she mentioned, were two issues - diesel price hike and FDI in multibrand retail. Both the issues economic in nature. 

Question -  does she know more about economics than Manmohan Singh? Should Mamta decide country's economic policies?

A quick comparison, (from wikipedia)-

Mamta's educational qualification - 

Banerjee graduated with an honours degree in History from the Jogamaya Devi College, an undergraduate women's college in southern Kolkata. Later she earned a master's degree in Islamic History from the University of Calcutta. This was followed by a degree in education from the Shri Shikshayatan College. She also earned a law degree from the Jogesh Chandra Chaudhuri Law College, Kolkata.

Manmohan's educational qualification -

He attended Panjab University, Chandigarh, then in Hoshiarpur, Punjab, studying Economics and got his bachelor's and master's degrees in 1952 and 1954, respectively, standing first throughout his academic career. He went on to read for the Economics Tripos at Cambridge as a member of St John's College. He won the Wright's Prize for distinguished performance in 1955 and 1957. He was also one of the few recipients of the Wrenbury scholarship. In 1962, Singh completed his studies from the University of Oxford where he was a member of Nuffield College. His doctoral thesis "India’s export performance, 1951–1960, export prospects and policy implications" was later the base for his book "India’s Export Trends and Prospects for Self-Sustained Growth"

Mamta's early career - 

Banerjee became involved with politics while still in school, joining the Congress (I) Party in West Bengal and serving in a variety of positions within the party and in other local political organizations. As a young woman in the 1970s, she quickly rose in the ranks to become the general secretary of the state Mahila Congress (1976–80).She was a college student in the mid-1970s.

Manmohan's early career - 

After completing his PhD, Singh worked for the United Nations Conference on Trade and Development (UNCTAD) from 1966–1969. During the 1970s, he taught at the University of Delhi and worked for the Ministry of Foreign Trade with the former Cabinet Minister for Foreign Trade, Lalit Narayan Mishra. As the Minister of Foreign Trade, Lalit Narayan Mishra was one of the first to recognize Singh's talent as an economist and appointed him his advisor at the Ministry of Foreign Trade. Singh and Mishra first met, coincidentally, on a flight from India to Chile. Mishra was on his way to Santiago, Chile to attend an UNCTAD meeting.

In 1982, he was appointed the Governor of the Reserve Bank of India and held the post until 1985. He went on to become the deputy chairman of thePlanning Commission of India from 1985 to 1987. Following his tenure at the Planning Commission, he was Secretary General of the South Commission, an independent economic policy think tank headquartered in Geneva, Switzerland from 1987 to 1990.

Mamta's track record  -

In 2009, Mamata Banerjee became the railway minister for the second time. Her focus was again on West Bengal. She neglected her duties as a railway minister to concentrate on electioneering in West Bengal.

She led Indian Railways to introduce a number of non-stop Duronto Express trains connecting large cities besides a number of other passenger trains, including women-only trains. The Anantnag-Qadigund railway line of the Kashmir railway that has been in the making since 1994 was inaugurated during her tenure. She also declared the 25-km long line-1 of Kolkata Metro as an independent Zone of the Indian Railways for which she was criticized.

Reuters reported that "Her two-year record as railway minister has been heavily criticized for running the network into more debt to pay for populist measures such as more passenger trains."The Indian Railways became loss-making in her two-year tenure. Even before stepping down as railway minister to become the Chief Minister of West Bengal, she declared that she would be able to handle both the portfolios together. Her nominee Dinesh Trivedi from her party succeeded her as railway minister.

On 14 March 2012, Dinesh Trivedi announced the annual rail budget 2012 that included an all over hike in passenger fares, ranging from 2 paise to 30 paise per kilometre for reasons of safety, along with network expansion and associated modernisations. The rail fare had not been hiked for nearly a decade  putting Indian Railways in ICU as far as its financial viability was concerned. The proposed fare hike would have added 4200 crores to railways income, which while paltry compared to its expenses, would still have saved railways from becoming bankrupt. The budget received enthusiastic support from a wide cross section of society including the general public, industry groups and all five Rail Unions. However, the fare hike proposal in the budget was fiercely opposed by Mamata Banerjee. Although Trivedi initially tried to defend the budget by pointing out that it was necessary for making Indian Railways stronger, Mamata Banerjee forced him to resign as Railway Minister on 18 March 2012

