25 December 2016

Mindless Application....

"Mind is a vestigial organ, like appendix or ear lobes. 'Application of Mind', as a concept, is overrated.", says Sam Peters

We are sitting in Lutyens Coffee Shop (LCS) an invisible coffee shop in the middle of Lutyens Delhi. This is the holdout of Senior Government Ministers, politicians of all hues and senior government officials in Lutyens Delhi. The entry is through strictly restricted membership.Despite not being a politician or a government functionary, I managed to get membership to this exclusive club.

Sam Peters is the spokesperson of a leading political party. Sam and I are spending a relaxed evening at LCS. Sun is just about to set, though you can't tell with all the smog around.We are talking about the need for applying ones mind before taking crucial decisions.

"Application of mind is an overrated concept. Its role in decision making is debatable at best", Sam continues.

"What if decisions go wrong?", I ask him

"You can always roll them back", quick comes the clear reply, "and if they are irreversible, we have to live with the consequences"

"You can't be serious", I tell him

"Our government has been doing this for the last two and a half years", says Sam, "we have become experts at taking decisions and then rolling them back. Did heavens fall? No, they didn't. All this talk about 'applying minds' (Sam did an air quote) before taking decisions is all a liberal left propaganda",

Sam concludes his point.

When arguments go against him, Sam uses two weapons. First is to call people names. People who debate with uncomfortable facts and figures are 'Liberals'. If they provide facts about how the decisions are impacting the poor and the marginalized, they are 'Left Leaning Liberals' (worst kind of Liberals). If the Press asks tough questions, they are 'Presstitutes'.

If name calling do not work, they use the second weapon. It is called the 'Anti-Modiji' weapon. There are three variants to this weapon. The question variant is 'Why are you against Modiji', the statement variant is 'Your are against Modiji' and the accusatory variant is 'Why are you impeding the progress that Modiji is trying to bring'. 

Both the above tactics are intended to divert attention from uncomfortable questions. Sam Peters is trying the 'Liberal' tactic on me. I am not going to fall for this.

"You bragged that in the last two and a half years, you have taken many decisions and rolled them back. Can you give me some examples?", I ask

"Oh, I can give you plenty", replies Sam, "where do I even begin? Let me start off with Porn Ban. Remember porn ban? One fine day we banned more than 800 websites telling the Supreme Court that they were porn sites. We were accused of intruding into people's bed rooms. Later we found that many sites had nothing to do with Porn. After some criticism we rolled back that decision. Couldn't we have done the due diligence before taking this decision? Of course we could have. But that would have called for the so called 'Application of Mind (AOM)' (air quotes again). Who cares for that? right?" Sam gives me a victorious smile and sips his coffee.

"That is just one decision. It doesn't mean that you regularly take decisions without AOM. One swallow does not a summer make", I point out.

"It is not just one", replies Sam, "Remember the encryption policy that R S Prasad tried to bring in, in the early days of the government? You were not allowed to delete your Whatsapp messages or emails for 90 days (even if they were Spam Mails). That was another decision taken without AOM, which we quickly rolled back", Sam is obviously proud of this.

"You rolled it back under public pressure, correct?", I question Sam.

"That proves my point that AOM is not required for decision making. You can always roll back the decisions", Sam is quick on the uptake here.

"You have given me an example of just one minister", I tell Sam, "It doesn't prove anything. May be the minister is incompetent. One swallow does not a summer make".

"You presstitutes won't give us credit where due, will you?", Sam admonishes me, but it is obvious that he is relishing dishing out the list of decisions of the government taken without AOM.

"My aviary is filled with Swallows, my friend", says Sam, "Let me give more examples. Remember our erstwhile HRD minister? She declared December 25 as a 'Good Governance' day and asked Schools and Government offices to be open on that day and ensure that Students attend schools and staff to attend offices. This decision was rolled back after public protest", Sam finishes with a twinkle in his eye.

"But that decision has not been rolled back. December 25 is still the Good Governance Day", I inform him

"Ha, ha, I had you there, hadn't I? The joke is on you. How many students are in school on December 25? How many staff is working in the office on December 25? None. Nada. Zilch. It is like an effective roll back", Sam is relishing this.

