The Hindu : Columns / Sainath : The austerity of the affluent

Here is an excellent piece by P Sainath which was published in The Hindu in May 2012 about the sham of austerity that our leaders practice. His criticism of Mr Montek Singh Ahluwalia has been unrelenting. He points out that he has spent 274 days in 42 foreign trips in a 7 year tenure. Between May and October 2011 Mr Ahluwalia spent 18 days abroad at the cost of Rs 2.02 Lakh per  day. All this while he was defending a very low BPL line for India.  There are other who have been pointed out in this article.

I am beginning to come to a conclusion that our economic policy makers seem to have a revolving door with IMF and World Bank and are out of touch with the reality of our country. Their Neo-liberal policies may well entice the middle class and greatly favour the upper class but they do not seem to carry the majority lower class with them. Kaushik Basu previous chief economic advisor to GOI who famously said that bribe giving should be legalized is currently with World Bank. Mr Ahluwalia has served on IMF in past. Our current chief economic advisor Raghuram Rajan is also from IMF. We seem to have great talent of Indians doing well in these organization. But the difficulty is that when they join GOI they also bring with them a baggage of thinking which is prevalent in IMF and WB which is perhaps out of touch with the reality of India which Sainath makes us aware off.

The article by P Sainath is well worth reading....
The Hindu : Columns / Sainath : The austerity of the affluent

What You Should Know About the Supreme Court Judgement on Auctions

On 27th September 2010 a Supreme Court(SC) bench comprising of 5 judges pronounced its judgement on a presidential reference filed by the government to seek clarity on the decision of SC in 2G case. It should be recalled that 2G case decision was pronounced by SC in Feb 2010 in which all 122 licences which were granted by government in a first come first serve allocation process were cancelled since the process was found to be illegal.

In the 2G judgement the SC had mentioned that
"The exercise undertaken by the officers of the DoT between September, 2007 and March 2008, under the leadership of the then Minister of C&IT was wholly arbitrary, capricious and contrary to public interest apart from being violative of the doctrine of equality. The material produced before the Court shows that the Minister of C&IT wanted to favour some companies at the cost of the Public Exchequer.".
The court had also observed the following
"In our view, a duly publicised auction conducted fairly and impartially is perhaps the best method for discharging this burden and the methods like first-come-first-served when used for alienation of natural resources/public property are likely to be misused by unscrupulous people who are only interested in garnering maximum financial benefit and have no respect for the constitutional ethos and values. In other words, while transferring or alienating the natural resources, the State is duty bound to adopt the method of auction by giving wide publicity so that all eligible persons can participate in the process."

The stricture issued by the court left the government in fix on two fonts one, how to cancel the licenses it had granted to the private parties without a backlash from the foreign government and foreign industry, and second this judgement had in effect put the government in spot with all it previous allocation of natural resources where the process followed was not necessarily transparent and might have resulted in private parties benefitting at the cost of the nation.  It tried to first seek a review of the 2nd Feb Judgement in the SC but when it was questioned by the Judge whether it really was seeking a review for the directive to allocate 2G licenses. The government finding that 2G is perhaps a lost cause withdrew this petition.

Later it filed a presidential reference under article 143(1) of the constitution which is used to seek clarity from the SC "on a question of law which has arisen or likely to arise". Essentially this article is used by the government to clarify any doubt it has on a question of constitutional law and it seeks SC's direct opinion on it in order to formulate its future course of action. The reference that was filed by the government cited the various processes followed in past for granting licences for telecommunication since 1994 and asked 8 question. Question number 1 to 5 dealt with whether auction can be the only process for allocation of  natural resources and question number 6 to 8 dealt with whether the telecom licenses granted in past which did not follow auction should be cancelled and can no telecom licenses be granted in future without auction.
When this reference came before the court it invited petitioners of the 2G case, representatives of Indian industry (FICCI & CII), the government of India and the government of the States to present their arguments.

The petitioners of 2G case argued that this presidential reference was used to by pass the 2G judgement and if the government wanted a review of the judgement they should follow the due process rather than use article 143(1) which according to them is used only when a question of doubt over law has arisen. They argued that the petition is not maintainable and government's intention was malafide.

Soli Sorabji argued that  "the Reference as framed is of an omnibus nature, seeking answers on hypothetical and vague questions, and therefore, must not be answered. if the present Reference is entertained, it would pave the way for the Executive to circumvent or negate the effect of inconvenient judgments, like the decision in the 2G Case, which would not only set a dangerous and unhealthy precedent, but would also be clearly contrary to the ratio of the decision in Cauvery II"
Prashant Bhushan alleged that "the language in which the Reference is couched, exhibits mala fides on the part of the Executive."

The attorney general Vahanvati on behalf of the government presented that the government had accepted the 2G judgement, and the process of auction for the quashed licences was underway. He argued that "WHEREAS while the GoI is implementing the directions set out in the Judgment at paragraph 81 and proceeding with a fresh grant of licences and allocation of spectrum by auction, the GoI is seeking a limited review of the Judgment to the extent it impacts generally the method for allocation of national resources by the State."

In its judgement the Supreme Court first looked at whether the presidential reference was maintainable, and then it had to decide which of the questions it should reply too. The court after reviewing the arguments came to the conclusion that presidential reference was maintainable as long as the decision with respect to allocation of spectrum licenses is untouched. It mentioned "We are, therefore, of the view that as long as the decision with respect to the allocation of spectrum licenses is untouched, this Court is within its jurisdiction to evaluate and clarify the ratio of  the  judgment in the 2G Case."

SC next looked at whether the 2G judgement had in anyway made it mandatory to use auction as the only mode of allocation of natural resources. After going though all the arguments the court in its conclusion mentioned that the stricture for grant of telecom licenses via auction in 2G judgement was limited to spectrum and did not apply to all natural resources. It said "Thus, having come to the conclusion that the 2G Case does not deal with modes of allocation for natural resources, other than spectrum, we shall now proceed to answer the first question of the Reference pertaining to other natural resources, as the question subsumes the essence of the entire reference, particularly the set of first five questions."

While replying to the set of first five questions the court looked at whether as per article 14 (fundamental right to equality before the law) and article 39(b) (directive principal of state policy which states that distribution of resources should be for "common good") of the constitution there was any mandate that auction should be the only(just) policy to be followed.

