India: Perfect Imperfections

Are you an Indian? A disappointed Indian. Are you the one who pick up

the Indian newspaper or watch an Indian news channel in the morning to destroy own happiness and descend the ladder into depression?

Probably you are one of them(I am the one)?

What is the first image most of us have in our mind, when we talk about India? It is  poverty, destitution, over population, corruption, starvation, crime rates and terrorism. 

 

Indianness has become the passion only at occasional times, either when Indian cricket team is playing in the stadium or when some neighbor knocks our country's borders. On 15th August or 26th Jaunary, it again gets highlighted in the form of selfies(with flag) or facebook statuses.

In the normal times, we are looking to move away from this nation. The number of H1B visa applications (2.5 lakh this year) is the testimony to the fact that people want to leave this place. Probably because this is the place where opportunities are in numbers one could hardly rely on for the safe future. Probably, because this is the land of problems.

Today, the people of India are so blinded by the problems in their nation that they have forgotten the great wealth that lies within. And maybe, just maybe, it is the fault of the Indian media and our prejudices formed because of it.

Why do most of us have so much hatred against the police men irrespective of the fact that we have faced their atrocities or not?

We cry foul against system so much about the system, that we even forget to thank NDRF(National Disaster Task force) for its efforts in the extreme conditions.

It will be a herculean task to enumerate all the achievements of India[neither I am a politician who will like to do the same]. But one hardly pays attention to those achievements today.

At the maximum sympathetic attitude, we attribute India having too much potential in manpower, wealth(may be black money), natural resources, but unable to tap it. Here again we blame the 'system'. True, the people are not corrupt, but the system is. But isn't the case everywhere else? India’s political structure is no more corrupt than any other nation. It is just that the Indian people needs to change its parameters to judge the situation of the country. The institutional failures or the systemic failures can only be corrected by the people facing it.

Lets be more grateful and  responsible citizens and consider this nation as a family where it is not feasible to put the precondition of  keeping all the pieces right. It is not wrong to put problems in perspective, but it is definitely wrong not to revel in what we excel. Self confidence not the false pride is the need of hour.

Section 377

In a major setback to gay rights activists, the SC recently dismissed a petition seeking review of Suresh Kumar Koushal judgment and held that homosexuality or unnatural sex between two consenting adults under Section 377 of the Indian Penal Code(IPC) is illegal and will continue to be an offence. This order quashed the hopes of law reform.

Moreover as India takes a step back, UK prepares to legalize the same. The Indian SC re-criminalized gay relationships based on a colonial law that the UK has given in the heritage. Contrary, UK government has make a announcement promising a deadline for same sex marriages.

Lets get a bit familiar with the Section 377 and its history. Then we will talk about its consequences.

What does Section 377 say?

Section 377 says that "Whoever voluntarily has carnal intercourse against the order of nature with any man, woman or animal commits an unnatural offence and can be punished with up to life term." This is an archaic colonial law established in 1860 that banned sexual intercourse on the basis of its nature as "against the nature". Moreover Section 377 is not unconstitutional.

In 2009, Delhi high court had ruled that Section 377 was against constitutional values and human dignity, which clearly violates the human right of an individual. Here argument made by SC against the HC ruling is that, the Delhi HC has relied upon the judgments of other foreign countries which cannot be applied blindfolded for deciding the constitutionality of Indian law.

In the landmark Naz Foundation case, the Delhi High court stuck down the provision of criminalized consensual adults from having homosexual intercourse. The effect of the decision was that though homosexual intercourse was no longer illegal, Section 377 would remain in the statute books and could be used to prosecute other unnatural sex acts. Then the PIL by Suresh Kumar Koushal, whose interest was to protect cultural values of India society was filed. And here the SC overruled the judgment of Delhi High Court stating the reason that "LGBT individuals form a diminutive fraction of population and this Section 377 is not used frequently, the decision does not hold water.

Gay rights activists’ plea that Section 377 criminalizes a group of people and deprives them of equal citizenship was also rejected by a Court that held on to a textual reading that the law only criminalizes certain acts but not people or identity.

Consequences:

Though prosecution of consenting homosexuals was infrequent, Section 377 was used by the police to harass and intimidate sexual minorities.

 The 2.5 million LGBT community is categorized as a high-risk group by the Department of AIDS control, as prevalence of HIV is 7 times higher in them than the others.  In addition, the existence of this provision also prevented sexual minorities from accessing sexual healthcare without risking harassment or arrest.