Manmohan's track record -

Following the advice of International Monetary Fund in 1991, Singh as Finance Minister, freed India from the Licence Raj, source of slow economic growth and corruption in the Indian economy for decades. He liberalized the Indian economy, allowing it to speed up development dramatically. During his term as Prime Minister, Singh continued to encourage growth in the Indian market, enjoying widespread success in these matters. Singh, along with the former Finance Minister, P. Chidambaram, have presided over a period where the Indian economy has grown with an 8–9% economic growth rate. In 2007, India achieved its highest GDP growth rate of 9% and became the second fastest growing major economy in the world.

Singh is now a strong supporter of globalization, seeing India's immense labor capacity as a path to delivering Indian goods in a worldwide market and eventually relieving large-scale poverty.

Singh's government has continued the Golden Quadrilateral and the highway modernisation program that was initiated by Vajpayee's government. Singh has also been working on reforming the banking and financial sectors, as well as public sector companies. The Finance ministry has been working towards relieving farmers of their debt and has been working towards pro-industry policies. In 2005, Singh's government introduced the value added tax, replacing sales tax. In 2007 and early 2008, the global problem of inflation impacted India.

Now, I let the readers draw their own conclusion. A litmus test for each one of us though, if you were to send your kids for economics education, who would you send them to - Professor Mamta or Master Manmohan? 

Apple - Falling in love with itself - Recipe for disaster

Why do successful companies fail? Because they get into the mode of incremental growth and stop thinking about game changing scenarios. It may be beginning to happen at Apple. 

Apple has become so predictable that people knew all about iPhone5, much before it was officially launched.

Some time back I had written a piece on Innovation. http://manishvermabrainwaves.blogspot.in/2010/04/living-in-flat-world.html#.UFK7UcHiZcQ. For easy reference I am pasting some excerpts from it here. It is so relevant to Apple of today. 

"For survival depend on innovation. It is no longer sufficient to do, what you do, better and faster. Understand what you do! Question the very need of doing it. Ask what besides that. It is about breaking the mold, but not for the heck of it, or just to see how much noise it makes when it breaks!

From organization's perspective, there is one lesson as well - Doing it better and faster gets the incremental growth, the tectonic shifts can't be handled by this philoshopy. Killing of Walkman by iPod is a typical example. Why could Sony not see the digital revolution coming? Did it not have smart people? Well, I think it is not about people, it is about the way organizations are structured. The organizations puts blinders on the employees. The incentive structure gets setup such that everyone in the organization does well when incremental growth is achieved. No one is incentivised or disincentivised to handle the tectonic shifts. A large ecosystem gets created that lives and breathes the incremental targets. While, milking an established product for incremental revenue is essential, however, to secure the long term future, a separate ecosystem has to be created that thrives on innovation, experiments and crystal ball gazing!"

Apple will have to get out of its cozy position of coming up with a few tweaks every year to its product lineup and expect the whole army of people to upgrade to the new tweaked products. Competition is  breathing down its neck and is segmenting the market in all possible ways. After living with iPhone, in almost the same avatar for the last six years, it is high time that it does something drastically new/different. Apple says, design center for the phone is the hand and thumb is the most important tool. Well, that might be true, but the most dreaded finger on the hand is the one in the middle, especially if the customer shows it! 

President - A useless expense!

What good is a President for? President has zero power, but a whole retinue of staff and huge paraphernalia that goes with it, all paid for by tax money. When Pranab Mukerjee was eyeing the Presidential position he was looking at it as a retirement home, that has exclusive gardens and lawns! I for one do not want to pay for Mr Mukerjee's morning walks in perfectly manicured gardens.

President is a  rubber stamp, a constitutional necessity. It is a position that is given as a reward for loyalty and is a complete drain on the national exchequer.

Would it not be a good idea to merge the position with the position of the executive head of the government, that is the Prime Minister? We can call this position by what ever name, but there is no sense in having a constitutional head, with zero power, that is different from an executive head.

