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Friday, 1 July 2016

The Indian Economy - Hayek's scheme of things


In economics, the most significant task is to make working models based on knowledge that we do not possess. The knowledge of ‘the market’ exists within the market and is possessed by the many individuals that form the market. This knowledge can never be concentrated and therefore, much of economic ‘planning’ is dependent on a set of concepts that basically get their steam from abstractions. Even if we held fairly credible data, it would still disregard human action and motivation, which is an absolutely essential parameter in gauging the tides of the market. While Adam Smith’s invisible hand might not exist in absolute terms, neither does the possibility of absolute ‘visible’ control. Our fundamental problem with planning, then, is the presumption that we possess such knowledge or at least, are in a position to gauge the extent of its ramifications.

To quote Hayek from his last book, ‘The Fatal Conceit,’ “the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” To paraphrase further, the naïve mind conceives order as the simple product of deliberate arrangement – and this arrangement, or at least the perception around it, is largely conceptual. The seminal question here is, does order, as we know it truly exist? And if such order doesn’t exist, then we’re in a serious predicament as to how we must proceed in the field of economics.

The most significant case in point in recent times is the global recession in the mid-late 2000s. Rewinding back to 2001, when the US Federal Reserve slashed interest rates in order to boost economic activity, which led to the eventual bursting of the property bubble, we can see, in retrospect, exactly how important it is for us to revisit Hayek. The Hayekian argument here wouldn’t be that the central bank got rates wrong, but that the state should not be in the business of setting interest rates in the first place. This is squarely different from the view of other prominent free marketeers. If the market had set rates, they would be much higher and the question of a kickback wouldn’t surface at all. This is just another manifestation, almost a century later, of Hayek’s prediction of the US market crash in 1929. The central idea is that the seeds of the bust are sown in the boom. The setting of unrealistic rates ends up in an unsustainable boom that leads to the unavoidable bust that follows.

This is of crucial significance, especially in light of the recent #RExit and the debate around interest rates. Whilst discussing interest rates in India, which by all measures could be reduced significantly, we run into a major roadblock. This is because of two major reasons. For one, the Indian economy has a deep-rooted tint (which is why, perhaps, the likes of Hayek are mysteriously absent from our economics classes) and secondly, because the individuals that comprise the market might not necessarily be satisfied with procuring lower interest rates on lending. It is common knowledge that if borrowing rates are to be reduced, lending rates will have to correspond. How then is the system to perform this balancing act of interest rates, deficit, trade and the innumerable sops that are a part of our economic DNA?

This is where the argument for a free market steps in. Of course, it would be thoroughly naïve to expect this change to be instantaneous, but let’s play with the idea for a while. Imagine a market the government doesn’t meddle in, which would act as a communications system with billions of unique pieces of information. This system would impartially influence the use of resources and by extension – prices, which would guide our actions as they rise and fall. These prices, as Hayek points out, are abstract signals, the knowledge of which we do not possess and therefore, we cannot tutor the signals that inform us about circumstances we don’t know about. This, in contrast with the government setting interest rates and prices – which may or may not be in tandem with the swings of the market, thereby sending wrong signals to the players in the market. Post the great depression and the (now) great recession, it would be prudent for us to learn while we can. Besides, it is impossible to guarantee other freedoms to people while they do not enjoy economic freedom – the less the economic freedom in the market, more will be the need to control other areas of people’s lives. This is because, to start with, tastes and preferences would have to be moulded to conform to the direction in which the market is being steered leading to a domino effect affecting all other areas. As a result, it is almost impossible to be a market collectivist whilst adhering to all other principles liberal.

In light of this, let’s explore a theory about why Hayekian policy has been ignored in large parts. The idea that the manufactured boom is unsustainable has a very sinister undercurrent. That is, that the recession that follows is essentially a return of the economy to normalcy. The notion that the recession must be left alone to do its job, essentially liquidating unsustainable ventures and letting ‘the fittest survive’ is too bitter a pill for politicians or the populace to swallow. While it is almost impossible to separate the two, this is more a moral question than an economic one – the question of social justice.

Hayek’s answer is simple, that any system, which is to ‘decide upon’ a general functioning of the market, cannot take into account the merits or the needs of any individual. It has to be absolutely dispassionate. It is true that individuals make up the market, and that is precisely why each one cannot be taken into consideration individually! Prices come about as a result of the action of individuals, but they aren’t and shouldn’t be decided by such individuals. However, such a colourless view wouldn’t only be counterproductive to our commitment as a welfare state, it would be against any standard of what we call social justice. Therefore, we must inch towards providing a minimum standard of living for all individuals beyond which, we must rely upon the signaling system of prices. The great problem with achieving this is that it is possible only in a wealthy society. Not only is India not wealthy, it is also a democracy – and as much as we love that, there’s no escaping democracy’s little sister, tyranny. Consider land acquisition; the new law facilitates the acquisition of land in four years. Compare that to the two and a half years that China took to not only acquire the land, but complete the Beijing-Shanghai railway line.

So how does one go about this goal in a country like India? This author has a few broad ideas. Firstly, the government must get out of all industries that it has no business running and/or has not the means to manage. Profit driven private or PPP models will provide the same employment and better production, in all probability, while being far more efficient than our cobweb ridden public system. The way roads and airports have been built is a good case in point. Besides, it makes no sense whatsoever for the state to be running airlines, hotels and the like when it has failed miserably to provide the basics that are necessary in a civilised society – basic education and health, law and order, sanitation and so on. The Nehruvian hangover of state sponsored productive growth must certainly be questioned at this point in history.

Better communication systems must be set up rapidly – roads, low budget airports, waterways and IT infrastructure – to boost trade and inch towards the setting up of more urban centres. The only way to ensure upper mobility without overburdening our cities and environment is the development of more urban clusters. Agricultural output must be increased in order to provide skills to and move the labour force (landless farmers, for instance) into the production of secondary and tertiary commodities. For this, we need better conservation of water and the apt application of technology. The production of value added commodities is of utmost importance – here, we can learn a thing or two from China and other East Asian countries.