The community would also face threats and intimidation or even blackmailing.

Way Forward:

This decision of SC is termed as 'retrograde' as it has brought back medieval prejudice and has also curtailed liberal values and human rights.  In majority of the cases, wherever the executive had failed and did not held constitutionally enumerated fundamental rights  to life and equality, the court had stepped in. This time it should not shy away from correcting a centuries-old law. With this decision, it seems like judicial route has been closed to bring the law in line. Now there are few ways forward.

One of them is the application of curative petition, which allows the Court to take cases even after dismissal of review petition provided that it involves gross miscarriage of justice and violation of natural justice. But as the track record of previous cases suggest, this route does not appear to be optimistic. Since the review petition was dismissed without even a oral hearing.

The another way is making use of Parliament's prerogative to amend Section 377 in tune with the social circumstances. Though the Union government too was in favor of High Court's view, it had left it to the SC to decide on the penal provision. With the upcoming elections, this legislative amendment is neither priority for Congress part nor for BJP(Indian cultural reasons).

The last but not the least route is to make benefit of the federal structure. As the Indian Penal Code comes under Concurrent List of Constitution, State Legislatures may amend a central law subject to approval of President. As this issue was well handled by the State Court as compared to Apex court, the legislative interventions at State level seems to be the most feasible way out.

Above all, it is a test of humane values, fairness and dignity in a society. It is important that institutions of the state acknowledge the importance of these values.

Politics of Subsidies

Seems like every political party is luring a common man to gain his support. Recent two moves of AAP and Congress -Subsidization and free distribution of electricity by AAP and subsidization of LPG cylinders from 9 to 12 by Congress suggest the same.


On the one hand the government are trying to cover these actions under the umbrella of welfare of people and to earn votes, on the other hand various Economists and opposition are not missing their opportunities to condemn their policies. The economists have expressed reservations on increasing the burden of subsidies while the opposition is crying that it will lead to fiscal indiscipline.  All these disturbances raise the most basic question: What exactly the subsidy - a boon or curse or just a charity shop to make political gains by wooing the voters.
RBI governor Rnagrajan stated- "we need to get careful with these expanding and misdirected subsidies". Hopefully this statement answers this basic question. But it does not explain the term 'misdirected' which is crucial to cut down anything. We will focus on various repercussions of these moves on the state economy. And for that we need to study the increasing gap between the government saving and expenditure.


The recent move of Union government to increase number of cylinders from 9 to 12 will cost the exchequer an additional Rs. 5,000 crore annually.  This step might bring some relief to millions of middle class and poor Indians who are battling high rates of inflation during recent times. But the cost to public exchequer is definitely going to deteriorate the state of Indian economy.


At this moment of time, resources needed to foot the bill for the fuel, food and fertilizer subsidies are not sufficient. Here comes a new term to  create illusion- "convenient accounting". This term refers to pushing this year’s expenditure to the next fiscal’s accounts. The Finance Ministry plans to book in next financial year, 2014-15, the expenditure that will be incurred on subsidies during the remaining months of the current fiscal (January-March). This will keep the fiscal deficit for 2013-14 within the target of 4.8 per cent of gross domestic product (GDP) — at least on paper.


The Budget Estimates (BE) for 2013-14 for these subsidies is Rs.2.21 lakh crore. The Finance Ministry has not so far raised before Parliament a demand for additional grants for these subsidies. However, as per latest official data, at the end of November, 2013, the fiscal deficit was already 94 per cent of the BE for 2013-14. With four months still to go in the current fiscal year, the Finance Ministry has limited space to manage the fiscal deficit, the excess of the government’s expenditure over its income. The UPA Government has not been able to garner through disinvestments the Rs.40,000 crore projected in the Union Budget. Moreover, tax collections are growing at a rate less than the target of 19 per cent. Union Finance Minister P. Chidambaram has pressed in budget cuts in social schemes in an election year to keep the fiscal deficit below 4.8 per cent but they are not going to be enough.


Mr. Chidambaram has said that the UPA Government will not let the India’s fiscal deficit for 2013-14 breach the 4.8-per cent target. International rating agencies have warned that a slip-up will trigger a rating downgrade for India.


This situation has dramatically undermined the confidence in the government’s ability to manage the macro-economy.
After having a quick glance over the current state of economy, lets try to figure out why this is happening and what is the way out? Lets have a look over the need of subsidy and various issues out of it.
The broad purpose of subsidy is redistribution of income, offset market imperfections and other social policy objectives as needed.


