Creative Head, Consultant Social Networking, Software
The question that I have been asking myself for quite some time now, is whether our freedom in 1947 has made any perceivable difference to our lives. I was born in that year, and barring the first four or five years of my life, I remember the rest. In general, I do not feel any better in 2011 than what I felt in 1955. Buying rice, sugar and ghee at fantastically low prices those days, eclipsed the flutter about rising prices. Being entertained by the now-vanished melodious music of Khemchand Prakash, Anil Biswas, SD Burman, Roshan, Naushad, OPN and Madan Mohan was indeed a treat.
The presence on the scene, of wise and respectable leaders relieved us from the worries about governance or lack of it. We could, if we needed, approach ministers for redressing our grievances against the system. Today, after 64 years of independent self-governance, we do not even know who in the government, can address our issues. The situation is worse in the villages. There is no public image of a given officer; legislature, minister or a judge. We do not know what a position-holding individual really stands for. We are on our own when it comes to tackling our challenges, if that is the definition of freedom.
Our freedom fighters are gone and so are our wonderful leaders of those times. The freedom fighters laid their lives so that we could live. They dreamt about betterment of future generations. They were confident that the religious status of our citizens coupled with the wisdom of Kautilya, would bring back the country to its golden status for which we were known for many years. They honestly believed their successors could achieve golden results. They assumed that India would turn around quickly and be at least at par with the rest of the world. Perhaps the reins of the country slipped into the hands of those who did not subscribe to the views of the freedom fighters or freedom leaders.
Did we go wrong somewhere on the road to progress, is a different question. More significant is the question whether we live with a sense of freedom or otherwise. We must ask ourselves these basic questions
• eat what we want to (adulterated vegetables and fruits in the market)
• receive the desired education (commercial exploitation by the educational institutes)
• receive medical aid when we need it (without getting fleeced by the hospitals)
• select our desired profession (do the reservations obstruct our opportunities)
• choose our place of residence (restrictions by States for original domicile )
• buy urban property (without getting swindled)
• drive around (chaotic traffic, no parking, road rage etc)
• go on public transport ( Driver’s without valid license)
• run a business (free from fear of harassment )
• let our women go around without fear
• raise our voice against the system (without getting hurt)
• vote for the right person, for want of the Mr Right
Most of us believe we are helpless in these situations. Yet we strive for happiness, struggling forever to extract the best from the social and political environment. We will continue to do so for ourselves without realizing that our efforts will expand to fill all the time at our disposal, and we will not be left with adequate time to do anything for the others or for our country.
Forget the freedom, let us think about the end results that we meant to achieve; happiness, peaceful living and tranquility in life. Ignore for the time being the esoteric spiritual ideas that our religion imbibed into our young minds through the medium of our parents and teachers, about contentment, self-realization, afterlife etc. Let us focus on the down-to-earth Maslow defined hierarchy of needs of a human being, the lowest rung at that.
Irrespective of our prosperity status, the three basic things that we need are the food, good health and shelter. Many enlightened souls realize that just these three may be good enough for our lifetime. The others pay attention to these with varying significance, generally the priorities are defined by groups or class of the society. The order of listing below applies to the lower and poor classes. This order is a bit changed for the middle class, where education may come much higher in the list. It might take some time before the lower classes start using education as means to alleviate their miseries.
If we agree that the basic needs have relevance to the groups of people, then it is prudent for the government to focus on groups and not individuals. It is therefore important that the government does not talk about equality, since it has no future. People do not look for equality outside their groups. Equitable distribution of resources, services and benefits is a mirage, good only for the sake of talking on the media.
Confused by this predicament, the government tries to give reasoning for its questionable behaviour from time to time, and the justifications provided are not coherent.
For forty years after independence, the leaders advocated socialism as the best route to quick progress, after the birth of new nation. After a certain stage of achievements, the ownership of the means of production and the fruits of production were reasonably well controlled but the government controls started retarding the economic growth of the country.