One of the most damning mistakes India made in the post independence years was to look wholly inward. With a large population immersed in poverty, it is but natural that we must concentrate our energy in trying to solve domestic problems, however, that can’t be done at the cost of international trade. India has been an economic prison for a long time and as a result, we’ve missed the train in several spheres. It would be foolish to try and compete with the likes of China; as TN Ninan puts it, trying to make a China out of India is like asking Greece to be like Germany! But with China’s demographic and other problems, it is essential that we manage to secure our space in the world as the next great manufacturing hub. It would be prudent to delve into services and the manufacturing of commodities that are uniquely indigenous in nature or commodities to which the value added is attractive beyond the simple labour-capital paradigm. In a word, innovation. A good example is the textile and garment industry where Bangladesh, for instance, has superseded our output – for our lack of labour reforms, tax reforms and the like.

This brings us to how we inherently look at industry. India has a history of looking towards industry to fuel development, especially in backward areas. However, there’s a crucial flaw in that reasoning. While industry provides employment, its primary role is to be productive – this cannot be reversed. If it is more productive and efficient, employment becomes a natural by-product. The anecdote of the Andhra Pradesh electricity board comes to mind where, upon being asked to create 10,000 odd jobs, the chairperson’s reply was that the role of the electricity board is to generate electricity, not jobs. There is a great lesson to be learned from that. The natural response of the state that more government jobs must be created in order to curb unemployment might not be the best way out, especially when it doesn’t possess the resources or the level of efficiency required. The state must also cease to regulate prices arbitrarily. Look, for instance at sugarcane. One wants farmers to be happy and therefore, gives them a higher price for their harvest; on the other hand, one also wants sugar to be cheap in the market! In this little game, what happens to the industry? This can be seen across sectors. Another example is the power sector – India, for the first time, has a power surplus, but regulated pricing disallows this power from being distributed! Couple this with the artificial rise in price via the hoarding of essential commodities and other skeletons from the License Raj closet, and we’re in a soup.

Our view of the profit motive is of importance too. If a system of prices is to govern economic activity, thereby giving birth to healthy competition, the profit motive is the most important means to be employed. Our Fabian Socialist roots might drive us to view the profit motive with disdain, but it is the only objective incentive that can be relied upon in a market. An anti-profit view then, is indistinguishable from an anti-market view. Indeed, if private players are to be observed, there is little else that one can point out to as an ‘ultimate driving force.’ Of course, this must be in line with the principles of fair practice. A good way of ensuring that is to ensure a low cost of entry, letting smaller players enter the market with greater ease. In this regard, the emphasis on entrepreneurship, especially in the service and IT sectors seems to be a step in the right direction. Small and mid-level players entering the market would, without a doubt, give birth to healthy competition – the invisible hand.

Of course, in order to move towards freer market conditions, we need massive structural reforms, especially in the tax regime, labour laws, investment, the banking sector and infrastructure development. But India’s sheer size makes certain of the fact that it is and will remain one of the largest contributors to world growth, this growth however, must not be jobless and certainly mustn’t be concentrated. Our demographic dividend and heterogeneity is a boon, the challenge is to not let it slip into stagnation. The question is, how do we avoid concentration? We’ve tried to do it artificially; perhaps the time has come to consider freer market conditions. In our land of contradictions, the greatest contradiction is that we have a profound love for freedom and liberty, which for some reason, doesn’t extend to the economy!

Written by Keshav Iyengar 

Keshav Iyengar is a musician and a student of economics and law.

Tuesday, 17 May 2016

Congress-free Assam soon to be a reality, here's why


Is Congress Heading for a Disaster in Assam?

The perils of forecasting an election came to the fore in Bihar last year. The image of eminent psephologists, assiduously built over years came crashing like a structure of match-sticks. Surprisingly, all major pollsters never ever blundered so consistently as in Bihar, giving a leading edge to NDA. In fact, one of the most awaited exit-polls- Today’s Chanakya gave a sweeping majority to NDA at 155 seats against the Mahagathbandhan’s 83, ( an almost diametrical reversal) only to recant later and blame it on a bug in the program that reversed the outcome because of faulty coding. They sure have a great sense of humour! When the final result placed the Mahagathbandhan at 178, at least one of the most respected psephologists of the country, Prannoy Roy had the courage and humility to offer an apology to the viewers for the confusion caused. In fact his words eloquently summed up the perils of forecasting-“With exit polls and opinion polls, we always made the point-even when we got it spot on-that there are statistical errors that shouldn’t make them be taken too seriously. You get it right, you get it wrong sometimes- that’s the life of a pollster.”

This goes to show the occupational hazards involved in making election forecasts. In this regard Assam is one of the most complicated states to hazard a forecast owing to its ethnic, linguistic, religious, cultural, caste and tribal diversities. However, the more tantalizing the task the greater is its seductive appeal in inviting an attempt.

Let me recall my earlier hypothesis that the dynamics of every election are different and if we are able to get an insight into those dynamics then it does become possible to forecast an election, its rigour notwithstanding. Dynamics are the forces that stimulate change within a system. If we analyse the dynamics operating in Assam a little minutely it gives a clear indication that the Congress is heading for a disaster in Assam. Let us examine them more closely.

Anti-incumbency and Aging Leadership

Tarun Gogoi has a stupendous record of going into an election the fourth time after three convincing victories. However, this in itself is his greatest weakness and may lead to his undoing. According to Prannoy Roy of NDTV, a party going to the polls with fifteen years in power faces an anti-incumbency effect of 80%. Now, that’s huge. To counter that effect you not only need solid evidence of consistent accomplishments but also its acceptability by the public at large.

To the credit of Tarun Gogoi, who remains amazingly energetic for his age, are many achievements in Assam. He inherited a troubled legacy of violence and a sinking economy. He was always quick to highlight this legacy in his press interviews-“When I took over, anarchy and mayhem ruled supreme with terrorists calling the shots, government employees not getting salary on time and businessmen fleeing due to a spree of extortions and abductions.” It goes to his credit that he brought the drifting law and order under control leading to peace and stability in a state marred by insurgency and communal strife. He also guided the economy to the path of growth. Imagine, 2001 had seen 1500 deaths in violence and that figure had come down to 154 in his fourteenth year. No mean achievement. The per capita income grew from Rs. 13059/- from in 2001 to Rs.49480/- while the state GDP grew from Rs. 38313/- to Rs.162652 crores.