To make the entire government setup accountable and answerable to the people, the executive head of the government should be directly elected. So we, the people, know who is going to lead the country. Today the situation is such that if you want to know who would lead India after next general elections, you have to either read Madam Sonia's mind or get into the head of RSS Chief or wait for M3 (Mulayam, Mamta and Mayawati) to make their mind!

President for all practical purpose is useless, only time there is a real need for the President is when the government is transitioning. I am sure those functions can be performed by Chief Justice. Let us make the government leaner and efficient. Let's start from the top!

Teachers Day - What courses can our Parliament run?

The entire legislative machinery is stuck, parliament is not functioning, important state matters and legislation related to economy, which have real material impact on the well being of large population of the country are pending. However, even in this situation political parties are able to push  a bill reserving quota, based on caste and creed, in promotions. You may ask - How low can they fall? Well, the digging is on.

When you think you have seen the lowest, they surprise you with their ingenuity of going even lower. Politicians should patent this process of finding newer depths to which one can fall. They can sell this IP to the corporates who are also falling over each other to get part of the spoils. In fact Indian parliament, as a whole, can probably run some courses, with formal degree and all, to share their collective knowledge of defrauding a nation and make some more money. I am taking a stab at the courses that they may want to offer -

a) Maximizing ROI - How to make multiple times the money you spent on getting yourself elected
b) The art of disguise - How to be religious but completely immoral
c) Self development - How to kill your self conscious
d) Innovation - How to find ways to make money where none seems to exist
e) Team work - How to team up with rival political parties of diametrically opposite ideology and make money

The candidates who pay premium on top of the regular fee will get the best seats in the parliament's visitor gallery to see the practical on the floor of the house.

I invite the readers to add to the above list of courses that our parliament could run. You see, on Teacher's day we must contribute our bit so that the great leaders could share with the rest of the nation their hard acquired practical knowledge of bleeding the country dry.

True Federalism

Is India not too big, too complex, too diverse, too varied to be driven by one set of policies and one vision.

Different parts of India are at different development levels, they are grappling with different set of problems, priorities are different. Trying to impose same set of policies whether economic, or for social development,  from a central command and control structure is not working. It is slowing those parts of the country that can grow faster and is compromising those parts of the country where focus has to be on the basic social development.

There is too much control with the center, it is time to restrict that and give states the authority  and responsibility to chart out the course that suits them the best and hold them accountable.

Let the center only handle defense, foreign affairs and ministries related to strategic research and development, for the country as a whole, rest everything including the finance and economic policies should be with the states. There is perennial fight going on between the center and the states with respect to dividing the tax money. Let the center only levy the minimum that is required to maintain the  ministries under its control, rest of the taxes should accrue to the state that is generating the commensurate revenue.

Today, numerous policies and programs are stuck just because not all the states agree to them. Even if the programs and policies are good, they get stuck because they seems to be pushed from outside (center) and because of partisan politics.  We can change that. The states should be able to decide what they want implemented and what they want to block. FDI in retail, insurance, policy on natural resources, reforms in banking, in agriculture, list goes on, all of these should get decided at state level. A mechanism must be created where even if only one state wants to implement a policy it should be allowed/enabled to do so, without waiting for the rest of the union to agree to it. It should be possible to create companies / business entities /legal entities that operate in a state, as if they are operating in an independent country.

This will make state governments answerable to their electorate. Today, bucks gets passed around, state governments blames center and center blames states, development and hence the people suffer. No one knows if the poor development in the state is because of faulty union policies or faulty state policies.

State elections should become more important than the union government elections. The political parties should focus more on putting their best candidates at state levels, they should focus on governing the states better, making them competitive, and improving the lot of people in the states that they govern. This will only happen if the states become more powerful and manage more of their affairs themselves.

I know the present state of the state governments and their governance record is pathetic. In fact, that is precisely the reason why I am suggesting, that we change the structure such that we take away their ailbi of always blaming the center for all the ills. The first principal of good governance and good management is to hold someone unambiguously responsible and accountable for it

It is clear and has been clear for a long time that our current system - both political and administrative - is broken,  what is required is overhauling of the engine and not just change of oil.