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Tuesday, 31 January 2017

India's elites can't stop the masses learning English (The Conservative)

Hillary Clinton, Anne Applebaum and others of the East Coast establishment of the United States are wannabe Europeans, unselfconsciously adopting strategic stances which seek to dovetail the US with the requirements not of the world’s most powerful Anglospheric nation but with a continent increasingly out of step with the future. For them, it is still Moscow that is the primary rival to Washington, not Beijing. 

Their counterparts in India are the wannabe British who lowered the Union flag from the Viceregal Palace in the final seconds of August 14 1947. India’s civil service and its presumed political overlords have seamlessly moved into the colonial practices and mindset vacated by the British. They have retained the administrative powers of the Raj as well as perpetuated (sometimes literally) the walls separating them from the multitudes they rule over. 

India is a democracy, all of whose political parties belong either to individuals or to families, much in the manner of a grocery store. It is a “free” country where the government has several hundred paths which can lead to taking away the property and freedom of a citizen. Indeed, such colonial-style laws and regulations have proliferated during each of the years when India has been independent, barring 1991-92, when then Prime Minister Narasimha Rao took an axe to some of them. From then on, he faced and ultimately lost a continuous battle against those whose powers (chiefly to collect bribes) were reduced by such a limitation of government.

INDIA IS A DEMOCRACY, ALL OF WHOSE POLITICAL PARTIES BELONG EITHER TO INDIVIDUALS OR TO FAMILIES, MUCH IN THE MANNER OF A GROCERY STORE. IT IS A “FREE” COUNTRY WHERE THE GOVERNMENT HAS SEVERAL HUNDRED PATHS WHICH CAN LEAD TO TAKING AWAY THE PROPERTY AND FREEDOM OF A CITIZEN. 

Those who quaff the elixir of colonial absolutism through entry into positions of governmental responsibility very soon consider – indeed, know – that they are as different from the natives they administer as their British predecessors were. Among the ways such distance between rulers and ruled was maintained was to ensure that their own progeny were given the benefits of being educated entirely or very largely in the English language, while at the same time blocking as many other citizens as possible from learning the language. 

This was achieved through the simple expedient of banning its use in state-run educational institutions, and by making life difficult for those private entities that sought to impart education in the international language. An example was Bengal, which had been the hub of intellectual expression before 1947. Its longest-serving (1977-2001) chief minister, Jyoti Basu, was a Communist who spent his annual vacations in London and who, under his impeccable local garb, was an Anglophile. 

It was as obvious to Basu as it had been to the Old Harrovian Jawaharlal Nehru that it would simply not do to give the natives access to the English language. Why, they might even get a trifle uppity and expect politicians to deliver benefits other than sermons. He therefore followed the example of Nehru in practically outlawing the teaching of English in Bengal, in the process reducing the state to an intellectual backwater and a laggard in the Information Technology revolution that swept through India in the 1990s. 

HOPEFULLY, A TIME WILL COME WHEN THE BUREAUCRATIC BRAKES ON THE DEVELOPMENT OF THE LANGUAGE GET REMOVED, SO THAT THE COUNTRY ITSELF MAY BE ENABLED TO MOVE FASTER. IN THE MEANTIME, PROVIDING A TAILWIND TO THE EXPANSION OF ENGLISH WITHIN THE POPULATION IS THE REALITY THAT INDIA AND THE US IN PARTICULAR SHARE ALMOST IDENTICAL SECURITY INTERESTS. 

As for Prime Minister Nehru, a statue of him, more than the Mahatma, ought to be erected in London, for he made the procuring of a passport by the ordinary citizen (and every other procedure associated with government) so cumbersome that few succeeded in getting that document, a situation that got altered only during the 1990s. The consequence was that, relative to population, far fewer citizens of India than Pakistan migrated to Britain during the years when the door was kept open for citizens of the Commonwealth. Prime Minister May, with her aversion to immigration from outside the EU, would have approved of such a policy, had she been around to advise Nehru during the period (1947-64) he was in office. 

While they themselves sent their children off to study in the UK or, later, in the US or Australia and Canada, India’s wannabe British overlords incessantly warned the people about the toxic effects of the English language. Fluency, they said, would result in the fading away of Indian culture and in the taking hold of an alien import that would enervate the citizen. 

It took the spread of cable television in the 1980s to reveal to the overwhelming majority of India’s citizens that those warning against the language were themselves more than conversant with it. Sitcoms gave a view into the homes of the governing class, and to the ubiquity of English in their lives. Simultaneously, private television channels (and later radio stations), free of the government-mandated need to demonize the language of India’s former colonial masters, began to be permitted. 


This created a desire to learn the language that was strong enough to ensure the proliferation of institutes teaching it, as well as its spread in schools. Finally, governments gave way and permitted its teaching in state schools. 

By the mid-1990s, the wave of interest in the English language had become unstoppable. So much so that even after a government which had an allergy to English imprinted within its DNA took office in 2014, very little could be done to slow down the pace at which the language was spreading in the general population – although exact figures are impossible to come by, given the biases and complexities of the Census of India. 

The present writer, for example, is not classified in its records as someone who knows English, which, given his atrocious grammar, may be correct. However, some surveys, through use of sampling, have put the number of those speaking English within the population of India as being between 220 million and 240 million, with about the same number having at least a rudimentary knowledge of the language.

Prime Minister Narendra Modi has sought to banish English from the portals of his administration, preferring to conduct work in Gujarati and Hindi through officials fluent in either or both languages. However, outside the stone edifices of what were once the haunts of British civil servants, the language of global commerce and which dominates the internet is still spreading, so much so that even Modi some days lapses into English during one of his frequent public appearances, even within India. 

I hope that the day will dawn when those who have replaced the British in the dovecotes of high office will accept that there is nothing contradictory in being a good citizen of the Republic of India and knowing the English language, and remove the many barriers to access so far as the hundreds of millions of less fortunate Indians are concerned.

In 1965, Prime Minister Lal Bahadur Shastri backtracked from his earlier move sharply to reduce the incidence of English in administration, even though he himself came from a Hindi-speaking state. Indeed, India is fortunate that the Hindi-speaking population of the country never sought to force their exquisite language down the gullets of those unwilling to learn it. Of course, governments were different, and even now the learning of Hindi is compulsory, and in examinations for the Civil Service, it is possible to get selected even if the candidate’s knowledge of English is sub-basic.

Interestingly, it has been leaders from Gujarat state that have been most insistent on making Hindi the dominant language of administration, beginning with Mahatma Gandhi. The anointed “Father of the Nation” knew the language of global interaction well and indeed got much of his education in the UK, always retaining a cohort of close friends from that country. However, he was insistent on doing away with English and replacing it with Hindi, as was the first Gujarati Prime Minister of India, Morarji Desai (1977-79). 

The present Prime Minister, Modi, presides over a Cabinet that contains almost no member not conversant in Hindi, and in which the overwhelming majority comes from the Hindi-speaking states, as does the core of his official family. However, this has not stopped Prime Minister Modi from accepting that India’s strategic interests mandate a close relationship with the other countries where substantial populations speak the English language. In other words, the Anglosphere, especially in a context where there will be more English-language speakers in India than in any other country, including the United States.

Even the wannabe British involved in the governance of the country (which in its essentials and outlook is not very different from what it was during the British Raj) are beginning to acknowledge that the desire to learn English is too widespread for them to halt, especially now that arguments inversely linking knowledge of the language to Indian tradition and culture or to the country’s interests more generally have been shown false. It is proving difficult even to a political class adept in contortions to claim that a language that forms the basis of modern commerce, especially in the knowledge industries, is toxic. 