After going through the arguments the court held that auction is not a constitution mandate to be followed in all cases of disposal of natural  resources. The court mentioned "The disposal of natural resources is a facet of the use and distribution of such resources. Article 39(b) mandates that the ownership and control of natural resources should be so distributed so as to best subserve the common good. ... Distribution has broad contours and cannot be limited to meaning only one method i.e. auction. It envisages all such methods available for distribution/allocation of natural resources which ultimately subserve the “common good”."

The court also mentioned  that "the submission that the mandate of Article 14 is that any disposal of a natural resource for commercial use must be for revenue maximization, and thus by auction, is based neither on law nor on logic. There is no constitutional imperative in the matter of economic
policies- Article 14 does not pre-define any economic policy as a constitutional mandate. Even the mandate of 39(b) imposes no restrictions on the means adopted to subserve the public good and uses the broad term ‘distribution’, suggesting that the methodology of distribution is not fixed. Economic logic establishes that alienation/allocation of natural resources to the highest bidder may not necessarily be the only way to subserve the common good,and at times, may run counter to public good. Hence, it needs little emphasis that disposal of all natural resources through auctions is clearly not a constitutional mandate."

The court went on the clarify that it can however test the legality of such decision of distribution of natural resources based on the fairness principal. The judgement said "When questioned, the Courts are entitled to analyse the legal validity of different means of distribution and give a constitutional answer as to which methods are ultra vires and intra vires the provisions of the Constitution. Nevertheless, it cannot and will not compare which policy is fairer than the other, but, if a policy or law is patently unfair to the extent that it falls foul of the fairness requirement of Article 14 of the Constitution, the Court would not hesitate in striking it down."

The court did express an opinion that auction is a more preferable method but not a constitutional mandate. The judgement read "In our opinion, auction despite being a more preferable method of alienation/allotment of natural resources, cannot be held to be a constitutional requirement or limitation for alienation of all natural resources and therefore, every method other than auction cannot be struck down as ultra-vires the constitutional mandate."

The court concluded that "our answer to the first set of five questions is that auctions are not the only permissible method fordisposal of all natural resources across all sectors and in all circumstances. As regards the remaining questions, we feel that answer to these questions would have a direct bearing on the mode of alienation of Spectrum and therefore, in light of the statement by the learned Attorney General that the Government is not questioning the correctness of judgment in the 2G Case, we respectfully decline to answer these questions."

Justice Jagdish Singh Khekhar provided a detailed explanation of the courts judgement in a separate judgement in which he agreed with the judgement but never the less provided some clarifications he thought were necessary along with several examples. He mentioned that "there can be no doubt about the conclusion recorded in the “main opinion” that auction which is just one of the several price recovery mechanisms, cannot be held to be the only constitutionally recognized method for alienation of natural resources. That should not be understood to mean, that it can never be a valid method for disposal of natural resources ". He concluded that "no part of the natural resource can be dissipated as a matter of largess, charity, donation or endowment, for private exploitation.  Each bit of natural resource expended must bring back a reciprocal consideration.  The consideration may be in the nature of earning revenue or may be to 'best subserve the common good'.  It may well be the amalgam of the two.  There cannot be a dissipation of material resources free of cost or at a consideration lower than their actual worth.  One set of citizens cannot prosper at the cost of another set of citizens, for that would not be fair or reasonable."

That was quite a lot of information that I have lifted ad verbatim from the Judgment. But I feel it was necessary for me to let the reader know what was exactly mentioned in the judgement, to best inform them of the aspects which in my view were important. Now the question before us is whether this judgement means that auctions are dead? Is GOI off the hook on Coalgate? Will GOI now be able to proceed with future allocation of telecom spectrum without auction? Will we never see a transparent process of distribution of natural resources? Will we continue to suffer because of crony capitalism?

I am not student of law let alone a constitutional expert but I can read English and this judgement is in plain English. My understanding is that this judgement does not really sound a death knell to transparency in general or auction in particular. It merely states that governments can make policy decision while staying withing the ambit of article 14 and article 39(b) of the constitution. It goes on to say that auction is a preferable way though not a constitution mandate. It also gave a stricture to the government that it can strike down a patently unfair policy or law.  It is also important to note that for spectrum allocation the court refused to answer the questions raised by government. Thus this judgement needs to be read into as applicable to cases other than telecom spectrum. As far as telecom spectrum goes the defining judgement was the 2G case and continues to stay unchallenged. It requires the government to follow the policy of auction.

The judgment may give a false impression to some governments ministers that they can get away with arbitrary allocation and they have given statements taking a dig at CAG for 'activism'. But it in no way lets the government of the hook as far as corruption and crony capitalism is concerned. I read a great explanation of how this judgement needs to be read in a Hindu editorial 'Auctions are dead, Long live auctions'.

Urban India Rejects September 2012 reforms - CNN IBN Poll

I must admit I am not putting much effort in this post. I watched the results of much hyped CNN IBN Poll today in a program hosted by Sagarika Ghosh. I am going to simply post data from that poll. As per CNN IBN "the urban middle class has dealt a severe blow to the Manmohan Singh Government, giving the Prime Minister's push for reforms a big thumbs down." The Poll was conducted between 20-22 September 2012

Here is a quick set of results on each of the economic policy changes:
1) Is hike in diesel prices justified?  - 87% said NO
2) Is cap on subsidised LPG cylinders to 6 justified? - 93% said NO
3) Is FDI in retail justified? - 76% said NO
4) Faith in Prime Minister Manmohan Singh? - 67% said NO (37% want him replaced)


There was a panel discussion on the poll results which I saw. The panelists were Siddharth Varadarajan(Editor-In-Chief The Hindu), Kumar Ketkar(Dainik Divya Marathi), Vinod Mehta(Outlook Magazine), Swapan Dasgupta. What I want to mention here is about the panelist who has struck a cord with me. Siddharth Varadarajan mention that there is skepticism and people do not see exactly why FDI in retail was required. He also mentioned that given the list of scams that have come out in open during the last several years, people do not see if they can trust the government on these issues. I am paraphrasing what he said but this is roughly what he said. I saw the entire discussion but this is what struck the most to me because he seemed to have hit the nail in the head as far as I am concerned. I am also asking why was there this rush with FDI in multi-brand retail?