However, it is ironical, that his achievements had unintended collateral damages. Way back in 2009 in an interview to Eastern Panorama when asked what gave him a sense of satisfaction he replied-

“Changing the mind-set of people from depression to optimism.”  And herein lay the anti-thesis of his own huge accomplishments. People in a ‘state of depression’ have a limited need of deliverance from insecurity. So it isn’t strange that the problem of infiltration which has become the core issue in this election (and will discussed later) was very much rampant even in those years but could not achieve the required critical mass to become a tilting election issue because the top priority of the people was stability and security by the enforcement of law and order.  He gave them security in abundant measure. Bandhs and bomb-blasts started abating, extortions and abductions got controlled while militancy and insurgency faded away as 14000 militants from thirteen rebel groups surrendered. The people too responded unstintingly by giving him ten years of governance. However, by the time he got his third term the masses stood actually liberated from that state of depression and began experiencing optimism. To reiterate, it is really so ironic that optimism has its political dangers. It raises expectations and class aspirations. Once the primary need of security is fulfilled people start craving for more. Aspirations, long supressed by the fear of ‘anarchy and mayhem’, begin gaining dominance and soon become an impelling force demanding positive political action.

Zone of Tolerance

Anti-incumbency is the gap between the performance expectations of the ruling party and the perceived performance. Zone of tolerance is the range where the shortfall is accepted by the electorate, albeit grudgingly. Once the gap surpasses the zone of tolerance, anti-incumbency spells disaster for the ruling dispensation. This is precisely what Gogoi is up against. The performance could not match the raised expectations. The five yearly per capita income growth that stood at 22.8% in 2011 declined to 17.5% in 2015. A survey showed that the overall satisfaction level which was at 63% in 2013 fell to 49% in 2014 which partly explains the abysmal performance of the Congress in the 2014 Loksabha election. Though data is not available, it is fairly obvious that it must have gone down to perilous levels at the time of going to election in 2016, an ominous sign for Gogoi.

With rising expectations of a growing aspirational class and a failing economy mere election rhetoric is woefully inadequate to win an election. The major electoral issues in Assam apart from insurgency, have been flooding and soil erosion, growing unemployment, problem of electricity, inadequate roads, falling agricultural production and most of all-Rampant Corruption. Since Gogoi had no concrete answers to these issues he was constrained to resort to emotional metaphors like comparing the BJP campaign to the Mughal onslaught which was repulsed consistently by the Ahom Kings of yore. Gogoi, an Ahom himself, perhaps failed to realize that a piece of medieval historical glory cannot satisfy the unfulfilled expectations of a young aspirational class that demands results in the current context rather than a glorified chapter from a history text. At seventy nine he is now seen as an aging politician whose governance has run out of steam. With fifteen years in the chair, his future promises carry no credibility and he has no substantial accomplishments to boast of in the last five years. In the final analysis, his insipid election campaign has been more of a reactive defence to the BJP’s charges rather than an active affirmation of fulfilling the peoples’ mandate so liberally entrusted to him for fifteen long years.

Divided Congress and United Opposition

The essence of Assam politics post 1985 had been effectively captured by Sandhya Goswami  Reader, Department of Political Science, Guwahati University in a paper titled ‘ASSAM: MULTIPLE REALIGNMENTS AND FRAGMENTATION OF PARTY SYSTEM’ presented in 2003:

“Electoral politics in Assam in the last twenty years can serve as a textbook illustration of the complexities of the relationship between social cleavages and competitive politics. Every professional or lay student of Assam politics would notice two fundamental changes in the last two decades: a 'fragmentation' of the party political space and explosion of ethnicities in the arena of politics. The party system has changed from single party dominance of the Congress to a truly multi-party system that shows high degree of party fragmentation. The slow and somewhat dormant process of politicisation of ethnicities has suddenly gathered momentum. It is hard to miss the link between these two processes: multiplication in the number of political parties is intrinsically linked to the politicisation of multiple ethnicities. Assam has moved from an era of 'catch-all' formations to that of 'cleavage-based politics”.

This multiple realignment and fragmentation has remained a salient feature in the past three elections and also dominates the current one. The only difference this time is that it is dangerously loaded against the Congress party. Index of opposition unity has always been the bane of a ruling party. This time Congress faces a lethal double spin attack on a very slippery wicket. While there is a grand alliance of the BJP, AGP and BOPF challenging it, it has already been riddled with dissension and faced a revolt within. Nine MLAs led by Himanta Biswa Sarma joined the BJP last year dealing a crippling blow to Congress. The significance of this alliance is that the votes are transferrable to the alliance candidate which makes this formation politically formidable specially in upper Assam and the tribal dominated regions. No doubt there are some friendly contests within the alliance, but the number is insignificant and even there the electorate is expected to exercise their franchise quite discretely. So, a united opposition and a divided ruling party means Congress is in for some real trouble this time.

