Friday, August 28, 2015

Patel Rap




Patel Rap

The jokes on the premium segment looking for reservations in Gujarat may be doing the rounds, but this sudden and sizeable eruption is a direct and damaging attack on the Modi bastion. It is designed to knock spots off the Gujarat Model, undermine its contours via civil disturbance, the unkind cut coming from erstwhile  staunch loyalists.

It is timed to raise the spectre - a lack of ‘inclusive development’, supposedly missing in action for the bulk of the Patels. This despite pockets of great prosperity and considerable representation in government, and amongst the diaspora. And all this, most inconveniently for Modi, in the run up to the Bihar assembly elections scheduled in October.

So what if the suspiciously large five lakh people turnout for the Patidar Rally had well-ordered parking lots full of cars amongst the usual buses and tractor trailers? The rally in Ahmedabad must have cost crores to organise, and not everyone there need necessarily have been a Patel, but money is apparently no problem for the right trouble-maker in the prime minister’s home state. Not when he is trying to win the crucial Bihar assembly elections.

The young leader fronting the rally, Hardik Patel, thinks 22 lakhs turned up for the rally instead of the 35 lakhs of people he was expecting, but it would be natural for him to have a touch of brain fever, having been catapulted to national prominence from nowhere  in a  week.

The agitation has cast in stark relief, in exaggerated form, some of the glaring problems with the Gujarat Model of development. Big business and big industry, even big agriculture, ensured the 10% plus growth per annum during most of the Modi as CM years, much to the chagrin and embarrassment of the then ruling UPA.

This not only shone out in a comparison of the states, but contributed handsomely towards Modi’s own rise to the national stage. The superb growth of Gujarat, along with his three  consecutive terms at the helm, combined with inspiring oratory, and a fondness for high technology, all played their parts. It propelled Narendra Modi to Delhi at the head of a majority government, that too, the first such in 30 years. 

But Hardik, a just about BCom. graduate, 22 years old, allegedly playing the thin edge of the wedge for the likes of Nitish Kumar from Bihar and the supremely crafty Arvind Kejriwal from Delhi, is highlighting that small and medium business, the small farmer and city dweller, got seriously left behind.

Hardik himself helps his father in a small business to do with pumps, and knows just how the shoe pinches. So even if he is a stooge of forces out to undermine Modi, there is a message in the kernel of truth that accompanies it.

And any government jobs and educational institution seats, such as those in engineering and medicine go, to the extent of a full half or 50%, to those who enjoy reservation status! The ordinary Patel that compose 15% of the state’s population, with so many of his caste brethren in  the Gujarat assembly and government , including the chief minister Anandiben herself, is apparently getting nowhere fast.

Rahul Gandhi, struggling perpetually to justify his dynastic inheritance of the Congress Party, has also been harping along these lines for long.  At least since the campaign for the national elections in 2013-14; but in RaGa’s signature style of  jumbled incoherence, at least in the delivery! So, the message was mostly lost in translation, or ignored, in favour of Modi’s rousing promises.

Rahul Gandhi also coloured his pronouncements with so much arch-leftist rhetoric and paternalistic, rote pro-poor hypocrisy, that the truth embedded was obscured. Instead, his comments were seen as forced, cravenly self-serving, and ultimately unconvincing.
Unfortunately, even in this sudden opportunity, all he came up with was that the bus burning and nine Patel deaths were a consequence of Modi’s ‘politics of anger’. It’s a simple message alright, but is it relevant in any central manner?

Hardik too, drunk on the sudden and massive attention of the last week, started saying all sorts of things. Senior journalist Shekhar Gupta is none too impressed however, and expects Hardik to fade from the public consciousness after his proverbial 15 minutes of fame, rather like farmer leader Mahendar Singh Tikait before him. Remember Tikait and his hookah, and all the Gandhi-topi clad farmers squatting on the boat club lawns in Delhi?