On pressures from the International Monetary Fund (IMF) the country was coerced into free economy structure. The leaders too realized that the agriculture-based economy of the Chanakya times, needed to be upgraded to the industrialization based Adam Smith economy. Little did they appreciate that the national character had already eroded during the times of socialism and crony corruption had penetrated the pores of the government machinery or the corridors of power, as it is better known.
Blinded by the partial following of Adam Smith’s laws of market driven economy, and fueled by heavy crony corruption, the country moved towards capitalism instead of communism, which was the intended goal of socialism. The means of productions as well as the fruits of production slipped into the hands of the corporate sector, which thrived on the funding of the corrupt individuals in the government or politics.
Personally, I am not much concerned by the fact that substantial chunk of the country’s money is now lying in the tax havens abroad, or has returned back in the form of Foreign Direct Investment (FDI). Yet, my mind is deeply depressed to see that the real estate structure of the country has been damaged for all times to come. The cities have become concrete jungles in the hands of the real estate mafia, with no facilities for its residents. The agricultural land in the villages has been grossly tampered with by schools and industries popping up without any planning and control of the government.
In the absence of any other agreed metrics for its performance, the government depends on GDP (Gross Domestic Product) figures, per capita income and increase of Foreign Direct Investment (FDI) as indices of its governance. Even though the calculation of GDP is driven by six core industries ie coal, iron, crude oil, steel, electricity and cement, it can be easily manipulated. And of course, no one can crosscheck it. It would nice, though almost impossible to include the variations given in the sub paragraphs below, to make these figures reliable or at least worth discussing.
Moreover, middle class citizens do not care about the gross total production of the country, or its gross income or expenditure. It has no consequence on the lives of the poor majority who are being superficially serviced by the government aids, subsidies and loans. For most of us, the rising prices are the real indicator of the state of things.
Conventionally, GDP is determined by the aggregation of products and services in a given period usually annual, from the viewpoint of any one or all of the dimensions such as product, expenditure or income. It considers products and services provided for in the country, the total income of the individuals, companies and the government, or total expenditure that various elements of the country make. It may consider the balance of payments between domestic units and across the borders of a country. GDP may be computed in any of the three manners, but the results are likely to be almost close.
So far so good, but here is a list of questions which make the relevance of GDP a bit inadequate:
• Parallel economy (tax evasion, illegal trade etc) is hidden from the GDP computations
• Wealth disparity between poor and rich is not reflected in GDP, somewhat irrelevant in the context of tribal and BPL families.
• The progressive value addition by the up gradation in product quality and performance eg in electronic hardware etc, is not included as additional product or service for GDP computations.
• Health care and disaster recovery like activities are counted in GDP but they produce no additional product
• Non salable items or services are not included, eg open source software, NGO operations etc
• But what is worse is that inflation and deflation are ignored during interpretation and claims of the government. For example, GDP of hundred in the year 1947 does not mean the same in 2047 since inflation increases the value of the product, expenditure or income. A correction factor called GDP deflator must be applied to arrive at the true value of GDP.
More confusing than the GDP is the figure of GDP growth. They keep promising GDP growth of a certain percentage at the time of the annual budget presentation, but as the year gets along, these percentage numbers are progressively reduced.
The GDP relates to elements in the domestic scene presuming that everything that happens inside a country belongs to that nation, which is not true. Foreign investments and foreign companies are operating in the country, and their assets do not belong to the domestic aggregates. Also, many Indian nationals are operating from outside India and their income and expenditure is not included in the computation of the Indian GDP.
To remove this inaccuracy use is made of the term Gross National Product (GNP) that includes the extras, which are stated above. But it is perhaps difficult to assess these resources and therefore it is not discussed much in the media.
No concrete proofs are yet available to substantiate the claims of the opposition parties that the black money is recycled back into our system through the tax havens abroad, in the form of FDI, yet the saying is that there is no smoke without a latent fire.
RS 32 Below Poverty Line (BPL)
The government advocates that this is only a number that facilitates monitoring of whether alleviation of poverty is on track or has derailed. Yet to ordinary citizens it gives a depressing picture that so many people live below the poverty line in spite of the 64 odd years of independent self-governance of the country.
