Politics fatigue

This is one of those nights when I think that the 2014 elections just couldn't come sooner. The viciousness and the ruthlessness with which the Government and opposition are at each other, it would seem that the future of this country depended on the results of the elections in 2014. From the looks of it, it could very well be.

There is no doubt that the past few years have been very tough for the Government of India. They've lost credibility domestically and internationally. There were two groups running the country, those of Manmohan Singh and the second one, the real one, of Sonia Gandhi.

While nothing is credibly available in the public domain, or at least I couldn't find one, Sonia Gandhi could not be the Prime Minister of India for reasons best known to the powerful and important people in Central Delhi. In comes Dr. Manmohan Singh, the exalted architect of India's economic reforms, a man of impeccable image and very loyal to the Gandhi family.

Such has been the loyalty of the man that he has watched India go back to the same economic conditions that PV Narsimha Rao and he worked so hard to get out of. All this while, the Prime Minister rarely spoke, even in the face of eye popping scandals, thus becoming the butt of joke for millions around the country.

All this while, Rahul Gandhi remained firmly ensconced as the next Gandhi family member to become the Prime Minister. Backed by powerful Congress stooges of the Sonia Gandhi camp, a never ending supply of photo opportunities and staged interactions, it seemed that Rahul Gandhi could really become the next Prime Minister of India without ever having lifted a finger in protect against the injustice and lawlessness prevalent in the country. At this point, there could be no greater example in the entire world than Rahul Gandhi of a person who has greatness thrust upon him.

Such is the effort put behind his election as the country's next prime minister that the usual Congress loyalists  of the likes of AK Antony, Khurshid, Manish Tiwari, Digvijay Singh, going out of their way to regurgitate how he's ready to lead and how they would love to work under him. Of course, none other than the Prime Minister of the country endorsed Rahul's candidacy to the seat that he is holding, saying he is ready.

In terms of survival, the Congress has been around the longest, and survived riding the Gandhi name since independence. They are fully aware where the voters are, and is fully aware of what they need to do to get the votes in. In terms of policy, Mrs. Gandhi and team have realized that this whole development/infrastructure wave is passe, and could see that the poor and the marginalized were getting increasingly disenchanted.

The middle class was also disenchanted, but in terms of voting, they don't vote, so they don't get a say. I don't blame anybody for thinking this way. As it is said, people get the government they deserve.

Coming back to the marginalized, the UPA is aware that it has completely screwed up the economy, it is scared to take decisions given the unprecedented levels of corruption in all levels of government, and not much maneuverability in the international arena.

In such a time when nothing seems to be working right, it helps to the grand old party of India, with a strong control over the media, no qualms to misusing federal institutions for meeting political ends, and fully activating the dirty tricks department.

In such a situation, Narendra Modi had been rising slowly as a person who was an able administrator, a no nonsense guy, a somebody that the people of India were increasingly clamoring for, given the utter lack of control the Prime Minister had, and the utter unaccountability that Sonia Gandhi operated with.

In such a time when Modi's own PM ambitions are rising, the people are increasingly getting disenchanted with the UPA, and Rahul Gandhi is unable to step up to the plate, it is but obvious for the Congress to activate a potent weapon it its arsenal - the secularism card. What happened in Godhra is a tragedy, and after so many years, remains shrouded in mystery on what really happened. With the liberal media never allowing the issue to die, and with steady fear mongering among the Muslims that if Modi came to power, they could be next, the Congress has been able to hold fort.

Coming back to the economic mess up, I believe that India is a fairly resilient and large economy to take many shocks, and I believe that the Congress has been testing this very notion. With the UPA responsible for almost a decade of jobless growth, the benefits weren't reaching the poor. Having ruled over most of the duration before 1991, I am sure the Congress still has many sharp practitioners of socialism in its ranks, and it was time to dust the old plans, and go back to the days of socialism when the government provided for everything, taxed the rich, doled the poor. The Food Security Bill, the Land Acquisition Bill, the Right to Education Act, etc, are all documents that, in an ideal world, should greatly improve the economic well being of the bottom of the pyramid, but in reality, operate in an environment where they do not have any effect of the situation at all.

