Blurb: There is lots to cheer about the Indian pattern of growth and poverty alleviation. But the glitterati, political and otherwise, still is blind to reality.

In this winter of gloom, doom and corruption, the government can obtain some warmth from data collected by its statistical agencies. Alas, these agencies have yet to hire some basic data processing capabilities from minor computer firms, let alone agencies like Infosys. Perhaps Nandan Nilenkani can loan some programmers from the UID project. So what is the issue, and what is the evidence?

Blurb: Nitish Kumar’s landslide victory shows that there is much that is beginning to shine in the new India.

There are winds of change in India that can only gladden the heart further of eternal optimists – and to even bring cheer to the pessimists. Let us recount what has happened in India over just the last two weeks. For the first time in anyone’s memory, there is a beginning of accountability, and even the beginning of a crackdown, on corruption. (See the seemingly accurate forecast contained in “CWG – the Peak of Corruption”, Indian Express, Sept. 30, 2010). Ministers have been made to resign, inquiries have begun, individuals have been arrested, and even an honest PM has been wrapped on the knuckles for not being more forthcoming on corruption.

Blurb: We elect who we are, but the reality is very disturbing.

The Food and Agriculture Minister, Mr. Sharad Pawar, gets appointed to be head of the International Cricket Council. He boastfully announces that the UPA coalition has given him too much work and therefore they should give him more junior Ministers to do his daily hard work. Meanwhile, food prices have erupted all over the country, now for more than 15 months or so. It has been raining double digit inflation in food, and for some articles, the inflation is above 15 to 20 percent each year for three successive years. In the first year, the government said that they were helpless because world prices of wheat, rice, and peanuts had all exploded because of the nasty shenanigans on Wall Street. True. There was a world crisis and oil had shot upto $ 147 a barrel. We couldn’t and the people didn’t blame the government

No Proof Required

Women’s  Bill: Women smart, men smarter?

By

Surjit S Bhalla

(Business Standard, Mar. 13, 2010)

Blurb:  It is difficult to imagine a worse “in the name of women” legislation anywhere in the world. Tragically, it is likely to slow down progress towards equality in India.

Amidst much obsequious and self-indulgent fanfare, the Congress party was able to push through the Women’s Bill in the Rajya Sabha. One reason for the inordinate hurry was the fact that constitutional policy change in India is now being made with a firm eye on the international newspapers and magazines. It was a set-up. The 100^th anniversary of Women’s Day, and our policy makers want to see their picture on the front page of the NY Times, or better still, the cover of The Economist. It was easier in the olden days when all people wanted was to “see my smilin’ face on the cover of the Rolling Stone”. (Youngsters, check Google for the Dr. Hook song). Thankfully, a Lok Sabha test awaits, so there is time.

From the introduction of the birth control bill some fifty years ago to today, the world has come a long way. The remarkably changing world order, where women are playing the same role as men used to. Much has been accomplished, and while it is politically and femininely correct to say that much remains, that ain’t so. Yes, some distance remains, but that does not give license for men, and institutions, to pass absurd legislation. Especially if a simple solution is in sight.

In typical Indian Constitution style (time to rewrite the Constitution – with more than 100 amendments in a short space of 60 years, none of us know what is the basic law, and what is man’s interpretation, and what is his re-interpretation) the Bill relies on quotas – read that for extreme lack of intelligence. It is so so India of the licence raj; set quantities. So the Bill says that one-third of all legislative positions in the country will be reserved for women candidates only. These legislative positions will be in all forms of government, from the Lok Sabha to the village panchayats, where it already exists.. Sounds simple and straightforward. The mistake is to assume that India, a country of 1.1 billion people, is a village. If it works in a village, it is bound to work at an all-India level. That is just not stupid, it is irresponsibly stupid.

As the men quaking dust has settled, the cracks are beginning to appear. First, at the national level, how are the women constituencies to be chosen? Are they to be frozen in time, as the quota reserved seats are for the SC/ST candidates, or are they to rotate. The latter, because there isn’t any quintessential woman constituency. So how are the women’s seats to be chosen? Oh, didn’t you know, by lottery. But, and amidst the mandatory references, and obsequious genuflections to all the vision and service the Nehru-Gandhi family has done for India, and continuing to do so, we are told that the party is open to suggestions.

So the Bill is as follows. One-third constituencies chosen by lottery for women only candidates. The lottery will mysteriously not touch certain constituencies – unless there is a national random TV drawing of the samples. The sitting candidate from the anointed constituency, man or woman, will have to go fish. But the Constitution requires residency, so are we going to change that part of the Constitution also? Why not – we have amended it more often than most people change their toothbrush.

Isn’t there a simpler way for achieving the worthwhile goal of equality? There is. Any recognized political party has to field in whatever election – Lok Sabha or municipal dog-catcher – at least one third females. End of policy. As simple as it can get. Now let us think of the implications. There can be an all woman party, but there cannot be an all man party. It can be the case that all the elected officials are women, it cannot be the case that all the elected officials are men. Far better, and far more equal, to give extra benefits to women today for equality tomorrow. By subscribing to laws like the women’s bill, all of us, women and men, are signing on to something that couldn’t, shouldn’t and wouldn’t happen.

So why are the women not demanding, signing up, for this deal? Surely if a constitutional amendment can be made, requiring clearance by both chambers, and ratification by 14 states, a simple agreement can be reached to field one-third female candidates? Because the women are smart, and the men dumb. With this law, women are guaranteed with 33 percent seats in parliament, a three-fold increase, and an increase guaranteed to stay forever. Oh, yes, there is the proviso that the parliament will look at the quota situation again in 10 years, but recall that reservations for SC/ST were meant to be reviewed every 10 years; instead, we have got quota after quota, with no end in sight. A sure 33 percent by law, rather than a hard-fought battle against the male order of only 10 percent at present? It’s a deal, say the smart women.