"Just three instances do not prove anything", I am feeling a bit deflated with the torrent of examples that are coming out of Sam. 

"Early in her term HRD minister took a decision to replace German with Sanskrit as the second language in the middle of the school year. This put a lot of students under difficulty. That was another decision taken without AOM. Even a kid would have thought through before taking such decisions. But we didn't. We simply rolled it back when protests erupted and courts intervened", Sam is on a roll.

"Even a decision to have an uneducated person to head the education department was taken without AOM, would you say?", I ask Sam

"Thank you for  giving credit where due, my friend. Yes, you are right. How could I forget such an achievement? Another example that AOM is overrated?", Sam sighs. He is obviously tired of giving this slew of examples.

"Ok, I grant you that two ministers took decisions that were without AOM. But to credit the entire government with a broad brush for the achievement of two ministers is a stretch", I tell him.

"Oh, come on. How many more examples do you need before you give us some credit?" asks an exasperated Sam Peters. What about 'Composite cap' decision made by Finance minister and rolled back the next day?", Sam asks

"What is that?", had not heard about it earlier.

"One challenge that we face when taking complex decisions without AOM is that we not get credit for rolling back the same. One day finance minister announced the introduction of 'Composite Caps'. Currently, in some industries like Private Banks, FDI is capped at 49% and FII is capped at 26%. Composite caps meant that the total caps was shifted to 75%. Market obviously assumed that now 75% FII was allowed and stock prices zoomed. Next day it was clarified that FII cap remained at 26%. The share prices deflated on this news. That was the end of Composite Cap"

"You could argue that the government should do the due diligence before making such announcements. I think you are being too hard on us. Why should we do AOM if we do not believe in AOM. Our policy is 'Act first, rollback next' ", says Sam.

I am not about let him off so easily. "Come on Sam, you have to do better than this. Every government takes decisions that has to be rolled back. The above examples just prove the rule. Your government is no exception to the rule", I insist.

"How many roll backs has to happen before you accept that too many roll backs has happened?", Sam tries a Dylan, "Cut us some slack, won't you?", same says in a beseeching tone.

I decide to be a bit lenient. "Ok, I grant that the decision to roll back the tax on EPF withdrawals was taken without AOM, but that is all. Only five or six decisions at the max."

"What about our PM landing in Lahore unannounced on his way from Kabul. Can you not grant me that one?", Sam begs.

"Ok. Fair enough. I grant you on that, though the jury is still out on that one", I add a caveat.

"What about Amit Shah saying 'Acche Din' will take 25 years? Do you think that promise of 'Acche Din' before elections was done without AOM?", Sam asks

I am not sure election promises fall into this category. Considering that people voted for 'Acche din', I give a guarded assent on that one.

Sam is encouraged by my decision to include election promises into the list. Out comes a long list of unkept election promises. "What about the promise to arrest corrupt politicians and put them in Jail? Considering that we have not put a single corrupt politician in Jail mean that the promise was made without AOM?"

"What about the promise of Job growth? There has hardly been any job growth in the last 2.5 years. What about economic growth? Other than a GDP Growth sleight of hand, we have not been able to deliver on that one. Sensex is at the same level as it was on May 2014. Do you consider these as promises made without AOM?", Sam looks at me expectantly.

"You are trying to take credit for a number of debatable points. All parties make tall claims in run up to elections only to face reality upon coming to power. You can't take credit for reneging on election promises.", I reply.

"Ok, I grant you that. Was worth a shot anyway. But will you grant me that the promise to put 15 lakhs in the bank account of all Indians count as promise made without AOM? I mean, no way we were going to be able to achieve that. It cost us the Bihar Elections, as it were", Sam asks hopefully.

I grudgingly acquiesce to this point. 

"While rollback of all the above decisions were credited to the ministers, PM could not take any credit for this. PM was under pressure to deliver. Press was questioning his decision making skills. That is why, on stroke of 8'O' clock on November 8th, he announced demonetization. The mother of all decisions taken without any application of mind.. This decision proves beyond doubt that our government is capable of taking any decision without due diligence and application of mind", Sam concludes grandly. 