The creaking public distribution system managed by the corrupt Food Corporation of India is supposed to manage the Food Security Bill for example. With creaking education infrastructure, and India remaining a laggard in terms of total investments in education, all children are supposed to attend schools that have no teachers, or have no toilets for girls, or simply do not exist. To counter the jobless growth, the Government comes up with the rural employment guarantee scheme, named after Gandhi ji of course, that provides for a 100 days wages to millions of rural Indians. It is another matter that most of them got paid without getting substantial work, but they won't complain, and would surely vote for a Government that pays them for nothing. Besides, 99% of the country does not care, nor understand what a bloating fiscal deficit, current account deficit, could result in.

In this backdrop, I would like to say that I am tired. I am one of those followers of social media where I am just tired of the dirty tricks and asinine plots unraveling themselves every day. The latest being the ordinance that would have countered the Supreme Court's directive to bar politicians with criminal records to contest elections. The Union Government pushed forward the ordinance that would have countered this, but for Rahul Gandhi's PR masterstroke of calling a hurried press conference and basically telling the Prime Minister to trash the ordinance. Immediately he is resurrected, hailed as the people's Rahul, and adulated as the man who has finally stood up to the challenge.

There is just way too many expectations riding on the weak shoulders of Indian voters. There is no doubt that the poor, and the not so poor (the food security bill covers 67% of the population) would probably reward the Congress for its move back to socialism. If they come back, it would imply that the move back to socialism is necessary, and one would expect more of it from the next puppet Prime Minister from the Congress.

It pains me to see the country in this race to the bottom, with the government willing to put everything at stake to ensure that they win, but its the people who would be paying the price, and expensive that price will be. 

race to the bottom for the economy

That the Congress agenda since coming to power has purely socialism should not be doubted by anyone. Slowly but surely, the Government has been putting in the systems and regulations that take India back to the days before the economic meltdown in 1991. With the Government in control of resources, and being a provider of basic goods and services to a vast majority, India is again moving back to the days when entrepreneurship stifled and government interference rose. 

I feel this time the situation is not so black and white. While there is still a considerable private sector contribution to the economy, the Government seems to have focused less on creating an enabling environment for them to grow, and more on creating an environment in which the poor are even more dependent on the state for subsistence. 

As Sagarika Ghose, of all people, tweeted, it is ironical that the Government is proud of declaring that 66% of the country's population does not have secure access to food grain, on the occasion of our 67th Independence Day. Of course she was referring to the Food Security Bill, which is to be tabled in the Parliament today. 

The basic premise of the Bill is, as quoted from the link above - Under the law, about 81 crore people would be entitled to receive rice at Rs 3 per kg, wheat at Rs 2 a kg and coarse grains at Rs 1 a kilo. 

This Food Security Bill would rest, of course, on the remarkable Public Distribution System of India, which pilfers and steals more than distributes. This same system has now been tasked with the responsibility of distributing food grains to crores of Indian families efficiently, on time, for cheap. All I know is that the middlemen and officials of the Food Corporation of India must be smacking their lips. 

Now coming to the current state of economic affairs, with unclear rules and regulations, lack of a general desire from the Government to govern, and foreign money again going out of the country, and a ballooning fiscal deficit, I think other than Sonia Gandhi's super duper economist and socialist team sitting in the National Advisory Council, nobody believes the economy can afford the grand socialist schemes of the Congress. Her minions parrot the same thing. 

One of the key features of globalization is that it puts all of us more or less on the same boat. Like they say, when America sneezes, the effect is felt around the world. Surrounded by the developed economies, the third world simply does not have the strength to not be affected by a global slowdown. One could argue that India should have grown considerably bigger to be a big boy at the table now - a big boy I said, on a table of men. Unfortunately, that is not so. The BRICS, a term coined by the God's Own - Goldman Sachs, is more or less dead. Brazil is limping, India well, doesn't even seem to want to be in the race anymore, Russia is on its own curve, and China is having its own issues. Popular opinion now seems to opine that the BRICS in itself was nothing but a marketing slogan, and anyways, it was all China. But as late as yesterday, South Africa hosted the first BRICS Business Council meeting. 