BJP’s Hat-trick

BJP has deftly scored a hat-trick this time by three ultimate swingers. The first was the alliance which has already been discussed above. The second was the exploitation of the defections in Congress last year. Himanta Biswa Sarma was a prize catch and BJP was shrewd enough to maximize the outcome from his skills, dealing a body blow to the Congress thereby. One of the most astute politicians and master strategists of the state, Sarma is considered the architect of Congress victories in 2004 and 2009.He was considered Gogoi’s successor but perhaps his ambitions got a jolt when he smelt that Gogoi was going to leave the political legacy of the state to his son instead. Consequently, he found himself ignored in the 2014 Loksabha election and Congress had to pay an exorbitant price for this blunder. Seeing the end of road in Congress he switched sides to the BJP and proved to be its huge asset. Recognizing his political prowess and strategizing skills he was made the BJP campaign in charge which he accepted with great relish. While Sonowal was the face of BJP in Assam, Sarma was the real leg on the ground. His energy levels and indefatigability can be gauged from the observation that he is reported to have addressed 280 election campaigns and done 100 padyatras across the state, a feat not only unmatched by any peer but that almost seems incredible. His connect with the masses was magical as was seen in the overwhelming response to his rallies. He could speak in a tone that had receptivity and carried conviction. A seasoned politician who was well grounded in the electoral dynamics of the state and had the practical expertise and wisdom to make the winning moves. He was quick enough to judge the disappointment of the masses with Gogoi’s performance and was accordingly shrewd enough to choose an emotive political issue that was lying supressed deep in the hearts of the masses and convert this election into a single point agenda-assertion of the people’s identity. He summed it up in an interview to the Indian Express-“This time the Assam election is not about individuals, Sonowal or Sarma or Gogoi. It’s about Assam’s place in India and the Assamese people’s identity in the country.” This struck a deep chord with the people and resonated across the state to become a singular election plank.

The third swinger was the announcement of the Chief Ministerial Candidate. Fortunately, BJP learnt a lesson, albeit painful, from the drubbing in Bihar where outsourcing political campaign had proved to be a disaster. A state election needs to be fought like a state election not only to repose confidence in the state leadership but also to convince the masses that the state has capable leaders whom the Central leadership trusts can fulfil the mandate of the people. Central leadership can supplement a state campaign but can usurp it only at its peril. The choice of Sarbananda Sonowal was meticulous indeed. He was the president of All Assam Students Union from 1992 to1999 and later joined the Assam Gana Parishad. He was elected MLA in 2001 and an MP from Dibrugarh in 2004. Owing to differences with AGP he joined the BJP in 2011 and went on to become the state unit Chief. A leader with strong credentials and high credibility, he was the face of the anti-illegal migrant campaign. The IMDT (Illegal Migrants Determination by Tribunal) Act 1983 had always been a festering sore with the Assamese people. This Act had superseded the Foreigners Act 1946, putting the onus of proving citizenship on the accuser and the police instead of the accused as provided by the Foreigners Act. This Act was blamed for the alleged massive influx of Bangladeshi illegal migrants whose increasing number was proving to be a threat to the identity of the Assamese. Sonowal had challenged this Act in the Supreme Court and it was struck down by it in 2005 as unconstitutional. In fact the Supreme Court described the Bangladeshi infiltration as an ‘external aggression’ and directed the deportation of such migrants who had crossed the border illegally. It is obvious how much this judgement would have endeared Sonowal to the Assamese populace at large. A charming personality with a well-established political base, Tarun Gogoi was no match to his persona. With a state restless for change, Tarun Gogoi now represented the forces of continuity that had lost favour with the people. Sonowal represented the forces of change that the people were yearning for and his declaration as the CM candidate put him far ahead of Gogoi in the race for victory. Needless to add, it is a historical truth that in the battle between the forces of continuity and forces of change, continuity has always lost.

Baddruddin Ajmal- The X-Factor

Immigration has been a historical feature of the development of Assam and the present socio-cultural diversity is the outcome of a very complex history. A cataclysmic movement in the political history of Assam was the Assam Agitation directed against the illegal migrants. Its outcome was the Assam Accord and the IMTD Act which was struck down by the Supreme Court. Muslims constitute one crore plus in Assam out of which around 42 lakhs are indigenous while another 60 to 70 lakh are from East Bengal/ East Pakistan and now Bangladesh. Some say this number could be 80 lakhs. The striking down of the IMTD Act was a huge setback to this community which had traditionally backed the Congress. This is where Baddrudin Ajmal a perfume baron rose on the political scene becoming the leader of the Bengali speaking Muslims in 2005 and amazingly gaining instant success. He floated the All India United Democratic Front (AIUDF) and went on to win 10 seats in 2006 and took his tally to 18 in 2011 to become the main opposition party in the assembly. What was the reason of such a spectacular success? It was the massive shift of the Bengali speaking Muslims to his fold. This came at a huge cost to the Congress and was particularly reflected in its debacle in the 2014 Loksabha election where he emerged as the X-factor leading to an unprecedented BJP sweep in seven Parliamentary constituencies. A CSDS post poll survey showed that 45% Bengali speaking Muslims voted for AIUDF while only 36% voted for the Congress leading to its disaster. However, a deeper analysis of the votes secured over the assembly segments in 2014 revealed a horrifying nightmare for the Congress. It had a winning lead only in 23 of the 126 assembly segments while the AIUDF had led in 24. It was the BJP that had walked off with the cake, leading in 69 constituencies.

This time Ajmal has put up candidates in 74 assembly seats, sending shockwaves in the Congress camp. In fact he has gone on record to declare that he will be the King Maker in this election and no government formation will take place without him. His rhetorical claims apart, the division of the minority vote which had damaged the Congress severely in 2014 is again going to cost it dear in this election too, perhaps leaving it in shock when the results are declared on 19th May.

The Election Issues 

Finally, what are the issues in this election? Post general election 2014, in an article titled ‘General Election 2014: Will BJP’s Gains Polarize Assam Further?’ Smitana Saikia argued that:

“This (2014)  election has sealed the process of disintegration of the ‘catch-all’ nature of the Congress party in Assam, the unravelling of which had already begun in 1985 when Asom Gana Parishad won the assembly elections with a landslide victory. A major reason for this is the realignment of social groups with political parties leading to both ethnic polarization and ethnic accommodation in the state. This breakdown has been expedited on account of growing dissidence and factionalism within the Congress party as well as increasingly shifting loyalties of its core constituencies to other emerging loci of power in the state. Furthermore, the emerging political constellation constituting parties like the Bharatiya Janata Party and All India United Democratic Front have a potential to further polarize a much fragmented and fragile Assam.”

The words were prophetic indeed! While the state of Assam had been long riddled with chronic problems as has been stated earlier, it seems they were all swept away by the wind of polarization. Himanta Biswa Sarma had already made it clear that this election was about “the Assamese people’s identity in the country”, and that is how it ultimately turned out.