Still, Hardik is showing the bumptiousness and aggression that comes with his instant celebrity at present. In this, he may have learned a trick or two from Kejriwal in this age of 24x7 news TV.

He has stoutly asked for Rs. 35 lakhs compensation for each of the dead Patels. He says he idolises the late Bal Thackeray, and thinks Raj Thackeray  rather than Uddhav, is a straight arrow, even if he didn’t have too much political support.

He’s been photographed toting a rifle. He’s duly criticised Modi and the Congress both. He is said to be close to Kejriwal and Pravin Togadia, but denies it. Hardik is now in Delhi to see what support he can rustle up from elsewhere, and determine what to do , amongst the curfews and Army flag marches in his wake, back in Gujarat. He says, quite refreshingly actually, do away with reservations or give me and all the other Patels a piece of the pie too.

Caste-based reservations may have  indeed outlived their utility and become redundant as India has begun to prosper. Hardik has pointed it out, and many commentators are willing to concur. Today, the bottom of the pyramid is represented by poor Brahmins and Kshatriyas as much as it is populated by Muslims, Dalits, Tribals and the varied and increasingly empowered world of the OBCs.

Mandalisation, the Pandora’s Box opened by VP Singh, in the nineties, or  the linguistic based carving out of new states started by Nehru decades ago, are all reaching their logical end of the line. Though, the recent bifurcation of Andhra Pradesh tells you that perhaps nothing has changed after all.

Affirmative action needs to move on to being based on purely economic criteria though, or it will increasingly regress towards a turn-the-clock-back free for all, and ‘me too’ set of anarchic agitations.

Also, the packages for backward states like Bihar and J&K , though seemingly robust in upwards of one lakh crores each, again do not seem to satisfy. Bihar says, for example, that Jammu and Kashmir is smaller and much pampered already, and 1.25 lakh crores for a big and populous state liker Bihar even without Jharkhand is not a lot at all.

But of course, this expecting largesse from the Centre can only sustain if the economy as a whole is growing fast enough to afford it. Fact is, currently, it is still not doing so, and needs to build further momentum. And the states too must shift for themselves. 
They must both welcome and facilitate investment, from the private sector, and foreign sources, in addition.

The other hard truth, highlighted perhaps by Hardik’s agitation, is the viability or lack of it in the SME sector.

Today, with increasing technology and mechanisation, scale of enterprise is essential to generate surpluses. This is a global phenomenon, and as we integrate with the international community, we must bear this in mind in order to be competitive.

The Indian SME sector, like others elsewhere, tends to be too hand to mouth. It has perhaps survived after a fashion all this time , mainly through the protectionist era, due to Gandhian notions of ‘small is beautiful’, and socialist ideas of employment generation at the expense of efficiency. This is applicable, also to the so- called ‘unorganised sector’.

But now, a lot of it has stopped manufacturing their shoddy goods altogether, and is simply and gainfully engaged in the import and marketing of well priced goods, from China and elsewhere, which have increasingly flooded the market as trade barriers have been relaxed.

Liberalisation has revealed that the Indian SME sector, by and large unable to fund the tooling up necessary, is just unable to compete.

And the truth is, there is no going back in a fast changing global environment. ‘Inclusive development’ will have to redefine itself, scale up to be viable, and produce goods and services of high quality and at a competitive price.

To do this, the new SMEs, like the publicly traded smallcap and midcap stocks that are the rage today, will have to be reinvented. To prosper, the country and its small and medium scale industry needs to welcome the advent of more and more big business and industry that can buy and use its services.

Hardik and his Patel agitators are barking up the wrong tree of caste-based reservations which are retrograde in the new 21st century India, purportedly with the fastest growth rate in the world.

It may be time to dismantle them altogether on the present basis, political will permitting. Fortunately, Hardik and his cohorts do recognise this already to their credit.
Going forward, the SME and ‘unorganised’ sectors need to stop being stand-alone strugglers buffeted on every side, and integrate with big business and industry, probably as ancillaries and suppliers.