I hope that a time will come when the bureaucratic brakes on the development of the language get removed, so that the country itself may be enabled to move faster. In the meantime, providing a tailwind to the expansion of English within the population is the reality that India and the US in particular share almost identical security interests. 

HOPEFULLY, THE DAY WILL DAWN WHEN THOSE WHO HAVE REPLACED THE BRITISH IN THE DOVECOTES OF HIGH OFFICE WILL ACCEPT THAT THERE IS NOTHING CONTRADICTORY IN BEING A GOOD CITIZEN OF THE REPUBLIC OF INDIA AND KNOWING THE ENGLISH LANGUAGE, AND REMOVE THE MANY BARRIERS TO ACCESS SO FAR AS THE HUNDREDS OF MILLIONS OF LESS FORTUNATE INDIANS ARE CONCERNED.


Now that a President of the United States has been elected who is not in thrall to the Eurosphere, but has given indications of his affinity to the Anglosphere, Washington and Delhi are likely to act in concert, both to extinguish the fires lit by Wahabism and to ensure that China does not regard its rise as licence to overawe smaller powers and take control of vast additional stretches of the earth’s surface.

I hope Prime Minister May will lessen her silent pining after Europe and accept that Britain is as much a separate and autonomous national and cultural entity as is Russia, and that these two powers form the bookends defining the limits of the Eurosphere. Given common sense and a modicum of luck, the odds are high that within a decade over a billion people across the globe will form part of the English-speaking world. May the tribe multiply!

[This article was also published in THE CONSERVATIVE, A QUARTERLY JOURNAL | January 2017 | Vol.2 Issue 2]

Sunday, 18 December 2016

Lutyens moles work to damage PM Modi (Sunday Guardian)

By MADHAV NALAPAT | New Delhi | 18 December, 2016

‘Out of 11 senior bureaucrats who were involved in the planning of the currency switch’, two are still ‘one hundred per cent loyal to the Lutyens Zone’.

India’s “Lutyens Zone” (analogous to the “Washington Beltway”) went into overdrive from 16 May 2014 to ensure that Narendra Modi becomes a single-term Prime Minister or even be forced to quit his office in between, as took place during 1979 in the case of the other PM from Gujarat, Morarji Desai. This strategy cannot be dismissed as impossible to implement. Although Rahul Gandhi has often been dismissed as an intellectual lightweight by several of his peers, according to a credible strategist working in the interests of the Lutyens Zone, the fact is that the vice-president of the All India Congress Committee “has been working to a plan to derail Modi from the start”. According to this source and another highly placed individual who has served as a core planner for the Lutyens Zone (LZ) leadership since the 1980s, the contra-Modi plan was “accelerated to take-off speed after he (Rahul) took effective charge of the Congress in November 2015”. The duo outlined the LZ “plan of action” since the shock collapse of the Congress in the 2014 polls. “We never expected the BJP to get a majority on its own, nor the Congress tally to go below 110”, the two significant sources said, adding that “it took about 19 months after 16 May 2014 before we were able to work out a plan capable of ensuring that the NDA would not return to power in 2019”. Both said that Rahul Gandhi “embraced the strategy fully, unlike those in his party who had been in leadership positions during the Manmohan decade”. These wanted to “continue with the past policy of cutting private deals with the BJP and putting on only a mock defiance of the new government”. From the start of mid-2015, when his grip over the rudder strengthened at the expense of the old guard of the AICC, Congress vice-president Rahul Gandhi “accepted our (dominant Lutyens Zone) view that with Narendra Modi in the Prime Minister’s chair, it had to be total war”, although sometimes cloaked in the language of conciliation. “Rahul understood that India would change fundamentally were Modi to win a second term or to have an unobstructed run in his present term”, the insider claimed, adding that “over the opposition of leadership elements in the Congress, Rahul insisted on a policy of complete opposition to the Modi government” so as to ensure that key measures such as the Land Bill or GST would not get passed early or preferably ever in the term of the Modi-led NDA.

According to them, “part of the strategy was to give misleading signals during Parliamentary sessions to those in the BJP who had been interlocutors with the Congress in the past”. These were informed that compromise was around the corner, when it was actually out of the question. As a consequence, the NDA government hardened its legislative position, especially on GST, in the expectation that “Congress would follow the UPA-period BJP strategy of opposing, but not obstructing” key legislative and other measures. The Lutyens Zone strategy was also to “create an international image at variance with the global picture of (PM) Modi as a reformer and as an individual who could get things done”. Simultaneously, contacts in media, civil society and governments in key countries were briefed extensively in a manner designed to give the impression of a government where minorities and the underprivileged were unsafe, and where crony capitalists were indulged. According to these sources, “the campaign has been successful, as can be seen from the proliferation of negative reports about the Modi government in the international media”. Whether because of a continuation of the “Vajpayee line” (of backroom compromise with the Congress while verbal pyrotechnics abounded in public), or “because (PM) Modi was advised by some key associates friendly to the Lutyens Zone that he should not appear vindictive, but statesmanlike”, the NDA government has thus far done almost nothing to enforce accountability on those UPA-era central heavyweights perceived as having made billions through stock exchange frauds, foreign currency manipulations and through tweaks in government policy. Additionally, senior bureaucrats who had acted as facilitators for senior UPA leaders during 2004-14, were allowed by the NDA government to continue in their posts and were often promoted to still more sensitive positions, as Prime Minister Modi sought to distance himself from any perception of bias or vindictiveness. Needless to say, such adherence to what may be termed a Prithviraj Chauhan strategy has not lessened the overt and covert campaign to hobble him in office and if possible to drive him out even before the 2019 polls.

According to the Lutyens duo, “out of 11 senior bureaucrats who were involved for 17 weeks prior to 8 November in the planning of the currency switch”, two are still “100% loyal to the Lutyens Zone” and therefore gave the government “advice that will boomerang on the government”. An example was the decision to replace the Rs 1,000 denomination note with a Rs 2,000 substitute. This “went against the logic of the metric system, where the deferred number mathematical theory points to 1, 2, 5 and 10”. It was pointed out by the strategists that throughout the globe, 1, 2, 5 and 10 (i.e. 10, 20, 50 and 100 or 100, 200, 500, 1000) are used to fix the value of currency. “By arbitrarily fixing 2000 and 100 as the two effective bands, the first has become useless in several transactions, while the latter is being hoarded”, a Lutyens Zone strategist pointed out, adding that the particular civil servant who recommended the Rs 2,000 note and withdrawal of the Rs 1,000 note “would get a Governorship when we take office by mid-2019 latest”. It was pointed out that the Rs 100, Rs 500 and Rs 2,000 bands are too far apart for ease of everyday transactions and would impact these even should currency supply normalise after ten months. The Lutyens strategist added that they “have been helped by the fact that a few officials are given wide discretionary power in the current administration, so much so that their recommendations are seldom re-examined before being implemented”. Another googly embedded in the policy, according to the sources, was the “hyper-high penalties for concealed income, which ensured that the grey market, rather than the exchequer got the benefit”. The source claimed that “our people in the system have consistently argued for high penalties so as to ensure the failure of disclosure schemes”. However, such claims of internal sabotage through toxic policies are impossible to verify, as the officials concerned would not implicate themselves by admitting to any role other than that of civil servants loyal to the government of the day. The two civil servants named as Lutyens moles by the strategists talked to are known for their efficiency and thus far, the absence of serious controversy.