Readers can access a report on the result here at CNN IBN website.

Why the mainstream Indian media supports FDI in retail?

For the last one week or so I have been writing posts about the FDI in multi brand retail policy. If you have been following my posts, then you would notice that I have been quite critical of the way in which this policy was pushed. Well it was not a surprise that it would come, it was expected to come as I have written in my previous post I have argued that the decision seems to have been heavily influenced by the corporate lobbying that has gone on for opening up of this sector, as also I have argued that international pressure has worked. I have tried to put up as many facts as I could to at least make my readers pause and think. Now I must ask my readers whether they have read any such criticism in the newspapers with large circulation and in the mainstream news channels that they are exposed to barring a few.

Well of course people have different opinion about this issue. It is expected that for any economic policy there will be divergent views. But have we been exposed to all these divergent views in the mainstream media? Another question is why this reporting only now what about in the run up to these decisions. What was the reporting like then? Was there enough debate about this issue, were all the pros and cons really presented objectively based on research and experiences, was it debated whether FDI investment was the only way to bring about the growth in our rural economy and to increase efficiency in the food supply as is being highlighted as its biggest benefit? Has it been debated whether the FDI investment alone will be enough? Won't we need investment in infrastructure like roads and power that Big Retail is not going to do? Had these investments in infrastructure been done by the country would we not have better efficiency or do we still need FDI in retail? We have heard about food wastage in the current dispensation but have we heard criticism of incumbent organized retail players as to what they have done to improve the situation? Why have they not been able to price their food products and specifically fresh fruits and vegetables cheaper? Do they really pay higher price to farmers?  Have people not been suspicious as to why the private organized players who should have had reservations about foreign competition like in may other sectors, were delighted to have foreign investment? Do they have an interest in FDI because they want to sell some or most of their existing stake? Have we heard enough in the last 10 days that they have been struggling with debt? It has been reported earlier but why have we not heard about this in last 10 days and why has no one tried to draw a linkage?

Why have we not been hearing more about these issues in the main stream media? Why is the media hailing this decision wholeheartedly other than a few exceptions?  When we see the same argument being made in media again and again we do not see the other side, because we have not been exposed to the other point of view, at least not by people we can trust. When politicians make an argument then we are mostly divided based on our ideological leanings and based on party lines. We are not always open to the views of a politician who belongs to a party we are ideological opposed to, even if he or she is making a valid argument. We fear that if we accept this argument from that person then we would end up being on his side on all the other issues, we do not agree with him on. So we are extremely cynical about the political parties. But what about the views of editors and the facts that journalist are supposed to write about? 

There are many question, and well, here is the answer. We will not hear about these things in the media because the media is not exactly independent in these matters. The media  in our country today has deep links with big corporations. They will not carry articles and opinions which are critical to them in a matter which is so important to them. The business men and politicians have long realized the importance of media. News media not only reflects the facts and opinions of the people it also influences the opinions of its readers. If they brow beat an argument enough, if they twist some facts and hide some other facts or if they promote one opinion more often than another divergent view, then they will be influencing their readers who will start believing what is being projected. 

Since the early part of last decade media companies have been carrying paid news, they have also been entering into these agreements called private treaties. What is a private treaty? Well it is an agreement where by a media group makes equity investments into the companies that enter into this treaty with. They buy a substantial share into that company via private equity placement against guaranteed advertisement and though not mentioned explicitly but is well understood 'no negative coverage'. It has been reported that Rahul Joshi the editor or Economic Times had given instructions to his reporter to write about their treaty clients in a way that enhances “the value of these companies and ToI’s (Times of India’s) investment.”.  Here is an example which is very relevant to the present situation. In 2002 Bennet & Coleman and company which  owns The Times Group, entered into a private placement agreement with Kishore Biyani the owner of Big Bazaar a retail player which will benefit immensely from the FDI policy announcement made on 14th September 2012. Can anyone in the right mind expect any criticism of the FDI in retail policy in Times of India and Economic Times? When the beneficiary of this policy is not just your client but actually you yourself. Times Group is by virtue of its ownership of Pantaloon Retail, Future Value Retail Limited and  Future Ventures India Limited a direct beneficiary of the FDI in multi-brand retail policy. No wonder we hear only praise of the government from Times of India and Economic Times for this policy move. 

The Times of India in its editorials encourages the government to 'Stand Up', not to give in to "rabble rousing pressure from opposition". It has made tall claims that "retail reform is estimated to bring in $16 billion worth of FDI in the next 3 years". It has hardly carried any opinion article arguing against the policy nor has it carried crititical reader comments. In fact as I have mentioned in my last post. Government of India almost appears to be following the script handed out by the Economic Times. The ET view as they have mentioned in one of their articles was that the government should "..open up FDI in multibrand retail quickly, and eases the rules that have curtailed FDI in single brand retail. It should explain that the provisions for FDI in multi-brand retail are enablers. It is up to individual state governments to implement them or not". Now the readers would be in no position to suspect that what they have been writing is in good faith unless the reader is aware that owner of the newspaper they are reading is a direct beneficiary of this policy why will it be critical of this policy? They will make profit when Big Bazaar makes profit.

I am going to end this post with a youtube video speech of Mr P Sainath where he explains the current state of our media companies and a state of affair he describes( borrowing from Ben Bagdekian) as "Corporate Incest within, Corporate Incest".

PS: Here's link to another article by P Sainath on how (as per his article) Times of India manipulated news about Bt Cotton at a time when Biotech Regulation Authority Bill was to be tabled in 2011. Now you can choose what you want to believe. But it is again 'for the welfare of farmer' argument similar to the current FDI in multibrand retail policy changes. So I am pretty sceptical. You can draw your own conclusions.

Corporate and US Lobbying for FDI in Multibrand Retail

ET's views had an effect

Some of the opposition to FDI in Multibrand retail stems from the suspicion that this decision was not entirely an independent decision made by the Government of India, and there were pressures by self interest groups put on the Manmohan Singh lead UPA government to make this policy move. It has been alleged that this pressure came primarily from two sources foreign governments on the one hand and big business on the other.