"Wait a minute", I protest, "the jury is still out on that one. This decision could prove highly successful in the long run"

"In the long run we are all dead, my friend", Sam responds with a tone of finality.

The more things change....

Recently I read tweet that made me ponder a bit. 

"I applied for passport on Monday, and it was delivered on Wednesday. Acche din are here".

I thought about time, about 10 years ago, and the hassles of getting a passport.

You had to fill this long, detailed form, give all sorts of details with proofs (copy attested by a Gazetted Officer and verified with the Original at the counter), answer all kinds of questions (similar to the ones asked by the bank clerk when a senior citizen goes to deposit his own money in the bank) and then wait for about a month, and a visit by the local police man to verify your address, before you got your passport.
All 35 pages of them, if you are lucky.
That was then. The philosophy was for the government to distrust the citizens until they proved trustworthy.
The same philosophy is behind the demonetization. Everyone is a black money hoarder until proven otherwise.
It is behind the complex taxation laws asking you to provide multiple evidences if you want to claim tax exemptions
It is behind the multiple security checks at airport. They check your cabin bag at security, check the baggage tag before you cross the check in gate and again check the baggage tag before you enter the aircraft !!
As the tweet shows, things are changing. And contrary to public beliefs, they started changing even before the current government took office.
But then, out comes demonetization...
The more things change.....

The new mechanic in town...

My grand father purchased a car in 1947, exactly on the day the country got independence, 15th August, 1947. He named it Economy. At the time he purchased it, there were a lot of challenges. The automotive technology was at its infancy, there were hardly any good drivers available, mechanics were few and far between, road infrastructure was bad etc were some of the challenges that he faced. He faced these challenges head on and soldiered on with his new car. He used it for over 20 years before passing the same to my father.

My dad used it for over 30 years. Over time Economy had some problems, there was some wear and tear, there were a couple of accidents, one in 1965 and another in '71 and the performance of the car slowly deteriorated.

And on one fine day in 1991, Economy stalled. It could not go on.

There was crisis all around, an expert mechanic, well versed in new global technology and with years of experience in vehicle repair was brought in to repair it.

He completely overhauled Economy. The car was repainted, refurbished, modern engine running on latest technology was fitted, imported spare parts were installed and the drivers were given clear and new driving instructions.

That was the condition in which I received Economy. The car quickly integrated itself with the new technology and the new mode of driving. The improvement in performance was mind boggling.Fuel efficiency almost trebled from about 3 Kmph before 90s to almost 9 Kmph consistently over about 20 years.

I maintained it very well with regular checkups and occasional changes in spare parts. I drove it over long distances. The drive was a pleasure. Economy was chugging along very smoothly.

Over the last 15 years or so, I observed some noise coming out of the car. Minimal noise. Not major. Something that I could Ignore.

I took it to various mechanics. They suggested a few tweaks here and there. They specifically recommended against any radical action, the argument was that Economy was in excellent condition. General opinion was that the noise was a localized problem and needed a localized, targeted solution. A 'Carpet Bomb' solution was discarded by almost all the mechanics that I spoke to.

About two years ago, a new mechanic came to our town. He was touted by his marketing team as the best mechanic ever to have graced the country. There was nothing he could not do. There was no problem that he could not solve, there was no technical issues with the car that he could not repair.

I took Economy to the mechanic and told him about the minor noise. I specifically told him that Economy is running beautifully, much better than the cars belonging to my friends.

He listened to my words and to sounds coming from Economy.

"Economy needs a total overhaul. There are noises all over and it has to be entirely dismantled and refitted with new spare parts", he told me.

He sounded so authoritative that I could not ask him some basic counter questions like, what is the basis of his observations, how good are his support staff, how can only he be right and all the other mechanics be wrong, does he have all the required spare parts and most importantly what is his experience and what are the facts based on which he has come to this judgement.

In other words I blindly trusted him.