• The term market basket or commodity bundle refers to a fixed list of items used specifically to track the progress of inflation in an economy or specific market. The most common type of market basket is the basket of consumer goods, used to define the consumer price index.
• The law of one price is an economic law stated as, ‘In an efficient market, all identical goods must have only one price.’
• Purchasing Power Parity is a condition between countries where an amount of money has the same purchasing power in different countries. The concept is based on the law of one price, where in the absence of transaction costs and official trade barriers, identical goods will have the same price in different markets when the prices are expressed in the same currency. In our context, we could apply to inter-state variations in prices.
• Scales of economy – Our salaries, taxes and purchasing power should relate to the situation in India. It should not be compared to the international scene, because that is not relevant for the Indian citizen.
Deviations from PPP imply differences in purchasing power of a “basket of goods” across countries, which means that for the purposes of many international comparisons, countries’ GDPs or other national income statistics need to be ‘PPP adjusted’ and converted into common units.
The Indian government considers three areas where inflation causes concern, food products, metals and building materials, and the hydrocarbons or the fuel. Experts state that the fuel prices cannot be controlled internally since they depend on the external factors and subsidies fail to neutralize the increases.
For other reasons for inflation, the experts wash their hands off by stating that inflation is a global phenomenon. The media was full of claims made by the finance minister in 2009, that India was isolated from the economy slowdown of the world because of stringent financial controls on transactions. In 2011, the same leaders are justifying that i the case of inflation, the country falls in line with the world. Public memory maybe short but such inconsistencies cannot be hidden from it.
When the government is confronted with hard questions, it uses the tricks from the discipline of statistics. It confuses the public by conveniently choosing from comparisons based on year-on-year figures or the seasonal / quarterly variations, depending on what suits the present moment. The whole exercise is futile when the government fails to convince the majority of the population, which is suffering under the brunt of taxes and inflation.
• Religion (Majority, Minority moving towards majority)
• Prosperity (The new vociferous middle class versus the poor) (Reservations)
• Language ( 30 minutes in a group, clans are formed)
• Region (Delhi or Assam)
• Immigration / Migration status
• Sex distinction (being highlighted for winning additional seats)
None of these groups is directly concerned about the GDP. Nor they are concerned about the other factors like GNP and FDI. The real issues are Inflation and BPL. The citizens are hoping that the government would stop using these mundane parameters of measuring its performance, and look for better indicators of the state of the citizens in the country.
A simple fact that is relevant but ignored politically by the leaders is that the groups do not need equal amount of distribution of services or products. The needs of the groups vary and they expect different things. A farmer’s needs are different from an industrial worker. A village student needs different studies compared to a city dweller. This talk of equality by the politicians is a farce used for befooling different people at different times. Some economic studies have categorically declared equal distribution as impossible and not worth pursuing.
Recently the government of India is using another word ‘inclusiveness’ to create confusion in the minds of people. The government is claiming that in its calculations all the members of the society, all the clusters of living must be included. This is a very well crafted mirage that creates an esoteric but misleading picture in our minds, that all are equal and are treated equally by the government.
The only thing that matters to the citizens is the needs in accordance with the group to which an individual belongs. How does one define, and then gauge, the quality of life in a diverse country. The rule is that the quality of life is represented by a few basic abstract parameters that are common to all segments or regions of society. Food, clothing, shelters, education, health, entertainment including social relationships, religious avenues, and security from crime , disaster recovery, and peace are a few major parameters that contribute to good quality of life.
In this confused state of things, it might help us to note that Bhutan was rated the 6th happiest nation of the world in 2006. With the economic and general downtrend in countries, this rating might have increased now for this country.
The term ‘Gross National Happiness’ was coined in 1972 by Bhutan’s former King Jigme Singye Wangchuk who opened Bhutan to the age of modernisation, soon after demise of his father, King Jigme Dorji Wangchuk. He used the phrase to signal his commitment to building an economy that would serve Bhutan’s unique culture based on Buddhist spiritual values that includes conservation of environment resulting into clean air, water, energy and abundance of natural resources. Bhutan has distinguished itself internationally, through the ban on the sale of tobacco by providing serious penalties for its sale. The country has also gone by the axiom that tourists would be charged heavily in order to distribute the benefit of earning to the locals.