They must, of course, be disciplined, with a willingness to learn or relearn the skills needed- with a commitment to efficiency, quality, professionalism, and timeliness. The Gujarat Model will just have to be tweaked a little thanks to the Patels.

For: Swarajyamag

(1,577 words)
August 27th 2015
Gautam Mukherjee

Monday, August 24, 2015

Shifting Sands


Shifting Sands

Two large neighbours, and two substantial shifts in perception.

Pakistan may continue to harp all it likes on the centrality of Kashmir in its failed dialogue with India.  Yet, like the proverbial one who is last to know, this is a litany grown stale, more irrelevant than intractable.

The raucousness of the rhetoric on Kashmir made more sense in years gone by when the largely porous Kashmir front kept the erstwhile Afghan Taliban and sundry mujahids from Central Asia and North Africa in employment - and practice.

But today, treating Kashmir as a tenet of faith without which nothing else matters, just as Pakistan did a decade or more ago, does not advance the cause of the Pakistani state vis-a-vis India. It smacks more of an egoist’s mad urge to a duellist’s satisfaction, a kind of vendetta blood lust, rather than rational, national, policy.

J&K has made much economic progress in comparison to POK, and this has not been lost on its people. The Separatists have become marginalized in their own homes, unable to exploit any large pool of legitimate grievance beyond the surly insistence that the Indian Army should withdraw, and leave the state to its murder and mayhem on its own cognisance.

As a consequence, much of their erstwhile support base has chosen to merge into the mainstream, inclusive of strong participation in regularly held elections.

But Pakistan keeps reading from a script and notes on Kashmir written a long time ago, and is yet loathe to update it! The world, meantime, has changed a great deal. 

Parity between the two sub-continental nuclear powers as an equivalence has long gone from the US lexicon, the only one that matters - and therefore from that of its Western allies.

And the main disparity, in ground reality terms, that has come to take its place is economic, a huge domestic consumption story for its 1.27 billion people, and this is clearly in India’s favour.

Pakistan meanwhile, may have a ruined client-based and rent-seeking economy, but it has built up a formidable nuclear weapons’ arsenal. One that it refers to frequently to underline its threat potential.    

But the insults and slights are becoming more pointed nevertheless, as Pakistan’s 
international utility has diminished- the US has bluntly asked for curbs on state-sponsored terrorism and withheld military aid and even a bilateral visit from Nawaz  Sharif to Washington, in order to encourage compliance.

The UAE and Saudi Arabia too, despite being fellow Sunni-run nations, have pulled back most of their support for Pakistan in favor of a growing new warmth towards largely Hindu India.

Savage new players like ISIS have clearly scared their one time Sunni mentors and 
financiers. Pakistan, having become an institutionalised nuisance, using terrorism to advance its agendas, as well as being the world’s chief nuclear proliferator, is no longer entertaining to its erstwhile backers.

And this despite India’s growing closeness to Israel, particularly in defence and training matters, plus agriculture related technology. And then there is India’s traditional ability to get along with Shi’ite Iran too.

But Pakistan’s much flaunted China card, for its strategic outreach, in replacement of its fading and once lucrative relationship with the US, is beginning to crumble. China may be Pakistan’s declared ‘all-weather friend’, but it is in quite a bit of economic trouble of its own now.

In fact, this is just the beginning. China’s highly debt-leveraged economy, at several multiples of its $ 12 trillion GDP, is melting down. It is heading towards a 5% per annum growth rate, not even the 7% it has been bravely projecting. It has lost a colossal $4 trillion in its stock market, an amount equivalent to its entire foreign exchange reserves, and twice what it has invested in US Treasury Bonds. And this, through June and July, despite its best efforts to stem the tide.

China needs an estimated 8% growth rate at a minimum to keep its home-fires burning. So, the question is, will all those $ 45 odd billion in promised investment into Pakistan’s infrastructure, plus another $ 10 billion into a mega nuclear power plant etc. actually fructify going forward?