This Hindu opinion piece "FDI in retail — UPA ‘retired hurt’" was published after the withdrawal of this proposal in November 2011. The diplomatic cables leaked by Wikileaks and referred to in the above article as also in another Hindu article, shed light on how Hillary Clinton, who has served on the board of Walmart, which is an Arkansas headquartered company(Bill Clinton is a former governor of Arkansas), had been very interested in knowing what was the position of Commerce Minister Anand Sharma on Multi-brand retail.

The article also refers to the statement made by John Menzer, the CEO of Walmart the 2005 annual meeting while addressing shareholders, how Walmart had "energized the FDI lobby and preempted the anti-FDI lobby" in their 6 meetings with the government. He also said in the same meeting that Wal-Mart does not want to wait for policy changes on FDI and wishes to enter with an Indian joint-venture partner to "take advantage of this market while it's still developing.". Of course the Indian partner was non other than Bharti group. It is important to note that only months before the recent policy decisions the Delhi High Court had issued notices to Bharti Walmart Pvt Ltd for alleged violation of FDI norms. On July 12th 2012, Ranjan Bharti had met Commerce Minister Anand Sharma on this issue.

One need not be concocting a wild conspiracy theory to allege that there was corporate and US government pressure on the Indian government to allow FDI in multibrand retail in such a hurry. There is enough evidence in public domain for one to be suspicious. In July 2012 Economic Times carried an article mentioning the following "Wal-Mart Stores, which has been trying to set multi-brand shops in India for a long time, spent nearly $1.5 million on lobbying in the last quarter ended June 30, 2012 on various issues, including matters 'related to FDI in India.'".

 Bharti does not have a great pedigree when it comes to keeping arms length relationship with the government. The Indian organized retailers have been struggling with excessive debt on their books. Kishore Biyani lead Future recently completed a restructuring of the group's assets in order to reduce debt. The FDI policy change in mulit-brand retails has been a boon for these companies and one can imagine that while the government has been promising a possible benefits to consumers and farmers sometime in future the immediate and certain beneficiaries have been the existing corporations who have ended up in this situation because of growing 'too big too fast'.

All in all the previously mentioned Hindu article by P. Sainath has been quite accurate in predicting that the earlier failed attempt to reintroduce the FDI in retail policy was all but a temporary set back, and as he had said, the team batting for Ms Clinton was "only retired hurt for the moment".

The Hindu : Opinion / Lead : A risky strategy, born of panic

The Hindu : Opinion / Lead : A risky strategy, born of panic

I always turn to The Hindu when I hear the same clutter in other mainstream media and I immediately see clarity. I see hope that some people still realize that to better understand an issue you need to see both sides of the story first, and then you will make a better judgement. It takes courage to stand out and not simply follow the side which appears to be winning at present. UPA will survive most people agree, but democracy has lost. A decision like FDI in retail is of such enormous consequences that a simple majority should not drive it through, let alone a majority garnered by congress 'Managers'. PM Manmohan Singh could have done better, Pranab Mukharjee had the sense to suspend this decision previously in the interest of democracy.

The Hindu : Opinion / Editorial : Irrational exuberance

The Hindu : Opinion / Editorial : Irrational exuberance

Fine Print of GOI FDI in Multibrand Retail Notification

Yesterday Government of India notified the FDI in multi brand retail. One of the finer prints which was also being reported yesterday and today is that this notification does not apply to eCommerce businesses.  E-Commerce businesses were not permitted to have FDI and that policy remains in effect. The curious implication of this policy is that while Walmart can do business in India, Amazon its upcoming competitor in the US and rest of the world cannot operate in India. It makes me wonder if all the benefit of technological innovation that is being suggested Walmart like businesses are going to bring to India, can't Amazon do the same, or may be, better. When we are opening up retail then why not online retail? What is the justification for not allowing FDI in retail eCommerce?

Interestingly this came at the back of another news story, that Walmart has stopped selling Amazon's Kindle eReader devices which it sees as a competitor. Another interesting article in Washington Post is here.
The article states "Retailers have been particularly critical of the online marketplace and its contribution to the trend of “showrooming.” They complain that customers often come into their brick-and-mortar stores to see or try out products that they’re interested in buying, only to leave and purchase the goods online, where customers often don’t have to pay sales taxes. That practice gives online retailers an unfair advantage..".

Now I am not alleging a conspiracy in keeping out Amazon and allowing Walmart in India, at least not yet. But this presents a curious case of a retailing giant like Walmart which is the biggest company in the history of the world being allowed to operate freely in India and not allowing its online competitors which Walmart and Target feel threatened by, and hence are trying to limit them desperately. Some have stated that the only company which ever was as big and powerful in the history of the world as Wal-Mart is today was, The British East India Company. An interesting article on the Boston tea Party protest against the British in America in 1773 is here which uses the Wal-Mart analogy to, I must say, a great effect.

Here is an interesting book on Wal-Mart's business practices. The link opens an amazon book retail page in the US. Lets see where this takes us, we are nothing but witness to history as it unfolds. Can our actions influence it?

Can retail FDI policy really be implemented statewise?

Central government ministers have been claiming that FDI in multi-brand retail policy that has been announced on 14th September has a clause that the States which do not wish to allow FDI in multi-brand retail need not allow it under the shops and establishments act. I came across this opinion piece in The Hindu Business Line which mentions that this cannot be implemented because international agreements signed by the government of India with other countries call for a national treatment for investment from other countries.

The article says "In effect, what this means is that if a Nilgiris can operate in Chennai, a Big Bazaar in Kolkata or an Easyday in UP, the governments of Tamil Nadu, West Bengal or UP cannot prevent a Walmart or Tesco from opening shop. If the licence is denied under the Shop and Establishment Act, this can be legally challenged under the BIPA agreements. The entire country, including all State governments, is obligated under the BIPA agreements." 

This is an interesting point that I have not seen being raised or clarified by the government ministers. At least HBL should allow the government to clarify on this. The bilateral agreements can be accessed here.

PS: I sought clarification from Hindu editor who pointed out that "we have already carried a story yesterday that the international agreements do not impact implementation of FDI in states. the Government had also formally issued a clarification in this regards."
The GOI clarification can be accessed here.