The calculation of the anti-Modi brigade is that the manner in which the 8 November currency policy that was accepted by Prime Minister Modi after being strongly recommended by no less than 11 key officials and advisers, “will lower tax collections by stunting growth”. Consequently, “raids will rise and summary assessments multiply” as the government seeks to lower its deficit through squeezing taxpayers. This is expected to anger the middle class and the trading community, both of whom were significant parts of the Modi coalition in 2014. The expectation within the Lutyens Zone is that the present currency shortage will continue well past mid-2017 and result in lower growth for several quarters, perhaps even for years, thereby allowing the opposition to claim that Modi failed to generate growth and employment during his term in office.

They say that their supporters in the government have told them that there are several known bottlenecks in the process of printing of currency, “such as that there is only a single intaglio machine” at each printing centre, thereby slowing down considerably the output of fresh notes with even low grade security systems embedded in them. “All this was known (to the officials consulted in the matter), but not revealed to the Prime Minister”, these sources claimed, adding that “a highly-placed mole convinced the PMO that universalisation of digital modes of payment in a short time-span was possible, when in fact it is impossible”. He pointed out that e-wallets are less than 4% of GDP, and as for overall black money, “our estimate is that the total is around 18% of GDP” or around Rs 27 lakh crore. This includes cash, assets and foreign holdings routed through banks and hawala. Cash in Indian currency forms the smallest component. Hence the overall effect on black money of the 8 November measure would not be substantial. About the official who persuaded the government that cash equals black money and hence needed to be 85% drained out of the system in a single blow, “He will be given a constitutional position when we take office”, the source said with a smile. As for counterfeit currency, even when added to terror funding, the total comes to less than 1% of the currency value withdrawn on the midnight of 8 November 2016. Although it is impossible to verify whether Lutyens Zone moles were deliberately ensuring the sabotage through distortions in detail of Prime Minister Modi’s hugely consequential scheme, it seems clear that unpardonable errors have been made in both the conceptualisation as well as the operationalisation of the details of the swap of Rs 500 and Rs 1,000 notes for new Rs 500 and Rs 2,000 notes, as well as in calculating its after-effects.

As daily cash hauls testify, more than the wealthy it is the common man who has been hit hard by the 8 November move. Should daily consumption fall by 30% (the present situation, according to field reports), GDP will fall by even more than the 2% calculated by former Prime Minister Manmohan Singh, who must be a happy man these days, in that errors made during his years in office have now been forgotten in the flood of reactions to the 8 November extinguishing of 86% of India’s currency. As for the unorganised sector, which accounts for more than 90% of the total of jobs in India, that has been severely affected by a brilliant decision implemented in a less than satisfactory manner, although it is impossible to verify the claims made by Lutyens Zone strategists that several of the errors were deliberate and aimed at sabotaging Modi’s bold plans. Rules and restrictions have been changed nearly 40 times, while tax rates and penalties have been altered at jet speed. Overall, the impact of 8 November on trust and credibility in the banking system as a reliable store of value, and in the Reserve Bank of India as its guarantor, seems to be long-lasting.

If there is even a 15% chance that the two Lutyens Zone strategists are speaking the truth about moles in the present dispensation, the necessity is for a comprehensive investigation into who and how key decisions on operationalising the Prime Minister’s move were made that have subsequently turned out to be problematic. Those responsible for making recommendations that have subsequently become toxic, need to be checked out. More than any outside force, it is those on the inside who have the highest potential for inflicting damage on the Modi administration, and this may nowhere be clearer than in the manner in which the 8 November decision approved by Prime Minister Narendra Damodardas Modi has been implemented thus far, although knowing his strong personality, Prime Minister Modi is likely to continue to stand by his entire team despite increasing political fallout from the manner in which his 8 November 2016 announcement has been tweaked and implemented.


Sunday, 27 November 2016

Officials advised PM Modi to ban 85% of India’s currency (Sunday Guardian)

By MADHAV NALAPAT | NEW DELHI | 27 November, 2016

PM raised several queries, especially on the impact on the common man and only when it was conveyed to him that steps were being taken to minimise hardship did he agree to the measure.’

Prime Minister Narendra Modi is working “more than ten hours a day” just on ensuring that the 8 November money measures announced by him ensure a smooth landing for the economy rather than turbulence. This despite the fact that the plan actually owed its origin to the Reserve Bank of India and the Ministry of Finance, who persuaded the PM to go forward with an idea which will affect (and has affected) over a billion citizens of this country. Prime Minister Modi showed moral courage in coming forward and accepting ownership of the currency swap scheme announced on 8 November, and has since then publicly backed every twist and turn in that policy by the monetary and fiscal authorities. Senior officials say “Prime Minister Modi was presented with the issue in such a way that turning down the scheme was out of the question”. Through the plan, concerned officials wished to “shield those in high positions in banks across the country from the consequences of the crony-oriented lending that they had been doing, specially since 2006”, the year when Narasimha Rao’s liberalisation policy was fully substituted by the UPA into a faux Nehruvian economic policy that combined Fabian socialism with Wall Street ways. “Officials argued that a windfall of up to Rs 550,000 crore would flow to the banks through the enforced extinguishing of currency notes issued by the RBI, and that this would recapitalise several banks that were in effect bankrupt, thereby allowing them to lend again”. The Prime Minister was assured that “steps would be taken to ensure that the common man suffered minimal discomfort” and that “the informal economy would accelerate its absorption into the formal without jobs being affected”. It needs to be mentioned that it is the formal sector that is responsible for not repaying bank loans of a value crossing Rs 750,000 crore, which will be several times the value of tax evasion by the informal sector. NPAs are being written off by banks at an accelerating pace over the past six years, with still more businesses declaring themselves unviable by the month.

The velocity of circulation of currency affects demand for the same, and the effects on the economic system post 8 November, combined with worries of further drastic steps including more demonetisations, is leading to hoarding of currency notes, thereby necessitating a higher volume of currency needing to get pushed into circulation. A senior official estimated that it will take eleven months for currency stocks depleted by the 8 November shock to get replenished. Holding on to low limits on cash made available to depositors will affect consumer spending. An interesting and possibly positive sidelight is that numerous NPAs are quietly being settled with old notes, although banks officially deny that this is taking place. Vehicle loan collections are up, especially former bad loans, as holders of the extinguished currency seek to deploy cash any way they can. However, NBFCs, which are a vehicle for funding small businesses, are facing non-payments of up to 50%, despite efforts by the RBI to boost confidence. And while card sales are up, Cash On Delivery (COD) sales have sharply fallen, and this forms the bulk of such business. There is a 30%-40% drop in restaurant and FMCG sales, with few expecting a quick rebound. The relentless official drive against cash transactions will result in numerous small stores and “kirana” establishments shutting down, as not many would be able to make the transition to fully digital payments. Even “dhabas” will begin shutting down, as many would not be able to afford the 21% sales and Value Added transactions on electronic transactions. A fall in economic growth over an indeterminate period of time will result in lower tax collections, leading to pressure on the Income Tax Department to squeeze as much as possible from taxpayers through use of technicalities. Bribe takers are offering handsome discounts for payments in new currency or in the form of gold and diamonds. The effect of the 8 November currency swap on overall employment is unclear, although jobs are being shed across the country on a daily basis. 