With the Assamese threatened identity on the one hand and the fear of deportation of the Bangladeshi migrants on the other, the state seemed to be divided into two antagonistic camps, both blowing the trumpet of survival. The instinct of survival is the greatest motivator of action and if indeed this was a polarized election, it would reflect in the numbers that would flock to the polling booths. When the polling was over, it was revealed that never in the history of the state had voters turned out in such unprecedented numbers, taking the polling percentage to an acrophobic high of 84.78%. Polarization stood confirmed!

Decoding Data

Data never lies. It conveys a certain story. Unfortunately, it is prone to multiple opportunistic interpretations which muddle up the truth. An unbiased interpretation of data will always lead to a singular result. So, what do we get if we decode the available data on Assam?

The unparalleled voter turnout gives a clear and unambiguous signal of two things- polarization and anti-incumbency. This was observed in 1985 when at a high of 78% Congress got knocked out of power. In 2014 Loksabha poll a voter turnout of 79.88 again saw the defeat of the Congress. Now, at 84.78% one thing is crystal clear that the majority vote has swung in the favour of the BJP alliance which accordingly should sweep this election. However, one factor that complicates this election forecast is the voting preference of the minority community. We have already seen that Baddrudin had emerged as the X-factor and a huge spoiler of the Congress victory. How the minority community chooses to vote will obviously decide the ultimate performance of the Congress and the AIUDF this time, even though the die is already cast in favour of the BJP led alliance.

If we take the assembly segment data of the 2014 election, two scenarios emerge depending upon the voting preference of the minority community. If this vote tilts towards AIUDF as it did in 2014, it would simply spell disaster for the Congress. The likely outcome would be as under:

S.NO    Party                   Number of Seats
 1.         Congress                     16
 2.         BJP                              61
 3.         AIUDF*                       22
 4.         AGP                             16
 5.        BOPF                           10  
 6.        Independents                   1
(* Bodoland People’s Front)

However, if it tilts towards the Congress, the likely scene would be:

S.NO    Party                   Number of Seats
 1.         Congress                     35
 2.         BJP                              53
 3.         AIUDF                          10
 4.         AGP                             17
 5.         BOPF                           10
 6.         Independents                  1

It may be observed that in either of the scenarios Congress is heading for a stunning defeat. A statistical propensity may compel one to take the final outcome as the average of the two scenarios. However, the special feature of Assam election this time is that it is certainly not going to turn out that way. There is going to be an unusual consistency in the voting pattern of either communities. Thus, the final outcome, whatever it is, will not be the average but will actually be nearer the either end of the two scenarios. To be specific, Congress will either be near 16 or 35. In either case, there will be nothing to cheer the Congress which is going to ruefully witness the fall of a mighty bastion.

Written by Milan Kumar >>

Retired as a Trainer from L.I.C of India. Regularly follow politics and media developments.

Thursday, 28 April 2016

Using freedom of speech for separatism is perversion of democracy


We earned our freedom through a long arduous struggle spanning two centuries. This hard-earned freedom must really be something to cherish and something to die for. There is no doubt about that in anyone's mind. In the same breath, it can also be argued how important must the 'freedom of speech and expression' be. After all, in a free society, if one can't freely express oneself then what is the point of such freedom. Something so obvious can't be a subject of doubt, right?

Freedom of speech is as precious as all supporters of democracy deem it to be, should be guarded with life. But what if some punks start gaming the system. 

However, all this freedom applies to the act of speech and expression only in the paradigm that mere speech and flow of ideas can't harm anyone. Ergo, nothing useful for a state to put restrictions on it, except may be a malignant will to control everything, like a dictator. This is the entire theory on which any means to control the ‘freedom of speech’ is taken very seriously, almost like a catastrophy, in our extremely vocal and open democracy, followed severe backlash in our free media. And not just in India, on this understanding liberals operate in any democracy, 'compromise on freedom of speech' is a region where a democratic government better not step in.

There are reasonable restrictions on hate speech but such objections are mildly put in Indian constitution. And considering the snail speed at which our judiciary functions, it can be safely said that within the legal framework nothing much has substantially challenged some perils of so much freedom to speak and express.

It should be emphasized that the assumption of ‘speech’ being harmless was made before the information era.

Don't get me wrong, freedom of speech is as precious as all supporters of democracy deem it to be, should be guarded with life. But what if some punks start gaming the system. It should be emphasized that the assumption of ‘speech’ being harmless was made before the information era. Even the worst of the defaulters could be managed within the legal provision that the penal code provided. But not quite today where the spread of information has become so efficient and quick, that law can't keep up with it.

One most obvious example of misusing this freedom is fanning separatist sentiments. And India has seen it being played out again and again. Another one would be hate speech, but that has been addressed under the law. Separatism and hate speech, both are a means to divide and threaten the integrity of our country. Where hate speech is an overt expression and separatism happens to flourish in the background, hidden from public eyes, behind closed doors, slowly over the years. It's a passive act. And it is never organic, it is externally organized and funded. Organic sepratism in a functioning democracy won't find many takers over a long time. It can be kept alive only through external support. Sepratism is always more planned, unlike some hot head giving a hate speech to please a crowd.

Separatists have not only been tolerated but constantly appeased by the successive governments of India.

Another quick comparison will tell you, in Indian set up, more Hindu leaders are known to have exert their domination through hate speeches, whereas it is more Muslims (or other minorities) who have indulged in separatism. Which is probably WHY, hate speech is openly vilified, while separatism is played down and tolerated. However, the effects of hate speech can last just a few months, over a small area, in a small population, the act of separatism is way more dangerous and can compromise the integrity of an entire country permanently. Yet, separatists have not only been tolerated but constantly appeased by the successive governments of India. Now, why is that?

In the garb of freedom of speech, to allow democracy to be used against national integrity, is a complete perversion of democracy. 