Mamata Pulls Out of UPA II

We have heard it today. Mamata Bannerjee withdraws support from the UPA II government. Was this the most expected decision from her? I must say at the risk of sounding opportunistic that I was expecting it to come. I have argued in past that the 14 September decision by Manmohan Singh has been undemocratic to say the least. One might argue that Mamata Banerjee was always opinionated and stubborn but she has support from the people who have democratically elected her to power. She has pro-poor views and has every right to do so. Congress has been autocratic in these decisions and has been quite arrogant in its confidence of being able to successfully horse trade with SP and BSP to keep Mamata in check.

We have to wait and see if congress is able to garner support from the SP and BSP to survive but even if they do they will extract a big price from the government. I am not convinced that Manmohan Singh can survive the full term and also effectively conduct business. The decision in FDI in retail was decision which even a seasoned and experience politician like Pranab Mukharjee did not see as tenable. If the government has to compromise with some of other parties on corruption in their states to survive then it makes another dent on its image of being weak on corruption.

Allow free market in land and natural resource too

Indian big business has been at best only a partial advocate of free enterprise. The demand by industry for government to acquire cheap land on its behalf is disappointing. I read a recent article by CII chairman Adi Godrej in Times of India. Right to Property which used to be a fundamental right in our original constitution before it was removed to supposedly allow government to under take projects for public good. Recently it is being recognized as a basic human right even by a Supreme Court Bench in 2008. The father of Classical Liberalism John Loche himself believed that right to property was an unalienable right. No where in the capitalist economies of the developed world, governments participate in land acquisition for private industry. Yes our business men sight that 'Indian realities are different' when ever it suits them.

I may not believe on all the new-liberal policies but I always believed that the ownership of the land that the population has the possession of the land they work on is older than the existence Indian Republic itself. So when I read about John Loche's argument that "property precedes government and government cannot dispose of the estates of the subjects arbitrarily". Then I agree with him completely. Unfortunately the industry with its demand for the government to acquire farm land and literally 'gift' the land to businesses in the form of cheap land as 'incentive' to set up business units.

My opinion on Mr Adi Godrej's article is that on an issue like agricultural land, the industry should be open to pay the market rate and rehabilitation costs like true free market participants. On coal block allocation when the entire process has been suspect rebidding would be the only just way out to ensure nobody got unjust benefits.

FDI in retail is too important an issue to be pushed through autocratically

Below is my letter to the the editor of Times of India which I wrote in response to and editorial 'UPA Stand UP' of Sep 17, 2012. The editorial advocates a strong stand by the UPA government for its decision on FDI in retail. It advises the government not to give in to "rabble-rousing pressure from the opposition". It mentions that the view that "FDI in retail will lead to closure of small shops is a lie". It goes on to claim "it has happened no where else in the world". Editorial says that if people fear it will happen in India then it "reveals a deep-seated inferiority complex". Citing risk of credit rating downgrade it makes a tall claim that "retail reform is estimated to bring in $16 billion worth of FDI in the next 3 years". Here is my response in my letter to the editor which I a suspect will not be printed, neither do I expect any other view questioning the ramming down of FDI in retail down the throat of the citizens of India to be printed. One wonders, what is the cause of this partisan reporting? Is it big business being able to convince the media better (Nira Radia tapes controversy comes to mind) or is it supposed pro-reform activism by some sections of the media. Both are bad but former seems more likely because of apparent half truths mentioned in the editorial. The reader has to decide.

"This is with reference to editorial 'UPA Stands Up'. While the need for efficient decision making by governments is well understood, FDI in retail is too important and issue to have been pushed without sufficient consensus. We would do well to keep in mind that UPA has only 37% of the votes cast in the last general election. Pushing though this kind of change under considerable opposition is not in line with democratic principles.

     The editorial expresses strong views in favour of FDI in retail. The figure of $16b investment in 3 years should be studied, Kishore Biyani had recently mentioned $10b in 8-10 yrs. These figures have been mentioned but empirical evidence has not been shown and we don’t know how they will benefit our productive capacities or just lead to more imports from China in the long run. Monopolistic retail chains do threaten local businesses; a case in point is the recent example of New York's refusal to allow Wal-Mart for the same concerns. TOI should allow a more informed debate on these issues by presenting views from both sides. This is too important an issue to be pushed through autocratically by any government, Congress or BJP."

Opposition to Big Retail in the developed countries too

Came across this Roger Moore style documentary on Wal-Mart's business practices and ill effects of big box retail monopolies on local communities in the USA. Case in point is that there has been opposition to companies like Wal-Mart even in the country of their origin, and people have been affected adversely just as there is so much opposition in India. Yet the present central government has gone ahead and made FDI in retail policy changes without bringing everybody on board.

Wal-Mart: The High Cost of Low Price paints a sorry picture of monopolistic tendencies and unfair business practices of Wal-Mart by interviewing former employees, managers and small businesses affected by the opening of Wal-Mart stores in their towns. Big foreign stores faces stiff opposition even in the country of their origin because of monopolistic predatory pricing, shortchanging employees, squeezing suppliers and storing imported Chinese products(Chinese suppliers provide Wal-Mart with close to 70 percent goods that it sells globally each year).

Since it was clear to the Manmohan Singh government last time around when it tried to take this decision, how much opposition existed to FDI in retail, they should not have gone ahead with it. The current government may very well survive because of political horse trading with its allies but democracy has lost, when a government which got only 37% of the votes cast in 2009 general elections has taken such a fundamental decision greatly influenced by foreign governments and corporate interests. 

Pushed to a corner Manmohan does a do or die again

Friday the 14th has been a momentous day in more ways than one. Not only were several huge policy decisions on foreign direct investment in aviation, broadcast and multi-brand retail made, it is also quite clear that the Monmohan Singh government has taken this decision without support from its allies. Essentially what Prime Minister Manmohan Singh has conveyed to everyone is that you have pushed me to a corner and made me take this decision and I don't care whether you like it or not. If these decisions are palatable to you then accept them if not then I dare you to take me down.

Now one can go on arguing about whether these policies are going to benefit us in the long run or not but what is quite clear is that they have been undertaken in desperation, perhaps to ward off the immediate troubles that UPA has been facing. One economic decision after another taken by the government has taken us from one scam to another. The nuclear deal with the US, and the decision to build large number of nuclear power plants with foreign investment has faced immense opposition from people. The government tried its best to dilute the national nuclear liability bill but could not do so to the extent it wanted. The telecom scam highlighted the crony capitalism that prevails in our country. Common wealth games scam left us with a huge bill to the exchequer with no real economic benefit.