Will China be able to invest substantially in India now, after the bonhomie of the Modi- Jinping mutual state visits?  In fact, President Xi  Jinping’s entire New Silk Road Policy with its Xanadu-like imaginings is under sudden threat.

China’s trillions in reserves cold be swallowed up quite quickly, given the size of its ambitions and gargantuan exposure in Asia, Africa, the Middle East, Europe and the Americas.

As an example, its nearly $600 billion worth of pension funds, amongst the biggest in the world, is deployed in its stock markets now, with a mandate to invest up to 30% of its corpus. But so far, it hasn’t got much purchase, and is unable to quell the panic. The precipitous drop in the Chinese bourses continues, with stocks, falling nearly 10% a day. The stock market is a key source of investible capital because all the Chinese banks are already vastly over extended.  

Even the Chinese currency, the Yuan, has been devalued 4% so far, probably to improve exports and to appeal to the ‘basket of currencies’ as an international medium of finance, and will most likely continue to be devalued in stages, up to an expected 10%. Hopefully, this won’t set off a competitive devaluation of other currencies, either voluntarily or involuntarily. However, these are uncertain times, when the world’s second biggest economy is breaking down.

All this is roiling the global currency and stock/commodity markets alongside though not yet in crisis proportions!

India has seen its 4th biggest fall ever at 1,624 points on the Sensex, and the Rupee has lost 82 paisa in a single day. This, when Indian fundamentals of the economy are better than most, and in the medium term, the China crisis should see much higher FII flows into Indian stock markets.

Similar carnage has been witnessed in every bourse and currency market around the world. The NASDAQ has dropped 7%, while the S&P and Dow Jones have lost about 3.5% on opening bell 24th August 2015. Under these circumstances, it seems unlikely that the US will go ahead with its plan to raise interest rates anytime soon.

But, even as this heralds the undeniable new vulnerability of China, it does not do India down, even militarily, including our own desi strategic outreach.

The age of the US Superman imagery is not yet extinct by a long chalk, but this time it is Modi’s India that has qualified for a hotline to the Oval Office. One that will be around much after Modi’s friend Barack demits office.

However, even apart from these dramatic developments, the changes in the geopolitical scene of South and South East Asia have been a long time in the making.
The US outlook changed gradually as the need for Pakistani cooperation in Afghanistan reduced. And as Pakistan grew into a full-fledged failed state cum ‘terrorist central,’ particularly after 9/11.

Simultaneously, the US equation with China changed and became less comfortable  after the demise of the USSR, the fall of the Berlin Wall, and the rise of Chinese militarism, askew balance of trade cum economic assertiveness.

Today with the new US rapprochement with Iran, an evaporated dependence on Arab oil, and very low commodity prices all around, almost every goal-post has shifted beyond recognition.

Pakistan therefore, continuing with the old Zia Ul Haq policy of a ‘thousand cuts’  to weaken and harass India, makes little sense now. Particularly, since its strenuous attempts to radicalize the Indian Muslim have yielded meager results. The unchanging nature of it seems to be the handiwork of the Pakistan armed forces and intelligence apparatus, clinging to power and the status quo at the expense of emasculating the democratically elected representatives.

And this, amidst a deeply troubled security environment of its own. One that threatens to break up what is left of the Pakistani state, as the fundamentalist, madrasa indoctrinated Wahhabi radical, growing in number, competes for mindspace with the under pressure ‘moderate,’ considered to be ‘impure’ reprobates, if not quite apostate.

And Pakistan, could, in the interim, be in the process of being truncated once more, disintegrating and retreating this time into its core, the bit once called West Punjab, located just across the Wagah border.