This covert act of sedition, commonly known as separatism, needs to be taken to task. It is a complete perversion of democracy to allow democracy to be used against national integrity. They're just people right, who can be bought, their  loyalties can be compromised. If they have genuine concerns, they have to be resolved internally. How do they reach to the “demand of a separate country “ is completely beyond logic. Imagine if this starts happening at every border state. What is India, a cake? Anybody can raise a voice using the freedom that India provided and take away a piece? This is not tolerance or freedom, this is stupidity in the name of democracy. This is the perversion of democracy.

Written by Ishaan Mohan Bagga

Wednesday, 20 April 2016

India, Iran and Afghanistan reach crucial understanding to counter Sino-Pak in Central Asia


The historic 19th century ‘Great Game’ of Lord Curzon’s making may be in the process of revival, albeit in different setting with different actors and varying interests.

From the vast deserts of Central Asia, the new Great Game seems to be shifting to the warm waters of the Indian Ocean, the premier commercial waterway of international trade. The actors are not the old imperial powers aspiring for empires but shrewd traders seeking large markets for their merchandise and accompanying political clout. They act not in isolation but in collaboration without losing sight of their respective national interests.

China, USA, Russia, India, Iran, Central Asian Republics, Afghanistan and Pakistan are the conspicuous actors of this new game. Actually, regional states in the Central and South Asia desire to forge new bilateral and multilateral relationship outside abandoning the model of the days of Great Game.

Their convergence on new relationship built along economic parameters is bolstered by modern technology and advanced entrepreneurship.

The focus of this relationship is on connectivity, on building new gigantic trade routes, on expanding maritime trade and commerce and ultimately on creating healthy contours of inter-dependability for progress and prosperity. The new Great Game is likely to move along these lines.

A major development in this scenario was the building of the Karakorum Highway that connects China’s eastern province of Xingjian with the Pakistani seaport of Gwadar on Makran coast. The next step in the process was Pakistan handing over the building of Gwadar sea port to China.  With that the two Asian countries are to stake claim for a role in maritime trade and diplomacy along the important waterways of the Arabian Sea and the Indian Ocean. The third phase of Sino-Pak connectivity is the prospect of China’s massive investment in infrastructural development in Pakistan’s strategic northern region of the Karakorum Highway connectivity. This move may not rule out the likelihood of China obtaining permanent foothold in the strategic Gilgit bordering on the underbelly of the Central Asian Republics of erstwhile Soviet Union, besides obtaining proximity to Afghanistan through the Wakhan corridor.

China’s forward move has evoked response from local stakeholders.  Much before Chinese President Xi Jinping signed $46bn energy and infrastructure development agreements with Pakistan last month, Iran and India had a long-standing agreement, signed in 2002, to develop the Iranian port of Chahbahar into a full deep sea port. West’s sanctions against Iran for her nuclear programme delayed expeditious work on the project.            

Iran, Afghanistan and India have reached an agreement of developing Iranian port of Chahbahar as a major trade and transit terminus promising much needed opening for landlocked Afghanistan and Central Asia to the warm waters of the Indian Ocean.

They signed a trilateral agreement 2003. India was to build a road-- Route 606 -- connecting Delaram, the border city of Afghanistan, with Zaranj, the capital of Nimruz province in Afghanistan. Iran was to build a highway from Chahbahar up to Delaram. Border Roads Organization of India constructed the Delaram – Zaranj highway, and it was completed in 2009.

The strategic Iranian sea port along Sistan-Balochistan coastline, 72 kilometers to the west of the Pakistani port of Gawadar, is poised to keep under her navy’s surveillance movement of gigantic oil tankers and warships in a volatile zone of the Indian Ocean.

For India, this link has strategic significance; it frustrates Pakistan’s adamancy of refusing India overland route to Afghanistan, Central Asian Republics and to Eastern and Western Europe. It demolishes Pakistan’s monopoly of overland access to Afghanistan for other countries in the sub-continent. Afghanistan becomes a natural beneficiary of the project with two-way access to the Indian Ocean and to Central Asia.

Observers take the operationalzing of the twin sea ports on the southern coastline of Pakistan and Iran as the harbinger of this century’s new Great Game in the Indian Ocean. Iran, Pakistan, India, China, Russia and the United States of America are direct or indirect stakeholders in the changing geostrategic scenario in this oceanic region.

Located barely 72 km away from each other in the deep-sea, Gwadar port in Pakistan and Chahbahar in Iran are not mere ports but geopolitical launch pads that can alter the strategic balance in the region. The Gwadar port — close to the Straits of Hormuz — allows China access to the Indian Ocean as the Karakorum Highway originating in Xinjiang disgorges at Gwadar.  China can monitor US and Indian naval activity in the Persian Gulf and Arabian Sea while its proxy Pakistan can control the energy routes from there.

On the other hand, Chahbahar port in Iran is India’s trump card and gateway to Afghanistan, Central Asia, Russia and Eastern Europe. It can allow India monitor Pakistani and Chinese naval activities in the Indian Ocean region and Gulf. The link will give India entry into Afghanistan and Central Asian markets bypassing Pakistan and thwart Chinese and Pakistani effort to turn Gwadar port into a hub of international trade

The Chahbahar port project is crucial for Afghanistan since it would enable shipping goods to Middle East and Europe as well as allow inflow of vital goods to Afghanistan. Economically it would imply a significant boost to its trade and investment in much-needed infrastructure.

The Hindustan Times of 11th April reported that India is ready to invest $20 billion in the development of Iran’s Chahbahar port and has requested it to allocate adequate land in the Chahbahar Special Economic Zone (SEZ). Indian companies were also interested in setting up petrochemical and fertilizer plants, including in the Chahbahar SEZ either through joint venture between Indian and Iranian public sector companies or with private sector partners.

In May 2014, India and Iran had signed a MoU to jointly develop the port once the international sanctions against Iran were lifted. Owing to high congestion of Bandar Abbas port, Iran has been focusing on the expansion of Chahbahar from 2.5 million tons to 12.5 million tons annually. Chahbahar can handle cargo ships bigger than 1000,000 tons and Iran has had long term plans of integrating Chahbahar with the North-South Transport Corridor. The Chahbahar –Afghanistan-Central Asian link will immensely boost Iran’s activity under NSTC,

While eyeing a larger role in Wes¬tern Asia, New Delhi’s regional diplomatic status will see a huge surge with the development of Chahbahar port. Iran, meanwhile, wants India to help create a free trade zone near Chahbahar, some 72 kms from Gwadar where the Chinese Overseas Ports Holding Company has agreed to help Pakistan establish a free economic zone.