The recession after the 2008 collapse of Lehman Brothers cut India’s growth rate to 6.7% in 2009 as compared with 9.5% the previous year. Each 1% decline of GDP means around Rs 150,000 crore gone. Housing was an important segment of good economic results during 2006-09, but in the absence of lower stamp duties the introduction of the Rs 2,000 note is expected to perpetuate black money in the sector. As for the unorganised sector, while it often does not pay direct taxes, through employment and income, the sector adds to indirect tax collections as well as demand for several of the items produced by the formal sector. A problem is that India’s tax structure is so convoluted and cumbersome that several units will go out of production once they get into the tax net. Although there is much talk about lower tax rates down the road, few are willing to risk investing money in the economy as a consequence of such an expectation. 

Interestingly, key proponents of “swadeshi” are in favour of switching from cash to plastic in a country where plastic is largely in the hands of foreign players, mostly from the United States, or in some cases, China. Ultimately, it is investors in these two countries who will be smiling all the way to the bank as millions in India move from cash to plastic to make payments. Which is why some argue that despite the contrary view of the RBI and the Ministry of Finance (both of whom are in thrall to the “Cashless Country” concept), cash needs to be accepted as a primary medium of exchange for at least a generation more, even while genuinely Indian owned companies get empowered to compete with the foreign owned giants that now dominate the India market for non-cash transactions. 

Confidence in the value and stability of a currency is core to the monetary health of a country, hence the refusal of US authorities to ever make any denomination of the US dollar inconvertible. This despite the dollar being the most counterfeited currency on the globe. Repeated devaluations and demonetisations of the Indian rupee have resulted in a high percentage of citizens of India switching to gold and other assets in place of the rupee as a store of value. While unaccounted money does get hoarded in India, especially by politicians, officials and businesspersons, much of this gets converted into assets such as land or gets converted into foreign currency and wired abroad through secretive but well established hawala channels operating through Nepal, Singapore, Dubai and Mauritius. However, officials moving in step with Prime Minister Narendra Modi’s plan for transformation of the Indian economy by the close of his term in office say that the Prime Minister “accepted the recommendation of his Principal Secretary, Revenue Secretary and RBI Governor to immediately disallow circulation of the now defunct Rs 500 and Rs 1,000 notes”. “The Prime Minister raised several queries, especially on the impact on the common man, and only when it was conveyed to him that steps were being taken to minimise hardship did he agree to the measure”, a long-term civil servant revealed, adding that “the subsequent silence of some top officials is inexplicable” in view of the fact that they were the prime movers of the 8 November demonetisation. The source added that “the effects on the poor have been uppermost in the PM’s mind and it is to this point that he kept returning time and time again”. 

The snafu relating to the size of the new currency notes was placed at the door of the RBI by a senior official, who pointed out that “everything from the design to the printing of the Rs 2,000 notes came from Mint Road (in Mumbai)”. The US dollar is the same size irrespective of denomination, while ATMs in that country avoid dispensing even $50 notes, focusing only on $20 notes so as to minimise hoarding of dollars. “If the RBI is sincere about working to implement PM Modi’s desire for an end to black money, it should print many more Rs 100 notes. Instead, the focus of the Central bank over the past six weeks has been the Rs 2,000 note”, which is very susceptible to being sucked into the “black” i.e. undeclared economy. “The economy needs lower denomination notes, of which there is a deadly shortage since months because RBI has for the past eight years catered mostly to the well heeled by concentrating on the production of Rs 500 and Rs 1,000 notes, rather than the more humble Rs 100 or Rs 20 and 10 that are essential in those sectors of the informal economy which create the most jobs”, an official now based in Mumbai pointed out. He added that “Prime Minister Modi has been careful not to interfere with the decisions of the RBI”. However, “perhaps the PM needs to be careful about some bureaucrats who painted a hyper-optimistic picture about the immediate fallout of the currency scheme” announced by the Prime Minister on 8 November 2016, advised a senior official who is in sync with the Prime Minister’s innovative views on transformation of governance. 

“The RBI is concentrating on Rs 2,000 notes that are the easiest to store and to transport in place of plastic because it wants to show that a higher value of currency has been printed”, a source claimed, adding that “the Central bank seems to care very little about small retailers and the common man, both of whom are facing a shortage of small denomination currency notes owing to the lack of an adequate contingency plan by the bank”. The official added that “only PM Modi has the authority to request (RBI Governor) Urjit Patel to ensure that the painful shortage of small denomination notes end through adequate supplies by the RBI”. “The shortage of currency combined with yet another demonetisation has led to a steep fall in the confidence of the people in the Indian rupee. They are going in for US dollars instead”, claimed a senior official, warning that “within a few more weeks, several hundred thousand small enterprises will close down unless the RBI gets its act together”. 

Officers in sync with Prime Minister Modi’s plans expect that during the next week itself, he will ensure that policies get tweaked in a manner than is people-friendly and not babu-friendly, and that “by 30 December, the economy will be running far more smoothly than it ever has”. The citizens of India are waiting eagerly for such an outcome to come about.

Trump wisely spares Hillary (Pakistan Observer)


November 27, 2016 | 
Geopolitical notes from India | M D Nalapat


PRESIDENT-elect of the United States Donald John Trump has indicated that he would not be appointing a Special Prosecutor to seek the incarceration of Hillary Rodham Clinton, his Democratic Party challenger in the Presidential sweepstakes. This decision will annoy several of his most loyal supporters, most of whom were energized by the prospect of the former First Lady being sent to jail. However, from a pragmatic point of view, Donald Trump has taken the correct call. A prosecutorial investigation and possible indictment of Hillary Clinton would take at least ten months, and is likely to have dominated the news cycle for much of that period.

The resulting hubbub would be a severe distraction from President Trump's own agenda, thereby diluting the possibility of shepherding the basket of policies through the legislature. In particular, because the investigation would develop into a partisan circus which would further poison relations between the White House and the Democratic Party. Although the charges against the former Secretary of State and the Clinton Foundation are serious, the fact remains that donations to the latter were made through cheque and not through envelopes stuffed with cash. Proving a judicially verifiable link between decisions taken by the State Department and foreign donations to the Foundation would be a difficult task. Certainly Foggy Bottom ( as the Department of State is evocatively referred to) pandered to the whims and geopolitical fantasies of states such as Qatar, China and Saudi Arabia.

However, it was usually not an outlier in such policies vis-a-vis the rest of the Obama Administration but part of a pack heading in the same direction. Importantly, almost always other NATO member-states endorsed the same policies, especially in matters relating to the Arab Spring and its aftermath. The Clinton Foundation may have opportunistically sought to cash in on policies already worked out within the bureaucracy, but only in a very few instances was it the initiator of policy, and this often at the level of the individual. Shrewd businessperson that he is, Donald Trump has apparently decided not to continue to invest time and effort on a Clinton prosecution but to direct his attention towards matter of greater concern to the United States as a whole, rather than to the small group of Clinton-phobic individuals who are unhappy at his decision to give Hillary Clinton a pass on the charges made against his defeated challenger.

By doing so, Trump has strengthened his image of pragmatism and created significantly greater distance between himself and a perception of vindictiveness of the kind that led President George W Bush to finish off Saddam Hussein at a crippling cost to the US. For Bush Junior, wrecking both an entire country as well as much of the US economy was an acceptable price to pay for getting rid of an individual who tried to get his beloved Pappy ( George H W Bush) assassinated. What President Trump needs is a cellphone configured to ensure that his tweets flow only to a limited number of intimates, ideally only Melania and Ivanka. Both the incoming First Lady as well as the First Daughter have conducted themselves with style. With her charming accent and expressed dislike of bad behaviour, Melania Trump boosted the voting tally for her husband on November 8.