Subsidies have fiscal effects, trade effects and redistributive effects. And the most lasting and worrisome effect is that it creates vested interests and acquire political hues. And subsidies have tendency to continue indefinitely irrespective of regime. Subsidy have proliferated in India for several reasons:
1. Wide expansion of governmental activities: Even after 20 years of privatization, governmental activities have substantial amount of area to work on. These sectors includes social policy, railways, food security, fertilizer and monetary policy.
2. Weak determination of governments to recover costs from the respective users of the subsidies: Subsidies amounted to 14% of GDP, but the Tax GDP ratio in India is 17.7, one of lowest in the world. We have 42500 super rich(having income greater than 1 crore), but our tax collection doesn't justify it. There is a government document,
Statement of revenue  foregone which lists the income which government  could have earned but hadn't earn. In India, for every 100 Rupees, government is leaving 60 Rupees unearned. Sometimes, this revenue forgone is given to big industries and taxpayers as part of concessions and sometimes it is the inefficiency to collect.  Effective corporate tax rate is 20% instead of 33% on paper. Further due to the complicated procedures for paying tax, a common man prefers evading tax rather than getting involved into it.
3. Low efficiency of governmental activities- Wide spreading corruption is the overt testimony for this. 39% of subsidized kerosene is stolen. Malpractices in targeting results in inclusion and exclusion errors accounting to more gap between the needy and the better offs.


The most general issues arising from subsidies are: a) distortionary effects of agricultural subsidies on the cropping pattern, b) their impact on inter-regional disparities in development, c) the sub-optimal use of scarce inputs like water and power induced by subsidies, d) Inadequate targeting of subsidies, e) discouraging effect on economic growth of sectors not covered by the subsidies, and last but not least f) environmental sustainability.
An example of sustainability issues arising from the subsidy structure can be seen in problems of water and energy consumption in agricultural sector. During green revolution, liberal subsidy in irrigation resulted in decline of groundwater from 20 cm per year in Punjab to 3 to 5 meters in Gujarat.


As subsidies are politically sensitive, nobody wants to take stand on rationalizing it. At present subsidy in India is footed on 3 fs- food, fuel and fertilizers which are making a burden on public exchequer. And the more worrisome concern is that it is not well targeted resulting in nulling out of the overall objective of subsidy.


The requirement of subsidy in the country like India cannot be denied in a country where social and economic inequality is prevalent. But its appropriate projection is a must condition.


The Way Forward
1. First and foremost need is to reduce the overall scale of subsidies. And energy subsidy could be the most important sector to focus to bring sustainable economy.
2. Another thing is that there is no subsidy on productivity related sectors. Like infrastructure(one dimension is connectivity), skill development,  education, health, life standard. India spend less on these which would be beneficial in long run. Further essential needs should be subsidized. According to UNESCO, India has lowest public expenditure on higher education per student in the world- an important parameter in deciding the wellness of a country. Even World bank has criticized India for increasing economic inefficiency due to its vast subsidy bills.
3. There is need is to create subsidy for job creation in small sectors rather than supporting just only industry giants by giving concessions.
4. There is urgent need to fill the holes in the existing economic policies and bring transparency in the procedures(as in concession given to corporates).
5. Further policy arbitrariness should be eliminated. As seen in the recent decision of increasing cylinders from  6 to 9 and then 9 to 12 cylinders. While Verrapa Moily himself gave the statement average requirement in India is 6.9 per person and more than 89% people are sufficient with 9 cylinders. Then there was no reason to increase it to 12.
6. As fuel subsidy constitutes major amount of total subsidy and also with the rising price of oil products  in international market and increasing subsidy, the rates of petrol are quite fluctuating. We need to focus more on self dependency rather than relying on imports by increasing production and encouraging conservation
7. Subsidy should be correctly targeted, introduction of technology, computer based system will be helpful.
8. Demolishing public sector monopolies and promoting private investment so as to increase production.
9. Preventing natural resources by incentivizing environmental friendly technologies. Energy economy and a budgeted carbon emission were a means of achieving ecological sustainability, and one way of getting there was to cut “unjustified elements” of subsidies.
10. Governments must ensure sustainability through regulatory and price-cum-incentives approach and also that companies adhered to the overall national sustainability agendas.
11. Outcome based calculation and reviewing periodically to eliminate unnecessary things.
12. Clarity on the proposed term for any scheme.
 These reforms are necessary to form a multipronged national strategy to fight against the setbacks of subsidy.

