In India a budget to be proud of

July 6, 2009

The free marketers are crying foul. In his budget speech on Monday, Minister of Finance, Pranab Mukherjee disappointed them by not detailing a plan for allowing foreign investment in the insurance sector, for privatization of public sector companies and of education.

Even as Mukherjee was making his budget speech, the Sensex of the Bombay Stock Exchange dropped.

To a large extent, big business led to its own disappointment by its euphoria after the re-election of the government of Prime Minister Manmohan Singh. Share prices soared on the stock markets as investors believed that the UPA, freed of its dependence on the Left parties, would now pursue a reformist agenda.

The term “Reformist” has usually been defined by business and the pro-business media in terms of free market policies that liberalize cross-border capital flows, open new sectors to private investment, and make labor markets more flexible (read ease out labor unions).

The evening after Mukherjee’s speech, the pro-business The Wall Street Journal is making a spectacle of itself, claiming interestingly that Mukherjee’s budget was ” a pretty dreadful spectacle”. Newspapers are expected to report and analyze, and not espouse causes, but that is a subject for another post, another time.

What industry and media like the WSJ mis-understood is that the Congress party, which is the main partner in the coalition government, has traditionally had a stand of its own on social policy, which is social democrat and far from pure capitalist.

Mukherjee used the budget speech to remind viewers that India was protected from the global financial meltdown because its large banks are government controlled and did not expose themselves to speculative activity, and stocking up on CDOs. He credited his former leader, the late Indira Gandhi, for nationalizing the banks when she was Prime Minister of the country.

By his focus on inclusiveness, on rural development, on expanding the economy through stimulus spending, Mukherjee has sent out a strong signal that social democracy is not dead in India.

By refusing to privatize education, and by in fact making a budgetary allocation for new IITs, Mukherjee is making the point that Pt. Jawaharlal Nehru’s strategy to spend on education and research as core competencies is still relevant.

Mukherjee’s budget in fact creates the opportunity for the emergence of more people from out of the pale of poverty, into becoming beneficiaries (and consumers) of the economic boom. The question is; will foreign investors decided this is a good market opportunity for them ? Or will they continue to demand what seems to be quite impossible in a country that is moving to its social democractic roots ?

There is some concern about the deficit in the budget, but at times of economic crises, deficit financing and government spending is the way out to stimulate the economy and create jobs. The challenge for Mukherjee is to rein in inflation when it happens, by a reduction of the deficit, and other appropriate fiscal measures.

There are also issues such as the implementation of the programs that aim to bring India’s vast rural poor into the mainstream of economic development. There will undoubtedly be leakages, corruption, and some of the money will not reach the target group.

But unbridled capitalism won’t solve that problem. Civil society and good politics can.


MySpace not responsible for assault on minors: US court

July 2, 2009

Internet servers like MySpace cannot be held liable when minors are sexually assaulted by people they first meet on a website, a California appeals court ruled in an opinion filed late on Tuesday, according to this report from Reuters.

The court seems to be saying, to use a metaphor from physical life, that if I rent a house to a person who commits a crime against a minor, or to a person who initiates a crime on those premises, I cannot be held liable.

I think that is reasonable from a purely legalistic standpoint, except in cases where a landlord is found to be actively abetting or aiding or profiting from the crime or its initiation.

But what if the landlord in this case saw the tenant lead an unknown minor girl to the house ? Should he just ignore it, as he is not legally liable, or should he just ask around, or drop in on his tenant just to show he is watching ? How much effort is good enough ?

Please note: this is no longer a point of law, but a matter of conscience.

To be sure, the landlord can try to smoothen out his ethical discomfort by blaming the parents who allowed the minor child out with the stranger in the first place, or by blaming parents who do not keep enough checks on the whereabouts of the children.

Or he may worry about intruding on the privacy of the tenant.

The landlord is within the law, but is his conscience clear ? If a crime does happen in his premises, he is not legally liable, but is his conscience clear, unless he puts in his best efforts to check what is going on ?

Social networks can’t be hauled to court for a crime committed or initiated by someone else on its premises, says the Second District Court of Appeal in Los Angeles.

“The idea is, you hold the speaker responsible not the soapbox,” Electronic Frontier Foundation (EFF) spokeswoman Rebecca Jeschke told Reuters.

The ruling, if adopted by other courts around the world, shifts the onus dramatically to citizens.

The public will have to be far more aggressive to get social networking sites to put in place security measures for minors, or prevent minors altogether.

Social networks are no longer liable for this role in a court of law, but they could be liable in a court of public opinion and action, liable for a failure of conscience.

Social networks can in certain circumstances be hauled before the court of public opinion and citizen action, made all the more easy on the Internet.

People with a conscience may, for example, decide to pull out of a social network because it does not protect minors enough, if its controls for preventing minors on its site are not strong enough.

Or people may decide to boycott products or services that are advertised on social networks that are found not to have a conscience.

To the other denizens of MySpace and other social networks; do we watch out for any signs of criminal activity and report it ? We are equally responsible as the people running the social network.