Unlike Jackie Kennedy, who loved the spotlight while professing to hate the attention, the spouse of a very strong-willed personality clearly has qualities that have enabled her to weather what must on occasion be a stormy life with an individual who is both passionately admired and hated, sometimes by the same audience. Hopefully the new First Lady will use the moral power that will soon be hers to push for policies that assist the poor, especially children. Although the biggest economy in the world, the US is far less caring of its needy citizens than any of its major European partners, or indeed countries such as Kuwait and Taiwan. Despite Obamacare, the Big Pharma lobby in the US has combined with the Doctors Mafia to ensure the most expensive healthcare system in the world, and which despite the money lavished on it, is uncaring of the poor.

Correctly, President-elect Trump has gone public about his intention to preserve some of the features of the Affordable Health Act while tweaking or sometimes removing other sections. This sets him apart from Ted Cruz, who is a fundamentalist in his political beliefs and therefore regards compromise as a weakness. At the same time, Trump refuses to hide his views, even when they may lose him votes. An example is the way he distanced himself from the views of Mike Pence on Russia. The next Vice-President of the US embraces the Beltway at least in his foreign policy outlook, and joined in the baying against Moscow. For this, he was publicly contradicted by Trump, who insisted that he would seek a genuine reset in relations with Moscow rather than follow the Paris-London line of hostility to Vladimir Putin. This sets him apart from Senator Marco Rubio, who follows the Clinton playbook of adopting positions that are popular with the audiences which are being wooed.

Donald Trump has the confidence to remain himself, which is why the surprise within the Washington Beltway at his choices is inexplicable save for the fact that the denizens of this privileged state of mind have dismissed him as an intellectual lightweight without a complete analysis of the man. It is clear that incoming White House Chief of Staff Reince Priebus is focussing mainly on "unifying" the party. Such a stand neglects the reality that voters opted for change and not continuity. From such a viewpoint, it would be senseless to appoint Mitt Romney as Secretary of State, for the man hates Trump. Far better to send him to the prestigious post of Ambassador to the UK. Choosing an envoy of such eminence would ensure that the globe understand that the special relationship between the US and the UK will be continued by a President Trump.

Given that a war on terror is ongoing, the historical parallel of the 1939-45 war against Germany needs to be remembered. Prime Minister Winston Churchill sent Lord Halifax as envoy to Washington in a gesture towards a crucial relationship. In like fashion, sending Romney to London would be a geopolitical gesture of significance, as would asking Representative Tulsi Gabbard to serve as US envoy to India. The former US Marine Corps member has developed significant traction within the ruling establishment in India, and could play a key role in ensuring a full scope alliance between Washington and Delhi during the Trump presidency. Trump's choice of a brilliant neurosurgeon, Ben Carson, as Housing & Urban Development Secretary, is inspired. Dr Carson can be expected to visualize and to implement cutting edge strategies for ensuring that the deterioration in infrastructure in the US be reversed at a reasonable cost.

As for Trump's family, they will be aware of the fact that while the patriarch of the clan has forgiven Hillary Clinton, the Clinton machine may be expected to keep up the pressure on Trump. Indeed, with Paul Ryan ( who has the same distaste for President-elect Trump as Mitt Romney) remaining the Speaker of the House of Representatives in another Reince Priebus-inspired. gesture of reconciliation between the old Republican establishment and new that is getting formed around Trump, there will be more than a few within the House of Representatives looking for an opportunity to impeach Donald Trump and place Mike Pence inside the White House.

Presidential candidates usually avoid such possible power plays by ensuring that their running mates are far less popular and indeed toxic. However, a confident in himself Trump chose the affable Pence, who has friends across the board in the Washington Beltway swamp who would be delighted were he to take over from the individualistic Trump. Given determination and qualities of next President of the US, it is likely that he will overcome the snares and traps placed in his way and emerge as a transformational leader. In his family, Trump has a group of able and loyal individuals not seeking official positions, and they too seem capable of batting away darts already being aimed their way.




Sunday, 20 November 2016

PM Modi’s currency swap enters a critical week (Sunday Guardian)

By MADHAV NALAPAT | NEW DELHI | 20 November, 2016

If RBI is correct that currency stocks are ample, its success ratio in reaching these where needed, is low to absent.

Officials in sync with the objectives of Prime Minister Narendra Damodardas Modi claim that there is global appreciation for his “braving personal unpopularity and the risk of low future seat tallies for the BJP” so as to implement a scheme that he has “had in mind since 26 May 2014”, his first day in office. Given his “methodical mindset”, the substantial and uncontrolled role of the informal economy has occupied much of Modi’s time. Not only does the government not control this vast sector, “it does not even have any idea about its extent and activities”. To the Prime Minister, “such an unregulated sector is akin to the ‘Dark Net’, the shadowy world of the deep internet that is resistant to policing”, an official said. The officials say that from Day One, the Prime Minister has been determined to ensure that all transactions in the economy get recorded, “both for revenue purposes as well as to ensure that anti-national elements do not misuse their access in order to create trouble for citizens”. They point to the Jan Dhan Yojna, PAHAL and MUDRA schemes as being “part of a continuum of activities leading up (to the 8 November currency swap)”. The Prime Minister’s vision is to see “every adult citizen of India have a bank account and access the internet in the palm of his hand”, and he has “worked on a plan to ensure both before 2020”. Early on, PM Modi tasked officials with “working out ways to ensure 100% access to banking and conversion of the informal economy into the formal space”, but by May 2016 as he entered the third year of his term, the Prime Minister was “feeling impatient at the slow progress made and decided to quicken the pace by leading from the front”. Two officials, who were in “complete harmony with the Prime Minister’s desire for speed, were Principal Secretary to the Prime Minister, Nripendra Mishra and National Security Advisor Ajit Doval”. According to the officials spoken to, “both were enthusiastic advocates of the currency swap scheme in internal meetings”, albeit for different reasons. From the outside, finance guru S. Gurumurthy played an “important role in selling the idea (of a lightning currency swap) to the top”. The official reiterated that “none of the bankers consulted expressed any apprehensions about the scheme” and that the RBI leadership was “totally in support of the move, as was the Economic Advisor to the Finance Minister and other officials of the Ministry of Finance”.

A characteristic of the Second Generation NDA Government has been that those from the outside with dissenting or out-of-the-box views have been excluded from participation in the policy process. Official advisory bodies have been few and those created have been both truncated and filled with retirees from service who may be expected to faithfully echo the line taken by the government. According to an official, the Prime Minister is under severe pressure of time and hence unable to meet with as many people outside the bureaucracy as was the case when he was Gujarat Chief Minister. Access to PM Modi is much more difficult (and in most cases impossible) than was access to CM Modi. While a flood of suggestions comes in via the internet, “almost all of this gets dealt with at the junior officer level”, and often these “lack the judgement needed to decide which should get referred to higher ups and even the Prime Minister”. Modi has always shown a willingness to accept new ideas and listen to different voices, that is, provided these gain access to him. “While he lasted, P.N. Haksar as Principal Secretary to Indira Gandhi used to ensure that the PM met at least two or three individuals of strong and contrary views each week. The same needs to take place now”, a former high official said, adding that “the way the currency swap is being implemented in practice shows the weaknesses of our inbred bureaucratic system that listens only to echoes of its own voice from the outside and dismisses the rest as inconsequential or motivated.”