Its governance is based on four pillars that are simple to list but require concerted efforts of all wings of the government and all classes of its citizens.
• economic development that is judged by GDP and other parameters
• good governance that is devoid of corruption and boasts of professionalism
• preservation and development of environment with prudence
• preservation and development of culture that reduces the demands of the citizens
Human Development Index (HDI) is reflected in the Human Development Report published yearly under the auspices of the United Nations. Indicators like education, health services, sanitation, rate of mortality, sex ratio are considered relevant in this context. HDI uses GDP as a part of its calculation and then factors in indicators of life expectancy and education levels.
India is much larger and more developed a country than Bhutan. India has had the highest rate of economic growth after China during recent years. We interact with the world in the popular language English. We have the largest number of dollar billionaires in Asia. While our top layer elites have acquired a living standard worthy of envy by the affluent Americans, at the base of the social pyramid are the millions who find it difficult to survive. Applying the GNH may be a little too early for us.
According to Kautilya, economy (Arth) of the country should take precedence over Dharma and Karma, which are the names given by him for judiciary and executive. According to Adam Smith, good governance should not, unduly, focus on political economy, but turn its attention to items such as food, shelter, education, health, army etc. In a disciplined democracy, a prudent approach is required that draws from both Chanakya and Adam Smith.
Reservations based on parameters other than prosperity, can only create ill feelings and heartburns in the minds of those whose legitimate rights are denied due to reservations. And this approach is self-defeating. Continued usage of this approach is likely to further divide the country into additional unforeseeable groups of society.
Instead of attempting to provide equal opportunity for education and profession, the government needs to determine the needs of different groups of society and manoeuvre its schemes in such a way that they can tackle the needs of individual groups. This does not in any way support the concept of MNREGA, since this scheme makes the people depend on the government forever; it does not empower them. It may also be an eyesore for the opposition parties since they see it as a legitimate means for funding for election results.
The natural resources were initially owned by the tribals. These have been snatched away from them and licensed to favourite cronies. It is natural that they would opt for separatism and use violence to regain their rights on natural resources. If only the government can get over its greed for filling the pockets of cronies, it can very easily negotiate with the Naxalites and other subversive groups. It may surprise the citizens of the country that these areas could be converted into great tourist spots and earn much more foreign revenue than what is being done now.
If progress is going to clash with the ideals of preservation of natural resources, particularly if the gains of progress are in no comparison with the depletion of resources, then prudence lies in avoiding such progress. A delicate balance is required in this case. Progress leads to improvement in life style both directly and indirectly.
Once while travelling in the train I was advised by a co-passenger, an member of Parliament, that majority of the MPs avoid discussions on population control, since it is not liked by a certain segment of the MPs. The government must then find ways and means to utilise the human resources in a more useful manner, and ensure unemployment does not become a cause of negative growth.
When someone dies, it is no longer important whether he was a celebrity or a beggar, the colour of skin was black or white, whether he owed money to someone or someone owned money to him, whether he used to be angry and aloof or he was a popular figure. Everything stops for him. Technology has not invented the tools for transferring anyone’s assets to the next life, if there is any next life. Alexander, Ashoka, Akbar, Hitler, Michael Jackson and innumerable others … all came, became powerful and rich … but today we have only their portraits hanging in the staircases or garages. We will be no different.
As Citizens’ let us make this world happy for all, our role as citizens is to reduce our demands and reduce the stress that we put on the system
For the Government we need to satisfy the groups of people in accordance with their needs and desires and demands … Let us not talk about equality or reservations. Provide people groups what they really want and need
• GDP and Inflation control are only two of the governing guidelines
• Conservation of natural resources by reducing demands on them will bear fruit
• Good governance without corruption and highlighted by professionalism
• Modify the belief system (religion and culture) and follow a new belief system
Let technology works towards these needs and not towards weaponry, faster travel, artificial growing of food, fiddling with the human life. Are you with me ?