This part of Pakistan today dominates its discourse, particularly after the decline of the Bhuttos of Sindh. And so, Sindh, the NWFP, and Baluchistan, regions which have been long suffering from Pakistan’s Punjabi hegemony, are seething below the surface.
Naturally, this sentiment is ripe for the exploitation, and some Pakistani government moves, like the virtual ceding of Gwadar and large parts of Baluchistan to Chinese ‘development’, have further loosened its grip.

Sartaz Aziz, as if on cue, at his recent press conference, was waving three dossiers citing RAW activity across the border. The beauty of it is that Indian security establishment does not need to send doped up manic illiterate killers across like Pakistan does.

Pakistani dissidents from amongst its vast array of second-class citizens that include ex-Indian ‘Mohajirs’ concentrated mainly in Karachi, are happy to reach out anywhere in the world. This, rather like the Tamilians of Sri Lanka, in the heady days of the LTTE ascendancy.

Things are certainly not shaping up even the way they were, a mere fifteen months ago when the NDA came to power. In these intervening lucky months, India’s GDP has risen on the back of lower oil and commodity prices, and the resultant deflation, despite stiff opposition and blockage of economic reforms.

India’s foreign policy and standing has also benefited from Narendra Modi’s energetic bridge-building. And now, the dark clouds that have descended on China’s economy are promising to become a silver lining for India, in both economic and strategic terms.  This, while somewhat degrading the threat from Pakistan, even if it is in passing.

For: Swarajyamag
(1,651 words)
August 24, 2015
Gautam Mukherjee


Saturday, August 15, 2015

Tipping Point



Tipping Point

The prime minister’s second address from the ramparts of Red Fort for the 69th Independence Day, long at 90 minutes, was notable for its focus on the poor, the farmer, the dalit, the tribal.

It was something of a report card, with facts and figures on the progress made towards helping these sections over the last fifteen months. His anti-corruption stand, and measures to curb the stashing abroad and bringing back of black money, also featured prominently for its anti-fat-cat feel.

The speech, delivered once again without benefit of bullet-proof vest or  canopy, despite the high security threat, was clearly designed to blunt the opposition onslaught. Modi took pains, via his inclusions and exclusions, to refute by implication, opposition and media charges that he is running a government only for the rich and the corporates. 

But, in the process, some of the trademark excitement and flair of his oratory was clearly sacrificed. There was very little inspirational coinage of acronyms and slogans, and no update on the ‘Make in India’ from a year before. The only bit of vintage Modi was in the vision: ‘Start-up & Stand Up’, and its pithy slogan to match. 

It is a pity that the recent bitterness of the principal opposition’s attacks in particular, possibly out of existential desperation, has had its effect on the  prime minister’s usual ebullience. He was noticeably measured and defensive. Even the colour of his safaa was less flamboyant.

And yet, there was a sense of confidence and determination that has come about with his 15 months on the job, and the self-knowledge that he is succeeding; despite the blistering and often unfair criticism.

Tipping Point, a best-selling book by sociologist Malcolm Gladwell (2000), defines its title and main message as:‘The moment of critical mass’. And while Modi is still building up to it, his critical mass; the evidence, like the tenaciously held Iranian mission to refine its own nuclear fuel, is definitely building.

The same book, amongst its many insights, has this to say: ‘Ideas and products and messages and behaviours spread like viruses do.’  So wheeling it back a bit,  just before Independence Day 2015, what do we need to make of Rahul Gandhi declaring he was there to ‘stop the RSS and Modi’?

This, after assuming the mantle, along with his mother, to drive the Monsoon session of parliament into being a complete washout . Is the mother-son duo, and imposition of strident, far-left policies on the Congress, feeling particularly threatened?

Not to be outdone, Modi has also asked teams of one minister plus four BJP MPs to visit all 44 Lok Sabha constituencies of the Congress MPs, and those of their firm allies, the Left, who also have 9 seats. They are to explain the parliamentary goings-on to the voters there, and expose the shenanigans of their elected representatives, including their willful blocking of important legislation. And, how their MPs are not just being an unhealthy opposition, using the  illegitimate politics of the trade union dharna inside parliament, where debate and discussion is the process laid down; but are out-and-out ‘anti-development’.