The colonial bureaucracy’s focus on a single objective to the detriment of the overall benefit is illustrated in the continued refusal of the authorities to permit the (free from direct taxes) farm sector to use extinguished currency notes for sale and input purchase. The loss of farm output through wastage and for other reasons as a consequence of the severe liquidity shortage the farm sector has been experiencing since 8 November, is far more than any gain consequent to lesser tax evasion. Already sluggish rural consumption is heading for a major dip this financial year, with discretionary spends in both urban and rural areas down as citizens hoard their small denomination notes rather than risk spending them. Mandis are unable to purchase fruits and vegetables from the farmers, who themselves are unable to purchase essential inputs. Given the lower access to banking infrastructure in the rural areas, the severe post 8 November restrictions put in place for monetary transactions (including deposits and withdrawal) will lead to a much slower return to liquidity in rural areas, while the urban areas too are likely to remain stressed. Rural distress has been accentuated by cooperative banks being denied access to cash. Even mobile recharge numbers have sharply fallen. The abundance of cash mentioned by some bank chairpersons and the RBI seems to be in evidence only in their imaginations, leading to a loss of credibility in such institutions. The way the currency swap has been implemented is leading, according to an official, “to a pronounced slowdown in sales of consumer goods, including those usually fast moving”. This will have an impact on revenue collections and increase pressure on the tax authorities to conduct raids and raise assessments in a situation where profits may be negative and income growth low. If the RBI and the more voluble bank chairpersons are correct in asserting often and in public that currency stocks are ample, their success ratio in reaching these where most needed, has been low to absent. Because of fear of continuing cash shortage, the velocity of currency is slowing down as holders store rather than spend their depleted hoards. As for the money coming into the banking system, only the restrictions on access to currency are keeping much of it there. Across the country, millions are experiencing the effects of a slowly liberalising economy suddenly returning to a planned mode. 

That several at the apex of the banking pyramid in this country have very limited knowledge of ground reality seems clear from bank officials’ remarks such as “the line outside branches and ATMs is coming down”. This is not because of lack of demand for currency, but a lack of cash in ATMs and in bank branches. Those where there is some cash to dispense are seeing long queues. As for the rural areas, currency supply has been much lower than in the cities, despite the political importance of the rural vote. In UP, Uttarakhand, Punjab and Gujarat, the way in which the currency swap scheme is being implemented is likely to impact voting behaviour substantially. The transport industry is down with trucks idle, while retail business has fallen across the country. Latest by the close of 50 days beginning 8 November 2016, access to cash needs to get restored to pre-8 November levels for the economy to right itself. Any further delay would result in an unimaginable situation very different from that anticipated by Prime Minister Modi when he signed off on the suggestion from some officials that he approve the shock withdrawal of Rs 500 and Rs 1,000 notes. The “reason for the Rs 2,000 notes was to speed up the volume of money supply as these get printed at the same rate as the Rs 100 or Rs 500 notes”, an official claimed, adding that “the level of safety features is the same as in the older versions”. 

The total currency in circulation on 30 September was Rs 17 lakh crore, of which 500 and 1,000 rupee notes amounted to 15 lakh crore rupees in value. The Rs 100 notes were 12% in value, the Rs 500 notes 46% and the Rs 1,000 notes 40%. A total of 21 billion notes of 500 and 1,000 were in existence. In the four currency printing presses, only 3 billion notes of all denominations can get printed in a month. Of this, the 6 billion Rs 1,000 notes will get cut down to 3 billion Rs 2,000 notes. Printing Rs 100 notes takes the same time as printing a Rs 2,000 note, and there is a looming shortage of these, as demand has spiked since 8 November. Apart from printing, the average time taken for dispensing to consumers is 36 days, according to an official. The math will show the speed at which the currency shortage can get addressed in a meaningful way. About six months is the minimum, which is why those saying that currency supplies are adequate need to explain their remarks.

The coming week will be a crucial period for the bold scheme announced by Prime Minister Modi. Unless the ground situation improves substantially, economic distress will be unmanageable. 

Those whom the Prime Minister has trusted with handling the machinery of government will need to deliver on their promises to him, so that he himself can keep the promise he has made to the people of India, of witnessing a smoothly running and corruption free economy within 50 days of this unprecedented decision. Modi’s bold move will enter the Guinness Book of Records for a single decision affecting the maximum number of people (1. 26 billion) in the shortest possible time (less than four hours). Those who are well-wishers of Prime Minister Modi hope that the team personally chosen and assembled by him will deliver the results expected of a government led by a maestro of the calibre of Narendra Modi. 
http://www.sundayguardianlive.com/news/7402-pm-modi-s-currency-swap-enters-critical-week

Friday, 18 November 2016

NATO is ‘fighting’ Daesh by committee (Pakistan Observer)

November 18, 2016 | Geopolitical notes from India | M D Nalapat

IF the humbling of the European country of Serbia through bombing raids be excluded, NATO has not won a single war since its inception, and has indeed lost every conflict it has entered into, especially since 1999. Of course, perusing books by trans-Atlantic "scholars" or television channels from that and affiliated zones, this fact gets obscured by coverage that is misleading and mendacious. Channels taking their cue from government sources, such as CNN or BBC, lead in giving viewers only what the chancelleries of the countries they are based in want them to see. They have, in effect, become an external publicity cell of the State Department in the US or the Foreign Office in the UK, although the fiction that these countries have a free press is mentioned by them and by their admirers repeatedly when comparing such media to those in the target countries of NATO.

If media in Russia is overwhelmingly on the side of Basher Assad in the Syrian war, to take an example, the media in the US or the UK has been overwhelmingly mobilised in favour of the "moderate fighters" battling Assad, almost all of whom are Wahabi and share that sect's distaste for European civilisation, although for tactical reasons, such an opinion is being kept hidden from view while the flow of assistance from NATO and its regional partners in the Middle East continues. In early 2011, this columnist warned that the fighters challenging Muammar Qaddafi in Libya were Wahabi ultras. This view was based on an analysis of the literature and speeches of some of the leaders of the NATO-backed revolt. Almost entirely, such tracts were filled with bile against Qaddafi but the reasons given for the same were not the absence of democracy in Libya or Qaddafi 's verbal sallies against US and its European allies.

The reasons these "moderate freedom fighters" of Libya gave for their antipathy to Qaddafi was the latter's refusal to convert Libya into a Wahabized State by blocking the education of women and making what they defined as religious law the basis of the jurisprudence of the State, stoning and amputation included. Many of the tracts used violent language to describe not only the regime in Tripoli but the trans-Atlantic partners as well. Clearly, neither the many speeches nor the pamphlets the "moderate freedom fighters" penned were taken seriously by NATO, else it would have been obvious what the future of Libya under the control of Wahabi militia would be. These fighters have defeated NATO by ensuring that the country over which they have near-total control has become an incubator for Daesh and a funnel through which hundreds of thousands seek entry into Europe. After the Sykes-Picot agreement of 1919, the 2011 "Arab Spring" gave NATO the illusion that the alliance could once again establish control over the Arab "street" through its control of social media platforms.