When helplessness becomes a learned behavior

Nearly everyone is stunned by the performance of AAP in Delhi and have the same question "wow, how they pulled off?". Lets try to find out what was the secret recipe for success of AAP? And what is the thing that has brought a common man to the so called Janta Darbar.

Lets start from a small conversation:

Two men travelling in a bus:

Man1: Few days ago, I went to get my son's driver license. And we just end up going to the division of motor vehicles repeatedly.

Man2: Oh, yes. You are right. This torture due to corruption sucks. We need to get rid of it.

Man1: But what else can we do apart from watching. The law and order is also pathetic here. Its hard to get out of it once you are there. 

Man2: Hmm. Lets just wait for some miracle or believe in some God to who can free us.

The above conversation shows the situation of "learned helplessness". According to psychologists learned helplessness is where people who have been put in a prolonged situation where they are unable to get results from their actions, give up trying, and thereafter, helplessness becomes a learned behavior. This behavior can be better illustrated from the scenario before independence. Initially the people were helpless and low in confidence having a prejudice that we shall never be able to compete and fight back with these inevitable British Sarkar. But once the wave of independence get into the nerves of the Indians, it was able to completely destroy the British kingdom, the path may be full of barriers but they succeed because they were determined to, because they had begun the journey from helplessness to empowerment. And this journey is one-way street, one cannot go back to feeling helpless or powerless even if they wish to. The contribution of leaders cannot be denied as they helped to remove the barriers of caste, creed, gender and brought whole India into one thread.

This scenario can be compared to the present day where a common man is fighting back to corruption which currently seems to be inevitable. But like any typical problem, it too have a solution. What we can see at the present time is the requirement of change. But what type of change? Experts in change management talk of two ways that you can make change happen. 1. By putting in place "drivers" that create a force towards the desired future state or 2. By removing the "hurdles" or barriers that prevent a system from moving to the desired future state. Its often easier to change a system by removing "barriers" rather than putting "drivers". As we could see who doesn't want a corruption free country(except few who are making profit out of it). But despite the desire of a majority of Indians for a corruption free country, there was a sense of helplessness or powerlessness, a belief that it's the way it is and nothing going to stop it and nothing can change it. Here the desire of people is the "driving" force to change, but the belief became a key barrier to this change. It is critical to remove this barrier to allow the system to change. Large section of Indians had succumbed to the phenomenon of learned helplessness and felt powerless to change the state of affairs regarding corruption in the country. Here comes the role of AAP. The main task was to undo this sense of helplessness and make people feel empowered to rise up and fight for their cause. Many key messages of the party were focused on this task only.

First of all, the name of the party created this sense of empowerment. It gives the sense of ownership of party to whomsoever wear the cap. Essentially, the topi became the crown that made them feel like the king of the party.

The first message on their website also their slogan or "mantra" is "A corruption free India is not our request, but our demand and obsession". This clarity and firmness of the purpose has brought people into confidence.

 Other messages of the party were also built on this feeling of empowerment. "the aam aadmi will be selected as a candidate", "the aam aadmi will got to the parliament and clean corruption", "the aam aadmi has won from this constituency and will live not as a minister but as an aam aadmi rejecting all the VIP culture". These messages give people a sense of being heard. The voice of aam aadmi has been irreverent in the past several decades resulting in increasing number of troubles. Politics became a business of votes to win elections and then putting the very people, their views, their priorities into a corner making their lives difficult.

The unique thing about the campaign of AAP was its door-to-door campaign that brought the feeling of being heard and empowered. Mohalla sabha of AAP to create Assembly manifestos was another good illustration. A great lesson that could be learnt from AAP is the real meaning of empowerment. Lets wait for the upcoming miracles to happen while being honest on our part.

On a common man's end what he can do to fight along in this battle is to follow the mool mantra-"We should not accept a favor, which is not our right". Moreover, a strong belief of being woken up will make the fight complete.

Once empowered, the people cannot go back to feeling helpless or powerless. The people of India have woken up; they feel empowered and will not settle for less any more. They will demand clean candidates, they will demand transparent political funding, and they will demand that money be spent on the needs of the aam aadmi. They will insist on their voice being heard and participating in the political process. 

Hail to the power of the people in the world’s largest democracy!

Changing the rules of game