I took an entire paragraph on BRICS to explain that the global economy is in a pretty bad shape, and it certainly, certainly does not help matters when India's national government seems to be working on its own tangent and on its own economic agenda. Till now, the Congress was more than adept at dismissing any criticism as being communal. Anybody who was critical of the UPA was a rabid communal. Unfortunately for Sonia Gandhi and her dream of putting Rahul Gandhi into the seat of the Prime Minister of India, they may have created a monster that will be very hard to tame for the next Prime Minister of India. 

Dr. Manmohan Singh has done irreparable damage to the position of the Prime Minister with his inaction, silence, and very Gandhi'esque secrecy. The common man, the one who works hard, consumes goods and services, and relies on the free market as a source of inputs and a market for outputs is surely going to see through this charade soon, one would like to think so! How long will the population continue feeding on the facade of secularism while their economic strength continues to drain under the UPA regime? No doubt, the economy simply does not believe the UPA anymore. 

With the Congress on a clear, undeniable action plan to win the next elections through this systematic recall of socialism, and the BJP in no seeming position to behave like a responsible and credible opposition, with the internal fighting and conflicting ideas, the gainers have undoubtedly been the regional parties. They have been parts of government, parts of the opposition, and had a jolly good time providing outside support to the Congress to pass its bills in the Parliament. Now whether it was under duress, or blackmail, or after receiving lots of money, or just because they really like the Congress, is anybody's guess, but no doubt, politicians like Mulayam Singh Yadav, Mayawati, Jayalalitha, Mamata Bannerjee, and the likes have shown that they are happy to play with the Congress, as long as their demands are met. Of course, the Congress has shown exceptional dexterity and skill in misusing the institutions of India for its political ends and arm twist these regional leaders into submission. Mulayam Singh Yadav, as expected, will support the Food Security Bill. 

Coming back to the end game, Congress has more often than not shown itself to be a master manipulator. They play the media very well, and have great expertise in propaganda. For all we know, they will end up convincing half the country that they are poor and will not survive without the direct cash transfer, the food security bill and other Gandhi named national schemes. Then its onto UPA III. I am certain Sonia Gandhi and her team have discussed the plans if they ride back into power, and surely they would have discussed the pathetic state of the economy they have led India to, and surely it would have involved how Rahul Gandhi can ride in like a knight in shining armour and take us to salvation. Till then, let us keep suffering. 

My initial thoughts on the new Companies Bill

I had sent a letter to a news publication last week on my thoughts on the new Companies Bill, that was recently passed by the Rajya Sabha and is now awaiting final signature from the President. They didn't publish it, but I thought i'd still like to put it in the public domain.