India needs English education for all

July 1, 2009

Education is the way out of economic backwardness for India’s large number of poor. Needless to say access to capital at reasonable rates, subsidies, health and other services are as important.

In this post my focus is on education. A number of state governments are enforcing state vernacular languages as the medium of education with scant regard to the relevance of this education in the job market.

They forget that India would not have emerged as an outsourcing hub but for a quirk of history, the decision by the British to introduce English as the language of education in the country.

We should be equally concerned about protecting our local culture and language. The McHomogenization of Indian culture is not at all desirable. But the classroom may not be the place for the protection of culture at this stage of India’s economic development.

The Wall Street Journal in this article has argued that the denial of English education to the masses is in a sense a form of domination, to keep the people subjugated.

“In fact, much of the political class remains opposed to English medium education supposedly because they fear the loss of local culture and language,” WSJ writes. It’s more believable that it’s because an ill-equipped population of voters is a malleable population of voters,” it added.

In the state of Goa in western India, a majority of the people backed Konkani as the mother tongue of the state, because it was the language spoken by most people But when it came down to the implementation of the language as a medium of education, parents fought back in favor of English.

They had by then realized that the official language issue had helped Konkani protagonists to perpetutate their roles as culture czars and educationists.

These protagonists re-wrote the language in the name of standardization, and expected children to learn a language that was by now quite different from what they had been used to speak at home. The script was also different.

Clearly there is a need to separate the politics of language from the relevance of a particular language in the new economic scheme of things. The education system, whether we like it or not, is geared to producing people suitable for employment in our factories and offices.

A few of us may have some discomfort about this mechanistic and production oriented metaphor of education. But to India’s poor, this is right now probably the only education that is relevant.

Savitabhabhi and the right to smut

June 29, 2009

News reports from India’s ContentSutra have it that a porn cartoons web site has been banned by the Indian government.

While we all stand for freedom of speech, I am not sure that we should extend it to the right to publish smut.

What is cute about an online celebration of a sister-in-law who has the hots ? That incidentally was the theme of, and some of the morally neutered media, US and Indian, gushed over it.

On this point I differ with the ultra-liberals who would argue that it has to be freedom at all costs, even if the freedom is exercised at the expense of good taste, or could endanger our kids who are also online.

Extending the liberal point of view further, this would add up to freedom to be solicited by pedophiles and other maniacs.

The fact is that if civil society is befuddled with confused liberal notions, somebody has to stop the smut online. If civil society does not have the way and means and the will to do it, the government does it.

The government has decided to take up the issue, and ban Hopefully, they will extend it to other pornographic sites. Else they would quite justifiably be seen as arbitrary.

I am not comfortable with the government deciding what should be made available to readers online, because the mandarins may misuse it, and they are not sophisticated enough to take a nuanced view.

That the government intervened however reflects the people’s inability to take a call as a concerted group, which is once again a reflection of the breakdown of consensus in civil society and the body politic.

Instead of relying on the liberal reflex, people worldwide have to take a serious view of the proliferation of smut and other things dangerous on the Internet. Just as we practively try to avoid crime on the streets, we should proactively try to stop criminal activities on the Internet.

As on the streets, there is the danger of fascism on the Internet. Governments also tend to want to curtail all freedoms in the name of curbing pornography, as in the case of China’s controversial filtering software for PCs.

But we have to find a middle-path for the sake of decency, good manners our sanity and that of the younger generation. We have to agree, or else the government will have to step in to tell us what is right.

P.S: A web site has sprouted on the Internet to save the porn site….yet another example of misplaced liberalism.

India’s economic boom is lopsided

June 26, 2009

It is fashionable among India’s new business elites to talk about the boom in the economy, but a lot of it has been awfully lopsided.

About 600 million people, or 60 percent of India’s population, live off the land, according to CNN. Majority of farmers depend on rainwater for crops — irrigation, electricity are a luxury.

Yet presumably in a bid to attract investors, Indian business and investment analysts have trumpeted India’s economic boom. Their comments often reflect a divide in urban/rural perceptions, a lack of knowledge about what goes on outside the cities.

Rather than provide a counter-balance to such skewed perceptions, the Indian media has by-and-large gone along with the urban point of view.

The same business classes are also planning to get the private sector into education, healthcare, and insurance, little realizing that private services are not a substitute for government. If government services are bad, fix it…….let’s not talk about privatization as a panacea.

The few instances of privatization in these sectors in India have shown that the costs of the new privatized services are way beyond India’s poor who are not only in its villages but also in towns.

The boom in India, which has been largely confined to its cities, and particularly in its outsourcing, retail, and telecom industries has created a new class that demands the best in schooling for its kids, the best in food, the best in healthcare, quite regardless of the price.

But these schools, hospitals, and other services are beyond the reach of the poor both in the cities and the towns, further accentuating the huge economic divide in the cities. School fees in some of the better private schools would add up to over US$3000 a year. That is a cost that is way beyond a woman working as a maid in the city who would earn less than US$500 a year, at the peak of her career.

