Saturday, 23 May 2015

Modi Sarkar : The First Year... Worrisome Portends and Trends

This is a short and truncated analyses; the full analysis will take time, and will be rather long - and will appear on my main blog, @Reflections in the due course of time. I am only covering the main points here. Please follow me if interested. 

Before I present the negatives : Let me state that it is too early to call this Government good or bad; one year just isnt enough. The following points are indicators that can be used as guides. I am not presenting the positives; there arent very many, as per me. There is far more to worry about, and far more that needs to be explained. 

My View : Negative at worst, and Zero at best... {First time I find myself in agreement with the Congress / Rahul Gandhi!}

Note : All Block-quotes are from my own articles

A lot has been said - and repeated ad nauseum by media and fans alike - way too much of the positives, which may or may not have any bearing with reality. Let me present the other side... the worrying aspect...

1) CENTRALISATION OF POWER
There is a clear and marked trend of centralisation of power; this brings uncomfortable memories from the past. This Government is decidedly about one man, and one centre. Not my idea of an ideal Government, frankly. For a distributed and diverse nation, centralisation is not the answer; a judicious mix of central command with a federated approach is the need of the nation. This is clearly absent; where present - as in Economics, the follow-through is exceptionally poor. This Government is about one man. And that is bad, period.

2) URBAN FOCUS

Read : Farmers see income gains vanish in Narendra Modi’s inflation war

Not one of the problems of Agriculture has been dealt with; as a matter of fact, there is rising discontent within the farming and rural community that is going to hit the electoral prospects of this Government in the near future. What do we need more : Smart Cities, Bullet Trains - or Rural Roads, Seeds, Canals, Schools, Connectivity, Market Access, Fair Remuneration and Price Realisation?

The villages of India have clear priorities : they are primarily agrarian economies, with farming and related activities as a base. The fact of the matter is that digitisation, urbanisation etc are not their primary concerns, Their primary concerns are bread and butter - same as everyone. And in that, they require bridging lab-to-farm knowledge, irrigation, better and faster access to markets, credit terms and avenues, seeds, better price realisation at farmgate... what is being done in these fields with the same level of Government attention, focus, speed and execution urgency? Nothing!

Take Smart Cities Concept as an example. There are two data points available : 5th Economic Survey, 2005 and NSSO 2011, Both tell the same story: Smart Cities are nothing but a fantasy. They are premature, they are the future, but very premature. The Idea is right, but a decade or two too early.

As per the first, there are 41.83 Million establishments in India; 76% of these worked without any power; employing 100.9 Million; 46% were own account establishments. As per NSSO 2011, 66% were OAE; retail trade slipped from 42% to 30% and ,manufacturing grew from 23% to 31%. Own Account Establishments were 60% of retail, 72% of Manufacturing, and 63% of service. Contribution to the GDP : between 46-58%. Statement of Simple Fact.

Now try and fit a smart city somewhere in all that.

What does the nation require? Research shows that nearly 93Million of our farmers are losing 800-odd per crop; data shows the level of poverty in our nation; consumption trends corroborate, with the top 10% growing at a rate of 3% as opposed to 1% consumption growth for the bottom 40%. Farmer suicides are going up; the economic fundamentals are shaky; the global economy is in unprecedented turmoil, and all we can think of is Smart Cities?

Our Armed Forces are in dire need of funds; and all we can think of is Smart Cities? Wow. Fantastic priorities.

We spend the lowest in GDP terms on Education, Defence and Health, and all we can think of are Smart Cities?



Besides, a Smart City requires - DATA CONNECTION. Being a Telecom guy, I now how ridiculous and ill-conceived that notion is; We in India have average & unreliable speeds of around 1,5mbps; the developed nations have a speed of upwards of 22mbps. They have high penetration of credit and debit cards and acceptability of online commerce; we dont. India has precisely 73Million broadband connections - this is including individuals with a double connection; I have three. Less than 69 Million Indians consume more than 512mbps of data on a monthly basis; and cashless transactions are unknown outside the protected environs of top places.