The coal allocation scam has finally pushed Manmohan Singh lead UPA government to the brink. Sitting on one failed policy after another, the coal scam has finally pushed the government to a desperate situation. It first decided to bring in the caste reservation in promotions bill and now has brought about these economic policies on foreign investment. That the prime minister is ultimately responsible for the failings of his government can not be denied. It has emerged that when it is convenient for the present government, then they would sight lack of political consensus as a reason for not taking a decision, as in the coal allocation and mineral mining acts. But in the case of FDI in retail they have gone ahead with the decision fully aware that people are opposing it, their allies are opposing it, and state governments are opposing it. There was no need for broad based consensus now.

I personally do not see the merit in the arguments how FDI in multi-brand retail will necessarily benefit us. There is no denying that our public distribution system is in shambles, but then which government department is functioning efficiently and not mired with corruption. What the political leaders of our country need to understand is that the problems we face are of our own creation and no amount of foreign investment will root out the real problems we face. These are the problems that are fully in our control and are squarely our responsibility. How much of the exchequer is being negatively affected by these scams and by wrongly conceived, poorly implemented welfare policies? How much of the public funds, are being eaten up by unsustainable PSU's like Indian Airlines? Is FDI the only source of foreign exchange and capital, what about increasing exports, and reducing reliance on imported fossil fuels for our energy requirements?

These are some of the issues that the central government should be occupying itself with, but unfortunately they have found themselves cornered with scams, specifically the coal scam and have chosen to fight back with a potential political hara-kiri, rather than address the problem of political corruption and a series of scams that citizens have witnessed in recent years. We will come to know in the coming weeks if the congress government survives. Either way my prediction is that we will be witness to several turmoil in our national politics in the days to come and next general elections will be fought on all the issues covered in this article including and most importantly political corruption.

Reservation Bogey in Lokpal

Over the last few days we have been hearing about the union cabinet's decision to have reservation in Lokpal. This is in my view shows the desperation in union government. They are trying to put as many obstacles in the path of an effective Lokpal as they can. When they have realized that citizens are largely in agreement with the "Team Anna" proposal for an effective Lokpal, they now want to play the age old divide and rule game.

This is completely absurd and I almost feel like saying that let the post of the prime minister of this country and the entire union cabinet be reserved for backward classes. That way perhaps there would not be a need for any other demands for backward class reservations in every walk of life that we face.

The truth of our country is that anyone with power in hands becomes the victimizer and one without the victim. It is far from true that the so called backward classes are victims and the forward classes are the ones who exploit. I doubt if the government officials including IAS officers who are from the reserved category are any better than the ones from the general category when it comes to corruption in their ranks.

This is very mischievous on the part of the government to introduce 50% reservation in the Lokpal. A body they should have the best of the best people in its ranks to defend our public finances from being squandered, and to prevent exploitation of the citizens by corrupt officials is being destroyed, to gain political mileage, and to divide the people, who are are in favour of an effective Lokpal.

This is going to be one long struggle for sure for us.

Anna Hazare Gets His Message Through

What a day! Do I need to say more? The parliament has unanimously resolved for in principal support of Anna Hazare’s three demands on Lokayukt in states, lower bureaucracy and citizens charter. The Lokpal movement had brought the citizens together in support of a corruption free India. This issue was raised predominantly by the urban population and some would say it was dominated by the middle class. I would say not the middle class necessarily but yes the more politically aware citizens were the majority in support of this movement. There were no truckloads filled audiences invited to Ramlila Maidan, the rallies also more or less had spontaneous support. For once people were out in large numbers for a constructive purpose.

Now one might argue that this wasn’t really a victory that “India Against Corruption” and the so called Team Anna were initially demanding. Their bill was never tabled in the parliament. But I for one had never believed that this was really the aim of Team Anna in the first place. It was never possible for the initial demand they were making to be accepted. The parliament was always going to be one to make laws. This was a demand raised in sheer sense of betrayal they had felt when the government’s version of Lokapal bill was revealed. It came to light then that the government is capable of being completely insensitive to public grievance on corruption. Possibly survival instincts of the supporters of corruption in the government had kicked in and they brought about a completely worthless legislation. Their aim in my view always was that the ruling party and ultimately the Parliament take the process of creating an anti-corruption ombudsman seriously. It was a proposal that had first come out in 1969, and had since been repeatedly discussed, but could never transform into a law. Anna has achieved that purpose. He has got his message through.

Over the years our politicians have conformed to the image of being both thick skinned and deaf. I would make an argument that before being corrupt, what they were corruptible and they are corrupt today because the special interest groups (read big businesses) have worked the system to their advantage. This is what causes the multi crore or rather multi lakhs of crores worth of scams that we come to hear about these days. So the politicians had two constituencies the vote banks(read rural poor and marginalized sections of society) and the super rich who would sponsor their political and personal lives. During Anna’s Lokpal movement they have become aware of a third constituency that of the politically aware citizens of our country who are concerned about the issues of governance faced by us, and they have finally responded.

Cutting across political lines they have accepted that corruption that has been troubling the nation for so long has reached a saturation point. By accepting Anna’s three demands they have shown that they are sensitive to genuine demands of the people. They have also shown that they can act with utmost maturity and conduct the proceedings of the house with dignity. This was a welcome sight. I would like to see more of these dignified debates in the parliament and not the walkouts and shouting and storming the well of the house that we witness all too often in the Parliament. I wish this does not become just a one of case but becomes a precedent on how the parliament should function on issues of national importance.