The new Companies Bill should be welcomed for its newness, if for nothing else! The fact that it replaces a piece of legislation that is over 50 years old should itself be an indication of how inadequate our corporate laws have been in dealing with contemporary economic issues.
 Corporate Governance is not a term limited to Board rooms and annual reports anymore. With increasing media scrutiny and demands for greater transparency, corporations can hardly afford to work behind opaque management and ownership structures. Corporate Governance scandals, long scoffed at as a thing to be seen only in Europe and North America, now occur in India with more alacrity than we would like to admit.
 There is no doubt in my mind that the intangible strengths of any organization are closely linked to its financial health. Corporate Governance issues in an organization certainly factor in investors sentiment that drives any company’s share price. Through the new Bill, there is an expectation that now organizations will be forced to be more transparent about their management styles and ownership structures, and greater transparency, in my opinion, is a good thing in itself. Considering that Boards are now tasked with direct responsibility on many issues, it can be expected that organizations will have no choice but to appoint more capable, and independent in the true sense, directors who must be willing to step up and take on the responsibilities.
 Board structures today seem to be driven by a quid pro quo understanding. Many independent directors sitting on the Boards of some of the blue chip companies are there to simply lend their good name to the Board, and not necessarily as an active, and alert, independent director who is willing to go against the popular opinion if need be. In return, they get a good compensation, have to attend only a few Board meetings in an year, and few of them sign on the Company’s annual accounts.
 While it will take more than a Bill to change this way of doing business that is firmly entrenched in our typically promoter driven organizations, I do expect that it will pump in some adrenaline into the nascent shareholder activism in the country.
 Now coming to the second, and perhaps the more discussed and contentious issue in the Bill, the mandatory CSR spend within the parameters stipulated in the Bill. To contend that this requirement is thrust upon companies that do not have the competence to run such activities is misplaced.
 For one, Indian companies are already responding to their social obligations and expectations in a variety of ways. Large organizations, the kind that Clause 135 aims to include, already have flourishing CSR practices that focus on a host of social issues, such as education, healthcare, livelihoods, and infrastructure.
 Secondly, the Bill is not looking to create a new bureaucratic layer to police on companies to ensure they are following the guidelines, but aims to achieve compliance through enhanced reporting, and clearly assigning roles and responsibilities within an organization.
 Through the Business Responsibility  Report and sustainability reporting, organizations are already reporting on their social and environmental activities in and around their areas of operations, and the various ways through which they are engaging with their internal and external stakeholders. SEBI, through the Business Responsibility Report, clearly mandates the top 100 organizations to assign the responsibility of an organization’s CSR activities on a member of the Board or executive, apart from clearly listing the scope and size of their CSR activities.
 Thirdly, I think this Bill will formalize, and make more transparent, the processes and roles within organizations that undertake CSR activities. From a corporate governance point of view, this greater transparency will ensure that the flow of funds is fully accounted for and reported at all points in the value chain. From a corporate governance point of view, this will deter promoters from misusing the existing rules to claim tax benefits on activities that can hardly be seen as CSR.
 In the aftermath of the 2008 economic meltdown, a common refrain was that when organizations make profits, it is theirs, but when they falter, the society has to bear the burden. Expecting organizations to step on their activities that give back to the society should not be seen as an anti-economic measure that will erode their competitiveness. No organization today can function without obtaining its social licence to operate.
 Organizations that have realized this would think that this new Bill does not change much, other than bring the Government at par with the current trends. 

I find it extremely intriguing how this world manages to keep itself busy. There are millions of societies around us, each with their own priorities, nuances, and headlines. What's important to one may not be important to the other. What is pointless to one may make all the difference to the other. 

Yet this world is getting smaller and smaller. Despite living our billions of different lives, we are connected by the same mediums that bring us thousands of pieces of information to us every day. Only one wall separates me from my neighbours and we both could be watching television yet what interests us on tv could be completely completely different. 

In such a state, how do then societies stay together, how do countries keep its people together, and most importantly, how does the media manage to keep us engaged all the time? 

How does media prioritize what piece of information could be most well received by the largest section of the population? Of course, since nothing works in vacuum, this whole story of different people having different priorities is greatly influenced by a lot of different factors. 

We all may think different, but we all are also just as closely bound to each other. Many thousands of individuals will get on a local train to get to work in Mumbai every morning, many hundreds will trudge into shiny gleaming corporate offices in Bangalore, many thousands will open the shutters of their shops in Guwahati. 

Then, we are affected by the same incompetence of the Government, the same thievery of our political leaders, the same unresponsiveness of our governance systems, and the same inequalities of our economies. If I look at it that way, then I find media's success in finding the right nerve to be a lot more believable. 

Tomorrow i'll wake up, get ready and set out on my daily journey to work. I will pass by hundreds of cars. Each person at the wheel will be on the same road, take the same bridge, pay the same toll, but each of us will have something different on our minds. Its amazing. 

Pride

I think one of humankind's biggest weaknesses is its refusal to learn from the past. This refusal is seen in every society, country or region on this planet. 