How long will it take to overhaul and retrofit the car? I enquired

It will take about 10 days, he told me. For about 10 days you will have to bear short term pain. But imagine the long term pleasure that you could experience, he said pointing a rosy future for Economy. It will run as smooth as a gazelle and as fast as a Cheetah. This will far outrun your friend's car in the long run, he assured me.

I asked him to go ahead.

It has been almost 7 days since I handed over the car to him. Every day I follow up. The experience has not been good till now. I see lot of people waiting in front of his workshop waiting for his intervention. It takes about 4-5 hours just to meet him. When I ask about the status, the responses are curt and terse (Unlike the marketing spiel that he used to give when he was seeking business). Spare parts are ordered, they are yet to arrive, he tells me. Some of his staff fell sick and he is trying to find a new support staff to take over the pending work. After dismantling my car, he found that he did not have replacement for some spare parts. Work is slow, can't you see that this is festival season and staff will not be available?

He still assures delivery in the next four days.

Also he told me that, for the next 6 months or so, Economy will go back to the pre-90s level of performance. Only when it adjusts to the new spare parts will it rev up and zoom like a cheetah.

"In the long run, Economy is going to be awesome", he has promised me.

One lives on hope.

18 December 2016

MEMEHIF and I: Catch me if you can

You know MEMEHIF, My Engineer MBA Educated Highly Intelligent Friend. I had introduced him Here and Here.

We share great times, MEMEHIF and I. We play games, we discuss politics....

One of the games that we play is called 'Catch me if you can'. The rules of the game are simple.

I am the runner and MEMEHIF is the catcher. The game works as follows.

I start the game by shouting a word or a phrase. The only condition is that the word / phrase should be in the public discourse at that time. Politicians should be talking about it on radio and TV, TV anchors should be holding debates on that word / phrase. Every time the narrative changes, I can change the word.

The task for MEMEHIF is to catch me before I change the word. Which means that he has to catch me before the politicians change their focus to a new catchphrase.

Simple? Right?

I say 'Acche Din' and start running. 

MEMEHIF runs after me. He is much faster and can quickly catch me. Only politicians can help me. They don't disappoint. Before MEMEHIF can catch me, the narrative had shifted to Dadri

I should 'Dadri'. MEMEHIF, if frustrated with the sudden change in narrative, do not show. 

Enthusiastic guy.

As MEMEHIF is close to catching me, I shout 'Governance Day'. He is disappointed for sure. But those are the rules, mi amigo.

As I continue the game new catchphrases are getting added by the dozen. Words and phrases like 'Swacch Bharat', 'Yoga Day', 'Vemula', 'Kanhaiya', Jan Dhan Yojana (I was almost getting caught there, just like in 'Swacch Bharat'), NSG, Black Money Amnesty, Demonetization, Black Money, Cash Less, Less Cash, Black Money Amnesty (again) are helping me to win the game. 

I didn't even have to use some heavily polarizing pseudo nationalistic rhetoric that used to be the flavor of the day.

MEMEHIF seem to have given up. He is no longer involved in the game. He is not happy with too many changes in narrative....

I did not tell this before, but I am doing it now. There is a simple rule that MEMEHIF can use to win. He can also say the word / phrase that he thinks is the leading narrative of the Government. Only few words are allowed. They are Job Growth, GDP Acceleration, Economic Agenda, Reforms, Poverty Alleviation and Secularism. I am not allowed to say these words / phrases. Only MEMEHIF can.

Any time he says one of these words, he wins.

So far it has not happened. I have been winning the game, big time.

Catch me if you can, MEMEHIF...

Mistaken priorities....

When there are too many policy reforms to be addressed, why is this focus on moving India to Cashless economy?

Cashless is a natural progression of a middle class economy. As the economy and the technology evolves, more and more of the country will move to Cashless. (It is worth noting that only one village in the whole of India has gone cash less in the last 15 years. So imagine the mammoth effort needed to move the country cash less !!) When government is focusing on and encouraging Cash Less at the cost of focus on policy reforms, only two conclusions are possible.