Lokpal Movement - Time to Chose Sides

The more I observe the events of the past week around Anna Hazare unfold the more I am convinced that the arguments being made about unconstitutionality of the movement, about wrongness of the method of protest and demands raised, about this being a middle class movement and not really a grass root movement of real India, about the parliament being supreme, about law making being delayed, about governance being affected, about a foreign government being involved and so, on seem to fall flat on their face.
Citizens of our country have lived with bad governance for too long. We have let corruption become a part of our DNA. We have for long time patiently tolerated corrupt administration. Some have renamed bribes as a convenience charge or a tip, some use it as means of getting ahead of competition, others call it compulsion. The government does not even use the term graft and calls it leakages. We have for too long eroded our conscience and have been too pragmatic in our lives to have allowed this monster to grow as big as it is today. It needs to be reaffirmed now that the time for taking sides is here.
Anna has galvanized the people of our nation for a just cause. There is a specific objective that people have this time, the leadership of this movement has the right credentials and there is a momentum in this movement which is unprecedented in recent history. It is time to choose sides. No longer can the political class hold on to unreasonable control of the public institutions of India. Every system works if the people who run the system make it work. But the political leadership has allowed our institutions to corrode and one wonders if this is what the founding fathers of our constitution would have envisaged for these institutions to function.
The three pillars of the constitution namely the executive, the legislature and the judiciary are meant to remain independent and not encroach on each other’s function and independent they are but efficient they are not. All three pillars have been affected by institutional corruption and they have failed to correct themselves for several decades now. The most responsibility of governance lies with the executive branch but not only are they the most lacking, it appears they are also the ones who are most against a strong Lokpal. This public outcry today is to move the executive, to force them to bring a strong Lokpal bill to the parliament. They will resist but for how long is the question? Can they continue to ignore the public anger against corruption? Can they use arguments about process and procedures to deny people their right?
All processes and procedures, the parliament and the government are meant to serve the people. Can the same procedures be used to deny people what they deserve? One can disagree with many of the points in the Lokpal bill which “India Against Corruption” has brought forward. What was expected is not that the entire bill should have been accepted as is? What was expected is that an honest attempt should have been made to make a strong independent Lokpal. An honest attempt should have been made by the political class to clean them self.
This is time for them to act now. It is time for them to choose sides now. They have to decide whether they will continue to protect their corrupt brethren or will they for once realize that status quo is no longer acceptable to people. They have to choose sides now and reaffirm their loyalty to their electors. Once they are on the side of the right then they can debate on what is the best way to implement the right. But they have to choose the right now. The time to choose has come.

THE FOURTH PILLAR OF DEMOCRACY AND THE ANNA MOVEMENT

It is common belief that the fourth estate of a democracy is a free and independent Media. Media’s purpose is clearly that of a mirror that reflects the state of affairs in the nation. It shows us who we are, where we are currently and where we are headed. It reveals and makes transparent the inner workings of the other three pillars of democracy namely the Judiciary, Legislature and the Executive. It on a daily basis or in case of 24x7 news channels minute by minute makes the people aware of the current affairs in the country. So while the legislature is a reflection of the representative nature of our democracy the media is what enables a participatory democracy on a daily basis.
All four pillars of democracy are meant to be independent. Independence and freedom of the media is ensured by the fundamental right to freedom of speech for every individual. That the media is indeed the fourth pillar of democracy is established even more whenever a popular movement rises in the country. This is when the media both thrives on and feeds into the popular movement. This is when the real power of media is revealed and the independence of the media becomes most important.

The present movement for the Lokpal bill is a culmination of years of reporting on corruption issues by the media. There was never a grand design that a movement like this had to be created. While India Against Corruption NGO did organize Anna's protest but it is beyond them to organize the entire media campaign in favour of this movement. This movement evolved over the years because of the failings of the executive that was revealed by the media to the socially aware population of our country. For long the political class has assumed that their decisions would go unquestioned by apolitical people once they have been elected to the legislature. They have thrived on ill informed voters who have brought them to power over and over again on petty issues. They have played politics on petty issues like cast, subsidies, religion, regional identity, and so on and avoided being answerable to voters on bigger issues like corruption, defense, terror and others.

Media savvy population of the country is a new breed of voters who not only want to elect representatives every five years, but also want to participate in the daily workings of our country by staying abreast with the major issues and demanding transparency and action by the executive and legislatures on those issues. Anna Hazare has all but been a catalyst of this movement. The movement was already on for several years now. Anna Hazare has only highlighted the most important issue for the people of our country, and brought that latent public discontent to media’s attention, and through the media, to the attention of the political class. The ruling political party is bearing the brunt of this discontent but this is a message for all representatives that they need to be responsive to peoples concerns even in a non election year. That the political class has resisted this movement as best as it could, shows the culpability of the political class in corruption.

The same politicians who talk about how the Lokpal would undermine the independence of public institutions forget that it is they who have over the years destroyed the independence of our institutions. The Police, CBI, civil service, anti corruption watchdogs like the CVC etc, have all been undermined by political interference. The bogey of independence of the three pillars of democracy that the government purports to be safeguarding in their bill falls flat on its face when one looks at the history of interference by the executive in the workings of our institutions. The cash for vote’s scam, corporate lobbying, MPs asking questions in the parliament for money, the political horse trading that is all but common in our country are examples of how the independence of legislature are undermined. Promise of appointment of judges of the Supreme Court and High Courts after retirement to plum assignments in government committees can very well be used by the executive for interfering with the functioning of the judiciary.

The People of this country through the fourth pillar of our democracy are conveying to the politicians that it is time for them to curtail their own powers when it comes to investigation of corrupt amongst them. It may very well have been possible for them to be self correcting, but they have failed to do so over several decades. They have lost that opportunity. This has allowed corruption to grow deep roots and spread its tentacles to every walk of life. Stronger measures are needed and the people believe that an independent and strong Lokpal with investigative machinery under it but with a limited mandate to deal with only public corruption is a must for our country. All politicians and the government in particular should listen to the people and not try to weather this movement. It can be predicted that the more they resist or the more they try to delay the bigger this social movement will become. It is not a question of whether the government relents; it is a question of when the government relents.

ANNA

So let me recap what happened on 16th of August, 2011. Anna Hazare refused to accept police conditions for his protest in JP Park. Police imposes section 144. Police arrests him and his associates from his residence early morning. They take him to Tihar jail and then he is released by late evening. But Anna refuses to leave the jail till he gets a permission to protest.

This short description of the events of today can very well go into history books if they finally result in the kind of change in our governance which all of us have desired for so long. Else it will be just another routine political protest that the ruling government of the day has been able to tide over and we are back to square one.

I have long believed that corruption whether big or small is the single biggest hurdle in recognition of our true potential as a nation. Lot of intellectual arguments can be made as to what the right “democratic” and “parliamentary” method should have been for bringing about a change. About who has the right to make laws in a democracy and why an elected government should bow down to unelected and self appointed “civil society”. But when you are talking of masses then no matter how intelligent the masses are it is not a time for intellectual debates. These arguments have happened in past and will continue in future but today the question is should the government bow down to Anna or not. Is Anna blackmailing an elected government?