Afghanistan, a direct beneficiary of the project has signed the tripartite transit trade agreement on using the port as an alternative route, which could jack up bilateral trade to $3 billion from $700-800 million. India has pledged $100m for laying railway lines connecting Afghanistan with Central Asia.

Interesting thing about the signing of a MoU by three countries, Iran, Afghanistan and India, is that it came about despite warnings from Washington that India was moving too fast and could undermine the sanctions regime. The signing of the MoU moved forward despite this obstructive warning.

Modi asserted that the signing of the MoU had nothing to do with the sanctions on Iran and as such India was not violating sanctions. With the lifting of sanctions on Iran, India will be fast tracking the work on the project. On the heels of a warning from the US ambassador to India, who said countries engaging with Iran must wait for the outcome of Tehran’s discussions with the P5+1 group, New Delhi remains undeterred.  Indian External Affairs Minister has just concluded two-day visit to Tehran and the way for finalization of Chahbahar project has been cleared. Additionally, Iran is preparing to allocate a gas sector to Indian for exploration and exploitation to meet India’s energy requirements. The port will enable Iran to open up to the Western world once the sanctions are lifted

Sources believe that after a commercial accord is reached on implementing the pact, Indian firms will, according to the Indian government, “lease two existing berths at the port and operationalize them as container and multi-purpose cargo terminals”, providing Afghanis¬tan with access to the sea and reducing its substantial reliance on Pakistan.

In final analysis, economic and political lines are drawn in the hitherto landlocked region of Afghanistan and Central Asia on the one hand and the Arabian Sea and Indian Ocean on the other. It remains to be seen when warships will be escorting gigantic oil tankers in and out of the Gulf of Oman and on the Indian Ocean.

Written by Kashinath Pandit

(The writer is the former Director of the Centre of Central Asian Studies, University of Kashmir, India)

Monday, 4 April 2016

The core problem of Kashmir is not Pakistan or the separatists - but the Muslim majority


"... We want a peaceful resolution to Kashmir ..." 

You may have heard this statement a countless number of times by now. By Pakistan spokespersons, Kashmiri Separatists and their agents in J&K government and public life.

What is this resolution that they speak of constantly?

Is this the resolution that Kashmir stays where it is, with India, and Pakistan stops it's proxy war and violence in the valley? And both the countries can go on their way, burying the hatchet which has marred the discourse for 6 decades?

Is anybody among them considering this as the peaceful resolution they continuously speak of? Is it not going to be the best final solution for the Kashmiri people, the Pakistani people and the Indian people? That the madness stops ...??

Clearly this posturing is not about a resolution at all. It's not about peace or development either. It is definitely not about India's interest or natural justice.

They complain about the Indian army, but will be happy under ISIS

Every time they utter the phrase “peaceful resolution” you should assume that it's a euphemism for either giving full freedom to Kashmir so it can become the den of the world terrorism under Pakistan's murky leadership and Islamic brotherhood, and right under India's nose. Or, we cut all the formalities and hand over Kashmir, literally the head of India, to Pakistan on a silver platter.

These are the only two favorable outcomes according to Pakistan and it's apologists. But they or their minions, who are thriving under Indian democracy, will never utter it in those many words. They'd rather talk about imaginary atrocities of the armed forces, which have not only protected the integrity of Indian borders over the years but have shed their own blood protecting the very Kashmiri population that is desperate for 'azaadi' - be it from the incessant firing and shelling from Pakistan or natural disasters like flood or earthquake.

The problem is not the separatists

State politics of Kashmir is like every other state of India, opportunist to the core, as long as it ensures a re-election, they will parrot any line which will get them votes, even if it promotes the agenda of India's number one enemy. Indian democracy never really devised any protection for itself to counter such deceit, which uses the the freedom given by India against it’s own interests.

The problem is not the local politics, they're the small fish. The problem is the population composition which has been allowed to be manipulated for more than 3 decades. The problem is not the separatists, but the local population which stands behind them.

What do Kashmiris really want?

India is not the British or like the other imperial powers, it's not even like Pakistan, how it was in Bangladesh, or is now in Balochistan. India is not even like USA or Russia. Then you may wonder what is it that these Kashmiris really want? They're not after development or peace, if they were, they wouldn't side with the aggressor and the country solely responsible for their ruin.

If Kashmir is under attack, people in Delhi don't think it's some colony of India under attack, our soldiers from every part of India die to protect Kashmir and it's people. How does it look when the same people position themselves with the enemy?

Bottomline is sharia-control

It is not Kashmir which was hijacked by India like Pak claims, but an entire part of India has been overtaken by Islamic fundamentalism under Pakistan's sponsorship. Kashmiri Muslims' taking over of Kashmir from India is a classic case of how Islam slowly spreads and takes over the countries, playing the victim while it happens. First it achieves local majority, then drives away the minorities through violence, then plays the victim card while openly engaging in violence.

This pattern has been witnessed repeating again and again, across the world. Exactly how a small infection spreads and becomes gangrene when not treated. It happened in Kashmir, today it's happening in Assam. Has also started in Bengal.

The way ahead ...

Kashmiri pandits are never going back. The generation that was driven away has spent their lives, the new generation has found their roots in the rest of India. They don't want to go back to the beautiful shit-hole.

If normalcy is ever achieved, through abolishing Kashmir's special status, it'll be through new migrants, Biharis, Tamilians, Maharashtrians and the rest of India. Kashmir needs to be absorbed back completely into the Indian state, so much so it can't be distinguished from the rest of India. May be it'll happen some day, won't be easy, will need a lot of courage on the part of India.

Written by Ishaan Mohan Bagga

Political Analyst. Social Visionary. Editorial Journalist. Founder of award winning open-magazine Indian Exponent.