There are lines drawn in the sand now, for ‘battle’, rather than discourse, as the President Pranab Mukherjee put it, in his independence eve address.  This is probably irreversible, because it seeks, not parliamentary style compromise and consensus, but the decisive win of one ideology and grouping over the other.

The sharply stepped up collision course picked on by Congress at this stage is perplexing, because the rejection of its welfare politics at the hustings took place only 15 months ago. Perhaps it is now pinning its hopes on vigorously denigrating the BJP and working to see it fail in its mission to bring vikas to the people.

The BJP, on its part, is equally unwilling to give the Congress the importance it seeks.  There is a considerable and ongoing slanging match.

Congress repeatedly points out that it is only paying BJP back in its own coin for all its obstruction of legislative business during the UPA period. The BJP counters by pointing out the substantial number of major scams under the UPA that had to be exposed. The Congress cites the alleged wrong-doings in  Rajasthan, Madhya Pradesh and on the part of the foreign minister, and demands its pound of flesh. The BJP rakes up wrong-doings of the Congress High Command over the decades, misdeeds of a much higher order, to put things in perspective. The acrimony on both sides is immense, polarising, and seemingly irreconcilable.

Congress says it represents the aam aadmi and the poor, notwithstanding Arvind Kejriwal’s kidnap, hijack, and heist of this particular platform! Rahul Gandhi has responded by copying some of the AAP’s tactics, demagoguery, and media hunger; and vows that he will see to it that the rights of ‘the people’ are not stolen by the ‘pro-business BJP’ .

BJP protests it is deeply pro-poor too, and now the Independence Day speech underlines it. But the Modi government is very clear that it is committed to ‘development’ as the means to the sustainable upliftment of the poor.
So which side is going to win this now vicious battle for the hearts and mind of the Indian voting public?

Fortunately for Modi and the NDA , there are four years to go till 2019, in which to prove the case for its model of governance.  This, essentially Gujarat model, is beginning to bear fruit elsewhere.

With an unprecedented $ 5 billion in single location investment and $20 billion pledged across different states by 2020, Taiwan HQ’d Foxconn has made a dramatic beginning. It is building, first in Maharashtra, an R&D centre, and mega manufacturing plant to make the innards of cellphones etc. that will employ thousands.

There is no ambiguity. Chief minister Fadnavis has allocated 1,500 acres of land near Pune for the project that even elicited envious comment from China. The young and enthusiastic Fadnavis not only played a highly proactive role in bagging this investment, but is proving the Modi vision of competitive federalism in the states.

There will, no doubt, be many more such big ticket foreign investments to come; and not just in the BJP ruled states. Karnataka, the present IT capital of the country, in nominal competition with Andhra Pradesh, and Haryana, under its Congress chief minister Siddaramiah, seems to be resonating with Modi’s vision. He too is promoting business and industry, and does not regard this activity as being ‘anti-poor’.

Whereas, the Gandhi scion seems to have a very different vision. He is making every effort to declare himself and his party opposed to the forces associated with big business. He thinks this will be electorally sound. But, in the absence of power, and money flowing into the High Command’s central coffers, is this going to be sustainable? And how long before the Congress-run states, which need to generate revenue and support their central leadership to boot, decide to protest?

The non-Congress, non-Left opposition, mostly regional parties representing other state bastions and governments, are also not comfortable with the disruption in parliament. And the central government, taking a cue from this, is hoping to still pass the GST Bill by calling a special session of parliament shortly.

Meanwhile, having just burnished his pro-poor credentials, Modi has gone to the UAE to enthuse the lakhs in the Indian diaspora there - and see if he can’t attract some of the $800 billion in sovereign funds into India’s manufacturing industry and infrastructure development.

For: Swarajyamag
(1,247 words)
15th August 2015

Gautam Mukherjee