One, this government do not have its priorities clear. It doesn't know what to do, so like a butterfly, it flits from one agenda to another (Acche Din, Swachh Bharat, Governance Day, Yoga Day, Porn Ban, Skill India, Make In India, Smart City Plan, Jan Dhan Yojana (probably a success, jury is still out on that one) Black Money Amnesty, Demonetization, Anti Corruption, Cash Less, Less Cash, Black Money Amnesty again...)

I am not even mentioning some Social Conservative Issues and pseudo issues that wasted the energy of the country in the last two years.

Two, it has it priorities abundantly clear. It knows that it goofed up by sucking out the currency from the system and is trying desperately to handle the aftereffects. 'Cash Less', 'Less Cash', 'Mobile Wallet'...etc are all euphemism for 'We are hopelessly short of Cash in our country'

My take is, it is point two above. The government is not fool. It knows the reality. There is hardly any cash in the system. Government is trying to make virtue out of necessity by asking country to go Cash Less. 

So what could be the priorities for the current government? Here are some.

Mr.Modi came to power by promising jobs and economic growth. That is the priority. We run the risk of fast losing our demographic dividend.

Power sector reforms is a priority. Coal India announced a dismal latest quarter. I remember the hype generated by Piyush Goyal when Coal India IPO was announced.

Judicial reforms is a priority. So many judges seats are lying vacant.

Financial sector reforms is a priority. Only 3% of India's savings goes to equity while business is paying upward of 19% for business loans.

Tax reforms is a priority, only about 6% of India's population pays Income tax.

Poverty alleviation is a priority, almost 30% of India is still poor,

Privatization of loss making PSUs is a priority, they are a waste of precious national / natural resources,

Rooting out corruption and putting corrupt people in Jail is a priority,

Building national infrastructure is a priority.

Rural electrification is a priority. Rural Banking is a priority, Agri Credit is a priority, preventing the rotting of food in godowns when parts of the country are reeling from drought and famine is a priority. Child education is a priority. Girl education and empowerment is a priority. Electoral reforms is a priority, inflation is a priority....

Improving the quality of public / government schools and hospitals, Strengthening Agri Supply Chain, ensuring that farmers get fair pay for their produce, expanding MNREGA and giving work and dignity to poor people, making India's educational institutions world class...

These are all priorities that the government can and should focus on.

Rural telephony and communication is a priority. Encouraging computer literacy is a priority. Educating farmers on organic farming is a priority. Solar is a priority as is non-conventional sources of energy.

Strengthening secularism and the celebrating the diversity of the country is a priority. Providing level playing field for everyone in the economy is a priority. Increasing our share of global trade is a priority. Making it easier to start business in the country is a priority...

I can go on...

Encouraging cash less by proactive policies and innovative approaches, building proper networks, bringing in the needed fool proof security, ensuring network availability, bringing cash less governmental interactions like automating property tax payments in Karnataka....

That is the need of the hour, if the government is serious about moving country to cash less.

Good policy reforms is like cooking food. Good cooking needs to be done on slow fire with regular oversight and interventions (regular mixing, testing for salt, spice etc). And it needs time. Similarly good policy reforms need time and diligent focus and oversight. And time.

Unfortunately, the demonetization has derailed any focus that the government may have had in getting some lasting policy reforms...Next two years will be a grind.

That is what I think. I hope to god I am wrong...

14 December 2016

MEMEHIF Paradoxes: Episode 2

MEMEHIF (My Engineer MBA Educated Highly Intelligent Friend) recently returned from a trip to Singapore. When I met him, he had only good things to say about Changi Airport.

"Awesome airport, bro", he said, 'bro' being the impact of meeting some young americans in S'pore, I suppose, "Must see, this Changi airport. Huge. Most impressive is the security guys. Young guys walking around with AK47s, their eyes are ever watchful to any funny business. Non-invasive is the word that I am looking for. Security is non-invasive. They trust the people but do a very good oversight and in case of any problem, they are quick on the uptake", said MEMEHIF

Normally this torrent is followed by a philosophical discourse. It was not long in coming.