Globalization has made the world a much smaller place, with each economy closely intertwined to the next, and has resulted in a world where the vast majority of the wealth is concentrated in the hands of a few. Till last decade, the equation was fairly straight forward. The developed world controlled the resources and was home to the corporations that sell us most of the things we buy while the third world provided the resources and the labour to produce the goods and services consumed. 

In the past 20-30 years, such has the dependence of the third world grown on the consumption of the first world that even a slight downturn in a capitalist market could result in substantial upheaval in the third world. In the past two decades, we have been presented with numerous examples of economies that followed the consumption driven path prescribed by the World Bank and fell to their knees. Argentina, Mexico, South East Asia all faced massive economic shocks when their markets in the first world stopped consuming their goods. I have no doubt that India, China and Brazil are fast heading there. 

This refusal to learn from the past comes perhaps not from pride as much as man's greed. The glorious 1990s and the early 2000s when the global economy was booming, consumption was rising, production was rising, salaries were rising, employment was rising, mergers and acquisitions were the order of the day, is now a faint hum of a train engine that has long left the station. What's left now is uncertainty, and a massive global effort to stop economies from tanking. 

How has it come to this? Greed. We want more, we consume more, we all want a bigger car, a faster gadget, and shop till we drop. Everybody wants quick money, and the early 2000s epitomized this, when unscrupulous banks and financial institutions were selling a giant ponzi scheme of toxic derivatives of derivatives of derivatives, all resting on a strong belief that real estate, the real hard asset at the bottom of it all would remain a precious commodity. 

So across Europe, the US, and the developed economies that are closely linked to these two economies produced, sold, splurged, and then it all came crashing down. People were unable to pay their debts of various kinds, jobs were lost, consumption was hit, and institutions that had been standing for decades fell in an instant, and the governments were left to figure out how to keep it from crashing in a giant fireball. 

The third world that had been producing the goods and services that the first world had been consuming is still shaken up, but is now focusing on increasing its own consumption base to allow for those mills to continue churning the products and services for consumption. It is exactly as Engels (or was it Marx?) who said that capitalism will always need to continue growing in order to survive. This is exactly the pattern followed by corporations since decades - search for new markets, search for new products, search for new sources for raw material, and the constant pressure of bottom line growth defining their actions.

So as the third world now begins to look inwards, it seems to be going through the same cycle of growth that brought a large part of the first world to its knees. Looking at the way India, China, and other nations are evolving, I really do believe that this is the only way that nations have grown, and where Japan was 60 years ago, or the United States 100 years ago, that's where the BRICS, and many other developing nations, seem to be standing. There is constant chaos, a constant churn, and a really really ambitious set of people who are driven to make it big. 

So in India we seem to be going through the same phase. There is no dearth of entrepreneurs who are willing to turn crook if they can make more money, the laws and regulations are 20 years behind times, crony capitalism is the order of the day, real estate is unaffordable to a vast majority of Indian families, infrastructure is creaking, and yet the consumption levels are racing up like there is no tomorrow. 

Today's Indians are saving less and spending much more than our previous generations and I very strongly believe that this growing inequality in the country is going to come to its head sooner than later. 

So I am sure that in this connected world, urban Indians are taking on more debt and saving less knowing fully well that this gratuitous consumption is what caused the developed giants to falter. But as the Indians and Chinese are saying, why can't I manufacture more, why should I have to follow environmental rules, why should my citizens have to curb their consumption, and similar questions. They know what debt can do, they know consumption without replenishment is unsustainable, but hey, everybody wants a piece of the action, whatever happens, we'll see later. 

So I do see this circle repeating itself. Its time for the developing world to consume, and grow more unequal, and go through the same cycle of capitalism that nations before them have gone, and committing the same mistakes that have brought them down, but really, its like a drug, you just can't stop! Eventually, with our polluted waters, depleted forests, and smog filled cities, we will perhaps pause to take stock of the situation. Till then, lets hit the pedal.