But maybe they are being too, too clever. They should know the Indian male who has kept them at a lower status than most countries in the world, including Bangladesh and Pakistan. The clever, chauvinist, cheating Indian male has most likely given them the Rajya Sabha bait. The law is unlikely to pass the Lok Sabha. The smarter men are likely to triumph. By not going for the simpler, fairer, solution, the Indian women, and women all across the world, and humanity, is the loser.

The author is Chairman of Oxus Investments, an merging market advisory and fund management firm. Please  visit www.oxusinvestments.com  for an archive of articles et; comments welcome at surjit.bhalla@oxusinvestments.com

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No Proof Required

India: Need for Change in Climate

By

Surjit S Bhalla

(Business Standard, Nov.7, 2009)

Blurb: India should heed the Aesop dictum: “Be careful what you wish for, lest it come true”

The Environment Minister, Mr. Jairam Ramesh, struck several chords when he suggested, via a leaked letter to the PM, that the time had come for a gear shift in India’s policy towards climate control. The traditionalists roared disapproval, and the climate control negotiators seem satisfied that order was restored. But there just might be more to the leaked letter.

I find it hard, perhaps impossible, to believe that the letter could have been written without the PM’s consent. The reason? Assume for a moment that the A climate team decides to change its view. How should it, how can it, change a major point of view?  An obvious choice is a leaked letter. This way no one has responsibility;the Pandora’s box gets opened, the old can of worms disperse, and the policy gets changed. So, in my scenario, the whole change in policy was planned!

And for good reason. The old policy had outlived its usefulness, and it was somewhat inappropriate for a new world order, and a new India. There were two pillars to the old policy. First, the developed countries caused the problem in the first place, so it was their moral responsibility to clean up the atmosphere and to fund the developing countries in their efforts. Any connection between the “moral” argument and the hackneyed, and obsolete, arguments of the “non-aligned” movement is not coincidental. Many had believed that India had graduated from moral posturing, but alas, that is (was?) news to our climate team.

It is true that developed country growth, since the Industrial Revolution, has been a cause of climate change. But this growth occurred at a time when there was zero knowledge in the world that industrial growth would cause the problem. Even Einstein had not commented on this aspect. So how can anyone be held accountable? Now the specious argument is often made, primarily by Indians, that ignorance of the law is no excuse. But we are not talking about any law here; by definition, when a law is formulated, the nature of the crime is known. In the case of the climate change, the ex-post crime was not a crime; indeed, it was an ex-ante virtue. Indeed, that is what development and poverty reduction is mostly about – gains in per capita income, and gains traditionally came through intensive energy use

The second foundation of India’s climate policy rests on its pledge to never exceed the per capita emissions level of the developed countries. In 2007, India’s per capita emissions were 1.2 tons per capita, just one tenth of the average for the developed countries. The Indian position seemed like a “no brainer” a no cost commitment for the future. While there may be an argument for changing our outdated moral stance, there seemed to be little reason to change the “commitment not to exceed” etc. Then why the attempt by the government of India to change its stance? The argument made by the traditionalists (paradoxically, in India most traditionalists are of the left persuasion) is that Jairam Ramesh was caving in to pressure from the West, especially America.

When in doubt, kick America and you cannot go wrong. And though it might change, America is the bad boy on climate change, along with India’s major non-aligned ally, South Africa. But India’s commitment is not to exceed the developed country average, which at 11.7 tons/capita of CO2 emissions, was only 60 percent of the average for the US (19.1 tons/capita). Even then, the commitment not to exceed a level ten times as large seemed “reasonable”. Not really.

The popular misconception is that emissions are proportional to per capita income. Not so. The rate of change of emissions per capita with respect to income per capita is less than unity. This occurs because as countries become rich, they move out of industry and into services; the latter is much less energy intensive. For example, a Wall Street trader needs precious little energy input besides a broad band. An automobile factory needs considerably more energy. So as the US moves out of car production and India moves into car exports, the energy uses of the two economies will tend to converge.

The importance of this convergence is illustrated by the figures in the Table. For 2007, actual data are reported; for 2025, the UN population projections are used along with forecasts of growth in per capita income. These forecasts are based on the growth experience of each country over the last five years 2004 to 2008. The world figures are the aggregates of  about 140 countries. The model explaining emissions per capita (time-period 1990-2007) has the following explanatory variables – (log) per capita income, the square of this to capture non-linearity, the size of the middle class and the size of the rich class.

The model does not incorporate any explicit emission control policies, something that most parts of the developed world are committed to. The figures are for a “business as usual” situation. And in this scenario, India’s per capita emissions rise to 7.4 tons/capita by 2025, very close to the global average and about half the developed country average of 15.2 tons/capita. But note that this is a business as usual model; the Europeans are committing themselves to an 80-95 percent reduction from 1990 levels by 2050 and a 30 percent reduction by 2020. In 1990, the developed country average was 7.5 and in 2007, 9.0. A thirty percent reduction of even the latter figure would mean that the CO2 emissions from developed countries will be less than 5 in 2025 (5.25 in 2020). India, at that stage, with growth and development and reduction in poverty and a high moral quotient will be at 7.4, almost 50 percent higher than the developed country average!

No matter what the assumptions, or the math, or the model, the traditional Indian policy towards climate change is untenable. This is perhaps what the “leaked” policy was trying to convey. It is time the traditional climate establishment saw the writing on the wall.