Here is my argument. Supposing the government does bow down. Will it be the first time the government in the center has bowed down from its stated position under pressure? Let me jog your memory a bit. Hasn’t the government of the day in our country bowed down in past, to corporate lobbying, to foreign governments in international negotiations, to terrorists while negotiating hostage release, to our enemy countries in defeat or near defeat in war, to its minority allies to keep the government in power, to political horse trading to retain power, to Pakistan sponsored terrorism by climbing down from previous position of no talks till all stops to constructive dialog; and the list goes on. Well the government in the center has a history of bowing down to people and groups of much less credibility than Anna Hazare. Why such reluctance now?

I would say that in present situation it would only be democratic for a democratically elected government to not remain rigid and to climb down from its stated position once again in history; to perhaps, create history.

They should climb down from their stated position, and accept, that the Lokpal bill they have presented in Parliament does not do enough to address the real issues of corruption. It is also perhaps time for the black sheep in the political hierarchy to step aside and let the white sheep take center stage or for the gray ones to turn white. It is time for the government of the day to choose between black and white and get rid of this menace once and for all. It is a golden moment for Manmohan Singh or who ever it is in the present government who claims to be Mr Clean to really prove than he can really take leadership at this hour, and give the nation what it deserves; a corruption free and productive governance. A strong independent authority to bring justice to victims of corruption would be the first step in that direction. It can be seen, that the nation believes so.

Prevention of Communal and Targeted Violence Bill

I have followed several television debates, and newspaper articles on the new proposed Prevention of Communal & Targeted Violence Act(PCTV) and have heard arguments from both sides. But I have not heard anyone making a balanced analysis that mentions both the flaws and the benefits of the new bill.

An argument being put forward by many of the proponents of this bill(including the drafting committee) claiming this bill is not discriminatory is that "Hindus" will also be protected in Jammu and Kashmir by virtue of them being a minority community there (of course they don't mention it is subject to J&K assembly accepting this bill). The argument being made by some opponents is that it is essentially an appeasement of Muslims. Here is my take on this bill.

Anyone who reads the draft bill is greeted with the statement that states "It extends to the whole of India. Provided that the Central Government may, with the consent of the State of Jammu and Kashmir, extend the Act to that State". There in front of us is the reality of our country, where we have given so much autonomy to a minority community simply for being a majority in a particular state and yet the secessionist and divisive elements prevail in J&K. The moderates demand more autonomy and the extremists demand secession. Positive discrimination alone did not ensure communal harmony.

This forms my prime argument about the inherent flaw in this bill. The flaw is that of division of population in front of law and the definition of the victim "group". My argument is that any amount of special rights to a group for being a victim group will not bring justice finally for the individual. Simply because this is an intractable problem, there is no right division. There is no right definition of a “group” victim or victimizer. In fact if this bill read in exclusion of the definition that this act uses for “group”, and the word group is used in a more general term as understood in common language then this act would be an excellent act and nobody in his right mind would disagree with most of the things mentioned here. In fact the definition of “communal and targeted violence” in this act is coloured by the definition of “group”. The victims of the “group” seem to be the real victims and the other victims are second class citizens when it comes to delivery of justice as per this law.

Let me mention what I have always believed about any division based on groups. I would say when you have to divide, divide down to the individual, not to any particular group. So when you have to protect anyone by law, protect the rights of an individual, irrespective of what group, or subgroup he or she may belong to as per a certain definition of a group.

So I don't quite agree with the definition of group (minority) as per this bill, and special protection for that group. Special privileges for Schedule Cast and Tribes in our country were provided to ensure they are protected and have opportunities of growth. 60 years of positive discrimination has not been enough to bring the SC/ST “group” equal rights and respect.

The current framework has only served to institutionalize that discrimination and bring it in the DNA of our country. The so called reservations have only led to more demands from other groups and subgroups for reservations favouring them. The so called general category has become more antagonized against the SC/ST/OBC because of reduced opportunities for them. The recent cut off of 100% in Delhi University which created such an outcry is of course only in general category.

I fear that further divisions of our society are being created in this anti-riots bill. Every citizen should be equal in the eyes of the law. When you define minority for special privileges, how to you define them? Do you define them only in terms of the religious and linguistic minority in a particular state by population? What if there is a Christian family living in a Muslim dominated ghetto in Nagaland. Who is the minority here the Christian family or their Muslim neighbours? Also why does the bill treat all Schedule Cast as one group, there are majority and minority religions in the SC and ST categories too. What if a majority Christian ST group commits violence against a minority Jain ST group? Where is protection for this “group” under the provisions of this law?

We are a secular country that means citizens are equal in front of the law no matter which religion they belong to. Religion is a private affair for the individual and should have no legal bearing in a secular country, except that every individual has a right to pursue his religious beliefs. The constitution does not say that every specially defined “group” has a right to pursue his religious beliefs. The keyword is "individuals" or “citizens”. This bill has simplified its definition of minority group by using the population in the entire state as a whole. This may be simple to define in a law, but does it address all acts of violence by one “association” on another “association”( the law uses “association” in place of the general term of group which we use in common language).

It is fair to assume the greatest culprits have been the public servants who have been derelict in their duty and have taken sides in a communal violence. That means the law should have restricted itself to sever punishment for such dereliction of duty and should make it mandatory for them to take immediate actions as per law to protect the victims of violence. That would have been enough to ensure that the administration does not become a party to the riots. But creating provisions which discriminate against an individual simply because as per the law he belongs to a majority group is not fair. We as a nation have to evolve and grow over this group and sub-group mentality.

If we have to divide, divide down to the individual and protect every individual's right, by treating him or her equal to any other individual, in the eyes of the law. That is the foremost fundamental right guaranteed by the constitution, every individual is equal before law. I am not a constitutional law expert but my intuitive understanding of right to equality under the constitution is that PCTV act in its present form infringes upon a citizens right to equality before the law. Barring special provisions for advancement of women, children, socially or educationally backward and SC/ST the state cannot create laws that are discriminatory.

Lastly I would like to argue that bringing this divisive draft bill in public domain at a time when public opinion is against the government on the Lokpal bill, is highly suspect, and may very well have been intended to deflect attention.