A telephone call to Palo Alto or to Seattle ensures that web filters get redone so as to generate kind of news and (mis)information that NATO regards as helpful to its objectives. There was recently a mock fight between Apple and US authorities about access to a phone belonging to a terrorist. A flood of media reports appeared that claimed that the US corporation was defying even the FBI "in order to protect privacy of owner" of each of handheld phones marketed by that company. Intention behind this imaginary fight was to ensure that buyers of such phones believed that Apple would protect their privacy. The reality is that each transaction on such instruments is open to scrutiny by US authorities, as indeed are transactions on Facebook, Twitter, Google, Hotmail, Yahoo and other platforms based within NATO alliance. Of course, platforms based in China have an even greater transparency to local authorities, as do others based in Russia.

What is noteworthy is that the NATO powers claim that their practices are different, when in reality only their "message spin" is. The Chinese or the Russians do not bother to conceal their access to modern methods of social interface and communications the way NATO does, even while it ensures the exile of an Edward Snowden or a Julian Assange, neither of whom would have become a fugitive had the US and Australia enforced the principle of freedom of speech.

Given the anger within intelligence agencies in the US about the way in which Bill and Hillary Clinton have traded access to decisions for cash, it would not be surprising if it were discovered that Wikileaks indirectly got its evidence against Hillary Clinton from intelligence agencies much closer to home than Russia's Federal Security Bureau. Given the anti-Trump bias of the US media, it was not surprising that much of the media commentary about the episode concerned the origin of the documents rather than the truths they revealed about a campaign fixated on no other ideal than power. Those who were heartened by Donald Trump's following the example of Churchill and Roosevelt in focussing on the prime threat rather than dissipating energies in subsequent conflicts were taken aback when General Flynn, who is billed as his closest national security advisor, made remarks about Turkey that ignore the reality of the situation in that country.

Some of Flynn's paid consultancies influenced this lack of realism about a country where Daesh has been mutating, thereby diverting him from the steely realism of Candidate (now President-elect) Trump. It is a disgrace that Mosul and Raqqa have yet to be captured by NATO forces, a setback explainable only by the way in which that alliance is hitting at Daesh with one arm and nourishing its warriors with the other, of course under a different label. The problem with NATO is that the alliance lacks a single focus but is instead driven by a cluster of agendas, some mutually exclusive.

The consequence is a mishmash of policy, the exact nature of which depends on which faction within the alliance has the advantage over the others at that particular time. They are seeking to fight Daesh by committee, not the best way to wage a war. President Abraham Lincoln prolonged the US civil war by at least a year because of his refusal to replace incompetent commanders in time and to enforce clear priorities rather than seek to mediate between rivals. And it is on the issue on which he was resolute, the Emancipation Proclamation, that he has earned a place of honour in human history. Unfortunately for the war on potentially the most destructive terror force in the world, NATO is showing in its battle with the scourge the same vacillation and misreading of ground realities that it has demonstrated in past conflicts, all of which it has in effect lost.


Sunday, 13 November 2016

Lutyens zone works to derail PM Modi’s currency move (Sunday Guardian)


By MADHAV NALAPAT | New Delhi | 13 November, 2016

The public and economic dislocation caused in the aftermath of the currency-based surgical strike has shown to those officials close to the PM the importance of ensuring administrative reform at an early date.

Associates of Narendra Modi say that from the start of his innings as Prime Minister of India, it was clear from his approach how far he actually was from the characterisation of Modi as vindictive. PM Manmohan Singh sent one of his own Cabinet colleagues to jail and was well on the way to a second meeting the same fate, even while others were made to resign after allegations of gross impropriety. On the contrary, Prime Minister Modi ensured that an official clean chit was given to the then Minister for Coal (Manmohan Singh) during the precise period when numerous allocations were made on the verbal and “unsigned chit” recommendations of key UPA members. No other UPA-era minister has been the subject of even an FIR, much less a CBI prosecution. Indeed, the UPA-chosen director of the CBI, Ranjit Sinha and many other officials were allowed to serve out their terms with dignity and retire with traditional honour. Many key positions within the Modi-led NDA government remain filled by officials who were active in the service of UPA ministers, including some who have been reported as having facilitated illegal transactions, including through the stock, commodity and currency markets. Indeed, several at the top of the present government’s civilian bureaucracy have long had close and open contact with the Lutyens Zone, including with Congress president Sonia Gandhi, who has long been the uncrowned empress of this pool of resourceful and influential policymakers.

However, the fact remains that Narendra Modi is an outsider to the Lutyens Zone, and is known for his patriotism, integrity and refusal to act as a facilitator of vested interests nourished over decades by the Lutyens Zone. Hence, from the start of his term, the Lutyens Zone and its component groups have been silently working to undermine the Prime Minister and sabotage or at the least slow down the transformational measures that he has regularly been introducing since the past two years. Along with this, an entire “samizdat” industry has been developed that is designed to discredit the Prime Minister, and this despite his expansive and accepting approach towards those who were all powerful in past administrations. Senior officials in sync with the desire of Modi for transformation of the economy and the governance system warn that the currency measures announced by the Prime Minister on 8 November are being sought to be sabotaged such that public anger will swell to the detriment of the NDA. They are doing this in the context of the reality that the withdrawal of Rs 500 and Rs 1,000 currency notes amounting to 85% of the total money supply (as against less than 1% of the money supply in the 1978 measure targeting Rs 1,000 notes) affect practically all the 1. 26 billion people of the country. Should the measure go sour, the BJP as a party will pay a heavy price at the hustings.

The public and economic dislocation caused in the aftermath of the currency-based surgical strike announced by Prime Minister N.D. Modi on 8 November has shown to those officials close to him the importance of ensuring administrative reform at an early date. “Without an efficiently functioning government machinery, the historic plans of Prime Minister Modi will not succeed”, a key official warned, adding that “this needs to be a priority for the coming year, so that from 2018 onwards, people will feel the positive difference” caused by Modi coming to power at the national level.

Modi took office on 26 May 2014 with four key governance objectives: (a) making quality education widely accessible at all levels, including technology and vocations; (b) creating a framework for affordable healthcare that would place stress on prevention through measures such as vaccination and providing disincentives to toxic consumables such as tobacco; (c) ensuring that infrastructure reaches a scale and standard as would ensure that citizens be given a smooth interface to live and to work; and (d) work towards an enabling environment for the Knowledge Era that would place emphasis on high internet speeds and universal availability, as well as such essentials as freedom of speech. Thus far, the record has been less filled with spectacular outcomes than expected when Modi took office, and for this, those in government who are committed to his goals are pointing to the administrative machinery, and in particular its still colonial-minded and ossified higher echelons, where procedures and customs from the British-era past have not only been preserved but expanded upon so as to harass the citizen and deny him the rights and freedoms present in other major democracies.

There has been a continuous campaign designed to portray Narendra Modi as an over-centraliser, whereas his close associates point out that he is known by those working with him as a decentraliser. As an example of the Modi approach to national governance, senior officials point to the Ministry of Human Resources Development. They say that a single agency and its satellite bodies have not and cannot ensure world-class educational standards. In such a context, a suggestion is to recruit global talent to fill some of the posts within major centres of learning, rather than confining the choice to those resident in India. In a similar way, a fresh approach has been suggested towards key posts in the Central government and its agencies. This is to ensure lateral entry of domain knowledge experts and those from the private sector with a proven record of practical achievement to at least 30% of middle and top jobs. “If the ratio is less, the change will be too small to be effective”, a senior official pointed out, adding that “the present system of reserving almost all the highest jobs to those from a single service (the IAS) needs to be replaced so as to ensure that those from all services are given the opportunity to serve in key posts”. Another pointed out that “it makes little sense to have someone with a History and not a Mathematics background as Head of Statistics, or to place a doctor who has joined the IAS in Sports rather than in Health or a Chartered Accountant in Animal Husbandry”. Senior officials committed to the transformational plans of Prime Minister Modi say that in the 21st century, domain expertise is crucial to good decision-making, and “this is conspicuous by its absence within the higher bureaucracy”.