The moves to have private services in education and healthcare and other areas are therefore designed to serve the new elites, and cannot compensate for government action.

While there is no objection to the elites pampering themselves like their counterparts in the U.S., there is a case for the government to set up more of its services. In these sectors there is case for more government.

The poor also have their aspirations for a better quality of life, and if that is not satisfied by government, it will find other avenues, in some cases in increased loss of faith in the system and criminality.

If the political class, corrupt and suspect, have already contributed to an erosion of faith in the system, self-serving prescriptions from parvenu Indian elites can only increase the alienation.

The day the baker in my town closed shop

June 26, 2009

There was once a baker in the town I lived in. He and wife and two daughters each evening mixed the dough, let it ferment, and in the wee hours of the morning lit his oven with firewood to bake fresh and fluffy breads. He then delivered the labor of his love to his customers in the town on a bicycle, with a rubber horn heralding his arrival at the crack of dawn. His job done, the baker went to sleep.

Competition and modernization caught up with the baker and his family. He toyed at one point with mechanization, but that required capital. An entrepreneur who knew very little about the art of making breads, but had a lot of capital, started a mechanized bakery which offered breads that were very cheap, and yes excited the local consumers who were told they were made hygienically, made in accordance with modern global practices, and even had vitamins added to the dough.

Soon the entrepreneur was supplying to a number of towns and cities in the state, and re-located his factory in a cheaper town. To make his operations more cost-efficient, he began delivering bread to my town every three days. Preservatives in his breads kept them going that long.

Our neighborhood baker in the meanwhile folded up his business, and to avoid the ignominy (as he saw it) of working as an employee for the mechanized bakery, took to home delivery of newspapers. All this has happened in the last about ten years or so.

To be sure, there will be a section of folks who will say that worrying about the baker is useless sentimentality as modernization, free markets, and development have to wipe away what is inefficient and outdated. Implicit in this theory is the bias that what is dated is essentially not worthy stuff, unless it is an antique that can be packaged and auctioned to collectors.

Somehow I don’t think that I am alone in my sentimentality for the baker. Even commerce is playing on it. These days bakery chains are talking about the virtues of whole wheat breads, and oven fired breads, and fluffy breads. We had them when the traditional bakers were around, and we didn’t value them enough to preserve them.

The upshot is that free markets and competition cannot be counted on to meet our gastronomical, emotional, and community needs. Supermarkets will kill corner stores, large book chains will kill traditional small book stores, mechanized manufacturers will kill businesses where people work with their hands.

Some of these cornerstones of the past will however come back some ten years from now with a vengeance, this time positioned as boutique stores, designed and priced for the rich. The unassuming and functional corner bookstores or retail store will come back in a new avatar, with another owner, and a lot of snobbery and affectation that will drive off traditional customers.

Civil society has to protect what it values, whether it is the corner store, the local bakery, the vegetable cart, or the local vendor of victuals, by actively supporting these enterprises, buying from them. We are not doing them a favor, but keeping our sanity through this whirlwind of change.

Preserving small businesses has a lot to do with preserving our culture as well. Our culture is not only about owning expensive paintings and listening to music (these days more spectacle than participative). It is about the common relations, the institutions, the people that make up our life. The corner shop where one can stop for a bit of the local gossip, the baker who knows everyone around for mile, and other such notables where part of a community, of the fabric and culture of a society which is fast giving way to impersonal businesses.

Preserving traditional businesses also has to do with empowerment of the people who run these businesses. As the businesses close the self-employed join the ranks of the factory employed.

People also stop taking ownership of what they produce, and that reflects on quality. Once a year, the baker I spoke about used to gift his regulars with a cake stuffed with raisins and nuts. It was his creation, he was proud of it, and the kids loved it. It was not delivered with a large corporate logo in a fancy box, and there were no photo ops for the media. No, this gift reflected a man’s dedication to put in his best efforts to thank his fellowmen for their support.

It was about community, humanity. The baker was one of many who participated in a way of life that is not inexorably doomed to die away.

Coming up for air

June 25, 2009

I am back…..and this time I don’t care if millions of people don’t read this blog.

I am blogging again to keep my sanity in a world where we are indundated each day by marketing hype, cant and bluster in a world where truth has become like the plasticine, the clay our children play with.

It is a world where executives of banks that have taken TARP bailouts are using their company jets for private excursions, according to the Wall Street Journal.

It is a world where the gods of the financial Mount Olympus believe they should get a bail out, and they do get it courtesy US President Barack Obama, if only to save the economy.

A world where the new regulations for the finance industry proposed by Obama sounds like a lullaby, rather than a warning against future misbehavior. It won’t put speculators to sleep, but maybe all of us until the next bubble bursts.

It is a world where corruption and doublespeak continue not only in Iran or China but in democratic countries like the US, Europe and India.

It is a world where norms of decency and civility are fast dying out, and getting replaced by individualism and anomie.

I need to blog, to come up for air.