Follow him on twitter @IshaanMohan

Tuesday, 29 March 2016

Improving relations with Saudis may help India gain leverage in Islamic world, especially against Pak


After concluding Nuclear Security Summit meet in Washington (31 March – 1 April), Prime Minister Narendra Modi will be visiting the Kingdom of Saudi Arabia. Observers are essaying the diagnosis of this visit in the background of various know or unknown complications.

Objective analyses of Modi’s visits abroad reveal his penchant for reassessment of India’s regional and global relationship with a view of infusing new vitality in the tenets of our foreign policy. His first visit to Middle East region was not to Israel as observers would have anticipated but to Abu Dhabi and Dubai.

When Modi’s visit to Abu Dhabi hit the headlines of major newspapers in the region, Pakistani leading English daily Dawn termed it as “wake up call for Pakistan.”

India and Saudi Arabia have been exchanging visits of top level dignitaries in the past. However, new vitality was infused in their relations when King Abdullah visited Indian in January in 2006 and was the Guest of Honour at our Republic Day celebrations.

India gives importance to friendly relations with the Saudi Kingdom. It is our largest supplier of oil. Nearly 2.8 million Indian workforces in that country make substantial remittances of foreign exchange to home country. Yet there is not one-way traffic; Saudis are conscious of the large scope of investment India is capable of offering.

Lately, Saudi-American relationship has met with a short and unusual spell of hibernation.  After adhering to its foreign policy for too long a period to the verge of stagnation, the Saudis ensconced themselves with a shift and adoption of ‘Look East Policy’. One important reason for this shift was that the US was no more in need of Saudi oil, which also meant reorientation of Saudi-US relations.

At the same time, India and China are new and alluring customers of Saudi hydrocarbon reserves for more than one reason. Both are oil hungry, both are fast growing economies and both are home to vast populations with a rapidly burgeoning middle class. All this is sufficient temptation to the Saudi corporate business houses to focus on India.

Riyadh is looking for new business partnership and not alliance. US-Saudi alliance has weathered the vagaries of history and their pattern of alliance is resting on solid foundation that will not get dislodged by the surge of new exigencies or opportunities.

The point is that Saudi Arabia’s India option is not America centric. Neither India nor China is nursing any ambition of replacing the United States in the Gulf. On that count, there is no scope of any misunderstanding at any level when visits of top leadership of India and Saudi Arabia are undertaken. Objective assessment shows that neither China nor India has any covert intention of replacing the US in the Gulf.

Nevertheless, observers will not cease unraveling political dimensions of Modi’s Saudi visit. Two regional countries, Pakistan and Iran, come into focus. In the context of Pakistan, we have noted that ahead of Mod’s visit to Riyadh, Saudi foreign minister Adel-al-Jubair, during his visit to Pakistan said, “Saudi relations with Pakistan do not come at the expense of India.” It obviously meant that Saudi-Pak relations remain in place and would not be affected by India extending hand of friendship to Saudis.

There are no two opinions on very close and solid relations between Riyadh and Islamabad. Pakistan is an important ally of the Saudis and Pakistani military is the trusted bodyguard of the Saudi monarchy. Saudis have financed Pakistan’s nuclear programme and Pakistan bemused itself calling it ‘Islamic nuclear bomb.’

However, more recent developments are noticeable.  When Islamabad declined to be part of 34-Islamic nations security coalition proposed by Riyadh, Saudi foreign minister al Jubair and Deputy Crown Prince and Defence Minister Mohammad bin Salman visited Pakistan at short interval.  By declining to commit troops in Yemen in April 2015, Pakistan caused ripples in her relations with the Kingdom.

Maybe Modi could cash on this opportunity. If, like in Abu Dhabi, Modi is able to make Saudis agree to a joint communiqué that condemns States using religion to sponsor terrorist activities at home and abroad, it would be a big step forward in commonality of thinking between India and Saudi Arabia in the context of countering international terror.

Position of Iran in the context of Indo-Saudi relations is different from the position of Pakistan. Iran, really, does not stand in the way of India and Saudi Arabia invigorating their mutual relationship, particularly in the realm of trade and commerce. India has good relations with Iran. She is well aware of the nature of relations between Iran and Saudi Arabia. In framing the nature or relationship, Saudis, like any other country, give priority to their national interests.

India is not a small country that Saudis would think of pressurizing her to downgrade her relations with Iran. India has vital strategic interest in a friendly Iran notwithstanding Iran meeting part of our hydrocarbon energy requirements.

India has vital strategic interest in restoration of peace in war-torn Afghanistan and Iran has a significant role in that process. Iran has provided a corridor to India via Chah Bahar sea port for conducting trade with Central Asian region. After sanctions were lifted from Iran in the aftermath of signing the nuclear treaty, Teheran announced massive investment to the tune of 7 billion dollars in India and India is a vital partner in the development of infrastructure in Iran.

In view of this ground reality, Riyadh will have no justification to think of pressurizing India for a shift in her Iran policy. And if she does, India will flatly refuse it. Modi is not the man to whom Saudis can sell blackmail.

This said India and Saudis have also common interest in other vital areas. Both are pitted against the onslaughts of jihadis directly or indirectly. The two countries have lately developed cooperation in sharing intelligence about terrorists and their activities. In June 2012, Saudis deported to India one Abu Jundal, a suspect terrorist linked to 26/11 Mumbai attack.

Lastly, but more importantly, the Islamic State has emerged as common enemy to both countries. Saudi monarchy is a major target of ISIS, and ISIS moles in India are alluring Indian Muslim youth to join the jihadis.

Modi’s impending visit to Saudi Arabia will essentially concentrate on two objectives. One is to find ways and means of strengthening joint anti- terrorism plans and programmes and the second is to open vistas of trade and commerce between the two countries with large space for private enterprise. Strengthening of Indo-Saudi relations will have impact on the future course of the Organization of Islamic Cooperation which comprises 53 Islamic States.

Written by Kashinath Pandit

(The writer is the former Director of the Centre of Central Asian Studies, Kashmir University)