It may be mentioned that the IAS as a service is not First Among Equals but a Superior Service, the way the Imperial Civil Service was in the past. Almost all IAS officers reach the highest pay scales in the bureaucracy or in PSUs during the course of their career, and enjoy a two-year advantage over other services when promotions are being decided. Since the start, they have had the benefit of the same One Rank One Pension scheme that has been so difficult for Defence Minister Manohar Parrikar to navigate through the civilian bureaucracy. Although in theory those IAS officers who are incompetent or dishonest are weeded out, in practice this almost never happens. Instead, obviously incompetent or corrupt officers are frequently protected until they retire with pensions intact. “Any closed group without competition or effective accountability cannot deliver results”, an official pointed out, adding that in general, “senior officers abhor change and regard procedures as crucial while outcomes do not matter”.

Those watching with dismay the efforts of the Lutyens Zone to slow down or sabotage key Modi initiatives say that apart from 30% lateral entry from outside officialdom, key posts should be open to all services and not simply to a single group. Among ministries where outside experts are needed, including at the top, such officers in sync with Modi’s goals pointed to Electronics, Telecom, Health, HRD, Defence and Civil Administration. Based on their experience, they say that “more than 40% of officers are deadwood incapable of achieving results” and of the balance 60%, “more than a quarter are corrupt”, some obviously so and yet escaping scrutiny and censure. Many of these officers said that the Administrative Reforms Commission headed by M. Veerappa Moily needed to be retrieved from the dustbin “as several of its conclusions and suggestions are relevant to present needs”. They say that the manner in which the currency initiative of Prime Minister Modi is being implemented, the glitches and procedural lapses in the details of Modi’s bold scheme, show the need to make administrative reform a key priority during the next six months “so that the crucial (to the 2019 polls) 15 months after that can ensure smooth and complete implementation” of Prime Minister Modi’s governance and policy initiatives.

Meanwhile, it is becoming obvious that the present government’s light hand on those at the top of previous administrations who were guilty of past misfeasance on a gargantuan scale needs to get replaced with greater accountability and punishment, if the Lutyens Zone is to be scared off from further acts of sabotage in the remaining period of Prime Minister Modi’s term in office.

Saturday, 12 November 2016

Sanders should be US Senate Minority leader (Pakistan Observer)

 | M D Nalapat
AS predicted in these columns in July 2015, Donald Trump has defeated Hillary Clinton in the US Presidential elections. But for the manipulations indulged in by the Clinton political machine, it would have been Vermont Senator Bernie Sanders who challenged the billionaire for the world's top job. Sanders would have had a much better chance than Clinton to defeat Trump, in that the millions of unemployed and under-employed who voted for the Republican candidate on November 8 would mostly have remained loyal to the Democratic Party ticket.

The Clintons have become too smug and too obviously wealthy to gain the loyalty of those who have seen their lifestyles plummet since the 2008 financial crash caused by Wall Street. And as this column has often pointed out, the Clinton Foundation has become a vehicle for patronage, its primary utility being as a vehicle for the political ambitions of Hillary Clinton and the extravagant lifestyle of Bill Clinton, whose penchant for travel in corporate jets and stays in luxury hotels began while he was Governor of Arkansas a quarter century ago. The tab for a significant share of such travels gets picked up by the Foundation, which markets itself as a saviour of the underprivileged. The Clintons were certainly close to impoverishment for years, but that was before he took office as Governor of Arkansas and later as President of the United States. Since then, both he and his wife are millionaires several times over, while daughter Chelsea is married to one of the richer families of New York.

Those in contact with the Clintons say that it has been Bill's ambition to launch his telegenic and gifted daughter into politics, but that this had to be put on hold because of the hunger for the US Presidency of Hillary Although reliable figures are difficult to come by in view of the secrecy maintained by the Clintons, it is estimated that $ 608 million was spent on the Presidential campaign of Hillary Clinton, which began in 2013, including money spent on securing the nomination. Cash has flowed in from multiple sources, and this must now be seen as a dead investment, in view of the fact that the Democratic Party has lost the White House while remaining a minority in both the US Senate as well as in the House of Representatives.

To Hillary's credit, even though such a step may have been politically advantageous in a close election, she refused to oblige Both Hillary and Bill Clinton are certain to remain the most powerful couple within the Democratic Party, even more so than Michelle and Barack Obama. The current President and First Lady of the United States lost a considerable amount of respect and goodwill in the final weeks of the campaign, when it seemed as though they were at Hillary's beck and call. Seemingly to the neglect of his awesome official responsibilities, Barack Obama criss-crossed the nation begging people to vote for Hillary Clinton. Whether by accident or design, the Clinton campaign showcased the couple with an African-American context, believing that the Obama would be able to generate a firewall of black votes in crucial states that were expected to win the contest for Hillary Clinton.

The reality is that President Obama has run the government in a neutral way and not as a representative of the African-American community, although that is the ethnicity to which he belongs. As it happened, although citizens of every colour – brown, yellow, white and black – flocked to listen to one of the most charismatic individuals on the planet, a much fewer number were enthused about Hillary Clinton, whose husband as US President introduced changes in the justice system which resulted in several hundred thousand African-Americans going to jail, often for long periods of time. At the same time, others were put off by the spectacle of their popular President and the First Lady (who has the elegance of a fashion model and the looks of a filmstar) serving almost as hired hands of Clintons, going from place to place at their bidding.

During the campaign, Obama lowered the dignity of his office by indulging in partisan politics on a scale never before seen in US elections, and that too, making the most personal and derogatory remarks about an individual who was on the road to being his successor Apart from Barack Obama, another individual tarnished by the campaign is Bernie Sanders. Although he had repeatedly pledged to take the battle for the nomination up to the Nominating Convention floor, he retreated and emerged instead as an admirer of Hillary Clinton. Together with the Obama, the Clinton political machine sent Sanders across the country to seek votes for Hillary, but the extravagant way in which he praised a candidate whom he knew to be close to Wall Street turned off several followers.

The same fate befell Senator Elizabeth Warren, who acted as a Clinton surrogate despite her idealism and the knowledge that Hillary Clinton was in league with interests that Senator Warren had courageously and consistently opposed. Now that Hillary has been defeated, both Sanders and Warren are left with very little leverage to fulfil their wishes in the matter of public welfare, unless Bernie Sanders bids for the post of Minority Leader of the US Senate. Should he take over this position, the New Yorker who has spent a lifetime in the service of the underprivileged may be able to have a potent influence on policy, or at least be able to challenge decisions of the Trump White House much more strongly than as a lone voice.

Hillary Clinton may not approve, but the reality is that Bernie Sanders is the fittest candidate to serve as Senate Minority Leader. Should a Sanders associate become the House of Representatives Minority Leader as well, the pair would be a formidable force in Washington. Senator Sanders has walked away from a fight before, that with Hillary Clinton over the Democratic Party nomination, and that retreat had disastrous consequences for his party. Will he have the will to wrest the leadership of the Senate and House for himself and an associate? Should he do so, the Sanders revolution will endure in the ashes of the Clinton Presidential flameout.