The logic is sound, I clearly stated that concept is needed - but a decade or two too early. This will work in a relatively corruption-free atmosphere, where the Land issues are under control. That we dont have. Next, this works in economic reality which enable the above, which again we dont have, as I have been at pains to point out.

The shift to the small cities will not happen in the industrial sector; the vast majority - upto 90% - of the actual producers are concentrated in only a select few agglomerations, namely Mumbai, Delhi, Chennai, followed by Kolkata, Bangalore, Pune, Ahmedabad. Other second-level sites are Nashik,Hyderabad, Coimbatore, Ludhiana, Kanpur, Rajkot,Surat. No one else comes even close to these cities, although Jaipur, Chandigarh, Hissar, Nagpur and a couple others do try hard.

The shift will not happen from these established centers; there is in existence an ecosystem that now is impossible to replace,. with manufacturing facilities being deeply interlinked with their vendors and suppliers who have now set up in the same or nearby areas. In B2B industries, a symbiotic relationship has started with the consumers and the manufacturers sometimes co-located, or located within 8-10Kms of each other.

The proof is in the manifest failure of industrial areas in other wannabe metros, like Indore and Bhopal, which have simple failed to take off. They remain consumption and trading centers, not producers, despite an incredible level of support given to them by successive Governments. The failure of Bhilai to rise as a comparable center to even Nagpur, let alone Surat & Rajkot, is a case in point.

What nonsense are we talking about?


We dont need Smart Cities, We need Schools, Colleges, Primary Health Centers, Rockets, Mortars, Fighter Aircraft, Missiles, Satellites, Seed Research, Irrigation, Water Purity for Agriculture, Extension Workers to teach our Small and Marginal Farmers, Redoing our Duty and Taxation Structures, Fair prices for farmers at farm-gate, cement or pukka roads, etc etc. A smart city can come after that.


3) DEFENCE, EDUCATION AND HEALTH
Let us take just one - Education as an example  :---->
Is This Government On The Wrong Path? :


Now look at education. You first shout to all and then some - education is the focus, we need a school every so-and-so Kms... And then dont budget for it. And on top of it all, in a classic mark of crass stupidity, increase allocation to states - without ensuring a mechanism for extracting value of this excess fund flow to the states, quite a few of whom are known for fiscal profligacy of the worst kind. And then, you expect the states to implement what is in essence a centrally thought plan. While the plan to devolve to states is laudable, there is a dire need to pull up recalcitrant state governments. Interested people can go through this report : State Finances - RBI Report


What has been done to ensure buy-in by stakeholders at the state level? What has been done to improve efficiency of monetary utilization in the states, and ensure that the excess funds dont get spent in idiotic schemes, for which quite a few of our states are famous? If the states were so efficient, they would have already improved on-ground governance, which they havent. One look at state budgets is enough. What mechanism has been implemented - or is being planned to be implemented - to ensure that the states' budgetary health improves, and that real value for money spent is obtained? This is what I expect a good PM to do, a good central government to do! 


4) FOREIGN POLICY
Too early to state anything here : results - positive or negative - require time to present themselves. I only state this : 

In FP, image means nothing; it is immaterial. FP is a matter of hardcore strategy, deliverance on words, hard power, and economic give and take. How a nation is perceived is of no relevance. Thus, a better global image makes us feels better as Indians, but counts for precisely nothing in Diplomacy, and that is an absolute.

If you sift away the hyperbole and focus on the hard facts, there are no achievements - precisely zero as on date in FP by this Government. FP changes take time to reveal themselves; let us wait and see.

Now, for example, if the Government had played hardball with USA, and negotiated well with EU, taking Brics along there was an even chance of splitting the combine straight down the middle; in FP, the $$$$$ reigns supreme. It matters little if you are an asshole or a murderer {Read history for real examples of both - Pakistan, or any number of other evil leaders who were hailed by The West} : if you can deliver $$$$, you are a good man, Read the 1971 war and its prelude, or Iraq or any number of other facts. This is beyond debate, I am afraid - and is not open to question.