"Public policy should be non-invasive like the security at Changi. It should not intrude into the lives of citizens. It should gel with the daily lives of people.Government should set rules and have good oversight, but must stay out of people's lives. Government should govern, it should not be running business. 'Minimum government, maximum governance' must be the mantra for any government"

"But demonetization is a serious intervention to the lives of individual citizens, isn't it? Forcing them to stand in line to withdraw their own hard earned money is the highest level of government intrusion into private lives. Do you agree with this?"

"Indian people are different. They listen only to the language of 'Danda' (Stick). You need someone superior to force them to do things that are good for them. Logic doesn't work for Indians", he replied.
P is for paradox....

11 December 2016

MEMEHIF Paradoxes: Episode 1

MEMEHIF is a dear friend of mine. Early in our friendship, I asked him about his unusual name.

"My father wanted me to be a friend to all. He also wanted me to be highly educated. In addition, early in my life he realized the I had a high IQ. So he wanted everyone to call me MEMEHIF, which stands for 'My Engineer MBA Educated Highly Intelligent Friend' ", he told me.

We have some highly involved discussions of late, MEMEHIF and me. Sometimes, I find his arguments paradoxical, though I do not tell him so.

Here is one such argument.

"Investing in FD is better than investing in Stocks. At least your capital is protected and your money earn some positive growth", I tell him

"Are you crazy?", he asks, "Equity is the best form of investment available for long term. Stock market leads the economic growth of the country"

"Ever since this government came into power is 2014, Sensex and Nifty have hardly moved", I point out.

"How can you consider stock market as a barometer of economic growth?", he asks, " There could be umpteen reasons why the stock market goes up and down.", he deadpans.

P is for Paradox....

Here is another example...

"Demonetization has impacted the poor and vulnerable the most", I tell MEMEHIF

"Do you know what is the percentage of poor in India?" he asks me.

"I read somewhere that it is about 400 Million. Should be around 40% or so", I respond somewhat cautiously.

"Your data is so outdated. 400 Million poverty was in 2005. Currently it is about 200 Million. So it is not that 'Poor' are significantly impacted. In fact 'Poor' form only about 25% of India's population. You are making a mountain out of a small hillock". He responds.

"So that means that most of the poverty reduction in India happened during UPA Rule. Right?" I ask him.

"Dont be stupid (MEMEHIF can be harsh, but he means well), what can you get at 32 rupees per day, which the per capita poverty baseline measure? The poverty reduction numbers are a joke. UPA was a disaster.", MEMEHIF replies somewhat caustically....

P is for Paradox...

02 December 2016

Oh the irony....

Note: I fully support the intent of the move by the government to remove black money. My post is about the intellectual dishonesty of may of its supporters.

Have you noticed how ironic it is when:

1. The guy who works in IT Company, with multiple credit / debit cards, Paytm and eWallet accounts, stand in ATM Line to withdraw cash and expounds on the merits of moving to cashless economy....
2. The IT Professional, who, on arriving in a foreign country, withdraws local currency, since 'Credit Card Charges and Exchange Rates are very expensive', expounds on the virtues of Cashless economy as soon as he is back in India...
3. The guy who bribes a cop 100 rupees for jumping signal to avoid paying a fine of 500 rupees, enthusiastically supports the move to curb black money...
4. The government employee, who books AC First Class train ticket from Kanyakumari to Jammu Tavi and cancels the same to claim LTC, pontificates on the ills of black money...
5. The private sector employee, who gives fake medical bills to avoid paying tax on 15000 medical allowance explains to us on the perils of black money...
6. The guy who sold his apartment through 60:40 Scheme ('Because that is the normal practice. Why should I pay extra to government?') expounds on the need to curb black money
7. Many who support the prime minister. criticize the government that he is heading....
8. We say, let us cut currency in circulation and at the same time reduce interest rates...
9. Slogan of 'Let us Curb Black Money' slowly morphs into 'Let us move into Cashless economy' as more and more facts come in...
10. They guy who has never experienced poverty and has not had any meaningful interaction with the poor and downtrodden in his life pontificates on the virtues of cashless economy to the same poor people.
11. Intelligent and knowledgeable people, who should be asking probing questions about public policy, believe the same thing on Wednesday that they believed on Monday, no matter what happened on Tuesday in between...

In the last one month, irony has turned into farce in this country....