So far, I have seen nothing except talk talk and more talk.

Talk is cheap. Even I can talk! Look above {EU example} for proof! Where;s the real action????? He has changed many a paradigm of our FP, and the effects in FP can only be observed over a long period of time. Personally, I am extremely uncomfortable with the FP as on date; at least insofaras USA, Israel and China are concerned.

There is no record of even one nation {non-European / Developing} that has benefited from a close association with the USA; quite the opposite. Add to that the recent revelations on arms aids, intelligence - the net result seems negative. Recall the previous time India and China tried to come close.

And ME-Israel? That is a sea-change : requires deep analysis for a thorough perspective. I am worried.


5) BUDGET

The budget document is also a strategy document, it reveals your real priorities. If you are not putting your money where your mouth is, it clearly raises the suspicion that you are insincere in your words, or you have no idea what you are doing - or you have compromised. And dont have the guts to say so openly. And that is precisely what this Government's actions in totality are stating to me as a worried and concerned citizen. I am already on record accepting that this is the best Government we have had in a long time - and if this is the best we can do, we had better get seriously worried!

Full analysis here : The Union Budget 2015-2016 : Glaring Holes

This budget has been justifiably praised on any number of points; sadly, it has got no praise for the two biggest points in its favour : The focus on the unincorporated sector, and the change in the duty structures. But most critically, there has been little critical appraisal of its faults, which are numerous.


This is a budget for Corporate India, and the top 20% of society. As I noted in my previous article on this budget,  Defence, Education, Health and Rural India are the priority sectors for us.

If poverty is reduced, in addition to a growing economy, we also require an educated and healthy population, which means an effectively functioning primary and secondary school set up, increase in facilities and so on. We already have an excellent higher education set up. If on the one hand you are pitching yourself as pro-poor, and on the other, you are increasing focus on high education and cutting on schooling spends in terms of a percentage, this does beget the question : are the priorities correct?

What we are in effect saying is, Corporate India, Middle Classes can reap immediate benefit, while making no efforts to tackle the real problems beings faced by Rural India, like reducing middlemen, education, etc. This is a majority government, they can easily take hard decisions. And yet they are not doing so - as I had foretold much earlier. And that is what makes this budget completely unimpressive, and very UPA 3-ish.

My rating : 2 stars. As I expected....

Asia's third-largest economy spends about 1 percent of its gross domestic product (GDP) on public health, compared with 3 percent in China and 8.3 percent in the United States. Indian states manage their health budgets separately. From : India keeps tight rein on public health spending in 2015-16 budget



6) HIGH DECIBEL PROGRAMMES WITH POOR FOLLOW-THROUGH

Swatch Bharat Abhiyaan and the Toilet Scheme are just two example that  have now been on for one year almost, and already shoddy implementation, and fanfare and media attention. Enough said; that said, like FP above, early days. Let us not criticize unduly!


7) ARROGANT AND UGLY UTTERANCES AT ALL LEVELS
The most worrisome aspect. It is not acceptable for leaders of a nation to belittle the past leaders at every stage and platform with utterances that reek of sheer arrogance and bravado, like "Good Government after 10/60 years"; "Indians now feel proud", and any number of other examples. These are statements we should be making - this is proof positive of a total lack of humility and sheer arrogance; it is also unacceptable - as it is beoynd debate that at least UPA-1 made many a good decision. Give credit where credit is due- which this Government doesnt. To top it all come the polarising and deeply offensive voices from people connected with the ruling party - I have heard more than a few. 

THIS IS NOT MY IDEA OF A GOOD GOVERNMENT... THE 7th POINT ALONE IS WHAT HAS DRIVEN ME COMPLETELY AWAY - note the capitalisation. I dont support a set of arrogant people, howsoever good may they be.  


Was the UPA better? I honestly dont have an answer. 
My recent studies have led me to a rather uncomfortable possibility that UPA-1 at least was a good Government, but to be honest, I need to study a lot more before I can make any such assertion!  

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